Even Conservos Believe Romney is a LOSER!

Willard Mitt scratches his cranium pondering which Etch -a sketch Mitt he will adopt today!

Bottom: the TRUE story of the deficits, not what Reepo spin-makers have put forward.

No, I am not making that claim, but a spectrum of conservos are as reported in politico.com, e.g.

http://www.politico.com/news/stories/0912/81280.html?hp=t1

Evidently, they all suspect now what most rational people knew during the Repug debates, that if Romney is nominated the GOP bid for the White House goes down in flames. Romney is the “Etch-a-Sketch” dude, the guy who changes his policy positions, ideology and beliefs from one moment to the next, from one year to the next.

Switch to a few years ago and he’s defending a woman’s right to an abortion, especially in cases of rape and incest. Switch to today – and, sandbagged by the Teabaggers- he sings a different tune. Which Mitt you gonna believe? Can Mitt even win a debate with himself?

The nitwit some months ago proclaimed he plans to ditch “Obamacare”, abolish it in toto! Next thing we hear barely a week ago is he plans to “keep certain provisions” - like the one that eliminates the pre-existing conditions insurance companies use to winnow their responsibilities, and exposure to future risk. Do people really believe this? Which “Mitt” is telling the truth? How can voters know?

Here’s a fact that exposes the liar: One cannot retain the elimination of pre-existing conditions unless one retains the mandate. It is the mandate, which delivers to the health insurers a large mass of citizens that will dilute the concentrated risk pool and make earning profits more likely. In effect, this ensures profits despite enrolling those already diagnosed with cancers, whopping LDL levels- triglycerides, or morbid obesity. Take away the mandate, the heart of “Obamacare” and the pre-existing conditions can’t be allowed, since there’s no way to allow payment for their treatment.

Of course when Mitt implemented “RomneyCare” in Massachusetts he knew all this! Moreover though he either rejects his own plan now – or claims it’s “not the same as Obamacare” (he’s never explained why) - the plan has worked wonders in the state of Massachusetts in terms of bringing down health care costs – as an MIT study found. So why disown it? Mainly because Romney had to alter his etch-a-sketch pattern to appease the Tea Party contingent of the GOP. It was either do that, or lose the nomination.

The other howler concerns Romney’s specious economic claims to "cut deficits" such as he plans to highlight in two new ads to air today in battle ground states. (See the attached graphic of how - contrary to Reepo spin - it's Obama who's really addressed the deficit, taking it down from the whopping debt Bush II left.) Anyway, Willard Mitt's new ads feature his claimed “priorities” to rescue the nation:

- Reduce spending
- Balance the Budget
- Cut the deficit

All splendid aims to be sure, but Romney’s own financial plans are totally at odds with his priorities. So how can we believe his ads?

For example, his plans include adding $2 trillion to the Pentagon budget (despite the fact the Pentagon already said it doesn’t need it), and adding $4 trillion by way of tax cuts. Those two over four years represent an increase of $6 trillion in spending! These additions can only be balanced by equal spending cuts but where will they come from? Mitt won’t say specifically, and those ideas that have come up before – listed by his campaign, such as eliminating the mortgage housing deduction – will only be drops compared to what he plans to spend. For example, the elimination of the mortgage deduction will save maybe $180 billion. Even if Mitt eliminated the mortgage deduction, as well as the child-dependent tax credit and knocked out all VA educational benefits and cut Tri-Care (the military veterans’ version of Medicare) by 50%, the spending cuts would only reach $1.4 trillion.

Do the math:

$6 trillion - $1 .4 trillion = $4.6 trillion

Remains unbalanced.

One sees from this that the rank and file of conservatives have good reason to fear Willard Mitt’s candidacy, because it’s composed of bullshit and bollocks.

This is why, never mind the Reepo dreamers and delusionals, Mitt will be clobbered come Nov. 6th.

One more point: Some confounded Reepos say “he still has time” – forgetting that early voting starts by the end of the month in a number of states. Polls, no matter the naysaying of GOOPrs, shows the proportion of voters who can still be won over or remain undecided are minimal. Thus, the results of an Obama victory might already be decided weeks before the actual general election.

How to get deficits to drop: Nix Renewing the Bush Tax cuts!

The new report out of the Congressional Budget Office (CBO) clearly shows the way to get a handle on the mounting deficits: kill the Bush tax cuts, I mean ALL of them - for the middle class as well as the wealthy. If that one step is taken, the deficit - which is projected to be $1.1 trillion this year, will fall to $585 billion next year, and to $345 billion in 2014. Most critically, this falling deficit will keep the bond markets and domestic austerity fetishists at bay, while keeping social benefits sound.

It is very simple to achieve but requires political gumption, and levelling with the American people: telling them they simply can't have their cake (future Social Security, Medicare benefits) and "eat it too" (continued tax cuts). Make a choice, take your pick. You're big people now!

The bottom line is that doing nothing will become the most direct way to slash the deficit, because doing nothing ....as in nada....is all that's required to finally retire or sunset the Bush tax cuts which have already outlived their usefulness and do next to nothing of economic benefit. The Financial Times analysis of Sept. 15, 2010 already showed that, including the observation that;

"“The 2000s- that is the period immediately following the Bush tax cuts – were the weakest decade in U.S. postwar history for real, non-residential capital investment. Not only were the 2000s by far the weakest period but the tax cuts did not even curtail the secular slowdown in the growth of business structures. Rather the slowdown accelerated to a full decline”

Contrast this with the hike in taxes immediately after Bill Clinton took office, leading to the accumulation of more than $600 billion in surpluses by the time he left office (see the one large bump on the accompanying graph near 2000), and the creation of 20 million jobs. Meanwhile, the FT analysis observed that:

“during each decade from the 1950s to the 1990s, growth in real gross non-residential investment averaged between 3.5 percent and 7.4 percent a decade. During the 2000s it averaged a mere 1%”

Can politicos process this and keep their hands off the extensions triggers, including for the middle class? Who knows? The trouble is there is this hidden demon in all politicos that tempts them to play politics with things like tax cuts instead of levelling.

But, especially in the case of Obama, being serious this time around about not reviving these cuts, including for the middle class, could have salutary effects. Already the likes of The Wall Street Journal ('$5 Trillion and Change' today, p. A14) is trying to pin the record high deficit accumulation on Obama as well as the largest yearly one ($1.1 trillion for 2012). The best way to neutralize such attacks in future would simply be to allow all the Bushie tax cuts to finally meet their end.

Of course, the WSJ indiscriminately uses the graph released by the CBO (attached) but doesn't parse it correctly. For while it shows a major deficit emergence near 2010 (see the high negative gradient dip), this isn't all on Obama. Much of it is a cumulative payment back-log from the Bush 2003 Medicare Modernization Act which delivered a new prescription drug benefit that was never paid for, and which also included yearly deficit creating engines such as "Medicare Advantage" which spends $12-15 billion a year more on services than traditional Medicare. And we won't even go into the corporate welfare bonanza it's become and the disallowance of any demand for the Medicare Part D PhrmA plans to allow the government to bargain for lowest drug prices like the VA does.. So, of course you're gonna get a growing deficit!

Then there has been the additional costs of Iraq (more than $1.3 trillion - including $330b for the pullout prescribed by the Bushies in '08, NOT by Obama last year) and the enormous "supplemental" budgets associated with Afghanistan, in the vicinity of $600b a year. And, of course, the Buish tax cuts extensions - which truth be told Obama did have the chance to stop, but didn't. But in any case, they have added about $300b this past year in extra deficits that only he must take ownership for, while during Bush's rein and under his tax cut decade, they added over $2.7 trillion including interest. (Thus the more realistic graph projections, in red and blue ink- attached, belie the way the WSJ interpreted the CBO data.)

Let us hope that the politicians of both parties commit to doing the right thing this year, and next - and that begins with: 1) no more wars that aren't fully paid for with tax increases and 2) no more Bush tax cuts! For anyone!

An Accurate Portrayal of the Coming "Austerity" Wars

Even as the country continues to slowly grind its way out of recession and deficit obsession, or at least tries to, some critical observers are projecting ahead to a not so nice future wherein the two political parties will become the ideological beach heads for a prolonged civil war. This will not be like the last Civil War, and may not even reach the stage of bloodshed, but it will be fought just as intensely and without remorse.

In his book, 'The Age of Austerity', veteran journalist Thomas Byrne Edsall has glimpsed the future by extrapolating rationally from the recent budget battles and deficit fights, and doesn't like what he sees. In particular, "a period of austerity markedly different from anything we have seen before...which will spark a resource war" between the Left and the Right. I must say that I myself have seen this battle looming, ever since the August, 2011 showdown over raising the debt ceiling in which the nation was essentially held hostage to Tea Bagger austerity and deficit cutting demands.

In his case, Edsall goes on to note that at the current time,

"The two major political parties are enmeshed in a death struggle to protect the benefits and goods that flow to their respective bases, with each attempting to expropriate the resources of the other."

This, of course, is one way to look at it. But based on my many prior blogs on this topic, the other way to look at it is in terms of one party - the Republicans - being taken over by extremely wealthy and powerful special interests, whose main objective is to impoverish the rest of us so they can maintain political and economic control. Thus, these interests incessantly inveigh against the welfare of the majority (as embodied within the "promote the general welfare" clause of the Preamble to the Constitution) to pad their own special agendas, including buying off our leaders and having them write laws to suit.

Hence, the only valid "expropriation of resources" is on the side of the Right and its wealthy purveyors, benefactors (Koch brothers, Richard Viguerie) and corporate interests at the expense of the rest of us. They want to therefore extend and enhance their tax cuts, and have much more defense spending in order to leave no money to support social welfare programs, or even domestic maintenance such as for our crumbling infrastructure.

They want us all stuck in a third world banana republic and with them pulling all the strings.

Because Edsall's take is more or less one of generic false equivalence, it makes sense he would see that austerity "raises the stakes of partisanship" with both Reeps and Demos cocooning themselves, and each party "believing its own facts and trusting its own sources".

However, this is much more true of the corporate Right and its lackeys than the left. For it is their lot who are so seduced by FAUX News they're unable to fathom or see the real facts. Indeed, many studies - including from The Columbia Journalism Review (e.g. May-June, 2003, 'Bias and the Middle East') have shown the Foxite side to be vastly less informed than the left watchers of MSNBC. (And indeed, to even remotely consider putting the Rachel Maddow show on the same plane as FOX's Bill O'Reilly is to reveal onself as a latter day journalistic Jacobin already brainwashed by rightist screeds.)

But I suspect that like most journalists, Edsall doesn't really buy into this (and I will get to more on this later) but uses it to try to show he's being "objective" as a journalist is expected to be these days and hence give roughly equal weight to both sides. Thus in vetting "conspiracy theories" he compares the anti-Obama Birthers against the Left's anti-Bushers and their claim of the Bushies having "foreknowledge of 9/11" - which - not to put too fine a point on it, is nowhere near as whacky as the Birther's claims - given how Bush's approval ratings soared and the military -national security state profited in the wake!) So never mind the two sides can never be weighted the same.

Because of not dispensing with false equivalence from the start, Edsall becomes the expected prey to the nattering nabobs of high finance, such as one W. James Antle III, who reviewed his book (WSJ, Jan. 10, ' A War of All Against All'). For example, Antle portrays Edsall's book as "one party protects tax cuts and the Pentagon's budget" while the other "fights to shovel money at social welfare programs".

Not one word here, not a one, that the former bunch has RAIDED the monies of the social welfare programs, namely Social Security, to pad its Pentagon budgets and off-budget war, supplementals funding. So who is being dishonest here? Meanwhile, as I showed earlier, both the tax cuts and the Pentagon spending and budgets were always devised by the Rightists to bleed social welfare monies dry by "starving government", see e.g. my earlier blog:

http://brane-space.blogspot.com/2012/01/defense-spending-cuts-dont-believe-all.html

The point here, which Antle avoided? One party - the Reeps, protects tax cuts and the Pentagon's budget for the RICH! The other party, protects social welfare programs for the majority of the country who are NOT rich and will depend on those programs later. Let's get it straight once and for all here that the protected tax cuts and Pentagon budgets do not have benefits that redound to the many, but to the few. Nearly 75% of those extant Bush tax cuts go to the top 10%. NONE of the Pentagon budget increases go to the many, but rather to defense contractors, with maybe 100,000 odd jobs for defense (e.g. aircraft building) going to specific congressional districts that have always been in the maw of the military, like Colorado Springs.

But this is the sort of one-sided journalism one gets when the reactionary press gets its hands on a book that doesn't meet every one of its 1-percent stoking criteria. Thus, Antle III really lashes Edsall when he finally drops the pretense of false equivalence and writes:

"For years, conservatives have sought to chip away at the infrastructure of contemporary liberal democracy"

Which is exactly, spot-on true! They have done it since the Reagan era by using the combo of regressive tax cuts and military spending to decimate the domestic purse for any social use.

Antle III then excoriates Edsall for "holding Republicans to account for being routinely engaged in an assault on programs and regulations that Mr. Edsall holds dear".

What Antle III doesn't say, doesn't dare to - is a majority of Americans also hold those programs dear! Polls consistently find 80- 85% of Americans, of both parties (but the little guys not the politicos) holding dear Social Security. As for those "regulations", even higher proportions of Americans demand them to ensure their meats aren't contaminated with salmonella or E. Coli. or that their melons aren't full of listeria which can lay them low with perforated bowels or comas. (Such as occurred to several Colorado citizens). Similarly recent polls have found 80% or more of Americans demand EPA regs to ensure mercury isn't pouring out from coal-fired plants to contaminate their food, water and air and make their kids more prone to asthma attacks.

Yet Antle's precious Repukes want to dismantle most of those regs, for both the EPA and FDA to save a few million bucks. Think they care about the majority of Americans? Think again! So no wonder Antle III complains that "Edsall gives short shrift t the right-of-center positions about the virtues of free market dynamism or deregulation"

Well, even Edsall clearly has his false equivalence limits, and perhaps - unlike W. Antle III - he grasps that if the free market truly existed, and was dynamic, we wouldn't see the ever increasing inequality we behold as betrayed by the Gini index (now near to the Philippines and Mexico.) As for "deregulation" recent studies, including published recently in TIME (3 months ago) showed that European states that kept more regulations fared better economically than those that didn't. The reason was that their trade improved because buyers knew the regs meant higher quality goods.

The funniest attempt at take-down is when Antle III blabbers on Edsall's unequal treatement of the Tea Baggers vs. what he (Antle) calls the "extemist Left". He writes:

"More space in 'The Age of Austerity' is devoted to nasty slogans appearing on a few signs at Tea Party rallies than to the estremism of the Left"

Hmmmmm.....he conveniently avoids mention of the many hundreds of Tea Baggers that brought their loaded weapons to those same rallies, along with their signs! Nor does he mention the Tea Bagger "campaign maps" leading up to the 2010 mid-terms with rifle sights over Dem areas. Then three months later Gabby Giffords was shot. Not saying a Tea bagger did it, but her district was among those targeted with a rifle sight - so they certainly created the climate where a generic whacko, nut or extremist could pull a trigger!

Memory is indeed short, very much so, when convenient.

Finally, Mr. Antle III yammers, on the "left extremists":

"After all, where did we first see a sitting President portrayed as Hitler?"

Hmmmmm.....maybe forgetting that Gee Dubya had many commonalities with Adolf Hitler, which was what the more savvy Left was trying to indicate. These included:

1) Like Hitler, Bush was never formally and officially elected by a majority of voters (both the 2000 and 2004 elections were stolen, though by different modus operandi)

2) Like Hitler, one of the first things Bush did after a "terror" attack, was to limit or repeal civil liberties. Hitler did it after the Reichstag fire, under an emergency 'Decree', Bush under the 'Patriot Act' (which was prepared BEFORE 9-11!)

3) Like Hitler, one of the first things Bush did is to wage all out war on unions, especially within Gov't. (‘Stomping Labor’, in The Progressive, June, 2002 ,p. 7.)

4) Like Hitler, Bush and his administration acted unilaterally -without any consultations in respect to international laws and treaties - from Kyoto to the International Criminal Court in the Hague.And just like Hitler, international treaty after treaty and concordance was violated, broken.

5) Like Hitler, Bush intimidated his opposition (e.g. using the "Patriot Act" etc) into political cowardice, thereby further reinforcing his bogus 'power with no mandate'.

6) Like Hitler - in invading The Sudetenland and Poland -and depicting 'terror' in those nations, Bush invaded Afghanistan, Iraq, and had at least early plans for Iran'. Hitler did it to neutralize 'Bolsheviks' and 'Jew terrorists', Bush to neutralize Islamic 'terrorists'.

7) Hitler had Josef Goebbels as “Minister of Propaganda” – Bush had Herr Karl Rove.

8) Hitler had the “Reich Courts” to hand down a host of deleterious verdicts on the citizenry, Bush had his self-crafted “Military commissions" which did away with habeas corpus and is now fully formalized whereby any American citizen can be indefinitely detained - say at Guantanomo. (Obama and his press assistant have, to their credit asserted they would never do that, but the worry of many is that an unscrupulous REPUKE with delusions of grandeur or dictatorship would!).

Mayhap, W. James Antle III needs to read a bit more, including of 20th century history, before taking to his ideological pseudo-free market -deregulation bollocks high horse.

In the meantime, let's hope the austerity wars aren't as terrible as Edsall believes. But that will depend on the tactics of the Right's deficit hawks, Repuke military promoters and deregulators....If they go too far, well......

An Unconstitutional "Committee" Poised to Add 40 Million to the Poverty Rolls

Each day as I pick up the papers, or read online news, I say to myself it just can't get any worse. There has to be a bottom, but where is it? When will the leaders in this country cease their destructive pro-party brinksmanship (and I am primarily writing here of the GOP) and work together for the common good of the people. True, every now and then a light emerges from the darkness, such as the vote in Ohio to restore the union rights taken away by Repuke gubernator John Kasich. But overall, the battles still rage, and societal decline remains.

At least as recently as 1996, an actual legislative hashing out was required by numerous congressmen to approve legislation that impacted citizens' welfare. It was only after this was done, that the final law - such as the 1996 Welfare Reform Act- could be brought to a vote. In effect, it was a constitutionally-based legislative process that enabled and validated that Act, an Act which saw the benefits of millions decline and fall into poverty - as welfare was replaced by work which in many states (e.g. in Maryland) allowed less than minimal wage rates. Many welfare to work folks in Baltimore, hired as janitorial or sanitation staff, were barely remunerated at $3 an hour. That this did not constitute a survival wage, far less a living wage never occurred to any of the politicos that endorsed it.

As disheartening as this Act was, it could at least be swallowed (if only half-heartedly) because citizens knew that a legislative process produced it. The outcome of the welfare to work wages was a product of the Welfare Reform Act. Its implementation didn't occur outside the Act, or the committee hashing out leading up to it. Such is not the case with the current "Joint Deficit Reduction Committee" which is a creature not of a legitimate constitutional process, but rather political expediency - in much the same way the "Warren Commission" was a creature of Lyndon Baines Johnson's political expediency in finding Lee Harvey Oswald solely responsible for the Kennedy Assassination. In both cases, a faux governmental veneer was attached to make citizens think there was a valid governmental benediction when there was nothing of the sort (all apologies to Stephen King for his new novel '11/22/63' predicated on a miscarriage of historical facts!)

Thus, in the case of this "Joint Deficit Reduction Committee", it didn't arise out of any formal governmental process that created it, but rather as a reactive concession to hostage -taking of the government by the Tea Party driven goopers. In other words, it marked a surrender concession to the debt ceiling debacle when the GOP House held the country to its demands ....."give in or we allow no increase in the debt" ...making the nation default. There were several options to this criminal ploy, among which I already blogged about was the invocation of the Constitution (Article 4 of Amendment XIV ) by the president:

http://brane-space.blogspot.com/2011/07/time-for-talk-is-over-mr-president.html

This Article (constitutionally mandated - as opposed to being the reactionary fabrication of a special "super committee") states explicitly:

"The validity of the Public Debt of the United States, authorized by law, includes debts incurred for payment of pensions ....and shall not be questioned."

Thus, instead of agreeing to be a williing hostage and to endorse an unelected committee's decisions, Obama could have issued an Executive Order to override a putatively derelict Congress (obviously also out of its mind) and invoke Article 4 of Amendment XIV to raise the debt ceiling himself.

This would have avoided the specious artifact of a "Joint Deficit Committee" and its obvious intent to do an end run around the legislative process.

To be clear, this specious committee is charged with finding at least $1.2 trillion in government cuts by Thanksgiving. If this unelected panel falls short, no resolution by Nov. 23, then deep budget cuts will be automatically triggered to both the defense budget and social spending in the amounts of $600b each.. Here again, the very existence of an automatic "trigger" does an end run around any reflective legislative process. It effectively enables an unthinking, non-debated economic adjustment to be administered with no human control or adjucation. It is, in effect, an abomination! (And no, I don't accept any true reflection inheres in this specious deficit committee, but rather political expediency to come to almost any solution most agree on. Real reflectivity by contrast requires adequate time to attain a rational and equitable solution and no artificial deadlines!)

The pressure is actually even worse than depicted, because the 6 Dems and 6 Repubs on this committee agree that they actually need to resolve their differences this week in order for the Congressional Budget Office to rubber stamp it by Nov. 23rd. The automatic cuts can still be triggered even if this happens if the Tea Party dominated congress fails to bestow its imprimatur by Dec. 23rd.

In other words, this diabolical farce sets us up for yet another hostage taking by the same creeps who perpetrated it during the debt ceiling debate in August.

The sad and sorry news out of this super committee is that the Dems on it are already caving on multiple fronts in return for a minuscule increase in revenues (about $350 b) proposed by the Grover Norquist dominated Rs. Thus, the Rs now "concede" to allowing an increase in revenues by eliminating or lowering itemized deductions for individuals, and lowering the automatic deductions for others, while retaining the Bush tax rates for millionaires and the one percent!

Not to put too fine a point on it, but this is a fucking, outrageous farce! In return for the tiny and major discomfiting revenue adjustments (almost exclusively painful to the middle class) the Dems will agree in return to:

- massive cuts to Medicaid (ensuring the states will have to lower thresholds even further to qualify)

- increasing the eligibility age for Medicare to 67 or 68 (some Rs even proposed 70)

- Allowing a change in the inflation -adjustment formula to "slow the growth of Social Security benefits" - an abomination on which I previously blogged, noting it would rapidly translate into increased poverty among the elderly by essentially removing one whole month of (currently) received benefits every few years.

It's abundantly clear to me that any "solution" approved by this ad hoc, created- under- duress "joint deficit committee", will be no better for the mass of people in our country than a subdued hostage's family's welfare after it gives its life savings to a terrorist or other criminal holding the hostage for ransom.

Democrats Must Stop Playing Politics with the Bush Tax Cuts

The just-released Congressional Budget Office (CBO) report on projections of federal deficits over the next ten years was both infuriating and stomach-turning. It also reinforces David Wessel's WSJ column today ('Tracking Missteps Behind World's Economic Slump', p. A4) that "The U.S. government - congress and the White House- has an incoherent fiscal policy".

By that he means that half the time they blabber about "the risk of rising deficits", but on the other hand seek to make them much worse - such as extending the Bush tax cuts for all back in December. The other half of the time they blabber about "fiscal support" and creating jobs, but then set in motion immediate austerity and spending cuts measures that will have exactly the opposite effect. In any other universe, this behavior would be regarded as the evidence for insanity.

Anyway, the CBO sharply reduced its projections of total deficits over the next decade- reduced to $3.5 trillion up to 2021, BUT with major provisos and qualifiers. The biggest one is that ALL the Bush tax cuts will finally be allowed to expire next year as opposed to once again being re-animated like the Zombies of the 'Walking Dead'.

If this isn't done, and Obama and the Dems punk out again by playing politics (e.g. demanding the tax cuts be extended "only for those earning $250k and under") then we are in deep shit. The CBO then projects $5 trillion additional be added to the deficit to make a total of $8.5 trillion by 2021. Of course, honing in on the fine details not all the $5 trillion would arise from extending all the Bush tax cuts - it would more be like $4 trillion. The other $1 in deficits trillion would come from:

a) not stopping the payroll tax cuts ($115 billion each year, for a total of $230b over two years)

b) Allowing "doc fixes" each year for Medicare, so providers aren't dinged by payout cuts, leading them to dump or deny Medicare patients ($200b)

c) Not getting out of Iraq and Afghanistan by 2014.

The worst travesty of all would be that none of the painful forthcoming $1.3 trillion in spending cuts (due by end of Nov.) will lead to a 'savings' if the Bush tax cuts are re-animated again in December. Doubling down, the higher deficits would bring total public debt to 82% of GDP by 2021 up from 23.8% this year, according to The Wall Street Journal (p.A4)

Most interesting to me, was the same Journal piece noting that revenues were down to historic lows of 15.3% of GDP this year, compared to 18% of GDP historically. Clearly, this shows the need for higher revenues in taxes (at the very least repealing all the Bush tax cuts). Yet oddly, in its editorial ('What Austerity?") the Journal's brain trust makes the claim that not extending the Bush tax cuts would have a deleterious effect on jobs!

And yet the historic evidence shows this to be palpable bullshit. So, the Journal editors can say "Beam us up, Scotty!" all they want (ibid.), but THEY are the ones who need beaming up! I mean, they already conceded (even in the editorial) that revenues are at historic lows! Well, then get rid of the Bush tax cuts, which I for one do not regard as a real tax hike but rather returning to tax normalcy.

It would bring us back to the marginal rates of 39.5% in the Clinton era, during which 20 million decent jobs were created, and more importantly, people feltwealthier. (And this wealth effect was a major reason Clinton's impeachment proceedings over the Lewinsky indiscretion didn't get very far.)

Further, as economists James Medoff and Andrew Harless observed in their excellent book, The Indebted Society, 1995, p. 84, 'Let Them Eat Cake',

"high tax rates are associated with higher productivity growth"

There is a consistent and strong relationship. By contrast, for the years when Arthur Laffer's supply side dogma held, productivity retreated by more than 30% and debt exploded- exactly the opposite of what we've been sold. The classic example was the Reagan era for which Medoff and Harless note (p. 23):

"For the health of the economy, Reagan's policies turned out to be just about the worst thing that could have happened: investment did not increase, growth continued to stagnate, and the federal deficit ballooned to new dimensions."

Meanwhile, a more recent Financial Times Analysis of the Bush tax cuts (9/15/10, p. 24) passed in 2001 and 2003, showed they engendered "the weakest decade in U.S. postwar history for real, non-residential capital investment".

The FT analysis also observed that “during each decade from the 1950s to the 1990s, growth in real gross non-residential investment averaged between 3.5 percent and 7.4 percent a decade. During the 2000s it averaged a mere 1%”

This is evidence enough that the Democrats have to stop playing politics with these god damned tax cuts! It isn't good enough to simply pout and whine (as one D-congress critter recently, in an MSNBC interview): "We can't figure out a way to get ahead of the no tax narrative!

Well, too fucking bad! Figure out a way! What are you, imbeciles? Do you need brain transplants?

Start by leveling with your constituents that they can have either tax cuts delivering maybe $400 a year at most now, or their Social Security and Medicare later! BUT ..if they opt for the tax cuts now, they can't depend on getting their benefits later! They can't fucking have their cake and eat it!!!

Got it?

This is not brain science, or rocket science. We're not asking you buttbrains to delineate a trajectory to Mars for a 9-month trip and a payload weight of 20,000 kg. All we're asking is that you craft an efficient and convincing comeback to the Reptiles 'no tax' bullshit and STOP playing into their hands. This you did - whether you realized it or not, when you conceded to allowing "some" tax cuts to go through but not others. You are then defeated! Or, when you blather for a payroll tax cut or holiday when THAT is what helps pay FOR Medicare and Social Security! (Besides which, the evidence so far shows no signficant economic benefit from the payroll tax cut of 2% (WSJ, p. A4, op. cit.).

When the Dems wake up they might be worth more in the way of support. Until then I have to regard them as clueless, incoherent losers - politically deaf and dumb- and who will continue to be beaten like orphaned whelps by the Repups.

More Writing on the Wall...

The Wall Street Journal article ('Consumer Pullback slows Recovery'. p. A4) today, said it all: a preview of what we are headed for in a low aggregate demand environment with massive social spending cuts. Bottom line: people still lack jobs, more people are halting searches altogether, and it will get much worse as the remaining government spending props are pulled out from under them - including extensions of unemployment benefits.

In such parlous, impecunious straits, NO, people won't spend! They will cut back on "everything from restaurants to tax preparation services to school supplies"(ibid.). As this consumer retrenchment goes on, it will be reinforced by government spending retrenchment leading to massive economic dislocation and raging unemployment.

So far, the GAO anticipates $270b lost from GDP or in the vicinity of 1.5% and that's assuming we do get more defense cuts than social spending cuts. They also forecast as many as 1.8 million jobs lost by next summer. As readers will see from the attached graphic (extreme left) this means that GDP will be in negative territory and we'll be in a new recession, if - as I project- it continues for four or more quarters (since the cuts will only increase).

Next, look at consumer spending and its dip for last quarter. This reflects consumers (responsible for 70% of GDP) now increasing their saving rate to 5.4%. This is almost within the range of Japanese citizens throughout the 90s when that nation experienced prolonged deflation and the "lost decade" - in terms of any growth. Of course, that loss of growth, GDP means that the deficit will increase despite this cockamamey debt fiasco plan. In other words, what these idiots who voted for it achieved is comparable to tossing gasoline on a fire, except the dems used unleaded while the reeps used leaded!

Finally, compare personal income vs. 'wages and salaries paid' and note the two trends and especially how wages and salaries have remained essentially flat from the beginning of 2010. This also reflects the drop in consumer spending since as people - workers realized they weren't gaining much more in income, they had no choice but to pare back on spending.

The personal income graph itself is exclusive of "government benefits" which - if included- might more parallel the trend of wages and salaries. However, if school lunches and nutrition programs are cut along with unemployment benefits extensions terminated (as with the immediate "discretionary" cuts) and Medicare providers across the board pay cut in November (likely via the automatic triggered cuts, or by weak-kneed pussified Dems on a weak super committee) then the bottom drops out. You wll likely see the personal income aspect dive below the (-10%) line.

I project by this time next January - after massive provider pay cuts to Medicare - and people are made to pay much more for services, or dropped, we will see consumer saving increase proportionately to at least 8-9%. A cut in provider pay, remember, means that either the costs will be passed on to Medicare beneficiaries, or that there'll be no incentives to take on new ones. Thus, millions of boomers now turning 65 will find they're holding an empty promise or benefit. This is what the rat bastards in DC have delivered to us.

Meanwhile, as consumers pull in their belts, businesses will have to as well. You can't have much of a business if you can't sell to anyone! THAT is the core problem of dropping aggregate demand, which trap I warned more than 30 blogs ago Mr. Obama would fall into if he didn't wise up to the Reeps' plan. (This meant not allowing himself and the nation to be taken hostage, by invoking the 14th amendment. It would have taken titanium balls for sure, but other presidents have stood up and done it when push came to shove, as JFK did in the Cuban Missile crisis.)

Again: that plan is to make the fiscal landscape in the nation so abysmal by next summer that Reeps will be able to hang it all on Obama. Worse, if the guy gives in again and passes all the Bush tax cuts or even the middle class ones. TO allay the worst, we NEED ALL that revenue from those tax cuts! That means ALL further extensions must cease. Let them all finally die!

Obama can't have it both ways: he can't on the one hand carp and stomp his feet for the Reeps to deliver revenue and a "balanced approach" while he keeps playing into their hands by extending the Bush tax cuts for the Middle class! As a Financial Times report observed, from the month of January, 2009, Obama's high minded plans can't work unless he also brings in revenue and that meant repeal of ALL Bush tax cuts. The FT noted it was disingenous to focus only on extending the middle class cuts, since that represented the bulk of revenues! ($2.9 trillion vs. $0.8 trillion).

Obama and his gurus - like the allegedly smart Mr. Plouffe- need to craft a narrative in support of higher revenues starting with repeal of ALL Bush tax cuts. If they can't do that, they're dummies. If they won't do that they're politically cynical manipulators out only for political gain.

If those tax cuts aren't finally retired, we'll all face even more monstrous cuts in the coming years and the attendant pain - all of which could have been avoided if our politicos just had enough balls, courage and principle to do the right thing, as opposed to the politically expedient thing.

Can We Get This Donkey a Balls and Spine Transplant?

Columnist Eugene Robinson of The Washington Post put it best in his column this morning: this debt deal was a major defeat for all progressives. But, he added, the next round is soon upon us (next month) and if the Dem side stands tough and is prepared to fight they might actually prevail, as opposed to caving again!

Don't hold your breath!

Somehow, "fight" doesn't appear to be any more in the Democratic Party lexicon than in their DNA. They appear to be congenitally predisposed to pusillanimous surrender, appeasement, Stockholm syndrome and persistently snatching defeat from the jaws of victory.

Even now, Wussie Dem Senate "leader" Harry Reid is mouthing platitudes to the press that he "really wants" to have on the Dem side of the super congress people who are "flexible" and "willing to consider entitlement cuts". (Though he did say that the repukes' refusal to include revenues makes the last difficult for him. Oh pity poor widdo Harry!)

For people who maybe have been living in caves, the "super congress" or super "committee" is the unaccountable group of 12 congress critters: 6 from each side, who will determine the next round of cuts (some $1.8 trillion) before Thanksgiving. If they can't come to any agreement, then automatic cuts will be effected to defense and Medicare. Though the Re-Pugs, as is their wont, managed to craft the "defense" cuts to their side to be one third inclusive of: foreign aid, Homeland Security and other ancillary props not really part of defense proper.)

What Harry is dithering about then, is appointing people to HIS side who are "flexible".

Well, sorry Harry, but you are already negotiating a prescription for FAILURE!

YOU really need to read Sun Tzu's The Art of War, to the effect that a "battle is generally won before it begins". What he meant is that before the opposing forces even face off, all the preparations that majorly assure victory for one side and defeat for the other, have essentially been made. In the latter case, they are almost always deficient compared to the preparations of the winners!


The Reeps and Mitch McConnell have made it abundantly clear that they intend to "stick with the program". Their hostage taking terrorism worked so well last time they will do it again next month, and hence ALL of their side will be strong, Teepee-oriented spending cutters. NO one for raising revenues!

This means that to even preserve a semblance of balance, Reid must appoint Dem hard liners on his side, else we will be faced with perpetual wuss (or blue dog, junkyard mutt) Dems aligning with Reeps on every vote to target only social spending and never defense. This despite defense now is the most bloated budget there is, sucking up 58 cents of every federal dollar spent. The U.S. now spends more on defense than all the other nations of the planet combined! What, are we going to start invading them all?

Thus, Reid doesn't have the freaking luxury of "flexibility", and if he thinks he does, he's not only the worst wussie to lead the Senate (worse than Tom Daschle, another appeaser), but a dumbass wuss besides. The reason is simple: the ONLY leverage the forlorn donkeys are left with (since they're so inept at bargaining) is defense cuts. If that leverage is ceded, then everything is lost and the Reeps win 99% of what they want again! This we cannot tolerate. Indeed, we won't. All hell will break loose if Reid appoints anyone to that committee of 6 who's not a diehard, hell bent progressive!

In that sense, let me show Harry Reid who exactly needs to be on his committee, from the House and Senate:

House Dems (3):

1) Rep. Emanuel Cleaver (Missouri)

2) Rep. Dennis Kucinich (Ohio)

3) Rep. Diana DeGette(Colorado)


Senate Dems (3):

1) Sen. Bernie Sanders (Vermont)

2) Sen. Barbara Boxer (California)

3) Sen. Chuck Schumer (New York)


There is some latitude in the choices, provided those of similar political tilt and temperament replace those listed. (For example, Sen. Diane Feinstein can replace Sen. Boxer, if need be).

But we don't want to see Warner from Virginia, Tester from Montana, Liebermann from Connecticut or Max Baucus!

Those are deal breakers, Harry!

As for the Dems' and their contribution mongering, begging for money donations, they can go suck salt or pound sand until I see some evidence of balls and spine. I will NOT give money to appeasing wussies.

Maybe after you losers win the next round, in Sept., with revenue hikes and especially massive defense cuts, we'll see about further campaign contributions!

Time to Begin Organizing Mass Protests for September

Okay, the politicos let us down with their delivery of a raw Satan Sandwich, and most of the corporate elites believe they have us over a barrel. But, as Keith Olbermann put it last night, "Even if our leaders don't know the difference between right and wrong, WE still do! We the People! And we will show them! To that end, we need to get mad, get outraged and ....get even! That is, by organizing mass public protests by September to get this unelected, constitutionally unaccountable "super congress" to back off ANY social spending cuts! (And in addition, to make whoever instigated any "automatic triggers" to that effect to back the fuck off!)

Here are the assorted points of outrage every American needs to know:

1)The proposed cuts would reduce discretionary public spending as a share of GDP to what it was in the 1950s. This is before the government had a major role in transportation, housing, education, safety, health, medical research or environmental protection. Also to the level it was before the NIH or the CDC, before HUD, before the EPA, before OSHA, before the Department of Education.

Logically, this means the retrenchment or degradation of ALL the above. THIS is the recipe for a third world nation.

To that end, we can't stand by as we allow corrupt assholes to dismantle all the advances so many have fought so hard for, with their blood, sweat and tears. We cannot and will not tolerate living in a nation that allows foods to be prepared with no safety regs, allowing worms, and parasites as well as salmonella to breed on everything from eggs to onions to tomatoes. Nor will we sit by and allow the corporate polluters to fill our skies and water with 87 cancer-causing toxins that will lead to a ninety percent increase in cancers even as Medicaid and Medicare funding is cut. Nor will we lie comatose as school meals and nutrition programs are eviscerated for school kids, or heating subsidies taken from elderly.

2) By slowly choking off public services, public investment and regulation, the deal sets the economy on a path to permanent strangulation. Every dollar cut from the budget, now or later, is a dollar less of private income. Already, the size of this dastardly Satanic deal totally neutralizes whatever benefit redounded from Obama's stimulus and puts the nation in negative stimulus territory - by a factor 4- toward a new recession or depression.

3) By cutting at Medicare providers, the miscreants that devised this "Satan sandwich" know full well that they aren't merely cutting this "entitlement" but eliminating it! They know that every round of provider pay cuts (when there ought to be a permanent Medicare doc fix) ensures fewer Americans will be accepted by anyone including family practice physicians. This means they will be taken back to the brutal days before Medicare!

The Plan:

I) Begin to correlate and organize a unified protest strategy as was done when Bush attempted to privatize Social Security in 2005. This means having a united front with hundreds of thousands on the march: seniors (from the NCPSSM, AARP, Senior League etc.) as well as other younger protestors from Moveon.org, Democratic socialists, Young Progressives, etc.

II) Note WHO is appointed to this "super committee" or "super congress", and particularly any appointee (in the Dem contingent) who is certain to tip the balance to the pro-defense spending side. That means, in particular, excluding an asshole like Joe Liebermann (a genuine defense hawk) - whose inclusion (say by a pussified Harry Reid) will ensure incessant 7-5 votes in favor of defense spending over Medicare.

If Liebermann, a fake democrat anyway, is appointed to the D-side of six, mount major protests in DC and his CT district. Do them every day, increasing in crescendo each day.

III) Target all the other members in their own districts. If Tea Baggers, send thousands of seniors to protest there and mainly in the State capitols. Also, have twin protests staged for DC and organize massive letter writing and email campaigns inundating each of them!

IV) Leave the most massive protests for the streets of DC and as many other cities as possible if the gang of 12 can't reach a deal and the "automatic cuts" are triggered. Let the high and mighty of this land know they will not get away with any automatic cuts to Medicare or other social programs. We are going to draw the ultimate line in the sand even if they won't!

All organizations with any skin on the table need to begin getting organized now because the next "blood in the streets" deadline will be upon us by mid-September. Yes, we were shocked by this deal, but now it's time to get cracking. No cuts, no UNLEGISLATED, unconstitutional cuts to social programs can be allowed on our watch!

Meanwhile, I ask readers to ponder these words from Richard Wolffe of 'Democracy Now' (July 29):

"We’re running a deficit because the people who run this society would like us to deal with our economic problems, not by taxing those who have it, the way we used to, but instead by endlessly borrowing from them. And now the ultimate irony, we’ve borrowed so much as a nation from the rich and the corporations, they now are not so sure they want to continue to lend to us, because we’re so deeply in debt. And they want us instead to go stick it to poor people and sick people instead. It’s an extraordinary moment in our history as a nation."

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.

NO BOGUS DEFICIT DEALS!!!!

The latest, from DailyKos:

By all accounts, it looks like a deal is about to be announced in which the debt ceiling is hiked in exchange for the promise of major spending cuts, including to entitlements, totaling at least $2.4 trillion.

Anything can happen, but it apppears the GOP is on the verge of pulling off a political victory that may be unprecedented in American history. Republicans may succeed in using the threat of a potential outcome that they themselves acknowledged would lead to national catastrophe as leverage to extract enormous concessions from Democrats, without giving up anything of any significance in return.

Not only that, but Republicans — in perhaps the most remarkable example of political up-is-downism in recent memory — cast their willingness to dangle the threat of national crisis as a brave and heroic effort they’d undertaken on behalf of the national interest. Only the threat of national crisis could force the immediate spending cuts supposedly necessary to prevent a far more epic crisis later.


Since last night I've had the ominous feeling that behind-the -doors meetings with Boehner and McConnell at the White House were nearing a "Neville Chamberlain" moment. I deduced this mainly from the shit-eating grins on the faces of the two Repukes which could barely be concealed. As I said in an aside to my wife: "I just hope Obama isn't planning to give away the farm to appease these guys!!"

Then, this morning the leaks began and none of them sounded good which is why the Net and especially Left Blogosphere has erupted like a supernova. Because what those like me smell is a grand betrayal.

MSNBC correspondent Luke Russert in one interlude mentioned trying to reach a point of "equal pain" divvied between both sides. But the plan on the table, for which some details have leaked, is ten times worse than Harry Reid's!

What "pain" might the Repukes endure?

"Some" defense cuts!

What pain might our side endure?

Possibly automatic cuts (up to $1.8 trillion) on Medicare!

Are you shitting me?? Defense cuts on their side for massive Medicare cuts on ours! That's no deal! That's not shared pain!

Meanwhile, Obama (now being called 'O'Bummer' on more and more left blogs) continues to bend over backwards to appease these miscreants to the point where you now actually wonder if he'll give in the whole 9 yards and allow a "balanced budget amendment" which would be the end of this nation. At one time, Obama said emphatically NO deal unless revenues are on the table, at least $400 billion in tax increases (he wouldn't even put the repeal of all the Bush tax cuts on the table).

Then, next, we heard he agreed with the Reid plan which offered NO revenue and $2.7 trillion in justy spending cuts, but at least no entitlement reforms.

Now, we hear that because of Repuke intransigence (and it is THEIR intransigence) he's prepared to cop to this cockamamey "automatic trigger" cum 12-man committee deal that pairs deep social safety net cuts vs. defense cuts for the repukes and again, no taxes!

This is an outrageous piece of bollocks and unworthy of any Dem president. You cannot give all your cards away and take all your D-poker cohorts' money and chips and give to the other side just to get them to keep playing! This is nuts!

Grow some balls, Mr. President! At least stick to your guns and demand the other side allow some revenue increases! You can't put ALL the onus for deficit repair on spending cuts! Apart from wrecking the economy (given it's poison in a demand poor environment) it will eliminate your plans for a 2nd term, by not only engendering a diminished no-growth, high unemployment environment but also pissing off your base!

Now, we need to get into some cartoon logic now which is being circulated by the WH gurus or some aides within. That is, no matter what odious, sellout deal is struck, the progressives will go along and stop bitching and also cease any efforts to force Obama into a primary competition next year.

The cartoon reasoning implicit in this hogwash is that progressives will be so terrified of the nutsos on the Right, say like getting one look at Michelle Bachmann or Sarah Palin and pondering them with the red box, they'll run to the polls to cast votes for Mr. O. Unfortunately, this is batshit crazy-think.

First, it shows these dipshit, pro-sellout aides aren't following the left blogs very carefully (especially the letters sections). One of the recurring themes in them is to just LET Bachmann or Palin and a Repug majority get in to "teach the Democrats how to fight for once".

The reasoning is that since Dems won't act like real Dems, since they take the base for granted given they have the Senate and the Executive, then mayhap being in the political wilderness for 4-6 years (and being forced to fight endlessly) will incite them to grow a spine. I don't say I necessarily see the benefit of this tack, but it is gaining momentum and gathering memetic inertia which will be difficult to stop.

Second, the pusillanimous tactics of the Dems, especially the White House, are beginning to feed the same lackadaisical attitudes embodied by the question: 'What's the point?', that created the massive abandonment of voting last November and drove the Repuke capture of the House. It seems to be accumulating pressure now, especially among the youngest voters, as well as many blacks and the elderly (who may just be put off by possible Medicare cuts on the table).

Do I think Obama will have to face a primary challenger next year? No, but it won't matter. If the base is de-energized because they've beheld their once proud and self-proclaimed fighter cave, it'll all be over but the pundit post -mortems.

Now, WH pseudo-experts may query why the Left and their cohort would "allow" this to happen? The answer inheres in what I call the "American Idol" voting paradigm. (Which I hear - from my wife, an avid fan- has often caused many worthy singers to be ditched in favor of lesser ones because the superior singers' specific fans just assumed everyone else would vote for them.

In the same manner, no single, de-energized pro-Dem person staying home will believe he or she could be uniquely responsible - say if Bachmann wins, or Palin- but will just assume too many more will go to the polls and vote anyway. After all, on many forums and blogs you still see often as many Obama apologists and defenders as critics. So the 'stay home' voter will simply assume those defenders will make up the slack of those like her who refuse to go out, not being motivated enough. Thus, one has at once the disqualification of any personal liability or responsibility for the bad outcome, matched with the passive-aggressive act of rejecting the standard bearer - by simply not showing up. ("Well, I didn't actually vote against him, I just expressed my discontent by not voting!")

But, as we know, that passive strategy can and does backfire, which is why it's so very dangerous and ALSO dangerous for WH über-strategists who believe the "base will be too terrified" not to stay in line. What they aren't processing is that each leftie is supposing his fellows will "remain in line" while he takes the election off as being uninspired!

If this occurs in states in which Dems have lost governorships and legislatures (like Wisconsin, Florida, North Carolina, Indiana) it means Obama could easily lose those states and end up a one-termer. Especially if he loses Colorado too.

The moral of the story? It would be better for Obama to take a chance and courageous dare by invoking the 14th amendment (sec. 4,5) and raise the damned debt ceiling unilaterally, than to accept a tawdry imitation of a deal which will entice his base to finally abandon him as an empty suit...and more talk than 'hope and change'.

If, on the other hand, the repugnant "deal" cited by Daily Kos (top) is made, then we must rely on the House and Senate Democrats to shoot it down by vote. If Obama refuses to save himself, they must do it for him!

THE WAR ON YOU! (Guest Article)

- By Michael Collins

http://www.smirkingchimp.com/thread/michael-collins/37617/the-war-on-you


Let the word go forth from Washington! The corporate rulers occupying our nation's capital have declared war on just about every citizen.

Have no doubt: those in the upper ranges of the top 1% of wealth in this country (aka The Money Party) want to kick you to the curb.

They want to reduce your social security and make you go broke paying for medical care.

They want to lower your wages and trash your retirement.

They ignore the clear facts that we've had negative job growth since 2000 and the situation is just getting worse.

They want to ship jobs, factories, and entire businesses overseas and give companies that do that a big fat tax credit for doing so.

They've been given so much for nothing for so long. Now, they're ready to take it all. It's their time!

The most recent assault is the ridiculous debate about raising the debt ceiling. There should be no debate. Failing to raise the ceiling right now means deliberate default on debts, refusing to pay bills the government can pay. It's called fraud.

The pressing need to fix the budget is a separate issue. Reduced spending and increased revenues should come through broad public involvement and open debate. It mandates that the rulers behave like adults.

But this crisis isn't about putting together a real budget. It's about creating a budget that punishes you, your family, and friends. It's about taking your attention away from your vital interests to maximize income and control by The Money Party.

Were the leaders on either side of the debate serious, the Bush era tax cuts would never have been restored. These cuts on the top 1% were temporary. Guess what? Congress lied. When the temporary tax breaks ran out a few months ago, they were revived and renewed just when we had the greatest need for revenues.

The Money Party won't give up its wars either. Iraq and Afghanistan have added $4 trillion to the national deficit of $14 trillion. Why not stop the wars? How hard is that to figure out?

Getting rid of Bush tax cuts for the super-rich, ending the wars, and moving out of the recession/depression would be huge steps toward balancing the budget. But that won't happen with this Congress and this president. Why? That would cost the financial elite money for taxes and lost income for all those weapons they sell to support the wars.

The Attack on You Began in Earnest Just Years Ago

Congress repealed Depression era banking regulation that kept your banks from risky investments in 1999.

Congress enacted legislation in 2000 that allowed extremely risky investments in real estate and other derivatives, illegal for nearly a century.

In 2001, the big banks and Wall Street celebrated its newly purchased freedoms with a decade-long binge of fraud and risky investments. Like a greedy con artist, they took everything they could from people here and around the world until there was no more to take. We have now hit the wall thanks to them.

The outrageous expenses of wars based on lies caught up with us and shoved the deficit to new heights. The tax cuts for the top 1% took away revenues needed to balance the budget.

The money they steal from the Social Security surplus is no longer enough. They want to keep the tax in place for us and take an even bigger rake-off.

This crisis is manufactured by the ongoing greed of The Money Party. It is funded by the US Treasury.

You pay for it, all of it.

Let's Drop the Pretense Right Now!

One thing I've always abhorred is pretense. The fraudulent and dishonest posturing over some claimed position, but which is really a cover for a deeper, unspoken agenda. Such is the case with all this debt ceiling and "deficit reduction" brouhaha which is merely a conveniently ploy to conceal the real agenda: destroying Social Security and Medicare once and for all. The Tea Party brigands and their ilk know they can't eliminate these programs directly, so are doing it through the "back door" as it were, using a "starve the beast" modus operandi based on draconian spending cuts in combination with preservation of Bush tax cuts that all ought to have expired last December. (Even Alan Greenspan agrees that those cuts need to be retired, a move that would save us $4 trillion over ten years essentially resolving this impasse on deficits with minimal pain)

But this is not what the Tea Baggers and extremist Republicans are about. At the behest of benefactors like Peter G. Peterson, they see a golden opportunity to employ the mania and hysteria for "deficit reduction" as a means to gut Social security and Medicare.

They aren't honest enough to explain or admit the real long term deficit problem hasn't been caused by "wasteful" social spending but by conservatives' own 30-year project of starving federal, state and local governments of revenue via tax cuts for the affluent and for corporations, coupled with insane, unpaid for military spending which for the past ten years has included "off budget" supplementals averaging $150 billion each per year. And how were these paid for? By raiding Social Security monies!

As a wake up call here, in 2010 the total raided Social Security monies amounted to $87 billion out of a total of nearly $140 billion. The grand total raided from S.S. from 2000 to 2010 exceeds $1.92 trillion. THAT is where the Social Security money has gone- to help support off budget accounting gimmicks and disguise the size of the real deficit.

But see, now that 44 million Boomers are ready to collect Social Security - with some 10,000 added each day (and the likelihood its finances will now be a losing wicket), the disgusting pols want to kill it or reduce it so dramatically as to barely allow the elderly to choose between meds and food. This is their golden moment, using "deficit reduction" as the pretext to go after "entitlements".

The problem for these miscreants is that we the aware citizens, can see right through their subterfuge.

We see how the hysteria is being whipped up, and the nation held hostage by a few radical fiscal extremists, to wring every last concession they can from a hobbled Dem party, which can never seem to get ahead of the curve. We can see how their true objective has nothing to do with deficits, but rather adherence to ideological purity in killing social insurance programs.

If these nuts really were invested in solving the DEFICIT problem they could so so easily, just by passively allowing all the Bush tax cuts to expire next year. But that's not what they want! They desire holding the nation hostage to force social program changes and hoping the weak-kneed, pussified Dems will cooperate, which they are.

On another level, beyond the social insurance programs, there is the specter of years of massive spending retrenchment including to food stamps, unemployment benefits, child school nutrition and health care for indigent mothers...as well as utility subsidies for poor seniors. All stand to be on the chopping block if either one of the current plans (Reid's or Boehner's) somehow passes, with no revenues at all.

This has led a group of influential Christians (the only apparent 'real Christians' I can see) to rally in Washington and implore congress to shield the poor from spending cuts (see: 'Coalition of Christians Urges Budget Cutters to Spare the Poor', The Denver Post, July 27, p. 9A).

One of these groups, Sojourners, a liberal evangelical group, has taken out ads in Las Vegas papers which read in part:

The Book of Proverbs teaches that where there is no leadership, a nation falls, and the poor are shunned while the rich have many friends. Sadly, Congress has failed to heed these biblical warnings."

Another ad headlines itself with:

What Would Jesus Cut?

The answer is primarily wasteful military spending, including on two occupations which have brought little constructive benefit to the country, while seeing mammoth waste of taxpayer dollars, whether to private defense contractors (like Bechtel, Halliburton etc.) in Iraq or to Afghan warlords and the Taliban via corrupt banking practices, in Afghanistan. Meanwhile, our own country's infrastrucure is collapsing from neglect and disrepair - even as R-TP-nincompoops on the Hill argue further on what cuts to make (including leaving more than 70,000 jobless as a result of no agreement to an FAA funding!)

Fifty years ago, corporations contributed to 30% of federal tax revenues while they only contribute 4% of them today. For example, right now as I write this, PhRma companies are permitted to leave all foreign, out of country profits off the table in terms of tax scrutiny. Other corporations, via defective laws passed in the 1990s, are allowed to just hang shingles in some little dump in the Caymans or elsewhere, and escape tax liability at home. There was some talk during Obama's 2008 campaign of addressing this, but so far I haven't seen a thing and it continues.

And yet, disreputable Tea Baggers want to take food out of poor seniors' mouths! Just so we are clear on this, let me also provide a quote from the article: 'Stealing From the Poor, Making Rich Richer':

"Social Security isn't broke, but millions of retirees who depend on it are, and many more would be broke without it. The average retired worker's Social Security benefit is just $922 a month--about $11,000 a year. Disabled workers average just $862.

One out of three seniors depends on Social Security for 90 to 100 percent of their income. Two out of three seniors depend on it for more than half their income. Even with Social Security, many seniors must choose between eating and heating, paying the mortgage or paying for medicine."


The preceding article appeared about two years before former Fed Chairman Allan Greenspan's term expired. It had to do with Greenspan's (then) recommendation to congress that cuts in Social Security be used to finance the ongoing Bush tax cuts. In other words, help the rich continue to invest in hedge funds and buy their furs, yachts, blood diamonds and Bentleys off the backs of poor seniors.

That episode over, with seniors able to breathe a tad easier (since the Bush S.S. privatization plan was scotched) we now have the Tea Baggers and conservatives humping and pumping to demand social spending cuts, including to Medicare, Medicaid and Social Security while they tout a bogus "deficit reduction" front, and hold the nation to ransom over a debt ceiling increase.

As for the "solutions" thus far offered (Harry Reid's or John Boehner's) don't make me laugh! What with the news that the GDP is now at the lowest it's been -for the 2nd quarter - in the past two years, ANY prescription relying only on massive spending cuts is a recipe for financial disaster! Don't these IDIOTS grasp that in a low aggregate demand environment you need to spend, not CUT! Are they totally mad? Do they want a second depression? If NO ONE spends, not business, not the consumer, not government - WHO do they think is going to hold up the GDP??? As one blogger, RJ Eskow, recently put it:

"As the economy burns to the ground, nobody's calling the Fire Department. Both parties want to throw gasoline on the fire, and their only disagreement is whether to use regular gas or unleaded."

I couldn't have used a better analogy!


We hope that by the time this fiasco further unfolds with no resolution in sight by Monday, Obama will finally act like a man and leader! This as opposed to an overly cautious, wimpy, former state Senator with a fetish for "splitting differences"! As more and more reasonable voices are adding to the crescendo, if he is a responsible leader - with his oath of office at heart- he MUST invoke Sec. 4 of the 14th amendment to pass the debt ceiling increase on his own! He can't allow a first time ever (hence historic, with his name on it) national default, or even a downgrade! The other side has disclosed it's playing with 52 cards short of a full deck, so he now has to act as the true Grown-up. That means going beyond the conciliator and compromiser -in -Chief, to the Decider, and Agent of Action!

He doesn't need any "approval" from wimpy, conflict-shy aides, or parsing any fine legal arguments (from Lawrence Tribe, or any one else as to the validity of this move), or acting like a Harvard law professor or Spock. He just needs to act like the determined Leader and PRESIDENT we expected him to be, as opposed to a hapless bystander while maniacs seek to tear up what's left of this nation! Making that one bold move will show in no uncertain terms that he's a decisive leader on a par with JFK, and truly ready for a 2nd term. It will also finally staunch this hideous conflation of social spending cuts to deficit reduction. An attachment that the Dems and their leaders never should have allowed to metastasize to this degree anyway!

Is Obama Serious?

The news in this morning's paper was not awe-inspiring or encouraging for those of us who'd hoped President Obama would stiffen his spine, or at least find a semblance of one in dealing with the bad faith repukes over the debt ceiling. We now see he's preparing a "sweetening" deal to give up at least $2 trillion in spending cuts, including "major changes to Social Security and Medicare cuts" - this despite the fact we know damned well we can't "cut" our way out of this deficit mess. TAXES MUST BE RAISED in one to one proportion to any spending cuts! And that means not merely closing loopholes!

As I noted in a previous blog:

http://brane-space.blogspot.com/2011/06/how-gop-could-destroy-economy-by.html


this is a god-awful, terrible idea! The reason is simple economics! The economy is fragile now and in a state of spinning its wheels because too many supply side fixes have been provided, and not nearly enough on the DEMAND side! The latter implies MORE spending, not less, and that means not removing the basis for middle and working class people to do so! When you advertise cuts, any kind of spending cuts, you are threatening the demand side with instability, because people will then pull back personal spending in proportion. Since personal consumption contributes 60% to the GDP this is a very dangerous and stupid action, but one which the disgusting vile repukes are more than happy to desire - since they know the devastated economy by next year will hurl Obama's re-election chances into the proverbial crapper.

Does he see any of this? One wonders! Especially after he literally gave away the country store and then some with his allowing the extension of ALL the Bush tax cuts to the tune of nearly $900b last December! If he'd just had the balls then to say 'NO!' - to all the extensions- we'd have been nearly $1 trillion less in the hole. If he'd even made raising the debt ceiling THEN part of the package (as Nicholas Kristof suggested to him yesterday in his Twitter conference) we wouldn't have to be talking about major changes to the social insurance programs (NOT "entitlements"!) now!

In that earlier blog I quoted from the essay, Our Greek Tragedy, appearing in TIME (July 4, p.. 26) by Rana Forhoohar:

"There's still a belief that the government can cut spending wholesale and expect consumers to pick up the slack. This is magical thinking!"

Which is exactly the core issue. Obama appears to have taken the Repukes' kool aid that the deficit problem can be saved by massive spending cuts. This is bald ignorance and monstrous codswallop! As I also noted, the problem is that aggregate demand is low (based on a tabulated rate of 9% unemployment and more like 16% real unemployment). Aggregate demand is composed of two parts: 1) demand generated by consumers for goods and services, and 2) the demand for investment goods.

In the case of (1), apart from the affluent who can afford to buy Marilyn Monroe dresses for $6 million and 100k blood diamonds for $20m, consumer demand remains low, falling almost quarterly! This is because the wages that support it are too low! The average worker's wages have remained static or gone down since the recession theoretically ended. Thus, consumers are buying less, and resorting to more saving.

16 million remain unemployed and more than 38 million are underemployed - so obviously they can't spend more, and as time goes on will plausibly spend less. Then there are the millions of seniors hurt by the lack of COLAs (cost of living allowances from Social Security, the past two years) so effectively they are already suffering from major cuts - since part of their Social Security payments are taken to pay for Medicare premiums! And Obama wants to cut more, by altering the COLA basis from inflation protected to consumer price index (CPI)? You have to be kidding me! This cuts seniors' income by 10% or more each year, if and when COLAs resume! They can afford neither more extended lack of COLAs, OR specious ones or higher Medicare premiums! If that happens they will pull back spending entirely adding to rapidly dropping existing demand on the side of (1). C'mon, Obama, wake up!

In other words, the demand side of the landscape looks so poorly for consumers they are hunkering down...likely expecting another shoe to drop. That "shoe" - when they pay attention to the news, sounds like a severe cut in possible social services, thanks to the Republicans' rhetoric. We expected Obama to stand up to these shit wipes and not give in to them again, as he did last December on the Bush tax cuts!

Meanwhile, investor demand for investment goods is largely hinging on their optimism or not. But when they see consumer confidence always stagnant or dropping, because of LOW demand, they have no incentive to start new businesses or invest in any! If investors are pessimistic (as many are now...because of the volatility of stocks) then they will withhold their investments- meaning the total aggregate demand drops!

Here's a numerical example of how this all works. Assume we have "full employment" (e.g. 4%) and it generates a total of $1,000 worth goods and services in a day. This is also the sum total of the profits and incomes the employees and employers share. Let households comprised of workers and employers use a large fraction (e.g. 90% or $900) of their income to purchase goods and services for consumption. The remaining 10% or $100 is saved but eventually purchased by investors as investment goods.

Now, say an agent or effect appears (e.g. states cutting pensions and benefits) which causes consumers to pull back on their spending such that the $1,000 becomes $900. Then, with an income of only $900, the consumption is also reduced, say to only $800. $200 in "savings" accrues but inveestors are so pessimistic and traumatized by the consumption decline that they only purchase $50 of the $200. In this case, the aggregate demand has shrunk 15% from $1000 ($900 consumption + $100 investment) to $850 ($800 consumption + $50 investment). The reduced investment- by a factor 2 ($100 to $50)- means that employment will drop, plausibly by the same factor. Therefore unemployment will reach: 4% x 2 = 8% for a 15% drop in aggregate demand. Similarly, if the consumptive demand is reduced to $500, and purchases are only at $450 - representing a 50% drop from what they were at 4% unemployment, with investment (out of $500 available) still at $50, then we can see that the jobs loss will increase by a factor 10 ($500/$50) rendering unemployment at: 10 x 4% = 40%. (I am assuming government spending cuts also cause nearly half the loss in consumer demand)

In this way, the stage is setting up for a major financial disaster, and a new recession or even depression. Granted, Obama wants to avoid a default on the government debt, but is it worth tossing the whole U.S. economy into the crapper to do it? (As a result of the R's extortion.) How about standing up to these assholes like Clinton did in 1995?

If as I showed, Obama really does implement a $2 trillion cut in spending, this a projected net loss of aggregate demand in the neighborhood of 40-50% by next summer! This translates into an unemployment level of more than 18% this time next year (30% real unemployment) and a new recession bordering on depression. Think the repukes will be happy? Hell, they'll be having wet dreams at the prospect of such an abomination (which they deliberately created) within months of the general election!

Are the Dems so stupid, so bereft of their own arguments and narratives that they're compelled to go along with this insanity? Are they remotely aware of the electoral and other consequences?

It doesn't seem so, nor would I have ever believed (before this) that the Dems would have allowed themselves to be so held to extortion by the Repigs that they'd sell FDR's and LBJ's major social programs down the river to appease bond pirates and political terrorists.

The bottom line here? Asking progressive citizens to agree to cuts in social safety nets in exchange for Repukes agreeing not to extend Bush tax cuts next year is a FOOL'S Errand! It's a cocklemamey "heads, I win- tails you lose" gambit that no sane or rational person would agree to. My point? If you're going to fucking demand $2 trillion in actual cuts, we need to see $2 TRILLION INCREASES in TAXES in addition to the purely PASSIVE act of not extending the Bush tax cuts (which ought to have sunseted THIS year!) Wake the fuck up, Demo-dweebs or you LOSE next year!

I am still hoping most of Obama's rhetoric is just that, and not intended to be taken seriously. If it is, and he makes the cuts to social programs being threatened or intimated, I am afraid his re-election chances will be about what Jimmy Carter's were in November of 1980.

Footnote: As of this latest edit (7:07 EDT), at least House Leader Nancy Pelosi has demonstrated some cojones, and asserted that her House caucus will have NO part in parlaying more Bush tax cuts on the backs of the elderly. She told Obama at the meeting today that Social Security will NOT be used as a "piggy bank" to finance tax cuts for the wealthiest.

Good for you, Nancy! Now let's hope that bold voice of the People, Harry Reid, also gets it - so Obama's plans lie dead in the water...where they belong with the Repuke-licans.