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:

– The Government is running out of money

– The Government can only raise money by taxing or borrowing

– We can’t keep adding debt to the national credit card

– We need to cut Federal Government spending and make do with no more money

– If the Government borrows more money, the bond markets will raise our interest rates

– If we continue to issue more debt, then our main creditors may refuse to buy it, an event that would lead us to insolvency and severe austerity

– Our grandchildren must have the heavy burden of repaying our national debt

– There is a deficit/debt reduction problem for the Federal Government that is not self-imposed

– The Federal Government is like a household and that since households sacrifice to live within their means, Government ought to do that too

– The only way to tackle our deficit is to cut excessive spending wherever we find it

– We should also find a bipartisan solution to strengthen Social Security for future generations

– We face a crushing burden of Federal debt. The debt will soon eclipse our entire economy, and grow to catastrophic levels in the years ahead.

– The next generation will inherit a stagnant economy and a diminished country

– The United States is in danger of becoming the next Greece or Ireland

– Fiscal Responsibility means stabilizing and then reducing the debt-to-GDP ratio and achieving a Federal Government surplus

– Federal Government austerity will create jobs

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).

[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).

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 →

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 →

When the Democrats, at the start of the present session, organized the Senate without changing the procedural rule allowing for the filibuster, and requiring a cloture vote of 60 members to end one, they took on responsibility for giving Republicans and blue dogs inordinate influence over the legislative process. The filibuster is a long-standing tradition in the Senate, but the constitution doesn’t require it. It requires only majority rule in the Senate. Read the rest of this entry →

Cenk Uygur writes about the importance of questions, rather than answers, in changing the conversation in a way that is favorable to Democratic ideas, and also praises Alan Grayson and Michael Moore for bringing up two questions that have changed the political conversation in ways that put the Republicans on the defensive. In saying that the Republican health care plan is “If you do get sick, die quickly,” Alan raised the question:

”Do Republicans Want People To Die Quickly”? Read the rest of this entry →

Alan Grayson been making waves lately. His characterizing the Republican health care plan as: “if you get sick, die quickly, and then calling out members of the Republican Party as “foot-dragging, knuckle-dragging neanderthals,” were both good for a laugh. And then, when they howled and demanded an apology, he refused to apologize to them, but instead said that he would only apologize to the 44,000 annual dead and their families for Congress’s inaction failing to fix the health insurance mess.

On Friday’s installment of Countdown, Lawrence O’Donnell, substituting for Keith, played a clip of Grayson’s recent speech on the floor of the House (above), and then also had him on the program for a softball interview (below). In both performances Grayson exuded confidence, comfort, and humor. In the interview he was just “basking,” a really “happy warrior” in the tradition of Al Smith, Franklin Roosevelt, and Harry Truman. Read the rest of this entry →

I think Republicans and Blue Dogs understand the power of “no.” But I’m afraid the progressives in Congress don’t understand it, and that’s why they’re losing the fight for health insurance reform, have sustained partial defeats on the stimulus package, and credit card reform bills, and are moving toward a partial defeat on the cap-and-trade bill.

From where I sit, the situation is a strange one, because the situation in Congress is a favorable one for progressives, if they will only grasp the leverage available to them if they would “just say no.” As we all know the Republicans are just saying no to anything offered by the Administration. And it is this that makes the situation favorable to progressives. In years gone by, Republicans mixed in their “nos” with frequent “yeses,” and it was then possible for “moderate” Republicans and centrist and even conservative Democrats to pass legislation over the objections of progressives. But now the Republicans’ determination to say “no” on everything prevents them from joining with blue dogs to run things, unless progressives play into their hands by compromising with themselves and the blue dogs, which, of course, is what they have been doing, thus far, giving Republicans influence over policy disproportionate to their numbers in Congress. Read the rest of this entry →

Last night, it occurred to me that the public option idea is a disingenuous approach to health care reform. Here’s the argument.

Talking to other progressives, I’ve noticed that they all freely say that single payer will work better than a public option, and that it is the best alternative they know. And then they also go on to say that they are supporting a public option, rather than single payer, because it’s more politically acceptable and will result in a single payer system anyway after a number of years, since everyone will switch to the public option. The question is: would these progressives support a public option, if they thought it would not result in a single payer system? I don’t think so, even though their counterparts in the US Congress are currently fixing to do just that as a recent post by Kip Sullivan (thanks to ralphbon for the reference) shows. Read the rest of this entry →

President Obama thinks that the best thing to do for an economy that has yet to turn around on jobs is to wait to see how the stimulus bill works, before seeking a second stimulus. This may seem reasonable, especially in the face of the widespread reports about opposition to a second stimulus from Republicans and Blue Dog Democrats. But, here’s the problem. Let’s say the stimulus works as intended. Given the “lack of complete information” about the full depth of the recession the Administration had when it crafted the stimulus, its effect is unlikely to bring unemployment down below 9%. So, the Republicans will call it a costly failure, while saying that there is no need for a further stimulus, because it too will be ineffective and also because we can’t afford another ineffective stimulus. The result will be that if it works, there will be no further stimulus. Read the rest of this entry →