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Obama & Boehner Go for Broke

OK, that may be an exaggeration but suddenly it seems that Boehner is warming up to ‘increasing revenue’, closing corporate tax loopholes and maybe even letting the infamous Bush tax cuts for the wealthy expire.  These would be as part of a larger 10-year budget reduction program /debt ceiling package proposed by President Obama.  Obama also put Medicare and Social Security reform/cuts on the table.

Most importantly, the President wants his $4 billion package over 10 years to be the first step in revising an outdated, unfair and impenetrable  U.S. tax code.

The budget cut and debt ceiling negotiations, with conservatives obstructing any progress that includes ‘revenue raising’, have been a farce so far.  Now it will enter the circus phase as both Party bases scream about betrayal by their leaders

 

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The 14th Amendment

Economists and others are discussing the possibility that Obama could invoke the 14 Amendment to stave off the US defaulting on its obligations.

The original purpose of Section Four, which is reflected in its text, was to prevent political disruption and party wrangling over the public debt following the Civil War. However, the language of the Amendment went beyond this particular historical concern. It was stated in broad terms in order to prevent future majorities in Congress from repudiating the federal debt to gain political advantage, to seek political revenge, or to try to disavow previous financial obligations because of changed policy priorities.Senator Benjamin Wade of Ohio was a leader of the Radical Republicans and the President pro tempore of the Senate. He agreed with Howard’s reasons for why the Confederate debt should be repudiated, but he argued that if the concern was to avoid future disruption of American politics, the current proposal did not go far enough. It was also necessary to guarantee the Union debt, because former rebels or rebel sympathizers who returned to Congress after the war might, out of selfish or malicious motives, seek to prevent Union soliders and their widows from being compensated. Moreover, there was no guarantee of what a later Congress, motivated by different priorities, might do. Shifting majorities in a future Congress might be willing to sacrifice the public debt or the interests of pensioners in the name of political expediency. Thus, it was as important to guarantee the Union debt as it was to repudiate the Confederate debt.   Jack Balkin

Balkin and others make the argument that Section 4 of the 14th amendment is to ‘protect’ the federal debt (honoring it) against political expediency.  This theory says that the President, not Congress, has the obligation to prevent default on ‘obligations.’  One way of doing this is for the treasury to just keep on issuing checks past the default deadline.

Obviously, this action would quickly be considered by the Supreme Court.  Would the Court conservatives ever side with Congress over the President and risk another international economic crisis?  Or will Congress compromise at the last minute?

More:

The Economist

The New Republic


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America in Decline

“The Decline of America” is a hot topic this summer.  Soul-searchers ask how and when American culture degenerated to a point where 24/7 media coverage of Rep. Weiner’s puerile self-indulgence is tolerated.   To many, it exemplifies the embarrassing and peculiarly American fetish around politics, personality and sex.  Why Weiner’s antics triggered comparisons to the decadence of ancient Rome, when Sarah Palin’s rise to VP candidate didn’t, is beyond me.

A few musings first published in The Week:

America in 2011 is Rome in 200AD or Britain on the eve of the first world war: an empire at the zenith of its power but with cracks beginning to show. – Larry Elliot, Economics Editor, The Guardian

Rome in the first two centuries A.D. faced a yawning gulf between rich and poor. The mighty empire built on tribute reached its geographic limits. Its economy created few exportable goods. Slaves acquired by conquest built most of its bridges, roads and aqueducts and took jobs in farming, mining and construction. As this cheaper labor replaced Roman citizens, idle, unemployed, hungry people filled the capital. – Alice Schroeder, Bloomberg News

Historians, for decades to come, will be unfoldingly horrified and appalled at the Bush administration’s alternating recklessness and indifference; levels that make James Buchanan, by comparison, look like a Lincoln. – P.M. Carpenter

Personally, I think it was some moment between the Congress’s assent to torture in 2006 and when Sarah Palin was selected as a serious vice-presidential nominee in 2008. – Andrew Sullivan, The Daily Beast

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I for one believe the publication of People Magazine by Time Inc.in 1975 signaled America’s cultural decline.  It was a brilliant business move.  The magazine captured the mood of a nation turning inward and craving distraction after the divisive debates of Vietnam and Watergate.  People validated a weird, collective self-absorption (the ‘me generation’) sweeping the country and set in motion the triumph of Personality over ideas, culture, politics, even religion and morals.  Added bonus: if readers were dissatisfied with their own lives, they could live vicariously through others.

Glorification of the individual, the personality, the ‘self’ dove-tailed nicely with the heightened ethics of greed and ruthlessness marking a major shift on Wall Street and in the economy  during the ’80s.  Captured brilliantly in the best-seller “Barbarians at the Gate”, the creation of wealth was moving away from production and building towards finance,  money off of money.  Financier replaced industrialist.  Carl Ichan, Michael Milkin and Henry Kravitz were Big Personalities,  innovators for using debt to finance corporate take-overs. Factories closed.  Dynasty and J.R. Ewing dominated TV.  Wall Street was a block- buster movie.  Conspicuous consumption ruled.  Kids killed for a pair of high-end sneakers.  Coke became drug of choice for the elite while the crack epidemic underwrote crime and urban decay.  Steel mills closed. Textiles moved overseas.  Auto makers shed thousands of jobs.  But an unending parade of Personalities could take your mind off things.

Personality and greed drive our culture even more today.  Conservatives, after all, have the Biggest and Baddest Personalities. The  People Magazine credo reached its apex with Sarah Palin’s 2008 candidacy. Finally, a Big Personality broke through the glass ceiling, overcoming ideas and deliberation, substituting the colorful background bio for lengthy (boring) C.V. Personalities in sports get nine lives in addition to multiple million dollar contracts.  Personalities in news are the news.  And once they become ‘the news’, they’re qualified to write books that become best-sellers.  Governance is a thing of the past: too many Personalities vying for power.  Big Personalities in finance try to control theirs: greed sells better under the radar screen.

Poor Representative Weiner.  His penis bulge was really minor after the likes of Clinton, Spitzer and Newt.  He  never started a needless war under false claims of WMD, never tortured a soul.  On the contrary, he was on the road to becoming the Biggest Personality in the Democratic party.  The 2012 nomination for  Vice-President seemed just around the corner!

Weiner did ace one part of last week’s ordeal  Whenever the Big Personality falls, he or she must confess and take full responsibility for the offending actions.  Confessional exposure for the sake of confession is one of the highest virtues one can exhibit in America today and the best chance for a fee pass on the misdeed.  The public forgets as soon as it forgives.

 

 

 

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Do You Want to Tax the Rich?

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Why Does Jon Kyl Get Away Making False Claims about Planned Parenthood

Something should be done when a US Senator makes false statements about controversial subjects, whether those statements are misleading assumptions, careless guesses or deliberate lies.  Last week Jon Kyl frothed at the mouth for the benefit of his conservative  base, saying that ‘over 90%’ of Planned Parenthood’s work centers on providing abortions.  The real figure is 3%. Senator Kyl said his words were ‘not intended as a factual statement.’  That means he deliberatedly lied or carelessly ‘guessed’ an exaggerated number based on his political ideology, causing Planned Parenthood funding to become the leading obstacle in passing a bill to fund the government for the rest of this year.

Planned Parenthood centers are more than anything a place where women who don’t have insurance can go for annual tests, cancer screening, birth control and other gynocological services.  I used Planned Parenthood in my 20s when I didn’t have private health insurance and was charged on a scale I could afford.

For years, Planned Parenthood has received government funds with the stipulation those funds cannot be used for abortion.  These centers keep scrupulous records.   They have to, given public scrutiny of their work.  Without Planned Parenthood, many young mothers would have no access to prenatal care, a key reason for undersized babies and complications at birth.

 

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Republicans at Odds Over Budget

Some House Republicans have been hoping that the prospect of a budget proposal that cuts federal outlays by trillions rather than billions would make it easier for the rank and file to compromise on the spending cut package. That theory could get a serious test if Speaker John A. Boehner decides to bring a bill to the floor that falls far short of the $61 billion in cuts already endorsed by the House.

Boehner has his hands full.  Tea Party activists refuse to compromise to keep the government functioning for six more months in FY 2011.  They want double the amount of cuts that the Administration and Congressional leaders to agree on:  $61 billion vs. $33 billion.

The government will shut down this Friday if the funding bill is not passed.  On Tuesday Republicans will unveil a more long-term budget that cuts trillions of dollars instead of mere billions.  Republic leadership is hoping Tea Party members can delay gratification now if their objectives can be passed later.

Meanwhile, the economy is beginning to create jobs again, adding 218,000 in May which dropped the unemployment rate to 8.8% after months of 9% plus.  A robust economy is the single most important factor in creating jobs and lowing the budget deficit.  At this stage of the economic cycle, deep spending cuts could snuff out a recovering economy

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