Will he walk he walk?
by digby
*link fixed
"what digby sez..."
Month: April 2011
And then they came for the Villagers
by digby
Jonathan at A Tiny Revolution
For the past 20 years, as the U.S. middle class has quietly collapsed, Dana Milbank has made a great living as a media liberal who constantly ridicules liberals. But recently it seemed as though he’d suddenly noticed something was going on. Why? Because it was happening to him and his “brand-name MBA” wife, who were being screwed by Citibank after they’d refinanced their mortgage. (In fact, while he didn’t mention it, his wife actually once worked for Citibank.) Now Milbank understood that “big banks” needed to be “brought to heel.” Except…after his brief encounter with reality, Milbank has gone right back to telling us what losers liberals are.
Do read on. You won’t regret it.
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Skin in the game
by digby
You know, I find all these campaign announcements about filing papers to run for office to be somewhat tedious. Blah, blah, blah, running for office, American people, blah, blah, public service,blah,blah.
But it looks like in Arizona they are about to get a lot more interesting:
The Arizona Senate formally passed the “Birther Bill” today, but not in its original version.
Apparently, requiring presidential candidates to provide a long-form birth certificate before allowing their names on the ballot in Arizona — despite it already being a federal requirement to run for president — was a bit too much for a few GOP lawmakers. So they made some amendments: if you can’t find your birth certificate, and you have a penis, a document describing your lack of foreskin will suffice.
I don’t know about you, but a certificate simply will not suffice. How do I know that it isn’t certifying someone else’s official clipped foreskin. They could have faked it 25 or more years ago, knowing that someday a circumcised penis might be used as proof of citizenship. I demand to see the proof!
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Who’s The Big Winner?
by digby
Please, please spare me the gloating about how Boehner is the big loser in this budget stand off because the “Tea Party” freshmen all defected and he had to count on
Democrats to pass the bill. It’s pleasant spin, and Dems are enjoying using it, but it isn’t a likely scenario. Johnathan Bernstein spells it out:
Yes, 59 Republicans deserted him on the final vote, meaning that Democratic votes were used to put the measure over the top. However, it’s not at all clear that he didn’t have the votes, if needed; after all, with a final vote of 260-167, Boehner could have lost over forty more votes and still managed to pass the thing. Boehner may very well have released many of the 59 dissenters, allowing them to vote No in the knowledge that he could get the bill passed without them. We’ll never know how many of them would have been available if push came to shove — so their defections don’t mean that Boehner is losing control.
Pelosi used to get crap from the right about how she couldn’t keep her Democrats in line when she was often cutting them loose to save themselves. Unfortunately for us, it was usually to let them vote with the Republicans, but the concept is the same.
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No pleasing some people
by digby
Am I hallucinating or didn’t we just go though months of caterwauling about how the health care bill was thousands of pages of words, nothing but words, too many to read, when all we need is a simple paragraph explaining everything in plain English?
Well, it looks like things have changed. I just watched GOP economist Douglas Holtz-Eakin and a bunch of faceless Republicans having a fit on Fox News because the president didn’t produce a gigantic pile of paper like Paul Ryan’s. It means he’s “unserious.”
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Breaking The Contract
by digby
Here’s a graph showing who owns the US debt:
42.1% US institutions and individuals
26% SS trust fund, civil service pension fund, military pension fund
22.4% countries other than China
9.5% China
I have an idea. How about we tell the wealthy US investors that we won’t be able to pay them back at the promised rate instead of the social security recipients? Let’s just see what happens.
Chart from Barry Ritholz via @JoshuaHolland
Punking The Big Boys
by digby
US Uncut, a group protesting corporate tax issues and government service cutbacks, claimed responsibility for a fake press release that said General Electric Co. (GE) would return a “$3.2 billion tax refund.”
The release, which was picked up by the Associated Press, was part of the group’s effort to pressure companies to pay their taxes, Andrew Boyd, a spokesman for the group, said in an interview. US Uncut had the idea for the GE tax effort and then cooperated on execution of it with a group known as the Yes Men, which has been involved in similar hoaxes.
“By pretending GE did the right thing by re-gifting their tax refund, we hold them accountable to that better future,” said Boyd. “People are moving very fast and are going to reprint the release, and we think there’s also an unconscious motivation that they’re happy to see the news.”
The statement, which purported to be from GE Communications, claimed the Fairfield, Connecticut-based company was responding to a “public outcry” and would “allow the public to decide how to spend” the returned money. Earlier this month, GE said on its website that it received no 2010 tax rebate, refund or payment from the government.
It’s not a good as putting out doctored videos to make racial minorities and women look like criminals for trying to help people exercise their rights, but it’s pretty good.
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Spending is Saving
by digby
Ok, now I’m really confused. Here’s Krugman:
I don’t want to step too much on the administration’s selling point, but progressives upset by the claim that there are three dollars of spending cuts for every dollar of tax increases should be aware that there’s a bit of creative labeling going on. As I understand it, they’re counting both interest savings and reductions in “tax expenditures” — subsidies through the tax code — as spending cuts. It’s a much more balanced plan if you look at the balance between revenue increases and non-interest outlays.
He says that the reduction in “tax expenditures” (closing loopholes, eliminating mortgage interest eduction etc.) count as spending cuts, which is why the ratio looks so tilted.
But from what I understood, the reduction in “tax expenditures” counted on the revenue side:
Obama proposes an overhaul of the tax system that would eliminate tax breaks and loopholes and even lower some tax rates, resulting in $1 trillion in additional revenue.
Obama also wants to allow Bush-era tax cuts to expire for individuals making $200,000 or more a year and couples making $250,000 or more. The revenue that would generate is not counted in his $4 trillion in deficit reduction because under existing law the cuts would expire on their own at the end of 2012.
I know that the Republican members of the gang of six are counting the reduction in “tax expenditures” as raising revenue not cutting spending
You’ve got to look at the revenue side also.
What we are looking at proposing is actually a reduction in corporate rates and personal individual income tax rates, which will put more money in people’s pockets and we’re going to do that with the reduction in tax expenditures. Every time we’ve done that in years past whether it was under President Reagan or President Bush we have seen revenues increase.
Here’s what the president said yesterday:
I believe reform should protect the middle class, promote economic growth and build on the Fiscal Commission’s model of reducing tax expenditures so that there is enough savings to both lower rates and lower the deficit. And as I called for in the State of the Union, we should reform our corporate tax code as well, to make our businesses and our economy more competitive.
Here’s how the Christian Science Monitor described the Tax Policy Center’s analysis of Simpson Bowles:
Today Eric Toder and Daniel Baneman of the Tax Policy Center released a preliminary analysis of the tax proposal put forward by the fiscal commission’s co-chairs Erskine Bowles and Alan Simpson. The centerpiece of their proposal is to eliminate almost all tax expenditures* except the earned income tax credit and the child tax credit and use the resulting revenues for a mix of deficit reduction and tax rate cuts (they also consider other options that would retain more tax expenditures.
If the reduction in “tax expenditures” is being counted as cuts, then what on the revenue side? The Bush tax cuts alone? (I had understood they weren’t part of the revenue numbers under consideration, but perhaps that’s a mistake.) Even so, if the tax expenditures are counted a cuts and the only revenue is from the Bush tax cuts on the rich, I think the ratio is still skewed.
And I’m guessing he’s not counting on the Bush tax cuts being part of any bipartisan deal done before 2012. If anyone thinks the Republicans are going to pre-emptively vote for that before the election (if they ever do) raise your hand. I’d like to sell you some stock in TEPCO.
The Gang of Six and Obama seem to me to want to call these “revenue.” Grover Norquist is already calling them new taxes. Krugman says they fall under “spending cuts.” I’m very curious about which side of the equation these “tax expenditures” actually go. it will largely determine the political fight going forward.
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The case for gridlock
by digby
David Leonhardt lays out a revolutionary proposal that could solve all of our deficit problems in one fell swoop:
A trick question: If Congress takes no action in coming years, what will happen to the budget deficit?
It will shrink — and shrink a lot. This simple fact may offer the best hope for deficit reduction.
As federal law currently stands, some significant tax increases are set to take effect in coming years. The most important is the scheduled expiration of the Bush tax cuts at the end of 2012.
Of course, both parties favor the permanent extension of most of those tax cuts — the ones applying to income below $250,000. Both parties also oppose big cuts to the military, Social Security and Medicare, at least in the short term. Unfortunately, the deficit is likely to remain frighteningly large over the next decade without either cuts to those programs or tax increases.
Democratic and Republican leaders alike dance around this point…
It’s as if tax increases were a mere technicality in any deficit-reduction plan. In reality, finding a way to raise taxes may well be the central political problem facing the United States.
As countries become richer, their citizens tend to want more public services, be it a strong military or a decent safety net in retirement. This country is no exception. Yet our political culture is an exception. It has made most tax increases, even to pay for benefits people want, unthinkable.
This is where the Bush tax cuts come in. They have created a way for inertia to be fiscally responsible.
They are scheduled to expire on Dec. 31 of next year, not long after the 2012 election. If Republicans win the White House and both houses of Congress, they will probably extend all the tax cuts, come what may for the deficit. If Mr. Obama wins re-election and Democrats control Congress, they are likely to extend the cuts on income below $250,000.
But if Mr. Obama wins and Republicans control the House, the Senate or both — an outcome that many analysts, at least for now, consider the most likely one — things could get interesting.
You know what? I think this may be the best we could ever hope for. Indeed, it would actually be quite easy for the president to pivot from the “shared sacrifice” defined as old and sick people putting their withered skin in the game, to simply saying it’s time for the whole country to ante up and pay in to save grandma. (If he wanted to, that is.)
There are reasons that the whole political establishment is having a breakdown over deficits right now but it has very little to do with their fierce commitment to fiscal rectitude. But I think things like this are important to point out. The easiest way to reduce the deficit is to simply go back to the tax rates that were in place when George W. Bush took office. No smoke and mirrors, no fancy “tax expenditure reform” or arcane budgeting tricks. How about we just keep it simple for now? And once we cut the deficit by doing nothing and everyone has pulled themselves together after this collective panic attack, we can all sit down and have a rational discussion about long term health care costs and fixing that little shortfall in Social Security.
First things first: do nothing. A perfect prescription for our problems.
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The Plan
by digby
CBPP gives a good overview of the president’s plan here. It’s worth reading for both the good points and the bad points. This is the conclusion:
The President’s plan represents an important step forward in the debate. But it should be recognized that this plan is a rather conservative one, significantly to the right of the Rivlin-Domenici plan. While we worry about some particular elements of the President’s plan, we worry much more that the deficit-reduction process that’s now starting could produce an outcome that is well to the right of the already centrist-to-moderately-conservative Obama proposal, by reducing its modest revenue increases and cutting more deeply into effective programs that are vital to millions of Americans.
The “revenue increases” are very dicey in my opinion. They are based on a reformation of the tax code that includes the elimination of middle class deductions like the mortgage interest deduction which is hardly likely to pass, and the closing of corporate loopholes which will be deftly reinstated in new forms by lobbyists. But what strikes me as the strangest thing about it is that it seems to have baked into it the idea that it must also contain lower tax rates, which strikes me as bizarre if the intent is to close the deficit.
I realize that it may make it all more politically enticing to the right, but if they can’t actually raise taxes then the ratio of cuts to revenue is very likely to be far higher than 3:1 when all is said and done. This revenue side of the equation is the major weak spot in all these “deficit” plans. The press should quiz the politicians very, very closely about just what they mean when they sign on to “raising revenue” and ask them why they think it’s necessary to lower rates as part of the package. The answers will be interesting.
Oh, and by the way, the president isn’t counting the 500 plus billion Bush tax cuts not being extended in his figures. I don’t know why.
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