Tag: this is why

We’re seriously talking about defaulting on our debt, and cutting Medicare and Social Security, so that Google can keep paying its current 2.4 percent effective tax rate and GE, a company that received a $140 billion bailout en route to worldwide 2010 profits of $14 billion, can not only keep paying no taxes at all , but receive a $3.2 billion tax credit from the federal government. And nobody appears to give a shit. What the hell is wrong with people? Have we all lost our minds?

Matt Taibbi (via paxamericana)
No, Matt, we haven’t lost our minds. Instead, we’ve all been told for twenty years that government can do nothing right, that taxes are the root of all evil, and that anyone else receiving so much as one red cent of guvmint money is a freeloader and likely a sub-human of some variety.

Where’s the Left’s Grover Norquist, out there day in and day out agitating and extracting oaths over Social Security or Medicare or in favor of single payer health care? Where have they been for twenty years, messaging relentlessly, and not just when their pet subject is “in the news” for a week or two (and we’re lucky to get that)? Where have the folks been who organize guaranteed primary challenges of Democrats and Republicans who stray from their oaths? Where is the Progressive News Network, the most popular national news organ on television, daily vomiting outright lies and relentless spin tuned to the broader national political message and aimed squarely at the lowest common denominator?

Until some version of one or all these things show up: we will fail. This is why.

Source: paxamericana

In short, the Boehner plan would force policymakers to choose among cutting the incomes and health benefits of ordinary retirees, repealing the guts of health reform and leaving an estimated 34 million more Americans uninsured, and savaging the safety net for the poor. It would do so even as it shielded all tax breaks, including the many lucrative tax breaks for the wealthiest and most powerful individuals and corporations.

Robert Greenstein, writing about the “Boehner plan” at the nonpartisan CBPP.
Said it approximately one billion times: this isn’t some side affect. It’s the intended consequence. The debt ceiling is simply a useful construct for ramming the same old policy of “zero social safety net, all wealth and benefits to top 2%” GOP dream government setup. All it is, was, or ever will be. If they fix the debt ceiling this morning, they will be using the next federal budget (which will need to be done to have a government post-September) to push the exact same line by this afternoon.
The GOP does not care about deficits. If they did, they’d have taken any of the four increasingly huge deficit cutting plans offered them. They want low to nonexistent tax rates on the top 2%. Simple arithmetic will show anyone that this means eliminating the social safety net; as Ezra Klein has noted: the federal government is better thought of as an insurance conglomerate with a large standing army. To cut taxes to “GOP preferred” levels, services have to go. And to get rid of those hugely popular and helpful services, a large number of people using them have to be convinced said services (and government in general) aren’t working or even in their interest at all. This is the core GOP governing strategy in fifty words or less. Everything they have done and said in the past several decades of tight, lockstep messaging with the aid of the most popular “news” network on television has been aimed at and in service of making those 48 words reality.
Everyone not already up the ladder will kindly go die in the streets. Today they’re using the debt ceiling, tomorrow it will be the FY2012 budget, the next day it will be veterans benefits or whatever else comes to hand. And until they are forced to pay a steep political price for steadfastly using gridlock and economic hostage situations as a negotiating strategy, they will continue to use them. That Congressional and Executive Democrats seemingly haven’t figured this out yet is why they fail.

Dean Baker AND Ron Paul

An interesting read in which Dean Baker agrees with Ron Paul’s idea:

…the Fed has bought roughly $1.6 trillion in government bonds through its various quantitative easing programs over the last two and a half years. This money is part of the $14.3 trillion debt that is subject to the debt ceiling. However, the Fed is an agency of the government. Its assets are in fact assets of the government. Each year, the Fed refunds the interest earned on its assets in excess of the money needed to cover its operating expenses. Last year the Fed refunded almost $80 billion to the Treasury. In this sense, the bonds held by the Fed are literally money that the government owes to itself.

Unlike the debt held by Social Security, the debt held by the Fed is not tied to any specific obligations. The bonds held by the Fed are assets of the Fed. It has no obligations that it must use these assets to meet. There is no one who loses their retirement income if the Fed doesn’t have its bonds. In fact, there is no direct loss of income to anyone associated with the Fed’s destruction of its bonds. This means that if Congress told the Fed to burn the bonds, it would in effect just be destroying a liability that the government had to itself, but it would still reduce the debt subject to the debt ceiling by $1.6 trillion. This would buy the country considerable breathing room before the debt ceiling had to be raised again. President Obama and the Republican congressional leadership could have close to two years to talk about potential spending cuts or tax increases. Maybe they could even talk a little about jobs.

In addition, there’s a second reason why Representative Paul’s plan is such a good idea. As it stands now, the Fed plans to sell off its bond holdings over the next few years. This means that the interest paid on these bonds would go to banks, corporations, pension funds, and individual investors who purchase them from the Fed. In this case, the interest payments would be a burden to the Treasury since the Fed would no longer be collecting (and refunding) the interest.

More detail at the link. I’m no economist, but it sounds like dodging the interest alone is worth doing in exchange for a fairly minor “bank tax” down the road as the reserve rate requirements would necessarily ratcheted up slightly to offset the eventual inflationary pressure caused by The Great Bond Shredding of ‘11.

Were I Obama, I’d get out on the hustings this very second talking about how under no circumstances should the Fed order these bonds be destroyed. Go have lunch with Joe Biden. Come back out and say “well, it is with a heavy heart I have to bow to the demands of my GOP overlords. We shall shred the bonds effective immediately. Bipartisan!”

After all, the only way to get something done in this government is for Obama to come out against it and wait for the GOP’s reflexive adoption of the opposite position no matter what the issue. That the Democratic leadership in DC haven’t yet figured this out is why they fail.

Dean Baker AND Ron Paul

Enemies List

A former senior C.I.A. official says that officials in the Bush White House sought damaging personal information on a prominent American critic of the Iraq war in order to discredit him.

[…]

…the White House at least twice asked intelligence officials to gather sensitive information on Juan Cole, a University of Michigan professor who writes an influential blog that criticized the war.

Look, what I really want to know is: did Juan Cole knowingly or unkowingly ever text a picture of his wang to someone. Serious People must know. Why can’t we get serious answers to serious questions? If not: keep walking.

Enemies List

Rep. Anthony Weiner of New York will step down from office amid intense pressure from congressional Democrats following his admission of risque online chats and photo swaps with multiple women and lying about it.

ABC News reports, you decide. What’s remarkable here is the “intense pressure from congressional Democrats” bit. A member of the GOP caucus could strangle somebody to death on the floor of the House and you’d have little more than an annoyed shrug on the part of either leadership. But let a Democrat sext somebody not-his-wife: hell to pay (though, presumably the same faux pearl clutching outrage would have been mustered if he were still single).
Meanwhile, Tom Coburn orchestrated illegal payoffs to Ensign’s cuckolded friend and, well, I’m sure he was working in the best interests of his Personal Lord and Savior, Jesus Christ. Let’s just leave it there. Keep walking. Some things in life are meant to be mysterious.

Did We Secretly Elect McCain?

Softening the administration’s earlier insistence that Congress raise the so-called debt ceiling without conditions, officials now say they won’t rule out linking an increase of the borrowing cap with cuts aimed at reducing the deficit—even though they’d prefer to keep the issues separate.

Honestly, it’s getting hard to tell. Whoever leaked this circular firing squad horseshit should be out before lunch. That they’ll instead be promoted is why the administration fails.

Did We Secretly Elect McCain?

It’s Courageous To Go Die in the Streets

David Brooks:

Today, Paul Ryan, the Republican chairman of the House Budget Committee, is scheduled to release the most comprehensive and most courageous budget reform proposal any of us have seen in our lifetimes….His proposal will set the standard of seriousness for anybody who wants to play in this discussion….This budget tackles just about every politically risky issue with brio and guts….Paul Ryan has grasped reality with both hands. He’s forcing everybody else to do the same.

Kevin Drum responds:

Courageous. Serious. Gutsy. I imagine that within a few days this will be the consensus view of the entire Beltway punditocracy. A plan dedicated almost entirely to slashing social spending in a country that’s already the stingiest spender in the developed world, while simultaneously cutting taxes on the rich in a country with the lowest tax rates in the developed world — well, what could be more serious than that?

I think I’m going to be sick.

He’s right, but it didn’t take a few days and it’s not just Our Punditocracy; here’s the generic Democrat legislator last night on Hardball (sorry, no transcript yet):

[it was] “courageous” [for Paul Ryan to put up a plan to abolish Medicare and other federal social programs]

This is deadly serious. It’s easy to say we drugged bloggers out here are simply another example of the smelly hippies flying off the handle on something. Rest assured: We are not. You are going to be fighting 100% of the GOP caucus, some non-zero percent of the Democratic caucus (exactly 100% of the Democrat caucus), the entire Beltway elite media, and the do-nothing defensive crouch of the President and his administration heading into 2012. Keep in mind where that “sensible compromise” is going to land when the Overton Window has been set far, far to the right. Every possible outcome other than status quo within the current frame of the debate is going to be a major GOP win, far beyond anything that’s happened in recent political history. And that’s with a Democratic Senate and a Democratic President faced with a politically daunting 87% public approval of either continuing or increasing Medicare coverage relative to today’s levels. This is why they fail.

Shortly after the Democrats’ “shellacking” last November, I phoned a friend in the White House who had served in the Clinton administration. “It’s 1994 all over again,” he said. “Now we move to the center.”

Robert Reich: Why Obama Isn’t Fighting the Budget Battle.
This is, to say the least, deeply troubling. The administration (and the Beltway media as well) have been all-too-willing to lap up the standard FOXnews and talk-radio line about Obama governing from the “far left” and being a “radical socialist” and so forth. Has not and is not.
In fact, he’s been governing from the center, or even center right all along. That’s simply how it is. Look at the record. Lowered taxes, passed a previously GOP-pushed version of health care reform, pushes previously GOP position on environment, GOP position on torture, GOP position on Guantanamo, GOP position on everything. It’s just that the GOP (wisely, from their viewpoint) promptly disavows these positions and moves the Overton Window ever further to the right. Thus, Obama’s “move to the center” described here will conceivably locate him somewhere to the right of Reagan. Which is what the GOP would certainly enjoy (and but simultaneously of course still criticize his supposedly socialistic positions), but it’s not what the voters who elected Democrats in three straight elections culminating with Obama’s own election want.
The sad fact is that Democratic “strategists” took exactly the wrong message from the “shellacking,” as usual, and are telling all Democrats to forget their ideas, get as far into a defensive crouch as possible, and “weather the storm.” When they lose again in 2012, it’ll me more of the same: this isn’t an example of voter fury with no clear outlet or focus or unifying leader to channel it one way or another (beyond “throw the bums out!”), this isn’t the fault of our lack of strong positions, of not fighting for the will of the people, of not presenting a compelling and alternate vision for America, it’s because we weren’t far enough to the right.
The problem is that it’s not true, hasn’t been true, won’t be true. Ever. This is why they fail.

Unified Field Theory

First principles:

  1. The recently House-passed continuing resolution only makes a government shutdown more likely by both caving to perceived GOP demands to “cut” while also exhausting the supply of low hanging fruit that Obama has already come out in favor of cutting.
  2. The GOP has the media high-ground, as always, because serious people know that cuts must be necessary, and since the GOP is at dollar value X, and the Democrats are, for all intents and purposes, at dollar value $0 (spending freeze as opposed to new cuts), the serious person answer must be $X/2. That’s the “grand bargain” that Democrats wisely point out will still submarine the economy and the GOP flatly refuses to even discuss. See: shutdown and default in 2011.
  3. Serious People furthermore agitate for deep cuts to Social Security, despite its dedicated funding source and minimal deficit impact in the near future, because, well, because that’s what serious people do. Acceding to the demands for cuts to Social Secuirty is 2012 suicide for the Democrats. It just is.

With all that in mind, what the Democrats need is a concentrated, coordinated effort that steals this idiotic media high ground surrounding the (perceived) absolute necessity of “cuts and a lot of them.” Karl Rove taught us nothing if not the fact that making your enemies’ strengths into their weaknesses is a potent political tool. Think Swiftboating. That The Democrat assiduously avoids the use of this tool is why they fail.

Therefore: the GOP is talking at least $100B in cuts, and immediately. Right or wrong, that’s going to have to be your number too. However, and critically, the GOP wants those cuts to come entirely from the non-military discretionary budget, somewhere around 14% of the whole government budget. This, then, is where and how you attack them. And you’re going to do it specifically and with dollar amounts.

You go down the list of GOP hobby horses: faith-based initiatives, the military, oil subsidies, agribusiness subsidies, general corporate welfare, abstinence-based education, all of it; but you don’t stop with spending, you also target revenue: capital gains taxes, estate taxes, social security taxes (as in: uncapped), and ultimately the tax code itself, which could use a few new brackets up top.

Secretary Gates can likely provide you with a long list of outdated or otherwise no-longer-needed military programs. Lots of them will seem ridiculous or hopelessly out of touch. Mock them and mock the GOP for continuing to support them.
Same goes for oil subsidies. These are the richest companies on Earth and the GOP wants to give them corporate welfare while asking for “shared sacrifice” from the poorest of the poor?

When you’ve run out of spending to cut from GOP programs, you go to work on revenue. That’s right, I said it. You need to too. First: revenue is revenue. Capital gains, management fees, bonuses, and everything else falls under regular pay. Next, you set about raising effective rates on corporations and the rich. The corporate side can be most effectively done by eliminating shelters and loopholes. Any country in which ExxonMobil pays $0 in taxes needs, needs corporate tax reform. Period. Still haven’t hit the number? New tax brackets. Still haven’t hit the number? Uncap Social Security. And so on.

You then pack the whole thing together and unveil it as the “alternative” plan and hoist the GOP upon it each and every day, all day. Because they are guaranteed to hate it. But will have to explain why they prefer to make these cuts on the backs of the poorest instead of the richest and furthermore call it “shared sacrifice.”

You’ve got less than two weeks to put this together. Recent history with the tax cut extension “fight” suggests you haven’t even considered something along these lines yet. But it’s how to win. That’s why it looks so strange to you. Yes, it’s simple minded. But simple minded is what works. You are the last few hundred people in America to come to this realization.

I’m not saying this bill would be what was passed, or that it would even reach the floor in a serious way…but it would drive the conversation in a way that benefits you, The Democrat, and not so coincidentally us the American people.
Currently you’re battling over the 14% that contains the most painful cuts possible. You shouldn’t be. You furthermore don’t even need to be. Change the conversation to terms that have the potential to benefit you. Right now revenue doesn’t even come up. It needs to. It needs to be the first question off the lips of the serious people. Until it is, you will fail.

Social Security

The size of that fix [required to keep Social Security fully funded] is significant, but not astonishing. Over the next 75 years, the shortfall will be equal to about 0.7 percent of gross domestic product. How much is 0.7 percent of GDP? To put that in perspective, the Center on Budget and Policy Priorities calculates that it’s about as much as George W. Bush’s tax cuts for the rich will cost over the same period. Saying we can afford those cuts – which is the consensus Republican position – but not Social Security’s outlay is nonsensical. Coming up with 0.7 percent of GDP isn’t a crisis. It’s a question of priorities.

And this is precisely how it should be talked about every single time a microphone is turned on. Clear, simple terms that highlight the basic stability of the program, the relative ease of fixing it (as opposed to, say, Medicare), and its critical position as the only thing between catfood and dying in the streets for millions of elderly individuals who have by and large paid into it, fair and square. Oh, but now your deal has to change and you have to keep working at your labors until you’re 70. Just makes perfect sense.

The parallels to Wisconsin are striking: A group and the government enter into a deal. Now the government wants to change the deal ex post facto, and uses a bludgeon of “dread Unions” to paper over the fact that they the government are the one dealing in underhanded fashion. And, of course, the media blissfully reports it from the government perspective. This is why we fail.

But, if a few million folks show up on the doorstep of said government, well, things can change.

Social Security