Showing posts with label fiscal policy. Show all posts
Showing posts with label fiscal policy. Show all posts

Nov 8, 2012

Protect Social Security, Medicare and Medicaid in Grand Bargain

FDR signs the Social Security Act in 1935
Time to get back to work, Mr. President. The forces of feudalism are forever busy.

Outside of the idiot caucus, and it pundits, no one wants the most successful social insurance programs in U.S. history diminished.

And no one, rational, wants the working class targeted in the coming the Grand Bargain.

Facing the elimination of public debt in 2001, the GOP under Bush-Cheney drove up the debt in the hopes that later structural deficits would force massive cuts to social insurance, education, stimulus spending and research.

Now is the time of reckoning of the lost decade.

Let's not reward what Bush-Cheney did.

In 2001, Fed Chair Alan Greenspan testified before the Senate Budget Committee on the potential dangers of having zero federal debt, a fiscal legacy that Bush, Cheney and his rightwing ideologues were desperate to avoid.


And avoid and reverse this no-debt legacy they did.

Greenspan’s was an ambiguous and wide-ranging testimony—recounted by former Treasury Secretary Paul O’Neil in The Price of Loyalty—that included Greenspan’s “fear that large surpluses would create a drag on the economy,” among other expressed cautions and concerns about the then-proposed Bush tax cuts (O’Neil p. 63) for the super-rich, now set to expire.

But the damage was done and Greenspan gave political cover (then and in later statements) to the reckless Bush tax cuts.

Said Greenspan in his subsequent testimony before the House Committee on the Budget (March 2, 2001):

At zero debt, the continuing unified budget surpluses now projected under current law imply a major accumulation of private assets by the federal government. Such an accumulation would make the federal government a significant factor in our nation’s capital markets and would risk significant distortion in the allocation of capital to its most productive uses.
A significant distortion to productive uses of capital? You mean like AIG, Citibank and Goldman Sachs?

Greenspan has since more or less apologized for his role in the train-wreck of the Bush-Cheney years that the GOP wants brought back, in part because the GOP friends in the Tea Party cannot stand the site of a black president reelected by other 'mud people.'

If President Obama takes Social Security, Medicare and Medicaid off the table, the American people will be behind him, Erskine Bowles and Alan Simpson be damned.

- A version of this piece has previously appeared

Jan 25, 2011

House Republicans Fly Into Black Hole on Anti-Infrastructure Ideology

The insanity of Wisconsin GOP Gov Scott Walker and Ohio GOP Gov John Kasich giving away federal money ($810 million from Wisconsin and $385 million from Ohio) will reverberate for years as the resulting labor-intensive projects would have provided badly needed jobs and begun a regional transit policy.

Dreams of launching an economic corridor among Minneapolis, Madison, Milwaukee and Chicago are now the nightmare of Republican rule as House Republicans take the torch.

Many felt that Wisconsin Gov. Walker really wasn't that crazy to give away $810 million and all of those construction jobs, campaigning aside. But here we are with the GOP trying to explain transportation infrastructure policy; they're off to a clumsy start.

One suspects the GOP doesn't know what a regional transit policy is and has only a vague idea of the function of infrastructure.

Listening to Rep. Eric Cantor (R-VA) talk about infrastructure is like listening to a Tea Partier lecture on the dynamics of biological evolution.

But the House GOP cannot govern on banal talking points. And the entertainment value of Cantor's fiscal non sequiturs does not off-set the catastrophic damage they can inflict onto American society.

By Brian Beutler of TPM

One area the Republican party's anti-spending crusade puts them in a bind is infrastructure spending. Repairing roads and bridges, modernization, etc. have historically been bipartisan priorities -- but they've also always cost a lot of money.

Ask Republicans whether they want to include transportation infrastructure in their calls for broad spending cuts, and you don't get a very specific answer.

"We've got to learn how to prioritize and do more with less in all areas of government," said House Majority Leader Eric Cantor at his weekly press conference today. "It just is what it is. In the terms of transportation, we've got to figure out ways how to leverage dollars, how to come up with innovative ways to address the nation's ailing transportation infrastructure."

There's a reason for that. Ask instead how they propose to upgrade the country's transportation infrastructure without new spending, and it turns out there's no simple answer.

"I don't think anybody would tell you that our nation's transportation infrastructure is in a state of existence that we would accept," Cantor admitted.

We've got the aviation industry that, you know, anybody trying to fly in and out of the tri-state airports up there in New York? No. When that area gets clogged up, the whole nation, practically, is delayed. Something needs to be done in that arena trying to bring us into the new digital age here, in terms of those issues. But you look at the bridges in disrepair. The highways -- certainly, for sure, we've got to be able to address those. There are things that are occurring at the state level, some innovative ways to approach the need for financing. But at the end of the day we've got to look to see where the tax revenues are being spent, what they're being spent on, are the priorities what the American people expect. But this is the kind of analysis that's got to be undertaken. And it's going to take work. It's not some easy answer: just spend more. I mean, again, this is what the American people are tired of, this response, we just need to spend because there's no other answer. That's not good enough, because the money's not there, we don't have the money.This is a real fix.

On the one hand, the Republicans banned earmarks, so individual members now have less capacity to direct federal dollars to these sorts of projects than they used to have. On the other hand, they also want to diminish the executive branch's resources, making it less able to tackle these problems alone. That means more and more crumbling roads, more and more unhappy voters, more and more demands from local governments and constituents for Congress to do something about it. But without the will to tax and spend, they can't.

Jun 10, 2009

GOP Lies and Lies

Update: See Bruce Murphy's piece that argues GOP is desperate against Doyle, mocking the silly notion that Doyle is doomed.

But lying is the Republican way.

Faced with the hollowed-out economy executed by the Bush-Cheney administration, 47 states this year face ballooning budget deficits, according to an analysis by the Center on Budget and Policy Priorities.

State legislatures and governors from California to Maine are fighting to clean up the fiscal carnage.

So the over-heated GOP shills in Wisconsin snipe and gripe, screaming about the state budget addressing the $6 billion deficit: The worst ever, sure to draw the wrath of the people.

Yes, the state budget not yet approved is the cause of economic misery and generates outrage across the state. Right.

And Jim Doyle is sure to feel this wrath and outrage. Milwaukee talk radio and GOP shills are never wrong.

Where were these fiscal Republican geniuses the last eights years that saw the Bush administration applaud and actually brag about economic progress as 1,000,000s of jobs were outsourced? Smirking no doubt.

Where were these geniuses the last eight years that saw in 2001 the projected elimination of all public debt [and states arguing about what to do with their surpluses] morph into Bush bequeathing $10 trillion debt to the new administration and the 50 states in fiscal crises? That's easy, they were applauding King George's leadership and courage.

Remember the "deficits don't matter" assurance infamously voiced by our intrepid former vice-president.

As the GOP scolds, do yourself a favor and don't buy their snake oil.

Their public record and commitment to honest commentary ain't the best as the omission of inconvenient facts make clear.

If we could get a honest policy discussion from Republicans, our country and our fellow states would not be in this mess.

Mar 27, 2009

Hey Wisconsin, Remember the Fear of Zero National Debt

As Gov. Doyle grapples with the giant budget deficits, it's worth recalling a time when zero national debt was feared and states argued about how much fiscal revenue they should shave off their budgets.

In 2001 Fed Chair Alan Greenspan testified before the Senate Budget Committee on the potential dangers of having no federal debt [we're at $11 trillion now], a fiscal legacy of the Clinton administration that Bush, Cheney and his rightwing ideologues were desperate to avoid.

It was an ambiguous and wide-ranging testimony, recounted by Treasury Secretary Paul O'Neil in The Price of Loyalty, that included Greenspan's "fear that large surpluses would create a drag on the economy," among other expressed cautions and concerns about the then-proposed Bush tax cuts (O'Neil p. 63).

But the damage was done and Greenspan gave political cover (then and in later statements) to the reckless Bush tax cuts for the super-rich.

Said Greenspan in his subsequent testimony before the House Committee on the Budget (March 2, 2001):
At zero debt, the continuing unified budget surpluses now projected under current law imply a major accumulation of private assets by the federal government. Such an accumulation would make the federal government a significant factor in our nation's capital markets and would risk significant distortion in the allocation of capital to its most productive uses.
A significant distortion?

The GOP commitment to make a fiscal mess of things is long-standing, notes Joe Conason in Salon today, and "and Republicans who are complaining about Barack Obama's spending are hypocrites," and avoid even addressing the arguments for stimulus spending (see Krugman, Dec. 1, 2008). Writes Conason

In our time, the Republican Party has compiled an impressive history of talking about fiscal responsibility while running up unrivaled deficits and debt. Of the roughly $11 trillion in federal debt accumulated to date, more than 90 percent can be attributed to the tenure of three presidents: Ronald Reagan, who used to complain constantly about runaway spending; George Herbert Walker Bush, reputed to be one of those old-fashioned green-eyeshade Republicans; and his spendthrift son George "Dubya" Bush, whose trillion-dollar war and irresponsible tax cuts accounted for nearly half the entire burden. Only Bill Clinton temporarily reversed the trend with surpluses and started to pay down the debt (by raising rates on the wealthiest taxpayers).
As is clear among honest observers, among the pathological programs pursued by the Bush administration was its enterprise to turn the national debt from prospects that were made in 2001 of the debt being completely paid off in 10 years to upping the debt to $10 trillion when it left office.

The wish list that the rightwingers, like Grover Norquist, desired from the future administrations dealing with the massive debt: Eliminating those awful programs like Social Security and Medicaid and Medicare which they hoped would become unsustainable because of the debt purposefully piled up by Bush and Cheney.

Bush bequeathed more than that: Millions of jobs shipped overseas, $trillions of unregulated financial products that may yet cost the dollar its role as reserve currency, states' deficits like Wisconsin's and on and on.

Obama has been scrupulously careful not to put the blame on the GOP; it's the wrong message for the guy sent in to clean up the mess. But Conason, Krugman and others should continue to further an understanding of the political-economic commitments of the GOP.

- See also Krugman: Large fiscal expansion needed (Dec. 1, 2008)

Nov 17, 2007

American dollar's decline: From symbol of hegemony to shunned currency


Update: Critics Assail Weak Dollar at OPEC Event
Like everything else, the administration has touched, corrupted and razed, Bush’s stewardship of the dollar has been less than competent and honest.

Readers of the foreign and left press are aware that should the neocons continue to dictate foreign policy, not just political and humanitarian disasters will ensue; some speak of suggestions and precursors of economic disasters.

One sign: The Dollar's weakness.

Sure, economists will tell you that this is a necessity to offset trade deficits, among other considerations.

But the foundation of the neocon project of an American empire led by an economically stable America will no longer be seen by the world as plausible - moral, fiscal and political considerations aside.

From The Independent in the UK.

The dollar's decline: from symbol of hegemony to shunned currency

The decline of the dollar, symbol of US global hegemony for the best part of a century, may have become so entrenched that some experts now fear it is irreversible.

After months of huge and sustained turmoil on the money markets, lack of confidence in the world's totemic currency has become so widespread that an increasing number of international traders are transferring their wealth to stronger currencies such as the euro, which recently hit its highest level against the dollar.

"An American businessman over here who is given the choice would take anything but the dollar," David Buik of Cantor Index said yesterday. "I would want to be paid in yen, and if not yen then the euro or sterling."


Matthew Osborne, of Armstrong International, added: "The majority would say sterling. There are a few dealers in the City who may take the view that they'll take dollars now, while they're cheap, and hold on to them for 12 months.

More at The Independent in the UK.

For an insightful interview on American economic and military idiocy, see Gabriel Kolko in the German SPIEGEL ONLINE.
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