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AFL-CIO Outlines a Debt Reduction Plan that Would Actually Work

4:56 am in Uncategorized by Bill Egnor

AFL-CIO Headquarters

AFL-CIO Headquarters by samirluther

Here we are in mid-September with 10 weeks of the “Super-committee” drama ahead of us. We’ll be waiting to see the posturing, the demands, the breath holding, the capitulations and, most likely, the intransigence of the Republicans forcing this whole exercise into failure.

The really sad part is that there is a plan out there which would actually reduce the debt by more than the 1.2 trillion this committee is charged with. That plan was laid out by the AFL-CIO and it does not require cuts to Medicare, Social Security or Medicaid.

The Hill is reporting that the venerable union has sent around a plan that outlines where trillions in deficit reduction savings could be found. If the real goal, as both Republicans and Democrats claim, is to reduce our national debt and get our people working then these are the ideas that should be discussed before we talk about cutting Social Security (which does nothing to add to our debt) or military retirement benefits.

The proposals run the gamut and they are pretty much what you would expect from a Labor Union; establish the public option as way to control costs for health care by competition with a plan that does not put profit first. Allow Medicaid to negotiate drug costs with pharmaceutical companies (why the hell we have not done this yet is a national shame) and allow the re-importation of prescription drugs from other countries. The AFL-CIO estimates that these three measures would save a total of $299 billion over the next ten years. As they say, that ain’t hay.

But that is not all the plan suggests. There are tax revenue ideas that make sense and are perfectly compatible with economic growth. The plan includes a changing the tax code so that capital gains are taxed at a rate just like income, a millionaires surtax, and the big Kahuna a small financial transaction tax on all trades on our stock markets. These measures are estimated by the union to provide, $168 billion, $400 billion and a $1 trillion dollars respectively over the next decade. That is more than the “Super-committee” is looking for in one fell swoop!
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Mirror Image Speeches, Both Bad

5:49 am in Uncategorized by Bill Egnor

Mirror Image

Mirror Image by cosygreeneyes

I watched both speeches last night on the debt ceiling. I have to say that this whole thing makes me crazed. It is a dumb time to talk about pulling trillions out of the economy, especially when we are talking about a policy that is supposed to be a decade long. All I see from the debt reduction right now is a slow growth of jobs because we never addressed the underlying problem of demand.

Be that as it may, there was plenty to be unhappy about from both the President and Speaker Boehner. President Obama is pitching us on the idea that cutting spending, and cutting it on social safety net programs is somehow going to bring the confidence and jobs fairies out of their coma and everything will be Moring in America again (I am not keen in any fashion on how much this President, this Democratic President grooves on Ronald Regan).

I understand that he is standing on the bridge of the Titanic and watching the Republicans push and iceberg into the path of the national and planetary economy. At this point I am not at all sure that there is much different he could have done, but that does not let him off the hook for granting the legitimacy of the deficit reduction by hostage taking (call it Disaster Legislating) in the first place.

He had the bully pulpit and could have been hammering it for months if he chose to do so. It is entirely possible that things would have been different, but it is water under the bridge now.

Last nights speech was kind of a primer for those (unlike you and me) who have not been paying attention and don’t have a the history of debt ceiling fights on the tip of our tongues. Still he was far too easy on the Republicans in terms of who is at fault for our massive debt. Five trillion (that is 5 million, million for those how don’t do big numbers well) was added to our debt in the 8 years of the Bush administration. That is more than 1/3 of the total.
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Conrad, Coburn and Cat Food II, Oh My!

5:49 am in Uncategorized by Bill Egnor

(image: twolf1)


Poor Kent Conrad, he thought that announcing that he was retiring next year would make him seem like a fair broker for massively unpopular budget reduction plans. He pushed the president really hard over creating the Cat Food Commission (threatening to hold up the last debt ceiling raise if it was not created).

That went pretty spectacularly sideways, ending with no Commission report, but instead a report from the two chairs that the not enough of the rest of the Commission would sign on for. It still gets talked about like Simpson-Bowels is the actual report instead of something cooked up by a couple of old coots that it is.

Then Sen. Conrad decided that he could do better and formed the so-called “Gang of Six”. It should have been called “The Gang That Couldn’t Shoot Straight” for all the success it had. They are supposed to unveil their plan for trying to implement the “old coots” plan which will invariably be misreported as the Simpson-Bowels commission recommendations. That is probably not going to go very well, which is why it is going to be presented to 60 or so Senators in private today.

Meanwhile Sen. Coburn (Douche-OK) the rogue member of the Gang, is also pushing a plan that has something for everyone to hate his own 9 trillion dollar deficit reduction plan. This plan would increase taxes by closing loopholes and would significantly change Medicare and Medicaid.

It would also hit Social Security. If you are inclined to want to change Social Security this plan might attract you. It would not use any of the savings in to reduce the deficit but rather extend the solvency horizon for it. It would increase the eligibility age by 1 month for every two years, starting in 2022. This is just a camels nose under the tent to change the program, at least to my eyes.

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Sen. Kent Conrad Joins The Republican Hostage Takers

5:35 am in jerks by Bill Egnor

Kent Conrad - Caricature

Kent Conrad - Caricature by DonkeyHotey


What the Hell is Sen. Kent Conrad smoking? And why it is that he won’t share (c’mon, Senator, don’t bogart that doobie!)? In today’s Washington Post Sen. Conrad enables the hostage taking of the Republican Party by saying that he does not think that the two trillion in budget cuts that the Administration is talking about is enough.

Worse, the Senior Dufus from North Dakota is actually tying these cuts to the Republican threat of not raising our debt ceiling. But don’t take my word for, here is a quote:

Conrad said he would agree to raise the debt limit for no longer than six months without a more serious effort to reduce future borrowing. And he told reporters that he is recruiting like-minded senators to “send a very clear message that some of us are not going to vote for a long-term extension of the debt limit unless there is a credible plan” to reduce borrowing.

This is not the first time that that Conserva-Dem has tried to hijack the raising of the debt limit ceiling. He was instrumental when we had a 59 seat majority in the Senate for holding up the last round of debt ceiling increase. At the time he rounded up 12 Senators and insisted on the creation of the Simpson Bowels Cat Food Commission as the price for their votes.

What makes me nuts about this whole thing is that it has no basis in economic reality. Yes our debt is high, we have been in the worst economic downturn (major recession plus an anemic recovery) that the nation has seen in 80 years, pretty much the life time of the majority of the nation, this tends to lead to higher debt.
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Water Cooler – Is Medicare/Medicaid The Debt Driver? Nah – It’s Tax Cuts!

5:15 pm in Uncategorized by Bill Egnor

It’s all about the debt. That is what the Republicans have managed to get Washington thinking. There is no doubt that we have a lot of it and that we do have to pay for it, eventually. Personally I thin that any attempt to deal with it before we fix our employment problem is going to make things worse not better, but no one in Washington is asking me.

But just as the Republican idea about what is important now is wrong so is the area they are looking to fix the problem. The Republicans have been telling us that it is the spendthrift ways of the Obama administration and its desire to for stimulus and it’s insistence on preserving Medicare and Medicaid that is making us broke, but the reality is, of course, something different.

Everyone has seen the Center on Budget and Policy Priorities chart showing what is blowing a hole in our budget, mainly the Bush tax cuts and the wars in Iraq and Afghanistan. In fact they have put out a new chart that shows where our problems are going to be over the next 8 years or so.

Is anyone surprised by the fact that by 2019 40% of our debt will be the Bush tax cuts and the costs of the wars (including interest since we did put the cost of two wars on our credit card). Look at the chart for yourself:

5-12-11bud2

The Chief Economist at CBPP had this to say about the chart:

Altogether, the economic downturn, the measures enacted to combat it (including the 2009 Recovery Act), and the financial rescue legislation play a smaller role in the projected debt increase over the next decade. Public debt due to all other factors fell from over 30 percent of GDP in 2001 to 20 percent of GDP in 2019.

We focus here on debt held by the public, which reflects funds that the federal government borrows in credit markets to finance deficits and other cash needs. That’s the proper measure on which to focus because it’s what really affects the economy. We compare it to GDP because stabilizing the debt-to-GDP ratio is a key test of fiscal sustainability.

As Kathy and Jim note, simply letting the Bush tax cuts expire on schedule (or paying for any portions that policymakers decide to extend) would stabilize the debt-to-GDP ratio for the next decade. While we’d have to do much more to keep the debt stable over the longer run, that would be a huge accomplishment.

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Water Cooler – S&P Waves The Red Flag, Republicans Charge

6:03 pm in Uncategorized by Bill Egnor

Bull Fight 7

Bull Fight 7 by George L Smyth, on Flickr

Today the consequences of having a “Know-nothing” party as one of two political parties became even clearer (as if not paying for two war, and a major Medicaid increase while drastically cutting taxes for the wealthy were not enough evidence). Standard and Poor’s lowered it outlook on the United States being able to pay its debt in the future.

Was it because we have massive deficits? No not really. Was it because we have a ton of debt built up by giving millionaires and billionaires tax breaks in order to spur economic growth that did not happen? Not directly.

The reason that the S&P is down grading the likelihood of the US meeting its debt obligations is actually because they do not believe that there is any chance of real fundamental agreement on what steps need to be taken before the 2012 elections.

Yep, that’s right. The S&P thinks that there is no chance that there will be enough adults in the conversation about our revenue issues before the country gets to decide if they want to keep any or all of the Bozo’s in Washington. Now, ya’ll know me, I am going to say that for all the weakness of the Democrats, they are not the ones insisting on illusionary solutions to a real world problem.

In fact I can demonstrate that the galling and frustrating compromises that we have seen over the last six months on this very issue show that it is not the Dems who are so intransigent and oblivious to the reality of the situation that they will play political games with the economic health of the nation. That falls the Republican Party, and solely to that party.

Democrats are not the ones who insisted that we lard up an already huge tax break renewal with another 700 billion for in breaks for billionaires. Democrats are not the ones that have just passed an new Budget Resolution that would drop the top tax rate by 10%. This is a budget that claims to balance the budget but it will actually add 7 trillion to the debt over the next decade and won’t balance it until, wait for it, 2081 if it ever did.

Democrats are not the ones who are insisting that tax increases are “off the table” from the very start. No friends and neighbors, that is the Republicans and their insanity has gotten so bad that the S&P does not see how we can get past this issue until there is a new election, in 17 months.
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Will Cantor And Republicans “Save” The U.S. By Destroying It?

5:30 am in banality of evil, jerks by Bill Egnor

Burning Man 2009

Burning Man 2009 by JahFae, on Flickr

There is an apocryphal quote from the Vietnam War “We had to destroy the village to save it”. I call it apocryphal because its attribution is murky and it has been distorted from the original quote over time. However it is still a powerful idea that leaders can get so close to their immediate goals that they lose sight of the bigger picture of what they are trying to achieve.

The quote comes from the story of Ben Tre , a provincial capital in the Mekong Delta. The United States Army made the decision to shell and bomb the town, even though there were large numbers of civilians in it, in order to break the Viet Cong hold on the town. They destroyed the town to deny it to the enemy. Not exactly a productive thing to do when you are fighting a counter insurgency.

It sees that this kind of thinking has infected the Congressional Republicans. Yesterday Majority Leader Eric Cantor (Dr. Evil –VA) said that he and his caucus, who control the House of Representatives, will not take up the issue of raising the debt ceiling until after it actually is hit. Right now the Treasury department estimates this will happen no later than May 15th.

Why is the House Majority Leader going to wait? Because he sees political advantage in playing with the nations credit rating. You see even when we a prevented by law from borrowing any more money there are ways that the Treasury department can shift dollars around for a few weeks to keep paying for things. They think they can get us through June and into July before those emergency measures run out.

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Goverment Shut Down Looms, Time To End The GOP Hostage Habit

5:14 am in banality of evil, jerks by Bill Egnor

GOP Ostrich

GOP Ostrich by stormbear, on Flickr

There are many ways to fall into bad habits, but the easiest is when one tries a vice and then is rewarded for having done so. This is where the nation is with the Congressional Republicans. Their vice has been economic hostage taking, and like all successful hostage takers, when they want something they look around of the nearest economic crisis to grab a hold of and insist that they get their way.

Which is exactly where we are with the impending, and probably inevitable, government shut down; their least reasonable members, newly elected (thanks midterm voters) have been signaling for months that if they did not get every little mean spirited and economically moronic thing they wanted, they would shutter the Federal Government.

Now with Speaker Boehner (Putz-OH) reneging on his privately agreed to cuts, there is little chance that there will be an agreement and a vote. In fact there would have to be a bill published today in order to be able to follow the new House rule of 72 hours before a vote, for there to be anything to vote on by the deadline on Friday.

It is not like the Republicans think that the public is going to be kind to them on this issue. Their leadership remembers how it played out in 1995 and they don’t want to go into another presidential election with weak candidates and a sour taste for their party in the mouths of the electorate.

Which is why they are trying to do everything they can to pin this on the Democrats. Too bad the facts are all against them. Today they are going to introduce another Continuing Resolution that would extend spending for another week. Sounds good until you hear what the price tag is.

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Speaker Boehner Stop Lying, Broke Nations Can’t Borrow

6:28 am in Economy, jerks, Republican Party by Bill Egnor

Bank Of Montreal

Bank Of Montreal by Galt Museum & Archives on The Commons, on Flickr

We’re flat broke. What do you think of when you read that? Having been busted more than a few times in my life it means no money and no prospect of getting any. Pretty simple and straight forward, unless, of course, you are the Speaker of the House; then “broke” can be parsed and spun and twisted.

We have all seen the great orange Speaker saying “We’re broke” over and over again as he tries to sell a justification for what his masters (the Freshmen Republican “Tea Partiers”) insist on him doing with the budget. It is really an effective statement, powerful, short and direct. It would be perfect if it were not for the fact that it is flatly a lie.

The United States has a deficit. That is true. The United States also has a lot of debt, but to say that we are “broke” is ridiculous. It is just another half truth scare tactic from the party that has made a performance art-form of the practice.

Even Speaker Boehner’s office has had to admit that he is parsing the word. When they were challenged on the claim the U.S. is broke they came out with a statement that said when the Speaker says “broke” he means spending more than you have for an extended period of time. Sheesh! It is hard enough to communicate in this life without making twisted and tortured parses of common words.

What gets up right up my nose about this meme is that is completely ignores the fact there are two things to do when one does not have enough money. Spend less or get more money. As State Rep. Joe Gibbons (D-FL) put it so succinctly on NPR this morning:

If my family checkbook at home is short, you know what I do? I get a second job. I don’t just eat three days instead of seven. … What they’re telling us we got to do is, you got to eat three days.”

There is a lot of opportunity and in fact lot of desire on the part of the citizenry in the nation to raise taxes on the wealthy both at the state level and the national level. Nationally 88% of folks surveyed said they would rather raise taxes on millionaires and billionaires than cut programs in an effort to balance the budget. In Wisconsin where this fight is playing out on the smaller scale 67% percent said they would like to see higher taxes on people making $150,000 a year.

Of course this shows the basic Republican ideological bankruptcy. They have been trumpeting (that’s what Elephants do, trumpet, right?) about the freaking deficit for two entire years. Yet in that time they have not been willing to raises taxes on the ultra-wealthy. Just so it does not go down the memory whole, they were the ones that held the extension of unemployment benefits for millions of out of work Americans hostage to get an extension of the Bush Tax Cuts for the Paris Hilton’s and Koch Brothers of the nation.

They are also the ones that are now trying to claim that the modest job growth that we are seeing as the final bits of the stimulus money from the American Reinvestment Act are spent is due to keeping taxes at the same rate as when their deregulatory policy crashed the national and planetary economy.

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Rounds 2 And 3 Of Republicans Screwing The Little Guy – Austerity

6:46 am in 2010 election, banality of evil, Economy, Elections, Politics, Republican Party by Bill Egnor

To hear the Republicans tell it, the problem with things, the reason they are likely to take over the House of Representatives tomorrow is all the spending that the Obama administration has engaged in. Personally I think a big part of it is all the spending groups like the Chamber of Commerce and Cross Roads GPS have done, but that is for another post.

The big push from Republicans as the campaign season is ending has been about the need to cut spending. They look at our deficit situation and they say that the reason we have such high unemployment is the massive federal spending. Things like the COBRA subsidy and unemployment benefit extensions. Of course this includes the stimulus bill with its 300 billion (300,000 million) in tax cuts, which all but the ultra wealth have received some share of in terms of payroll tax reductions.

This is where you get prominent Republicans like Mississippi Governor Haley Barbour on TV saying things like this:

“The American people do not like Obama’s policies,” Barbour told anchor Harry Smith. “They don’t like all of this outrageous spending. They don’t like running up the deficits. They don’t like piling trillions of dollars of debt on our children and grandchildren, and they don’t think it works. They think it’s been bad for the economy, that it has made it harder to create jobs.

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