Category Archives: The Economy

Editorial – Profiles in Timidity – NYTimes.com

Great Editorial in today’s New York Times:

We are starting to wonder whether Congressional Democrats lack the courage of their convictions, or simply lack convictions.

Last week, Senate Democrats did not even bother to schedule a debate, let alone a vote, on the expiring Bush tax cuts. This week, House Democrats appear poised to follow suit. The idea is to spare incumbents from having to vote before Nov. 2 on whether to let the rich go on paying less taxes than the nation needs them to pay.

This particular failure to act was not about Republican obstructionism, of which there has been plenty. This was about Democrats failing to seize an opportunity to do the right thing and at the same time draw a sharp distinction between themselves and the Republicans.

AND

The American public is right to be confused and distrustful of its elected representatives.

Their focus on the well-being of the richest Americans is eclipsing the needs and concerns of vulnerable Americans. A roughly $1 billion pro-work program in last year’s stimulus law that has provided jobs to 250,000 low-income workers is scheduled to expire at the end of September. But with less than a week to go before adjourning, Democrats have been unable to get Republican support to extend the program or, it seems, to make the Republicans pay a political price for being the Party of No.

This program is a model of the welfare-to-work initiatives long championed by the Republican Party. But Republican lawmakers would prefer to end it than to let the Obama stimulus package be seen as helpful. So deep is their desire to thwart Mr. Obama and the Democrats, that they are ignoring Republican governors who have called for the program’s continuation. And they have indicated they would vote down a must-pass spending bill and other last-minute legislation if Democrats attach a provision to extend the program to those bills.

That is pure obstructionism, but it leaves Democrats still struggling to challenge the Republicans’ ability to define the terms of the political debate this election season, while Americans who really need the help go without.

MORE:   Editorial – Profiles in Timidity – NYTimes.com.

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Income Gap Widens: Census Finds Record Gap Between Rich And Poor

I can’t believe the “public” isn’t paying more attention to this–or the fact the Republicans only care about helping the rich.

The income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession.

The top-earning 20 percent of Americans – those making more than $100,000 each year – received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by those below the poverty line, according to newly released census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.

At the top, the wealthiest 5 percent of Americans, who earn more than $180,000, added slightly to their annual incomes last year, census data show. Families at the $50,000 median level slipped lower.

“Income inequality is rising, and if we took into account tax data, it would be even more,” said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in poverty. “More than other countries, we have a very unequal income distribution where compensation goes to the top in a winner-takes-all economy.”

Lower-skilled adults ages 18 to 34 had the largest jumps in poverty last year as employers kept or hired older workers for the dwindling jobs available, Smeeding said. The declining economic fortunes have caused many unemployed young Americans to double-up in housing with parents, friends and loved ones, with potential problems for the labor market if they don’t get needed training for future jobs, he said.

via Income Gap Widens: Census Finds Record Gap Between Rich And Poor.

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We survived Bush. You’ll survive Obama. Wisdom from Margaret and Helen

This is an excerpt from one of their older columns.  I courage you to click the link and read the entire post from these wise Senior Citizens!

Margaret, please tell Howard that I love him because he loves you.  But that is about all the reaching across the aisle that I can handle.  A few years back, millions of people across this nation and across the globe marched for peace.  George Bush ignored us and we had to endure his lazy ass being in the White House for eight years.

So now a black man named Barack Obama, elected by the will of the people, has decided to fight for the poor, and work for world peace… and a bunch of white guys who think Fox really is News just can’t stand it.

Well, they can kiss my ass because I am tired of their belly aching.

This is exactly how our political system works.  Sometimes your party is in and sometimes it is out.  Your party is currently out.  So shut the hell up and deal with it.

Now don’t get me wrong.  I’m all for a group of disgruntled citizens banding together to form a third political party because they don’t feel represented by the other two.  But let’s be honest – this bunch of idiots  doesn’t like that a black man is the most powerful man on the globe.   I wonder if they know that, while 78%  of  the world is not white, only 13% of the United States is black.   So they can relax.  Barack and Michelle most likely will not be buying the house next door.

via We survived Bush. You’ll survive Obama. « Margaret and Helen.

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Downhill with the G.O.P? Or How to Make the USA a Banana Republic

I’m going to run Paul Krugman’s latest column, below, in it’s entirety.  It’s too important to run the  risk some folks might not click the link and read it all.

Krugman is a Nobel Prize winning Economist who has been right in just about every economic point/scenario he has made.   He has accurately called out both the President and his Administration as well as the Republicans and Democrats in Congress for their short sidedness and trend toward political expediency.

Unfortunately, Congress and the President ignore him because his historically proven points aren’t politically popular.

Once upon a time, a Latin American political party promised to help motorists save money on gasoline. How? By building highways that ran only downhill.

I’ve always liked that story, but the truth is that the party received hardly any votes. And that means that the joke is really on us. For these days one of America’s two great political parties routinely makes equally nonsensical promises. Never mind the war on terror, the party’s main concern seems to be the war on arithmetic. And this party has a better than even chance of retaking at least one house of Congress this November.

Banana republic, here we come.

On Thursday, House Republicans released their “Pledge to America,” supposedly outlining their policy agenda. In essence, what they say is, “Deficits are a terrible thing. Let’s make them much bigger.” The document repeatedly condemns federal debt — 16 times, by my count. But the main substantive policy proposal is to make the Bush tax cuts permanent, which independent estimates say would add about $3.7 trillion to the debt over the next decade — about $700 billion more than the Obama administration’s tax proposals.

True, the document talks about the need to cut spending. But as far as I can see, there’s only one specific cut proposed — canceling the rest of the Troubled Asset Relief Program, which Republicans claim (implausibly) would save $16 billion. That’s less than half of 1 percent of the budget cost of those tax cuts. As for the rest, everything must be cut, in ways not specified — “except for common-sense exceptions for seniors, veterans, and our troops.” In other words, Social Security, Medicare and the defense budget are off-limits.

So what’s left? Howard Gleckman of the nonpartisan Tax Policy Center has done the math. As he points out, the only way to balance the budget by 2020, while simultaneously (a) making the Bush tax cuts permanent and (b) protecting all the programs Republicans say they won’t cut, is to completely abolish the rest of the federal government: “No more national parks, no more Small Business Administration loans, no more export subsidies, no more N.I.H. No more Medicaid (one-third of its budget pays for long-term care for our parents and others with disabilities). No more child health or child nutrition programs. No more highway construction. No more homeland security. Oh, and no more Congress.”

The “pledge,” then, is nonsense. But isn’t that true of all political platforms? The answer is, not to anything like the same extent. Many independent analysts believe that the Obama administration’s long-run budget projections are somewhat too optimistic — but, if so, it’s a matter of technical details. Neither President Obama nor any other leading Democrat, as far as I can recall, has ever claimed that up is down, that you can sharply reduce revenue, protect all the programs voters like, and still balance the budget.

And the G.O.P. itself used to make more sense than it does now. Ronald Reagan’s claim that cutting taxes would actually increase revenue was wishful thinking, but at least he had some kind of theory behind his proposals. When former President George W. Bush campaigned for big tax cuts in 2000, he claimed that these cuts were affordable given (unrealistic) projections of future budget surpluses. Now, however, Republicans aren’t even pretending that their numbers add up.

So how did we get to the point where one of our two major political parties isn’t even trying to make sense?

The answer isn’t a secret. The late Irving Kristol, one of the intellectual godfathers of modern conservatism, once wrote frankly about why he threw his support behind tax cuts that would worsen the budget deficit: his task, as he saw it, was to create a Republican majority, “so political effectiveness was the priority, not the accounting deficiencies of government.” In short, say whatever it takes to gain power. That’s a philosophy that now, more than ever, holds sway in the movement Kristol helped shape.

And what happens once the movement achieves the power it seeks? The answer, presumably, is that it turns to its real, not-so-secret agenda, which mainly involves privatizing and dismantling Medicare and Social Security.

Realistically, though, Republicans aren’t going to have the power to enact their true agenda any time soon — if ever. Remember, the Bush administration’s attack on Social Security was a fiasco, despite its large majority in Congress — and it actually increased Medicare spending.

So the clear and present danger isn’t that the G.O.P. will be able to achieve its long-run goals. It is, rather, that Republicans will gain just enough power to make the country ungovernable, unable to address its fiscal problems or anything else in a serious way. As I said, banana republic, here we come.

So the clear and present danger isn’t that the G.O.P. will be able to achieve its long-run goals. It is, rather, that Republicans will gain just enough power to make the country ungovernable, unable to address its fiscal problems or anything else in a serious way. As I said, banana republic, here we come.

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Dana Milbank – With ‘Pledge to America,’ Republicans are new Foundering Fathers

Interesting article….Here is a brief excerpt and I encourage you to click the link to the full post.

The 45-page booklet explaining the Pledge contains archaic fonts reminiscent of the founding texts, and it is filled with random snippets of historical phrases such as “consent of the governed” and “bearing true faith and allegiance.” The Republicans illustrated their own importance with a full-page photo of Mount Rushmore facing a full-page photo of Rep. Rob Wittman (Va.) working at a meat counter.

The lawmakers piled on layers of sentimentality. “We pledge to uphold the model for our country our founders envisioned, a grander America, the exception among the nations of the Earth, where promise of liberty refreshes the hopes of mankind,” exulted McCarthy, who designed the Pledge.

Yet for all the grandiosity, the document they released is small in its ambition. The policy goals they cited were banal (“Support the troops! Fight the terrorists!), and their prescriptions were often narrow and procedural (regular votes on proposed regulations).

The flaws became apparent when the lawmakers made the mistake of taking questions. “There are not many specifics in here about how you would get to the balanced budget if you plan to extend all the tax cuts and expand defense spending,” the Associated Press’s Julie Hirschfeld Davis pointed out. “So can you give us some more details?”

via Dana Milbank – With ‘Pledge to America,’ Republicans are new Foundering Fathers.

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Eugene Robinson – The GOP’s Hooey to America

The Republicans really don’t have any new ideas.  They just want to return to the Bush Years, which they consider “the good old days.”  I just can’t believe that anyone can vote for these bozo’s…But then, as P. T. Barnum said, “There’s a sucker born every minute.”

The Republicans were doing pretty well as the Party of No. So why did they decide to rebrand themselves as the Party of Nonsense?

All right, I’m being slightly disingenuous. Inquiring minds demanded to know just what the GOP proposed to do if voters entrusted it with control of one or both houses of Congress. But if the “Pledge to America” unveiled Thursday is the best that House Republicans can come up with, they’d have been better off continuing to froth and foam about “creeping socialism” while stonewalling on specifics.

The problem with the pledge is that the numbers don’t remotely add up. The document is such a jumble of contradictions that it’s hard to imagine how it could possibly pass muster with anyone who survived eighth-grade arithmetic — unless, perhaps, the Republicans have something in mind that they’re not prepared to talk about quite yet.

The pledge bills itself as a plan to “create jobs, end economic uncertainty, and make America more competitive.” These sound like worthy initiatives, but the GOP also promises to “stop out-of-control spending and reduce the size of government.” Most economists would contend that right now, given the level of economic distress throughout the nation, those goals are mutually exclusive. No matter, I suppose, since the pledge wouldn’t really do either.

via Eugene Robinson – The GOP’s Hooey to America.

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Healthcare Reforms that Start on Thursday

Important information that frequently gets overlooked.  The Health Care Bill was not perfect, but there are some significant benefits starting tomorrow:

Setting aside the question of the long-term impact of the new law, Surge Desk outlines the list of the initial changes that will go into effect on Thursday.

1. Insurance companies will no longer be able to deny children coverage for pre-existing conditions.

2. Children of parents with insurance will be allowed to remain covered under those policies until the age of 26.

3. Insurance companies will be forbidden from terminating coverage for any other reason than customer fraud.

4. Insurance companies will no longer be able to cap the amount of benefits and treatment a person can receive in a lifetime.

5. Insurers can no longer charge customers for preventive services like mammograms and colonoscopies.

6. High-risk pools are mandated to cover those who have been denied coverage because of pre-existing conditions.

via Healthcare Reforms that Start on Thursday.

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The Angry Rich and Taxes

Another great column from Paul Krugman at the New York Times.

Every time the issue of raising taxes comes up, the GOP screams “class warfare.”

Class warfare is already underway in America.  The Rich are the ones who declared it…via the GOP.

Here are a couple of excerpts.  I encourage you to click the link, at the bottom, and read the entire post.

Anger is sweeping America. True, this white-hot rage is a minority phenomenon, not something that characterizes most of our fellow citizens. But the angry minority is angry indeed, consisting of people who feel that things to which they are entitled are being taken away. And they’re out for revenge.

No, I’m not talking about the Tea Partiers. I’m talking about the rich.

These are terrible times for many people in this country. Poverty, especially acute poverty, has soared in the economic slump; millions of people have lost their homes. Young people can’t find jobs; laid-off 50-somethings fear that they’ll never work again.

Yet if you want to find real political rage — the kind of rage that makes people compare President Obama to Hitler, or accuse him of treason — you won’t find it among these suffering Americans. You’ll find it instead among the very privileged, people who don’t have to worry about losing their jobs, their homes, or their health insurance, but who are outraged, outraged, at the thought of paying modestly higher taxes.

And…

At the same time, self-pity among the privileged has become acceptable, even fashionable.

Tax-cut advocates used to pretend that they were mainly concerned about helping typical American families. Even tax breaks for the rich were justified in terms of trickle-down economics, the claim that lower taxes at the top would make the economy stronger for everyone.

These days, however, tax-cutters are hardly even trying to make the trickle-down case. Yes, Republicans are pushing the line that raising taxes at the top would hurt small businesses, but their hearts don’t really seem in it. Instead, it has become common to hear vehement denials that people making $400,000 or $500,000 a year are rich. I mean, look at the expenses of people in that income class — the property taxes they have to pay on their expensive houses, the cost of sending their kids to elite private schools, and so on. Why, they can barely make ends meet.

And among the undeniably rich, a belligerent sense of entitlement has taken hold: it’s their money, and they have the right to keep it. “Taxes are what we pay for civilized society,” said Oliver Wendell Holmes — but that was a long time ago.

One more excerpt:

You see, the rich are different from you and me: they have more influence. It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes.

And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they’ll say; we all have to be willing to make sacrifices.

But when they say “we,” they mean “you.” Sacrifice is for the little people.

via Op-Ed Columnist – The Angry Rich and Taxes – NYTimes.com.

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Robert Reich: The Defining Issue: Who Should Get the Tax Cut — The Rich or Everyone Else?

From Robert Reich. Well put….

Who deserves a tax cut more: the top 2 percent — whose wages and benefits are higher than ever, and among whose ranks are the CEOs and Wall Street mavens whose antics have sliced jobs and wages and nearly destroyed the American economy — or the rest of us?

Not a bad issue for Democrats to run on this fall, or in 2012.

Republicans are hell bent on demanding an extension of the Bush tax cut for their patrons at the top, or else they’ll pull the plug on tax cuts for the middle class. This is a gift for the Democrats.

But before this can be a defining election issue in the midterms, Democrats have to bring it to a vote. And they’ve got to do it in the next few weeks, not wait until a lame-duck session after Election Day.

Plus, they have to stick together (Ben Nelson, are you hearing me? House blue-dogs, do you read me? Peter Orszag, will you get some sense?)

Not only is this smart politics. It’s smart economics.

The rich spend a far smaller portion of their money than anyone else because, hey, they’re rich. That means continuing the Bush tax cut for them wouldn’t stimulate much demand or create many jobs.

But it would blow a giant hole in the budget — $36 billion next year, $700 billion over ten years. Millionaire households would get a windfall of $31 billion next year alone.

More:   Robert Reich: The Defining Issue: Who Should Get the Tax Cut — The Rich or Everyone Else?.

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U.S. Retirement Deficit Reaches $6.6 Trillion: ‘God Help the Poor Gen Xers’

How do you feel about cat food in your golden years?

No, not for the cat…

America’s retirement crisis has reached epic proportions, according to a recent study by Boston College’s Center for Retirement Research. The study estimates that the current retirement income deficit, or the gap between the retirement savings of U.S. households and what they need to have in order to maintain their living standards past retirement, is a whopping $6.6 trillion — five times the projected federal deficit for 2010.

“The key sources of income retirees are relying on are either under attack, in the case of Social Security, or disappearing, in the case of traditional pensions,” said Ross Eisenbrey, vice president of the Economic Policy Institute, at a press conference on Wednesday. “The early Boomers are better off than the late Boomers, and God help the poor Gen Xers. Seventy percent of them are on a track that leads to a fallen standard of living in retirement.”

According to the latest retirement income data, half of 65-and-older households have an annual income of less than $29,744 — about half the median income of younger households. Traditional pensions are disappearing in favor of 401(k) plans, which allow employers to shift much of the cost and all of the risk to their employees, and on top of this, Congress is considering cutting Social Security to balance the federal budget.

Maria Freese, director of government relations for the National Committee to Preserve Social Security and Medicare, said that the $6.6 trillion estimated retirement deficit is a “conservative number” and that the crisis could become far worse if Social Security is compromised.

via U.S. Retirement Deficit Reaches $6.6 Trillion: ‘God Help the Poor Gen Xers’.

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