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How to Restore the Good Name of Government

2:28 pm in Uncategorized by letsgetitdone

There are four very important things the president can do before the elections of 2014 that would help to restore some faith in Government and, as a by-product, at least tentative trust in the possibility that renewed Government deficit spending may help people.

Why is it that Washington village “progressives,” and their associates in other parts of the country who are nevertheless part of the Washington village culture, often ask useful questions, but, almost always deliver, underwhelming answers? Here’s an example from Richard Eskow, probably the best writer at Campaign for the American Future.

How do we restore the good name of government spending, which is especially important during periods of high unemployment and slow growth like these? First, by supporting those politicians who are unafraid to make the case. Second, by demanding that the reluctant ones take a bolder stand – without mixing their messages between spending and premature austerity. Third, by rejecting the insanity that today’s Republican Party represents. Some in the GOP are even opposing infrastructure spending – as America’s bridges, schools, highways and dams decay around us.

Underwhelming, right? Why? First, because there aren’t too many politicians who are unafraid to make the case. Second, because people who are reluctant aren’t likely to respond to only “demands” from people who fiercely desire more government spending. Third, because merely rejecting Republican insanity is very unlikely to cut it, since that is what Democrats have been doing and it seems to be having little or no effect. And fourth, because the only way to restore faith in Government spending is to take actions that have consequences that are highly visible and unambiguously good for the vast majority of people. In other words, those who want to restore faith in Government spending have to get the Government to take actions delivering things for people that they see as important. So, how can this be done?

At this juncture, little can be done that involves the Congress because Republicans and Democratic corporatists won’t let it happen. They won’t legislate anything useful before the election.

Nor will they legislate anything useful after it unless 1) Democrats get a majority in both Houses and 2) Democrats who constitute those majorities are willing to move away from corporatism and legislate in the interests of people. So, if something can be done in this area, it must be done by the President. There are four very important things he can do before the elections of 2014 that would help to restore some faith in Government and, as a by-product, at least tentative trust in the possibility that renewed Government deficit spending may help people.

1. The President can re-institute the rule of law in the area of national security and secrecy by ending mass surveillance of the US population immediately, ceasing all investigations and attempts at prosecutions of journalists who have been trying to tell the public about the overreach of our intelligence agencies, beginning investigations and prosecutions of intelligence operatives who have broken existing laws in gathering intelligence, ending current prosecutions of whistle blowers, and issuing pardons for those who already have been tried, convicted, and jailed.

2. The President can re-institute the rule of law in the area of FIRE sector control and mortgage frauds by beginning investigations and prosecutions of high level executives at too big to fail FIRE sector organizations who have committed fraud including those that caused the financial collapse of 2008, which, in turn, led to the Great Recession and the destruction of so much middle class wealth.

These first two initiatives are supremely important because they will deliver a very visible presidential message that the Government is re-instituting honest government and a single system of law, which, in turn, will give people some reason to believe that renewed spending by the Government will be carried out honestly for the benefit of people, and not for the benefit of FIRE, health care, energy and other elite corporations. Giving people this is an essential step in restoring faith in additional spending, since from their point of view, it looks like the financial power of Government has been used to save big corporations and Wall Street and see to it that they prosper, while leaving working people and home owners to twist slowly in the economic winds of “the long depression” (Eskow’s memorable phrase). How can they believe that renewed spending will help them if they believe that the Government promising good results from new spending is a corrupt government, in the pocket of the 1% or perhaps even the 0.001%?

3. The President can next do something that is very essential to developing widespread support for renewing spending, because it will make plain that the US Government has and always will have whatever amount of funds it will take to create full employment and to finally end the long depression. The President has to remove the perceived problem of the national debt from the consciousness of the public by paying off a large proportion of it WITHOUT running economy-destroying surpluses. There’s only one way that can be done by the President acting alone right now, in time to affect the campaign environment in the 2014 election by eliminating the debt as an issue backing continued austerity propaganda.

That way is to cause the US Mint to create and deposit a platinum coin with a face value high enough to repay the debt subject to the limit entirely as it falls due, and to cover deficit spending for a long period of time thereafter. If the President does that, and sees to it (as he has the power to do) that the Mint’s account, and ultimately the Treasury’s spending account are credited with reserves equal to the value of the seigniorage resulting from the Mint’s deposit at the Fed; and also, if he follows that up by immediately paying off a large percentage of the debt, then everyone will know that the seigniorage is being used to get rid of the debt quickly.

When people know this they will know two other things. One, that the Treasury is easily paying off the debt, and two, that it has and always can easily create whatever funds it needs to follow through on its promises to end the long depression without either cutting spending or raising taxes. This will be a revelation to people which the President and the Democratic Party must drive home.

4. The White House and the Democratic Party must then run a campaign advocating a list of programs people will immediately view as likely to solve their economic problems. These must promise full employment recovery within a year using full payroll tax cuts and a Job Guarantee program at a living wage with good fringe benefits, strengthening social security and other trust fund programs by guaranteeing their annual spending regardless of the size of their trust fund balances, and by greatly increasing the size of safety net benefits and the protections they afford in case of inflation, truly universal and comprehensive health care using enhanced Medicare for All, revenue sharing for states on a proportional basis by population, fixing US infrastructure over 5 years, fixing the Housing crisis with various specific measures redressing the injustices done to homeowners by the big banks since 2007, fixing the student loan crisis with a “debt jubilee” and a grant program covering post-secondary education, and, lastly, dealing with environmental, climate change, and sustainability issues with a massive 5 year transition away from fossils fuels and nuclear and to renewable energy.

Democrats must then meet the cynicism and ridicule greeting these campaign promises by guaranteeing that if people give them a victory, then they will get rid of the Senate filibuster and other impediments to rapid action, and will legislate their program within the two year period of the next Congress without fail. These guarantees must be backed with a further promise not to run for re-election if they break any of their promises. Only then will some of the cynicism greeting their promises be dispelled.

Finally, these Democratic promises will surely be met with a campaign emphasizing the bogeyman of hyperinflation. Democratic promises will be estimated in a primitive way totaling up what will they cost over the two year period. The assumption will be made that they won’t be countered by automatic stabilizers producing increasing fiscal drag as the US approaches full recovery.

Democrats will have to respond with their own projections estimating that drag. It will come from gradual and automatic re-imposition of payroll tax cuts calibrated to kick in gradually as unemployment decreases, and gradual shrinking in Government spending on the Job Guarantee (JG) program as the private sector responds to increased demand by hiring people from the JG rolls.

In addition, it will come from increasing private sector savings and increasing trade deficits as recovery moves forward. It will also come from the White House working with Congress to phase in some of the programs I’ve mentioned gradually and in response to increasing fiscal drag.

The bottom line is that if the Democrats are successful in winning the Congress in 2014, and in legislating these programs, then faith in Government will be restored. But, there will be a fly in the ointment, as there is always is in life. The debates over fiscal policy will shift to debates about the likelihood of inflation, and managing the economy to avoid inflation at full employment will become a prime concern. We will have traded increasing government illegitimacy, chronic unemployment, stagnation, and “long depression” problems for renewed faith in government, full employment, prosperity, and inflation concerns.

That’s a great trade-off for all of us, I think. And I will take it anytime over the current neoliberal evolution toward a feudal/fascistic order.

(Cross-posted from New Economic Perspectives.)

Photo by l’ennui d’ennui, used under Creative Commons license

What That Letter Should Have Said

9:54 pm in Uncategorized by letsgetitdone

On Valentine’s Day, Senator Bernie Sanders sent a letter to the President, authored by himself and signed by 15 other Senators, all Democrats. The letter was a response to the rumors that the President intends to include his Chained CPI proposal to cut Social Security benefits in the budget he will soon send to Congress. It summarized:

Mr. President: These are tough times for our country. With the middle class struggling and more people living in poverty than ever before, we urge you not to propose cuts in your budget to Social Security, Medicare, and Medicaid benefits which would make life even more difficult for some of the most vulnerable people in America.

We look forward to working with you in support of the needs of the elderly, the children, the sick and the poor – and all working Americans.

The letter also stated a number of the usual talking points made in arguments against cuts to Social Security. In addition, it also contained praise for the President for his actions in improving the economy, creating jobs, and reducing the deficit, and it mentioned some specifics, including reduction of the Federal deficit to less that half of the $1.4 Trillion deficit he began with. The letter also asserted the need to do much more, especially in the areas of the economy, reducing unemployment and wealth and income inequality, and reducing the deficit “. . . in a fair way.”

It is a positive development that a group of Senators decided to preempt the President’s budget offering stating their disagreement with any proposed cuts to SS, Medicare, and Medicaid, but I think there were a number of ways in which the letter could have been done more effectively. First, It would be great if progressives urging the President not to cut the safety net would stop reinforcing the frame that lower deficits are good and that the President is due praise for cutting the deficit so sharply (CBP projects a 3.0% of GDP deficit this fiscal year). It is not good that he has cut the deficit so much, because in doing so, he has subtracted from Federal Government additions of Net Financial Assets (NFAs) to the economy. These contributions are projected to be so low this year that they will only compensate for the demand leakage due to the trade deficit, leaving no additional NFAs for net aggregate private sector savings.

Given the presence of unequal economic power to collect financial assets in the hands of economic elites, the implication of this is that the lower deficits will only further exacerbate inequality in the United States as well as contribute to continued high and long-term unemployment and stagnation (low growth) in the economy. In short, the austerians, including the President and other Democrats and Republicans who have been insisting on lower deficits are responsible fr the stagnation we see all around us.

Second, the letter would also have been more effective, if it had more than 15 signatures on it. Many Democratic Senators are running for re-election this year. Do they really want to be running as one of the faces of a party whose head is advocating for cuts to Social Security? Is this really good for Kay Hagan, Jeanne Shaheen, Mary Landrieu, Mark Pryor, Mark Warner, Cory Booker, Tom Udall, Mark Udall, Chris Coons, and John Walsh? So why haven’t they signed the letter? Do they really expect to re-elected if they decide to support a budget that contains chained CPI, and, even if they don’t support it, will they benefit if their party leader is proposing chained CPI? So why wasn’t Bernie Sanders able to get these additional signatures from Democrats who face challenges and are running this year?

And third, this letter would have been much, much stronger if the Senators who signed it said to the President directly that they know that there is no short or long-term debt problem and hence no further need to worry about cutting the deficit to achieve fiscal sustainability or ficsal responsibility. And that they also know that any debts that the Treasury has incurred in the past, or deficits that it incurs in the future, can be either paid off as they fall due, or covered completely by revenues from High Value Platinum Coin Seigniorage (HVPCS) used under the authority provided by legislation on denominations, specifications, and design of coins, passed in 1996. (Full details and issues surrounding HVPCS are given in my e-book.) They also should have added that since there is never any need based on the idea that “we’re running out of money,” to cut any safety net programs, that they want the President to know that everyone signing the letter is committed to voting to kill any budget offered by the President including the chained CPI, or any other provision cutting safety net programs.

A letter enhanced in the three ways I’ve just outlined would have been a damn sight more effective in warning Obama off the chained CPI, than the one Bernie Sanders and the other 15 Senators sent. And it also would have been much more effective in getting those Democratic Senators who signed it and are running, elected in November.

Cross-posted from New Economic Perspectives.)

Dear Dr. Krugman: Please Let Me Explain

8:35 pm in Uncategorized by letsgetitdone

Paul Krugman looking downwards

Krugman misses his deficit hawk friends.

Paul Krugman can’t explain why the deficit issue has suddenly dropped off the agenda. He says:

. . . quite suddenly the whole thing has dropped off the agenda.

You could say that this reflects the dwindling of the deficit — but that’s old news; anyone doing the math saw this coming quite a while ago. Or you could mention the failure of the often-predicted financial crisis to arrive — but after so many years of being wrong, why should a few months more have caused the deficit scolds to disappear in a puff of smoke?

Why indeed are they so quiet? Could it be because the deficit hawks have succeeded in getting the short-term result they want, which is a likely deficit too small to sustain the private savings and import desires of most Americans, and also because the political climate is such right now that they cannot make progress on their longer term entitlement-cutting program until after the coming elections have resolved the issue of whether there will be strong resistance to such a campaign if they renew it? Let’s look at the budget outlook first.

Here’s CBO projecting deficits of 3.0% of GDP this fiscal year, followed by 2.6%, 2.8%, and 2.9% for fiscals 2015, 2016, and 2017. Those deficits are mostly smaller than Warren Buffett’s and the Eurozone’s favorite deficit target of 3.0%. They are the same too small deficit targets that have prevented the Eurozone’s PIIGS from responding effectively to the crash of 2008, and the prolonged depression and astronomical unemployment rates which have engulfed them since. When one considers that CBO’s projections are usually too conservative when it comes to projected deficits, so that the reality of these is likely to be smaller, as it has been regularly, for the past few years, then it’s even more apparent that Peter G. Peterson and his other austerian friends have gotten where they want to go for the time being.

Nor are there any other major influences in Washington, DC advocating higher deficits. Even “progressive” groups and politicians always talk about “pay fors” and offer 10 year deficit reduction plans that envision deficits averaging far less than the 3% target.

So, the deficit hawks have already gotten to their short – term goal. Their long – term goal of hollowing out the social safety net has met with increasing resistance over the past four years. And the resistance is strong enough that the Democrats have no stomach for bipartisan compromises cutting Medicare or Social Security for the present.

The deficit/debt hawks now need a breather. They needed to go into wait-and-see mode to see what the elections of 2014 produce.

If they produce the right mix of tea partiers, and Republican and Democratic debt hawks. They may be able to produce a new “Grand Bargain” early in 2015 before 2016 election pressures become intense, and the influence of Hillary Clinton’s candidacy on Democrats in Congress becomes too great. I say this not because I think that Clinton will necessarily oppose any such bargain in the long term; but because such a bargain would be risky for her candidacy and the Democrats in the run-up to the elections of 2016.

So, from my viewpoint I don’t think the time is propitious for the deficit/debt hawk forces to keep pressuring for entitlement reforms and a long-term solution to their favorite, and non-existent, financial problem of excessive public debts in fiat sovereign nations like the United States. And I think they know that.

Instead, it is a good time for them to regroup and plan their next attack on entitlements. That will come under cover of the Republicans’ next debt ceiling attack, which is a good possibility for March of 2015.

So, I see the Peterson forces beginning to beat the drums again towards the end of the year and build up the intensity of their appeals from January to March. I don’t see a strong move to cut entitlement spending in the lame duck session, since there will be no debt ceiling cover then to generate leverage heavy enough to get Democrats to accept part of the blame for cutting entitlements.

Cross-posted from New Economic Perspectives.

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What Now?

8:34 pm in Uncategorized by letsgetitdone

Today, John Boehner bowed to the inevitable logic of the impending political season and placed a “clean” debt ceiling increase bill on the floor of the House. At this writing, the bill passed with 28 Republican and 193 Democratic votes. Now it moves on to the Senate, where it is expected to pass in time to allow the Treasury to keep issuing debt instruments.

So, now we have had agreement on a budget partially rolling back the sequester, and the Republican leadership appears to have decided not to have another debt ceiling crisis. I wrote a post called “What Happens Now?” just after the Government shutdown ended last October. There I analyzed the political situation and made a number of predictions about the short-term future. Here’s how I answered the question: “Growth and Jobs or Shutdowns and Debt Ceiling Crises?” Read the rest of this entry →

The Simplest and Best Way Out

11:01 pm in Uncategorized by letsgetitdone

Well, the proverbial s__t is now hitting the fan in our State Governments, and we’re looking at struggles in State after State between newly elected Republican Governors scapegoating civil servants, while they insist that taxes can’t be raised on the wealthy and large corporations during a recession. Put briefly, the moves to austerity and the resulting conflicts in Wisconsin and other States are partly Democrats’ fault, because they failed to pass a State revenue sharing bill to close the gap in State budgets, so that no cuts in services, employee benefits, or jobs would be necessary. A revenue sharing bill of $300 Billion passed in 2009 would have done the trick, and could have been passed as part of the stimulus package.

Why didn’t they do it? Well, the gutless wonders in the 21st century Democratic Party wouldn’t go after the filibuster when it would have made a difference in January of 2009, and that left them negotiating with a few “moderate Republicans” and blue dog Democrats who ended up controlling the final form of the very inadequate stimulus bill. There’s no turning the clock back, of course. But the Democrats should still propose revenue sharing, make a big fuss about it, and talk about how the Rs were perfectly willing to bail out the big banks, AIG, and even foreign banks, but are not now unwilling to bail out their own American States, and would rather attack public employee unions and their collective bargaining rights rather than doing anything constructive about jobs. The Ds should also point out that all the Rs have done since winning the House is to kill jobs, and that their refusal to pass revenue sharing is just another instance of job-killing.

Of course, someone will read this proposal and say that the Federal Government can’t afford even a bigger deficit than it has now so that it’s not a serious proposal. To them I say that I prefer to deal in reality and not act as if I believe the fantasies of people who think the Government is like a household. I know that people believe that the Federal Government can’t afford it. But that belief is based on various fairy tales and myths I’ve exposed before like:

Everyone of these myths/fairy tales is used to support the idea that the Federal Government can’t afford to do the things it ought to do to end the economic suffering in America, and, in particular, that we can’t afford to save State employee jobs and benefits by providing revenue sharing grants of $1,000 per person to every State to close their budgetary gaps. Every one one of them is untrue. Belief in any of them is stopping us from helping the 99ers, from educating our kids, from re-building our infrastructure, from healing our sick, from re-inventing our economy, from developing our alternative energy sources, from creating real wealth for our children and grandchildren, from extending Social Security benefits, and from stopping these completely unnecessary attacks on unions and collective bargaining.

What we badly need is a mental housecleaning in our economic thinking. We need to sweep away the false ideas of neo-liberalism and its practice of “Aztec Economics,” because our experience (most recently, Ireland, Greece, Spain, the Baltic nations, the UK, and even ourselves, since we held back on stimulus and health care reform out of austerity concerns) tells us that they are serving us very badly and causing suffering all over the world. It’s time to try the ideas of Modern Monetary Theory instead, and see if they will work better. They tell us, in part, that Federal Government spending isn’t in itself a “cost,” since our constitutional authority to spend is unlimited and we can now do so electronically. So, when considering such spending we must never look at its nominal financial cost; but only at its likely real impact. Does it increase value? For whom? What are its real costs in terms of resource consumption and negative outcomes? Does it bring full employment? Does it solve national problems? Is it likely to cause inflation? Does it create a better life for most people?

These are the kinds of questions we should be asking. Asking and answering them correctly and making fiscal decisions based on the answers is fiscal responsibility. Fiscal irresponsibility is watching the impact of spending on deficits, surpluses, debt-to-GDP ratios and other numbers of this type.

The current Administration is fiscally irresponsible, not fiscally responsible. The President’s Fiscal Commission exhibited the height of fiscal irresponsibility. And the current Congress, in jumping on the bandwagon of Aztec Economics and austerity, will give us even more fiscal irresponsibility, while congratulating themselves about taking the tough decisions that fiscal responsibility calls for. What more is there to say? We live in Orwell’s world. We must find a way out!

(Cross-posted at All Life Is Problem Solving and Fiscal Sustainability).

The Fear Card and the Guilt Card

8:34 pm in Uncategorized by letsgetitdone

A little while ago I did a piece on tweeting the fear card, and the attempts of certain supporters of the Democrats in this year’s elections to persuade dissatisfied and angry progressives that severe damage will be done to the country if the Republicans take over the House, the implication being that severe damage will not also be done if the Democrats retain control of the House. As the election has approached the fear card is being supplemented by the guilt card.

The guilt card asks whether angry progressives won’t feel guilty If Republican neanderthals like Bachmann, O’Donnell, Angle, Paul, Joe Miller, Johnson, Webster, etc. beat fine Democrats like Russ Feingold and others. And then it suggests that if you don’t want to feel guilty you have to get out there and work for the Democrats, so that the great evil of a Republican victory will be averted and we can have two more wonderful years of Democratic rule.

I really have the same answer to both the fear card and the guilt card, and they are my own fear and guilt cards for Democratic Congresscritters and a Democratic President. First, aren’t you afraid of turning the country over to the neanderthals again and going back to the Bush policies? Won’t you feel guilty if you lose to the knuckle-draggers, and completely blow the golden opportunity for change the American people gave you in 2008?

If you are afraid, and you do will feel guilty, then don’t berate me or other angry progressives for whining. Just stop whining yourself and do what it takes to get our votes. It’s easy.

First, in the Senate, get your lazy butts in gear and use the nuclear option to get rid of the filibuster. Second, pass the economic program I’ve written about here. Third, pass a bill defining legal persons incorporated by States and operating in Interstate commerce in such a way that they cannot fund political messaging. Fourth, pass HR 676 Medicare for All. Fifth, pass EFCA. Sixth, dissolve the Catfood Commission. There is no long-term deficit problem. It’s a myth. Forget about it!

Next, for us angry progressives let’s keep two things in mind. First, hctomorrow’s post of September 14th. He places our voting decision in the November elections in the context of experimental research on Game Theory, and likens our situation to an iterated prisoner’s dilemma game in which the best immediate tactic is to defect against a cooperating partner. He points out that the Democratic Party’s game against us progressives is to ask us to cooperate, indeed to use any sort of appeal to get us to support them, while they defect from any promises they make to us and act to please the interests that fund their campaigns. He also points out that in an iterated prisoner dilemma situation, such as the one we find ourselves in, it is self-defeating for us to continue to support the Democrats, however persuasive their fear and guilt cards may be.

Continued cooperation with them by us will not secure cooperative behavior on their part, but according to a vast amount of experimental evidence will only result in further defections of Democrats from our interests. To get their cooperation we have to engage in defecting behavior too. That is we have to stay home, or vote for third parties, or even vote Republican, because only then is it possible for them to learn that their strategy of continuous defection won’t work. Prisoners Dilemma research has shown that defection will bring occasional cooperative behavior on the Democrats’ part. When that occurs the indicated response by us should be cooperation. But not until then.

To these notions, I want to add my own view that if we accept that we need to defect from the Democrats to show that if they don’t cooperate, we won’t either, then this election is a better time to do it than in the election of 2012. Then, both the Presidency and the Congress will be up for grabs. In 2010 however, the most likely result of elections where we defect is that the Democrats will lose only the House.

Today, Jim Moss makes the case that the 2010 elections won’t give the Republicans so much power that they can repeal anything they want too, and also that control of the House doesn’t mean very much, since with the filibuster still intact in the Senate, most legislation gets blocked or watered down anyway. He’s right! This is not that critical an election. If we defect from the Democrats now, we can see how they behave over the next two years, do our best to develop the framework of a real third party, then, If they continue to defect, we can decide whether to go back to them again or pull the trigger, and end the Democratic Party, as we know it, for good.

(Cross-posted at All Life Is Problem Solving and Fiscal Sustainability).

The Tenth Thing to Do – Not!!!

8:02 pm in Uncategorized by letsgetitdone

[Ed. note: What do you think? Is the national debt really one of the most urgent things on the To-Do List?]

Earlier this month, Thomas Geoghegan wrote a piece for The Nation telling the Democrats the ten things they could do to really get the base excited, and at the same time do good things for the country. Here’s his list.

1. Raise Social Security to 50 percent of working income.

2. Let’s extend Medicare to people 55 to 65.

3. Make it a civil right to join, or not to join, a labor union.

4. Put in a usury cap of 16 percent.

5. Set up small government banks like the German Sparkasse.

6. Give everyone the right to six days of vacation — six consecutive paid working days.

7. Let employees sue corporate officers for breach of fiduciary duty to the corporation.

8. Pass a College Bill of Rights.

9. End the filibuster.

10. Get the country out of debt.

Well, I might disagree with one or two of the first nine items. For example, I’d go for Medicare for All, and I’d also put in a usury cap of 6 points over prime, since a cap of 16 percent would still leave the banks with enormous profits on credit costs of near zero for them right now. But where I think Geoghegan is way off base is on getting the country out of debt. I’d like to keep this post as short as possible, so I’ll focus on just a few of his views. He says::

Finally, we have to take back the GOP’s big issue, the federal debt. Indeed, for every kind of debt — government, consumer, trade — the Democrats have to be the party that gets the country out of debt. That’s the only way to bring back a fair and just economy that lifts the middle class. As debt piles up, even our base is freaking out. Deep down, people grasp that America got into this mess with too much private debt. "Hey, if we’re all trying to get our own debt down, how does it make sense for the government to run it up?"

This statement conflates a number of different problems under the same heading — “debt.” But these “debts” are very different, and Geoghegan doesn’t explain either their differences or their relationships. He only assumes that “debt” is a bad thing, and that we have to get rid of it to please the base. But what are the three kinds of “debt” and how do they differ? Well, first, Federal debt is that part of the deficit (the difference between tax and other revenues of the Government, and Federal spending) that the Federal Government has matched with the sum of its outstanding debt instruments. Second, non-Federal debt is the sum of loans outstanding incurred by other Government entities in the United States, and by private sector entities: individuals, corporations, and other organizational entities. . . .

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2012: How U.S. Voters Can Wrest Control of Congress from Special Interests — Part III. Why and How Congressional Elections Can Be Won By Transpartisan Voting Blocs in 2012

9:15 pm in Uncategorized by letsgetitdone

[Author's note: This series has been re-posted by Joe Firestone (a.k.a. letsgetitdone) on behalf of author Nancy Bordier with her express permission.]

By Nancy Bordier

See the series introduction here.

All U.S. House of Representatives seats and one third of Senate seats in Congress will be up for re-election in 2012. The U.S. House of Representatives holds the "power of the purse" because it initiates all revenue bills. Electing a majority of representatives to this body who are untainted by special interest money is the fastest and most direct way for U.S. voters to get their policy priorities enacted into law and stop the passage of legislation that serves special interests.

With 80% of Americans wanting most Congressional representatives to be defeated, and the two major parties attracting little more than half of all of registered voters combined, there are likely to be enough discontented voters in most Congressional districts to oust their incumbents — provided they have a mechanism for putting House candidates on the ballot that elicit the votes of a plurality of voters. (U.S. election laws permit candidates to be elected without a majority of all votes cast; they just need to get more votes than any other candidate, referred to as a "plurality").

This mechanism is provided by the web application described in Part II, the Interactive Voter Choice System (IVCS), which enables voters to take advantage of the large scale collective action power of the Internet to win Congressional elections in the electoral districts where they live. The efforts of voters to use the Internet and the application to oust incumbents will be furthered by the fact that incumbent Democrats and Republicans in Congress are often elected to the U.S. House of Representatives with less than 100,000 votes in non-presidential election years. (Each district comprises a total population of approximately 600,000.)

Moreover, while many state election laws are designed to thwart candidacies not backed by the major parties, the rules governing primary elections for the U.S. House of Representatives require the signatures of only a small percentage of registered voters to put a candidate on the ballot on an existing political party’s line. While the rules vary widely among the 50 states, it is only 5% in states like New York State.

In a hypothetical New York State Congressional election district with 300,000 registered voters, of whom 150,000 are Democrats and 150,000 are Republicans, all that the 80% of dissatisfied voters have to do, in order to put a candidate on the primary ballot of either party, is to collect valid signatures from 7500 registered voters in that primary.

Not only are the signatures of only a fraction of registered voters required to put a candidate on an existing party’s ballot line, but there is no minimum number of party voters required to actually vote for the candidate to get him/her elected in the party’s primary election. Moreover, only a small minority of a party’s registered voters actually turn out to vote in primary elections and this minority actually determines the party’s general election slate of candidates.

Recent Tea Party victories in electing unknown party candidates in primary elections against establishment Republican incumbents show how easy it is to take advantage of the low number of signatures and primary voters required — especially when the candidates are backed by irate, aggrieved voters who can be mobilized to vote in larger numbers than dispirited, apathetic or over-confident mainstream voters.

These statistics and requirements show that grassroots voters do not face insurmountable obstacles to ousting incumbents in their Congressional districts in 2012 — provided they can agree on who they want to run, and can get candidates on the primary and general election ballot that can attract a plurality of votes cast. This is no small matter given the two major parties’ pre-eminence in electoral politics and the surging special interest-backed Tea Party movement, but the IVCS web application makes attaining this goal entirely feasible in most election districts that have a majority of irate mainstream voters who want to replace their representatives.

What has prevented the majority of dissatisfied voters in the past from running and electing insurgent candidates against those run by the two major political parties with special interest funding is that they lacked a mechanism for building voting blocs whose members can agree on a set of priorities and slates of candidates, and attract enough voters away from special interest-backed candidates to cast a plurality of votes for bloc candidates.

Third parties like the Green party and the Libertarian party, for example, have not sought to create a hybrid voting bloc, even for the tactical goal of defeating major party candidates, because they have been striving to differentiate themselves from each other and from the two major parties. (Moreover, both have been handicapped in developing substantial electoral bases by federal and state "winner-take-all" election laws that favor the two major parties.)

In contrast, the IVCS web application empowers voters, existing political parties and new parties focused on winning Congressional elections to build transpartisan voting blocs without large sums of money. IVCS enables them to bring together virtually unlimited numbers of voters across the political spectrum to set shared transpartisan policy agendas and select common slates of candidates willing to run on their agendas. With 80% of the electorate wanting to oust most Congressional representatives, the application enables these blocs to easily acquire the voting strength they need to outflank and outmaneuver existing stand-alone political parties that are running special interest-backed candidates. In fact, they can pre-empt these parties from running such candidates by building voting blocs that run winning candidates on their ballot lines in party primaries.

The application makes the formation of these blocs, agendas and slates possible by providing free web-based tools and services to individual voters across the political spectrum on a single website. These tools allow them to set their policy agendas and contact voters who share their policy priorities so they can join forces to create voting blocs in their local Congressional election districts dedicated to electing representatives who will enact their priorities into law. (To view a prototype of the website, click here.)

The application provides an easy-to-use repertory of bottom-up collaboration and consensus-building tools designed to enable grassroots voters to organize and run autonomous voting blocs in their Congressional districts free of unwanted outside influence. They can operate their voting blocs inside or across party lines, or in new parties they or others create. Although the tools also help voters use their voting blocs to build electoral coalitions and even new parties on a local, state and even national level, individual voting blocs will always be the building blocks and driving forces of these relationships.

Voting bloc members can adopt whatever rules they think they need to manage themselves internally and negotiate external relationships, including electoral coalitions, agendas and slates of candidates with other voting blocs, political parties, unions, etc. If they function in ways their members find objectionable, with or without formal rules, dissatisfied members can leave the bloc and join or start other voting blocs with modes of operation more to their liking. The competition among voting blocs for members will enhance the prospects for democratic decision-making.

(Cross-posted at All Life Is Problem Solving and Fiscal Sustainability).

Myths of Peter Orszag

10:50 pm in Uncategorized by letsgetitdone

Orszag’s maiden voyage at the New York Times entitled “One Nation, Two Deficits,” is full of myths, and that’s the polite way to say it. I’ll review these and comment on each of them one-by-one.

“The nation faces . . . . an unsustainable budget deficit over the medium and long term.”

This is an article of faith among deficit hawks and deficit doves too, but neither group has been able to explain what they mean by “unsustainable” budget deficits, or to explain why they are “unsustainable.” This statement applies to OMB, to CBO, to the Catfood Commission, to the Peter G. Peterson Foundation, to the International Monetary Foundation, and even to people like Paul Krugman who share the view that the United States has a medium and long-term deficit problem.

We can’t let them get away with this any longer. We need a clear definition of fiscal sustainability from them, and we also need to know what that definition implies about what levels of the deficit, the national debt, or the debt held by the public to GDP ratio, are, in their view, unsustainable. Until that is done the view that there are unsustainable budget deficits in any of the short, medium, or long-terms has to be considered a myth when it is applied to a nation like the United States, sovereign in its own fiat currency, able to create that currency by spending and marking up accounts at will, and owing no debts to anyone except debts denominated in the currency it has full authority to create to pay its obligations. In short, nations with monetary systems like ours have no solvency risk. So it is up to the deficit hawks, including Orszag to explain how a nation with no solvency risk can possibly have “a fiscally unsustainable deficit”, national debt, or public debt-to GDP ratio.

“. . . Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.”

Worth it? That really depends entirely on your point of view. In Orszag’s view, Government spending must be funded either through tax revenues or through borrowing. That’s another myth. I don’t hold it. I know it’s not necessary to end the tax breaks for the rich because we need the money for other things. The truth is that we don’t. We (the Treasury and the Fed) can always make more money.  . . . Read the rest of this entry →

Give The People What They’ll Like, Already: Not “Stupid Hooverism”

10:31 pm in Uncategorized by letsgetitdone

For the Democrats in Congress, winning in November isn’t rocket science; it’s about having the will to pursue survival ruthlessly. The key to winning is giving the American people what they’ll like, and not allowing any of the normal Washington obstacles to stand in the way. But, for Dems to act that way depends on them changing both their beliefs and their behavior. Let’s start with the beliefs.

The first belief that has to change is the idea that deficits are a problem for the Federal Government, that Democrats have to minimize to show that they are responsible. This is a myth, a lie, a scare, or a fraud. Deficits are only a problem when inflation begins to appear. If there is no inflation, Democrats should not even give lip service to the idea that deficits are important. Read the rest of this entry →