Archive for category Budget Deficit
Republican Mitch McConnell’s Twisted Logic on Taxes, Economics and Deficits
Posted by Lance Haley in 2010 Election, Budget, Budget & Deficit, Budget Deficit, Conservatives, Economics, Financial Crisis, Government, How and Why We Get Screwed, Logic & Reasoning, Politics, Republicans, Senate, economy on July 24th, 2010
PARALLEL UNIVERSE by Steve Hester
Remember how “vibrant” the economy was at the end of the Bush Era?
Recall that when Bush left office in January of 2009, the U.S. budget deficit was at an historical all-time high, roughly $1.3 Trillion .
So now Republican Senate Minority Leader Mitch McConnell claims that the Bush Tax Cuts “increased revenue, because of the vibrancy of these tax cuts in the economy.”
What an inexplicable disconnect between his statement and the foregoing facts regarding the economic collapse brought on by the Global Financial Crisis in 2008, and the deficits a majority of Americans agree that Bush hung around Obama’s neck; deficits that were unprecedented in relation to previous Administrations. It’s patently obvious that McConnell operates from a parallel universe where the laws of basic math and logic don’t apply.
As Ezra Klein of the Washington Post so kindly put it, “it’s enough to make you very, very sad.”
What’s even more unbelievable is how McConnell and the Republicans attempt to blister Obama and the Democrats on taxes, spending and deficits, all while ignoring the most blatant evidence of what the Republicans did after inheriting Clinton’s budget surplus. To describe this behavior in terms of an hypocrisy is an understatement.
So now the country seems inclined to put these guys back in power?
That is utterly terrifying.
NOTE: the sublime painting by Steve Hester is an original watercolor for sale at this link.
Wonder Why President Obama Raised His Own Taxes?
Posted by Lance Haley in Budget Deficit, Business and Money, Capitalism, Economics, economy, taxes on April 16th, 2010
In case you forgot – and I am almost certain you didn’t – today is April 15th. Tax day. Not that you needed or wanted any reminder.
But there are a few things you might not have considered, and a way to re-frame the notion of taxes in order to understand why we pay them – albeit reluctantly.
As was reported today in the Wall Street Journal, the Obamas just paid $1.8 MILLION in income taxes the year. FYI: that is NOT a typo.
Want to put that in perspective? In 2008, George Bush paid just shy of $204,000 in income taxes; and Dick Cheney paid approximately $600,000 in taxes that same year. That means that President Obama paid over twice as much in income taxes his first year in office than George Bush and Dick Cheney did combined in their last year in office.
So when President Obama increased Medicare contributions on the top 1% of wage earners in this country in order to help fund health care reform, he raised his own taxes. Not your taxes – unless you make in excess of $250,000 a year. His taxes. That is something only one President – George Bush I – has ever agreed to do in almost thirty years.
And the President may later propose to raise taxes again on himself and the very rich. Why, you might ask?
Because this President understands that sublimating his own financial self-interests to that of the greater social good is something Americans have always expected from those who could most afford it – a notion that seems quaint and antiquated in this era of repacious greed and obscene self-interest. Sacrificing a portion of one’s wealth for the good of America was one of the principle things that made this country so great.
Want proof? Read it and weep . . .
This chart from the Citizens for Tax Justice outlines the income tax rates for the top 1% of taxpayers in the United States since 1916. Take note of several very salient facts:
1) It may surprise you to learn that with the exception of 1916 (%15), 1925-31 (25%), and 1988-92 (30% +/-), the current tax rates for the wealthiest Americans has never been lower (35%);
2) In the past, high tax rates on the very rich were able to offset severe economic conditions (The Great Depression), the high costs of war (WW II, Korea, and Vietnam), and helped financed the greatest economic expansion in this country’s history (The Go-Go Years of Wall Street – late 1950’s to mid 1960’s);
3) The reason most Americans now pay a higher rate of taxes in relation to inflation-adjusted income is that the very rich have paid far less in taxes since 1988 – a policy that should not be lost on anyone, Republican or Democrat; the rich DO keep getting richer. Unfortunately, political rhetoric and economic propoganda trumps truth virtually every time.
Here is the reality, America: If you want to reduce deficits, balance the budget for future generations, keep entitlements at their present levels (Social Security and Medicare), and reinforce the middle-class, taxes on the very wealthy are going to have to go up. Significantly.
Call it what you may – “transferring wealth”, Socialism, etc. This is a zero-sum game. Otherwise, many of us will go broke over time while they grow ever richer. It’s that simple. This is not class warfare. This is not social engineering. This is reality, people.
But based on some silly twisted philosophical perception that imposing disporportionately “higher” taxes on the rich is inherently unfair and “Socialist” in nature – which even Warren Buffet, the richest man in America, agrees is nonsense - we vote against our own self-interests, and vicariously support the ultra-rich getting richer. Why? Because we no longer recognize the fact that in the past, America always imposed a proportionally greater financial burden on it’s citizens who have prospered most from her bounty, and were blessed with the gift of wealth.
Against his own self-interest, President Obama readily accepts that duty, as well as the additional burden it imposes on his family, based on the time-honored American principle of self-sacrifice . . .
All for the good of the country.
NOTE: The gentleman pictured at the top of this post is none other than the richest man in America – Warren Buffet.
Thank Goodness Obama Healthcare Reform is Dead? Caveat Emptor . . .
Posted by Lance Haley in 2010 Election, 2012 Election, Bailouts, Banking, Budget, Budget & Deficit, Budget Deficit, Business and Money, Campaigns, Capitalism, Conservatives, Economics, Financial Crisis, Financial Terrorists, Government, Healthcare Reform, How and Why We Get Screwed, Medicare, Sarah Palin, Show Them the $$$, Wall Street, Wealth Disparity & the Ultra Rich, economy, financial industry on February 12th, 2010
This is the face of the future for Republican Health Care and Social Security Reform – memorize it!
Now remember all of those terrifying Town Hall meetings in the Summer of 2009, where all you heard about on a daily basis were “Death Panels” and Medicare cuts, and Big Brother’s government bureaucrats making decisions about both the quality and quantity of health care you were going to receive?
You have nothing to worry about. Obama’s Health Care Reform is likely all but dead, and many of you will try to vote the Republicans back into power in this Fall’s mid-term elections so that they can protect you from Obama’s scary Socialist Big Government. Hip, Hip, Hooray (or is that Horror?) for their brand of Capitalism and individual freedom.
Except for one thing. The Republicans do not intend to protect you from anything (remember, that’s the point of shrinking government support). Including going broke in your retirement years from either rising health care costs, or diminishing retirement income. Think I am kidding? This is not hyperbole!
Ignore what follows at your own peril . . .
At the 2009 CPAC (Conservative Political Action Conference) - this is the Superbowl of Conservative power-brokers, with Glenn Beck as their 2010 Keynote Speaker - Republican Congressman Paul Ryan (R-WI) proposed that Medicare be completely dismantled, and replaced by a system of vouchers for seniors to purchase health insurance in the private sector.
Make no mistake about it: this will be the platform for the Republicans’ answer on how to reform health care once they are back in power. Do you doubt that? Well, Fox News reported that Ryan has been annointed as “the leader of future of the conservative movement.” That’s code for Republican Presidential nominee. He is their visionary, and here is his vision for American retirees’ Medicare and social security safety nets.
According to The Economist magazine, and an analysis from the Congressional Budget Office (CBO), Ryan’s “daring plan” will stimulate both the health insurance industry, as well as the health care industry, while slowing the growth of government health care spending; which is great if you are a Republican rising star like Ryan, who receives almost 40% of his political campaign contributions from health-related industries and their beneficiaries.
What’s not so great for retirees is that the CBO analysis shows why this is so great for the government and those industries: the dollar value of those vouchers you are going to get under Ryan’s plan will not rise as quickly as the projected costs of health care. Which means retirees will have higher out-of-pocket expenses as time goes on. And you can be certain that if those costs are going up, your private health insurance will also be going up at an equally rising rate – after all, they have to make a profit. That’s Capitalism. Right?
Another great thing about this plan – but not so great for retirees – is that the cost to the government will continue to grow more slowly because, as the CBO projections show, people will use less health care when they have to increasingly pay more and more out of their own pockets. Remember last summer when Sarah Palin and the Teabaggers scared you about the government rationing health care? Now you can do it to yourself!
In essence, Ryan’s Republican plan would make the government go broke more slowly than American retirees will, while temporarily keeping this growing health care crisis at bay another decade or two, and increase the profits of health-related industries along the way, forcing you to resort to receiving less and less health care as you grow older.
Don’t believe me? Do the math. It’s really that simple.
And Remember: Under the Republican Healthcare Reform Plan you will NOT even have Medicare supplemental insurance to fall back on. You wanted government out of your life . . . you got it!
So be happy you are not going to get Health Care Reform from Obama. I don’t mean to alarm you – especially after the Republicans scared you sufficiently enough to ensure health care reform would not get passed. After all, now they are free to begin selling you their notion of a “free market” alternative. Caveat emptor (“buyer beware”).
And recall the proverbial admonishment: “Be careful what you wish for . . . you just might get it.”
Happy retirement, America. 
P.S. Ryan’s “free market plan” also calls for Social Security to be completely dismantled, and privatized. Surely the impact of that policy is not lost on anyone after the global financial markets collapsed for the second time in a decade – losing almost 40% of their value in both downturns, with average investment returns for the past ten (10) years of about 1%. What if your social security safety net was invested there? Hint: it’s not a “free market” proposal - the government will limit your choices on how you can invest your social security retirement. Are you really so naive as to think Wall Street won’t have their greedy fingers in that enormous financial pie? They own Washington, D.C.!
Allah Bama is Holding America Hostage For a Whole Side of Pork – Isn’t That Against Their Religion?
Posted by Lance Haley in Budget, Budget Deficit, Government, How and Why We Get Screwed, Politics, Show Them the $$$, economy on February 11th, 2010
Allah Bama’s Monument to Pork Barrel Spending
Are Republicans really serious about pork-barrel spending? What about national security? How about the War in Afghanistan that they have been paying so much lip service to since 9/11 – as in 2001?
One has to wonder as Senate Minority Leader Mitch McConnell and the rest of the party stands silent, and defenseless (or so they act), as fellow Republican Senator Richard Shelby (R-Alabama) just hung a whole side of pork around the necks of his own party members. Believe it or not, Shelby contends it’s all done in the name of critical national security, when it’s really for the sake his home state – Allah Bama.
Since when did building tanker refueling planes constitute a critical national security issue when compared to personally holding up the appointment of seventy – count them, 70 – presidential nominees to various government positions. What is most glaring is that one of these appointees is designated to become the top Department of Defense point-man for managing deployments to Afghanistan.
Is Senator Shelby providing comfort and support to the terrorists? After all, isn’t that the standard moniker Republicans try to hang around the Democrats’ necks everytime they delay anything regarding national security?
Let’s see? Building refueling tankers in the next five years or ensuring proper deployment of soldiers to Afghanistan in the next five months? The choice is not exactly rocket science. Anyone want to argue this one with young American soldiers’ lives on the line?
Go ahead . . . make my day.
Even Conservative writers and bloggers have weighed-in against Shelby’s political grandstanding, pointing out that there is no legitimate basis for holding up the business of the whole Senate confirmation process over pork-barrel spending. Daniel Larison of The American Conservative magazine said it best:
With this kind of irrational thinking, Shelby could probably even make a case for the critical national security aspect of his $819,000 Catfish Genome Project down there in the bayou that was awarded in 2009. You know, they have to serve those tanker refueling plane pilots something while they are up in the air for those long overseas flights to Afghanistan.
Wunder if dat der Vulcan feller is feedin’ dem catfish pork rinds?
America: Ten Years From Now, Recall When You Believed Health Care Reform Was Too Expensive
Posted by Lance Haley in Budget Deficit, Uncategorized, economy on February 4th, 2010
Let’s see. Obama’s Health Care Reform was way too expensive. We just could not afford it. It was going to financially break the country.
Read this little statistic released this week, and then you just keep telling yourself that . . .
Americans Better Hope Obama Does Not Fail On Repairing the Economy
Posted by Lance Haley in Bailouts, Banking, Budget Deficit, Business and Money, Capitalism, Congress, Economics, Financial Crisis, Financial Terrorists, Government, How and Why We Get Screwed, Lobbyists & Lobbying, Politics, Sarah Palin, Senate, Show Them the $$$, Wall Street, Wealth Disparity & the Ultra Rich, economy, financial industry on January 24th, 2010
Most Americans have a hard time with economic complexity, and reading charts . . . BORING!
Please stay with me on this one . It is far too important to ignore, because the graph posted above does not paint a pretty picture for the future of this country. If you do not care to understand the fundamentals, skip to the explanation and assessment at the bottom under “gobbly-gook“.
This graph was apparently created by Bank of America’s Merrill Lynch Global Equity Strategies research group for Bloomberg financial news (Bloomberg.com), and posted at one of my favorite investment and economic blogs – Seeking Alpha. For those of you who do not engage in economic analysis – I minored in Economics in undergraduate studies - this chart represents the comparative relationship since 1996 between the U.S. stock market (utilizing the S & P 500 as an indicator) and job growth/decline in the American labor market utilizing the U.S. Conference Board’s “job plentiful index”. The key factor here is the radical divergence between the stock market and jobs over the past seven years.
From 1996-2000, job growth grew lock-and-step with the stock market, and the job index was actually much higher than the relative market index – meaning that as businesses made money (profits), jobs were created – this concept of “wage labour“ correlating with profits is the single most fundamental component of Adam Smith’s original theory of Capitalism as outlined in his treatise The Wealth of Nations. Capitalism in its most simple of terms states that as companies compete for and secure profits, workers will benefit through both increased job opportunities and rising wages, all which serves the best interests of society.
If you follow the graph out from 2000-2003, both indexes dropped in remarkable comparison as a result of a relatively severe recession. However, after 2003, the stock market goes up, but job growth lags far behind, and this growing divergence is only temporarily halted by the financial meltdown in late 2008 – when the two lines meet again in early 2009. Now the divergence between the two is growing ever wider at an alarming rate.
So what does this gobbly-gook mean?
Simply put, the stock market believes publically-traded companies in the United States - which are overly-represented by very large corporations - will produce a growth in profits without creating more jobs.
What this really means is that no matter who is President – Barack Obama, Sarah Palin, Mitt Rommney, John McCain, [you fill in the blank] – the future for the future of U.S. workforce looks bleak. Moreover, if you think putting the Republicans back in office will change that – with their proposed policies of cutting taxes, gutting business regulation, and further fostering the concentration of power in large corporations – you are only fooling yourself.
Obama said this past week that he is going to make the economy, specifically job creation, his number one priority. I had absolutely no illusions that Obama was going to be able to turn this mess around quickly – he was handed the second worst economic situation in U.S. history, coupled with two very expensive wars. Nonetheless, I am sorely disappointed in his failure to immediately regulate the financial system, and focus the bailouts on bolstering small and medium-size business to quickly boost employment. You can defend Big Business all you want, but it is statistically indisputable that small and medium size businesses provide over 50% of the jobs in this country, and produce 64% of the new jobs every year.
Adam Smith, the Father of Capitalism, would be astounded at the bailouts for Wall Street, and the subsequent consolidation (concentration of power) of these financial behemoths. Moreover, he would bemoan the fact that such an extraordinary amount of financial capital was squandered on such an inherently risk-weighted aspect of business (trading derivatives and securities), which only produces profits while creating virtually a statistically insignificant number of new jobs in comparison (which ironically, Wall Street was shedding jobs at a record pace while making record profits and bonuses on trading in 2009 – so as for creating new jobs, “that dog just won’t hunt”).
Better pray it’s not too late to redress these problems. Hoping Obama fails on this front, is proverbially speaking, biting you nose off in spite of your face.
P.S. The bailouts were a monumental failure - and the primary blame must be placed at the feet of former Treasury Secretary Henry Paulson, Goldman Sachs CEO Lloyd Blankfein, and present Treasury Secretary Tim Geithner (former New York Federal Reserve Chairman) for reasons I address in a future posting. Paulson, Geithner and Blankfein could all be charged for conspiracy to commit financial fraud if Federal Prosecutors would just grow some testicles.
All Proposed U.S. Budget Deficit Reduction Plans Are “Nothing Burgers”
Posted by Lance Haley in Bailouts, Banking, Budget Deficit, Campaigns, Congress, Conservatives, Economics, Financial Crisis, Government, How and Why We Get Screwed, Politics, Senate, Show Them the $$$, Uncategorized, Wall Street, Wealth Disparity & the Ultra Rich, economy, financial industry on January 24th, 2010
“Nothing Burger“: Two pieces of bread slapped together with nothing in between. Usually eaten when you have nothing in the house except bread or are too lazy to spend 2 minutes making a decent sandwich.
- definition in the The Urban Dictionary
This is utter laughable.
Senator Gregg Judd (R-New Hampshire), the highest ranking Republican on the Senate Budget Committee, claims the Democrats are not serious about cutting the deficit. He first offered a plan co-sponsored by Democratic Budget Committee Chairman Kent Conrad (D – North Dakota), that would require Congress to establish a bi-partisan commission to study deficit reduction recommendations, and if a fixed number of its members could agree on specific budget cuts, Congress would then be compelled to vote on those measures before the 2010 mid-term elections this Fall.
President Obama and the Democrats endorsed a similar deficit-reduction plan, but without the requirement of a mandatory vote in the Senate on the issue. Senator Gregg then criticized the Democrats, calling their plan a “nothing burger“, insinuating that they were not serious about deficit reduction. And the Republicans are?
Senator Gregg, you need a little lesson in transparency.
First, there is serious doubt about whether you can even get the support of your own party on this issue – both Senate Minority Leader Mitch McConnell (R – Kentucky) and House Minority Leader John Boehner (D – Ohio) stated they will not back the plan because the Republicans are philosophically opposed to tax increases. In other words, Republicans tacit acknowledge that deficit cutting would likely involve raising taxes, and they would rather let the country go bankrupt before they would make it pay its own way – now that is fiscal responsibility at its finest.
Second, that nasty little chart just below indicates that the real explosion in the government debt started in 1981 – after Ronald Reagan took office and the Neo-Conservative movement began. The largest deficit increases (as a percentage of the previous deficit) occurred from 2003 to 2006, not ironically when President Bush and the Republicans controlled both the White House and Congress. Moreover, that does not even account for the estimated $600 Billion for the wars in Iraq and Afghanistan that we borrowed from China through 2007, – projected to increase to $1.6 Trillion before Obama took office - and which was “kept off the books” by the Bush Administration, Enron style.
Ouch!
Third, no Washington politician is ever going to be serious about fiscal responsibility, regardless of which party they belong to – it just does not make political sense if you are an incumbent running for re-election. Besides, Senator Gregg, proposing mandatory deficit reduction is easy when you are being disingenuous about the political realities of the issue.
One final word on that lesson about transparency, Senator Gregg: While serving as the Senate Republican’s lead negotiator and author of the TARP program (Wall Street bailouts) in the Fall of 2008, you recommended that Bank of America receive $45 Billion from the TARP funds – at a time when you owned millions of dollars in Bank of America stock. After your Bank of America stock recovered rather nicely this past year, you are now proposing that the TARP fund be terminated so as to not create a “piggy bank” for politicians.
And you have the audacity to criticize the Democrats, Senator Gregg?