Blame Obama.
I hope the President starts negotiations over deficit reduction from the strongest possible position. After all, he won the election.
The consensus (Simpson-Bowles, Congressional Budget Office, Republican leaders, White House) is we need to cut the deficit by $4 trillion over the next ten years.
Here's how.
First, raise taxes on the rich -- who are now richer than they've ever been, and taking home a larger share of total income and wealth than in over 80 years.
Sixty years ago, Americans earning over $1 million in today's dollars paid 55.2 percent of it in income taxes, after taking all deductions and credits. If they were taxed at that rate now, they'd pay at least $80 billion more annually -- which would reduce the budget deficit by about $1 trillion over the next decade. That's a quarter of the $4 trillion in deficit reduction right there.
A 2% surtax on the wealth of the richest one-half of 1 percent would bring in another $750 billion over the decade. A one-half of 1 percent tax on financial transactions would bring in an additional $250 billion over the decade.
Add all this up and we get $2 trillion over ten years -- fully half of the deficit-reduction goal. Raise the capital gains rate to match the rate on ordinary income, and cap the mortgage interest deduction and tax-free employer health care at $20,000 a year, and that's another $500 billion over ten years. Bottom line: $2.5 trillion in additional revenue, and that's not including spending cuts.
Now, for spending cuts: Cut military spending by 10 percent and we save over $500 billion. Eliminate special tax subsidies to oil and gas, price supports to big agriculture, subsidies for ethanol, tax breaks and research subsidies for Big Pharma, and indirect subsidies to the biggest banks on Wall Street, and we save close to another $1 trillion over ten years.
Bingo: $4 trillion -- without raising taxes on the middle class, without cutting Social Security or Medicare and Medicaid, without cutting education or infrastructure, without reducing programs for the poor.
Are you with me?
....Thursday's Supreme Court decision that could have a big effect on future public corruption cases and will quite likely end up letting a good number of convicted public officials out of prisonStarbucksgate: CREW Calls for Investigation of White House
The allegations suggest that the Obama administration may be flouting the same recordkeeping laws that the Bush administration did: the federal and presidential records acts (FRA and PRA). Both laws require that White House staff retain records—including emails—related to their daily work. By using private email accounts to schedule coffee shop meetings with lobbyists (an apparent attempt to prevent these sessions from appearing in White House visitor logs), Obama officials can bypass normal email archiving procedures and "avoid the creation of any record that would memorialize those meetings." Since emails scheduling meetings with lobbyists would almost certainly be the type of emails that the FRA and PRA require White House officials to preserve, the Obama team is "in violation" of the FRA and the PRA, CREW writes.Krugman:
We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.The G20 as Naomi Klein sees it:
And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.
As thousands protested in the streets of Toronto, inside the G20 summit world leaders agreed to a controversial goal of cutting government deficits in half by 2013. We speak with journalist Naomi Klein. "What actually happened at the summit is that the global elites just stuck the bill for their drunken binge with the world’s poor, with the people that are most vulnerable," Klein says.Endless war, a recipe for four-star arrogance
I've been trying to think of a way to explain this in a way Mitch McConnell would understand. As 2009 got underway, Republicans had left two huge messes related to the economy: 1) a nearly-catastrophic recession and unemployment crisis; 2) a budget mess, including a $1.3 trillion deficit and $10 trillion debt. Both problems were simply left for the Obama administration to clean up.They do it because it works. We are now celebrating the Era of Stupid and the stupids vote.The economic question of 2009 was which problem would be addressed first, but there was a catch that went largely unstated. Whichever mess policymakers chose to clean up first would necessarily make the other mess worse. It was simply unavoidable -- investing in a recovery would increase the deficit; lowering the deficit would take money out of the economy and exacerbate the recession.
Questions of sincerity notwithstanding, it was the main difference between the Democratic and Republican approaches to the economy -- Dems wanted to focus on one of the messes Republicans created (growth and jobs); the GOP wanted to focus on the other (deficit and debt).
That is, it would be the difference if lawmakers like McConnell approached governing with even the slightest bit of seriousness. Notice in his response that there's nothing even approach coherence -- he wants Obama to spend less, and more. He wants the administration to take on a larger role, and smaller. He wants the White House to care more about debt reduction, and less. He wants the president to prioritize investing in job creation, and to stop prioritizing investing in job creation.
Why anyone could take such policy gibberish seriously is a mystery to me.
Of all the claims Rove made, one in particular caught my eye for its sheer audacity and shamelessness -- that congressional Democrats "will run up more debt by October than Bush did in eight years."Don't let them rewrite history. Remember this.So, let's review a little history:
The day the Bush administration took over from President Bill Clinton in 2001, America enjoyed a $236 billion budget surplus -- with a projected 10-year surplus of $5.6 trillion. When the Bush administration left office, it handed President Obama a $1.3 trillion deficit -- and projected shortfalls of $8 trillion for the next decade. During eight years in office, the Bush administration passed two major tax cuts skewed to the wealthiest Americans, enacted a costly Medicare prescription-drug benefit and waged two wars, without paying for any of it.To put the breathtaking scope of this irresponsibility in perspective, the Bush administration's swing from surpluses to deficits added more debt in its eight years than all the previous administrations in the history of our republic combined. And its spending spree is the unwelcome gift that keeps on giving: Going forward, these unpaid-for policies will continue to add trillions to our deficit.
Yesterday, the White House “increased its estimate for next year’s deficit to nearly $490 billion, a record figure that will saddle the next president with deepening budget problems in his first year in office.” But, on ABC News’s Good Morning America today, Claire Shipman reported that the deficit is actually much higher because “creative White House accounting” didn’t include the war, the unemployment costs, Medicare fees, or the housing bill in its calculations. If those numbers are included, it brings “the grand total to about $600 billion.”
Today, lawmakers took to the Senate floor and blasted President Bush’s wasteful spending. To fully illustrate the impact, Sen. Sheldon Whitehouse (D-RI), brought up a chart showing the budget plans of President Clinton versus the budget formulated by Bush. He concluded that by squandering Clinton’s government surplus, Bush has cost the country $7.7 trillion:Right.This next chart illustrates the value of the differences between the budget landscape planned by President Clinton and the one created by President Bush. As you can see, the difference between the two is a staggering $7.7 trillion. This number represents the fiscal harm that President Bush has inflected on our nation. This number is the Bush debt. […]
Like most concepts of enormous size, this amount takes some thought to comprehend. $7.7 trillion is $25,000 owed by every adult or child in the United States.
After listing several examples of oddly convenient "budgetary constraints", Benen ends by saying:The Bush administration has a long and comical history of going to great lengths to hide bad news from the public. Today, Amanda at TP reports on the latest gem:
The U.S. economy is faltering. Family debt is on the rise, benefits are disappearing, the deficit is skyrocketing, and the mortgage crisis has worsened. Conservatives have attempted to deflect attention from the crisis, by blaming the media’s negative coverage and insisting the United States is not headed toward a recession, despite what economists are predicting.
The Bush administration’s latest move is to simply hide the data. Forbes has awarded EconomicIndicators.gov one of its “Best of the Web” awards. As Forbes explains, the government site provides an invaluable service to the public for accessing U.S. economic data:
“This site is maintained by the Economics and Statistics Administration and combines data collected by the Bureau of Economic Analysis, like GDP and net imports and exports, and the Census Bureau, like retail sales and durable goods shipments. The site simply links to the relevant department’s Web site. This might not seem like a big deal, but doing it yourself–say, trying to find retail sales data on the Census Bureau’s site — is such an exercise in futility that it will convince you why this portal is necessary.”
Alas, as the economic conditions worsen, the administration decided to shut down this “necessary” website, citing “budgetary constraints.”
When public information conflict with the White House’s agenda, the Bush gang has a choice — deal with the problem or hide the information. Guess which course they prefer?Well.. lessee... hmmm. Really do some hard work? Sit down and do some difficult math? Actually govern?