Tag Archives | Federal Budget/Taxes

Taming the Deficit (Rumors)

Recent US Federal Deficit Numbers

Obama Deficits Bush Deficits
FY 2012: $1,101 billion FY 2009: $1,413 billion
FY 2011: $1,299 billion FY 2008: $248 billion
FY 2010: $1,293 billion FY 2007: $161 billion

The federal deficit is the amount each year by which federal outlays in the federal budget exceed federal receipts. But the gross federal debt increases each year by substantially more than the amount of the deficit each year. That is because a substantial amount of federal borrowing is not counted in the budget. See here.

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Think Budget Will Get Resolved: Think Again

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Occupy Congress: House GOP Negotiates with Self

The outright rejection by House GOP members of a Democratic plan designed to get as close to a Republican proposal as possible, including a spending cut/revenue ratio of 6:1 means that the House GOP has no intention of negotiating with anyone but themselves.

By refusing to consider any tax/revenue increases in any budget reduction package, the GOP is setting the public up for mandatory and brutal across-the-board cuts in discretionary spending including $712 billion in defense spending and $566 billion in non-defense spending such as education, veterans health benefits, energy, the environment, and a number of social programs serving the poor and middle class.

Who are these people representing?

I know not me.  In the latest NYT/CBS poll, 7 of 10 people think the House GOP budget proposals benefit the rich. Two-thirds believe the rich should be taxed more; the same number believe corporations should not be given tax breaks.

Congress included more cuts in defense spending if automatic cuts are triggered purposefully, figuring cuts that size in the military would act as incentive for the 12 Congress members in the Super Committee to negotiate a plan to present to the full House and Senate.

But the real zinger is the quote I’m including in my next post….

 

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Debt Ceiling Poll: Overwhelming Support for Congressional Compromise

debt ceilingThe newest NBC/Wall Street Journal poll finds Americans still reject partisan gridlock and want leaders to compromise to take action on the deficit and debt ceiling.

When Democrats and independents are asked if they want the Democrats in Congress to make compromises to get consensus on the current budget debate, 65% do and 27% want them to stick to their position.  When Republicans and independents together are asked, 53% want compromise, 42% do not.  38% of all respondents believe the debt ceiling should be raised, compared to 31% who don’t and 30% who felt they didn’t know enough to say yes or no.

55% of those polled believe not raising the debt ceiling would be problematic, only 18% did not.

A clear majority, 58-36% support President Obama’s plans to address the budget issue (cuts plus taxes, 10-years) over the Republicans (spending cuts only).

President Obama is rated favorably by 47% while those who think the country is on the wrong track rose to 67%.

One long-time pollster for Democrats, Peter Hart, and one for Republicans, Bill McInturff, conducted the poll.

 

 

 

 

 

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Deficit Deal: Whose Country is This!

The collapse of the Boehner-Obama deficit reduction talks essentially confirms the total incapacity of Republicans to compromise in the interests of the country.  There is no rational reason:

1.  Reductions in spending (primarily discretionary spending) far outweigh ‘raising revenue’ in Obama’s $4 trillion plan.

2.  The tax breaks for oil and gas, private jets and hedge fund managers are inexcusable in this economy.  Due to a huge loophole in the tax code hedge fund managers making billions of dollars a year pay no personal income tax.  This is a clear oligarchical haven.

3.  Obama is willing to tackle the ‘sacred cows’ of Medicare and Social Security.

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To make this into an ideological split between Keynesian and supply-siders, taxes vs. spending, big government vs. small, when the entire fiscal system and credit worthiness of the American economic system is on the brink, is treasonous.  If these people aren’t able to grasp the situation, they have no right to govern.

If Republicans can’t see the difference between what’s necessary for economic growth long-term and what’s necessary on an emergency basis now, they have no right to govern.

And if the Republican leadership can’t whip their base into line, then they have no right to govern.

Obama needs to be clear with the American people:  if we cut spending too much now, the economy will collapse.  If we don’t close loopholes in tax rates and repeal Bush tax breaks for wealthy people, a deficit reduction program won’t be enough to make a dent, and Republicans know that.  It’s  not a  matter of ideology, the figures don’t add up.

The surest means to raising revenue is economic growth.  A collapsed economy doesn’t grow.  Once the economy picks up and the deficit ratio drops, we can get back to retiring debt.

Republicans do not have a right to win seats to Congress and think they represent ‘the people’ more than an elected President, for goodness sake!  They don’t have the right to represent their districts in a national assembly and refuse to compromise.  Compromise is what gives American democracy the flexibility to have lasted 200-plus years.

New York Times

National Journal

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Stimulus: Did it Work? Obey’s 1% Doctrine

A great debate about if the Stimulus Bill worked, and a fine size-up by Dave Weigel in Slate.

Did the stimulus do less than President Obama said it would? Absolutely. In the first months of 2009, when the president sold the bill, got it passed, and defended it, he tossed off predictions for job growth that got progressively higher and were never matched. At his most optimistic, he said the stimulus would be a success if it “created or saved” 4 million jobs. It fell far short of that. But ambitious, expensive bills have fallen short before, and it hasn’t discredited their reasons to exist. George W. Bush’s tax cuts were supposed to balance the budget by 2010.

Weigel  does an excellent job showing how the dynamics between media, policy and politics determine public opinion and why.  It’s a ‘last hurrah’ warning to conservatives in Congress against pulling the deficit reduction reigns too tight.

The Republican leadership is being pushed into the same mistake the Roosevelt Administration made in 1937 when it was forced by Congress to cut back on stimulus and the Depression double-dipped.  Why are we repeating history?

 

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Gates: Isolation or Engagement

It seems Defense Secretary Gates has been retiring almost as long as he served Presidents Bush and Obama. The media, ardent fans of the Secretary, have followed him on five or six victory laps in his months-long ceremonial departure.  As the New York Times puts it, “…the last trip to Afghanistan, the last hearing before Congress, the last news conference, a series of last interviews with reporters” not to mention a couple of  commencement speeches

Gates’ most lasting achievement may be accepting the Secretary of Defense job in the first place.  He claims credit for deterring the Bush Administration from taking military action against Iran and engaging other foreign military adventures.

“The only thing I guess I would say to that is: I hope I’ve prevented us from doing some dumb things over the past four and a half years — or maybe dumb is not the right word, but things that were not actually in our interest,” Mr. Gates said.

It’s ironic that Gates came into the Bush Administration to clean up after Donald Rumsfeld and leaves as questioning and debate about the future of American power accelerates after Iraq and Afghanistan:

I’ve spent my entire adult life with the United States as a superpower, and one that had no compunction about spending what it took to sustain that position,” he tells NEWSWEEK, seated in a windowless conference room aboard the Boeing E-4B. “It didn’t have to look over its shoulder because our economy was so strong. This is a different time.”

A pause.

“To tell you the truth, that’s one of the many reasons it’s time for me to retire, because frankly I can’t imagine being part of a nation, part of a government … that’s being forced to dramatically scale back our engagement with the rest of the world.”

Indeed, it’s time for Gates to retire, because scaling back the military, in particular, is what the times as much as the economy, demand.  For over 20 years,  the single ‘Superpower’ model has been an illusion.  The more the US exercises power unilaterally in any sphere – military, climate, human rights – the more the world pushes back.   After WW2, the US and USSR became two co-dependent superpowers that manipulated war, politics and the subtleties of diplomacy to their own advantage in a race for domination. One without the other, standing alone, can’t depend on Cold War myth or a hyped fear of terror to rally allies.

It’s been left to Gates to call a spade a spade in a disheveled and contrary world.  He recognized the dangerously adventurous policies of the Bush Administration and canceled the F-22 program as symbol of Pentagon waste.   More cuts have been forced on the Pentagon in direct response to the bleeding budget deficit, itself accumulated in large part by the ‘wars of choice’ Gates candidly warned future administrations to avoid.

Cold Warriors like Gates have a knee-jerk reaction against terms like ‘isolationist’ for good reason. Standing on the sidelines in WW2, or not rebuilding Europe afterwards would have been morally and economically disastrous for the US.

But to many of the Vietnam generation and beyond, pulling back from world crises would benefit the US.  ‘Engagement’ has too often meant American intervention into conflicts within other nations through the ‘soft’ approach of aid or the aggression of war, coup d’etats and assassination.  More recently, the ‘war on terror’ has been used to legitimize similar efforts.

The US will never abandon all its international commitments or even all its off-shore operating bases.  But it can’t police the world.   Power has shifted.  What business does the US have in selling advanced weapons systems to Taiwan?  If Taiwan decided to use them against the People’s Republic of China, we won’t risk war with China on behalf of a small, island nation that China claims in the first place.  NATO, born of the Cold War as a US-European military alliance that could face off with the USSR and Warsaw Pact,  is now in the absurd position of flying air sorties to loosen Col. Quaddafi’s grip on Libya – a far cry from its original mandate. The War in Afghanistan is the only case in NATO’s history where the alliance was called upon to fight in defense of one of its members.  NATO, a bloated relic of the past, is a huge waste of time, money and leadership that should have been dismantled two decades ago.

The US currently  maintains 865 military bases outside the US, Iraq and Afghanistan at a cost of $102 billion a year -  more if the latter are included.  Is this the global infrastructure we need sixty years after WW2?  Shouldn’t other countries and regions be more responsible for their own protection and security? During the Cold War, the US rebuffed Europe whenever European leaders moved to strengthen their independent defense capability.  Fear of European independence is absurd today.

Too many assumptions about US security not challenged in decades still direct the deployment of US troops and material around the world.  Even without the economic meltdown of 2008-9, China and India were growing in relation to the U.S.  The ‘decline of America’ has become a political catch phrase.  Some use it to strike fear in our minds and build anti-foreign sentiment.  Others give it an anti-capitalist slant.

In reality, we are experiencing a relative decline in American economic and political power as other countries develop their own economies and assume greater roles in world politics.  China may be the world’s second largest economy but its per capita economic output in 2010 is the same as America’s was in 1878,  that’s 132 years ago.

Right now, the staggering US economy is pressuring cut-backs in America’s far-flung global infrastructure.  It’s a time to recalibrate and adjust, not panic.

 

 

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Do You Want to Tax the Rich?

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