Tag: taxes

Why is the USA running in the red?

outine increases in defense and domestic spending account for only about 15 percent of the financial deterioration, according to a new analysis of CBO data.

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From: The Washington Post

By Lori Montgomery, Published: April 30

“The nation’s unnerving descent into debt began a decade ago with a choice, not a crisis.

In January 2001, with the budget balanced and clear sailing ahead, the Congressional Budget Office forecast ever-larger annual surpluses indefinitely. The outlook was so rosy, the CBO said, that Washington would have enough money by the end of the decade to pay off everything it owed.

Voices of caution were swept aside in the rush to take advantage of the apparent bounty. Political leaders chose to cut taxes, jack up spending and, for the first time in U.S. history,wage two wars solely with borrowed funds.“In the end, the floodgates opened,” said former senator Pete Domenici (R-N.M.), who chaired the Senate Budget Committee when the first tax-cut bill hit Capitol Hill in early 2001.

Now, instead of tending a nest egg of more than $2 trillion, the federal government expects to owe more than $10 trillion to outside investors by the end of this year. The national debt is larger, as a percentage of the economy, than at any time in U.S. history except for the period shortly after World War II.

Polls show that a large majority of Americans blame wasteful or unnecessary federal programs for the nation’s budget problems. But routine increases in defense and domestic spending account for only about 15 percent of the financial deterioration, according to a new analysis of CBO data.

The biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue. That’s nearly half of the $12.7 trillion swing from projected surpluses to real debt. Federal tax collections now stand at their lowest level as a percentage of the economy in 60 years.

Big-ticket spending initiated by the Bush administration accounts for 12 percent of the shift. The Iraq and Afghanistan wars have added $1.3 trillion in new borrowing. A new prescription drug benefit for Medicare recipients contributed another $272 billion. The Troubled Assets Relief Program bank bailout, which infuriated voters and led to the defeat of several legislators in 2010, added just $16 billion — and TARP may eventually cost nothing as financial institutions repay the Treasury.

Obama’s 2009 economic stimulus, a favorite target of Republicans who blame Democrats for the mounting debt, has added $719 billion — 6 percent of the total shift, according to the new analysis of CBO data by the nonprofit Pew Fiscal Analysis Initiative. All told, Obama-era choices account for about $1.7 trillion in new debt, according to a separate Washington Post analysis of CBO data over the past decade. Bush-era policies, meanwhile, account for more than $7 trillion and are a major contributorto the trillion-dollar annual budget deficits that are dominating the political debate….

Most Republicans reject raising taxes as part of the solution; House Speaker John A. Boehner (Ohio) has called it a “non-starter.” But Democrats won’t go for a proposal based solely on spending cuts. The“Gang of Six,” a bipartisan Senate group dedicated to debt reduction, is expected to unveil a strategy as soon as this week that couples sharp spending cuts with a rewrite of the tax code that would raise additional revenue.

(The debt ceiling, set at $14.3 trillion, covers all federal debt, including money the Treasury owes other federal entities, such as the Social Security trust fund. The CBO data focus on the portion of the debt borrowed from outside investors. The debt is the accumulation of annual deficits; if annual budgets are in surplus, the nation can pay down the debt.)

The annual surpluses that set the nation on this course emerged in the final years of the Clinton administration. In the typical American household, a surplus comes as welcome news. But the White House is not a typical household. When Treasury Secretary Robert Rubin saw the budget shift into the black in 1998, he immediately warned President Bill Clinton that, politically, it was a mixed blessing.

Rubin wanted to use the surplus to start repaying the debt, which was then just more than $3 trillion. The White House billed it as “saving Social Security first,” viewing the surplus as an opportunity to shore up the nation’s finances before huge numbers of the baby boom generation began claiming federal retirement benefits. “The problem was a whole other part of the political spectrum wanted to use the surplus for tax cuts,” Rubin said in an interview. “They said they wanted to give the people back their money. Of course, it was also the people’s debt.”

What to do with the surplus became a central issue of the 2000 presidential campaign, with Vice President Al Gore arguing that much of it should be put in a “lockbox” to protect Social Security and Medicare. Bush pushed for a broad tax cut, arguing that taxpayers at all income levels were owed a refund. “Some say that the growing federal surplus means Washington has more money to spend, but they’ve got it backwards,” Bush said as he accepted the GOP nomination in August 2000. “The surplus is not the government’s money. The surplus is the people’s money.”

As soon as he took office, Bush pushed Congress to make good on his tax pledge. Less than a week after his inauguration, he got a boost from Federal Reserve Chairman Alan Greenspan, who testified before the Senate Budget Committee that “tax reduction appears required” to prevent the federal government from accumulating too much cash. Greenspan feared that large surpluses would turn the government into the nation’s largest investor, creating distortions in the markets.

A chorus of skeptics warned against spending the surplus. Some stressed the inherent uncertainty of the CBO projections. Others said a big tax cut would unleash pent-up desire in both parties to pursue expensive priorities without the pay-as-you-go restraints that had helped produce the surplus.

Congress approved a $1.35 trillion tax cut in record time. A second package, worth $350 billion, followed in 2003. Together, they constituted one of the largest tax cuts since World War II, according to the conservative Tax Foundation.

Bush’s first Treasury secretary, Paul O’Neill, resigned after the White House decided to pursue the 2003 measure. “I believed we needed the money to facilitate fundamental tax reform and begin working on unfunded liabilities for Social Security and Medicare,” O’Neill said in an interview. But the White House, he said, was focused on improving economic growth for the fourth quarter of 2004. “They wanted to make sure economic conditions were great going into the president’s reelection.”

Proponents of tax cuts argue that the legislation merely returned tax collections to their appropriate levels. They note that the CBO’s 2001 forecast assumed that tax collections would stay above 20 percent of the nation’s gross domestic product (defined as the total of all economic output) — well above the historic average of 18 percent of GDP.

“It’s not obvious that America was ready to have taxes at a level this high persistently,” said Donald Marron, a former CBO director who now heads the nonprofit Tax Policy Center. “Some degree of tax cutting was inevitable.”

But some key advocates of the tax cuts now say such a large reduction was probably ill-advised.

“Nobody would have thought that all these things would have happened after you cut taxes,” Domenici said. “That you’d have two wars and not pay for them. That you’d have another recession. A huge extravaganza of expenditures” for the military and homeland security after the Sept. 11, 2001, attacks. “You would pause before you did it, if you knew.”

Bill Thomas, the former House Ways and Means Committee chairman who helped shepherd the tax cuts through Congress, defended the 2003 package as “fuel for the economy.” But he said in an interview that the 2001 measure was larded with “stuff that I was not all that wild about,” including bipartisan priorities such as a big increase in the child tax credit and a break for married couples — provisions Thomas believes did little to promote economic growth and amounted to “throwing money out the window.”

“I couldn’t do anything about it,” said Thomas, a California Republican who retired in 2006. “You’re the candy man when you advocate those kinds of tax cuts.”

In the end, Bush cut taxes and spent more money. Good times masked the impact, as surging tax revenues reduced the size of year-to-year deficits during the first three years of his second term. But after the economy collapsed during Bush’s final year in office, deficits — and therefore the debt — began to explode as Obama sought to revive economic activity with more tax cuts and federal spending.

Today, the CBO forecasts are unrelievedly gloomy, showing huge deficits essentially forever. As policymakers grapple with the legacy of the past decade, a demographic wave of senior citizens is crashing at their doorstep, driving up the cost of Medicare, Medicaid and Social Security.

William Hoagland, who was for years a top budget aide to Domenici and other GOP Senate leaders, said it is simplistic to think today’s fiscal problems began just 10 years ago. In 1976, as a young CBO analyst, Hoagland produced a long-term simulation that showed entitlement costs gradually overwhelming the rest of the federal budget.

“This situation really goes back to long before [the Bush administration], which is to say to old dead men that have long left the Congress,” he said.

Still, Hoagland said, the abandonment of fiscal discipline in the wake of the surpluses clearly didn’t help. “Nobody pushed for paying for this stuff,” he said. Not even after “it became very clear in the middle of 2003 that the line had turned on us. And the surpluses as far as the eye could see were no longer there.”

Emphasis Mine

See:http://www.washingtonpost.com/business/economy/running-in-the-red-how-the-us-on-the-road-to-surplus-detoured-to-massive-debt/2011/04/28/AFFU7rNF_story.html?nl_headlines

Cost Of Tax Cuts For Rich Exceeds Value Of Budget Cuts

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from HuffPost: (William Alden)

NEW YORK –” Today, as Americans submit their tax returns, the wealthiest earners will each reap hundreds of thousands of dollars in tax savings.

As part of a law passed late last year, the Bush-era tax cuts for the richest Americans were extended for two years. The estimated cost to the government of that portion of the tax deal, $42 billion this fiscal year, exceeds the stated $38 billion value of the savings from the federal budget cuts lawmakers approved last week.

Those budget cuts, which will affect many services for poor Americans, add more strain to a still weak economy, leading some economists to lament that this allocation of federal resources is not the most efficient way to promote economic growth.

“I don’t think it’s a good time to be trimming federal outlays if you’re interested in the vulnerability of the economy,” said economist Gary Burtless, formerly with the Labor Department and now at the Brookings Institution. “I’m not quite sure where the theories come from that this is going to strengthen economic growth over the next 12 to 18 months. It’s going to have the reverse effect. It’s going to slow it down.”

In the wake of the worst economic downturn since the Great Depression, the economic recovery has been uneven. The financial sector, which employs some of the country’s wealthiest citizens as its executives, has seen profits rebound. Pay at top financial firms has multiplied, while wages for most Americans have stagnated.

Between January 2008 and January 2010, the private sector lost nearly 8 million jobs. Last year, payrolls began to expand, but the pace of the recovery has been slow. With companies reluctant to spend their reserve cash on hiring, the unemployment rate remains high. Last month, 8.8 percent of the workforce was unemployed, a figure that would be significantly greater if it included the millions of jobless Americans who have entirely given up looking for work.

Thanks to the tax cut extension passed last year, struggling Americans will get to keep a few thousand dollars that otherwise would have gone to the government. A family making between $50,000 and $75,000, for instance, saves just over $2,000 on average, according to the non-partisan Tax Policy Center. From a broad economic perspective, that’s money Americans can spend on themselves, theoretically boosting demand, stimulating business activity and generally helping promote a recovery.

But the extension of the tax breaks for the wealthy have proven more controversial, especially as job-creation has remained slow. Under the extension, a family that earns between $500,000 and $1 million gets an average $25,000 tax break, according to the Tax Policy Center. A household earning more than $1 million gets more than $130,000.

Over two years, tax cuts for the wealthy will cost the government about $120 billion and will create or save about 290,000 jobs, according to analysis by the White House-aligned research groupCenter for American Progress. That’s a cost of about $400,000 per job, many of which will likely yield salaries far below that value.

The tax extension seems especially hard for critics to swallow in light of last week’s federal budget deal, which calls for spending cuts of about $38 billion. In comparison, tax breaks for the wealthy will cost the government $42 billion during this fiscal year, according to Michael Linden, director for tax and budget policy at the Center for American Progress.

The cuts come at a period of economic weakness, when those who most rely on government services struggle to put food on the table. Last week, the International Monetary Fund cut its forecast for U.S. economic growth — by the same degree as it cut its forecast for Japan, whose economy faces a major strain as the country attempts to rebuild after a devastating earthquake and tsunami.

But some fiscal restraint is necessary for supporting long-term economic growth, said Mark Zandi, chief economist of Moody’s Analytics. In theory, government spending cuts encourage private businesses to boost their own spending, thereby helping stimulate economic activity. A reduction of public spending might also help stem inflationary pressures and boost investors’ confidence.

While these proposed cuts represent only a small percentage of the year’s budget, they are an important first step, said Zandi, who has advised lawmakers from both parties.

“I think it’s entirely appropriate to focus on discretionary spending, and how we can reduce it going forward,” Zandi said. “My druthers would not have been to cut as deeply right now, until the economy is off and running.”

The deficit-reduction plan put forth by President Barack Obama in a speech on Wednesday includes a combination of cutting spending and ending tax breaks for the wealthy when those naturally expire. He laid out a strategy for reducing the deficit by $4 trillion over 12 years, calling for additional cuts across the board.

“If they make serious cuts over time, that’s actually going to be quite good for the economy,” said Andrew Lo, professor of finance at the MIT Sloan School of Management. “It’s bitter medicine, but we’ve got to take it.”

Emphasis MINE

see:http://www.huffingtonpost.com/2011/04/18/tax-cuts-rich_n_848933.html?utm_source=DailyBrief&utm_campaign=041811&utm_medium=email&utm_content=FeatureTitle&utm_term=Daily%20Brief

Gross Income Inequality…

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From Alternet: by  Les Leopold

Hedge Fund Gamblers Earn the Same In One Hour As a Middle-Class Household Makes In Over 47 Years!

How do they make so much money? Where does it come from? How can hedge fund firms with fewer than 100 employees make as much profit as firms with thousands of employees?
“We live in a very, very rich country. Yet we seem to be utterly consumed by a collective hysteria that we’re about to go broke. Historians are certain to look back at this period and wonder why the richest country in history consumed itself in a struggle over how many teachers to fire.

How rich are we?

Just take a look at the latest reports on what the top hedge fund managers haul in. In 2010 John Paulson led the list with a record $4.9 billion in personal earnings. That’s a whopping $2.4 million an HOUR. Here’s a factoid to make you wretch: It would take the median US household over 47 years to earn as much as Paulson pocketed in just 60 minutes. And, every hedge fund manager pays a lower tax rate than the average family.

The top 25 hedge fund earners took in $22.07 billion in 2010. Thanks to a generous tax loophole these billionaires will pay a top tax rate of 15 percent instead of 35 percent. Closing that loophole on just those 25 individuals – just 25 guys who wouldn’t miss a penny of it — would raise $4.4 billion, which is enough to rehire 126,000 laid-off teachers.

Wait a sec. This is America, not Russia. Don’t we want our entrepreneurs to go out there and earn as much as possible? We don’t want to punish the successful who are building up our economy, do we?

Maybe that’s a strong argument when you’re talking about the CEO billionaires of Apple and Google and other successful companies that make products we use. But when it comes to financial billionaires, we don’t even know what they do for a living.

Each and every day I ask people and I get a blank stare or something like: “They invest. They make money.” Sure enough, but how do they make so much money? Where does it come from? How can hedge fund firms with fewer than 100 employees make as much profit as companies like Apple with tens of thousands of employees?

This much we know. They speculate. The place bets. They jump in and out of markets at lightening speeds. They have secret betting formulas just like card counters in Vegas. And as any state attorney general can tell you, a good number of them cheat by betting with illegalinsider tips, front-running trades, sneaking in trades after markets close and so on. The entire industry is barely regulated as it plays with a bankroll of $2.2 trillion that comes mostly from enormously rich investors. You can bet the next crisis will bubble out of this vast and murky casino.

I have yet to hear a convincing argument that financial billionaires produce economic value commensurate to what they earn. And if they don’t, that means they are siphoning off the wealth from the rest of our nation. Either we do something about it or we’ll watch our standard of living crumble.

Blah, blah blah. We’ve heard it all before. We know that super-rich financiers are gaming the system. We know they pay low taxes or none at all. We know they’re stashing their cash in offshore accounts. But now that the economy isn’t crashing anymore, it seems there’s nothing we can do about it. We just have to learn to live with a new kind of aristocracy. Get used to it.

Maybe not.

There’s a movement underway for what economist Dean Baker aptly named a “financial speculation tax.” The idea, first put forth by the late James Tobin to raise money to help eradicate global poverty, is to place a very small tax on all financial transactions. Here’s how Baker’s Center for Economic and Policy Research describes it:

The FST (also known as a financial transactions tax or the Robin Hood tax) is a modest set of taxes on Wall Street trading – e.g. 0.25% (1/4 of a percent) on a stock purchase or sale and 0.02% (1/50 of a percent) on the sale or purchase of a future, option, or credit default swap. These rates are proportional to the actual transaction costs in the industry….

Each time I write about these issues, my editors worry that you, the readers, have given up — that nobody believes it’s possible to fight Wall Street and win.

Well, I’m not giving up on you.”

Emphasis Mine.

see: http://www.alternet.org/story/150570/hedge_fund_gamblers_earn_the_same_in_one_hour_as_a_middle-class_household_makes_in_over_47_years?akid=6823.108242.QFQEdp&rd=1&t=2

Why Progressives Get No Respect.

“One of the biggest problems facing the Democrats going into this election is that they’re getting absolutely zero respect for everything they’ve done for the average American over the past two years. Tax cuts, health care reform, financial reform, expanded veterans’ benefits, direct funding of student loans

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The Myth Of The Self-Made American: Why Progressives Get No Respect

“One of the biggest problems facing the Democrats going into this election is that they’re getting absolutely zero respect for everything they’ve done for the average American over the past two years. Tax cuts, health care reform, financial reform, expanded veterans’ benefits, direct funding of student loans — the list is long, and one that, by rights, should get the Democrats re-elected handily.

The problem is that the average voter has no idea that any of this ever happened. In fact, if you ask most Americans (even a lot of Democrats), they’ll tell you that Obama raised their taxes.

This ignorance is on full display at your average Tea Party gathering, which is full of people who will proudly insist that they’re entirely self-made. “I did it all myself,” they’ll snarl, quivering in spittle-flecked outrage. “I didn’t get any government handouts. Nobody ever did anything for me — so why are all my tax dollars going to support those shiftless welfare cheats who aren’t willing to work like I did?”

The magnitude of the self-delusion is gobstopping. Did Mr. Self-Made Man grow up in a VA or FHA-funded house? Attend a public school or college? Go to school on the GI Bill, Pell Grants, or student loans? Does he claim a mortgage interest tax deduction every year? Does he support his retired parents out of pocket, or does Social Security do it for him? Does his employer get government contracts or subsidies that make his paycheck possible? Does his business depend on a sound currency, enforceable contracts, or reliable transportation systems?

It’s like his rich Uncle Sam, the benefactor whose generous bequests paid his way into the middle class, has been written totally out of his entire life story. Forget gratitude; these social contract deniers insist loudly that none of that ever happened. At all. They pay taxes; but they’ve never seen a cent returned to them for anything. And they write their “self-made” myths accordingly.

Unfortunately, this is just a symptom of a much larger problem, one that progressives need to resolve if we are to prevail in the future. The bizarre fact is that most Americans who’ve made it into the middle class got there with the help of seriously life-changing government investments and subsidies — and yet, ironically, if you ask them if they’ve ever used a government program in their lives, they’re very likely to tell you: Nope. Never. I did it all on my own.

Suzanne Mettler, a professor at Cornell, actually documented this effect in a 2008 study. She asked people who’d been the beneficiaries of 19 specific government programs — including some of the most popular and widespread programs in the country — whether or not they’d ever used a government social program. Here’s what she found:

Pct. of program beneficiaries who report they have not used a government program

There it is, in black and white. Sixty percent of people who get home mortgage interest deductions (one of the most important and lucrative middle-class subsidies going) don’t see this as a form of government help to their households, even though many of them wouldn’t be homeowners at all without it. Fifty-three percent of the people who got through college on student loans — and 40 percent of GI Bill beneficiaries — also think they’ve paid their own freight. And 44 percent of Social Security recipients don’t think that Social Security is a government program — which comes as no surprise to those of us who remember the ubiquitous calls during last year’s health care fight to “get your fllthy government hands off my Social Security.”

What’s going on here? How can so many people receive so much, and yet remain in such obstinate denial about where it all came from?

A big part of the problem, says Mettler, is that some government programs are simply more visible to the average voter than others. The visible ones tend to be the ones that are administered directly by a government agency, and show up in the budgets as clear line items. In particular, the programs that benefit the poor are often right out there on the table, where voters can see them and activists can ignite them into political issues: welfare, food stamps, government subsidized housing, education, Head Start.

But these programs are just a small fraction of America’s overall social spending. The bulk of our tax money goes to other programs — such as the mortgage interest deduction, student loan programs, and military spending — that are hidden from easy public view in what Mettler calls “the submerged state.” This spending is usually done in ways that are not directly visible to voters. A lot of it is corporate welfare, designed to prop up favored industries that are so powerful that no change is possible unless they’re somehow bought off with new profit opportunities or subsidies. These industries have a strong interest in keeping this spending out of the public eye and off the political table, where it might be challenged. An important subcategory includes government-funded programs that are run through private companies, like prisons or pre-reform student loans (or, for that matter, Obamacare). The money comes straight out of Uncle Sam’s pocket, but the beneficiaries never see his hand directly.

The big disconnect occurs because so many of the programs that benefit the middle class fall into this category. Take the mortgage interest deduction. This is, in effect, a subsidy that keeps America’s real estate and building trades sectors in business — and, as we’ve painfully discovered, was also of huge interest to the banks as well. But even though every homeowner in America profits handsomely from this subsidy, most Americans don’t understand very much about it. It’s just a line item on their income taxes. And there’s strong pressure to keep it that way. If the magnitude of this subsidy somehow moved into general awareness, it might be challenged. It would be subject to political debate. And that’s the last thing the builders and bankers want.

The 58 percent of our federal spending that goes to defense is almost certainly the biggest skeleton in the “submerged state” closet. A lot of that spending goes to businesses, large and small, around the country. If you’re a Congress member protecting jobs in your district (including your own), there is absolutely no upside to making an issue out of this. And, again, the beneficiaries are largely middle-class households, who fail to see the very real connection between these “government programs” and their own paychecks.

Mettler argues that any real reform that involves these hidden non-state actors must begin with explicitly making the invisible visible to the eyes of the public. It takes time and effort to bring the machinery of the submerged state up into the light of day, but it’s necessary — and effective. Obama’s effort to restore direct federal funding of student loans was a good example of this. The banks were making billions each year off this program, at the expense of millions of students who should have been getting that money instead. He was able to pull this off because activists and journalists had already spent several years hauling the ugly wreck of a policy up into public view, which weakened the ability of banking lobbyists to defend their position. By the time Obama arrived, they were weak enough that he could demand — and get — a complete end to this lucrative subsidy.

Making the invisible visible is also essential if we’re going to counter the Tea Party‘s self-serving, denial-wracked narratives, and open the way for Democrats and progressives to get the credit they deserve for the good that they do. We need to start pointing out, loudly and often, all the covert-but-effective ways that government investment and intervention has made the middle class possible.

Specifically, we need to drive home the fact that anybody who calls themselves an American cannot, in the same breath, declare that they are in any sense entirely “self-made.” This is indeed the land of opportunity. But those opportunities exist only as long as we work together to create them; and willfully denying that is an insult to every other American who sacrificed to make your opportunities possible. It’s like saying your parents had nothing to do with raising you. You’d expect them to be hurt, offended, and angry at your lack of gratitude. The rest of us who contributed to your success aren’t wrong to feel insulted, too.

Progressives know the truth: Nobody in America ever did it alone, for themselves. For the past 220 years, we’ve done it together, for each other. Bringing that interdependence back out into the light and putting at the center of our politics shifts the entire dialogue in ways that can help the progressives over the long haul, in at least three ways.

First, it reaffirms the democratic social contract. From the arrogant Wall Street bankers who still think they deserve bonuses for tanking the economy to the furious white men of the Tea Party, people who’ve convinced themselves that nobody ever gave them anything are justified (at least in their own minds) in deciding that they don’t owe anything to anyone else, either. And as long as they can keep the “self-made” lie going, they’ll also go on believing that they’re totally exempt from the whole social contract on which a democracy runs.

Second: It calls the conservatives’ politics-of-rage game. The self-made myth allows the conservative movement to keep feeding on the fury of aggrieved people who falsely think they’re getting nothing for something, even while they’re standing on a pile of wealth that we helped put under their feet. Setting the record straight on exactly what they did get for their tax dollars removes a lot of the justification for this outrage, and makes them look like the tantrum-throwing spoiled brats they are.

Third: It demands that people give credit where credit is due. Nothing changes until those of us who’ve paid our share of taxes, worked hard and played by the rules, struggled to raise sound families and build decent communities, and served our country at home and abroad start demanding acknowledgment, respect, and a proper “Thank you” for everything we’ve each contributed to make so much mutual success possible. And the real patriot is the one who always makes sure that Uncle Sam himself is the very first one to stand for applause.

Putting the lie to the “self-made” myth is critical to restoring the progressive ideas of common wealth, common sense, and the common good to a central place in our political story. It’s time to hand the country’s real “entitlement classes” the full, complete, annotated bill for everything they’ve received from the government’s hand — and demand that they never again forget to thank the 300 million of us who made it all possible.

see: http://ourfuture.org/blog-entry/2010104329/myth-self-made-american-why-progressives-get-no-respect

Emphasis Mine

Eight Nasty right wing lies about Obama

The public has been misled on a ton of issues like tax cuts, the deficit, the economy, and the cost of health care.

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From Alternet:

“The public has been misled on a ton of issues like tax cuts, the deficit, the economy, and the cost of health care.

There are a number things the public “knows” as we head into the election that are just false. If people elect leaders based on false information, the things those leaders do in office will not be what the public expects or needs.”

Here are eight of the biggest myths:

“1) President Obama tripled the deficit.

Reality: Bush’s last budgethad a $1.416 trillion deficit. Obama’s first budgetreduced that to $1.29 trillion.

2) President Obama raised taxes, which hurt the economy.

Reality: Obama cut taxes. 40% of the “stimulus” was wasted on tax cuts which only create debt, which is why it was so much less effective than it could have been.

3) President Obama bailed out the banks.

Reality: While many people conflate the “stimulus” with the bank bailouts, the bank bailouts were requested by President Bush and his Treasury Secretary, former Goldman Sachs CEO Henry Paulson. (Paulson also wanted the bailoutsto be “non-reviewable by any court or any agency.”) The bailouts passed and began before the 2008 election of President Obama.

4) The stimulus didn’t work.

Reality: The stimulus worked, but was not enough. In fact, according to the Congressional Budget Office, the stimulus raised employment by between 1.4 million and 3.3 million jobs.

5) Businesses will hire if they get tax cuts.

Reality: A business hires the right number of employees to meet demand. Having extra cash does not cause a business to hire, but a business that has a demand for what it does will find the money to hire. Businesses want customers, not tax cuts.

6) Health care reform costs $1 trillion.

Reality: The health care reform reduces government deficits by $138 billion.

7) Social Security is a Ponzi scheme, is “going broke,” people live longer, fewer workers per retiree, etc.

Reality: Social Security has run a surplus since it began, has a trust fund in the trillions, is completely sound for at least 25 more years and cannot legally borrow so cannot contribute to the deficit (compare that to the military budget!) Life expectancy is only longer because fewer babies die; people who reach 65 live about the same number of years as they used to.

8) Government spending takes money out of the economy.

Reality: Government is We, the People and the money it spends is on We, the People. Many people do not know that it is government that builds the roads, airports, ports, courts, schools and other things that are the soil in which business thrives. Many people think that all government spending is on “welfare” and “foreign aid” when that is only a small part of the government’s budget.

This stuff really matters.

If the public VOTESin a new Congress because a majority of voters think this one tripled the deficit, and as a result the new people follow the policies that actuallytripled the deficit, the country could go broke.

If the public VOTES in a new Congress that rejects the idea of helping to create demand in the economy because they think it didn’t work, then the new Congress could do things that cause a DEPRESSION.

If the public VOTES in a new Congress because they think the health care reform will increase the deficit when it is actually projected to reduce the deficit, then the new Congress could repeal health care reform and thereby make the deficit worse. And on it goes.”

Dave Johnson blogs at Seeing the Forest and is a Fellow at theCommonweal Institute. He has over 25 years of technology industry experience.

EMPHASIS mine.

see: http://www.alternet.org/news/148614/8_nasty_conservative_lies_about_the_democrats_and_obama_that_must_be_debunked_before_the_election/

Tea Party Time

government – financed by common taxes — is the most efficient provider of so many goods and services.

chasdarwin1 Comment

see: http://www.huffingtonpost.com/robert-creamer/obion-county-fire-tragedy_b_753893.html

Robert Creamer creams the tea party/ GOP ‘less government’ ideology.’

“This week, MSNBC’s Keith Olbermann reported the story of the Cranick family’s house fire. When the family’s Obion County, Tennessee house caught fire on the night of October 5th, the fire department from the nearby town failed to respond since the Cranick’s had forgotten to pay a $75 fee. Firefighters finally responded to a call by Cranick’s neighbor, who had paid his fee. They sprayed the property line to protect the home of the neighbor and watched at the Cranick’s home burned to the ground.

The firefighters had been ordered not to intervene to save the Cranick’s house — even though they were already at the scene — because, apparently, it would have encouraged others not to pay the $75.

The Obion County fire incident is symbolic of the moral and economic bankruptcy of the Tea-Party-Republican vision of government and the economy. And it poses the stark choice facing American voters in the Mid-Term elections.

The Tea-Party-Republicans — including the Republican Congressional leadership – talk incessantly about how government services should be slashed. They believe that society should maximize the extent to which each individual is responsible to fend for themselves. They claim that is more “efficient”. The Obion County fire illustrates clearly why that assertion is simply wrong.

Competitive markets are extremely efficient at encouraging innovation, increasing productivity and distributing goods and services in many arenas. But there are other arenas where history and experience have demonstrated that it is both more efficient and more humane to provide goods and services through government — which, as Congressman Barney Frank likes to say, is the name we give to the things we have chosen to do together.

The core difference in values between the right wing and progressives is whether we create a society where we’re all in this together, or all in this alone.

Mainstream Americans understand that there are a number of areas where it makes much more economic and moral sense to guarantee goods and services to everyone in the society and ask our citizens to finance them by paying their fair share of taxes rather than paying for them “ala carte”.

We came to the conclusion decades ago that government should provide every child with an education, and our public schools have provided the foundation of American economic prosperity.

We use government to provide infrastructure necessary to support our economy — roads, bridges, harbors, airports, sewer and water systems, and street lights.”

N.B.: and the Internet.

“We provide common parks and recreation facilities that are open to public use.

Government provides for our common defense and our domestic security. We don’t require each person to hire a private army or security firm to defend his or her home. That would be stupid, wasteful and lead to anarchy.

Government is particularly efficient when it comes to providing social insurance –– like Social Security and Medicare. The overhead for these programs is tiny compared with other insurance programs (including private health insurance plans) run by the private sector. They have covered everyone reliably and effectively for generations. That’s why they have virtually unanimous public support.

At long last, with the health care reform bill, America joined the company of every other industrial nation, in understanding that it is more efficient and more humane for government to assure that everyone in society has access to health care. Of course one of the signals that prompted this change was the sheer fact that private market health insurance caused our health care cost to skyrocket to 50% more per person than any other nation — with worse outcomes. Almost certainly, the Affordable Care Act is just the first step in reform, since a public option will certainly be needed to ultimately bring our spending in line with other nations. But it was a critical first step.

Of course, most everywhere in America, we provide fire protection through the government. We all pay — through our taxes — to assure that if the time ever comes when we need to call 911 because of a fire, no one will have to check to see if we have paid a fee, a clerical error on payment records will not cost us our homes, and firefighters will not stand by and watch our homes and lives go up in smoke. And of course we also support common protection because fire doesn’t necessarily stop at the property line — just ask Ms O’Leary of the legendary Chicago Fire.

The Obion county story demonstrates what happens when we forget that government – financed by common taxes — is the most efficient provider of so many goods and services.

It makes no economic sense to allow what is likely a multi-hundred thousand dollar home to be consumed by flames because a failure to pay a $75 fee. Now, either the insurance company or the Cranick’s will have to build a brand new home in its place. Their former home was wasted because of the absurdity of the system that had been set up to protect it.

That same absurdity is implicit in so many of the other Republican economic positions. Its ultimate expression is the Republican desire to repeal health care reform and return us to an out of control system run by private health insurance companies that has cost us 50% more than any other country. That system is wasting trillions of dollars that come out of the pockets of middle class Americans — just to allow private insurance companies and their top executives to make obscene amounts of money.

And with fire protection and health care, the moral consequences are also clear. Bad enough that someone’s home was allowed to be destroyed because of the failure to pay a $75 fee. Would the firefighters have been allowed to intervene if the family pets were inside the house — what about a child?

The Republicans want to return us to a health care system that allowed for-profit health insurance companies to brazenly make those same choices everyday. They made life and death decisions that determined whether people were treated or not — and often whether they lived or not — using their own bottom line as their only real guide. They wouldn’t cover you because you have a “pre-existing condition“. They would cut you off when you got sick. They hired armies of bureaucrats who do nothing but deny claims. Some of the worst of these abuses are now history because of health insurance reform. If the Republicans have their way, those new protections will be repealed.

But let’s be clear. The people behind the “drown government in the bath tub” politics are not the kind of folks who run around in three corner hats and George Washington wigs. The Tea Party rank and file is not the principal engine of anti-government fervor. The money for the ads and the buses and the radio shows are provided by big corporations — by people like Rupert Murdoch of Fox and David and Charles Koch.

The Koch brothers own virtually all of Koch Industries, a conglomerate whose annual revenues exceed a hundred billion dollars and is the second largest privately owed company in the country.

The Koch’s combined fortune of thirty five billion dollars is exceeded only by those of Bill Gates and Warren Buffett.

They may be libertarian true believers. But the Kochs would also benefit mightily by making government small and toothless. They would benefit more than most anyone from lowering tax rates for the wealthy. They have a massive stake in lowering the standards for environmental regulation since their oil companies and other holdings have made them one of the top ten air polluters in the United States.

The same goes for the many funders of these ultra-right causes. The money comes from very wealthy families and massive corporations. For them the right wing ideology is nothing more than a vindication for their own wealth — and a justification for their own economic self interest. And the fact is that their economic self interests conflict with those of the vast majority of their fellow citizens.

Progressives cannot be cowed by the anti-government propaganda that spews forth from these giant economic interests even when it’s dressed up in the clothing of the small number of ordinary Americans who have become Tea Party activists.

In fact the Cranicks of Obion County Tennessee are truly emblematic of the victims of the Koch brother’s vision of America. The Cranicks are victims, as are the eight million Americans who lost their jobs because of the greed and recklessness of the big Wall Street banks — because of the traders and CEO’s that ride around in corporate jets and demand that smaller and smaller quantities of their billions be taxed to pay for our common welfare.

The choice we face on November 2nd is between the interests of the Cranicks and the interests of the Kochs.

Hopefully the fire in Obion County, Tennessee will provide the light necessary to illuminate the true consequences of the Tea Party Republican agenda. And it may help provide the spark that is needed to help mobilize millions of Americans to vote November 2nd and reject that agenda at the polls.”

Robert Creamer is a long-time political organizer and strategist, and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.

(Emphasis mine)

The Recovery Act

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The American Recovery and Reinvestment Act of 2009 — President Obama’s $787 billion stimulus — has been marketed as a jobs bill, and that’s how it’s been judged. The White House says it has saved or created about 3 million jobs, helping avoid a depression and end a recession. Republicans mock it as a Big Government boondoggle that has failed to prevent rampant unemployment despite a massive expansion of the deficit. Liberals complain that it wasn’t massive enough.

It’s an interesting debate. Politically, it’s awkward to argue that things would have been even worse without the stimulus, even though that’s what most nonpartisan economists believe. But the battle over the Recovery Act’s short-term rescue has obscured its more enduring mission: a long-term push to change the country. It was about jobs, sure, but also about fighting oil addiction and global warming, transforming health care and education, and building a competitive 21st century economy. Some Republicans have called it an under-the-radar scramble to advance Obama’s agenda — and they’ve got a point. (See TIME’s special report “The Green Design 100.”)

Yes, the stimulus has cut taxes for 95% of working Americans, bailed out every state, hustled record amounts of unemployment benefits and other aid to struggling families and funded more than 100,000 projects to upgrade roads, subways, schools, airports, military bases and much more. But in the words of Vice President Joe Biden, Obama’s effusive Recovery Act point man, “Now the fun stuff starts!” The “fun stuff,” about one-sixth of the total cost, is an all-out effort to exploit the crisis to make green energy, green building and green transportation real; launch green manufacturing industries; computerize a pen-and-paper health system; promote data-driven school reforms; and ramp up the research of the future. “This is a chance to do something big, man!” Biden said during a 90-minute interview with TIME.

For starters, the Recovery Act is the most ambitious energy legislation in history, converting the Energy Department into the world’s largest venture-capital fund. It’s pouring $90 billion into clean energy, including unprecedented investments in a smart grid; energy efficiency; electric cars; renewable power from the sun, wind and earth; cleaner coal; advanced biofuels; and factories to manufacture green stuff in the U.S. The act will also triple the number of smart electric meters in our homes, quadruple the number of hybrids in the federal auto fleet and finance far-out energy research through a new government incubator modeled after the Pentagon agency that fathered the Internet. (See TIME’s special report “After One Year, A Stimulus Report Card.”)

The only stimulus energy program that’s gotten much attention so far — chiefly because it got off to a slow start — is a $5 billion effort to weatherize homes. But the Recovery Act’s line items represent the first steps to a low-carbon economy. “It will leverage a very different energy future,” says Kristin Mayes, the Republican chair of Arizona’s utility commission. “It really moves us toward a tipping point.” (Watch a video “TIME Polls America: Spend or Cut?”)

The stimulus is also stocked with nonenergy game changers, like a tenfold increase in funding to expand access to broadband and an effort to sequence more than 2,300 complete human genomes — when only 34 were sequenced with all previous aid. There’s $8 billion for a high-speed passenger rail network, the boldest federal transportation initiative since the interstate highways. There’s $4.35 billion in Race to the Top grants to promote accountability in public schools, perhaps the most significant federal education initiative ever — it’s already prompted 35 states and the District of Columbia to adopt reforms to qualify for the cash. There’s $20 billion to move health records into the digital age, which should reduce redundant tests, dangerous drug interactions and errors caused by doctors with chicken-scratch handwriting. Health and Human Services Secretary Kathleen Sebelius calls that initiative the foundation for Obama’s health care reform and “maybe the single biggest component in improving quality and lowering costs.” (Comment on this story.)

Any of those programs would have been a revolution in its own right. “We’ve seen more reform in the last year than we’ve seen in decades, and we haven’t spent a dime yet,” says Education Secretary Arne Duncan. “It’s staggering how the Recovery Act is driving change.” See TIME’s interactive “The Economy’s Toughest Task.”

That was the point. Critics have complained that while the New Deal left behind iconic monuments — courthouses, parks, the Lincoln Tunnel, the Grand Coulee Dam — this New New Deal will leave a mundane legacy of sewage plants, repaved roads, bus repairs and caulked windows. In fact, it will create new icons too: solar arrays, zero-energy border stations, an eco-friendly Coast Guard headquarters, an “advanced synchrotron light source” in a New York lab. But its main legacy will be change. The stimulus passed just a month after Obama’s inauguration, but it may be his signature effort to reshape America — as well as its government. (See pictures of Barack Obama behind the scenes on Inauguration Day.)

“Let’s Just Go Build It!”
After Obama’s election, Depression scholar Christina Romer delivered a freak-out briefing to his transition team, warning that to avoid a 1930s-style collapse, Washington needed to pump at least $800 billion into the frozen economy — and fast. “We were in a tailspin,” recalls Romer, who is about to step down as chair of Obama’s Council of Economic Advisers. “I was completely sympathetic to the idea that we shouldn’t just dig ditches and fill them in. But saving the economy had to be paramount.” Obama’s economists argued for tax cuts and income transfers to get cash circulating quickly, emergency aid to states to prevent layoffs of cops and teachers and off-the-shelf highway projects to put people to work. They wanted a textbook Keynesian response to an economy in cardiac arrest: adding money to existing programs via existing formulas or handing it to governors, seniors and first-time home buyers. They weren’t keen to reinvent the wheel.

But Obama and Biden also saw a golden opportunity to address priorities; they emphasized shovel-worthy as well as shovel-ready. Biden recalls brainstorming with Obama about an all-in push for a smarter electrical grid that would reduce blackouts, promote renewables and give families more control over their energy diet: “We said, ‘God, wouldn’t it be wonderful? Why don’t we invest $100 billion? Let’s just go build it!’ ”

It wasn’t that easy. Utilities control the grid, and new wires create thorny not-in-my-backyard zoning issues; there wasn’t $100 billion worth of remotely shovel-ready grid projects. It’s hard to transform on a timeline, and some congressional Democrats were less interested in transforming government than growing it. For instance, after securing $100 billion for traditional education programs, House Appropriations Committee chairman Dave Obey tried to stop any of it from going to Race to the Top, which is unpopular with teachers’ unions.

Ultimately, even Obama’s speed focused economists agreed that stimulus spending shouldn’t dry up in 2010. And some Democrats were serious about investing wisely, not just spending more. So House Speaker Nancy Pelosi insisted on $17 billion for research. House Education and Labor Committee chairman George Miller fought to save Race to the Top. And while the grid didn’t get a $100 billion reinvention, it did get $11 billion after decades of neglect, which could shape trillions of dollars in future utility investments. (See 10 big recession surprises.)

It takes time to set up new programs, but now money is flowing to deliver high-speed Internet to rural areas, spread successful quit-smoking programs and design the first high-speed rail link from Tampa to Orlando. And deep in the Energy Department’s basement — in a room dubbed the dungeon — a former McKinsey & Co. partner named Matt Rogers has created a government version of Silicon Valley’s Sand Hill Road, blasting billions of dollars into clean-energy projects through a slew of oversubscribed grant programs. “The idea is to transform the entire energy sector,” Rogers says. “What’s exciting is the way it fits all together.”

“They Won’t All Succeed”
The green industrial revolution begins with gee-whiz companies like A123 Systems of Watertown, Mass. Founded in 2001 by MIT nanotechnology geeks who landed a $100,000 federal grant, A123 grew into a global player in the lithium-ion battery market, with 1,800 employees and five factories in China. It has won $249 million to build two plants in Michigan, where it will help supply the first generation of mass-market electric cars. At least four of A123’s suppliers received stimulus money too. The Administration is also financing three of the world’s first electric-car plants, including a $529 million loan to help Fisker Automotive reopen a shuttered General Motors factory in Delaware (Biden’s home state) to build sedans powered by A123 batteries. Another A123 customer, Navistar, got cash to build electric trucks in Indiana. And since electric vehicles need juice, the stimulus will also boost the number of U.S. battery-charging stations by 3,200%.

“Without government, there’s no way we would’ve done this in the U.S.,” A123 chief technology officer Bart Riley told TIME. “But now you’re going to see the industry reach critical mass here.”

The Recovery Act’s clean-energy push is designed not only to reduce our old economy dependence on fossil fuels that broil the planet, blacken the Gulf and strengthen foreign petro-thugs but also to avoid replacing it with a new economy that is just as dependent on foreign countries for technology and manufacturing. Last year, exactly two U.S. factories made advanced batteries for electric vehicles. The stimulus will create 30 new ones, expanding U.S. production capacity from 1% of the global market to 20%, supporting half a million plug-ins and hybrids. The idea is as old as land-grant colleges: to use tax dollars as an engine of innovation. It rejects free-market purism but also the old industrial-policy approach of dumping cash into a few favored firms. Instead, the Recovery Act floods the zone, targeting a variety of energy problems and providing seed money for firms with a variety of potential solutions. The winners must attract private capital to match public dollars — A123 held an IPO to raise the required cash — and after competing for grants, they still must compete in the marketplace. “They won’t all succeed,” Rogers says. “But some will, and they’ll change the world.” (Watch TIME’s video “Google’s Energy Initiatives Director Talks Clean Power.”)

The investments extend all along the food chain. A brave new world of electric cars powered by coal plants could be dirtier than the oil-soaked status quo, so the stimulus includes an unheard-of $3.4 billion for clean-coal projects aiming to sequester or reuse carbon. There are also lucrative loan guarantees for constructing the first American nuclear plants in three decades. And after the credit crunch froze financing for green energy, stimulus cash has fueled a comeback, putting the U.S. on track to exceed Obama’s goal of doubling renewable power by 2012. The wind industry added a record 10,000 megawatts in 2009. The stimulus is also supporting the nation’s largest photovoltaic solar plant, in Florida, and what will be the world’s two largest solar thermal plants, in Arizona and California, plus thousands of solar installations on homes and buildings.

The stimulus is helping scores of manufacturers of wind turbines and solar products expand as well, but today’s grid can only handle so much wind and solar. A key problem is connecting remote wind farms to population centers, so there are billions of dollars for new transmission lines. Then there is the need to find storage capacity for when it isn’t windy or sunny outside. The current grid is like a phone system without voice mail, a just-in-time network where power is wasted if it doesn’t reach a user the moment it’s generated. That’s why the Recovery Act is funding dozens of smart-grid approaches. For instance, A123 is providing truckloads of batteries for a grid-storage project in California and recycled electric-car batteries for a similar effort in Detroit. “If we can show the utilities this stuff works,” says Riley, “it will take off on its own.”

Today, grid-scale storage, solar energy and many other green technologies are too costly to compete without subsidies. That’s why the stimulus launched the Advanced Research Projects Agency-Energy (ARPA-E), a blue-sky fund inspired by the Pentagon’s Defense Advanced Research Projects Agency (DARPA), the incubator for GPS and the M-16 rifle as well as the Internet. Located in an office building a block from the rest of the Energy Department, ARPA-E will finance energy research too risky for private funders, focusing on speculative technologies that might dramatically cut the cost of, say, carbon capture — or not. “We’re taking chances, because that’s how you put a man on the moon,” says director Arun Majumdar, a materials scientist from the University of California, Berkeley. “Our idea is it’s O.K. to fail. You think America’s pioneers never failed?”

ARPA-E is funding the new pioneers — mad scientists and engineers with ideas for wind turbines based on jet engines, bacteria to convert carbon dioxide into gasoline, and tiny molten-metal batteries to provide cheap high-voltage storage. That last idea is the brainchild of MIT’s Donald Sadoway, who already has a prototype fuel cell the size of a shot glass. The stimulus will help him create a kind of reverse aluminum smelter to make prototypes the size of a hockey puck and a pizza box. The ultimate goal is a commercial scale battery the size of a tractor trailer that could power an entire neighborhood. “We need radical breakthroughs, so we need radical experiments,” Sadoway says. “These projects send chills down the spine of the carbon world. If a few of them work, [Venezuela’s Hugo] Chávez and [Iran’s Mahmoud] Ahmadinejad are out of power.”

Then again, the easiest way to blow up the energy world would be to stop wasting so much. That’s the final link in the chain, a full-throttle push to make energy efficiency a national norm. The Recovery Act is weatherizing 250,000 homes this year. It gave homeowners rebates for energy-efficient appliances, much as the Cash for Clunkers program subsidized fuel-efficient cars. It’s retrofitting juice-sucking server farms, factories and power plants; financing research into superefficient lighting, windows and machinery; and funneling billions into state and local efficiency efforts. (See TIME’s special report “Obama’s Agenda: Get America Back on Track.”)

It will also retrofit 3 in 4 federal buildings. The U.S. government is the nation’s largest energy consumer, so this will save big money while boosting demand for geothermal heat pumps, LED lighting and other energy-saving products. “We’re so huge, we make markets,” says Bob Peck, the General Services Administration’s public-buildings commissioner. GSA’s 93-year-old headquarters, now featuring clunky window air conditioners and wires duct-taped to ceilings, will get energy optimized heating, cooling and lighting systems, glass facades with solar membranes and a green roof; the makeover should cut its energy use 55%. It might even beta-test stimulus-funded windows that harvest sunlight. “We’ll be the proving ground for innovation in the building industry,” Peck says. “It all starts with renovating the government.”

The New Venture Capitalists
The stimulus really is starting to change Washington — and not just the buildings. Every contract and lobbying contact is posted at Recovery.gov, with quarterly data detailing where the money went. A Recovery Board was created to scrutinize every dollar, with help from every major agency’s independent watchdog. And Biden has promised state and local officials answers to all stimulus questions within 24 hours. It’s a test-drive for a new approach to government: more transparent, more focused on results than compliance, not just bigger but better. Biden himself always saw the Recovery Act as a test — not only of the new Administration but of federal spending itself. He knew high-profile screwups could be fatal, stoking antigovernment anger about bureaucrats and two-car funerals. So he spends hours checking in, buttering up and banging heads to keep the stimulus on track, harassing Cabinet secretaries, governors and mayors about unspent broadband funds, weatherization delays and fishy projects. He has blocked some 260 skate parks, picnic tables and highway beautifications that flunked his what-would-your-mom-think test. “Imagine they could have proved we wasted a billion dollars,” Biden says. “Gone, man. Gone!”

So far, despite furor over cash it supposedly funneled to contraception (deleted from the bill) and phantom congressional districts (simply typos), the earmark-free Recovery Act has produced surprisingly few scandals. Prosecutors are investigating a few fraud allegations, and critics have found some goofy expenditures, like $51,500 for water-safety-mascot costumes or a $50,000 arts grant to a kinky-film house. But those are minor warts, given that unprecedented scrutiny. Biden knows it’s early — “I ain’t saying mission accomplished!” — but he calls waste and fraud “the dogs that haven’t barked.” (See 25 people to blame for the financial crisis.)

The Recovery Act’s deeper reform has been its focus on intense competition for grants instead of everybody-wins formulas, forcing public officials to consider not only whether applicants have submitted the required traffic studies and small-business hiring plans but also whether their projects make sense. Already staffed by top technologists from MIT, Duke and Intel, ARPA-E recruited 4,500 outside experts to winnow 3,700 applications down to 37 first-round grants. “We’ve taken the best and brightest from the tech world and created a venture fund — except we’re looking for returns for the country,” Majumdar says. These change agents didn’t uproot their lives to fill out forms in triplicate and shovel money by formula. They want to reinvent the economy, not just stimulate it. Sadoway, the MIT battery scientist, is tired of reporting how many jobs he’s created in his lab: “If this works, I’ll create a million jobs!”

Obama has spent most of his first term trying to clean up messes — in the Gulf of Mexico, Iraq and Afghanistan, on Wall Street and Main Street — but the details in the stimulus plan are his real down payment on change. The question is which changes will last. Will electric cars disappear after the subsidies disappear? Will advanced battery factories migrate back to China? Will bullet trains ever get built? The President wants to extend transformative programs like ARPA-E. But would they be substitutes for the status quo or just additions to tack onto the deficit? And would they survive a Republican Congress?

Polls suggest the actual contents of the Recovery Act are popular. But the idea of the stimulus itself remains toxic — and probably will as long as the recovery remains tepid. “Today, it’s judged by jobs,” Rogers says of the act. “But in 10 years, it’ll be judged by whether it transformed our economy.

See: http://www.time.com/time/nation/article/0,8599,2013683,00.html

emphasis mine

The Reagan Revolution has come home to roost!

chasdarwin1 Comment

Watch what we do, not what we say.” (Famous Republican advice.)

The Reagan Revolution was first and foremost about cutting the taxes paid by the rich and corporations. Now, almost 30 years later, the United States of America is drowning in debt. And that is exactly what they wanted to happen.

The Plan

There were the reasons for the tax cuts Reagan said, and there was the plan Reagan had. Reagan SAID that there was this thing called the “Laugher” Curve that he said proved cutting taxes would actually increase government revenue. But what they were saying was a smokescreen, something to tell the rubes. Increasing government revenue was the last thing Reagan and his cohorts wanted. They knew (and have since said so) cutting taxes would lead to terrible deficits. They called this a “strategic deficit.” This was the plan.

Bankrupting our government (We, the People) was the plan and today we can see that it was what they did. They didn’t want revenue to increase because the idea was to “starve the beast.” Reagan called it “cutting their allowance.”

The plan was that by cutting the funding for government, government would have to cut back on what it does: regulating business, protecting regular people against powerful interests, building infrastructure, educating kids, taking care of the poor and elderly. With government (We, the People) out of the way businesses could be unleashed and really start to make money. And for those who could afford to pay, private companies would take over those other functions. That was called “privatization.”

Infrastructure? We had plenty of infrastructure back then – grab the cash now and worry about that later. (It’s later now.)

So taxes were cut. And immediately the budget went into deficit and the government started borrowing. The debt started to grow. That was the plan. They said so.

Conservatives well understood that the public was not behind their plan. This was why it was explained as a way to increase government revenue. “Watch what we do, not what we say” is about tricking the public – deceive people by telling them you are doing one thing while really doing another. They knew that if the public came to understand their plan they would all be voted out of office. The idea was to force the other party to make the cuts.

Every time someone did try to cut the public outcry was enormous. So they just kept borrowing, intentionally trying to make the debt get so bad that eventually the government would be faced with bankruptcy.

Clinton, for a time, foiled their plans. In 1993 there was a hard-fought battle to raise taxes at the top by just a small amount. Every Republican voted against it. The public was saturated with lie after lie about how this would destroy the economy. Of course, the economy boomed in the 1990s following the Clinton tax increases and by the end of Clinton’s term the government was paying off debt so quickly that Alan Greenspan called for Bush II to again cut taxes on the rich, saying it was dangerous to pay off the government debt – yes, the same Alan Greenspan who now says we have to get rid of Social Security to pay off debt. The plan.

Bush called restoration of deficits “incredibly positive news”

Seven months after taking office, George W. Bush learned that his budgets had already erased the previous administration’s huge surplus — that was paying off our country’s debt at a rapid rate — and had instead forced the country to start borrowing heavily again. Bush said the huge deficit was “Incredibly positive news” because it will create “a fiscal straitjacket for Congress.” That’s right, massive deficits were “incredibly positive news.” The plan.

Deficit Hawks Today

Now we’re experiencing part two of The Plan: use the debt as a reason to cut the things government does for We, the People. The deficit cutters insist that the government should cease investment in infrastructure, educating kids, taking care of the poor and elderly and protecting regular people against powerful interests. First and foremost they want to cut Social Security. They blocked a reasonable health care plan in the name of “less spending.” They fight every effort to stimulate the economy and create jobs so that We, the People can get out of this unemployment emergency. (High unemployment puts tremendous wage pressure on the remaining workers.)

Are we going to fall for it? Are we going to walk right into part two of The Plan? Or are we going to restore the tax base, which is the lifeblood of democracy. Taxes on the wealthy and big corporations are what brings the ability of We, the People to control our own destiny instead of yielding always to the powerful interests.

This is the choice we are faced with. The “deficit hawks” are offering only The Plan. So far restoring the tax base back to where it was is off the table, not even to be discussed. Are we going to allow that? Or are We, the People going to fight back and demand that democracy be restored?

Previously: Reagan Revolution Home To Roost: America Is Crumbling and Finance, Mine, Oil & Debt Disasters: THIS Is Deregulation.

see; http://www.truthout.org/reagan-revolution-home-roost-america-drowning-debt59819

emphasis mine

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After the Summit: Progressives 1, Reactionaries nil

Here is a basic fact: If the House Democrats voted tomorrow to approve the Senate bill, health care reform would become the law of the land.

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From the 26 Feb 2010 NY Times editorial: ” The main lesson to draw from Thursday’s health care forum is that differences between Democrats and Republicans are too profound to be bridged. That means that it is up to the Democrats to fix the country’s dysfunctional and hugely costly health care system.  At the meeting, President Obama laid out his case for sweeping reform that would provide coverage to 30 million uninsured Americans and begin to wrestle down the rising cost of medical care and future deficits. The Republicans insisted that the country cannot afford that — and doesn’t need it. The House Republican leader, John Boehner, trotted out the old chestnut that the United States has the “best health care system in the world.”  N.B.: This is because we have poorly framed the issue as health care reform, rather than health care insurance reform, or improved access to health care.  “…Republicans stuck to their script and argued for small solutions, such as letting people buy insurance in other states that might allow skimpier — and thus cheaper — coverage. That is a formula for helping healthy people cut costs while driving up premiums for sick people unable to get similar coverage.

Republicans balked at any big expansion of Medicaid or any big subsidies to help middle-class Americans buy insurance on new exchanges. As a result, their plans would cover only three million uninsured over the next decade, a tenth of what the Democrats are proposing. That is not enough.

Mr. Obama should jettison any illusions that he can win Republican support by making a few more changes in bills that already include many Republican ideas. Republican speakers made clear that the only thing they would accept is starting over from scratch. That would be the end of sweeping reform.

The Republicans tried to wring a pledge from Mr. Obama that he would not resort to “budget reconciliation,” a parliamentary maneuver to sidestep a filibuster in the Senate and pass legislation by a simple majority. Reconciliation is a last resort. But Republicans and Democrats have both used it for major bills in the past. The president wisely refused to tie his hands.

Here is a basic fact: If the House Democrats voted tomorrow to approve the Senate bill, health care reform would become the law of the land.”

see: http://www.nytimes.com/2010/02/26/opinion/26fri1.html?hp

More: from Alternet, by Lindsay Beyerstein (see:http://www.alternet.org/story/145821/obama%27s_health_care_summit%3A_dems_find_common_ground%3B_republicans_not_on_board)

“President Obama presided over a six-hour televised summit on health care reform yesterday with Republican and Democratic members of Congress. The marathon meeting was billed as a last-ditch effort to get Republican input on the health-care reform package before Congress. But, arguably, the real purpose of the summit was to captivate the attention of the media while House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., figured out how to push ahead with health care reform through budget reconciliation — a parliamentary procedure that would sidestep the filibuster and the 60-vote supermajority required to overcome it, allowing Democrats to pass Senate legislation by a simple majority of 51 votes.

Republican leaders made it clear from the outset that their members had no interest in modifying the bill that has already passed the Senate, but instead wanted to scrap the bill altogether. House Minority Leader John Boehner, R-Ohio, stated repeatedly in the days before the summit that the GOP would accept nothing less than a do-over.”

More, Kristoff, 26 Feb, NY Times:” If we’re lucky, Thursday’s summit will turn out to have been the last act in the great health reform debate, the prologue to passage of an imperfect but nonetheless history-making bill. If so, the debate will have ended as it began: with Democrats offering moderate plans that draw heavily on past Republican ideas, and Republicans responding with slander and misdirection. Nobody really expected anything different. But what was nonetheless revealing about the meeting was the fact that Republicans — who had weeks to prepare for this particular event, and have been campaigning against reform for a year — didn’t bother making a case that could withstand even minimal fact-checking….

It was obvious how things would go as soon as the first Republican speaker, Senator Lamar Alexander, delivered his remarks. He was presumably chosen because he’s folksy and likable and could make his party’s position sound reasonable. But right off the bat he delivered a whopper, asserting that under the Democratic plan, “for millions of Americans, premiums will go up.”

Wow. I guess you could say that he wasn’t technically lying, since the Congressional Budget Office analysis of the Senate Democrats’ plan does say that average payments for insurance would go up. But it also makes it clear that this would happen only because people would buy more and better coverage. The “price of a given amount of insurance coverage” would fall, not rise — and the actual cost to many Americans would fall sharply thanks to federal aid.

His fib on premiums was quickly followed by a fib on process. Democrats, having already passed a health bill with 60 votes in the Senate, now plan to use a simple majority vote to modify some of the numbers, a process known as reconciliation. Mr. Alexander declared that reconciliation has “never been used for something like this.” Well, I don’t know what “like this” means, but reconciliation has, in fact, been used for previous health reforms — and was used to push through both of the Bush tax cuts at a budget cost of $1.8 trillion, twice the bill for health reform.

What really struck me about the meeting, however, was the inability of Republicans to explain how they propose dealing with the issue that, rightly, is at the emotional center of much health care debate: the plight of Americans who suffer from pre-existing medical conditions. In other advanced countries, everyone gets essential care whatever their medical history. But in America, a bout of cancer, an inherited genetic disorder, or even, in some states, having been a victim of domestic violence can make you uninsurable, and thus make adequate health care unaffordable.

One of the great virtues of the Democratic plan is that it would finally put an end to this unacceptable case of American exceptionalism. But what’s the Republican answer? Mr. Alexander was strangely inarticulate on the matter, saying only that “House Republicans have some ideas about how my friend in Tullahoma can continue to afford insurance for his wife who has had breast cancer.” He offered no clue about what those ideas might be.

In reality, House Republicans don’t have anything to offer to Americans with troubled medical histories. On the contrary, their big idea — allowing unrestricted competition across state lines — would lead to a race to the bottom. The states with the weakest regulations — for example, those that allow insurance companies to deny coverage to victims of domestic violence — would set the standards for the nation as a whole. The result would be to afflict the afflicted, to make the lives of Americans with pre-existing conditions even harder.

Don’t take my word for it. Look at the Congressional Budget Office analysis of the House G.O.P. plan. That analysis is discreetly worded, with the budget office declaring somewhat obscurely that while the number of uninsured Americans wouldn’t change much, “the pool of people without health insurance would end up being less healthy, on average, than under current law.” But here’s the translation: While some people would gain insurance, the people losing insurance would be those who need it most. Under the Republican plan, the American health care system would become even more brutal than it is now.

So what did we learn from the summit? What I took away was the arrogance that the success of things like the death-panel smear has obviously engendered in Republican politicians. At this point they obviously believe that they can blandly make utterly misleading assertions, saying things that can be easily refuted, and pay no price. And they may well be right.

But Democrats can have the last laugh. All they have to do — and they have the power to do it — is finish the job, and enact health reform.

see: http://www.nytimes.com/2010/02/26/opinion/26krugman.html

More, Brooks, 26 Feb NY Times: “Most of the credit goes to President Obama. The man really knows how to lead a discussion. He stuck to specifics and tried to rein in people who were flying off into generalities. He picked out the core point in any comment. He tried to keep things going in a coherent direction.

Moreover, he seemed to be trying to get a result. Republicans had their substantive criticism of the Democratic bills, but Obama kept pressing them for areas of agreement.”

see: http://www.nytimes.com/2010/02/26/opinion/26brooks.html

More:Eddie Reeves: “This wasn’t a draw, and anyone who thinks so missed the brilliant strategy.

It’s been a fait accompli for months now that if health care is to pass, it will do so solely with Democratic support. So the whole game for the administration is to shore up those nervous swing Midwestern and Southern Democrats whose votes are crucial but in jeopardy. Solidifying the support of these two dozen or so Members was the true aim of the summit.

In one fell swoop, the President altered the trajectory of the health care debate. First, merely by announcing this summit, he calmed the tsunami of negative press coverage that deluged him and his party after the GOP Senate victory in Massachusetts.

Next, the announcement took the spotlight off Democratic congressional leaders and put it on the President himself. That was smart, since, despite his travails of the last several months, the President’s personal popularity still rates highly among the American people, while that of Reid, Pelosi et al. comes in just north of dirty gym socks.

The gambles that Barack Obama took with this summit were three-fold:

Gamble #1 – Could he strike the right rhetorical balance between big-picture statesman and deal-seeking negotiator?

Gamble #2 – Could he use the summit in effect to replace Harry Reid and Nancy Pelosi as the leader of the health reform legislative push?

Gamble #3 – Could he count on the Republicans to continue to be the party of obstinacy and obstruction?

There is no question that the President won all three rolls of the dice.

see: http://www.huffingtonpost.com/eddie-reeves/healthcare-summit-another_b_477820.html

Emphasis mine

Understanding Movement Conservatives

Terrorist Attack: ” Something that can only occur during a Democratic Administration.”

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Movement Conservative Vocabulary

Big Government: ” Spending taxpayer money on the less fortunate.”

Death Tax: ” The Estate tax, which applies only to the wealthiest Americans.”

Tax Relief: ” Reduced taxes for the wealthiest several percent of Americans.”

Taxes: “A burden to waste money on roads, schools, and the infrastructure which a modern society requires.”

Terrorist: “Almost any person whose religion is not Christian – particularly Islam – and who disapproves of US middle East  policies.”

War on Terrorism: ” An excuse to suppress civil liberties, expand the military,  and give government funds to your friends by attacking countries whose people look different, and whose religion is non Christian.  Since the attacks create hostility, we can declare the victims ‘terrorists’, and self perpetuate this situation.”

Terrorist Attack: ” Something that can only occur during a Democratic Administration.”

Pro-Life: ” Its fine to kill innocent people of another country, or execute innocent victims for crimes they never committed, or let 45,000 die each year because they don’t have access to health care, but it is a crime to cause an abortion of a pre-human.”

Deficit spending: “Something that only Democrats cause” – see Big Government.

Family Values: ” Oppose gays; venerate guns; legislate morality; and vote Republican”.

Global Warming: “A commie conspiracy dis proven every winter in the Northern Hemisphere”.

Scientists: “People who think facts are superior to ancient dogma – often inconvenient.”

Only A Theory: “A label to use for inconvenient facts – see scientists. ”