Month: July 2011

It was only a decade ago …

I keep seeing comments along the lines of “Keynesianism doesn’t work, because liberals keep running deficits even when times are good, and never pay debt down.”

Guys, how about looking at recent history (pdf)?

Between 1993 and 2001, federal debt held by the public fell from 49.2 percent of GDP to 32.5 percent of GDP. What stopped the paydown of debt wasn’t liberal big spending; it was demands from conservatives that the surplus be used to cut taxes. George Bush said that a surplus means that the government is collecting too much money; Alan Greenspan warned that we were paying off our debt too fast.

I believe it was a highly respected Republican leader who memorably said: “go fuck yourself” … oh wait, I mean, “Reagan proved deficits don’t matter.”

Still it’s good to keep that timeline straight. If only to remind yourself that you haven’t died and landed in bizarroworld.

.

God John Boehner is slimy pile of offal. I feel some real sympathy for the President having to negotiate with this sanctimonious jerk. Yuck.

SEN. MITCH MCCONNELL, R-KY., MINORITY LEADER: Default is no better idea today than when Newt Gingrich tried it in 1995, is — it destroys your brand and would give the president an opportunity to blame Republicans for a bad economy.

Look, he owns the economy. He’s been in office almost three years now. And we refuse to let him entice us in to co-ownership of a bad economy.

Boehner remembers that too — and so does Cantor.

I’m still rooting for a clean debt ceiling vote, and in his press conference the President finally relinquished his demand that they do something “big”, so it’s not out of the question. But if I had to guess they’ll get a deal of some sort over the week-end. And if we’re lucky it will be something small and fairly insignificant and we live to fight another day.

And there will be another fight on this another day.

.

Go ahead and fight but you can’t possibly win

by digby

I hope that everyone remembers the day the constitution changed to make the House majority the supreme ruling body of the United States of America:

So the proper way to see the current negotiations are in the context of watching both sides surrender. Republicans, as I’ve argued, are having to do most of the surrendering; what they’re going to get will be nothing remotely close to what they bid, and most of the drama of the past weeks has been trying to find a way to convince the House Crazy Caucus of that.

This is just funny. The House Republicans have gotten a Democratic president to agree to trillions of dollars in domestic spending cuts in the middle of an ongoing economic downturn featuring 9.2% unemployment. No, it appears they may not manage to privatize Social Security or invade Cuba, but it’s a pretty good job of work they got accomplished considering that the debt limit vote has always passed before without any deals at all.

Meanwhile, learn to take your licks Democrats — and thank them for the privilege of being allowed to voice your difference — because regardless of whether you have a Senate majority and a Democratic president in the White House with legendary political gifts, this country is run by the House Republicans and there’s nothing you can do about it:

But Democrats will have to surrender too. In that context, the question becomes what, exactly, they want to give up. Of course Democrats are upset about coming cuts to programs they believe are vital to the nation, and of course they’re upset about what they see as nonsense economic policy, and of course they’re upset, for that matter, about the possibility that they may make their best deal only to find that House Republicans who persist in believing things that are not true will still spike the who deal and send the economy into a tailspin anyway. And of course liberals should be pushing for the best deal they can get, and fighting for their priorities.

But the bottom line is that whether it’s associated with the debt limit or with FY 2012 spending bills, Republicans are going to get some of what they want, there’s no magic way — not the 14th amendment, not the McConnell plan, not brilliant negotiating or brilliant speeches by the man in the White House — to make that go away. What we’re seeing now, therefore, is Democrats coming to grips with that reality, and battling over what specific losses they should absorb.

Right. And next time, when Republicans ask for the total destruction of the Federal Government we must pray that they “surrender” again and agree to only destroy Medicare and Social Security. But the good news is that you have every right to fight your little hearts for what you believe in as long as you understand that it’s inevitable you will lose.

The problem with all this is that we know that the president wanted to do a Big Transformational Deal To End All Deals since before he came into office and it is equally clear that he saw this as an opportunity not a roadblock to his agenda. So this idea that it was thrust upon the poor hapless president and his party is wrong. All negotiations have at least two parties or they aren’t negotiations. And in our government system one of the parties holds the White House and one half of the congress. They are not powerless and they do have leverage over the Republicans. The idea that one faction in the House of Representatives trumps everything else is simply not true.

If that were true, Bill Clinton would never have survived impeachment. Indeed, plenty of Villagers insisted that he simply had to resign because it was all just so very awful. But he knew he had something on his side — the power of the presidency itself and the backing of the American people. And until Barack Obama started pounding the drum for his Grand Bargain, a majority of the American people were indifferent to spending cuts and wanted him to focus like a laser beam on jobs. But he got on that bully pulpit and convinced them that he was elected to do Big Things and that a “balanced approach” to the horrors of deficits was imperative and they’ve come around quite smartly. They also came around on the fact that raising the debt ceiling was absolutely necessary — just in time for the House Democrats to be tarred as the crazed obstructionists if they object to this massive, unnecessary slashing of government at the worst possible time. I suspect that was sheer luck, but I will give the President credit for his timing.

One can only wonder what might have happened if he had done the same thing to convince the public that a clean debt ceiling vote was imperative instead and never put these cuts on the table in the first place.

RIP DADT: Another one bites the dust
by David Atkins (“thereisnospoon”)

The moral arc of the universe is long, but it does bend toward justice:

President Obama has certified the repeal of “don’t ask, don’t tell,” clearing the way for gays to serve openly in military…

“As of Sept. 20, servicemembers will no longer be forced to hide who they are in order to serve our country,” Obama said in a statement.

He was joined by Defense Secretary Leon Panetta and the chairman of the Joint Chiefs of Staff, Adm. Mike Mullen.

Good riddance, DADT. As bad as things get on other fronts, it is good to know that in some ways, things do get better, and there are advantages to having allies in the Oval Office.

In a broader sense, it’s a reminder that on most fronts not involving abortion rights (more on that in a later post), the Left broadly speaking is winning the culture wars, which is why the Dominionists are so obsessed with them. The promotion of a raving lunatic like Michele Bachmann isn’t so much an act of strength by the culture warriors on the right, as a sign of desperation. They’re getting beaten on nearly every front as society becomes increasingly egalitarian, as LGBT people become more and more accepted in the social mainstream, as gender roles become increasingly equitable, as sexuality increasingly becomes something to be honored rather than feared, as racism is forced to become increasingly coded, as more ecumenical spirituality, agnosticism and atheism begin to slowly overtake more dogmatic doctrines, as the values of John Wayne movies give way to the values of films like Avatar, etc.

It’s on the core economic front that Democrats have fallen down, and the left generally is being savagely beaten. Foreign policy hasn’t been going especially great either, but it bears reminding that throughout the history of this nation, the part of the two-party system that passes for the left in America has traditionally been at least as bellicose if not more so than the rightist faction, ever since the days of Andrew Jackson. Barack Obama has often been negatively compared to FDR on the economy and rightly so, but let us not forget the horrors of Korematsu and internment camps, the loud voices on the right calling for isolationism during WWII, and FDR’s failure to act on dealing with Jim Crow, lynchings and civil rights abuses in the South.

We can and should be deeply concerned about the economic and foreign policy conversation in this country. But for the sake of sanity if nothing else, we mustn’t neglect to celebrate what we have achieved in the fight for equal rights for all our nation’s brothers and sisters.

Dollar for Dollar

by digby

Pelosi lines out the strategy: give the Republicans the entire 2.4 trillion in cuts they asked for now and agree to tackle taxes and entitlements down the road.

House Minority Leader Nancy Pelosi acknowledged Friday that Democrats may reluctantly accept a last-minute compromise to raise the debt limit that involves up to $2.5 trillion in spending cuts, without any agreed-upon plan for new tax revenues.

The plan would place a firewall between entitlement spending and the threat of default, upsetting GOP plans to force deep cuts to those programs. And if, as a result, the GOP declined the offer, Democrats would agree to punt the questions of entitlement spending and tax cuts to a future, streamlined legislative process.

The potential endgame, Pelosi said, would meet an arbitrary GOP requirement that Congress only grant President Obama as much borrowing authority as he’s willing to accept in spending cuts, and leave for a later date a twinned fight over revenues and social insurance programs.

“We’re willing to bite the bullet and make serious cuts in discretionary spending,” Pelosi told a small group of reporters and bloggers.

And the interest saved on that can take us to like a trillion and a half dollars saved. We could go even further with non-health mandatories, could take us almost to two trillion. We could use the offshore — the Overseas Contingency [the wars in Iraq and Afghanistan] — could take us to two-and-a-half trillion dollars. Which is the dollar-for-dollar for the lifting the debt ceiling.

I don’t think we have to have dollar-for-dollar, but for those who think they do, there’s a path to get there.

That’s not a great deal for Democrats, she noted, but it protects key programs like Social Security, Medicare, and Medicaid. “[T]hat’s a non-revenue path. I don’t like it at all but it doesn’t go near our entitlements,” Pelosi said.

There’s one big problem: “I don’t think the Republicans are going to accept that. So whatever they would want to accept over-and-above that would have to be something, I think, down the road. And that would be treating entitlements and revenue.”

Apparently, Obama and Boehner are still working on a Big(ger) Deal but this sounds very much like exactly what John Boehner was looking for back in May:

Published: May 9, 2011

WASHINGTON — Speaker John A. Boehner said Monday that Republicans would insist on trillions of dollars in federal spending cuts in exchange for their support of an increase in the federal debt limit sought by the Obama administration to prevent a government default later this year.
Related

In his most specific statement to date on what Republicans will demand in the debt ceiling fight, Mr. Boehner told the Economic Club of New York that the level of spending reductions should exceed the amount of the increase in borrowing power.

“Without significant spending cuts and changes to the way we spend the American people’s money, there will be no debt limit increase,” Mr. Boehner told members of New York’s business and finance community. “And cuts should be greater than the accompanying increase in debt authority the president is given.” Mr. Boehner said those cuts should be in the trillions of dollars, not billions.

Now that the president has introduced SS and Medicare into the mix, instead of getting a higher dollar figure than the 2.4, he may be getting something even better: some kind of fail-safe “entitlement/tax reform” up or down vote based on Simpson/Bowles . (I doubt he ever dreamed that the President would put SS on the table.)

Digging Into the Legacy

by digby

I just have to pile on to David’s earlier take-down of today’s NY Times coverage of the default crisis talks by pointing out this one laughably nonsensical passage:

[T]he president and Mr. Boehner were moving ahead with their plan, aides said, trying to agree on matters like how much new revenue would be raised, how much would go to deficit reduction, how much to lower tax rates and, perhaps most critical, how to enforce the requirement for new tax revenue through painful consequences for both parties should they be unable to overhaul the tax code in 2012.

The White House wants a trigger that would raise taxes on the wealthy; Mr. Boehner wants the potential penalty for inaction to include repeal of the Obama health care law’s mandate that all individuals purchase health insurance after 2014.

And what excellent incentives. Either the Republicans agree to cut spending or the President will follow through on what he’s already promised to do. Twice. Or the Republicans refuse to cut spending and get to destroy Obamacare. That’s one helluva deal.

I really don’t think Obama’s going to agree to let them mess with his health care plan beyond what he’s already agreed to do (which is slash the hell out of the Medicaid provision.) He’s already potentially sliced millions of people out of the system as it is and put medicare on the table. But at this point, the fate of the world economy is on the line and the President has foreclosed the 14th amendment remedy, so who knows?

.

Shared sacrifice, Village style

by digby

The Washington Post today:

“If both sides agree, that measure could also include some tax and entitlement changes, such as ending breaks for corporate jets, raising the Medicare eligibility age or changing the measure of inflation used to adjust Social Security benefits. However, the largest tax and entitlement changes are likely to be left until next year, the officials said, when policymakers will have more time to weigh the effects on taxpayers, program beneficiaries and the economy.”

I’d laugh if it wasn’t so tragic. Raising the eligibility age or changing the COLA are humongous changes that shouldn’t even be contemplated in this context since Social Security’s shortfall isn’t even projected to happen for another 35 years and it contributes nothing to the deficit. And the idea that this would be “balanced” by ending some perks for corporate jets is so bizarre that I’d think it was part of a Stephen Colbert satire if I didn’t know better.

But this is where the Village stands today: the “reasonable” position is to accept huge cuts in discretionary spending and Social Security in exchange for some symbolic nothingness on the part of the wealthy and call it “shared sacrifice.” And needless to say, we should be prepared for many more cuts to the “entitlements’ down the road since this was the “easy” stuff. We are all the way down the rabbit hole now and somebody’s throwing dirt on top of us.

I actually suspect this might be bad reporting. Unless they’ve decided that the only way they can achieve this all-important element of the Grand Bargain is with the fate of the world economy hanging over its head, I would think SS cuts would be the last thing they’d want to force Democrats to swallow. (Oh wait, what am I saying?)

Let’s hope it was floated purely so that people will be relieved when it doesn’t actually happen. In today’s politics that’s how they make 2 trillion dollars in cuts during a protracted economic downturn look like a Democratic win.

Update: FYI:

Disaster 2012: Obama All Over Again?

Dear RedState Supporter, It’s the devastating truth that young voters will believe whatever Barack Obama tells them. First he says he’ll never consider cutting Social Security. Now he says he WILL consider cutting Social Security. And the young will go along with it. Just because he says it’s right. “Don’t worry, Dad, President Obama says you’ll hardly notice the cuts.” If I were counting on Social Security today, I’d be dead scared. No one can do more to stop Obama than the young voters who gave him the White House in 2008. The chart tells a small part of the disastrous story. Internet Tactic: 2008 Presidential Race Obama McCain Facebook friends on Election Day 2,397,253 622,860 Unique visitors to the campaign website for the week ending November 1 4,851,069 1,464,544 MONEY RAISED ONLINE $750 million $370 million We must get the truth to young voters the same way Obama spreads his lies — using Facebook, cell phones, emails and videos. But we conservatives are still miles behind the Obama machine when it comes to doing that. That’s why Human Events, the national conservative newsweekly and publisher of my work, has launched Click to Victory 2012, anurgent campaign to create a dominant new conservative web site targeting voters 18-34 — and to use all the Obamacrat tools and tactics to convince them they must overthrow Obama in 2012. This is costly work that I wholeheartedly support. But it can’t be done without your help.I urge you to learn more by clicking here. For Freedom, Erick Erickson Managing Editor, RedState.com and RedState Morning Briefing

The New York Times reports. You decide.
by David Atkins (“thereisnospoon”)

Little better encapsulates the problems we face in the media than a brief perusal of this morning’s New York Times online. All the old favorites are there: the “both sides do it” waffle, the “Democrats in disarray” switcheroo, the center-right view disguised as the reasonable one, in “contrast” with the featured hyper-conservative view. If it weren’t real, one might even consider it a work of performance art to confirm every blogger’s media critique:

After weeks of Republicans holding the full faith and credit of the United States hostage to the demands of the Ayn Rand and Ludwig von Mises cults, the Times’ blaring A1 headline declares Challenge To A Budget Deal: Selling It To Democrats. Yes, Democrats:

Congressional and administration officials said that the two men, who had abandoned earlier talks toward a deal when leaks provoked Republicans’ protests, were closing in on a package calling for as much as $3 trillion in savings from substantial spending cuts and future revenue produced by a tax code overhaul. If it could be sold to Congress, the plan could clear the way for a vote to increase the federal debt ceiling before an Aug. 2 deadline.

But the initial reaction to the still-unfinished proposal hardly suggested a quick resolution. This time, the flak came mostly from senior Congressional Democrats, who are angry at some of Mr. Obama’s concessions and at being excluded from the talks.

The president worked to ease concerns from members of his party, inviting Democratic leaders to a White House meeting on Thursday evening that lasted nearly two hours. The participants would not comment afterward.

No one could possibly imagine why Democrats in Congress wouldn’t go along with a “deal” offering $3 trillion in devastating cuts that will only exacerbate a protracted recession and jobless recovery, paired with “overhauls” of the tax code that would likely be regressive overall in nature, and that will be implemented in an election year approximately when pigs fly and Greenland’s ice sheet shows up in Dante’s Inferno. Clearly, the ideological rigidity of House Democrats is preventing the President and the Speaker from coming to a reasonable compromise on delivering Fancy Feast to America’s seniors.

And if it isn’t Democrats in particular who are to blame, it’s nasty “both sides do it” partisan bickering:

President Obama and the Republican House speaker, John A. Boehner, once again struggled against resistance from their respective parties on Thursday as they tried to shape a sweeping deficit-reduction agreement that could avert a government default in less than two weeks.

Of course, as the New York Times points out immediately below the previous article, the deal is important because the states will be in even more trouble than before without assistance from the federal government. No mention is made of why states governed by Democrats and Republicans alike are experiencing fiscal crises (think: historic recession created by financial sector recklessless, that will surely worsen with the cuts proposed in the “deal”), or the fact that most conservative “red” states rely more on federal aid and give back less to the federal government than do more liberal “blue” states. Bringing in that sort of context would be an indication of bias, and a violation of professional journalistic standards.

On the opinion side, we have a featured article by Grover Norquist, who sees an unprecedented opportunity to use a made-up crisis as shock doctrine material and drown the safety net in a bathtub. His Shrillness Paul Krugman has an esoteric piece about how we’re still in a recession that will only get worse with austerity measures. And in the supposed middle, lying sensibly in between the Nobel Prize-winning Keynesian and the rabid ideologue nutcase, is the execrable David Brooks, who can barely contain his orgiastic delight over the Gang of Six and the “Grand Bargain”. Brooks envisions himself as a grand conciliator, bringing two ideologically recalcitrant toddlers together for the good of the country and lower taxes for billionaires:

Imagine you’re a member of Congress. You have your own preferred way to reduce debt. If you’re a Democrat, it probably involves protecting Medicare and raising taxes. If you’re a Republican, it probably involves cutting spending, reforming Medicare and keeping taxes low….

At the last minute, two bipartisan approaches heave into view. In the Senate, the “Gang of Six” produces one Grand Bargain. Meanwhile, President Obama and John Boehner, the House speaker, have been quietly working on another. They suddenly seem close to a deal…

[B]oth bargains would boost growth. The tax code really is a travesty and a drag on the country’s economic dynamism. Any serious effort to simplify the code, strip out tax expenditures and reduce rates would have significant positive effects — even if it raised some tax revenues along the way…

Mostly you do it because you want to live in a country than can govern itself. Over the past few weeks, Washington has seemed dysfunctional. Public disgust has risen to epic levels. Yet through all this, serious people — Barack Obama, John Boehner, the members of the Gang of Six — have soldiered on. They’ve been responsible and brave. If you’re a Democrat, you hate to see domestic cuts. If you’re a Republican, you loathe revenue increases, even little ones.

Get that? If you’re a Democrat, you hate domestic cuts. If you’re a Republican, you hate taxes. Even little bitty taxes. Which is why in Brooksland, the reasonable center between Krugman and Norquist, it’s a perfectly fair compromise for Democrats to swallow $3 trillion in cuts, including to vital and very popular entitlement programs, in exchange for a promissory note for nebulous tax “reform” later. In Brooksland, the public’s clear preference for a debt ceiling increase, for new and much higher taxes on the wealthy, and for no cuts to Medicare and Social Security, are irrelevant annoyances compared to the supposed good intentions of Obama and Boehner, who are just trying to do the right thing, don’t you know.

And arbiters of conventional wisdom wonder why the public has lost faith in government, media and institutions in general.

The “liberal” New York Times. They report. You decide.

The Miseducation of Michele Bachman

by digby

Did it shock you as much as it did me to find out that Michele Bachman was a tax lawyer? The mind boggles. Sarah Posner delves into one of the famous Christian law schools that spawned many a right wing functionary, and the career of the Republican woman who would be president:

At the May “First Friday” lecture hosted by the Institute on the Constitution at the Heritage Community Church in Severn, Maryland, IOTC founder Michael Peroutka presented the evening’s guest speaker, attorney Herb Titus, with a “Patrick Henry Award” for “his tireless and fearless telling of God’s truth to power.” Titus (best known for his representation of former Judge Roy Moore in his failed quest to install a 2.6-ton Ten Commandments monument in the Alabama Supreme Court building) is one of the few lawyers in America who, Peroutka noted, truly “believes God is sovereign and therefore God’s law is the only law.” For Peroutka, the Constitution Party’s 2004 nominee for president, this was his usual spiel on God and the law.

In the late 1970s, Titus played an instrumental role in launching the law school at Oral Roberts University (ORU), from which GOP presidential hopeful Michele Bachmann graduated in 1986. Titus, who rejected his Harvard Law School education after reading the work of R.J. Rushdoony, the late founder of Christian Reconstructionism, was moved to exercise what he believes is a “dominion mandate” to “restore the Bible to legal education.” To teach, in other words, that Christianity is the basis of our law, that lawyers and judges should follow God’s law, and that the failure to do so is evidence of a “tyrannical,” leftist agenda.

Titus’ lecture, as well as the teachings of Reconstructionists, the Constitution Party, and the IOTC, provide a window into Bachmann’s legal education, and thus how her political career and rhetoric—so incomprehensible and absurd to many observers—was unmistakably shaped by it.

take the time to read the whole thing. This is the same creepy network of right wing Theocrats who are now sprinkled throughout the government bureaucracy and elected office. They have a lot of patience.

.

Slashing the future

by digby

This post by Kevin Drum outlines some of the consequences of default on August 2nd if the government follows the Tea Party line and exempts Social Security, Medicare, interest payments, military payrolls, and veterans benefits:

You just cut the IRS and all the accountants at Treasury, which means that the actual revenue you have to spend is $0.

The nation’s nuclear arsenal is no longer being watched or maintained

The doors of federal prisons have been thrown open, because none of the guards will work without being paid, and the vendors will not deliver food, medical supplies, electricity, etc.

The border control stations are entirely unmanned, so anyone who can buy a plane ticket, or stroll across the Mexican border, is entering the country. All the illegal immigrants currently in detention are released, since we don’t have the money to put them on a plane, and we cannot actually simply leave them in a cell without electricity, sanitation, or food to see what happens.

All of our troops stationed abroad quickly run out of electricity or fuel. Many of them are sitting in a desert with billions worth of equipment, and no way to get themselves or their equipment back to the US.

Our embassies are no longer operating, which will make things difficult for foreign travellers

No federal emergency assistance, or help fighting things like wildfires or floods. Sorry, tornado people! Sorry, wildfire victims! Try to live in the northeast next time!

Housing projects shut down, and Section 8 vouchers are not paid. Families hit the streets.

The money your local school district was expecting at the October 1 commencement of the 2012 fiscal year does not materialize, making it unclear who’s going to be teaching your kids without a special property tax assessment.

The market for guaranteed student loans plunges into chaos. Hope your kid wasn’t going to college this year!

The mortgage market evaporates. Hope you didn’t need to buy or sell a house!
The FDIC and the PBGC suddenly don’t have a government backstop for their funds, which has all sorts of interesting implications for your bank account.

The TSA shuts down. Yay! But don’t worry about terrorist attacks, you TSA-lovers, because air traffic control shut down too. Hope you don’t have a vacation planned in August, much less any work travel.

Unemployment money is no longer going to the states, which means that pretty soon, it won’t be going to the unemployed people.

Ok, that’s all very catastrophic and everyone assumes that if this happens everyone will come to their senses when “the markets” tank — but that the real long term danger is that the full faith and credit of the United States will suddenly become a very dodgy prospect with unknown consequences. So, in the unlikely event that they don’t pass some kind of ‘deal to end all deals” or even a short term mini-deal, this would be the type of cuts you’d expect to see — cuts that Michele Bachman and crew obliviously ignore when they agitate for The Debt Rapture.

But that list should make you all quake anyway because it’s a list of “discretionary” expenses that are the main focus of the “deals” that are on the table. Those budgetary items are going to be slashed in the trillions and don’t think real humans are going to feel the effects. Yes, it’s absolutely nuts on a macroeconomic level — but it’s really bad on an individual level too. Those are all things that are hardly “discretionary” in most people’s minds.

But cutting them deeply is exactly what this “deal” is all about. Even without the Safety Net programs being mindlessly included in this thing, brutally slashing these programs is a recipe for second world status in a generation.

Update: My mistake. This list of cuts is from Megan McArdle.

.