Monday, August 1, 2011

Get Set for Brutally Harsh Times!

Well, as suspected, Obama caved yesterday to the Repuke deficit terrorists. Yes he obtained MINIMAL "wins" in not having to go through this hellacious rigamarole again in 6 months or a year, and escaping default - but at an enormous cost that may well mean he becomes a 1-termer next year. There is no finessing this abomination, and the Repug fiscal extremists have every reason to gloat and party hearty if the final deal goes through. They have WON, as with a capital W. The Obamanites can spin this narrative any way they wish, but it is assuredly no "compromise" - not when Medicare stands to be viciously de-funded by way of automatic spending cuts and no taxes are on the table!

As pointed out in a blog at Daily Kos:

As Robert Greenstein, of the Center on Budget and Policy Priorities, pointed out in a recent statement about a different proposal, there's just no way to enact spending reductions of this magnitude without imposing a lot of pain. And contrary to the common understanding in the Washington cocktail party circuit, "pain" does not simply mean offending certain political sensibilities. Pain means more people eating tainted food, more people breathing polluted air, more people pulling their kids out of college, and more people losing their homes—in other words, the hardships people suffer when government can't do an adequate job of looking out for their interests.

More immediately, but equally troubling, this agreement would not address our most pressing economic problem: lack of jobs. On the contrary, by reducing deficits starting next year, this deal would do the very opposite of what virtually every mainstream economist now believes we should do: increase consumer demand by pumping more money into the economy

Worse, the dems - pussies that they are- refused to demand more concessions for their side, including extensions of unemployment benefits! Meanwhile the only thing the Repugs are giving up, if at all, are some defense cuts - all of which amount to pork for their districts.

Theoretically, this lamo plan makes a huge deal out of a "committee" of 6 Reeps and 6 Demos who will decide on what further cuts to enact, where. But as we saw with this extended debt ceiling fiasco, that's easier said than done. If no agreement is made by the humans then "automatic" cuts are introduced to the tune of $1.8 trillion, meaning that the Reeps' defense gets zonked half and Medicare gets zonked half.

How is this fucking fair? It merely confirms former defense analyst's Chuck Spinney's prediction that the increase of military spending as percent of GDP (back in 2006) would see military spending squaring off against Medicare. THAT is precisely what we have!

Given these automated spending cuts are most probable - if no 'Gang of 12' agreement emerges by Thanksgiving - it means an immediate $900b cut to Medicare providers. (The gurus who spin this shit assert "beneficiaries won't be affected", only providers). But it doesn't take a genius to predict what will transpire!

As Medicare provider cuts are introduced (an estimated 29% cuts to primary care physicians by January, 2012) the providers will simply cut back their services, or dramatically raise prices. In the worst case scenario, they will simply accept no more seniors into their plans, no matter they just turned 65. In other words, Medicare will have been transmuted into a hollow benefit. On paper, you're supposed to receive it, but in the practical world you don't get dogshit or diddly. You're on your own!

Moreover, this is pegged to worsen each year as the automatic cuts are renewed. Each time, more and more cuts will be exacted and more and more elderly will be without any medical coverage because no one, not even primary care physicians, will accept them! Even now in Colorado (and I'm sure many other states), 1 of 3 seniors over 65 can't get into any physician's practice because they're being denied. As round after round of these cuts continues, we could see most seniors without any Medicare coverage by 2013. Of course, this may well be what the shit head repuke austerity and deficit hawks wanted all along, just as the baby boomers are entering the program by 10,000 each today. And what do we see? A DEM President signing onto this perfidy!

All of this, or a LOT, could have been avoided if Obama had just had enough balls to allow ALL the Bush tax cuts (for rich and middle class) to expire as they were intended to, in December last year. That ONE move would have saved $4 trillion over ten years as opposed to $3.7 trillion now under this horrific deal! At the very least, even if he lacked the balls to let them expire, Obama ought to have tied their extension to a debt ceiling resolution at that point - going past the 2012 election. Then we wouldn't have had to put up with this three ring circus bullshit and national hostage -taking by the Tea Baggers- to enable them to wring out vast concessions on spending cuts they'd never get via legislation.

So now, instead of most citizens simply doing without a few hundred bucks each year, they're going to be clobbered unmercifully by federal cuts! No unemployment benefits, food inspections cut at the FDA (so more people will get salmonella, or tomaine and require hospitalizations, meaning more medical costs), the elderly with no more utility assistance - so they'll either have to roast or freeze in their homes or beg for charity; cutbacks in school lunches, elderly meals; cutbacks in environmental protections - so water will get dirtier - more cancer-causing chemicals- meaning more cancers, more costly chemo treatments (even as chemo drugs are now in sort supply); libraries closing, schools degraded, hospitals and airports reverting to the level of 3rd world nations. The Clean Air act may also be repealed to save coppers, meaning more mercury from utility smokestacks pours out, more acid rain, more effluent - translating into more asthma, more COPD and a whole array of lung disorders.

Perhaps even worst of all, tens of billions in federal matching funds for state Medicaid programs stand to be cut - which usually go to states. But given so many states are themselves now cash-strapped, that means they will have to either drop large numbers from the Medicaid rolls or revamp qualifying criteris - say to the level that anyone earning less than $400/mo. is then ineligible. Then where will all these people turn? Mostly to ERs, passing those costs on to the rest of us!

Yes, this is what we can expect.

In addition, the idea that a nation of 310 million can be run at the level of the domestic spending of the 1950s Eisenhower administration (when there were half as many people) is totally batshit crazy insane. There is no way this can happen. What it means, really, is accepting the quality of life in a low grade third world nation - say like Guyana ca. 1978. In that nation, when I visited then, the unemployment rate stood at over 20%, stores were closed most of the day because of lack of activity, and any people who did dare to venture onto the streets risked their jewelry being cut off their bodies (many women, as I was told, had rings cut off with their fingers by snatch and grab robbers).

So yes, expect a major crime wave with many more robberies and assaults too, as people who are steamrolled try to make ends meet any way they can. Expect also shoplifting epidemics. One thing you can bet on: people on the outs will not just roll over and die! With no job prospects, and no more government support, crime will be the only alternative. Indeed, many will perpetrate it simply to get put into a jail where they'll be assured of 3 hots and a cot!

Consumer spending will also plummet even more, and we can expect consumer contribution to the GDP to perhaps go down to barely 40%, if that. With no business spending, and now no government spending, it portends an aggregate demand collapse of epic proportions. As Economist Paul Krugman put it in today's NY Times, we face a "lost decade" of opportunity and jobs - as bad or worse than what befell Japan in the 1990s. In that period, extended deflation stalked the land since NO one was spending, not government, not consumers or business.

Surely, when people entertain these cuts they will see that they will have no choice but to cut spending. If Medicare is viciously sliced forcing us to pay much more, I already told my wife that we will probably have to start by cutting all charitable contributions first, maybe letting half of them all go. That behavior will likely be repeated many times over, thereby multiplying the pain as the previous provider of last resort - the charities -all take huge hits like they did in the wake of the '08 recession.

Sure, I will still give but the donations now will likely more be $2 or $3 at a time and less often than $5 or $10 monthly. One has to look out for oneself if the government is forced to cut back and one's expenses are significantly increased.

The America on offer will be vastly more brutish, churlish and unliveable but that will be the result of passing this lopsided cave-in piece of trash. Obama would have been better off invoking the 14th amendment and letting the devil take the hindmost.

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