Tag Archives | budget deficit

S&P Cautions on US Debt – Gave Subprime Derivatives AAA Rating

If you cry ‘wolf’ too often, you won’t be believed when the wolf appears.  If you don’t cry ‘wolf’ when the wolf appears, you won’t be believed when another shows up.  This is the dilema that S&P finds itself in after saying it has turned ‘negative’ on US debt.The S&P did not downgrade US debt from its AAA rating, nor will it anytime soon.  S&P, it turns out, was negative because it fears that Congressional gridlock will block any meaningful reduction in the US deficit.  (As if everyone and their mother didn’t fear the same thing!) Ok, fair enough.

But, let’s at least get the facts straight:

Republicans reacting to the announcement by Standard & Poor’s that it might downgrade the U.S. government’s triple-A bond rating got it backwards: the rating agency’s concern isn’t primarily about deficits and debt but the political gridlock that may prevent doing anything about them.

Read here and here and especially here.

 

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Do You Want to Tax the Rich?

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Tax Cuts, Revenue, Spending Explained

Bruce Bartlett crunches numbers and adds some history to a histrionic budget debate in Fiscal Times

Of course, Republicans claim that the Bush tax cuts stimulated growth in the last decade. But real GDP growth was much higher in the 1990s, unemployment was much lower, and we had budget surpluses instead of deficits. Arguably, these benefits flowed in large part because of the tax increases in 1990 and 1993, not to mention those enacted by Ronald Reagan in the 1980s, which stabilized the nation’s finances. Yet it is Republican dogma that tax increases never reduce the deficit despite the obvious evidence to the contrary.

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Obama vs. Ryan on Health Care

Health care, particularly Medicare reform, will be a big topic again in 2012.  Ronald Brownstein writes about the Obama and Ryan approaches in The Atlantic:

For instance, the legislation (Obama’s) allows groups of providers to share in savings when they form “accountable care organizations” to better coordinate patient care. It ties hospitals’ reimbursements to their quality ratings and penalizes them if too many of their patients must be readmitted. It creates mechanisms, including an independent Medicare board, to incubate further delivery-system changes.

Republicans, on the other hand:

Republicans rejected all of those arguments in the blueprint from House Budget Committee Chairman Paul Ryan, R-Wis., expected to pass the House this week. His plan would not only repeal Obama’s health care law but also end the existing Medicare program for Americans 55 or younger, replacing it with a voucher (or premium-support) system in which government would provide seniors a stipend to buy private insurance.

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The Single Most Important Way to Lower Budget Deficits

A growing economy.  More employment = more tax revenue.  When Clinton left office after years of economic growth, we had a budget surplus.  When Bush left office, we were in deep decline.

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Majority of Americans Reject Wisconsin Attempts to Strip Public Workers of Rights

In a major rejection of conservative activism, the majority of Americans oppose stripping Wisconsin public employees of collective bargaining rights according to recent polls here and here.  According to the New York Times/CBS News poll, they also oppose cutting the pay or benefit of public workers:

As labor battles erupt in state capitals around the nation, a majority of Americans say they oppose efforts to weaken the collective bargaining rights of public employee unions and are also against cutting the pay or benefits of public workers to reduce state budget deficits, according to the latest New York Times/CBS News poll. 

and:

The public strongly opposes laws taking away the collective bargaining power of public employee unions as a way to ease state financial troubles, according to a new USA TODAY/Gallup Poll. 

The poll found that 61% would oppose a law in their state similar to one being considered in Wisconsin, compared with 33% who would favor such a law. 

Ohio and several other states that have new Republican governors and legislative majorities are considering laws that would reduce the power of government employee unions to bargain over benefits and work rules. 

Wow.  Better watch out!  Once again, a political party (this time Republican) has severely overestimated its mandate.  Governor Scott Walker was confident that his stand against the collective bargaining rights of public employees was the vanguard of a new employer-employee order.  His hard-core line, however, is back-firing.

Once again, TV played a role in making the public workers human to the American people.  Interview after interview showed public workers from various trades are reluctant but determined protesters.  This image contrasted with the Governor’s attack on his own employees as self-serving, over-paid ‘prima donna’s who are bankrupting the State of Wisconsin.

 

 

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Britain Slashes Defense Budget – Could we be next?

Prime Minister Cameron announced an 8% cut in Britain’s defense budget as part of a new economy-wide austerity program.  Troops will be reduced by 12,000, civilian defense workers by 25,000, artillery weapons by 40% and a number of plane purchases dumped.

The planned cuts have raised concerns across the Atlantic, leading Cameron on Monday to phone U.S. President Barack Obama to reassure him that Britain intends to remain a major military power, The Wall Street Journal reported.

Any cuts in the US military budget to help reduce the US deficit would be fought tooth and nail by war hawks and the defense industry, no matter how logical those cuts are.  Unlike the early to mid 1980s in this country, there is currently no constituency pressing for arms reduction and military spending cuts.

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