Tag Archives: deficit

Confidence

11 Jul

If the federal government doesn’t raise the debt ceiling by August 2nd, it’s feared that the country’s inability to pay its bills and/or debts will plunge the world economy into yet another downward spiral, rivaling the 2008 meltdown. Or possibly something worse than or equal to the Great Depression.  Or perhaps it’s exactly what Dr. Paul ordered.  Consider:

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It’s too early to analyze whether the President’s strategy in “negotiating” with congressional Republicans is yet another awful example of horse-trading in the face of intransigence, or instead some tactical rope-a-dope brilliance.

But in the midst of an economic recovery that isn’t creating any jobs, I get the sense that it’s fundamentally irresponsible for any part of the federal government to further harm everyone’s already shaken confidence – in the economy, in employment, in production or consumption, in government in general. While Eric Cantor stands to personally profit from a federal default, the party to which he belongs is busy yelling about deficit and spending reduction, all of which signifies nothing in the face of President Obama’s proposal for a package that would, in ten years, reduce the deficit by $4 trillion.

Obama has, in fact, infuriated Democrats by proposing cuts to Medicaid, Medicare, and Social Security entitlement benefits. The deal he’s proposed would seem to be exactly what the Republicans say they want – significant spending cuts, reformation of entitlement programs, and deficit reduction. The reason they won’t go along? The proposed rescission of the Bush/Obama tax cuts for the wealthiest Americans. Not for nothing that even the Republican patron saint Reagan raised taxes when necessary, and that tax rates are at historic lows yet doing absolutely nothing to move the economy along, Boehner and his minions are showing that they’re not really about spending cuts and deficit reduction. They’re all about protecting millionaires and billionaires from an incremental rise in their effective income tax rate.

Seriously – they’re willing to plunge the world economy into possible depression in order to ensure that Paris Hilton keeps a bit more of her money. And the recovery? Because the stimulus was weakened in an effort to gain Republican support that never came, it wasn’t enough to do what it should have.

David Frum explains that the Republicans have painted themselves into a corner by invoking the debt ceiling as the “no deal” option. He compares 2011 to 1990, when the Republicans raised the top marginal rate from the high 20s to the low 30s – the act that blew George H.W. Bush’s “no new taxes” lip-reading pledge out of the water.

Had House Republicans succeeded in derailing the 1990 deal, things would have bumped along as before. The deficit would have stayed big, interest rates would have stayed high, growth would probably have remained slow. Unpleasant, but not the end of the world.

But this time there is a hard and dangerous deadline – a deadline imposed by Republicans themselves. By deploying the debt-ceiling weapon, Republicans denied themselves the option of choosing “no deal.” Unlike 1990, this time, there must be a deal, and if Republicans cannot get a deal that their most radical members like, they will have to settle for a deal that their most radical members do not like.

This predicament creates powerful temptations for individual Republicans to defect from the party coalition in hope of gaining for themselves the kind of credit and clout that Newt Gingrich got by defecting in 1990. This time, however, defection carries a heavier price: a real risk of tumbling the country and the world into financial crisis.

Back in January, John Boehner promised it would never come to this. I believed him – and argued vigorously on television against those who predicted that the radicals would carry the day. It looks like I was wrong about that, at least that I have been until now.

Another writer at FrumForum writes:

In fact, a growing faction (and I count a few people I consider friends as members of it) somehow seems to think that a default on the debt would get the nation’s house into order on the basis that it would cut spending. It would cut spending, and cause a worldwide depression at the same time. Republicans need to do a lot more to convince voters that they can govern and a legitimate jobs plan would be a very good start.

The Republican strategy at this point appears to be “destroy the economy so Obama can’t be re-elected”. That may, in fact, happen. And maybe President Bachmann or Romney can fix the economy by further cutting taxes. But it’s doubtful.

If Boehner could get his caucus to back the proposal now before them, it would be historic and may actually help the economy in a palpable way. But the serious Republicans have let the tea party and the idiot Republicans (Bachmannites, Palinists) gain too much influence.

So, Americans wait for Washington to get serious. The world waits for us to get serious. The economy treads water while Washington dithers. The culture in Washington hasn’t changed – with Obama it’s worsened because it takes two to tango, and the Republicans have strategically sidelined themselves.

Mr. Cantor suggests that a more modest $2 trillion in deficit reduction should instead be pursued. Thinking small, this solution would give Republicans everything they want (weakening of the social safety net), with absolutely no pain being felt among the wealthiest Americans. The middle and working class are getting historically shafted in this country while both parties tiptoe around the very wealthy because of the idiotic way in which we fund elections.  When someone calls the GOP on this, they get accused of class warfare; in fact, it’s the Republicans who are engaging in class warfare on behalf of society’s haves.  Calling them out on it is called “truth”, not “class warfare”.

The country is pretty fundamentally broken. One hopes it can be fixed soon, and that serious people begin to treat serious matters seriously. One hopes that Washington can start leading with thoughtful compromise, rather than bumper sticker slogans.  One hopes that the interests of the country and her people someday trump the interests of partisanship or campaign financiers.

Scary Monsters, Albany Style

29 Nov

Courtesy Marquil at EmpireWire.com

The NYS Deficit

3 Feb

It was just solved by three men in a room. What could possibly go wrong?

This is my favorite line from TAP’s report:

The plan also includes an additional $800 million in cuts from next year’s projected deficit, taking next year’s deficit from $13.8 billion to $13 billion.

That’s not a bite. That’s the kind of bite my mom takes from a chocolate bar because she remembers being a kid during the war having no chocolate and savoring each microscopic morsel.

New York State: We’re F*cked

28 Oct

Liz Benjamin at the Daily Politics has the painful facts:

Calling the fiscal crisis facing New York “unprecedented,” Gov. David Paterson today called on legislative leaders to whack another $2 billion from the current budget when they return to Albany Nov. 18 for their second emergency session in three months and stressed that nothing is off the table when it comes to cuts…

…Paterson revealed the state’s four-year deficit projection has grown to a whopping $47 billion from $22.6 billion in July. That is the largest cumulative deficit in state history.

According to the state Budget Division, while the current deficits are the largest in absolute dollars in history, as a percentage of the general fund budget, they are similar to those faced in 2003-04.

In that year, the state closed an $11.2 billion budget gap, which represented 28.4 percent of the then $39.5 billion general fund.

Governor Paterson says that nothing – nothing – is sacred, and everything is up for discussion. Oh, and he’s going up to Capitol Hill to ask for a bailout of New York State. FAIL.

New York's Freefall

30 Jul

People leaving, energy prices staggering, taxes higher than average, and it’s only now – at the doors of a crisis – that action is going to be taken. Governor Paterson estimates a $6.4 billion deficit for 2009 – 2010, and in the middle of an election year, he’s calling the state legislature back in mid-August to take a break from chicken BBQs and do some work.

Not just any work, but the kind of work that New York legislators are loath to do. They’re going to have to make extraordinarily tough choices with respect to spending and borrowing – the sorts of choices that piss of a great many of their special interest constituents.

But what I’d like our legislature to remember is that they work for all of us. Not for SEIU, not for NYSUT, not for CSEA, but for every single New Yorker. They work for you and me, and they have hitherto tended to abandoned their responsibility to the population at-large in favor of the big donors and powerful lobbies. Lax oversight and regulation of lobbying means that Joe Bruno can go to work as a lobbyist – he can’t lobby the legislature, but the governor’s door is open.

So, I don’t want to hear that such-and-such special interest is going to go ballistic over cuts that are desperately needed to fix what’s broken. I want to hear that these people who keep getting re-elected over and over again are making the hard choices and decisions that they supposedly get elected to make.