Category: Uncategorized

Upstairs/Downstairs

John Kyl (R, AZ), Saturday: [tax increases are] the wrong medicine for our ailing economy, […] [any possibility of a potential future increase only serves to] put a wet blanket over job creation and economic recovery.
John Kyl (R, AZ), Sunday: The payroll tax holiday has not stimulated job creation. We don’t think that is a good way to do it. [Thus we want to raise taxes on every American that currently receives a paycheck]. The best way to hurt economic growth is to impose more taxes on the people who do the hiring. As a result, the Republicans have said, ‘Don’t raise the existing tax rates on those who do the hiring.’ [That is to say, the 1%. Who aren’t, uh, actually hiring. But still. Don’t raise THEIR taxes. Raise the 99%’s taxes. Only that will get the old economy going again!]
Lemkin: Again, the MSM will see no dissonance whatsoever in these positions. Of course raising taxes on most everyone in the country to avoid a tiny tax increase on a tiny fraction of the country makes the best economic sense in an aggregate demand-based economic downturn. What other conclusion is even possible given this data? Surely both sides are at fault for low aggregate demand in the 99%; this is only fixable if both sides agree to lower taxes on the 1%. Again: what other conclusion is even possible?

The Rub

In all the rush to cast a pox on both houses, most Serious People seem to be missing the underlying point here.

The Republicans want tax rates to remain at current (i.e. Bush/Obama tax cut) levels or to be lowered. To do that without collapsing the Federal Government, they have to end Medicare. Period, the end, no other way to do it. Zero the non-military discretionary budget and you still aren’t getting particularly close. Thus, this:

…committee Republicans offered to negotiate a plan on the other two health-care entitlements–Medicare and Medicaid–based upon the reforms included in the budget the House passed earlier this year [this is what is commonly referred to as the “Ryan plan”; it ends Medicare but leaves in place a voucher system which seniors would use to try to buy coverage on the open market. Good luck with that, seniors. Anyone paying attention will recall that this is the issue Medicare was created to solve. At any rate, under Ryan’s plan everyone that fails to find coverage they can afford with regard to the differential between voucher and actual cost: go die in the streets.]

Republicans on the committee also offered to negotiate a plan based on the bipartisan “Protect Medicare Act” authored by Alice Rivlin, [which would allow seniors to] choose from a list of Medicare-guaranteed coverage options, similar to the House budget’s approach–except that Rivlin-Domenici would continue to include a traditional Medicare fee-for-service plan among the options.

So, the GOP “choices” here are: completely voucherize and functionally end Medicare under the Ryan plan, or vastly extend Medicare Advantage and get to Ryan’s plan stepwise. After all, Medicare Advantage has bee such a smashing success; it’s the plan that delivered a ~14% more costly version of Medicare, the program it sought to “revolutionize.”

Democrats, on the other hand, believe that a return to Clinton era tax rates fundamentally solves the near- to mid-term budget issues. This is widely known to be true; it is also known to be true by Republicans, who are simply using the current “crisis” (which, not coincidentally was invented by them during the run-up and denouement of the debt ceiling “crisis”) as an excuse to attempt various long-held policy goals, most notably: ending Medicare.

Long term issues in our budget do indeed exist, these can only be handled by bringing health care costs under control; Democrats wish to work towards that goal, Republicans choose to address the issue by simply ending that program entirely. This is the point at which it’s worth noting that, if we paid for medical care the per-capita rates that our next-nearest “competitor” pays, we’d be facing surpluses as far as the eye can see. Right now.
But, a massive step in that “solvency” direction would, in fact, be Medicare for all. Instead, the GOP demands Medicare for none or they blow up the country. Those are your two GOP-approved choices. They simply don’t want to talk about it in public, because eliminating Medicare is a wildly unpopular position to hold. You’d think someone in the media would mention something as explosive as this from time to time. Doesn’t ever seem to come up.

Clearly, though, both parties are equally at fault here. Truly a triumph of 21st Century Journamalism.

A country that has been now since 1963 relentlessly in the courts driving God out of public life shouldn’t be surprised at all the problems we have. Because we’ve in fact attempted to create a secular country, which I think is frankly a nightmare.

Newt Gingrich, disgraced former Speaker of the House and occasional front-runner in the race for the GOP nomination of 2012, sharing his thoughts on what the real problems facing the country are.
Last I checked, the founders were the ones that attempted to create a secular country. What part of “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof” is not entirely clear to these people? You get to have all the religion you want, Newt, and be sure to include infinite free divorces for all God-fearing Men in your personal catechism. But, guess what? You don’t get to establish Your Personal God at the head of our government, no matter how well meaning you may or may not be. There is simply no other way to interpret the Constitution on this. Which hasn’t stopped them from trying.

Do nothing, Congress. Ezra Klein and EJ Dionne both write today about the benefits of simply letting various existing policies expire…doing so would net $7.1 TRILLION in deficit savings over the same decade that the “Super-committee” can’t find a way to reliably extract $1T. This path requires no votes, it requires no legislation, it requires no GOP assistance of any kind. Gridlock is all that’s required to make it happen.
So why is it no Serious Person (to whom deficits are, always have been, and always will be the preeminent policy question come-what-may) ever talks about the biggest deficit reduction plan currently out there, a plan that outstrips all other extant deficit plans by several orders of magnitude? Because they don’t actually care about deficits. None of them do. Because deficit reduction is not the goal. The GOP and their media enablers do not care about deficits. They care about eliminating social spending in this country to lower taxes on the richest 1%. Period. Everything and anything else that happens is collateral damage to that desired policy outcome.

Gridlock works. Gridlock will help America. Relying on gridlock is the best possible negotiating tool for Democrats. Period. Be prepared to end the Bush tax cuts. All of them. Be prepared to end the “doc fix.” All of it. Be prepared to end it all. Then you begin to drive policy decisions and have actual governing authority to get jobs bills and other things done.

Instead, they will, of course, continue to negotiate with themselves and parrot right-wing talking points. This is why they fail.
Just sit there quietly and let it all expire. Whenever the GOP talks about deficits, you bring up the $7T you are cutting deficits by over the next decade.
When the GOP gets tired of that, realizes you are serious about this, and is ready to talk, they’ll come to you. Then you set the terms. Then you begin to govern. This is how politics works. The Democrat seems to have largely forgotten this. Again: this is why they fail.

Here’s how it works- Obama says something, Republicans completely lie about it, the media notes the lie is catching on without ever actually calling it a lie, the Democrats have to waste resources and respond to the lie, Republicans double down, this sucks the life out of everything else for a couple week, and in ten years this will be conventional wisdom that Obama called Americans lazy, just like Al Gore claimed to invent the internet and the rest of the bullshit that wingnuts have adopted as received truths (snow in November refutes climate change, the more you cut taxes the more government revenue you raise, if a bombing campaign does not make people like you it means you didn’t bomb hard enough or your targeting was off, liberals lost Viet Nam, waterboarding isn’t torture, etc).

We’re so fucked as a nation.

John Cole, to whom I’d only add that, should Obama fail to win reelection in 2012, his decision to nationally televise the “Lazy Speech” from the Oval Office while wearing an overly earth-toned, almost certainly focus group chosen sweater will be held out as a prime reason American opinion crystallized against him.
That these are easily proven to be lies and utter fabrications does not matter. Recall Cokie’s Law: if it’s out there, it must be treated as fact, uncritically and forever. Anything else smacks of journalistic bias.
And yes, we are so fucked as a nation.
Source: balloon-juice.com

Tanned, Rested, and Ready

Brad DeLong gets emails:

I’m pretty sure if Aquaman dropped into the race right now and just said “Washington outsider” and “regulations are killing us” for two weeks, he would be the frontrunner for the Republican Presidential nomination through December.

Sure, sure. But he’d just as quickly be inexplicably captured by some two-bit villain with no powers to speak of and ultimately miss the early primaries while awaiting rescue. So save up all your Aquaman dreams for 2016 when things really open up. He and Huntsman will really make a run of it.

Tanned, Rested, and Ready

Frankly, half of [the automatic cuts] is aimed at national security. Leon Panetta, our Secretary of Defense says that will hollow out our defense. So number one I would be committed to keeping the $1.2 [trillion in automatic cuts]. We’ve got 13 months to find a smarter way to do it.

Jeb Hensarling, (R, TX) GOP chair of the “Super-committee” reassuring everyone that the automatic cuts scheduled by the all but inevitable failure of the “Super-committee” will, in fact, be coming out of Medicaid, Social Security, and Medicare. The latter two are the only places left to get this kind of money, assuming the non-military discretionary budget isn’t simply zeroed. Medicaid will be included simply out of spite.
Anyone bothered by this funding structure can (and will) kindly go die in the streets.
But Obama sure uses a lot of drones!!!! Drones, everyone, DRONES!!! Must vote for Ron Paul or other meaningless candidate because there’s no moral imperative at all implicit in keeping a social safety net in place for millions by keeping the semi-sane in charge of at least some part of the government post-2012.
Source: tpmdc.talkingpointsmemo.com

the current hand wringing about the administration’s pledge [not to raise sub-$250k tax rates] feels like a distraction…especially given that we could achieve medium term sustainability without going there.

Jared Bernstein agrees that we can achieve neutral debt/GDP ratios without savaging middle class rates. Serious People sure love to wring hands. It’s as though they have a vested interest in the tax rates of the trans-$250k class. Oh, right.

Again with the Middle Class

It’s almost as if our media aristocracy of inbred Serious People have a vested interest in seeing to it that the middle class, and only the middle class, gets soaked in any economic “compromise.” Amidst reacting to a particularly poor NYT Magazine piece, Dean Baker nails it:

…the piece too quickly dismisses the possibility of getting substantial additional tax revenue from the wealthy. It presents the income share for those earning more than $1 million as $700 billion, saying that if we increase the tax rate on this group by 10 percentage points (from roughly 30 percent to 40 percent), then this yields just $70 billion a year.

However, if we lower our bar slightly and look to the top 1 percent of households, with adjusted gross incomes of more than $400,000, and update the data to 2012 (from 2009), then we get adjusted gross income for this group of more than $1.4 trillion. Increasing the tax take on this group by 10 percentage points nets us $140 billion a year. If the income of the top 1 percent keeps pace with the projected growth of the economy over the decade, this scenario would get us more than $1.7 trillion over the course of the decade, before counting interest savings. Of course there would be some supply response, so we would collect less revenue than these straight line calculations imply, but it is possible to get a very long way towards whatever budget target we have by increasing taxes on the wealthy.

Shocking. And but also, Baker smartly includes the most important issue in any truly serious discussion of American economics and the proper balance of same: the cost of health care:

We pay twice as much per person as people do in other wealthy countries. Since more than half of the tab for our health care is paid by the government, our broken health care system becomes a budget problem. If we paid the same amount per person for our health care as people in other wealthy countries, we would be looking at long-term budget surpluses rather than deficits. The reason that we pay so much more is not that we get better outcomes – we don’t generally. Rather it is that we pay too much to drug companies, hospitals, medical specialists, and others in the health care industry.

Baker’s being generous. We spend as much as five times more per capita than the best performing countries do, all of which achieve uniformly better outcomes than we do. Obviously, the only possible answer here is just get Big Guvmint out of the way so the poor can kindly go die in the streets. It’s the only serious answer to the problem. Well, that and lowering taxes on the wealthiest 1% of the country.

Read the whole thing.

Again with the Middle Class