Category Archives: Economy

What If FDR, Truman Or Eisenhower Faced This Congress?

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Despite the fact that our economy was in freefall when President Obama entered office, people are fond of blaming him for our current misery.  Instead of supporting Obama’s attempts to right our sinking ship, Teapublicans have chosen to fight him every step of the way. 

No matter that the record number of Senate filibusters paralyzed our government.  No matter that the cries of “Socialist” have further divided our nation.  Teapublicans seem only to care about ensuring that Obama is a one-term president.

And just when it appeared that the economy was growing again, Teapublicans chose to turn the debt ceiling into a “crisis” resulting in a downgrade of US Treasury Securities and further despair.

All this got me wondering: What if today’s Teapublicans had been around following the Great Depression? Would they have been willing to fund Social Security? Would they have opened the US Treasury to build our infrastructure? Would our nation’s most iconic structures have ever been funded? Would there be a Hoover Dam? Would the Tennessee Valley Authority exist?

What if Teapublicans had been around following WWII? Would they have approved the post WWII-era top tax rate of 91 perecent? Would they have approved of the billions spent to expand our Universities? Would they have supported the GI Bill? Would they have approved of Eisenhower’s interstate highway system?

Looking at more recent history, would they have approved of raising the debt ceiling as Reagan was tripling the national debt? Would they have approved of his tax increases?

I think you know the answers. 

Now ask yourself this: What would have become of the US if today’s Teapublicans had been around during the founding of our nation? Would they even have been willing to spend their money to fund the Revolution?

It Is Now Clear That S&P’s Downgrade Was Political.

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Now that the Fitch rating service has confirmed the AAA rating for US Treasury bonds, it raises questions about the real motives for the downgrade by S&P. Of the three rating agencies, both Moody’s and Fitch have maintained the AAA rating. Fitch even called the outlook for US Treasury bonds positive.

Why the different outlooks?

It is possible that it merely represents a difference of opinion. It’s also possible that S&P wanted to flex its political muscle. When you read the full analysis by S&P, two statements stand out:

1 – “The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently.”

2 – “Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.”

Certainly, each party has rushed to blame the other for S&P’s downgrade. However, since only one party (The Democratic Party) was publicly willing to compromise, and since the other party (The Republican Party) chose to create a crisis in order to get its way, it’s abundantly clear which party is truly to blame for the US Treasury bonds being downgraded for the first time in history. It’s also clear that the Republican position of maintaining the Bush tax cuts is fiscally irresponsible.

A Question of Compromise.

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When Democrats and Teapublicans named their members of the so-called Super Congress, the media immediately asked, “Will Senators Patty Murray, John Kerry and Max Baucus be willing to compromise with their Teapublican counterparts? What about Representatives James Clyburn, Xavier Becerra and Chris Van Hollen?”

Say what?

During the last three and a half years, Democrats have amply demonstrated a willingness to compromise.  During the negotiations for health reform, they caved on the most important component – the public option. Last Fall, they gave in to Teapublicans by extending the Bush-era tax cuts despite the growing deficit. And in the recent negotiations to raise the debt ceiling, Democrats gave up on increased revenue from closing tax loopholes and raising taxes on the wealthy. 

What compomises have Teapublicans been willing to make?

One can’t help but wonder why the media failed to ask if the Teapublican representatives on the Super Congress committee will be willing to compromise. After all, Mitch McConnell said he would not appoint anyone to the committee who would vote for increased tax revenue. Could it be that the so-called “mainstream, liberal-biased” media are now biased toward Teapublicans?

The Democrats can’t afford to negotiate away their principles again. If they do, Democratic support for the administration and Congress will likely collapse. Of course, that’s what Teapublicans are counting on.

Downgraded Expectations

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I’m not just referring to the lowered credit rating for US Treasury notes. If Teapublicans are allowed to continue the same political obstructionism they’ve displayed in the first 2-1/2 years of the Obama administration, we should all become accustomed to expecting less. Less jobs. Less retirement benefits. Less access to health care. Less government services. Less civility in public discourse. And less honesty.

Just consider: Despite being elected by an overwhelming majority of the voting public, President Obama has, thus far, been stonewalled by Teapublicans who, the day after the election, stated that their main goal is to make Obama a one-term president. Many on the right immediately called for Obama to fail despite the obvious implication that that would mean the US would also fail.

No previous president has been subjected to such organized obstruction and nonsense. Teapublicans have questioned his legitimacy by saying he was born in Kenya. They have called him a socialist, a communist, a facist and a Nazi. And they have blamed him for the economic disaster created by his predecessor.

In Congress, Teapublicans have filibustered a record number of legislative initiatives. They have blocked a record number of cabinet and judicial nominations. They have blocked nearly every attempt to stimulate the economy and create jobs. And they created a debt ceiling “crisis” when their own tax cuts led to massive increases in the national debt.

It’s all part of their “starve the beast” philosophy of less government. So what has it gotten us? An economy that is still struggling more than three years after their less-government-no-regulation policies led to the worst economic crash since the Great Depression. And now that US Treasury bonds have been downgraded as a result of their brinksmanship, the economy is once again teetering on the edge of disaster.

Given that S&P clearly stated its reason for downgrading our bond rating is our dysfunctional Congress, one might assume that Teapublicans will come to their collective senses and begin to compromise in order to create jobs, generate more revenue and cut our deficit.

That is the lesson sane people might take away from S&P’s message. But, that’s not who we’re dealing with.  Instead, we have to rely on John Boehner, Mitch McConnell, Michelle Bachmann and Eric Cantor correctly reading their tea leaves.

World’s Greatest Nation? Really?

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Although many Americans are fond of calling the US the greatest nation on Earth, that hasn’t been true for many years. Certainly we have the world’s most powerful military, but that’s no criteria for greatness. Neither is the fact that we are still the world’s richest nation, despite the downgrade in our credit rating by Standard & Poors.

But greatest?

Does a great nation tolerate an ever-widening gap between billionaires and the working poor? Does a great nation leave tens of millions of its citizens without access to health care? Does a great nation allow millions of its children to be homeless? Does a great nation allow its education system to become third-rate? Does a great nation allow its infrastructure to decay and collapse merely to give another tax cut to large corporations and the wealthy?

Does a great nation use its financial and military power to prop up brutal dictatorships around the world? Does a great nation bankrupt the small farmers of neighboring countries by subsidizing corporate farms then demonize those farmers when they cross the border looking for jobs? Does a great nation demean those who labor to build things with their hands, to put out fires, or to teach its youth? Does a great nation begrudge a comfortable retirement to its elderly? Does a great nation allow large corporations and the wealthy to elect its politicians?

How can a nation be called great when it rewards greed and corruption? When its judicial system rules that corporations have rights superior to those of its citizens? When its financial institutions are allowed to grow so large they are immune to failure from their own mistakes? When its corporate lawyers are tasked with seeking out financial and legal loopholes that allow their clients to game the system? When its politicians are more concerned with scoring political points than the welfare of its voters? When its citizens are more interested in the antics of its celebrities than those of its government? When it allows its previous leader to run up a huge debt, and then blames the leader who inherited it?

We didn’t need Standard & Poors to tell us that our nation is on the verge of bankruptcy. When it comes to fairness, ideas and ethics, the US has been on the verge of bankruptcy for many years.

If Teapublicans Have Such Great Ideas, Why Do They Lie So Much?

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Why do they generate and circulate a seemingly endless number of blatantly false and misleading chain emails that demean our President?
Why do they try to shout down everyone with whom they disagree?
Why do they parrot talking points instead of rationally debating issues?
Why do they protect the obscenely wealthy and attack the poor?
Why do they complain about immigration then hire illegal immigrants to do their landscaping or repair their roofs?
Why do they preach small government then pass laws giving government power to prevent gay marriages and lawful abortions?
Why do they fight to ban abortions while, at the same time, fighting against sex education and the contraceptive practices that would help avoid them?
Why do they revere police and firefighters for responding to 9/11 then try to take away their right to collective bargaining and health care?
Why do they praise those in the military and ignore veterans in need of help?
Why do they revere President Bush for adding $7 trillion to our national debt and crashing our economy then attack President Obama for adding $1.4 trillion in trying to fix it?
Why do they complain about the excesses of Wall Street bankers while trying to block laws that will regulate them?
Why do they slash budgets for education while complaining that the US is falling behind other nations?
Why do they complain about unemployment as they cut federal budgets to force even more layoffs?
Why do they complain about government health care while telling the government to keep its hands off their Medicare?
Why do they complain about passing health care reform after a 10-month debate then pass a bill to kill entitlements with virtually no debate.
Why do they talk about helping small businesses then undercut them with policies that only benefit large corporations?
Why do they refuse to eliminate tax loopholes for corporations that claim an offshore P.O. Box as their corporate headquarters?
Why do they subsidize big oil companies and refuse to subsidize renewable alternatives?
Why do they call themselves conservatives when they’re against conservation of our environment?
Why do they demand compromise then refuse to consider alternate ideas?

The Tee Hee Party. Making Politics Laughable.

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If the consequences weren’t so very serious, the nonsensical ramblings of the Tea Party would be great comic theater.  Certainly the Teapublicans have provided us with some of the best political comedy ever.  Witness Saturday Night Live’s repeated skewering of half-governor Sarah Palin.  The commercials for “I’m Not A Witch” Christine O’Donnell and for the chicken-bartering Sharron Angle.  The Google results for Rick Santorum.  Or the snickers whenever Michelle Bachmann exposes her utter lack of knowledge of anything.

But in between all of our belly laughs, we really should be crying.  Because the sad fact is that these lunatics are in control of the US House of Representatives for another year and a half.

These are people who don’t know the difference between a deficit and a debt.  People who believe that the only way to balance a budget is through draconian cuts.  People who believe that those cuts will not create higher unemployment.  People who have deluded themselves into believing that causing our President to fail will not cause harm to our nation!

They believe this because they’re either too rich or too stupid to worry. 

Yes, we truly are witnessing a tragic comedy.  And the most tragic thing of all is that we’re all responsible for electing these people, either through action or apathy. 

A Primer On The National Debt From Reagan’s Economic Advisers.

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Teapublicans have elevated Ronald Reagan to God-like status. They have named a Washington D.C. airport after him. They worship at his presidential library. They even want to add his image to Mount Rushmore National Monument.

So why don’t they follow his economic example?

This has never been more puzzling than during the current debt ceiling debate. Under Reagan, Congress was forced to raise the debt ceiling 17 times. But under Obama, Teapublicans refuse to raise the debt limit even once. To save Social Security, Reagan raised the income cap on FICA deductions. But under Obama, Teapublicans want to destroy Social Security, Medicaid and Medicare. Reagan raised capital gains taxes to 28 percent. But under Obama, Teapublicans consider the current rate of 15 percent too high. Under Reagan, the highest income tax rate was 50 percent or more. But under Obama, the highest rate is 35 percent. And under Reagan, tax revenues averaged 18.2 percent of GDP. But under Obama, tax revenues are just 14.9 percent of GDP as reported by the conservative Heritage Foundation.

Indeed, former Reagan Policy Adviser, Bruce Bartlett, recently stated on MSNBC’s Hardball with Chris Matthews, “The dirty secret is that Obama’s a moderate conservative.“ Further, he noted that $7 trillion of the national debt is due to George W. Bush’s policies and tax cuts. $2 trillion is due to the Great Recession that President Obama inherited. And only $1.4 trillion of the debt is due to Obama’s policies, including the measures taken to keep our economy from sliding into the abyss.

And speaking about the Teapublican refusal to increase revenues as part of their plan to cut the deficit, the father of “Reaganomics” and former Reagan Budget Director, David Stockman, said, “When I look at the Republican plan, I have to say I think it’s half right on some things, and it’s half-baked on a lot of others… you’re telling the people of America that we can solve this issue – which is very dangerous, the deficit that we’re facing and the debt we’re building up – by not raising taxes on anyone. That, in my judgment, is a big lie.”

Bartlett was even stronger in response to a question about the Teapublican-dominated Congress. “A good chunk of the Republican caucus is either stupid, crazy, ignorant, or craven cowards who are desperately afraid of the Tea Party people. And rightly so,” he said.

Economic Terrorism

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Remember when the Teapublicans were running for office last November? They hammered Democrats for not creating jobs fast enough and promised to have a laser-like focus on the economy. Well, I guess you could say they were telling the truth. But who knew they were actually referring to a laser site on an assault weapon aimed at killing the economy entirely?

Since the debt ceiling first became an issue in January, Teapublican antics have already had a disastrous effect. The lingering debate over the debt ceiling has caused many employers to question the outcome. As a result, they have delayed hiring and any new expenditures. In recent days, the stock markets are down dramatically. And new data has shown that the economy grew at a pitiful rate in the first quarter of this year. All of this is the result of uncertainty.

Now imagine what will happen if Teapublicans actually fail to raise the debt ceiling. Or if they succeed in making the draconian cuts they want.

How much will the stock markets crash if the US defaults on its debts? What will be the long term effects if US Treasury bonds are downgraded? What will happen when consumer interest rates skyrocket? What will be the economic effect of failing to make Social Security payments? How many people will die if doctors know they won’t be reimbursed by Medicare?

Truth is, the Teapublicans now controlling our debt ceiling debate may well have a greater negative impact on our nation than Timothy McVeigh, Al Qaeda and the Taliban combined.

An Economic Lesson For Teapublican Nincompoops

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Upon discussing the debt crisis with some conservative friends, I realized that few of them know the difference between the national debt, the budget and the deficit. Like Michelle Bachmann and other Teapublicans, they wrongly believe that refusing to increase the debt ceiling will result in cutting spending and reducing taxes.

Faced with such stupidity, it’s difficult to know where to begin. But I’ll start with some definitions:

Budget – The annual spending plan authorized by Congress based on anticipated revenue and anticipated spending needs. (For Teapublicans, a budget is the money that Congress authorizes the President to spend.)

Deficit – The negative difference between actual spending and actual revenue.

Surplus – Thanks to Bush, we haven’t seen one of these since the Clinton era. But just for the sake of conversation, a surplus is the positive difference between actual revenue and actual spending.

National Debt – The accumulation of deficits from our nation’s history. It is money that has already been spent.

Debt Ceiling – This is an arbitrary number established by Congress based on paranoia. Since the 1970s, the debt ceiling has been raised more than 70 times; 17 times by Reagan and 7 times by George W. Bush.

Now here’s where it gets really difficult. Failing to raise the debt ceiling will cut spending. But only because there will not be enough money to pay our bills. It forces the Secretary of Treasury to decide which bills to pay; money that Congress already agreed to spend. Failing to raise the debt ceiling will effectively cause the US to default on its bills. (For Teapublicans like Bachmann, Cantor and Palin, it’s as if you went on a spending spree at Walmart and then decided not to pay your credit card company.)

In effect, failure to raise the debt ceiling turns the US into a bunch of deadbeats. Other nations and individuals will not want to invest in our country. Interest rates will rise dramatically. And world stock markets will crash. Indeed, most experts say default will make the Great Recession of 2008 seem like…well…like a tea party.