Flirting with Fiscal Armageddon: Notes on the U.S. Debt Crisis
Let me confess right here that I never advanced past Economics 101. To my undergraduate mind, the Dismal Science just seemed to lack the visual sweep and splendor of ancient history, art or even evolutionary biology. The only illustrations in my overpriced economics textbook were graphs, and the prose didn’t exactly crackle with energy or humor.
My aversion to economics persists to this day, so the opinions I offer here are strictly those of a perplexed amateur. But that’s all right, because the financial disasters of the past few years have convinced me that everybody is perplexed when it comes to economics — including the economists. The subject is simply too vast and too convoluted for our simple mammalian brains to comprehend.
Any human who pretends to understand the system from top to bottom is doing just that: pretending. And we don’t want to deal with pretenders when we’re facing fiscal self-immolation.
Meanwhile, the time bomb is ticking. As of this writing, the federal government has less than two weeks to get its act together and avert the first debt default in the history of the republic. What does that mean, exactly? In the simplest possible terms, as I understand it (and believe me, I understand it only in the simplest terms), it means that the U.S. has to raise its credit limit or it will no longer be able to borrow money. When it can’t borrow money, its checks will start to bounce. And when its checks bounce, its credit rating will go pffft!
That’s not good. In fact, it could be horrific. As former Treasury Secretary Lawrence Summers quipped when asked what would happen if we didn’t raise our debt ceiling, “It’s going to be Lehman [Brothers] on steroids, it’s going to be financial Armageddon.”
The Federal Reserve, our government’s trusty banker, is reportedly preparing a “doomsday” plan, as are several Wall Street institutions. A default would undermine an assortment of federally backed financial products, ranging from treasury bills and real estate investment trusts to grandma’s money market fund. We could witness the third disastrous stock market collapse of the still-new century.
You can bet that our banks will do everything in their power to preserve their capital, along with the personal finances of their top clients. The rest of us will be on our own.
That goes for the 50 states that comprise our indivisible Union. Like college kids cut off without an allowance, the states would be running up insurmountable debts of their own, and their individual credit ratings could collapse. We’re looking at a nuclear chain reaction in the making.
The resulting economic devastation could be incalculable. So, too, would be the devastation inflicted on the American psyche. Some of the more pessimistic pundits are suggesting that we might never recover. Centuries from now, historians would be scratching their heads in amazement, wondering how this towering economic juggernaut could have incinerated its own house when it would have been such a simple matter to save it.
The point is that we can still save it. And I’m betting that we will. (By the time you read these words, the issue might already have been decided one way or the other. )
America could easily lift the debt ceiling and still conjure up inventive measures to reduce our staggering $14.3 trillion running tab. It could pull the plug on its endless and unwinnable wars against religious fanatics… could stop propping up corrupt foreign regimes… could quit subsidizing favored corporations… could raise taxes on top earners and tax capital gains as income… could cut back on cushy benefits for federal workers… could streamline the mindboggling bureaucratic machinery that dictates what sort of light bulbs Americans are allowed to buy.
Instead, our elected representatives are flirting with national suicide.
So why are Congressional Republicans and President Obama playing chicken, speeding toward each other with blazing headlights as the August 2 deadline approaches? What personal and partisan agendas could possibly rank higher in their priorities than the future of America?
Good question. Glad I asked it. Today’s militant Republicans are wedded to two overriding principles: 1) Keep taxes at a minimum (read “Do nothing to impair the ability of the elite to amass more wealth and power”) and 2) Destroy Obama. The president, for his part, needs to reinforce his moderate-liberal street cred by protecting entitlement programs as much as they can be protected.
So far, Obama has shown a greater willingness than his G.O.P. adversaries to compromise for the good of the country. The Senate’s hearteningly bipartisan “Gang of Six” reached a reasonable compromise solution, too: they agreed that we could scale back a few entitlements as long as we closed some egregious tax loopholes that favor the plutocrats.
But the rogue Republicans in Congress refuse to concede even that much. Force our favorite corporations to pay taxes just like workers? Let the Bush-era tax cuts expire on schedule — and risk alienating our base? Compromise with that Kenyan in the White House? Never!
America and its people should never be held hostage by a narrow and selfish ideology that represents the interests of a favored few. In fact, the trouble with our hoary two-party system is that it no longer serves the interests of the majority. More than ever before, extremists drive the debate, nominate the candidates, win the elections and serve the special interests who put them in the driver’s seat. This has to stop.
Should we launch a third party to cover the mid-region of American political thought? I think we should. But sooner than that, we need our representatives — and especially Obama’s stiff-necked Republican opposition — to drop the stubborn ideological blustering and avert the debt meltdown. I still trust that they will. They’d better.
I have a suggestion, and I’m absolutely serious: if the U.S. defaults on its debt as a result of partisan intransigence, with all the attendant economic unraveling and long-term ruin promised by our professional prognosticators, we should consider charging those intransigent representatives with high crimes and misdemeanors, not excluding the ultimate accusation reserved for those who betray their country: treason.
That’s right. You heard it here at The New Moderate, of all places. And why not? Moderates can and should react fiercely when politicians sabotage the nation. We’re under no obligation to be perpetually polite in the face of hyperpartisan brinksmanship, and we can’t afford to stand idly by while America implodes. In times like these, we need to think a little more like radicals.
We wouldn’t become leftist radicals, of course; we’re not talking about collectivizing the means of production (whatever production still survives in the U.S.). No, we’d become radicals for justice, for balance, for common sense. But we’d tolerate nothing less. Just ask gentlemen like Ben Franklin, John Adams and George Washington if being a moderate means ruling out radical action. If they could still speak, I think you know what they’d tell us.
THE NEW MODERATE 
sooner or later this economic system will self implode from consumption…better sooner rather than later while we still have resources…
Roberta;
Malthus was wrong. He was well rebutted in his own time. Througout my life I have been hysterically told of the iminent end of the world – from nuclear armagedon, through silent spring, the population bomb, The coming Ice Age, Global Warming, Peak oil (repeat every couple of years), ……
There is more wealth, for more people, there is more food, less poverty better health, the entire world is better in most every measurable way. Partly I know it is better because I have bothered to check real statistics – such as we have more forests today than 30 years ago. Partly because I can look arround. Not only do I have more wealth – things I value not money, than ever before, or than my father or grandfather did, but the poor people I knew from 30 years ago, are not poor today, and the poor today have far more real wealth than those 30 years ago.
My eyes tell me that what I am told daily on the news is false. The sky is not falling.
The real problems will get solved. They always do – though never through government.
There is only one limit to Wealth – consumption, the point at which we have more than we can possibly enjoy. As Adam Smith observed two centuries ago – the rich get there, and then rather than accumulating wealth they accumulate money. This is why contrary to popular misconceptions the greater the disparity of the distribution of money (absent government corruption) the more wealth there is AT THE BOTTOM. Smith understood this 200 years ago.
Dave: I’d love to be as optimistic as you. I don’t disagree with your sunny observation about increased wealth in our time, but that wealth is partly due to the fact that we have so many more dual-income households now than, say, 50 years ago. Also, two stock market crashes in one decade (and a possible third on the way) don’t exactly inspire faith that our financial prospects are improving.
We’ll have to wait and see what happens August 2; I don’t think we’ll have a default (there are some fail-safe measures that Obama can still deploy). But all this dancing on the precipice is making me nervous.
Througout much of my life I shared your disdain for finance. I accepted the conventional wisdom that even thinking about money was atleast scurilous, and probably sinful. I traveled through many political and even religious views. But throughtout most of my life I held to a strong though not well thought out belief in individual liberty – though I mistakenly conflated liberty and equality.
But as I have continued to grow I have recognised that economics is not the dismal science, it is not science at all, it is all about freedom. It is about the individual freedom to seek what we desire. The market place is how we pursue happiness. We produce in order to get what we want. We each make our own choices, whether that is money, power, houses, Cell Phones Flat Screen TV’s, time with our kids, vacations, reading, entertainment, …. We are free to make our own choices, nor are we limited to one. And so we must prioritise our needs and desires. The free market is how our priorities regarding what we want are converted from what we produce. Unlike most of human history, during the last couple of centuries we are no longer required to produce for ourselves what we need. We can produce what we are good at, and trade it for whatever we want. And miraculously the free market – something else that is only a couple of centuries old, transforms the one into the other.
This is economics. This is the mechanism that has enabled even most of the poor of todays world to live better than the pharohs. Most amazingly, the creation of wealth for oneself requires the creation of even more wealth for others. Progressives and all too many others focus on the few “entrepeneurs” as if they are some tiny fraction of all of us. But each of us are “entrepeneurs”. Though some are more successful than others, all of us try to improve our lot – though we do not share the same desires. Some are better than others, but the vast majority of us participate to some extent in making the world a better place – not by prayer, or charity or self denial, but by trying to make it a better place for ourselves.
That actually is the system – the whole of it pretty much in its entirety. The free market itself is incredibly complex, matching and constantly re-arranging what we produce and what we want is infinitely complex. But that is the only knowledge problem in the entire system. The infinite variability and instantaneous changes in direction involved in matching our wants and desires with what we produce are beyond the capacity of any computer, any expert, government of any size. Any attempt to impose some form of order or organization on the market from above, always means a loss of individual freedom. It means others forcibly making decisions for me regarding what I desire and what I can do to get it. The market place often imposes limits, but only government can legitimately use force.
Interesting point about all of us being entrepreneurs — we are, in a sense. But of course there are good entrepreneurs who improve our lot and not-so-good entrepreneurs who exploit others and only look out for themselves. Government has its bright and dark sides, too. I think the ideal society combines the best of both.
The approaching Armageddon is not an accident. We have an arbitrary deadline, but in reality its only meaning is political. The real crisis and irresolvable problem is between two different views of the world. The president at-least has a fair grasp of his. The president believes that government is a force for good. This is possibly his core value. He has campaigned on that belief and governed based on it. His failures are because not in-spite of it.
With few exceptions that is also a world view shared by most republicans. What separates the republicans from the president, is that the republicans are far less sure of that. It is not a core principle for them, and at the moment it does not seem to be working to well.
A few of us, far fewer than all republicans, or all tea party members, or even all libertarians, believe – fairly confidently, that government is at best a necessary evil.
The purpose of government is the legitimate use of force. That is the only thing government can do that we can not do ourselves.
Despite the fact that most republicans are actually uncomfortably in the class of people who believe that government is a force for good. This conflict is essentially over that proposition. Nor is it ending anytime soon.
If those who believe as I do are right, then we will repeatedly be confronted by the failures of government. We can raise the debt ceiling tomorrow – whatever differences it makes will only be temporary.
You are worried about economic Armageddon, The great depression did not come about they day after one bad decision, nor the failure to make one purportedly critical decision. The current recession required several mistakes compounded repeatedly over almost a decade.
Details of what happens in Washington on a daily basis may crash the markets or elevate them, but what really matters is not a single decision that purportedly must be made by Aug. 2, but to what extent we get our fiscal house in order.
The good and bad part of my conception of economics is that you do not have to get everything perfect for it to work – though I would note that for most of human history progress, prosperity, wealth grew little if at all. The greater the freedom the greater the prosperity.
We have a weak recovery because we have restrained the economy from fixing itself, and we have compounded the problem by reducing our freedom chasing more government created common good mirages. We may even go into a double dip – but recovery is actually inevitable. We are not facing fiscal Armageddon – though we do have a choice between better and worse.
Where does this view of “government as evil” come from? I see a lot of evil originating from the too-loosely regulated realm of Wall Street. I don’ think it was evil of the government to limit the excesses of robber barons (or slaveholders, for that matter).
Evil doesn’t take up residence solely in one sector… it’s dispersed throughout society. Every complex society is going to need some degree of government intervention; the moderate ideal is wise government, not necessarily limited government.
I genuinely do not understand your last sentence (omg, maybe I really AM stupid 😉 )
You believe in “wise government,” but not necessarily “limited government”? I think I understand your political views well enough to assume that you are not talking about realpolitik or benevolent tyranny, but then what is unlimited, wise government?
It is certainly not constitutional government, since the whole concept behind our constitution is limited government, with built-in checks and balances.
I don’t think that the proponents of limited government see government as “evil, ” nor are they advocating a total lack of regulation in the marketplace. I think that those who call for limited government are calling for balance and common sense. I don’t know of any important conservative, for example, who has literally called for the end of Social Security…..but most have called for significant restructuring of SS, which is now essentially a ponzi scheme which is reaching its tipping point. Some of those restructuring plans rely almost exclusively on the private sector to administer SS going forward. Now, I’m not sure whether or not I would be in favor of those, but I would like our leaders to have an open debate on it, rather than resort to the “Republicans want to take away your SS” nonsense that we always hear.
And, for what it is worth, I hate to always be in the position of defending the GOP….I have a lot of problems with Republicans and do not agree with the conservative position on many issues. I do, however, believe that the Democrats have moved way too far to the left, and that they rely on identity politics and class warfare rhetoric to maintain their political power, which I believe is far more dangerous than the small government rhetoric of the right.
Priscilla: (I had to reply to my own comment because, for whatever reason, there was no “reply” button on your comment) I probably should have used the term “minimal government,” because as you suggested, the opposite of limited government is unlimited government. (I know some people think I’m to the left of Lenin, but hey, I’m not THAT radical.)
I do think big government can be wise government when the times demand it… the Great Depression comes to mind, along with FDR’s inspired work programs. And, as you know from my recent rants here, I think we’re in dire enough straits right now to justify more government intervention on the job front.
Have the Democrats moved more to the left than the Republicans have moved toward the right? Simple answer: nope. Both parties are marginalizing the moderates in their ranks and venting their share of divisive rhetoric, but I think the Republicans are starting to go off the deep end. When we’re in an almost unprecedented budget crisis, how can they not even consider raising taxes on the top earners (including big corporations, of course) back to Clinton-era levels? (We’re not talking about the Eisenhower-era 90% tax on top earners.)This is not only selfish… it’s utterly reckless, not to mention contemptuous of the endangered American middle class.
It’s almost as if the right would throw the country under the bus to guarantee a defeat for Obama, and that’s just plain wrong. Why do they hate this president with such ferocity? Granted, he’s not an especially effective leader… but he’s turned out to be a milquetoast establishment liberal, not a raving lefty. Why else would he be taking such heat from his own party?
Last night’s address, even according to an admitted Obama partisan like Chris Matthews, was an inappropriate and dangerously political speech, which attacked Republicans and presented no plan other than to say that any plan had to extend into 2013, i.e. beyond the next election. I can never recall a president giving a White House speech purely to attack his political enemies, while presenting no new development or information to the people. I give credit to the broadcast media for offering the Speaker a chance to respond, because it showed their recognition that this was, in fact, a political broadside and not an attempt at consensus or compromise.
Obama may not be a raving lefty, but if the Democrats have to stop funneling tax money to their base of big unions, special interests and minorities, they will lose, pure and simple. Democrats get elected to “help people” by giving them things, Republicans get elected to “help people” by cutting their taxes….it’s been that way for a century.
You can rant all you want about Republican evil (and I do like your rants, even when I disagree !) but it would be just as easy to rant about Democrat evil, and we end up in the same stuck place. Third party? I’m not a fan, but I understand those who are.
Priscilla: I thought Obama gave a good speech, but as one pundit said, it was the speech he should have given a month ago. He explained the situation clearly and acted like an adult, but he offered no solutions. I think he was entitled to do a little carping at the GOP opposition; if I were Obama, I’d be livid at their refusal to compromise on taxes. Obama has put some key entitlements on the table, incurring the wrath of more liberal Democrats, yet the Republicans won’t budge. I’m afraid the more reasonable Republicans are letting the Tea Partiers drive the bus. They need to reclaim their party.
As for the tax issue… well, you know where I stand. Taxes are at the lowest level in decades, and still the Republicans would rather see us default than cut into John Paulson’s multi-billion dollar income or Muffy’s trust fund. They’re starting to remind me of the aristocrats in Bourbon France… not a good sign.
Dave, I agree with your perception of the President’s political view as the Government being a force for good, but I completely disagree with your assessment of the Republican side of it. Although I consider myself a conservative, I do see Republicans moving more to a view closer to the President’s. However, the true conservative view is that the citizens of this nation can make better decisions and get far more accomplished, whether for themselves or when helping others than the Government can. True conservatives see it exactly like Reagan said in his first inauguration. Government is NOT part of the solution, Government is part of the problem.
Mark: I’ve always scratched my head over that “government is part of the problem” quote. Reagan was part of the government, which implies that he, too, was part of the problem.
Today’s militant Republican is finally a Republican that has finally said enough borrowing money and taking money from Americans.
I am surprised that they let the Democratic Party agenda get us to this point where we are questioning why it is wrong to “spend ourselves out of debt”. Isn’t that what the Democrats stated when they took power a few years ago? They doubled the debt from George Bush because they wanted their turn at spending money and then said we can all afford it and if we need to “print more money”? I mean, bailouts really were also bad and the first one was Republican owned. It was a mess all around.
The fact that business leaders in politics let this happen in the first place is tragic. The U.S. shouldn’t be held to owing money to anyone. That is the first sign of a weak country. If I remember correctly there was only one time the U.S. was not in debt and that was the 20 years following the War of 1812. This is when the U.S. had 18 surplus years and paid off 99.97% debt..
There was no “Progressive Income Tax” at this time. There was a temporary one during the Civil War and starting in 1894 (11 years after Karl Marx death) a Progressive Tax system was just beginning to form up to the 1913 Progressive (Socialist) Tax System. The educated children in college (1880’s-90’s) got their wish. Ohh, yes! I forgot the Federal Reserve Act was passed in the same year. Just think two of Karl Marx’s dreams were acquired in the same year. Now the Government is subject to a Private Bank owned by “Money Changers in Europe who have been trying to take over since the beginning of the United States and also the Government politicians get control over the people and the money for manipulation to bring in more Karl Marx ideas.
As for the “Elite to amass more wealth and power”. The politicians are in on it as well. They make $147k each or at least close to that amount. Have some 2nd homes. Do dealings with Corporations of many kinds. They do what money makers do. Lend money to people who spend and pay back more than what they lend out. They save and find ways to get good deals. My suggestion: Check out the coupon people. They save a lot of money. Stop complaining and do something for yourself to save.
Yes, The Republicans would like to destroy Obama for their parties candidates. Would Democrats do the same if it was reversed? Yea, it is a selfish mentality. Deal with it!
Obama is defending his entitlement programs or at least some Democrats. They wouldn’t have gotten them if we stopped them from doubling the debt from George Bush, but they had to get their way also.
Closing loopholes don’t favor only plutocrats. They favor whoever is entitled to get them. Like farmers who are making corn for ethanol while people starve around the world and the price for corn based products increase on our grocery store shelves.
Compromise is good, but let us remember it is bringing down the debt. Not breaking even with tax raises and entitlement cuts and then going out and spending again. This means that any increases in benefits, new programs, etc. can not happen.
I don’t consider them rogue Republicans. I see them as Opportunists. They should allow loopholes to be closed as it shows favoritism.
Sad thing is that if a Corporation sells its product with a 10% profit margin and then the Government comes in and wants to put a 35% profit in for it own spending habits. Now the consumer pays 45% more. The consumer loses in a Corporate Tax. It is essentially indirect taxation on the people.
The Government wants more money from us thru the business side? How tricky they are!
You can let the tax cuts expire, but you still have to cut entitlements. If you gather all the money and assets of the “rich” (those getting a paycheck above 250k) you would have only close to 1 Trillion. We are 14 Trillion in the hole and our Deficit is 1.5 Trillion per year. You would have to take from the rich over every year the same things and even half more. The spending and borrowing needs to stop!
Karl Marx said, “From each according to his ability, to each according to his need”.
Today’s Entitlements do not require your ability, just you having a need.
Pass a test and you get a check. Five kids and one on the way! No Problem! Here’s a check from a few taxpayers with kids. We (the Government) believe that this is Charity when we get taxes from hard working people.
I would say that it would have been better if someone took out Karl Marx from the start. He was a writer who sat around and dictated for Communist friends and clubs while at the same time was trying to understand Capitalism. One friend paid his rent and the other paid for his family’s food and health. Karl sat at the museum writing all the while his wife was dying at the home he was renting. He died the way he started…poor, never actually working a serious labor intensive job, and complaining about the rich.
He tried to understand the system, but when you have anti-Communists in each ear telling you things. Hey! Why not make something up and let others try to figure it out?
He was trying to understand Capitalism and how it works, but people have altered his ideas to meet their own agendas.
Wasn’t Karl Marx working on “Das Kapital II” when he died? Oh, yes, his Communist friend Engels finished Vol. 2 (1885) and 3 (1894) for him. Oddly, 1894 was when the income tax started in the U.S. and became official in 1913.
I believe we all are held hostage by two narrow and selfish ideologies. That of Adam Smith and that of Karl Marx. They both favor few people with money and power. In essence, both Democrat and Republican are in cohesion in power and wealth. I would like to think the Centrist agenda is Logic and Common Sense mixed with a happiness agenda for all.
You are correct our two-party system is no longer serving the best interests of the majority. They have been railroaded by money and power. Greed/Selfishness are the two main innate human traits that bring shame to our species trying to discover the truth of our existence. Until this evil is eradicated (Jesus teachings come back) we are subject to this curse. George Washington said in his last term that he foresaw two political machines eventually coming to odds and destroying a nation.
Extremists do drive the debate. The question is which ones? Left, Center or Right. The Status Quo is the center. If we are extreme in the center…we can swing both ways within the majority at all times. Obama and the Republicans can’t do this because they have a constituency of far left and right ideology. They can try, but they get called out on it.
We should launch a third party! It has been in the making for two years at least. It is just a matter of meeting and being aggressive. Business Cards, flags, meetings, teachings of Centrism, Chow’s (eat meetings).
Time to bring back the ancestors good old days of being free and loving your country without massive taxation or power hungry rulers.
When 50% of the nation is being represented by these politicians….I don’t think that “Treason” is correct. “Betrayal” might better sum it up. That goes for not only Republicans, but also Democrats and you would have to go to trial for each one.
I would bet that it would be very hard and time consuming to try each one. First, you root out the Centrists…or at least the one’s that could belong to a Centrist Philosophy based on their actions/ideas. Then you are left with wishy-washy moderates who vote this way and that. Then the hard core.
So what are you wanting to do? I just moving from Indy to Shenandoah Valley, VA. In about mid-August I will be living there. I hear you are in PA.
Kent
Correction: Karl Marx had two anti-Capitalists screaming in his ears while trying to understand Capitalism. He also was trying to figure out the Capitalist system in order to provide ways to dismantle it.
I also want to address details.
There is no fundamental difference in this instance between the US government and your own personal finances. If you have less revenue than expenses you must make choices.
You can borrow – and borrowing to acquire an asset is an investment, but borrowing to pay expenses is something that can only responsibly be done for short periods to get past a short problem. The US government deliberately does its accounting in the most irresponsible manner possible. Few in government want to distinguish assets, liabilities, capitol, revenue and expenses, it would make spending for pure expenses much harder – though progressives have found a way to spin expenses as investing.
It is not necessary even right now to be able to borrow to be able to pay debts.
Just as a family with less revenue than expenses will turn the lights off turn the heat or air conditioning down, forgo the monies and other unnecessary expenses, and still try to pay the mortgage, the same principles apply to the government. Most of us do not write checks that are going to bounce – among other things you can go to jail for that – nor does the govenrment need to.
The only way the US government defaults is if the president chooses not to use the more than sufficient revenue of the US government to pay its debts obligations.
In fact there is more than sufficient revenue is properly husbanded to pay all our debts, and all of social security and medicare, and more of the remainder of government than after a so called shutdown, that would occur if we fail to pass a budget – which is the next fight coming. A failure to increase the debt limit would be a serious curtailment of spending – possibly a shut-down of much of the government – though not all.
Further the US government conservatively has almost $1T in liquid assets – cash or something very close to cash.
Nor is this the first time the US government has defaulted. It is not even the first time in the last hundred years. Nor would a temporary failure to make debt payments be nearly as bad as the numerous other instances in which the US government has unilaterally acted in a way to radically devalue its debt.
The credit rating of the US government is actually meaningless (just as yours and mine are) unless it is attempting to borrow, and unless the debt ceiling is raised there will be no borrowing and even a rating below Greece would be meaningless – until we borrow again.
There is a serious question about our future being debated – and neither side fully comprehends the debate, but it is not about our credit rating or financial armegedon come Aug. 2. The question is whether we are going to bring spending atleast back to sustainable levels.
Both parties are seeking political advantage. Aside from the tax issue, another major issue for Republicans is getting the President to sign on to social security and medicare reform. No one sane fails to grasp that reform is necessary. But democrats have already used the republican willingness to address the issue as a political club. I highly doubt there is any deal possible with republicans that does not force democrats to step up to the plate on entitlement reforms now, and therefore neutralise the impact before the election.
I have no idea what the Federal Reserves “doomsday plan” is but their track record over the past century has been abysmal. The Federal Reserve is far from “Trusty”.
The president has been far from willing to do anything – except willing to talk about his willingness. The white house has not proposed a budget as required by law. The president floats numbers, but has not actually publicly proposed anything that he would agree to.
There are numerous proposals that he has rejected including the Ryan Plan and his own Deficit commission plan. Purportedly the republicans have rejected proposals made in private, but the only player with almost no cards on the table is the president.
One of the problems I have with the concept of “moderate” is the presumption that compromise is always (or even usually) good.
Lurking behind this entire debate is the fact that the ratings agencies have already said that absent a credible agreement within 90 days to cut $4T of spending over the next 10 years they will reduce the US credit rating.
To put this into perspective – we are still not really talking about real spending cuts. We are still arguing about reductions in the rate of spending increase. 2008 spending was $2.8T continued forward for ten years that is $28T. Republicans are proposing $44T for ten years and the president wants to spend $46T. And just to clarify – as Volker and Reagan proved (and is critical to Keynesian economics) inflation is controlled by government – specifically by the Federal Reserve. So any figure over $28T either means the government is choosing inflation, or that it is choosing to spend at-least $16T more – or $1.6T more per year, than in 2008.
Personally, I am starting to see Sen. McConnell’s plan in a better light. Just give the president a significant debt ceiling increase – and then when all the bad things you are afraid of absent a debt ceiling increase happen anyway, the president and the democratic party own responsibility for them.
I have often wondered if Revelation chapters 17 and 18 are speaking of the United States? In particular the “Whore among the waters”. The great city of New York being Babylon. Wall Street in particular.
Nostradamus predicted an explosion of something close to resembling a nuclear missile in the future of a great city across the “great water”.
Either way both can collapse a city or a world in one hour. Either Economic collapse or Economic collapse after a nuclear attack via a rogue country.
“And he saith unto me, The waters which thou sawest, where the whore sitteth, are peoples, and multitudes, and nations, and tongues.”
“For all nations have drunk of the wine of the wrath of her fornication, and the kings of the earth have committed fornication with her, and the merchants of the earth are waxed rich through the abundance of her delicacies.”
“How much she hath glorified herself, and lived deliciously, so much torment and sorrow give her: for she saith in her heart, I sit a queen, and am no widow, and shall see no sorrow. Therefore shall her plagues come in one day, death, and mourning, and famine; and she shall be utterly burned with fire: for strong is the Lord God who judgeth her.”
“And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more” “The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble, 13And cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men. “The merchants of these things, which were made rich by her, shall stand afar off for the fear of her torment, weeping and wailing, And saying, Alas, alas, that great city, that was clothed in fine linen, and purple, and scarlet, and decked with gold, and precious stones, and pearls! For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off, And cried when they saw the smoke of her burning, saying, What city is like unto this great city! And they cast dust on their heads, and cried, weeping and wailing, saying, Alas, alas, that great city, wherein were made rich all that had ships in the sea by reason of her costliness! for in one hour is she made desolate. Rejoice over her, thou heaven, and ye holy apostles and prophets; for God hath avenged you on her.”
“And a mighty angel took up a stone like a great millstone, and cast it into the sea, saying, Thus with violence shall that great city Babylon be thrown down, and shall be found no more at all. And the light of a candle shall shine no more at all in thee; and the voice of the bridegroom and of the bride shall be heard no more at all in thee: for thy merchants were the great men of the earth; for by thy sorceries were all nations deceived.”
Just a thought!
I agree. I’ve believed this for a while now. USA is steeped in corruption and godlessness. Yet it imagines itself to be God’s specially chosen land of promise.
(Believe it or not, I’m a liberal, albeit religious. I believe GOP are agrnts of destruction. Obama has been eminently reasonable.)
I would strongly sugest learning some basic economics if you wish to weigh in on this debate. I can recommend several easily digestible basic texts, a few that can be read in a single sitting. Basic economics is not all that complex.
Cars crash too – sometimes in unexplainable ways, but we do not presume that because things go wrong on occasion, that driving and automobiles are completely incomprehensible – even to the experts.
The entirety of your remarks on this issue devolves into your personal choice with respect to who you have chosen to believe.
All parties to this debate have their own interests, their own axes to grind their own agenda. As always Pres. Obama is able to make his position sound good. Results to this point have not matched rhetoric. For me that alone would make me deeply skeptical of anything he says.
But in the end we are each responsible for our own opinion. Our voices do matter – Gallup still has almost 2/3 of us unwilling to raise the debt ceiling absent congress PASSING a balanced budget amendment. Most of us do not believe that congress and the president are capable of doing their job.
But I do not know how you form a meaningful opinion starting from the proposition that we can not understand what we are doing.
For reference, modern orthodox schools of economics, taking their lead from Keynes, believe that the economy is fully understandable from top to bottom, that details can be ignored and using statistics, mathematics and aggregating values we can manage the economy.
There is one heterodox school of economics – traditionally associated with libertarianism that asserts that economics is the study of human behavior – what humans want and desire and their effort to acheive that. That is the Austrian school. That is heir to the classical liberals such as Smith, Hume, Mills, Bastiat, Turgot, Say, …. of the 18th and 19th centuries. This is the only school of economics with a credible explanation for economic cycles – one that fits the Great Depression and the current Great Recession perfectly.
It is the school responsible for the Reagan and Thatcher revolutions. It is the school of Friedrick Hayek who receive a Nobel for his exposition that top down systems of economic management must fail – because aggregates, statistics, mathematics, … can not provide sufficient knowledge to manage the economy. Essentially the Austrians distinguish between the ability to understand human behavior sufficiently to understand the operation of the economy, and being able to know enough about all the internal dynamically changing interrelations to be able to manage it.
Your first paragraph is almost an austrian anti-keynesian riff, but it is followed by relianance on some of the most prominent keynesians of the day – Summers and Obama.
Help! You guys are writing faster than I can read. I’ll return to your posts later when I have a little more time.
Rick, seriously.
Obama and the Democrats have steadfastly refused to present any kind of budget or debt reduction plan, while shamelessly demagoging every Republican idea. You may not like Paul Ryan’s plan or Tom Coburn’s plan, but they are PLANS, with specifics and details and they point the way foward. What is Obama’s plan…you say that he is willing to compromise, but how do you even know that, given the lack of any details and the total secrecy of the talks?
The devil in in the details, sir…..he should present a plan publicly,like the Republicans and then let both sides hash it out in public meetings…that would not preclude “back room deals” necessarily, but it would allow people to know what both sides want.
^^
Thats’s me, btw. I didn’t realized I was logged into wordpress, and it picked up my user ID (pearows, get it, lol?)
Priscilla,
Obama offered one plan. It was shot down by the Senate I believe by a vote of 97-0 against.
Yes, the Republicans are more transparent now than Obama’s promise to be transparent. Umm, Imagine that!!
Priscilla: Well, the Republicans did offer a plan, which I probably should have mentioned. But of course it was all “slashes without taxes” — pretty much a radical scheme (though not radical enough for Michele Bachmann) to distribute government largesse away from the needy and the environment and into the pockets of the elite (by refusing to raise taxes on them). It’s as if they expect to remake America in their image… totally unrealistic. At least Obama is willing to make concessions that grate against his liberal instincts, because he knows we have to come up with a solution that works for the greatest number of Americans.
Pea rows… I like that! You realize, of course, that you could also be “Prose.”
Well, I think that your characterization of the GOP as uncaring for the needy and anti-everybody-but-the-rich is not only untrue, but immoderate (!!!)……
But, let us assume, for the sake of argument, that you are correct, and that every Republican congressman and senator is committed, over all else, to making sure that the rich get richer and the poor get poorer.
That does not detract from my central point, which is that Obama and the Democrats are not putting ANYTHING on the table. They have articulated no vision, no plan, no nothing – at least not in public. All they do is say that the GOP plan is unreasonable. Ok, fine, then be reasonable, and explain how you are going to stop increasing the national debt at the rate of $4 billion a day.
Are there tea party politicians who are unreasonable? Yeah, for sure. I like Michele Bachmann, but her position that she will not vote for a debt ceiling increase under any circumstances is unreasonable. But, face it, if it weren’t for the tea party rout of the 2010 elections, we would be barrel-assing to financial armaggeddon even faster than we are now.
Obama appears committed to unlimited government growth and control of the economy. He also seems almost unbelieveably thin-skinned and politically motivated.
There should be no default. The money is there. This whole drama was set up by the GOP to pressure Obama, and now Obama is trying to turn it back on them. All along, the Republicans have demanded significant spending cuts, while Democrats have demanded significant tax increases. This should be something that can be negotiated, but in order to negotiate in good faith, BOTH sides have to offer details and specifics.
The president and his party refuse to do that, as far as I can see.
OK, so after my rant this early morning, I’ve got more.
It’s simple. You spend what you have in your bank account and no more. You either make more tax money to spend more or you don’t increase your spending.
In this case, the Government put IOU’s to foreign countries, and investors in bonds. When the economy tanked the Government wouldn’t cut back the spending. They borrowed more and more and more to get the Healthcare through, plus other things to become law. These laws cost money.
When the economy tanked people feel it first in cut backs on wages, wage freezes, low raises. The company feels it by firing employees, less spending. But when “BIG GOVERNMENT” needs to follow suit. HELL NO! I thought Government was the tool that works in conjunction with the people?
No, Government is the crazy robot that we invented that says it knows better and can fix all our problems (politicians). Keep your hands off my life and just do protection!
My ancestors came here to do things on there own. What are we weaklings? Based on these Government programs I’d say we are some weak people…..thanks Karl Marx, and Engels…you morons. Every time I do something now my Government not only protects me, but tells me how to live. What to eat (it’s coming! I deal with phone calls now from the Insurance company), what to do to stay healthy (hello! the internet can tell you this), Where you can and can’t go (driving monitors?) and do.
More laws and more laws and never removed when obsolete. How much can we pile up? Including this spending? I thought Obama said when he ran for President that the U.S. needed to tackle the deficit and debt so his kids and future generations wouldn’t be left with less? Then his Political Party passes doubling the debt. Creating laws on people who need health care, but were without it for the past 233 years (not everyone covered). Why now? Couldn’t he of fixed the spending problem first. No! agendas, agendas, Karl Marx.
The Republicans aren’t much better. They say less Government control and then want to control the morals of people. Especially women! Hypocrites! Driven by mostly religious men who want to dictate what a woman does to herself. Hey! if the Republican church goers really want to be serious about their religion morals check this out:
There is a verse in the Bible that says, “Do you not know that your body is a temple of the Holy Spirit, who is in you, whom you have received from God? You are not your own; 20 you were bought at a price. Therefore honor God with your body,” (1 Cor. 6:19-20). I don’t see Republicans going after males with tattoos and piercings as much as the abortion.
OK, so anyway, Dave. politicians aren’t going to do all that. It is too much! They do more to worry about being on a Committee meeting than our countries deficit. I gather since most are lawyers…most like the Committees because it makes them more like judges when they interrogate someone in those meetings. When it is debate…they fall in line with the person they believe in philosophy…either Karl Marx or Adam Smith.
The Democrats haven’t pushed a yearly budget since the last years of George W. Bush. So they could borrow and spend whatever they liked.
Now they want more money from us middle class and high income workers. Both are workers. One gets paid more than the other. Why are they two different people? Because Democrats (Karl Marx) likes class warfare. Don’t ever make too much…you will be a high income workers in then the Democrats can say you are making people poor…..What morons! You work and work and make more money over time and at some point you are now the enemy? Hello Democrats! You created the Progressive Tax that was supposed to be “Fair” from the start. If it isn’t “Fair” yet then you must of did something wrong. Why do you keep the lower income people depressed while always saying the “rich workers” should be “depressed”. It’s all smoke and mirrors to keep people down. If the Democrats did “knock down” the rich workers…what purpose is there to work…especially for high wages. Then we all will be depressed.
But hey! That’s Socialism…It is bad enough that Capitalism has it’s up’s and down’s.
Interesting. I totally agree with your previous biblical interpretation, and totally disagree with the rest of what you say.
Rick, news is coming across that the GOP is showing signs of a split.
It seems that the Tea Party has the Minority GOP leader and is choosing the opposite views than the Majority GOP Leader.
I would gather that there are some Tea Party members that are not full Republican believers, but independents/moderates that are conservative.
We can pull these off into our camp right now if we make a huge aggressive “splash into the pool”. All it takes is a flag, cards, and running around in malls and places all over different parts of the towns and countries.
I think we should be calling Solomon on this. He might feel what I feel.
Priscilla can stand close and laugh at us.
But at least we can stir up some thought and a movement of what most are feeling and not saying.
Why would I laugh? I think both parties are pathetic, in their own way of course. I am not a Tea Partier ( although I like tea and parties), although I believe it is a powerful grass roots movement, which has a great deal to recommend i. Unfortunately, too many tea party folks are quick to demand smaller government, but just as quick to scream bloody murder if their own government cheese is taken away.
Despite their well deserved rep as the “stupid party,” the Republicans are the only party that is trying to lead us out of what will soon be a financial disaster…do I think it will happen on August 2nd? Not unless Obama decides to make it happen. The GOP has passed a plan, CCP that was tabled in the Senate, on a party line vote by Democrats, who offered no competing plan.
Now, I have only read a general overview of CCP – it could welll be a dog, but at least it addresses all of the key issues, including tax reform and revenue increase. If the Dems come up with something better, with more targeted military cuts and less tax increases, that could begin the debate over how to address the deficit and the debt. But until then, just calling for class warfare – which is all most of the Democrats have done – isn’t gonna cut it.
By the way, Obama, Reid and Pelosi all voted against the last debt ceiling increase, saying that it was irresponsible.
So maybe I’m laughing at everyone (not really), but , trust me Kent, I’m laughing through my tears 😉
CCB
Rick,
After defeat of “Cut, Cap, and Balance” in the Senate.
http://www.cnn.com/2011/POLITICS/07/22/debt.talks/index.html?hpt=hp_t2
“Democrats insist must be a more centrist measure balancing spending reductions and tax hikes.”
They don’t know anything about “Centrist”. Too bad, we aren’t a political party of some recognition in this country. We would put the Dems. to shame on using the word “Centrist”.
Kent, why are you going by the name National Centrist Party? Are you suggesting that you represent the National Centrist Party? Please email me at scottehredt@NationalCP.org so we can discuss your use of this name. Thanks.
scott ehredt
co-founder of the National Centrist Party
Obviously, we haven’t met! Contact you soon.
Yes! Their behaviouri is criminal. And yes to 3rd party.
vta, I hope you’ll take a look at what the NCP is offering and take the easy steps to support our efforts: http://www.NationalCentristParty.org. I’d be interested in any comments you have about us and will be happy to discuss any questions you have. (scottehredt@NationalCP.org). We actually just interviewed Dr. Diane Rogers from the Concord Coalition (their chief economist) on our most recent blog talk radio show regarding this topic. It was very refreshing to have a non-partisan discussion of the issue and we found that we shared a tremendous amount of common ground with her. Again let me know any questions you have.
I don’t understand why the government has to conduct their negotiations like every other organization. Both sides believe that waiting until the last minute gives them leverage. This child like behavior being shown by both sides is just another example of how the polarizing of US politics is bad for the country. We are all Americans first, not Democrats or Republicans. I believe the moderates have to step in to restore some sanity to politics. Why can’t political parties work together for what is best? Are their ideas of what is best so different? What is so good about a moderat party, is that it can bridge that gap that is increasing between the two parties. I hope that it happens in my lifetime, and I also hope that I can help.
AMAC, Check out the National Centrist Party at http://www.NationalCentristParty.org and see if it isn’t something you want to get behind. We’re advocating that politics as we know it today be replaced by politics that makes sense much as you are suggesting.
AMAC: That’s the kind of reasonable thinking that makes moderates so indispensable… if the raving Republicans and Democrats would only notice.
Part of the problem, I think, is that most Americans today draw their political ideas from pre-screened sources that already mirror their beliefs. Liberals read Huffington Post, conservatives watch Fox News… and these news sources just reinforce their extremist tendencies. That’s another reason to make sure that centrist voices are heard.
Will we start a third party? Well, there are already numerous centrist parties and organizations out there, and that’s part of the problem. We need to unify if we’re going to become a force in American politics.
diddo
I am sympathetic to the OLD, legitimate conservative view of government, but in the new, techo, globalized world (which I have problems with), I think it’s an anachronism. The nation is now the company, or the companies will overwhelm the nation. (Pretty much already have; e.g., lobbyists writing legislation.)
Very interesting, well-considered thoughts here.
Right now, we are dealing with paralyzed gvmt, caused by an attempt at blackmail. Highly undemocratic. Democracy requires compromise. Trés simple, non?
No doubt some you think not. But to obstruct paying obligations already made until all one’s demands are met … Please!
Ygdrasille: Good to see you here! Yes, the government is paralyzed by an unwillingness to compromise (mostly on the part of the Republicans at this point). Obama has agreed to compromise on entitlements, but the GOP won’t compromise on taxes. It’s like trying to get Hindus to eat beef.
If there’s a default and another financial collapse, a lot of Americans will be extremely unhappy with their government, and rightfully so. I’m surprised there haven’t been massive demonstrations yet… but you can bet there WILL be if Congress doesn’t reach a debt solution by the deadline.
Thanks for the welcome!
I’ve never liked being a pessimist, but that’s what I am. (We pessimists like to say we are realists.) But since this is not about me … The current impasse is not just a disturbance in the force, it’s something that’s been building for some time. I think it will get worse before/if …
Yes, people will be very unhappy, mostly for themselves. Which reminds me of a question I think about often: Why does the concept (and feeling) of solidarity, even the word, seem to be missing from public consciousness in the US? (I’d also say from public discourse, but since I don’t read enough, I won’t say it.) The idea surely underlies much of the program of “the left”, but it is not clearly articulated; almost as if people who espouse it are afraid to sound like (oh no, that word!) socialists. Is it because of the old “frontier mentality”, “live free or die”, “don’t touch my money”, “get away from me”, etc.,etc?; i.e., it has never been present?
I ask not out of academic curiosity, but because I think without a sense that we’re “in this together” (sorely missing from “the right/wrong”), I don’t think we have much future. And, being a pessimist …
For the real centrists/moderates. Here is a link to Thomas Freidman’s NYT piece, Make Way for the Radical Center, in which he describes a newly formed national third party and its mechanism for determining a viable third party candidate for future presidential elections:
I’ve made myself scarce here, btw, because, although I really enjoy Rick’s writing, in general the site mostly has participants who are clearly from the right of center. While these are not the true far-right crazies, I literally can find thousands, probably tens of thousands, of similar righties talking partisan Republican politics online and that is of no use to me. Sigh.
Ian: Ah, but that’s precisely why you’re needed here! Yes, most of the commentary on my posts is coming from right-of-center thinkers. They’re essentially classic moderate Republicans like George Will. I enjoy sparring good-naturedly with them and even learning from them, but I could definitely use a little reinforcement from other moderates who will vouch for the fact that my own ideas aren’t so immoderate.
I read Thomas Friedman as often as possible, and I’ve already seen this particular piece. Interesting that Doris Kearns Goodwin also called for “raging centrists” in politics. In other words, there seems to be a quiet (moderate?) groundswell for moderates who don’t simply support the status quo. That’s a heartening development. (I just wish they’d discover me already!)
Hi Rick,
Did you happen to also read the comments on Freidman’s column, many were civil and intelligent and give some insight into how people (from the biased pool of NY Times readers) feel about such talk.
The problem on New Moderate isn’t so much that what I call Wall Street Journal Republicans come here, its that moderates don’t. Where are they, not just on your site, but everywhere? The two major answers are that 1. Moderates hate to talk about politics and hate the anger, ignorance, heat, and nonsense that accompany any political discussion. Its congenital, that is why we are moderates and not partisans. 2. There is no actual moderate product to react to, to love or hate. If there were a third roughly speaking centrist, or better, non-ideological party, perhaps there would be moderates online and everywhere with a passionate interest in something that has an actual existence.
I still have my hopes up that the times are slowly producing a climate for a moderate cat herd to round up.
Your crowd is nice enough but I just have no interest in a near daily attempt to debate economic anachronistic sillyness. People who don’t know how to do open heart surgery don’t go around pretending they can, why do people who have no real competency about economics delude themselves into thinking they have an educated opinion? And its everywhere, on both ideological sides, when it comes to social policy, you don’t need to intelligence, education, and experience to be a philosopher king and proclaim your own grand analysis. Its just silly to participate. The people who actually understand the nuts and bolts of what is going on are not spending their time online yacking!
But I do enjoy your writing, its quite a nice professional level,if there ever is a moderate party president perhaps you can be a speech writer for his or her administration.
Ian,
I agree that we are not all economists. But a well informed and educated person can have an opinion. I don’t enjoy the argumentative speech, as you identified. I do think that it is important for moderates to meet, discuss and debate. I have been a Democrat as long as I have voted, but I am not pleased with either side. I think that if we can meet, and discuss issues with a large enough group, that we can eventually form a difference making community. As much as I desagree with them, the Tea Party is a good recent example of this. I think that we can gather supporters and influence election, maybe not in the form of third party candidates, but supporting open-minded individuals that happen to belong to an existing party. I think that any site or organization that supports moderate political positions is a positive site and worth participation.
Ian: Thanks for the vote of confidence. Speechwriter… hmm. You know, I was originally inspired to write by listening to recordings of Churchill’s wartime speeches. I was dazzled by his eloquent rhetoric, and by the power of words to move people’s minds. Of course, by the time the Moderate Party runs a successful candidate for the presidency, I’ll probably be in a nursing home.
Ian, when it comes to defining moderates, it sounds as though you would agree with many that moderates represent the “mushy middle” of political thought….aloof, detached, and essentially apathetic regarding politics.
I think that that would describe a certain type of moderate, but certainly not the type who writes or comments on sites like this. Not all moderates are “above the fray,” and many, I would say Rick included, hold strong ideological opinions and biases, which are based on educated thought and reflection. In fact, as you note, moderates can themselves be divided into ideological camps not unlike the partisans that they try not to be.
While those with strong opinions are more likely to enter debate or yack online, I don’t necessarily agree that those folks lack substance – in fact, people who enter into political discourse are often people who have become informed about the issues that they debate.
Democracy always holds the risk that people will be misinformed by words that have no substance, seduced by demagogues and populists. My view of moderates is that they are more willing to investigate and analyze both sides of a debate, rather than taking sides upfront, based on a particular ideology. I would agree that, even here, and on other so-called moderate sites, that is not always the case, but I would disagree that it is silliness.
Replies to a few comments:
AMAC, yes, of course we moderates should talk, and I like your phrase “difference-making community.” Moderates already make a difference in politics, but we are NOT yet a community, in the sense that there is a huge lack of tangible connections between us. I hope that will change and I am willing to put an effort into doing my bit.
Yes, we have a right to an opinion about the budget. We also all have a right to an opinion as to whether my car burns oil because of a sticky oil ring, or is it worn valve guides? Most people who know nothing about engines would admit it and abrogate their right to an opinion about my engine. Most people who know nothing about the far, far more complex science of economics would NOT admit it and get huffy when you say they don’t have a basis for their opinions. There is such a huge difference between one’s right to have an opinion and the hard work it takes to have an opinion that is informed and valuable, which goes for moderates or partisans alike.
Priscilla, I like how you defined moderates, but you have misconstrued my opinion. I certainly do not think moderates have to be mushy, I simply say that moderates dislike the shallowness, ugliness, and childishness of politics and we don’t like involving ourselves in that type of nonsense. Give me a meaningful fray, I’ll join it. Give me a bar brawl, I don’t have time for it. As well, I personally have a thing about people knowing what they are talking about, its something that my parents drilled into me from a young age. Talk with people when they really have the background to understand what they are talking about; talking with impostors, who have no clue how much they don’t know is just a bore and a waste of time. That goes for talking with cranks as well, people who have assembled a fanatical and huge collection of facts but who lack an understanding of how those facts actually fit together and come out with Jesse Helms- or Micheal Moore-like wild schemes of disconnected factoids.
Ian,
You make a very inteligent arguement. From my business and mathematics background, I find that very inteligent experts over various subject matter can have very different opinions. How many ridiculously qualified economists have we seen on television with very different ideas about what is right for our country? I get very frustrated when people discuss as if they were experts when they don’t have the background or education to support their opinions. I share that with you. It is difficult to determine if these experts have a hidden bias or agenda that forms their opinions. I am not an economist, but as responsible voter, I am entitled to decide what I think is best. I wish I knew what would work best for our economy, probably more responsible citizens!!! I wish I felt their was an option to turn to in the form of a political party as well. I have voted independent befor, and couldn’t help but feel I threw my vote away. I think that the best short term solution is to unite various truly moderate groups to influence what candidates are nominated and elected. As much as I hate that these candidates will carry one of the two established labels, I think it is the best option. I am new to this site, and hope you continue to post comments. I do enjoy you take on issues and you make a lot of sense. I am not intending to seem confrontational with my comments, I just wanted to open a discussion with another inteligent person. Thanks.
AMAC, I agree with everything that you’ve said, and Ian, that obviously means that I hope that you continue to contribute to the discussion here.
Diddo!
Everyone who posts knows what they mean by their own comments and we all believe that others will “get” us too. I find that people misconstrue most of what I say, which I assume is mostly my fault for not saying it clearly.
Part of my frustration is that there must be tens of thousands of liberals and conservatives posting on their blogs and everywhere else, while there are about probably less than 100 moderates posting on moderate blogs, in spite the fact that some of the blogs are extremely well run and interesting.
With the political spectrum breaking down to roughly 40, 40, 20, conservative, moderate, liberal, it seems on the face of it astounding that moderates have so little activity in every way. My post above gave my two reasons for why this may be: A we don’t as a group seem to enjoy political discussion and all the nonsense that goes with them and B we have no moderate product to be passionate about. Its actually some kind of rather deep question, why do moderates not participate in politics with anything like the vigor that the partisans do.
And yet all the same we control elections. But probably less than 5% of our congresspeople are moderate. Yet in the end the outcomes usually wind up in the center, as the two wings cancel out like acid and base. Leaving us living in a political world were nearly all political discussions are like living in a constant titration reaction, yechh. Micheal Moore’s idiot opinions vs. Glen Becks, that is how it sounds to me.
I guess one of the things that got me going was listening to the conservative bias of many posters here, and what I consider to be economic nonsense from some with a right of center bias. Here Rick is running the site, making extremely thoughtful posts, and in the end wadaya get, mostly more right of center stuff. While it is at least civil, it still frustrates me. As I said, If I want to hear Obama sucks all day and all night, its easy to find that. But its not at all what I’m looking for. Oh the lonely life of a passionate moderate!
I agree with all of this post. (No time for more now. :-(. )
And another thing, (I really should be working, but I fight my own tendency to be obsessive and to practically lose consciousness when I sit down to write a short note and then it turns out as a manuscript.)
Your point, AMAC a,bout us having the right and even the obligation to sort out the disagreeing experts is well taken and, yes, they certainly are well qualified and seem to be at opposite poles half the time. And yet if you really look more closely, their disagreements are within certain boundaries and while they are dressed up to sell newspapers our TV commercials and and therefore often edgy and extreme in tone, there is a lot of facade to that. On the most basic issues they would agree.
I am no economic expert myself, I had four college courses, did extremely well, better than I did in my actual major, but that is far far far from the level of knowledge of a professional economist. I am also “advised” by my father, who’s knowledge of economics dwarfs mine, and, as he is retired and cares passionately about that he does a lot of analysis and then I hear it. He is a strong liberal, and I try to filter that out and account for his bias and do some of my own reading to balance it. In most of my discussions with him he gets POed that he hasn’t convinced me of the “liberal line,” so I must be doing a decent job of balancing.
What is total nonsense is the idea that we can default. Its like, the “let the banks fail” that was a popular riff 3 years ago. That is pure idiocy, irresponsible national economic suicide. Another nonsense, this time political, is that obligations to seniors can be cut. They would come back and destroy the party most responsible for that. Another nonsense is the equation: I want tax cuts, the same or more services for my personal subculture/interest group, and a balanced budget and reduced deficit! That is impossible!!!!
Reagan and W both presided over massive increases in the deficit and did not cut the size of the government. This conservative blather about how Republicans want balanced budgets has no proof behind it. Obama inherited an economic nightmare and the democrats went in for pure Keynes to try to save the economy, which added to the bank bailout, led to astounding red ink.
W’s stimulatiory tax cuts are for the moment “permanent.” Entitlements to seniors cannot be cut to any serious degree, its both a political and a moral reality. So, its reality that we cannot balance the budget. Its uncomfortable and scary, but its not possible to find a scenario with a balanced budget. Is that the end of the world?
Go online into google and start pulling down (in images) graphs of things like the ratio of GDP to debt. Well, here:
Our National debt is at nearly 100% of our GDP. Economists consider that worry some or even dangerous. But to put it into perspective, there are about a dozen countries with higher values of this ratio. The US had a considerable higher value, about 120% in 1946 and then it traveled steadily down for about 30 years and hit a low point under Carter. The escalator went sharply up under Reagan and Bush I, down under Clinton and up again under Bush II and Obama.
Compare your own debt (mortgage car payments, Credit cards etc. with your yearly income. More than or less than 100%? Mine is much more, and I’m quite solvent.
I’m not against the basic impulse of the Tea party to fight the upward debt spiral and some of them are perfectly decent rational people, then the Sarah Palins and Glen Becks of the world latched on and gave them a freak show image. Its a good thing if some pressure is being exerted on our debt to end its endless upward trajectory. But the central ideas of the GOP, sharp tax cuts for the wealthy, cuts in entitlements to seniors, and reduced federal spending under crisis conditions in the economy and historically high unemployment rates, is a nonsense and a disaster.
Yes to high crimes and misdemeanors, or whatever it is legally. A minority (elected, much the worse; i.e., they have constitutional responsibilities) are trying to assert their will in a destructive way, by refusing to deal with the matter at hand, the debt ceiling. They are glibly threatening economic hardship for the country in order to get their way. NO MATTER that no one knows how that will play out. I’m not expressing it well, but I believe a legal case of this sort can be made.
I believe that the 14th amendment route is a viable, and regardless of reports, and practical option. I think that Obama has taken the position, wisely, that it is not on the table to try to get a cooperative solution. Obama has taken a lot of grief over not having a plan, when it needs to come from the HOR. I believe the republicans and democrats are not actually compromising because they both know the president will do the right thing and follow the 14th amendment. I voted Obama and also have been critical. If you take a hedonistic approach, Obama has failed. Things were bad when he took over, and have not improved. I want a balanced budget, so do all politicians. This is not a partisan issue. The manner in which we balance it, unfortunately, is. I don’t think health care, social security, and education should shoulder the cuts. The youth of the country and the seniors should not shoulder the entire burden. I hope that all the political positioning and yelling from the extremist nut jobs is over and a deal is struck. I also hope that we get a new wave of moderate politicians running for office as a result. They need only one mission as far as I am concerned… Unity.
I also love how so much of my time has to consumed by worrying about what will “spook” the stock market. We have to treat the stock market like some kind of medieval dragon we have to appease to keep it from destroying our village. I understand how it effects the economy, I just get sick of it. If our credit rating does get downgraded, maybe we can sacrifice a virgin to the stock market to reverse the damage. Any volunteers???
Heh. And, defender of the tea party that I often am (although not so much lately), I do agree with you (and Rick)…..the problem with the conservative argument that tax cuts would promote investment, which would, in turn, create a greater return and more jobs, is that those tax cuts, meant for investment, are instead pocketed by the people who are supposed to be investing them.
And then cutting spending to pay off the debt simply becomes a way of driving down demand and income. So, we’re just screwed every which way.
But I think that giving up on capitalism, which appears to be the Obama way, is the wrong way. Regulated capitalism works, and creeping socialism does not (not saying that Obama is a socialist, mind you, but he surely leans that way). I think that the government, in attempting to control rather than regulate the economy, is destroying the free market. And with the end of economic freedom, comes a lot of bad stuff.
Your first two paragraphs are totally rational (very nice), the third falls off the deep end in my estimation. What possible evidence do you have that Obama leans socialist? Could you please define your understanding of socialist? I am so tired of educated people (take Krugman for example) who tear the established meanings of words to shreds and wind up with completely cranky arguments. Krugman believes that Obama started negotiating on the debt from a position to the right of the average Republican!, you believe that Obama leans socialist, and both of you are educated people but start talking complete nonsense, like so many others, where politics is concerned. How can we possibly find solutions to our economic problems when even educated people are so completely irresponsible in their use of language and hyperbole?
Its not Moderate!
Ian,
Do you know your history? Anyone with knowledge of political and philosophical history should know Socialism (Marxism). You speak as if someone says they are doing it for the benefit of the country…then it’s not agenda driven by a philosophy or ideology. You give “Benefit without doubt” vibes about the politicians…that is not good.
There are many “Planks” to the Communist Manifesto. Find it on the internet, learn it and beef up your history.
Yes, despite crit from all sides, I think pres has handled it very well. I think he’s 2 or 3 steps ahead of the rest of us.
This is the speech that puts in all in perspective. From a “Tea Party extremist”…..
Kent, (there is no reply button to your comment so I reply here.) Are you really seriously asking me if I ever heard of communism or socialism Kent? As a measure of whether I “know”history? I’ve lived in Russia and read a good deal of the socialist philosophy in Russian, and seen the disaster that it was for Russia. When you have done the same, let me know….
I think that you, as Priscilla don’t have the foggiest idea of what constitutes either Marxism, Socialism, or Communism. Go to Hirshes Dictionary of Cultural Literacy if you want concise definitions of those philosophies.
On the NYT site this morning, some of Krugmans followers have concluded that Obama is a “supply sider”!!!!! Is Obama a commie, is a right-winger, all depends on which nut you ask on the internet.
No catastrophe can fail to have some silver lining, I have decided to dust off my economic knowledge, read a year or two’s back issues of the Economist, and arrive at some kind of semi-educated opinion on the present state of economic affairs.
But I have looked at a great number of opinions, raw data and graphs in the last week, in between getting my work done and one thing that is obvious is that Republicans have been pure death to the economy, the last one who had any clue was Bush I, which was why his party did not support him and he was a one termer. Reagan and Bush II have done us very, very wrong. I never hated W Bush, but it is clear to me now just how destructive his presidency was. If you doubt my words, Go look at that graph I posted above of the GDP to National debt ratio since 1945 and ask yourself if you want to ever have Republicans in any position of Federal power.
When people start accusing politicians of being communists, marxists, socialists, etc.; the debate continues to be counterproductive. I know that when I watch political speeches and hear the name calling, I immediatly tune out. For me, the same goes when reading blogs. Once wild accusations are made, I assume the remainder of the comments are not useful. Off the topic… does anyone know a good source to educate myself on the platforms of candidates. I was recently trying to bone up on the platforms of the republican candidates and found nothing. I went to each candidates (5 frontrunners) and found non specific, unhelpful information. I feel comfortable with Obama’s platform, but know little about the republican candidates. I don’t find information like, “loves America”, and “wants America to succeed in a global economy” helpful. Is there a candidate that doesn’t love America!!! It is difficult to find good facts on the internet. If anyone can help, I am still looking. I did vote for Obama but try to avoid voting just because I voted that way before.
Ian, I have a very good understanding of what constitutes the ideologies of which you accuse me of being ignorant. I won’t go into my educational background or politcal history, but suffice it to say that you judge me based on….well, not much. With all due respect, you really shouldn’t do that.
You seem like a reasonably smart fellow, and I find your commentary interesting. But, if you do not see the redistributionist philosophy inherent in the economic policies of the current Democrat Party, then I believe that perhaps you are seeing what you want to see, and not what is actually there.
Socialism is not a dirty word, nor is it a slur. Most European democracies have strong socialist parties that advocate a strong welfare state, government control of healthcare and key industries, and income redistribution from the wealthy to the poor. So when I say that Obama is not a socialist, but leans that way, I think that I am on pretty solid ground, despite your disagreement. I also do not consider calling someone a socialist to be “name-calling”, and I am a bit taken aback by the number of people who apparently do.
I am a great admirer of the writer Christopher Hitchens. Hitchens was, for many years, an avowed Marxist. He has, in recent years, moved away from Marxism, but I never thought that, in acknowledging his philosophy, he was calling himself a pejorative. In my opinion, moderates need to lighten up a little on this stuff….
Priscilla,
“Redistribution of health from rich to poor” is not socialist as you think it is in the US now.
Maybe it is “the amending of catastrophic gap between rich and poor”. Or “consolidation of the middle class”. Just because Obama’s policy looks like “redistribution philosophy”, it doesn’t mean he has socialist ideas…
To be truly on the “socialist” side, the US had to have a revolution, not a Tea Party, which is a very strange party that started to call Obama “socialist”… and “Nazi”… and “Muslim” and… whatever
If there’s an advanced economy on the planet that doesn’t effectively take from someone to give to someone else, I’d like to know about it. Parties who have no belief in “collective (scary word!) welfare” try to do it as little as possible. They are more comfortable with the age-old class structure way of running a country.
Well, Y, you make a good point. Large, complex societies have to find ways to equalize opportunity and provide for those who cannot provide for themselves. But I would submit that once you get to a point, as the US has, where 49-50% of the population pays no federal income tax at all, you have a problem. Because what you have at that point is half of the citizens shouldering 100% of the tax burden and the other half with no “skin in the game,” so to speak. It’s a recipe for partisanship, and it is not surprising that both sides feel embittered and angry. You may feel that the guy making $250K should have his taxes hiked up to 39% (add in payroll and state taxes and you’re talking way more that that), but if he has a mortgage and a couple of kids in college (who are not eligible for grants, just loans), he’s probably going to disagree that he is a “wealthy” guy with “excess income”.
My point is that all of this is more complex than politicians would have you believe. Raising taxes on the rich is not going to solve the problem, and cutting spending for those in need is not what anyone wants. So, why not debate solutions and stop using class warfare to whip up bitterness and anger?
OK, you make some interesting points, But now, for balance, talk about that statistics that have to do with how much of US wealth and income are in the hands of the top quintile.
And, for accuracy, its ain’t so that the bottom half pay no taxes. Where did you get that? I’ve been looking at those figures. The middle quintile, (the literal middle class) pay 6.7% of US taxes, which may seem low until you consider they make about 13% of total US income. Now, consider tax burden a a percent of disposable income. Yes, it is complicated.
While you complain of taxes, tell me Priscilla, how many vehicles do you own, of what vintage, and what gas mileage do they get? I’ve just sort of noticed that the +$200,000 crowd all seem to have enormous new (Lexus or BMW) SUVs and seem completely uninhibited by gas prices from continuing this habit. While complaining bitterly about attempts to bring health care to those without coverage. Are you aware that when you work in retail sales, you get part time work and no health care benefits to go with your “no taxes”?
I’m sorry Priscilla, while it is immediately evident that you are an intelligent and well educated person, here you are simply wrong. Redistribution in not socialism. In contrast to Marxism and Communism, Socialism has a simple definition. Socialism is when the government owns the means of production, or the means of production are owned in common. Period. It is not income redistribution, which as Ygdrasille noted wisely, is a uniform aspect of government. You have charged (wildly) that Obama appears to have given up on capitalism, its more pure nonsense. I’m agin nonsense, not only as a moderate, but as a person who cherishes knowledge. Its not an innocent mistake, because as AMAC noted it derails discussions.
Its a riff with conservatives, Obama is a Marxist, Obama is a socialist, Obama is a communist. Obama is a Muslim. I’m sick of it. Its ignorant. Its sad when intelligent people who ought to know better repeat ignorant nonsense. It does not help anyone have a meaningful discussion of our problems. There is something in conservatism that seems to actually cherish ignorance, scorn knowledge, and be proud of that. I’ll never be attracted to that mindset, its completely unattractive.
I hated listening to all the abuse and nonsense (especially in my very liberal environment) that were hurled at W. Bush, who is a decent, honest man of above average intelligence. I lost most of my respect for the intellectual capabilities of the people who did it. Same goes for those who play these ignorant Obama is a Muslim, Obama is not a citizen, Obama is a socialist riffs.
The original post was about the economy and debt, which lead to deeply divided philosophical opinions on the purpose of government. I have spent a lot of time in the past few days looking at almost every conceivable kind of graph tied to these questions. One point that does stick out is that the divides between the quintiles of both income and wealth are growing, in spite of attempts of some Republicans and conservatives to portray income redistribution as “Marxism.” As well, and perhaps not unconnected to this, US life expectancy and infant mortality parameters are shockingly lower that those of comparable countries, which may not be unconnected to the fact that we do not have universal (I don’t say single payer, which I oppose) health care, whose very idea gets conservatives blathering about the potential loss of their freedom. The US ranks #34 on the infant mortality list with a rate that is nearly three times higher that that of Japan, Finland, and Sweden. Yes, some American see their “freedom” in terms of taxes, (what a luxury to be at the point where your biggest concern seems to be being slightly less wealthy) for other Americans, freedom may be defined as their lack of freedom to take their child to a doctor unless the child is already seriously ill, which may be rather later than is best outcome wise.
I have noticed that many of those who think that their freedom is mostly defined by lower taxes were born on third base and have somehow believed all their lives that they hit a triple.
There’s lots of complexity all over the place, but I think one can still stand back (after lots of reading and study) and identify the basic lines of what’s happening. One would certainly need to do that if wanted to, say, start a moderate political party or movement. Otherwise, it’s just grist for doctoral theses (or competitive blogs).
Before fear-of-AlQaida, there was fear-of-Communism. I think those decades have made Americans irrationally afraid of the word “socialism”, as if it were some sort of beast from hell. Social Security, Medicare are “social” programs. Why is the adjective OK (at least I think it is), and the noun is not?
I don’t think you necessarily need a revolution to implement socialistic (eeks!) ideas.
Exactly, Y. While I understand, Ian, that you are using the literal textbook definition of socialism in its purist sense, there are many nuanced aspects of modern socialism that are seen in every western democracy – “social” programs, groups fighting for “social” justice, etc.
And I think that the reason that people think that it is “name-calling” to refer to someone as having socialist leanings is not only tbecause Americans are irrationally afraid of the word, but that many of them have very rationally determined that, while a little socialism may be good, a lot of socialism is antithetical to the free market, which most Americans still believe in. And, since many Americans won’t vote for politicians who might take us further down that path, most politicians don’t want to be associated with the “s” word.
And, by the way, Ian, I think you have me confused with some rich matron who drives a big SUV and votes the straight “R” ticket in every election. Not so. At the moment, I drive a 2004 Toyota, and work part time in retail. I’ve only voted for a GOP presidential candidate twice in my life. And I’ve been around for a while.
I also never said that 50% of Americans pay no taxes – I said that they pay no federal income taxes, and that is a fact, give or take a few percentage points ( I’ve seen percents ranging from 47 to 51, but it’s roughly half). So when Obama talks about raising federal income tax rates, it’s no skin off their noses (or backs, or whatever 😉 )
I have beaten my point about socialism to death and will officially relent. I never would have expected that anyone who sometimes defends the tea party, is highly sympathetic to the plight of those making over $250,000 and over, complains that Obama appears to have given up on capitalism and states that he is leaning socialist would only mean socialist in the most mild, non-pejorative sense.
But, there are more things on heaven and earth than my imagination can grasp.
So, Peace, Priscilla, I don’t mean to be heavy handed or rude (but sometimes can be anyhow), you have maintained your composure and spoken mildly, which, at the least, qualifies you as a moderate by style, Cheers to you.
But have a gander, if you will, at the income tax burden by quintile data I pasted below that shows some “objective factual data” (hah, as if there were such a thing!)) on tax burdens by economic class.
Nobody in the US is afraid of Socialism. The Tea Party meant “Communist” when they screamed that “Obama is Socialist”, but they were so afraid to say “Communist”, it is still an American remnant phobia from McCarty witch-hunting.
“Nazi” and “Muslim” are words that the Tea Party still can utter freely.
Er, I am. Afraid of socialism that is, which I continue to define, purest that I am, in the textbook way.
Had I been alive in the early 1900s I probably would have been attracted to the idea, the original impulse had the best intentions. But the reality of it, as we now know….
The Soviet Union, as its full name stated was Socialist, not communist, communism is what is what they aimed at (poor old Gorbachov even claimed that they were finally approaching it just before all the air escaped), Mao’s China, Castro’s Cuba, Pol Pot in Cambodia, the North Korean stalinist fascists, all these and more were socialist regimes in the textbook sense of societies that were trying defeat and eliminate capitalism by seizing the means of production. I not only fear these socialist societies, I loath them, they were and are evil life crushing societies that killed many tens of millions to produce, mostly, life in hell. When I say socialist I DO mean it as a pejorative, Socialism did destruction to a Russian culture (among many others) that was a thousand years old and had many actually very beautiful parts of it. Some part of this Russian soul has still survived but the harm done is something that I do not know if Russia will ever truly recover from. I hate socialism, with a bright blue flame.
I am 100% sure that when righties call, Obama, a Socialist, a Marxist or a Communist, somewhat interchangably, they mean it as a curse, and it IS a curse.
For many reasons, I think there is little left of the free market. And I think we really have corporatocracy rather than democracy. Gvmt is not balancing business needs with social needs. (No time to expand on this now.)
Wow, 78 comments and counting! We’ve blown away the old record. I’ve skimmed the more recent comments, but I can’t really delve deeply into any one of them at this point.
So I’ll just add that wealth redistribution isn’t only a leveling-down phenomenon. Over the past couple of decades we’ve witnessed the greatest UPWARD redistribution of wealth since the first Gilded Age. And it’s even worse, because then it was simply a matter of a small class of moguls lifting themselves above the masses. Now our top tier is fattening itself by sucking the lifeblood out of the middle class: banks practice usury with impunity, corporations enrich themselves by routinely outsourcing mid-level jobs, investment wizards short the very products they offer their clients… and the entertainment industry soaks its fan base by charging exorbitant ticket prices (so they can offer 8-figure salaries to their stars). And of course, private colleges now charge annual tuition that rivals the average citizen’s annual salary. Middle class kids are wallowing in debt from the moment they leave campus.
I’m not a leveler; I think rich people contribute amply to any society. But come on… how many vacation homes are enough for a single family? Three? Five? How many dozen antique cars are too many? The imbalance has to be readjusted soon, or we could be looking at violent class war within a decade. I really don’t know how much more abuse the average American can take.
The Bush-era tax cuts for the rich were meant to expire. To perpetuate them is essentially to declare war on the middle class. If you can’t tell, this makes me angry.
Guess we don’t talk much because on economics we simply agree on almost everything.
But see my numbers on taxation levels by economic class.
Cheers!
Despite the atrocities you mention, the term “socialism” continues to be used, without implying any necessity of mass murder. It’s just a word. If you discard it, you will have to invent another. In any case, I prefer to think of Western European models.
The issue is that nations need to try to maximize the collective (eeks!) well-being without stifling creativity, entrepreneurship, etc. A balance needs to be achieved. The all-seeing (in fact, blind) market won’t to it.
Ygdrasille: Yes! I’d love to see a little more balance in society. That’s what being a moderate is all about, after all. It doesn’t mean we favor equal outcomes for everyone, just some needed checks on greed and exploitation at the upper end, and a reasonable safety net at the lower end. Within those wide boundaries, people would be free to succeed or just tread water. Nobody would drown. These days, the free market has become a “winner take all” game… and it doesn’t seem capable of correcting itself.
Rick, so what is the solution? Declare war on the upper class? And who decides how many vacation homes Bill Gates gets to have? My answer would be……Bill Gates. But I’m open to argument……
Gates, by the way, like many libs, talks about how he would be fine with paying more taxes. But he doesn’t. Kind of like Warren Buffet and Obama himself, who itemized deductions so that he and Michelle could keep their “extra income.”
Bottom line: if we confiscated every penny from every person who made $200k or more ( I’m talking 100% tax rate), it would only keep the government going for, like, 2 weeks. So, why are we debating this? It is not a solution.
On a side note : 1) over 80 comments…wow! 2) valdo, I expected you to weigh in sooner than this 😉
To clarify….I’m not suggesting that Gates, Buffet, or Obama voluntarily pay more taxes than they legally have to. But our tax code gives them the ability to avoid paying their “fair share,” and, if we were to raise their taxes, their accountants would find new and different ways to avoid paying.
What I am suggesting is that, because of politics – on both sides of the aisle – we spend a lot of time arguing over what is “enough money,” when that is not the real issue. The real issue is that our tax code is badly in need of reform, as are our entitlement programs. But, once politicians start talking about how these reforms might look, they are immediately demagogued and dismissed. The devil in the details, and all that………
Priscilla: I think everyone should pay income tax — even the working poor, even if their tax rate is only 1 or 2 percent. Everyone who is physically and mentally able needs to contribute something. And yes, the tax system needs a pretty radical overhaul: combine those low Bush II tax rates with all the available loopholes and shelters, and it’s easy to see why the top 5 percent in this country control — what is it now? — half the wealth or even more.
I can’t believe that raising the taxes on these folks (in a perfected system without loopholes, of course) wouldn’t raise our revenues by a pretty substantial amount. So it’s not a matter of deciding how many vacation homes Bill Gates & Co. are allowed to have; it’s a matter of forcing them to pay their fair share. Then they can use what’s left over to buy as many vacation homes as they feel they need.
What I’ll never understand is how members of the embattled American middle class can defend the rights of the top tier to keep padding their portfolios while their own class slowly drowns in a sea of debt and despair. It might be that they’ve bought the starry-eyed argument, cleverly sold by rich right-wing pundits, that anyone can succeed in this country through hard work and gumption. That might have been true during the heyday of small-town America, but those days are long gone. Mom and pop can no longer compete against a system that readily devours them. Just about the only small-time entrepreneurs who succeed now are 20-something computer geeks backed by richer-than-God venture capitalists.
Priscilla, I am sorry to be your personal debunker, but those making $200,000 or higher in 2010 made. $7.9 trillion. The 2010 Federal budget was $3.552 trillion (revenue was $2.381 trillion). Taking all the money from the those making more than $200,000 would thus run the government for more than two years, not two weeks. Or run the govt for one year and pay off $4.4 trillion on the deficit. Its beginning to sound good actually.
I do thank you for making me think and find actual numbers, that is the biggest plus in taking part in these online discussions, it stimulates me to find the actual data.
Under the heading of lies,damned lies and statistics;
Lets talk about some real numbers. I copied and pasted you have to match the columns,it did not come through as a table.
The percentage numbers are not a column with a heading, just percentages.
From this we can see that the middle quintile earned 15.4% of the income and paid 14.1% of the total taxes. The upper quintile earned 41.5 5 of the income and paid 52.8% of the total taxes. The total tax rates for each quintile are in the last column, 34.5% for the top quintile, 13% for the lowest.
I’m seeing no indication from these figures that the bottom 50% pay no taxes, nor that we are bleeding the rich white.
These figures (and more!) can be found here:
http://en.wikipedia.org/wiki/Progressivity_in_United_States_income_tax
(1991 to 2004 Tax Foundation data)
Percentile Income (incl. govt. transfers)
Federal Tax Share (incl. Social Security)
State and Local Tax Share
Total Tax Share (incl. Fed, State, Local)
Total Tax Rate (incl. Fed, State, Local)
80%–100% 41.5% 52.8% 41.4% 48.8% 34.5%
60–79% 21.0% 22.2% 22.7% 22.4% 31.3%
40–59% 15.4% 14.1% 16.3% 14.8% 28.2%
20–39% 12.2% 8.3% 12.2% 9.6% 23.2%
0–19% 9.8% 2.6% 7.5% 4.3% 13.0%
Columns did not line up, a shame, but do a little work, or go to the article and you will have some real figures to deal with rather about tax burden by income. Bottom line to me, Bush II tax cuts removed trillions in tax revenue from our system under some supply side economics fantasy, those cuts did NOT appreciably stimulate the economy, and the screaming we hear that they are tapped out and need even more tax relief, (the GOP Ryan plan) is just plain nuts. We have made painful cuts, now increase revenue. The upper quintiles have money they are just sitting on and there is no case that they pay everything.
I don’t want to make it more complicated but now you can consider that rates of increase in income by quintile, and you will see that its the proverbial rich getting richer and middle class falling behind. If you divide the change in income over the last 30 years by inflation by quintile you will see that only one quintile, the top one is gaining, the others are falling further behind.
I can put these numbers out in graphical form if anyone has any enthusiasm for it!
*******Now, how are you going to grow the economy when only the top quintile has money to spend and they are sitting on it? Hmmm?*******
Thanks for doing the research, Ian. Much appreciated. It should be clear to anyone that the rich have been widening the wealth gap at the expense of the middle class. It wouldn’t bother me as much if the rich were simply prospering on their own (though I’d still expect them to pay their fair share of taxes)… it’s the inverse relationship between their fortunes and middle-class fortunes that really gets my eyeglasses steamed. The lower the middle class sinks, the more the rich seem to thrive.
That said, I’ve seen the statistic (or at least heard the story) that nearly half of Americans pay no income tax. In fact, a leftist acquaintance brought it up during an online debate with me. I was arguing that illegal immigrants receive government benefits without paying income tax, and he mentioned that 48 (or whatever) percent of Americans pay no income tax (i.e., so why pick on the illegals?).
Anyway, you’ve pretty much summed up my own opinion on letting the Bush tax cuts expire. (Good job!) I think it’s outrageous that they still want to jiggle the system to drop more money into their pockets, even though they’d still make out like bandits by playing fair. If they were playing pinball, the machine would be flashing the “Tilt!” alert by now.
Rick wrote: The lower the middle class sinks, the more the rich seem to thrive.
========================
Are you in talks with Jay? 🙂
“We finally have a debt deal. See what happens when the two parties put aside their principles and do what is best for them personally? It’s what they call a ‘two-step’ deal. It steps on the middle class and the lower class.” –Jay Leno
Valdo: Ha, I didn’t see Leno’s remark until now. Great (or maybe mediocre?) minds think alike.
Ian, if you are going dispute facts, you should dispute the stated facts and not redirect to another argument. I specifically stated – twice, in fact – that about half of Americans pay no FEDERAL INCOME taxes. That happens to be a fact.. evenCNN agrees 😉
http://money.cnn.com/2011/04/14/pf/taxes/who_pays_income_taxes/index.htm
Of course, in addition to federal income tax, we pay social security, medicare and unemployment taxes, sales taxes, licensing and permit fees, capital gains taxes, inheritance and estate taxes, state income taxes, local property/school taxes etc. That is what you are talking about, and what your statistics refer to.
Rick, I agree that the middle class is drowning in debt and despair. The overall burden of taxation falls disproportionately on the lower middle class. Social Security taxes, for example, are only taken out on the first $107K of income…so those who earn more than that don’t have to pay in anymore, despite the fact that they still collect. That seems unfair to me – but when I hear people demanding that we remove that limit, I wonder…. why not consider means testing for SS, so that millionaires and billionaires do not receive taxpayer funded SS pensions? (Oh noooo….we can’t talk about SS reform, or we will be accused of pushing granny over the cliff ! 😉 )
But, I digress – for many of us, the biggest single tax hit is federal income tax . The very rich can game the system so that they don’t pay their fair share and about 45-50% of working Americans who make under $50K can avoid paying any share at all. That does not mean that they are not paying any taxes – they are just not paying the big daddy income tax. The one that Reagan cut, Clinton raised, Bush cut and now Obama wants to raise again. If the Bush tax cuts expire, middle class taxes will go up too, and will hit hard those who are already hurting. But those in the population who are not paying …they need to get skin in the game, if they are going to be truly engaged in this argument and not just calling for the rich to be soaked. Because, a lot of not-so-rich are gonna get soaked too.
Rick, we agree in principle on this…everyone should pay their fair share. My point is that that will never happen as long as our tax code remains as byzantine and riddled with loopholes as it is. And taxing the rich at a rate greater than is fair, in order to punish them for being greedy, won’t work. You can’t make the poor rich by making the rich poor. Obama can rail about ending tax breaks for corporate jets, but the people that will most hurt won’t be the corporate fat cats – it will be the folks who manufacture the jets. And the amount saved would be a pittance in comparison to what we spend. But the political value of ginning up more hatred for those fat cats is priceless.
Priscilla, Yes, I was wrong, I seem to have a reading comprehension problem. I read your comment to mean that it was the Bottom 50% that paid no taxes, not just Some 50%, including members of each quintile. Zing, you got me.
On the other hand about shifting arguments, yes, I have that right, we’ve all been doing it. And you were wildly wrong as well about the relative sizes of the income from those earning over $200,000 to the size of the budget, you were off by a factor of 50 and thus your conclusion that further tax on the rich is just more or less a dry hole was also erroneous.
The important thing to me is that I continue to be prompted to dig into economic graphs. I was starting to feel pretty liberal (God Forbid) until I downloaded the OMB spreadsheets on the Budget and deficits year by year since 1900. There is no doubt that there is a monster loose and its gonna be quite a while more until I can put its roots into perspective.
Listen, Ian, people like you are rare enough. Keep digging up those facts- not many are willing to put in the time and effort. I may not always agree with you – or vice-versa – but I have great respect for you.
Geez, Priscilla, you Are wicked clever, you’ve conquered me with your kind words. Believe me, the respect is mutual.
I think what makes my situation unusual is that I have an unusual amount of free time on my hands at times (read self employed!) and the fact that my family was a sort of a test tube for producing informed skeptics and intolerable know-it-alls. If not for the family influence I’d just be the same hand waver so many others are. Trying to bring my kids up in that tradition has been actually sort of painful, in a way its a form of killing their innocent enjoyment in joining misinformed but enthusiastic movements, and leading them down the path of the skunk at the garden party way of life. Forever telling people that they are talking nonsense, not all of them thank you, believe me!
NY Times shows how tax cuts for the rich have had a “huge damaging effect” on US economy:
nyti.ms/r6qRS4
We have a deal. Now the political positioning can continue. I enjoyed the comments regarding the tax rates and have many concerns and opinions. I do not accept that tax cuts will result in more jobs or even higher paying jobs. I don’t believe the nature of a publicly traded company allows for it. I am not anti-rich, but I have experience and have not seen this work. I think that if we are going to offer these tax breaks to companies, they should come once bench marks for employee pay and increase of jobs. We shouldn’t allow these companies to increase their profits and assume they will do the right thing. If they would hire more Americans, and increase pay for employees, I would not have a problem giving them a tax break to counter their expenditure. Just what I think!
In my reading last week I came across a statement in the NYT that one of Bush IIs top financial advisers wrote an economic textbook in which one chapter was dedicated to proving that tax cuts do NOT lead to federal revenue growth. I need to hunt for that article again and get his name. This does not prove that thesis of course, but it does show that its not unreasonable to talk about it.
You might like to read Gary Hart’s very sensible article on the subject.
http://www.esquire.com/blogs/politics/next-debt-crisis-6187266.
One of his statements is that the next time we decide to go to a discretionary war, we out to pass its funding up front, which might make us think harder about whether we really need that war.
Its paired with a flip side article from former Sen. Packwood that while representing a Republican view, is sensible.
Ian,
I agree that they do not work. I like the idea of rewarding companies with tax breaks for increasing jobs. I don’t have a problem with tax breaks offsetting the expense of more jobs. I don’t understand why certain people expect us to believe that if we give companies money, they will pass it on to employees. If that were the case, CEO’s would not make such ridiculous amounts of money. In 1985 CEO average compensation was 24 times that of the average employee, not the lowest paid. In the 2000’s, it has fluctuated between 200 and 300 times the average employees pay. …and these are the people we are supposed to believe will pass on tax cut savings in the form of job or salary growth. Once again, I am not an anti-capitolist but enough is enough. I have heard the arguments that this compensation is dictated by the market, as in that’s what it takes to get the best people. I cannot believe that a suitable CEO won’t be found for a fraction of that cost.
What I have read regarding the tax breaks for jobs solution is that most corporations don’t see this a an attractive bargain. In other words, companies hire workers because they need them in order to produce goods and services, and hiring unneeded workers, especially if those workers increase the corporation’s payroll tax obligations, doesn’t make sense in an economy where demand is down. It would be as if you made a charitable donation purely for the tax write-off – the write off is so much less than the donation.
I guess the answer is for the government to find incentives that match up with what they want companies to do. And, at this point, I have no idea what those might be….anything that would work would probably be shot down (pardon the phrase) by one side or the other…….
Or, if we at least had a balanced budget amendment that required Congress to pair up deficit spending with an income stream to pay for it, then at least the increased taxes would have started the year after the Iraq War. And who would have voted for the war if it meant they were at the same time voting for increased taxes? Fewer, or at least they would have thought long and hard about the vote. The National Centrist Party version of a balanced budget amendment calls for any deficit spending to be tied to a revenue stream the length of which doesn’t exceed the expected period of benefits from the deficit spending. In the case of War we should have some guidelines such as 10 years, or maybe in the case of a war where our very existence as a nation is at threat, maybe 50 years. But any vote for deficit spending would, in any case, also be a vote for increased taxes.
I have not read the proposals for the balanced budget amendment. I am all for a balanced budget. It gives me a sense of security knowing that our country is making more than we spend. My concerns come with how this amendment would be interpreted. If an unexpected emergency does arrive (natural disaster, war, etc.), would services be cut or reduced to offset this amount? I don’t want to speak too much to these points as I need to educate myself on the subject more. I worry an amendment like this one would just be another point of argument for the already divided legislators.
Sometimes people will only do what they are required to do. So in the case of divided legislators, they will only balance a budget if they are required to do so by a higher authority. The other branches of government are equal and the only higher authority is the Constitution.
Every balanced budget amendment (BBA) has an “escape clause” to allow for deficit spending during war time, natural disaster response, etc. Some BBAs (like the one now considered in Congress) single out specific reasons for deficit spending, which I think is a mistake because it isn’t flexible to handle unforeseen reasons. I’ll be putting the National Centrist Party version in writing this month and it will allow deficit spending for any reason by simple majority vote. However, that deficit spending will need to have an income stream (i.e. taxes) attached to it. Thus, any vote for deficit spending is also a vote for the taxes to pay for it over some number of years.
Raising taxes is the one thing voters do punish Congress for doing.
The idea of tying deficit spending to a revenue source is very attractive.
You know, it never occurred to me before, but perhaps a meaningful center party could be nucleated, not by finding politicians who are willing to leave their parties for a center party, (hard to do, they would lose so many friends) but by well known and respected economists.
Its a fantasy of course but just imagine the impact if our best known economists were to form a union and reject the policies of both parties and create a middle party economic blueprint.
These days dreams are all I have regarding our govt.
I like it.
Well, thanks to the tax cutting policies of Bush II we now have a structural deficit, meaning that there is no way to balance the budget in this economy. When Bush II made those tax breaks at the beginning of his presidency and never was much of a spending cutter, (especially after starting two wars, only one of which was unavoidable) that just meant that severe cuts would have to be made in the future. I believe that conservatives called this “starving the beast” (the beast being federal spending.)
Between the options of trying to contain the deficits that Bush II caused ( I’m at the point of believing that our current deficits belong pretty directly to him) or trying to spend our way out of a double-dip recession, it would seem far more important to fight the double-dip recession. The 100% national debt to GDP ratio is scary, but other countries have higher ones, its slightly analogous to a family debt to earnings situation where your debts (mortgage, car payments, student loans, etc.) equal one year’s earnings. Most families would be delighted if this were the case. In fairness to the debt cutters, the credit raters for US debt are NOT delighted and that is a real problem.
How do you create growth in the economy when the very top earners are investing their money rather than spending it, and everybody else has a negative growth in their earnings relative to inflation? Ah, you give them easy credit, first cards, then equity loans, then mortgages. Ooops, we did that already, and that party is now over, the middle class now has diminished earnings and is tapped out credit wise, not to mention that we can’t sell our houses in this market. Corporations are sitting on trillions in cash (well its almost cash, short-term investments), why should they invest it in more production (=jobs) when no one has the money to create the demand for those products?
It seems pretty clear that the economy is trapped in a vicious cycle with little ability to generate new jobs, new corporate investments in production, or, at the root, new demand for products.
If the private sector is locked up, then govt. spending is needed to create demand.
Only, we have a structural deficit, thanks to Republican “starve the beast” policies and govt. stimulus seems very unlikely. When they starved the beast they had no idea that the bursting of a housing bubble leading to bank failures and a worldwide financial crisis was looming in the near future.
An ode to irresponsibility, bad decisions have consequences. Now our good options are hard to find. Oh, and Europe is also sinking, in part because we dragged them down, in part because of their own mistakes, in part because there is no strong economy in the world to stabilize the boat.
Do you think the stock market will notice?
I’m gloomy.
Wow, I’m not sure I’ve ever read anything like this before Ian. Perhaps the most void of clear thinking and one sided I have seen here – right off the TelePrompTer of the rapidly and appropriately sinking ship of MSNBC. You didn’t even mention Obama.
Are you sure you are on the right blog? The New “Moderate”?
Do you also visit the Christian sites and try to sell a satanic cult?
2 years, eight months in and the man who has squandered 5 trillion gets no blame of any of it. ALL Bush? I’ll give him a piece of it but reallly…stop it. No one can be that naive. So you must be either very bored and having a little fun or deranged. If it’s the latter, lease tell me you aren’t old enough to vote and that you had Keith Olbermann write this for you.
Yes, thanks to the miracle of the internet there are now tens of thousands of hyperpartisans online at any moment flinging poo at one another. I know my lines, Doug, I’m supposed to say something witty like “How much did Carl Rove pay you to write that?” But seriously, when you go from 0 to 90 in half a second on the hyperbole scale and include only one trivial fact in your post, its already not a good sign. But you have done me a service, you’ve provided me with a foil. The real purpose these conversations have for me is to stimulate my own curiosity and get me digging and then writing posts to clarify my own thoughts.
Yes, I am beginning to sound like the NYT editoral page on economics issues, or worse, Krugman. To think that I would have to agree with Krugman on something, its as surprising and as unpleasant as having a septic zit on my bottom. I’ve spent a lot of effort reading lately and stand by what I said above, liberal as its beginning sound. After I posted it and then did my daily reading I was pretty surprised to see pretty the same thoughts in columns by the big economic wheels.
In Vermont I have not voted for a democrat for a state office for years and won’t in the future either, our state democrats own all the political real estate and are off the wall, unrestrained power. People actually think I am some kind of Conservative activist here, I have spent so much energy protesting the excesses of progressive democrats. When they passed the statewide property tax I actually may have called them socialists, I can’t quite remember.
I have always hated the riff “Bush lied,” which is mostly about the weapons of mass destruction that Saddam turned out not to have. Bush did not lie, he was just wrong, Saddam Hussein wanted everyone to think he had those weapons and, to his sorrow, he fooled everyone. But now in my reading on the cost of the two Bush II wars I have come across the fact he did actually lie, he lied about their cost, and I am sad to say it. Official administration predictions were at the 100 billion for Iraq level. The truth: We are at something like 3 trillion and still counting. Same with Afghanistan. Many of those costs are future costs related borrowing and replenishing destroyed equipment, but they are real US costs in the trillions.
Yesterday I found an extremely honest article on the cost of the Iraq war on, of all places, Forbes.com:
http://www.forbes.com/2009/11/25/shared-sacrifice-war-taxes-opinions-columnists-bruce-bartlett.html
The author looked quite a bit like a famous fellow who is a great hero to the Doug’s of the world. I was quite surprised to read sentences in Forbes like the following:
“In recent years, Republicans have been characterized by two principal positions: They like starting wars and don’t like paying for them. George W. Bush initiated two major wars in Iraq and Afghanistan, but adamantly refused to pay for either of them by cutting non-military spending or raising taxes.”
and:
“Bush even fired his top economic adviser, Lawrence Lindsey, for saying publicly that the war might cost between $100 billion and $200 billion.”
Now Doug, you may or may not realize it, but each president, when they come into office inherits their first budget from the previous president. The 2009 federal budget, which was SUBMITTED BY G.W. BUSH, had an estimated deficit of 407 billion and an actual deficit of 1.4 trillion. These are facts, you can look them up.
I have paid almost no attention to US economic issues for, well, almost forever. I had the same vague ideas that everyone who reads the daily papers has. I had the impression that our deficits now are the result of bailing out the banks and a stimulus program under Obama. If you asked me two weeks ago that is what I would have said, that Obama’s Keynsian stimulus was in the trillions and the bank bail out cost that as well. This crisis got me digging and I was surprised to find out that the bailout money has been paid back, the govt. may even make a profit on it in the long run. The stimulus cost several hundred billion.
Our humongous deficits are structural, they are 75% due to lack of revenue. This in turn divides into the Bush II tax cuts and the crisis/recession. Our economy is still earning less than it did in 2007.
Bush I, who I actually greatly admire, was of a different sort, he passed a tax increase to fund his own war, this act of intelligence and honesty led many his own party to reject him and he lost, giving us the great sexual predator as president. Ouch.
Now Doug, write something sensible that is not mostly just cookie-cutter boilerplate mud and I will respond, but if you want to post another like you did above, well, there is always Yahoo!, you will be one of a million over there. But thanks for providing the stimulus for me to write this!
In fact, I owe a lot to Doug, he got me going on this one, and I may have discovered an actual american conservative intellectual worthy of respect. Bruce Bartlett was the author of the Forbes piece, I just looked up his bio and its a hummer, he’s no lefty. Bartlett was a member of Reagan’s staff, as a domestic policy adviser. He was an economic officail in the treausure depts under bush I He worked for Jack Kemp as an economist, adn has done time at nearly all the major conservative think tanks. From Wikipedia:
“In 2006, he published Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (ISBN 0-385-51827-7), which is critical of the Bush Administration’s economic policies as departing from traditional conservative principles. He compared the second Bush to Richard M. Nixon as “two superficially conservative presidents who enacted liberal programs to buy votes for reelection.”
“In August 2009, Bartlett wrote a piece for the Daily Beast in which he attributed the recession of 2009 to George Bush and Republicans, whose policies he claimed resulted in an inferior record of economic performance to those of President Clinton.[10] In the same editorial, Bartlett wrote that instead of enacting meaningful healthcare reform, President Bush pushed through a costly Medicare drug plan by personally exerting pressure on reluctant conservatives to vote for the program. Bartlett claimed that because reforming Medicare is an important part of getting health costs under control generally, Bush could have used the opportunity to develop a comprehensive health-reform plan and that “[b]y not doing so, he left his party with nothing to offer as an alternative to the Obama plan.”[10] Bartlett concluded:
Until conservatives once again hold Republicans to the same standard they hold Democrats, they will have no credibility and deserve no respect. They can start building some by admitting to themselves that Bush caused many of the problems they are protesting.”[10]”
I dunno Doug, you think that maybe Kieth Olbermann is writing Bartlets’ stuff as well? I predict that you will have no answer.
I’m guessing there aren’t many moderates who blog or comment on blogs. This thread, at least, seems to be a (more civil than usual) form of jousting (competitive blogging). At least there’s no name-calling. It may be dialog, but mostly people just dig in. (No listen, no learn!)