Month: January 2011

Full Faith and Credit

John Chait sees some hope:

My guess is that Republicans are hearing from the business lobby that even risking a default would be totally unacceptable.

This because he notes Paul Ryan’s recent statement implicitly accepts that the debt ceiling will be raised (not can be, or might be):

“I want to make sure we get substantial spending cuts and controls in exchange for raising the debt ceiling”

Fair enough, Chait, and I’m sure they are already hearing it from the business lobby, but I think you’re forgetting the Tea Klanners in the back benches as well as the rump of the idiot Blue Dogs who all too often also think along similar, overly simplistic economic lines. We should never forget that a smaller and less organized contingent of these idiots managed to defeat the initial bailout, sending shockwaves through the markets that then and only then convinced them to do what was right (and not what played well with their foolish constituencies, most of whom want the US on a gold standard as soon as possible).

The problem with a similarly construed default bait-and-switch in which a symbolic first vote happens and then is undone some time later: the shockwaves in this case would be the end of the American economy as we know it. And there’d be no take-backs. It would simply be over. Once the genuine possibility of a default is even raised, you’ve basically defaulted. Why should anyone act otherwise in the aftermath of such a near-default? The thinking would immediately coalesce along the lines of: they didn’t actually pull the trigger this time, but we’re just one election away from something like that happening, and that’s more risk than we can bear. Get a few of these “I’m heading for the doors” mentalities together and our whole economic construct falls apart. Irrevocably.

They’re dumb enough, they’re bad enough, and dog gone it, people (will) hate them. But, rest assured, they’ll find a way to do it and will be laughing all the way to the gold deposit bank and calling it strict constructionism.

Job Killing vs. Actual Killing

Steven Pearlstein writes about the GOP’s latest tick: adding “job-killing” to the front of basically any Democrat-related noun. He finds just one teensy problem with the practice:

Repealing health-care reform, for instance, would inevitably lead to thousands of unnecessary deaths each year because of an inability to get medical care.

Although lack of effective regulation led directly to the deaths of 78 coal miners last year in West Virginia, Republicans continue to insist that any reform of mine safety laws is bad for miners’ employment.

Republicans also continue to oppose food safety legislation that could save the lives of hundreds of Americans killed each year by contaminated food, just as they oppose any regulation that would effectively keep assault weapons out of the hands of convicted criminals and narco-terrorists who kill thousands of innocent victims on both sides of the Rio Grande.

Indeed. Read the whole thing.

Job Killing vs. Actual Killing

“Fiscally responsible” is code for cutting taxes on rich people and gutting Social Security. Those are their goals, and that’s always been the case.

Duncan Black, simplifying it for you.
I’d only add that these same forces, and (of course) their media enablers, repeatedly include Social Security despite the fact that SS has its own funding source, is not in any imminent danger, and does not contribute to the deficit at all, nor will it for at least 45 years, even if we do nothing. But, by all means, it MUST BE DESTROYED by the end of the week or we all die. It’s the only possible conclusion for any serious person.

Milbank!

Well, I guess at least the GOP’s rampant and immediate hypocrisy is becoming something of a narrative over to the WaPo:

For two years, Cantor and his colleagues campaigned against high deficits. Now, in the new majority’s first major act, they plan to vote to increase the deficit by $143 billion as part of a repeal of health-care reform.

For two years, Cantor and his colleagues bemoaned the Democrats’ abuse of House rules to circumvent committees and to prevent Republicans from offering amendments. Now, Cantor confirmed on Tuesday, Republicans will employ the very same abuses as they attempt the repeal.

For two years, the Republicans complained about unrelenting Democratic partisanship. Now they’re planning no fewer than 10 investigations of the Obama administration, and the man leading most of those has already branded Obama’s “one of the most corrupt administrations” in history.

For two years, the Republican minority vowed to return power to the people. Now the House Republican majority is asking lobbyists which regulations to repeal, hiring lobbyists to key staff positions and hobnobbing with lobbyists at big-ticket Washington fundraisers.

Now, of course, Dana just can’t resist larding on a lot of straw man false-equivalency crap about being “just as arrogant and overreaching” as the recent Democrat Majority that was so clearly operated by and for Lord Satan. But I’ll take what I can get. The A|B comparison stuff runs first after all. And Lord Jesus and the MSM knows the innernets are making us stoopid and shortly as measured by span of attentions.

Milbank!

Shocking News, Everyone

The Washington Post Editorial Board is beginning, beginning mind-you, to think that maybe the GOP isn’t quite so serious about deficits after all:

Deficit financing is fine, it seems, when it comes to tax cuts. But that’s not all. Under the new rules, not only are tax cuts exempted from the pay-go concept, but the only way to pay for spending increases is with spending cuts elsewhere. No tax increases allowed – not even in the form of eliminating loopholes or cutting back on tax breaks. Of course, if you wanted to expand the loopholes, no problem. No need to pay for that.

Having made clear that no tax cuts need be paid for, the rules then take the extra step of specifying which deficit-busting tax cuts the new majority has in mind. They assume the continuation of all the Bush tax cuts; extension of the new version of the estate tax; and the creation of a big tax break to let “small businesses,” which can be expansively defined, take a deduction equal to 20 percent of their gross income.

Tax cuts for the wealthiest are fully protected. But tax help for those at the other end of the income spectrum? Forget it.

Shocking stuff. Can’t be right…Seems like I read something, somewhere about this, a while back…but that must have been all wrong.

At any rate, that $4T can easily be made up by trimming waste, fraud, and abuse inherent in the discretionary, non-defense budget…which totals around$1.4T for 2010. So, cutting four times that amount (over 10 years, solely to pay for new deficit spending to protect tax cuts for the richest 2%, and most definitely not current levels which would also require similarly scaled cuts in the very same time-frame) shouldn’t be any big deal. And, of course, Boehner’s ~$30M cuts in the House member’s own budgets gets us 0.75% of the way there already.

Shocking News, Everyone

Is Rahm Still Available?

Bill Daly, potential Obama Chief of Staff: [The Obama administration] miscalculated on health care. The election of ’08 sent a message that after 30 years of center-right governing, we had moved to center left — not left.
Ezra Klein: The health-care law the president signed was modeled off of the health-care law the Republican governor of Massachusetts had signed, which was in turn modeled off of the health-care law the Republicans in Congress had proposed in 1993. That’s “left”? And meanwhile, Daley thinks the country had moved substantially leftward over that period — “after 30 years of center-right governing, we had moved to center left” — but that even a compromise bill based on Republican ideas was too far left for the country, which would imply that the administration he served in the early-’90s, which pushed a more ambitious health-care bill when the country was further to the right, bordered on communist.
Lemkin: Yep, and do we really want anyone who has ever been quoted peddling that particular brand of horseshit running the President’s days in the inevitable “Eliminate ACA or we destroy the economy of the United States of America now and forever through default!” battle that will be coming on in, oh, five or six weeks? I say no, but then I’m less than skilled in multi-dimensional chess…

Rest Assured, Austan: It’s Just a Game

Michele Bachman (R, MN): at this point I am not in favor of raising the debt ceiling
Mike Kelly (freshman R, PA): [Raising the debt ceiling would be] absolutely irresponsible.
Lindsey Graham (R, SC): [Failing to raise the debt ceiling] would be very bad for the position of the United States in the world at large, [but I’ll gladly hold it hostage] until a plan is in place [for the nation’s long-term debt that satisfies whatever GOP hobbyhorses are in play on the day in question.]
Austan Goolsbee: This is not a game. The debt ceiling is not something to toy with. […] If we get to the point where you’ve damaged the full faith and credit of the United States, that would be the first default in history caused purely by insanity…. There would be no reason for us to default, other than that would be some kind of game. […] We shouldn’t even be discussing [default]. People will get the wrong idea. The United States is not in danger of default…. We do not have problems such as that. This would be lumping us in with a series of countries through history that I don’t think we would want to be lumped in with.
Lemkin: Which of these do you suppose will hold the media and popular opinion in its sway? This is probably the purest expression of GOP nihilism there is. They will destroy the country’s economic footing, irrevocably, and turn us into a land of gentle skin and pelt traders clustered down by the river if they have their way. At least that model eliminates any potential for minor to moderate increases in Social Security taxes on the wealthiest 2% of all future skin and pelt traders clustered down by the river; plus trade at those stands will likely be entirely conducted through valuable metal transfer. And that’s another big big win for their side. And winning the day is what it’s all about.

Put it this way: suppose that from here on out we average 4.5 percent growth, which is way above any forecast I’ve seen. Even at that rate, unemployment would be close to 8 percent at the end of 2012, and wouldn’t get below 6 percent until midway through Sarah Palin’s first term.

Paul Krugman brings the optimism while not-so-gently chiding his fellow media travelers’ insistence that all focus be upon what are essentially made up problems of deficit and government spending. Employment is the problem. Fix that and you can work on wage growth and lessening income inequality across the spectrum, lard on some tax reform, and all these so-called existential spending issues and all the hooha over the “right” size of government will evaporate.
Even less clear is why the media forever focuses on the self-funded, no deficit impact at all for at least 40 years Social Security program when they do a story on the horrors of deficits. It’s a story for another post, but maybe (just maybe!) it’s because they don’t plan on needing it. Medicare, on the other hand, they know they need, know is a deficit ballooner, but just don’t care so long as they get theirs. Very Patriotic.

No, Tax Cuts Do Not Pay for Themselves

thebroadermarket:

By Jordan Eizenga 

One can understand the attraction for thinking that tax cuts should stimulate higher rates of economic growth. With greater after tax income, workers are more likely to work harder and longer and, facing fewer taxes, entrepreneurs are in a better position to start companies and hire new workers. The problem is that the data does not bear this out either. For example, the Bureau of Labor Statistics, a statistical agency in the United States federal government, notes that over the past decade of lower tax rates, the number of business start-ups has actually declined.

Even if tax cuts generated increased economic growth rates, both conservative and liberal economists agree that economic growth would not increase anywhere near enough to offset the cost of the cuts.

The whole thing is absolutely required reading.

No, Tax Cuts Do Not Pay for Themselves