Why do the Republicans hate working Americans so much? And, why has President Obama consistently skipped over to their side by failing to stand up for the working classes as Democrats have historically done? And, why have the Congressional Democrats given the President a pass, except for a few?
David Michael Green calls Republicans—Regressives, and this agenda has persisted for over 30 years; therefore, this explains why those top 80% of income earners are suffering today.
Fareed Zakaria explains this very well. He said the biggest 50 factories are in China. The world’s tallest building towers in Dubai. The U.S. is losing patent applications, along with scholarly works published in scientific journals to China.
China is moving up the value chain, and working to become a world leader of medical research, among other successes. They are moving to become a worldwide game changer in a post-American world. Along with China, the wealth of other nations is expanding creating these growing nations as world economic centers.
Now, we are witnessing the bullying Regressives in Congress wanting significant cuts in the budget if the debt ceiling is to be raised. They have refused to consider any tax increases on the wealthy and their corporations, who rarely pay their tax rate anyway.
Most multi-national corporations pay less than you do. Many pay below 9%. Some pay zero percent in spite of huge profits.
The Regressives continue to say via their propagandistic message that a rise in taxes is a job killing action. They fail to say that when the nation taxed the wealthy at a 90% rate, our real economy was at its best and when it was dropped to its lowest level, under LilboyBush, the real economy collapsed to its worst!!
Since the tax rates have been the lowest we have experienced an evermore increase in the numbers of unemployed, underemployed and those no longer looking. For every single available job in the country, there are five people applying for that job.
Since consumer spending makes up 70% of our GDP, the demand-side has shrunk. The wealthy have more expendable income than anyone else, yet their spending has failed to pull the country out of the recession. So much for tax cuts as job killers. What is the truth is that tax cuts are actually job-killers, and not the other way around.
The public sector makes up around 33% of GDP and the Regressives want cuts there, or to transform those jobs into private sector jobs as dictated by the corporate elite, such as the Koch brothers, who want to steal more government dollars for themselves.
This is what an Oligarchy is. Vladimir Putin did just what the Regressives want to do under his Communist Party reforms. Are the Regressives actually closet modern Communists?
The Regressives are Hooverites wanting to vacuum up all the public sector dollars into their private sector bank accounts.
The Regressives fail to say that the current debt-to-GDP is 90%, yet the Brits have theirs at 110%, and Japan’s debt-to-GDP is at 220% and continue to have a strong economy and can still borrow on the world market successfully in spite of this very high debt level.
The Regressives have failed to tell the American people that if the Bush tax cuts were eliminated the Treasury would find $3.9T more dollars over the next ten years in their account. This change would drop our debt to the bottom of the debtor-industrialized nations. And, if we don’t raise the debt ceiling, the nation’s economy would be placed at an extremely high risk level, as well as negatively affecting the rest of the world with a decline in demand, and higher borrowing rates—a possible doubling of rates. The increase would cost the U.S. $500B more and increase the debt-to-GDP by another 15%.
The Regressives must hate America, as well!
The U.S. has never defaulted on its debts. Congress has already mandated to cover its debts via the Constitution (14th Amendment).
If Simpson-Bowles would be enacted, we would see a drop of our debt-to-GDP to 2%, then our debt level would drop to the second lowest debt-to-GDP in the world!!!!!!! [in spite of it being a Regressive's dream-come-true.]
Fareed Zakarea continued to report that the No-Tax moronic bullies who regurgitate nonsense have failed to say that closing the tax loophole gap and cutting of the deficit won’t do the fix. The Regressives say that closing the tax loopholes is a tax increase when actually loopholes are only “gift scams” given to the wealthy elite to avoid paying taxes.
The Regressives have failed to explain to those dumb Americans who proclaim they want government spending reduced receive public benefits in the form of Social Security, Medicare, Medicaid, GI benefits, supplemental health benefits, mortgage tax deductions, student loans or grants, energy assistance grants, and other health benefits, as well as other government subsides.
They have failed to say that 40% of the public sector unemployed are teachers, and that 500,000 of those who make up the public sector unemployed are not only teachers, but are fire and police workers, as well as librarians. Therefore, if cutting those jobs over the last three years has been good for the economy, then prove it!
James K. Galbraith wrote, “Social Security is NOT a government purchasing program. It therefore takes nothing directly from the private sector. What it does, is provide insurance: it protects workers from poverty in old age, whether or not their families would otherwise be willing and able to support them. Along with Medicare and Medicaid, Social Security is a powerful protector of the entire working population—young or old.
It distributes purchasing power, in loose relation to past earnings, in a way that meets the basic needs of a larger number of Americans who would otherwise, in many millions of cases, be destitute or medically bankrupt.
The notion that cutting Social Security would help keep interest rates down is absurd because interest rates are set in a way that has no relationship at all to the scale of Social Security, Medicare, or Medicaid.” (Galbraith)
The Regressives who want to raise the recipient age of Social Security have failed to say that by lowering the age of “access to Medicare would work quickly to rebalance the labor force, reduce unemployment and futile job searching among older workers while increasing job openings for the young. It is the application of common sense. And, unlike all the pressures to enact long-term cuts in these programs, it would help solve one of today’s important problems right away.” (Galbraith)
Galbraith continued to make the point that the President, who claims to be a member of the Democratic Party, has failed the following points:
"First, there is the claim that we face a fiscal crisis, which is a big untruth.
Second, a concession in principle that we should deal with that crisis by enacting massive cuts in public services on one hand, and in vital social insurance programs on the other. This is an arbitrary cruelty.
Third, a refusal to stand on the strong ground of the Constitution, against those whose open and declared purpose is to tear that document and the public credit to shreds." (James K. Galbraith, from Alternet.org, "Deficit Predators: Everything You Need To Know About The Twisted, Dangerous Debt Ceiling Fight, 7-11-11.)
Paul Krugman wrote: "...voodoo economics has taken over the G.O.P.
Supply-side voodoo — which claims that tax cuts pay for themselves and/or that any rise in taxes would lead to economic collapse — has been a powerful force within the G.O.P. ever since Ronald Reagan embraced the concept of the Laffer curve. But the voodoo used to be contained. Reagan himself enacted significant tax increases, offsetting to a considerable extent his initial cuts.
Last year Mitch McConnell, the Senate minority leader, asserted that the Bush tax cuts actually increased revenue — a claim completely at odds with the evidence — and also declared that this was “the view of virtually every Republican on that subject.”" ("Getting To Crazy", 7-14-11, NYT)
This is what we are dealing with today---sadly laughable, political manipulation by moronic Congressional lifers, such as Mitch-the Scarecrow (no brain)-McConnell wanting the golden parachute paid for by the taxpayers.
This is from Phil Davis's Istablog:
Intro by Ilene at Phil's Stock World
Michael Hudson argues that there is no real need to raise the debt ceiling (below). Rather than slashing social security, medicare and other social support programs, we could cut spending that is funding our various wars, end Wall Street bailouts, claw back outrageous profits from fraudsters acting through the TBTF banks, and stop pandering to other special interest groups. We could raise taxes on the ultra-wealthy - the top 0.1% - those who measure their monthly income and capital gains (non income for tax purposes) in millions. But there is no political will, or big campaign contributors, that will support a real solution. The issue is another example of creating a crisis so that emergency measures can be rammed through à la Rahm Emanuel's famous statement about never letting a good crisis go to waste.
As Jim Quinn of Burning Platform points out: "We will hit $20 trillion in debt by 2015. That is a lock. Total Federal government revenue today is $2.175 trillion. We spend approximately $1 trillion per year on our military related adventures, or 46% of our total revenue. If interest rates are 5% in 2015, we will spend $1 trillion on interest. If rates are 10%, we will spend $2 trillion on interest.
"Do you get the picture? An unsustainable trend will not be sustained. We have two choices. We can proactively address the problem or just wait for the collapse of our economic system. This debt ceiling reality show is all the proof I need. Our leaders will choose to wait. It won’t be long." (THE SHOW MUST GO ON)
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How much do we spend on military? According tousgovermentspending.com, we spent an estimated 848.11 Bn in 2010.
According to Warresters.com, we spend even more on military as a whole. Its numbers include past expenses: "'Current military' includes Dept. of Defense ($653 billion), the military portion from other departments ($150 billion), and an additional $162 billion to supplement the Budget’s misleading and vast underestimate of only $38 billion for the 'war on terror.' 'Past military' represents veterans’ benefits plus 80% of the interest on the debt.* (*Analysts differ on how much of the debt stems from the military; other groups estimate 50% to 60%. We use 80% because we believe if there had been no military spending most (if not all) of the national debt would have been eliminated.)"
For 2009, Warresters calcuated: Total Outlays (Federal Funds): $2,650 billion, MILITARY: 54% and $1,449 billion, NON-MILITARY: 46% and $1,210 billion.
Transcript
PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. And in Washington the drama over whether the United States Congress will raise the debt ceiling or not continues. The Republicans defend the need to cut spending and get government under control and the Democrats standing, defending the people’s social programs–at least that’s the theater that’s being played out. What is the reality? Well, for his take on all this, we’re now joined by Michael Hudson. Michael is a distinguished professor at the–distinguished research professor, I should say, at the University of Kansas City. He’s the author of Super Imperialism: The Economic Strategy of American Empire. And he joins us again from New York City. Thanks for joining us, Michael.
MICHAEL HUDSON, RESEARCH PROF., UMKC: Thank you, Paul.
JAY: So, what do you think? Good versus evil. We’re playing out the debt struggle and the debt ceiling issue. And if we don’t raise the debt ceiling, we’ll be in the apocalypse. What do you make of it all?
HUDSON: I think it’s evil working with evil. I think the whole argument in Congress is a charade that was pretty much set up two years ago, when the Obama administration first took office and Mr. Obama appointed the reduction commission of Republican Senator Simpson and Clinton manager Bowles. When Mr. Obama went on television two days ago, he said he’s hoping to reach a compromise, which is pretty much what this commission said. And the people he appointed to the commission to head it were the people who said, number one, cut back Social Security. If you have to choose between paying Social Security and Wall Street, pay our clients, Wall Street. And secondly, cut back Medicare. But most especially, cut back Medicaid to the poor. You have to give money to the job creators, mainly the financial managers who are closing down firms, downsizing, and outsizing–outsourcing on labor. They’re called job creators instead of–to the people who actually get work and spend money on goods and services, which is what’s keeping the market going in business.
JAY: Now, somebody who defends the Obama administration would probably say, number one, Obama was dealing with the political reality in America that public opinion and the press and the media were heavily on the side that government needs to be cut. And they would also probably make the argument that there are inefficiencies that could be cut. I mean, Obama did at least early on in his administration say–talk about the need for stimulus. So that certainly his waned. Do you think there’s any merit to some of that defense?
HUDSON: I think that words–Mr. Obama’s great with words. He says one thing, and he does the opposite. Here’s basically the charade that’s happening when he’s trying to be reasonable. In order for him to move way to the right and to continue the Bush administration policies, he needs the Republicans to move even further to the right. They have to be so extreme that they’re perceived as the crazies. And then Mr. Obama can say, look, they will give Mr. Obama room to move way to the right, because he’ll say, I’m not as crazy as Michelle Bachman. I’m not as crazy as Boehner. I’m not as crazy as the Republican leaders. But they were going to close down the government, and that would have really hurt us. And we have to–we do have to cut what’s inefficient. What’s inefficient? Paying for people on Medicaid. Got to cut it. What’s inefficient? Medicare. Got to cut it. What’s inefficient? Paying Social Security. What is efficient? Giving $13 trillion to Wall Street for a bailout. Now, how on earth can the administration say, in the last three years we have given $13 trillion to Wall Street, but then, in between 2040 and 2075, we may lose $1 trillion, no money for the people? That is absolutely crazy. So when we talk about public opinion, we’re talking not about public opinion that watches your Real News Network; we’re talking about the public opinion of Fox TV and sort of the echo chamber that says–that presents the financial sector as job creators rather than job destroyers.
JAY: Well, what would you think are the real repercussions if, let’s say, they don’t raise the debt ceiling now in August? Let’s say Obama calls the Republicans’ bluff. It seems to me it is quite a bit of a bluff, seeing as the US Chamber of Commerce has told the Republicans they have to vote in favor of raising the debt ceiling. It’s kind of hard to believe that in the long run the Republicans are going to defy the business and banking community. But let’s say they play this out and Obama says, okay, we’re not going to savage government spending the way you want us to, and if you want to not–if you want to force us into this quote-unquote “abyss”, we’ll go there because it’s on you. So what is the abyss? I mean, is this really such a serious issue?
HUDSON: It’s not about the abyss at all. It’s not about the debt ceiling. It’s about making an agreement now under an emergency conditions. You remember what Obama’s staff aide Rahm Emanuel said. He said a crisis is too important to waste. They’re using this crisis as a chance to ram through a financial policy, an anti-Medicare, anti-Medicaid, anti—selling out Social Security that they could never do under the normal course of things. They’re using this to stampede the Democrats.
JAY: Yeah, I understand the point. What I’m saying is is, you know, whether Obama would want an alternative policy or not. What if he says to Republicans, okay, do your worst, we’re not going to go down this road? What would be the repercussions of him saying–. I mean, I think the Republicans, personally, would more or less cave in, because they’re not going to defy the whole business community. But let’s say–. So, what happens? So they don’t raise the debt ceiling. So, what happens next?
HUDSON: Then, obviously, they have to cut back some kind of government spending. What are they going to cut back? They’re not going to cut back the war in Libya. They’re not, because that’s–.
JAY: They have to cut back because they can’t borrow more. That’s the point you’re making.
HUDSON: Right. They’re going to have to decide what to cut back. So they’re going to cut back the bone and they’re going to keep the fat, basically. They’re going to say–they’re going to try to panic the population into acquiescing in a Democratic Party sellout by cutting back payments to the people–Social Security, Medicare–while making sure that they pay the Pentagon, they pay the foreign aid, they pay Wall Street.
JAY: Yeah. But what–I hear you. But what I’m–I’m saying, what could be an alternative policy? For example, don’t raise the debt ceiling. Number two, raise taxes on the wealthy. Number three, cut back military spending. I mean, there are ways to do this without having to borrow more money, aren’t there?
HUDSON: Of course. There’s no need at all. Of course they’d–. First of all, the Federal Reserve can basically print money. And whether they count this as the debt or not, they can say this is off-balance-sheet activity. They can technically sell Treasury bonds to themselves and say this is–. They can do Enron-type accounting if they wanted to.
JAY: [crosstalk] probably is some of that going on anyway. But go on.
HUDSON: Of course they could cut back the fat. Of course what they should do is change the tax system. Of course they should get rid of the Bush tax cuts. And the one good thing in President Obama’s speech two days ago was he used the term spending on tax cuts. So that’s not the same thing as raising taxes. He said just cut spending by cutting spending on tax cuts for the financial sector, for the speculators who count all of their income that they get, billions of income, as capital gains, taxed at 15 percent instead of normal income at 35 percent. Let’s get rid of the tax loopholes that favor Wall Street.
JAY: I mean, this is, I guess, the point you were making at the beginning of this segment. Obama has bought into the only solution is some form of cutting. The alternative strategy’s not even being talked about. So of course he loses the battle of public opinion, because he’s not fighting it.
HUDSON: That’s correct. And that shows where his actual beliefs are. Lawyers very rarely understand economics anyway. But Mr. Obama has always known who has been contributing primarily to his political campaigns. We know where his loyalties lie now. And, basically, he promised change because that’s what people would vote for, and he delivered the change constituency to the campaign contributors...
***
S & P: America Could Default Even if Debt Ceiling is RaisedKnee-jerk conservatives may say, "yes, we have to slash all social support programs like unemployment benefits and food stamps".Knee-jerk liberals might say "raise taxes instead of cutting any spending".But the truth is that plugging the major holes in our economy is more important than either cutting spending or raising taxes.And stopping bailouts and giveaways for the top .1% of the richest elite (which weaken rather than strengthen the economy, as shown here, here and here) and slashing spending on unnecessary imperial wars (which reduce rather than increase our national security, as demonstrated here and here) is what the budget really needs.As I wrote last year:Why aren't our government "leaders" talking about slashing the military-industrial complex, which is ruining our economy with unnecessary imperial adventures?And why aren't any of our leaders talking about stopping the permanent bailouts for the financial giants who got us into this mess? And see this.And why aren't they taking away the power to create credit from the private banking giants - which is costing our economy trillions of dollars (and is leading to adecrease in loans to the little guy) - and give it back to the states?If we did these things, we wouldn't have to raise taxes or cut core services to the American people.
I pointed out the next month:If there's any shortfall, all we have to do is claw back the ill-gotten gains from the fraudsters working for the too big to fails whose unlawful actions got us into this mess in the first place. See this, this, this, this and this.
***
Matt Taibbi agrees with Michael Hudson that the debt ceiling debate is a charade and that Obama's move to the right is a political strategy that has nothing to do with solving, let alone identifying, the real problems in our economy.
Obama Doesn't Want a Progressive Deficit DealExcerpts:
But what is becoming equally obvious, to both sides, is that the Obama White House is using this same artificial calamity to pitch its own increasingly rightward tilt to voters in advance of the 2012 elections.
It has been extremely interesting in the last weeks to see observers on both sides of the aisle make this point. Just yesterday, the inimitable New York Times conservative Ross Douthat listed Obama's not-so-secret rightward push as a the first in a list of reasons why the Republicans should dig in even more, instead of making a sensible deal:
Barack Obama wants a right-leaning deficit deal. For months, liberals have expressed frustration with the president’s deficit strategy. The White House made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts last December. It pre-emptively conceded that any increase in the ceiling should be accompanied by spending cuts. And every time Republicans dug in their heels, the administration gave ground.The not-so-secret secret is that the White House has given ground on purpose. Just as Republicans want to use the debt ceiling to make the president live with bigger spending cuts than he would otherwise support, Obama’s political team wants to use the leverage provided by those cra-a-a-zy Tea Partiers to make Democrats live with bigger spending cuts than they normally would support.
[...]
This is interesting because just last week, the liberal opposite of Douthat at the Times, Paul Krugman, came to the same conclusion:
It’s getting harder and harder to trust Mr. Obama’s motives in the budget fight, given the way his economic rhetoric has veered to the right. In fact, if all you did was listen to his speeches, you might conclude that he basically shares the G.O.P.’s diagnosis of what ails our economy and what should be done to fix it. And maybe that’s not a false impression; maybe it’s the simple truth.
[...]
The blindness of the DLC-era "Third Way" Democratic Party continues to be an astounding thing... They've abandoned the unions-and-jobs platform that was the party's anchor since Roosevelt, and the latest innovations all involve peeling back their own policy legacies from the 20th century. Obama's new plan, for instance, might involve slashing Medicare and Social Security under "pressure" from the Republicans.
Read more here: Obama Doesn't Want a Progressive Deficit Deal | Rolling Stone Politics | Taibblog | Matt Taibbi on Politics and the Economy.
As I pointed out yesterday, the same thing is true of the sticky-price CPI, which is arguably the conceptually closest thing to what we really mean by core inflation:
So, terrible growth prospects; low inflation; oh, and low interest rates, with no sign of the bond vigilantes. Ordinary macroeconomic analysis tells you very clearly what we should be doing: fiscal expansion and monetary expansion by any means we can manage; in fact, the case for a higher inflation target pops right out of just about any model capable of producing the kind of mess we’re in.
And what are we talking about in policy terms? Spending cuts and an end to monetary expansion.
I know the arguments — fear of invisible bond vigilantes, fear that 70s-style stagflation is just around the corner despite the absence of any evidence to that effect. But why do such arguments have so much traction, while everything economists have spent the last three generations learning is brushed aside?
One answer is that macroeconomics is hard; the idea that if families are tightening their belts, the government should do the same, is as deeply intuitive as it is deeply wrong.
But the susceptibility of politicians — including, alas, the president — and pundits to these wrong ideas demands a deeper explanation.
a wide refocusing of the mechanisms of our society towards the crucial obsession of oligarchs: wealth and income defense.
That has to be right. It doesn’t necessarily take the form of pure cynicism; it’s more a matter of the wealthy gravitating toward views of economic policy that make immediate sense in terms of their own interests, and politicians believing that only these views count as Serious because they’re the views of wealthy people.
But the upshot is terrible: more and more, this really does look like the Lesser Depression, a prolonged era of disastrous economic performance. And it’s entirely gratuitous.
Dr. Drew Weston illustrated how the people are being sold-out through the following lies. Dr. Weston wrote, " whatever ails you, (whether budget deficits, unemployment, or kidney failure), the solution is tax cuts for the rich.
The second is the belief (this one true) that whatever ails them can be fixed within any two-year election cycle by an infusion of venture capital from the Chamber of Commerce, Wall Street, Big Oil, The Pharmaceutical lobby, or whatever interests could be served or threatened by some piece of legislation. These venture firms now require a controlling interest of 51% of an elected official (whether Democrat or Republican), but the futures market for political votes seems to be the only market that is working efficiently in America today.
And third, belief that defines the Republicans [Regressives] is that deficits present a grave threat to our way-of-life--except when Republicans are in power, at which point deficits are deficit-neutral. [Or, don't matter.] This deep and abiding concern with deficits (under Democratic administrations) stands in sharp contrast to their relative indifference to unemployment, which they consider a luxury good consumed by people with too much time on their hands (after all, their unemployed), whose "whining" is really annoying to lawmakers, lobbyists and Washington pundits who want to get on with the real business of cutting budgets, and who have more important things to worry about than people who, for God's Sake, can't even keep a job now, can they." ("The Three Wings of the Republican Party", Huffington Post, 6-19-11.)
President Obama has moved right, instead of left. He has moved to challenge the Regressives who are being pushed into the far-right, along with the Tea Party cra-zz-ies. The question will be how will Obama's base feel about being pushed into austerity when it is totally unnecessary? Will they support a candidate who wants to continue to squeeze them from all sides leaving them on the edge of bankruptcy, or squeezing newly graduating young workers sitting on the sidelines for years to come.
Many are saying this recovery from the abyss, which has been orchestrated by the Regressives for over 30 years, will remain damaged for several years to come.
The world, as a whole, is engaged in an ever-increasing sovereign debt accumulation. It is at its peak, as we speak.
In spite of simple solutions to ease the debt crisis here at home, President Obama is hell-bent on cutting the bone instead of the fat.
http://eye-on-washington.blogspot.com
P.S.
Listen to the interview with Fareed Zakaria by Terry Gross on her Fresh Air program.
P.S.
Listen to the interview with Fareed Zakaria by Terry Gross on her Fresh Air program.
