Category Archives: Economy

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.

Republicans In Denial (As In Denial Of Any Democrat Proposal)

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Today, Congressional Republicans pulled out of negotiations to resolve the deficit.  And (here’s a shocker) they blamed Democrats.  Their reasoning is that Democrats insist on tax increases rather than merely relying on more than $1 trillion in cuts to Medicare and other programs. 

“Let me be clear.  Tax hikes are off the table,” said House Speaker John Boehner. 

So, according to Republicans, even though the major cause of the deficit is the Bush era tax cuts (primarily for the wealthy), the only way to cut the deficit is by cutting spending for Medicare, Medicaid, Social Security, Planned Parenthood, Public Broadcasting, the Environmental Protection Agency, the Consumer Protection Agency, the Department of Education, etc.  At the same time, Republicans refuse to consider cuts to subsidies for Big Oil and corporate agriculture which they say would be tax hikes.  Of course, they also want to repeal the Affordable Care Act and repeal regulations on the financial industry.

So according to Republicans, when it comes to deficit negotiations, everything is on the table.  Except anything that Democrats want.

I guess that’s what passes for “bipartisan negotiations” these days.

Warring States

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The current debate about withdrawing troops from Afghanistan and Iraq, and the anniversary of Daniel Ellsburg’s release of Pentagon papers started me thinking about our history of wars. When I looked it up, I was stunned!

Since our Declaration of Independence, the United States of America has been almost constantly at war. In fact, not counting the Cold War and relatively minor deployments intended to protect American “interests” abroad, the US has been at war all but 33 years of its 236 year history!

Now you may try to justify those wars (as I used to) by assuming they were the result of our desire to spread democracy around the world and to defend human rights.

You could use that argument. But you’d be wrong.

After wresting the continent away from Native Americans, Great Britain, France, Spain, Russia, and Mexico, our military has spanned the globe. Few of our enemies actually attacked us. More often, wars resulted from a perceived threat to our future and security, especially that of our large corporations. Following is a partial list of military actions involving the US:

1775-83 – Revolutionary War
1776-1915 – Indian Wars
1798-1800 – Quasi-War (undeclared naval war with France)
1801-05 – First Barbary War
1806-10 – Mexico
1810-18 – War with Spanish Florida
1812-15 – War of 1812
1815 – Second Barbary War
1824 – Puerto Rico
1838-39 – Indonesia
1840 – Fiji Islands
1841 – Samoa
1843 – China
1844-48 – Mexican-American War
1853-54 – Japan
1854 – Nicaragua
1857-58 – Utah War (dispute with Mormons)
1859 – Mexico
1861-65 – Civil War
1863-64 – Japan
1866 – Mexico
1866 – China
1867 – Nicaragua
1868 – Japan
1871 – Korea
1873-96 – Mexico
1889 – Kingdom of Hawaii
1893 – Kingdom of Hawaii
1898 – Spanish-American War
1899-1913 – Phillipine-American War
1900 – China (Boxer Rebellion)
1914-17 – Mexico
1915-34 – Haiti
1917-18 – World War I
1918-19 – Mexico
1918-20 – Soviet Union
1941-45 – World War II
1945 – China (vs. Japanese)
1950-53 – Korean War
1955-75 – Vietnam
1957-75 – Laos
1965 – Dominican Republic
1968 – Laos & Cambodia
1975 – Angola
1983 – Grenada
1989 – Panama
1991 – Gulf War
1992-96 – Bosnia and Herzegovina
2001-present – Afghanistan
2003-present – War in Iraq

Moreover, since the end of World War II our military, led by the Central “Intelligence” Agency, has overthrown numerous democratically-elected leaders throughout the world. As a result of this incessant meddling, millions have been imprisoned, tortured and killed. For example:

1953 – In Iran, the CIA overthrew democratically-elected Mohammed Mossadegh and replaced him with a brutal dictator, the Shah of Iran.
1954 – In Guatemala, the CIA overthrew democratically-elected Jacob Arbenz after he threatened to nationalize the United Fruit Company, in which CIA Director Allen Dulles owned stock. The right-wing dictators who replaced Arbenz killed more than 100,000 Guatemalans.
1957-73 – In Laos, the CIA carried out approximately one coup a year trying to nullify Laos’ democratic elections.
1959 – In Haiti, the U.S. military helped “Papa Doc” Duvalier become dictator.
1961 – In Dominican Republic, the CIA assassinated Rafael Trujillo, a brutal dictator supported by Washington. But only after his business interests began competing with our own.
1961 – In Ecuador, CIA-backed military forced democratically-elected President Jose Velasco to resign.
1961 – In Congo (Zaire), the CIA assassinated democratically-elected Patrice Lumumba.
1963 – In Dominican Republic, the CIA overthrew democratically-elected Juan Bosch and installed a repressive, right-wing junta.
1963 – In Ecuador, CIA-backed military overthrew President Arosemana. A military junta assumed command and began abusing human rights.
1964 – In Brazil, a CIA-backed military coup overthrew democratically-elected Joao Goulart and replaced him with a brutal junta.
1965 – In Dominican Republic, a popular rebellion tried to reinstall Juan Bosch. The revolution was crushed by CIA-led U.S. Marines.
1965 – In Indonesia, the CIA overthrew democratically-elected Sukarno. His successor, General Suharto, massacred 500,000 to 1 million civilians.
1965 – In Greece, with CIA backing, the king removed George Papandreous as prime minister for failing to support U.S. interests in Greece.
1965 – In Congo (Zaire), CIA-backed military installed Mobutu Sese Seko who exploited his country for billions.
1967 – In Greece, CIA-backed military overthrew the government two days before elections. The ensuing “reign of colonels,” backed by the CIA, tortured and murdered political opponents.
1967 – In South Vietnam, the CIA helped identify and murder 20,000 alleged Viet Cong leaders.
1969 – In Uruguay, notorious CIA torturer Dan Mitrione ascended to power becoming so feared that revolutionaries kidnapped and murdered him a year later.
1970 – In Cambodia, the CIA overthrew popular Prince Sahounek and replaced him with Lon Nol. The move strengthened the Khmer Rouge, which rose to power and massacred millions.
1971 – In Bolivia, CIA-backed military overthrew leftist President Juan Torres. He was replaced by Hugo Banzer who had more than 2,000 political opponents arrested, tortured, raped and executed.
1973 – In Chile, the CIA assassinated democratically-elected Salvador Allende. He was replaced by General Augusto Pinochet, who tortured and murdered thousands of his own countrymen.
1975 – In Angola, the CIA helped launch a war killing more than 300,000 Angolans.
1979 – In Nicaragua, following the fall of CIA-backed Anastasios Samoza II, the remnants of his personal National Guard became the Contras, who fought a CIA-backed guerilla war against the Sandinista government.
1980 – In El Salvador, following the murder of Catholic Archbishop Oscar Romero, the country dissolved into civil war. CIA-trained death squads roamed the countryside, committing atrocities and killing 63,000 Salvadorans.
1983-89 – In Honduras, the CIA taught Honduran military officers how to torture people. The notorious “Battalion 316” used the techniques on thousands of leftist dissidents.
1986 – In Haiti, following the exile of “Baby Doc” Duvalier, the CIA rigged elections in favor of another right-wing military strongman. The CIA-created National Intelligence Service (SIN) suppressed popular revolt through torture and assassination.
1990 – In Haiti, after leftist priest Jean-Bertrand Aristide captured 68 percent of the vote he was deposed by CIA-backed military which brutalized the country.
1993 – In Haiti, as chaos grew, military dictator, Raoul Cedras, is removed on threat of U.S. invasion. Aristide is returned to power only after being forced to accept an agenda favorable to the country’s ruling class.

Here’s an idea. If Americans are as serious about wanting peace as most claim, maybe we could stop meddling in the internal politics of other nations. Then we could take half of our massive defense budget to solve real problems like poverty, climate change, diminishing energy resources, air and water pollution, and health care.

But given our propensity for war, that will probably be viewed as unpatriotic.

Why President Obama Can’t Fix The Economy.

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It’s not his fault. And it’s not for lack of trying. But he’s dealing with a stacked deck.

For decades, the cornerstone of the US economy has been durable goods, driven primarily by housing starts. In other words, our economy has depended mostly on housing construction.

For example, in 2004, more than 2 million home-building permits were authorized nationwide. In 2005, the number had risen to more than 2.1 million. Then in 2007, the number dropped to less than 1.4 million. By 2009, the number was just 583,000. And even though the number increased to more than 604,000 last year, you can see that it’s only slightly more than a third of the annual building permits from just prior to the Great Recession!  And half the number in 1959!

Now think of what those numbers mean. Each of those permits requires building contractors, carpenters, electricians, plumbers, roofers, sheet rockers, flooring contractors and more. In addition, the homes need new appliances, furnaces, air conditioners, cabinets, light fixtures, plumbing fixtures, garage doors, etc.

Get the picture?

When the financial giants swindled billions from American homeowners, they destroyed confidence in homeownership. And, as the same crooks are now disposing of their inventory of foreclosed homes, they are driving down home prices which puts more homeowners in foreclosure and prices drop even farther. The end result is massive unemployment. And, if you’re unemployed, what’s the last thing you’re going to do? That’s right. The last thing you want to do is buy a home.

So what’s a President to do after the real estate industry has been driven off a cliff? The problem certainly wasn’t of President Obama’s making. Indeed, his administration has done Herculean work getting things moving back in the right direction. But he needs to do more. He needs to push for additional stimulus that will create more jobs which will encourage more people to buy homes which will create even more jobs.

But don’t hold your breath. Because, in addition to the GOP (Grand Obstructionist Party) in the Senate, he’s now faced with a Republican/Teabagger majority in the House. And all of them are determined to deny him another term in office.

If you think you hear the faint strains of Nero fiddling, you can be certain that he’s now a Republican.

Republican Agenda Has Never Been More Clear.

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Following the vote by House Republicans to cut Medicaid and turn Medicare into a certain-to-fail voucher system, Senate Republicans filibustered a bill that would end oil subsidies to the most profitable companies on Earth.  They followed that by doing the same to a bill that would end subsidies for Ethanol.

In doing so, Republicans have made it abundantly clear that they don’t care about cutting the deficit.  Not really.  If they did, they would gladly trim these subsidies from our budget resulting in savings of billions of dollars.

As evidenced by their assault on Medicare, Medicaid, Social Security, unemployment insurance, education, women’s health providers, the environment, labor unions, first responders and teachers, they certainly don’t care about ordinary citizens.

What Republicans do seem to care about is protecting the profits of their corporate masters. You know, the large corporations that were given all the rights of citizens by the conservative-dominated Supreme Court so they could anonymously spend millions to elect Republican candidates.

The connection couldn’t be more obvious.

One man’s solution for Medicare and the health care crisis.

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Now that House Republicans have voted to end Medicare and Medicaid as we know them, I believe it’s time to look at the real problems with the system. In addition to Medicare fraud, many of the problems are structural. Not with Medicare. But with the health care industry itself.

Unless the skyrocketing costs of health care are controlled, we will not be able to fix our social insurance programs such as Medicare. Moreover, we will not be able to control our deficits. That is precisely why President Obama and the Democratic Congress chose to focus on health care reform in 2009. Unfortunately, the resulting bill was a compromise with Republicans hell-bent on protecting the insane profits of the health insurance industry and PhRMA (Pharmaceutical Research and Manufacturers of America).

Therefore, I humbly offer the following suggestions for consideration:

1 – Create a medical triage system with the entry point being Board Certified Family Nurse Practitioners, rather than MDs. These people are Registered Nurses with additional education and training. They are more than capable of identifying and treating the majority of illnesses and symptoms, as well as writing prescriptions, and they can refer patients to a physician or specialist as needed. However, they are billed at a lower rate than physicians. Implemented nationally, this system could save millions, if not billions, of dollars.

2 – Encourage patients to call medical professionals more often. Ignoring symptoms usually doesn’t make them go away. Patients of all ages tend to avoid talking to medical professionals until they absolutely have to. This often results in illnesses being allowed to advance which, in turn, makes them more difficult (and expensive) to treat. All patients should be encouraged to call or visit with Nurse Practitioners whenever they notice a change in their bodies or a symptom of concern.

3 – Eliminate unnecessary tests and treatments. Currently, (some) doctors order a battery of lab tests and treatments in order to maximize their profits. They also claim to do this as a defensive measure against potential malpractice suits. I believe it’s time to recognize that everyone makes mistakes (including health care professionals). We should try to limit the number of malpractice suits and the size of the awards. At the same time, the medical profession needs to more aggressively weed out those who are responsible for the most egregious errors.

4 – Regulate the cost of pharmaceuticals. Currently, Big PhRMA is able to charge whatever it wants for its products. In some cases, the mark-up on pharmaceuticals is astronomical. An inhaler used by millions of Americans costs $38-$40 in the US. But in other countries, its price is as little as 5 cents!

5 – Create incentives for family practice physicians. Too many of our medical students focus on specialties that offer the greatest return on the investment of their medical education. They reason that, since they will be faced with the daunting task of paying off tens of thousands of dollars in loans, they should choose the specialty that pays the most and faces the least probability of legal issues. As a result, the percentage of family practice physicians and OB/GYN physicians is dwindling. This could be fixed by offering more government scholarship awards and tax benefits to those who choose the traditionally lower paying specialties.

6 – Eliminate the need for the poor and uninsured to use Emergency Rooms for primary care. We’ve all heard stories of people who call an ambulance in order to be transported to the ER to be treated for a common cold. Of course, since many of these people can’t afford to pay for their care, the costs are absorbed by the hospital and passed on to other patients.

Recognizing that many of the stories are likely exaggerated, it is true that people go to the ER when a simple visit to a doctor’s office would suffice at a fraction of the cost. But rather than complain about the phenomenon, we should look at the cause. Often it’s simply because these people don’t have ready access to any other form of care. By creating more and better access such as clinics staffed into the night by Nurse Practitioners, people would be encouraged to seek care through more appropriate means.

7 – Demand that health care providers publish outcomes for the most serious ailments and treatments, and encourage patients to seek out the most successful providers. It is a well-accepted fact that it is less expensive to seek treatment from the most successful providers, even if that means traveling out of state. There are fewer complications and patients tend to recover faster.

8 – Last, and most important, take the profit out of the health care industry for those who aren’t directly involved in providing care. In other words, contrary to Republican beliefs, eliminate the middle men (insurance companies) and allow the government to finance care through taxes and/or withholding. I’d much rather have the government determine the accessibility of medical care than large corporations whose primary goal is to limit care in order to maximize profits.

The growing hole in our economy.

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For the past two years, the Obama administration has been trying to reduce unemployment. And, given the challenges, it has been remarkably successful.

Following the Bush/Cheney administration, President Obama faced an economy that had jettisoned nearly 8 million jobs. Despite Republican opposition, the Obama administration has managed to turn things around. Certainly it has not happened as fast as most people would like, and the unemployment numbers are not as good as we would like to see, but the stock markets have recovered and the economy has added 854,000 private sector jobs in 2011 alone.

At the same time, state and local governments have cut 86,000 jobs this year alone.

As a result of the reduced revenue created by the Great Recession, the Bush tax cuts, and the out-of-control costs of health care for government workers, the loss of government jobs threatens to throw our economy back into the abyss. And the Teapublicans, who were elected in 2010 with the stated purpose of creating jobs, are doing everything in their power to push the economy over the cliff.

You see, instead of focusing on job creation, Teapublicans have focused, instead, on social issues such as gay marriage, abortion and collective bargaining. They are determined to eliminate funding for NPR, Public TV, the National Endowment for the Arts, the Dept. of Education, the EPA and Planned Parenthood. They want to end or dramatically change “entitlements” such as Medicaid, Medicare, and Social Security. And they want to cut government spending by the trillions.

If successful, they will push tens, perhaps hundreds, of thousands more people into unemployment, eliminating government jobs at a rate faster than the private sector can create them. And who will receive the blame for their actions? Certainly not Teapublicans themselves. No, the conservative media will focus the blame on President Obama. You know, the foreign-born black Muslim who was only able to gain office thanks to voter fraud and “lame stream” media.

Does that mean I’m accusing Teapublicans of sabotaging our economy for political purposes? In a word, yes. Republicans have done it before, why should we expect a different approach this time?