Author: lemkin

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

Re: Several of The Big Lies

dont-bs-me-bro:

Sorry, you are free to believe what you like, but this graph proves none of that, because it only goes back to Jan. 2010. It ignores the first 11 months of Obama’s adminstration, and seasonal changes in employment from quarter to quarter, year over year. It simply is not possible to examine just the most recent 11 months of data and draw any kind of big picture conclusions about the economy.

People choose cutoff points in graphs for a reason, to amplify the message they are trying to send. Let’s see some graphs that go back to 2007, or even earlier, for some context, and then we can debate facts about the economy.

So that takes care of (A) and (B). 

Or, not. Does this graph go back far enough for you? Total non-farm jobs under Bush and Obama:

Same conclusion: The United States under Obama is creating jobs. Period. Fewer than desirable, but job creation nonetheless.

You continue:

As for ©, of course government-funded jobs are not real jobs, because we have to fund them. This distinction causes confusion among those who don’t understand the difference between “real” jobs and government, taxpayer-funded jobs.

A real job is created when a private citizen or business dips into its own assets, or takes out a loan, to hire a person.

This is unadulterated horse-shit. A job is a job. A person is hired to perform a task in exchange for money. Period. They are jobs every bit as real as any other. They transfer money, also just as real, directly into the broader economy. That money spurs a larger overall economy. More people are hired. Lather, rinse, repeat: the Federal Government gradually reduces support as the private markets recover and can employ more people. I’m not sure why this is remarkably hard to understand other than the fact that it demonstrably works (see original three-part graph) and yet is incompatible with a worldview that states that no action of government, large or small, can be for the betterment of society. Ever.
All that aside, though, it is indisputably true that federal/state/local government employment has been distinctly reduced under Obama. Perhaps this graph has a sufficient time scale to pass your ever-so-sensitive BS detector?

That’s government employment relative to population. While the government did indeed get a lot bigger under such noted socialists as DD Eisenhower, it has since shown no trend at all relative to population. There at the very end, under Obama, you’ll note both the census spike and a distinct downward slide.

But, feel free to believe whatever nonsense you are being peddled. These are just the rather inconvenient facts.

Me Talk Presidential

Great inside tale from Matt Latimer, a former Bush speechwriter, set in and around the time what ultimately became TARP took shape:

When White House press secretary Dana Perino was told that 77 percent of the country thought we were on the wrong track, she said what I was thinking: “Who on earth is in the other 23 percent?” I knew who they were—the same people supporting the John McCain campaign.

Me Talk Presidential

Several of The Big Lies put to, er, lie in one graph.

A) “No jobs have been created in the Obama administration, stimulus or otherwise,” unless, that is, you count all those jobs that have been created. Fewer than necessary to be sure, but indisputably there are jobs being created and tasks done in exchange for money.

B) “Government has exploded in the Obama administration” unless, of course, you exclude temporary census workers or set utterly arbitrary start/end dates to capture peak census-hiring (but not their subsequent and prompt return to zero). In fact, line 3 clearly shows government has indeed gotten smaller (as measured by employment) under Obama. This also holds as a percent of GDP, but that’s another graph.

C) “Government-funded jobs aren’t ‘jobs’ at all,” until you start to think about that line being parallel to the private jobs line, and where that, collectively, would put the overall employment line relative to population growth.
I mean, if you’re going to do crazy things like employ people by funding and then building infrastructure projects until the economy recovers, and then count those people as actually employed, well, then I think we know you’re a dirty fucking hippy who needs to shut the fuck up and worry a lot more about the bond vigilantes who are going to show up any day now to get 10-year bond interest rates up way, way above 2%, you can be sure. So there. Any. Day. Now.

…nobody, and I mean nobody, in a position of influence within the GOP cares about deficits when tax cuts for the affluent are on the line. Deficit hawkery is just a stick with which to beat down social programs.

Paul Krugman, reacting to the shocking news that the rising GOP House Majority will be moving to change the rules in ways “clearly designed to pave the way for more deficit-increasing tax cuts in the next two years. These rules stand in sharp contrast to the strong anti-deficit rhetoric that many Republicans used on the campaign trail this fall […] these new rules […] could have a substantial impact and risk making the nation’s fiscal problems significantly worse.”
As Krugman says: these guys don’t care about the deficit, now or ever. They simply use concern to whip up anger against then-as-now non-existent “Cadillac Queens of Welfare” and whatnot such that ever more wealth can be transferred to the richest of the rich. And rest assured: they won’t be satisfied until they have it all. It’s what is going on in corporate America, and it’s what is going in political America. Well, such as the two spheres are even distinguishable anymore it’s what’s going on…