Archive for fiscal austerity

"Think what Ballmer's play money could do to help farmers and their children."

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it's all about the money 2

Let's talk money. Few people have enough. A very, very few are sitting on craploads of money, *coughKOCHS, ADELSONcough* but most of us aren't.

GOP Congress members block any Democratic bill that aims to rectify that. *coughMINIMUMWAGEcough* Without wage hikes, the "have-nots" can't spend money. Without that money going into the economy, our situation remains stagnant. And Americans continue to struggle.

But that's okay with Republicans. That way they can blame it all on the president and use his/the Dems' "failure" as a fundraising ploy to win elections while claiming they could do better. Never mind that they've come up with no plan of their own other than that proven catastrophe called austerity. *coughPAULRYANcough*

Billionaires and corporations continue to hoard their money, while the rest of us agonize over how to stay above water, feed and clothe our kids, and simply make it through another day.

And with that, here are a couple of Los Angeles Times letters to the editor, because our voices matter:

Thank you for Friday's compelling story about agricultural workers in the Central Valley ("Dreams die in drought"). I was moved by the plight of these families struggling to get by, and chagrined at the number of children they bring into the world and the stress that this adds.

If someone ever wondered about the differences between the haves and the have-nots, one need only read this story and the adjacent one about the obscene price Ballmer might pay for the Clippers ("NBA record $2 billion offered for Clippers," May 29) .

The fat cats sit game-side doodling on their cellphones while field laborers eke out an existence, or don't. Just think what Ballmer's play money could do to help these farmers and their children.

I only hope the Mormon missionaries in the moving Column One learn from the example of Jesus to not only feed the poor but also to fight for justice for the least of those among us.

Philip Spradling

Pasadena

***

Economist Brad Schiller cautions that President Obama's proposal to boost the minimum wage to $10.10 an hour would cost hundreds of thousands of jobs. He doesn't mention the multiplier effect of a wage increase. ("A higher minimum wage -- at what cost?," Opinion, May 27)

The multiplier effect is the single most powerful factor in growing an economy. It is to macroeconomics what compounding is to investing.

Schiller mentions the 500,000 jobs that "might" be lost (according to the Congressional Budget Officer report), but he conveniently omits the fact that the CBO also states that the wages of 16.1 million workers would go up. The positive multiplier effect on the 16.1 million workers would more than make up for the negative multiplier effect of the 500,000 who "might" lose their jobs by creating new jobs due to added demand.

In 1992, James Carville famously coined the phrase, "It's the economy, stupid." It's time for an update: "It's the multiplier effect, stupid."

Eric Geisterfer

San Pedro

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European leaders begin to realize austerity is crippling nations. Gee, ya think?

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stimulus austerity

Drastic cuts, sequestration, firing public workers by the hundreds of thousands, slashing programs that keep people healthy and alive, closing schools, suppressing stimulus plans when we need them most, and ignoring the opportunity to rebuild a crumbling infrastructure are all wrongheaded policies that progressives have been trying our best to reverse.

Europe is rethinking their own approach to cutting and starving their way out of their economic problems and ending up on "a dead-end street." It's about time.

The Los Angeles Times has an article on that very thing:

Prodded by Germany and its insistence on fiscal virtue, governments elsewhere have fired workers, chopped welfare benefits and shelved big-ticket projects, turning the continent into what some call one giant "Austerity-land."...The punishing spending cuts have stifled consumer demand and economic growth, not spurred it. [...]

Public patience with continued belt-tightening is wearing thin as misery increases and as officials repeatedly push their predictions of economic recovery further into the future. [...]

The pressure may finally be starting to tell. Recently there have been signs that the region's leaders, most notably in Berlin and at European Union headquarters in Brussels, are rethinking their dogmatic pursuit of spending cutbacks and balanced budgets. [...]

Advocates of a more nuanced policy note that U.S. economic performance has easily outpaced Europe's and that Japan is witnessing a comeback. [...]

[S]o many countries cutting so much so fast, they contend, has turned out to be an act of collective kneecapping that has crippled the entire region. [...]

More pro-growth policies — investment in big infrastructure projects, for example — could jump-start faltering economies and help countries make the revenue they need to pay down their debts, analysts say...

That, however, would require a farsightedness and cooperative policymaking that critics say has been sorely lacking.

Take note, Republicans. Or is that asking too much? As I wrote in a 2011 post, GOP jackasses, foresight is not exactly their strong suit.

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"Like NRA who scares the Bejesus out of elected officials when we talk gun control, rich do same with loop holes"

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gutting

Another guest post is by our pal and regular TPC contributor, David Garber:

 WHO'S GUTTING WHO?

Here's the headline currently on Huffington post: "Obama: 'We're Probably Not Gonna Get A Deal' If GOP Insists On 'Gutting' Medicare, Social Security, Medicaid"

Okay, on the surface, that sounded reasonable until I focused on the word, Obama's word, 'Gutting'. Wait a minute -- that should be touching, not gutting. Stop way before gutting. The holy trinity cannot be touched. Period.

Why are we even discussing this? Has Obama lost sight of his victory from last November? Here we are, just beginning his second term, and he's out trying to strike a grand bargain. Why? Is America clamoring for one? Maybe, but not the one Obama or the Republicans are talking about.

What we the people are looking for is a deal on immigration reform and gun control. And jobs.

But do you know what we need even more? An overhaul to the tax system. We want a fair and efficient system -- with more revenue for the Dems and less government for the Repubs. And you want to know how easy that is to accomplish? Very.

Don't let the liars in Washington fool you. Or the shortsighted news readers on the TV and radio. Overhaul is as simple as a stroke of the pen.

How? Simply slash the outrageous tax breaks for the super rich. Before you tune me out, just consider this:

  • No more yacht write-offs (how many people do you know that have a yacht? You pay taxes to cover their write-off).
  • No more private jet write-offs (again, how many people do you know that have private jets? You're paying for their write off with your taxes).
  • No more corporate off shore stashing of profits to avoid taxes (you have to pay taxes, why shouldn't they?).
  • No more subsidies to oil companies thus giving them billions in profits with unfair write-offs like off-shore banking. (You're paying for it with your taxes).
  • No more tax breaks to companies for outsourcing jobs. (Yes, we give a break if a company hires workers in a foreign land as opposed to a legal worker here in the states.)
  • No more giving free money to banks (too large to fail or jail) thus giving them even larger corporate writeoffs for managing the money they've been loaned).

Do you realize we give big banks interest-free money and let them keep it and call it profits? Yup, and they're not even encouraged to use it for customer loans or service. It's OUR TAX MONEY. Yet go in and try to get a loan. Good luck.

If a big bank needs cash to stay afloat, force them to use that money for loans to individuals and small businesses, or else the bank must return the money within two years WITH a punitive interest payment for the use of the money. If you borrowed money, whether you used it or not, you'd have to pay the piper. Why not JP Morgan/Chase or Citibank?

Implement these suggestions and watch how quickly financial institutions start giving out home mortgages to those who qualify or start up capital for small businesses to get launched. Need new equipment to modernize your small company? The banks will loan it because if they don't, they will have to pay interest. Watch the economy jump then. Big banks will become smaller and new banks will start up and carry those who leave the big established financial institutions for those who care about their customers. No depositor will be losing money. Nor will the banks unless they're unscrupulous, in which case, leave them. There will be options.

What's holding us back are loopholes that should never have been in existence in the first place. Their purpose has long since retired -- along with the crooks who wrote them into the tax codes.

And just like the NRA who scares the Bejesus out of our elected officials when we talk any sort of gun control, the rich do the same if you threaten their loop holes.

Politicians think only the rich put money into their campaigns so the poor and middle class don't matter. Ask Karl Rove how that went. Our vote is what they need even more than money. And our vote counts just as much as the millionaires' or business tycoons'.

So demand what's important -- our elected representatives start representing us -- the poor and middle class. The rich don't need our help. Obama and Congress should be talking about gutting -- but gutting the tax system, not our security nets.

The Holy Trinity, Medicare, Social Security and Medicaid cannot be tampered with. They're not the problem. We can even improve them and cut our taxes at the same time -- hear that, Republicans, tax cut -- if you stop protecting your rich cronies and do your job.

Congress, we can remove you -- and we will. We'll gut you (with our votes) like Jack the Ripper -- a sacrifice that's more important than gutting 99% of the public. Dump the Chump!

For the past 25 years, David Garber has been serving as the show runner and or writer on some of television’s biggest hits… Saved By The Bell, Power Rangers, 227, Bill Cosby Show and many other network series. His writing and producing have also netted David two very prestigious awards:the PRISM AWARD and the TV CRITICS AWARD – TV SPECIAL OF THE YEAR. Currently he’s authoring a short story series called “A Few Minutes With…”

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"The Republicans and Democrats bet they can make each other blink first."

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you blinked

Another guest post is by our pal and regular TPC contributor, David Garber:

Wanna Bet?

From time to time, on this very site, Laffy and Paddy post very interesting bar bets. Sure ways you'll win a free drink if you can find a sucker to take them. I love those as there's always a catch. A gimmick. A "trick" either with words or with actions. Some of these simply amaze me. Others cause you to slap your forehead and make you ask, why didn't I see that?

But once in a while, you do "see that" or you amend the challenge so it goes in your favor. The sequester is just such a bar bet.

Here's how. The Republicans and Democrats bet they can make each other blink first. That's the misdirect. They have you thinking about blinking, when really what this is all about is getting some budget cuts -- with or without increased revenue -- depending on your point of view.

So the gauntlet is tossed. It's called sequestration. The Democrats make a go of it by playing Chicken Little. They say the sky's falling. The Republicans counter playing Rope-A-Dope. They say we need even deeper cuts and no revenue increase. We don't want to touch taxing yachts, private jets, or cutting write-offs for third and fourth houses. (Some might call this the 2% rule as it affects only the top 2% of the country) -- and while we're at the cutting stage, let's drop a bunch of  our social safety nets, just to be on the "safe" side and get the Dems to blink. (That's called sticking it to the 98%)

The cocky Congress accepts the bet. Sequestration, the challenge, begins. But neither side blinks. So who wins? The Republicans say they do. "Look at all those cuts we got in sequestration " The Democrats are saying, "Not so fast. Look at all the jeopardy you're causing by weakening our defense, gumming up our air travel and putting our health and food safety at risk!"

The payoff is about to come. And just like hearing an old joke, you know the punchline before it comes -- but also like an joke, it's only old if you're heard it before. And we have. The Republicans say we're not weak on defense, we're strong. And they pull out the old, "Let's create a new spending bill and only address those things we want put back in the budget and even increase defense spending to show our steel balls. We have the majority in the House. We can pass it and save the day." The Republicans to the rescue.

They'll force Obama and the Democrats to look weak on defense and border protection if they don't go along. They calculate that the Democrats will blink. The House is in Boehner's pocket on this one. And the Senate won't have enough Democrats who are strong enough to vote against national security to stop the new spending bill to make it to Obama's desk.

Blink.

But wait! It's a bar bet after all. And there's always a gimmick.

The Democrats counter, taken directly from the Republican play book -- load the bill down with totally unrelated additions. Tack on teaching, research, first-responders, air traffic controllers, airport security, FDA funding, et al -- maybe even a new bridge to nowhere-- everything else that has been cut under sequestration, forcing the spotlight on the Republicans as they try to pare those additions from the bill.

The spotlight moves off of the Dems and onto the Repubs, making them look like obstructionist weaklings -- and who can argue with that description -- Bobby Jindal? Newt Gingrich? Maybe call in Jeb Bush? It's called the double end around play. Reconciliation between House and Senate bills.

The point of this lesson is that the trick is in the details -- and by trying to make the Democrats look weak, they can turn the table and make the Republicans look even weaker by having passed these cuts to begin with. Sure some Dems voted for it -- with a gun put to their head to get an increased debt ceiling so we didn't default on our obligations. Not going into sequestration to start would have been the smart move. But who can accuse these cronies of being smart?

Fortunately, there's still time before irreparable damage has been done to pass a simple bill rescinding the sequestration portion of the 2011 budget bill -- called the 2013 Budget Adjustment Bill. It may take a week or so -- right now Congress has no skin in this fight. Their salaries are guaranteed not to be touched. So they're not in any hurry. We Americans are, but we'll have to wait it out for the bar bet to be called a draw, and then we go right back to where we were. Both sides blinking at the same time.

So let's patiently watch this bet play out. If done right, the status quo will return. If done wrong, the Democrats lose and we along with them. So grab a bar stool and let's see if I'm right. Wanna bet?

For the past 25 years, David Garber has been serving as the show runner and or writer on some of television’s biggest hits… Saved By The Bell, Power Rangers, 227, Bill Cosby Show and many other network series. His writing and producing have also netted David two very prestigious awards:the PRISM AWARD and the TV CRITICS AWARD – TV SPECIAL OF THE YEAR. Currently he’s authoring a short story series called “A Few Minutes With…”

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"People have figured out what Republicans want: Cut taxes for the rich and if the country goes to the dogs, it is Obama's fault."

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blame obama

Today's L.A. Times letters to the editor, because our voices matter:

Re “Obama's dangerous experiment,” Opinion, Feb. 28

Rep. Howard P. “Buck” McKeon (R-Santa Clarita), the chairman of the House Armed Services Committee, fails to mention that he himself voted for the “sequester” in 2011.

Two conclusions can be made: that he agreed with these cuts at the time, or that he negotiated in bad faith, planning to undo the cuts that he didn't like at a later date.

McKeon infers from President Obama's behavior that the administration wishes to “hollow out” the U.S. military.

I infer from McKeon's behavior that he wishes to protect a small number of defense contractors (that donated large sums to his campaign) at the expense of the large number of average citizens in his district who benefit from social programs.

Richard Olmstead
Van Nuys

***

McKeon mentions the president's proposals to avert sequestration, then goes on to blame Obama for all the ills that sequestration will visit on the military. Huh?

He also whines about previous cuts to the military budget, despite the fact that one GOP-initiated war has been wound down and the second is in the process of being ended.

The Republicans can't have it both ways — either focus on the budget cuts and suck up the pain, or work with the president to find alternatives.

Enough with the hypocrisy.

Brent Vanderwood
Mission Viejo

 ***

Dear Congressman: You may be absolutely right about what may happen to the military and to civilian jobs because of the sequester. You may also be absolutely right that it really was a “dangerous experiment.”

But I did not think that Republicans would care so much for cutting budgets that they would rather destroy the country.

People have figured out what Republicans want: Cut taxes for the rich and, in that fight, if the country goes to the dogs, it is Obama's fault.

I am a small-business owner. Can you tell me what you have really done for us? If more people had money, I would have more customers. I do not make money when only the rich can afford my products and there are not enough people in the middle who can.

Sam Mookerjee
Canoga Park

***

If one were to look at the yea and nay votes in the House on the sequestration bill, one would see that McKeon voted in favor.

If civics were still taught in our schools, we'd see that the president can create no laws; that is the job of Congress — the Senate and the House of Representatives.

So now my elected representative is blaming the president for the sequestration problem? Doesn't sound to me like the party of “personal responsibility” is capable of taking any.

Doug Kimball
Lancaster

***

The sequester is wrong, but McKeon's solution is absurd.

The Republican bill passed in the last session would cut deeply into programs for the poorest in our country to maintain a level of military spending that dwarfs the rest of the world's.

Now, while we are in a recovery period from the recession, is not the time to be cutting spending. We should have a short-term stimulus package coupled with a long-term tax reform and spending package.

We do need to do something to control the cost of Medicare in the long term; the healthcare law is starting to address this issue.

Michael Ubell
Oakland

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Hey America, guess what! Paul Ryan still wants to kill Medicare!

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medicare poster paul ryan, eric cantor, boehner

privatization

Austerity does not work. Just ask Europe. Privatization doesn't either, it just widens the wealth gap and creates more inequality. In fact, because of budget cuts, “even police protection is more accessible to those with cash.”

Steve Benen at The Maddow Blog:

The unemployment rate was effectively unchanged at 7.9%, and as is often the case, austerity measures undermined the employment landscape — while America’s private sector added 166,000 jobs in December, the public sector lost 9,000 jobs. Indeed, over the last three months, the nation’s private sector added 624,000 jobs, while 24,000 government jobs were lost.

It’d be easy for Washington to improve the latter number and lower the unemployment rate, but congressional Republicans won’t allow it.

By the way, GOP, you can scratch more talking points off your list, because three-quarters of deficit reduction has been via spending cuts, and we have the slowest spending in decades.

The L.A. Times:

Fired up as once-unimaginable spending cuts start to slice the federal budget, Republicans are launching a new phase in their austerity campaignresurrecting the party's cost-cutting plan to turn Medicare into a voucher-like system for future seniors.

Read that first part again. Republicans are "fired up" over the nation going down the sequester toidy, and they actually believe they have momentum. And by momentum, they mean every poll showing disagreement with their policies:

poll cuts taxes ed showpoll sequester ed show

In fact, GOP Sen. Rob Portman was protested at panel discussion for supporting Medicare, Social Security cuts.

And Michael Hiltzik wisely asks: Cut Medicare and Social Security? What’s the rush?  There's a good reason why Republicans refuse to provide details.

Did I mention that those "future seniors" who Republicans speak of so dismissively may not realize it yet, but they won't like what's coming down the ol' voucher pike?

So what do they do with their imaginary momentum? Clearly, something constructive to get us out of the ditch their party created, right?

Ryan's approach would transform the benefits program into one that would provide a fixed amount of money in a voucher that future seniors could apply to the cost of buying private health insurance or to buying coverage through traditional Medicare.

Again, that "fixed amount of money" is a drop in the bucket compared to the costs of even one medical procedure... which would be covered by Medicare. And how many seniors can or want to switch from Medicare-- a program that works so well and has a proven track record-- to spending a fortune on premiums to Big Insurance which cares nothing about them but cares a whole lot for their damned bottom line?

What part of "This plan has never gotten American support" doesn't Ryan get? Read our lips, Paul: That would shift healthcare costs from the government to seniors.

Ryan's budget proposal is expected to lock in $1.2 trillion in sequestration-linked cuts over the next decade, while also reducing growth in the costs of Medicare and Medicaid — the health program for the poor, disabled and seniors in nursing homes. Other safety net programs, including food stamps and school lunches, also would be targeted.

See how the GOP is changing their ways in order to appeal to more voters? Me neither.

Oh, and to anyone out there who still thinks Chris Christie is worthy of praise and would make a swell Dem, think again. Chris Christie supports the Ryan Budget.

Finally, just for good measure, a couple of L.A. Times letters to the editor, because our voices matter:

Re “Seniors vs. kids claim is a sham,” Business, Feb. 27

As a senior, I am concerned about my Social Security and Medicare benefits. However, I am also concerned about the future prosperity of my children and grandchildren.

Your writer correctly points out that the chatter about “generational theft” in the debate over national fiscal policy is an intentional distraction. This false proposition that we must choose between spending on seniors' benefits or spending on our children's futures diverts attention from the national economic policies of the last 30 years, which have damaged the economic security of most Americans. These flawed policies caused an immense transfer of wealth to the top 1% while most Americans' incomes stagnated.

We don't need excessive wealth languishing in private hands and corporate slush funds. Our country has enough wealth to serve the needs of all our seniors, our families and our children. We need more of this wealth redirected to serve all Americans.

John D. Kelley
Santa Barbara

***

The argument that Social Security is causing a generational rift is just as false as the use of the term “entitlements” to describe both Social Security and Medicare.

The generational theft is a scam created by those who are trying to kill these programs. The truth is that the benefits from these programs may be greater for young people than they are to the old.

Consider this: When Social Security and Medicare pay for the cost of caring for your parents and grandparents (and that is who the old people are), it relieves the young of that obligation. The point is, if those programs do not pick up those costs, who do you think will have to? The children and grandchildren.

Sanford Thier
Marina Del Rey

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CHART-- Memo to GOP: Spending cuts SHRINK the economy, undermine growth. Oh, and the U.S. added jobs in January.

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shrinkage smaller

chart spending cuts shrink economy

Via Steve Benen at The Maddow Blog.
The red columns show the economy under the Bush administration; the blue columns show the economy under the Obama administration.

For the first time in years we're seeing a slight contraction in economic growth. Here is an email alert from the New York Times from this morning:

The United States economy contracted unexpectedly in the final quarter of 2012, hurt by weaker exports, a drop in military spending and a slower buildup in inventories.

The Commerce Department said Wednesday that economic output in the quarter fell at an annual rate of 0.1 percent, compared with growth at a 3.1 percent pace in the third quarter.

READ MORE: http://www.nytimes.com/2013/01/31/business/economy/us-economy-unexpectedly-contracted-in-fourth-quarter.html?emc=na

Now before everyone panics, Steve Benen at the Maddow Blog notes that this is not necessarily evidence of a new recession, and on the whole, the report really isn't that bad.

But that won't stop Republicans from playing the Blame Obama game. Did I mention that, per a Fox Business email alert, the ADP National Employment Report shows the U.S. private sector added 192,000 jobs in January, topping estimates of 165,000?

Via Benen:

I realize the right doesn't want to hear or believe this, but when Washington spends far less -- in this case, the cuts focused on defense -- it takes capital out of the economy and undermines growth. It is, as a practical matter, a form of austerity, which hits the brakes on the economy. This is Economics 101 and yet Republicans continue to insist that it is the only policy they really care about.

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