Democrats Republicans cave on payroll tax cut extension

By Michael J.W. Stickings

Wait... what? The Republicans caved? Not the Democrats?

Then again, this one would have been hard even for the Dems to lose. Even after caving on the spending bill to keep the government running, they didn't back down when House Republicans demanded unacceptable offsets for a one-year extension of the payroll tax cut, Senate Republicans were already on board for a two-month extension, the extremists in the House were being challenged by members of their own party, like John McCain and Scott Brown, and, in the end, House Republicans faced a simple choice: support a highly popular tax cut or oppose it. Even for this radical bunch of partisan ideologues, the demands of immediate political calculation triumphed.

And it's not just the payroll tax cut, it's unemployment insurance and reimbursement rates for Medicare physicians. Sure, it's just short-term, there will be a go-nowhere conference committee to try to work out the details of a full-year extension, and there will be many more opportunities to cave, but, for the Dems: win, win, win.

What a nice Christmas present. And what a refreshing change.

Oh... so long, John Boehner. You're the biggest loser here.

Smartest Republican of the Day: Scott Brown

By Michael J.W. Stickings

Politico:

Fighting for reelection in deep-blue Massachusetts, GOP Sen. Scott Brown ripped into House Republicans on Tuesday after Speaker John Boehner vowed that his caucus would reject the short-term payroll tax cut extension that nearly 90 percent of senators voted for over the weekend.

"The House Republicans' plan to scuttle the deal to help middle-class families is irresponsible and wrong," Brown said in a statement.

Well, he's right. And I'm sure political self-preservation has nothing to do with it.

A vulnerable freshman, Brown has been running to his left as he prepares for a tough challenge next year from Elizabeth Warren, the presumptive Democratic nominee. While Brown lauded House GOP efforts to secure a full-year extension of the payroll tax cut, he said the two-month Senate compromise would avoid tax hikes for millions of Americans at year's end, when the tax cut expires.


"The refusal to compromise now threatens to increase taxes on hard-working Americans and stop unemployment benefits for those out of work," Brown said. "During this time of divided government, both parties need to be reasonable and come to the negotiating table in good faith. We cannot allow rigid partisan ideology and unwillingness to compromise stand in the way of working together for the good of the American people."

Hey, give him some (but not much) credit, he's smart enough to know what works in Massachusetts -- and throughout much of the rest of the country. Which is to say, he's smart enough to know that being a Republican is toxic, with so many of his fellow Republicans looking completely insane, particularly when the Democrats stand firm on a popular issue and back the GOP into a corner.

(But will the White House cave once again?)

Democrats capitulate to Republican demands, Congress averts government shutdown

By Michael J.W. Stickings

Last night, Congress reached a deal on a massive spending bill that will, among other things, keep the federal government running:

Retreating from their harsh partisan sniping, and perhaps fearing public rebuke, Congressional leaders said Thursday that they had agreed on a large-scale spending measure to keep the government running for the next nine months.

But an accord on extending a payroll tax holiday set to expire at the end of the month remained elusive, with Democrats weighing a possible short-term extension, setting the stage for another fight with Republicans over how to pay for it.  

And there's the problem, or at least the most glaring problem.

President Obama and (presumably) Democrats on Capitol Hill wanted to offset the extension of the payroll tax holiday, which would benefit 160 million workers, by imposing a surtax on income over $1 million, that is, on millionaires. Republicans love tax cuts but, plutocrats that they are, opposed any such tax increase on the wealthy. (Their priority is tax cuts for the wealthy, not tax cuts for everyone else.)

Instead of fighting for the tax cuts for 160 million people, though, Democrats capitulated, taking the surtax off the table and thereby giving up their main bargaining chip.

The spending bill will go through, but, needless to say, the payroll tax holiday battle will continue, with the GOP now holding the upper hand. Democrats are reportedly "considering a plan that would find savings in other ways, including fees on the federal housing finance agencies, and could seek to end certain deductions and other tax benefits for millionaires," but, with Democrats committed to the payroll tax holiday extension, it looks like Republicans will be able to get what they want out of this: not a surtax on millionaires and nothing else that would in any way increase the tax "burden" on millionaires but spending cuts of some kind.

How the hell did this happen? Over to you, Charles Pierce:

Oh, they have made a day of it. First, the pillars of Jell-O in the Senate roll over on the itty-bitty surtax they wanted to lay on the plutocrats to pay for a payroll tax cut for the rest of us. Then, the president announces that he's not going to veto after all the bill in which 400 years of Western jurisprudence is pretty much torn to ribbons and tossed to the wind, albeit slightly less deeply into the wind than the original monstrosity would have liked. And, finally, Ron Wyden of Oregon steps forward to give cover to zombie-eyed granny-starver Paul Ryan's latest attempt to "reform" Medicare in the same way that Arthur (Bomber) Harris "reformed" the building codes in Dresden. It's a Very Special Holiday Episode of the long-running hit comedy, Ah, Who Gives a Fk Anyway?

This is an outrage. This is borderline sociopathic. This is so gloriously suicidal that I keep waiting for an angel to come down from heaven to show David Plouffe and Harry Reid what Washington would be like if they'd never been born.

**********

It cannot be emphasized enough. Of the three issues under discussion, the polling data on two of them simply could not be clearer. The American people want taxes raised on the very wealthiest among us, and the American people do not want Paul Ryan's clammy hands anywhere near the Medicare program. Public opinion is (distressingly) ambivalent on the detainee provisions, but it's not overly popular with the people who have to implement it, and it has retired Marine generals throwing bricks at it, and, dammit, the president taught constitutional law, or so we are told repeatedly.

None of these "compromises" will solve a single one of the country's critical problems. None of these "compromises" will create a single job. All they will do is toss away almost every one of the major political advantages the Democratic party has going into the 2012 elections. My god, six months ago, Paul Ryan was a squawking albatross around his party's neck. (Remember how he said he'd "given up fear for Lent," and then proceeded to start charging people a fee to come to his town meetings, and setting the cops on constituents who showed up at his office while he was on vacation? Ah, thim was the days.) The "Ryan Plan" was well on its way to being an anchor. Now, thanks to the Democrats, and to a preposterously compliant elite political press, Ryan's rehabilitation is nearly complete. Nice work, fellas.

Here's a tip, gang: The American people are not angry at government because people yell at each other and nothing ever gets done. The American people are angry because people yell at each other and nothing the American people really want ever gets done. They want higher taxes on billionaires. They want Medicare kept out of the hands of the vandals. If they think about it a little, they even like their jurisprudence with a little habeas corpus sprinkled on top. Instead, they get endless platitudes, and the steady, futile placating of an insatiable political opposition.

Yes, well done. (And brilliantly put, Mr. Pierce.) Democrats willingly relinquish the advantage, to the extent they ever really had it, on winning issues (both in policy and electoral terms), and, while the government stays open, we end up with a convoluted appropriations bill that is heavily Republican.

Yeah, Merry fucking Christmas.

**********

I'm with my friend Libby on this: "I understand the need for pragmatic compromise. But this isn't compromise, it's the same devious cave-in to placate the plutocrats. It's not only spineless, it's stupid. I'm really sick of stupid."

Unfortunately, stupid is all we've got.

Republican economics: give money to rich people and everything will work out

By Richard K. Barry

Isn't it about time that every working man and woman in America realized that the Republican Party doesn't give a crap about you or your ability to have a job and support your family?

In a recent interview, CNBC host Jim Cramer made the mistake of assuming House Majority Leader Eric Cantor (R-Va) would support extending unemployment benefits "given the chaotic situation." Perhaps not all that surprisingly, Cantor replied:

Jim, the most important thing we can do for somebody who's unemployed is to see if we can get them a job. I mean, that's what needs to be the focus. For too long in Washington now we've been worried about pumping up the stimulus moneys and pumping up unemployment benefits and to a certain extent you have states for which you can get unemployment for almost two years and I think these people on unemployment benefits would rather have a job. So that's where our focus needs to be.

The interesting thing for me is that in the same sentence where Cantor says you can get unemployment insurance for almost two years in some states he also says people on unemployment benefits would "rather have a job." What he really means is that supposedly lazy Americans who want to collect government checks for up to two years need to be cut off so they will be forced to get a job.

What Republican bullshit. Working men and women are just too lazy, in Cantor-world, to get themselves off the government dole.

But not only is this view wrong and obnoxious, it's also bad economics. Republicans want to put more money into the hands of their rich friends through tax cuts, or at least not increasing taxes, which they argue will act to create jobs. They don't care that this just doesn't work and hasn't worked as a way to create jobs, they are ideologically wedded to it. They argue that all we need to do is give money to rich people and they, "the job creators," will make sure there's a job for anyone who wants to work.

In fact, the only thing it ensures, and has ensured, is that the rich will get richer and poor will get poorer.

By definition, to be a Republican means that everything the government does is wrong and everything the private sector does is right, even when that is demonstrably untrue.

As Paul Krugman writes:

When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would be otherwise. But as you may have noticed, right now the economy isn't booming - again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work - but they can't take jobs that aren't there.

As Krugman continues, extending unemployment benefits would help.

One main reason there aren't enough jobs right now is weak consumer demand. Helping the unemployed by putting money in the pockets of people who badly need it, helps support consumer spending. That's why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly.

A program like unemployment insurance, which not only helps Americans survive, but is also good for the health of the economy, is of limited interest to Republicans simply because it is not exclusively a private sector solution.

It doesn't matter that unemployment benefits stimulate the economy and job growth, that they have been proven to work. Republicans hold such ideologically narrow views on the role of government that they would rather Americans starve than that we use available and effective policy tools to put the country back to work and the economy on the path to recovery.

The Republican campaign slogan for 2012 should be: "Give Money to Rich People and They'll Make Sure We Are All Taken Care Of." Do you think that would sell?

As I said, any working man or women in American who supports these clowns needs to give their head a good shake.

(Cross-posted at Lippmann's Ghost.)

The eyes of Texas

By Capt. Fogg

It's no secret that Florida's economy is hurting more than that of many other states, but I'm sure it would be much worse if our sales tax cap on yachts costing more than a quarter million weren't in place. Of course mine didn't cost quite enough for me to benefit significantly, but it's gratifying that some of my friends saved enough to pay for a few thousand gallons of fuel. I'm sure it puts a smile on the faces of the many who have to choose between lunch money for the kids and driving to work. I'm sure that the several of my neighbors in foreclosure are altruistic enough to be glad those with that level of disposable income might use the savings on that Taiwan built vessel for an extra trip to the Abacos this summer.

Texas, which has a share of the yacht trade, is jealous, which is an extraordinary thing to say of our second biggest state with its continental sized self esteem. A Republican sponsored bill to cap the sales tax on yachts is now out of committee and will be considered by the Texas House along with deep cuts to education, nursing homes and other things that benefit only the surplus population.

The eyes of Texas are on taxes and the rest of us are watching.

(Cross posted from Human Voices)

Rise against the Republican plutocratic agenda

By Michael J.W. Stickings

The Republican Party is, when you get right down to it, a party of greed and cruelty wrapped up in theocratic moralizing. (It's hardly any wonder that Donald Trump is doing so well, nor that Franklin Graham, one of the party's chief theocrats, is saying such nice things about him.) And perhaps the core of the Republican agenda, more important than the social conservatism, is tax policy that benefits the rich, both individual and corporate, at the expense of everyone else, that punishes everyone else, and especially the poor and others most in need of help, for not being rich.

This has been the case for a long time, but increasingly, it seems, in these difficult economic times and with the American economy (and American hegemony) in such dire straits, likely never to recover, let alone to be what it once was, Americans are waking up to what Republicans are all about and expressing their opposition. The Tea Party expresses the rage of the right, anti-government rage that complements the Republican agenda. This new opposition, garnering less media attention, expresses not the counter-rage of the left, nor even rage at all, but a genuine concern for fairness, compassion, and fiscal sanity in American politics.

Here's Think Progress:

All across America, a Main Street Movement has broken out to defend the middle class against right-wing attacks on labor rights and basic public services. In recent days, this movement has turned on GOP House members who voted to effectively end Medicare and turn seniors over to private insurance companies when they approved Rep. Paul Ryan's (R-WI) radical budget bill.

On Tuesday, Rep. Sean Duffy (R-WI) was the latest congressman to face the ire of Main Street America during a town hall event with constituents who stopped being polite and started getting real.

First, constituents explained they were upset that Ryan's plan would cut off people under the age of 55 from Medicare. Then, others directly challenged Duffy about defending tax breaks for the wealthy for voting to effectively replace Medicare with a voucher system.

Ryan himself, supposedly a courageous advocate for fiscal sanity but really just a right-wing extremist whose focus is on tax cuts for the wealthy and spending cuts to programs for the poor, was challenged by his own constituents the other day. And Republicans are facing significant criticism over their support for Ryan's Medicare-slashing plan.

I suspect we'll see more and more of this. Or, at least, I hope we do. It's time for Americans to say enough is enough to the greed and cruelty of the GOP.

Here's the Duffy clip:

Ayn Rand devotee Paul Ryan gets booed by his own constituents

By Michael J.W. Stickings

To Republicans, Rep. Paul Ryan of Wisconsin is a superstar. To many in the media, he's a towering oracle of economic wisdom. To many in the Democratic Party, he's a political giant far too formidable even to question.

And so Ryan, a worshipper of Ayn Rand, gets away with spinning his right-wing extremism without much of a challenge, except from a few lone liberal voices like Jon Chait and Paul Krugman and from some of us outside the media/political establishment on the left of the political blogosphere.

He is widely touted as one of the true heroes of the moment, if not of our time, a courageous campaigner for fiscal responsibility, for balanced budgets and getting America's economic house in order at long last. And yet what he really is is a campaigner for the same old right-wing Republican economic policies, just with a pretty face and broad media appeal. His version of fiscal responsibility, a pretty standard conservative one, involves cutting programs for the poor and cutting taxes for the rich.

To their and their country's shame, most people don't much care about the poor, who barely have a voice in Washington. Most people also oppose cuts to major entitlement programs like Social Security, and so Ryan, like the rest of his party, doesn't want to go there. Nor, of course, does he support significant cuts to military spending, which would certainly help balance the budget. But the key is that Ryan wants to do everything he can to give the rich as much as possible at the expense of everyone else, not just the poor but everyone who isn't rich, including the middle class, or what's left of it. And in supporting tax cuts for the rich, Ryan exposes himself not as a crusader for fiscal responsibility but as your typical Republican, a party of the rich, by the rich, and for the rich, a party that suckers the non-rich into voting for it by playing to deep-rooted fears about race or terrorism or whatever other Other it identifies as a vote-winner.

But you know what? Tax cuts for the rich aren't popular. At all. Republicans generally try to hide their support for such cuts, but they just can't do that anymore, or at least it's more difficult for them to do so, and more and more their real agenda, their plutocratic political agenda, is being exposed. People just need to pay attention.

Which is precisely what some of them are doing, including in Ryan's own district, where this week he was actually booed at a town hall for advocating tax cuts for the wealthy:

In a video posted by ThinkProgress, an attendee at the event this week told Ryan that he believes the rich should pay higher taxes to help close the deficit and strengthen Social Security.

"The middle class is disappearing right now," he said. "During this time of prosperity, the top 1 percent was taking about 10 percent of the total annual income, but yet today we are fighting to not let the tax breaks for the wealthy expire?"

Ryan protested that "We do tax the top," before being drowned out by the audience's jeers.

Here's the clip. Hopefully it's just the start of what Ryan and the GOP deserve, which is the disapproval of voters and, come next November, votes for the other side.

(And instead of cowering in fear before Ryan and his media-enhanced stardom, Democrats should learn from this, as from all the polls showing public opposition to tax cuts for the rich, and counter the Republican agenda with a fair, sensible, and compassionate alternative that doesn't crush the poor, punish the middle class, and let the rich rape and pillage at will.)

The Fine Print of the Obama Tax Cuts

by Distributorcap

There was a lot of high-fiving in Congress during December. For a legislative body that is suppose to administer the direction of the country - the past year was filled with a lot of purposeful dissemination of misleading (or wrong) information, partisan fighting (not bickering) and downright GOP obstruction. But somehow after the Democrats suffered a complete thrashing in November, this Congress, much to the chagrin of assholes like Steve King and Jim Demint, managed to pass a bunch of important bills and laws.

The hateful and bigoted DADT - gone. The 9/11 rescue workers are finally getting some long overdue (but not nearly enough) compensation. The START nuclear treaty approved and in place. But no bill was as controversial as the gargantuan tax bill that was passed by Congress and signed into law by President Obama. By signing this bill, Obama reneged on his promise of reversing those poorly-timed, ill-conceived and ultimately destructive Bush tax cuts for the uber-wealthy. But the Republicans were in-transient, holding hostage all tax cuts by requiring that the uber-rich continue to receive those favored brackets. As ransom for this tactic, Obama added a couple of breaks and packages for the not-so-wealthy (aka as the people the GOP could care less about). This way the middle class would continue to benefit from the lower rates and everyone could share in the pain of increasing the deficit another $800 billion. All this was done [allegedly] for just two more years.

Be careful what you negotiate for.

The continuation of lower marginal tax rates will bring a lot of smiles to those with high incomes. In addition, the Obama tax cuts (they no longer belong to Bush) also changed some business accounting rules to encourage investment. For those currently on unemployment - a lifeline was extended. And for the middle class, the lower tax brackets will continue to put a few extra shekels into their purses (if they don't get eaten up by the fees the banks will now charge to compensate for limitations in the Financial reform bill).

What is barely discussed anywhere in the media is that this massive treasury give-away (remember we are still paying for an endless, useless and aimless war) does nothing for the long-term unemployed. Those folks - the ones who have used up their 99 weeks of benefits - did not receive one iota of help. Buried in the fine print of the bill is the mathematical certainty that the working poor - those families making under $40,000, the ones that needed this break the most - will actually will pay more in taxes. And finally that the payroll tax holiday for FICA (social security) is most definitely the first nail in the coffin to the end of Social Security as we know it. As the cherry on the sundae - let's not forget that we get to do this all over again in 2012.

I have said from the beginning that I believe this was a really, really bad bill. After reading the tea bags for this bill - we should only hope that is it just bad - my gut is now telling me it will be catastrophic.

First, the unemployment insurance extension is only for 14 months, while the tax breaks are for two years - ain't that a peach for those living on the edge. After 99 weeks of government benefits expires - you are on your own - it's time to find your inner Ayn Rand. And all this has to be renegotiated in 2012 - during the Presidential and Congressional election season. Try talking about higher taxes to a population that thinks every tax increase is just a code word for wealth transfer to Cadillac driving unemployment queens (not for the useless wars, snow removal or police protection). And if the teabag movement gathers anymore steam (aided and abetted by the media, which loves the drama they bring to the screen) - forget about anyone talking higher taxes.

Worse is what this bill does to the lower classes, working poor and Social Security. Part of this bill was a payroll "tax holiday" for those contributing to FICA. The current rate was 6.2% of your pay, up to an income cap of $106,800 (or a max of $6621). For 2011, that rate drops to 4.2% (or $4485). Everyone gets some sort of break, but those earning over the cap will get the full $2136. Let's take a look at the math of this.

Around 12% of the country earns more than $106,800 - so those people will get the full benefit of the holiday. Let's assume 26 paychecks (bi-weekly pay) - that means anyone over the cap gets an additional $82/check. For those making over the "magic" number of $250,000 (the level the tax debate kept deferring to) - they already come home with well over $4500 per check.  That $82 starts to look like a rounding error.

I am not minimizing this amount - for people on the bottom end of the pay scale, every dollar counts. Let's look at it from the perspective of your "average Joe-the-Plumber." The median annual income in the US is just below $50,000. That means this tax holiday will save those families (yes I realize it depends on one/two income families - but I am just trying to simplify things) around $1000 - not chump change. Again at 26 paychecks - those families will see a bump of $38 per check. I am no psychologist - but there is definitely a different mentality in spending/saving when someone receives one check for $1000 versus a stream of payments of $38 over 12 months. My fear is that the $38 (which won't even fill up a car today) - will get lost on lunch, Starbucks, clothing and other assorted non income generating savings. It is easy to deposit $1000 in a savings account/mutual. It is even easier to spend $38 on unnecessary things.

But the administration tell us that the idea of the payroll "holiday" is to get people to buy shit - even if it is only $38. On the macro level it all sounds well and good. The Government estimates that 2% drop in the FICA rate is worth $120 billion - and they also tell us those dollars will go straight into the economy and help create jobs. Keep dreaming. If people use it to pay down debt - (and many people in the lower brackets have way too high debt loads) - well that generates ZERO economic growth. They are just paying for crap they already used. And if we continue to buy cheap crap from overseas - well it will help the unemployment rate -- in India or Taiwan.  Remember the "pre-paid refunds" Congress gave 3 years ago - that $250 check - where was all the benefit?  Until confidence is restored, and people pump up demand naturally and start spending for real reasons (not by plopping $38 into a paycheck) - this payroll tax holiday is nothing more than macro-bubble economics and window dressing.

There is a deep dark side to this payroll holiday. Remember that Americans are like Pavlov's dogs when the bell is rung for tax increases - they bark, complain and vote out the ones who supported an increase.  Let's see how quiet the teabaggers are when this cut is about to expire. Want to bet it gets extended - indefinitely. Which of course means payments into the Social Security trust fund (the one with all the IOUs signed by Ronald Reagan and George W. Bush) will start to be underfunded even quicker. Guess what can of orange pekoe tea worms is being opened? You don't have to be an economist to combine an aging (65+) population, a growing income disparity, an economy that is NOT going to return to pre-2000 employment levels anytime soon and an underfunded Social Security system to see you are creating teabagger paradise - the end of the New Deal - and a lot sooner than they ever dreamed of.

What people should do is take that payroll holiday bonus (whatever amount it is) and automatically invest it in some sort of savings/retirement account - knowing that Social Security is not the third rail anymore. Want to bet that doesn't happen?

Finally - lets look at those working poor. In 2010 any single person earning between $6450 and $75,000 (or two-income family earning between $12,900 and $150,000) was eligible for a $400 ($800) Making Work Pay tax credit. That break is now gone - replaced by the payroll tax holiday. Let's say you are a two-income family that earns $38,000 (which 40% of the households in the country top out at!). Your $800 Making Work Pay credit is gone in 2011, but you now get (thanks to the great negotiating skills of President Obama) the FICA tax holiday - which is worth $760. So at the end of the year - you have a net tax increase of $40! Anyone making less will have an even bigger increase. The break-even point is $40,000. Based on this little math game - over 40% of all American families - the ones with the lowest incomes - will actually pay more in taxes - while those fine folks at $250,000 who are enjoying an additional $2,136 for Ferragamo shoes, Parada bags, Beluga caviar, and Dom Perignon champagne. Want to bet that a good chunk of that aforementioned 40% are teabaggers?

I wonder how many teabaggers bothered to read the bill, do the math - or realize that no matter how angry they get...... well let them eat tea cakes with Asti Spumonte.

Oh - 43.6 million Americans (or 14% of the country) lives below the poverty level - which is around an income of $21,700 for a family of four. In 1980, before the dawn of trickle down your pants tax cuts - that number was 27 million or 12%.  Pretty pathetic for the richest country on Earth.

Debunking conservative lies and propaganda

By Michael J.W. Stickings

Mustang Bobby posted this -- from Dave Johnson at OurFuture.org -- at his place yesterday. It's a valuable reminder of the way things really are:

There are a number things the public "knows" as we head into the election that are just false. If people elect leaders based on false information, the things those leaders do in office will not be what the public expects or needs.

Here are eight of the biggest myths that are out there:

1) President Obama tripled the deficit.
Reality: Bush's last budget had a $1.416 trillion deficit. Obama's first budget reduced that to $1.29 trillion.

2) President Obama raised taxes, which hurt the economy.
Reality: Obama cut taxes. 40% of the "stimulus" was wasted on tax cuts which only create debt, which is why it was so much less effective than it could have been.

3) President Obama bailed out the banks.
Reality: While many people conflate the "stimulus" with the bank bailouts, the bank bailouts were requested by President Bush and his Treasury Secretary, former Goldman Sachs CEO Henry Paulson. (Paulson also wanted the bailouts to be "non-reviewable by any court or any agency.") The bailouts passed and began before the 2008 election of President Obama.

4) The stimulus didn't work.
Reality: The stimulus worked, but was not enough. In fact, according to the Congressional Budget Office, the stimulus raised employment by between 1.4 million and 3.3 million jobs.

5) Businesses will hire if they get tax cuts.
Reality: A business hires the right number of employees to meet demand. Having extra cash does not cause a business to hire, but a business that has a demand for what it does will find the money to hire. Businesses want customers, not tax cuts.

6) Health care reform costs $1 trillion.
Reality: The health care reform reduces government deficits by $138 billion.

7) Social Security is a Ponzi scheme, is "going broke," people live longer, fewer workers per retiree, etc.
Reality: Social Security has run a surplus since it began, has a trust fund in the trillions, is completely sound for at least 25 more years and cannot legally borrow so cannot contribute to the deficit (compare that to the military budget!) Life expectancy is only longer because fewer babies die; people who reach 65 live about the same number of years as they used to.

8) Government spending takes money out of the economy.
Reality: Government is We, the People and the money it spends is on We, the People. Many people do not know that it is government that builds the roads, airports, ports, courts, schools and other things that are the soil in which business thrives. Many people think that all government spending is on "welfare" and "foreign aid" when that is only a small part of the government's budget.

This stuff really matters.

If the public votes in a new Congress because a majority of voters think this one tripled the deficit, and as a result the new people follow the policies that actually tripled the deficit, the country could go broke.

If the public votes in a new Congress that rejects the idea of helping to create demand in the economy because they think it didn't work, then the new Congress could do things that cause a depression.

If the public votes in a new Congress because they think the health care reform will increase the deficit when it is actually projected to reduce the deficit, then the new Congress could repeal health care reform and thereby make the deficit worse. And on it goes.

Speak the truth. Make it prevail.

Dems: no vote on extending middle-class tax cut

By Creature

If I didn't know better I'd think the Dems want to be in the minority again. When handed a winning political issue, in a potentially brutal election cycle, they punt. It makes no sense and is utterly frustrating. What the fuck is wrong with these people?

May sanity reign supreme

By Carl 

One hopes this stance will continue. President Obama seems pretty firm that no more tax cuts for those who don't need them is a good idea. 

The Clinton tax cuts for the middle class of 1993-1994, and concommitant tax hike on the wealthy created a gross domestic product (economic activity) of 3.8% per year on average. The Bush tax cuts, of which nearly all went to the wealthy, created a GDP of...well, 2.7% from 2001 to 2005 (he did inherit a brief recession) and a -0.002% from 2006 to 2009. This, despite blowing the budget surplus out of the water and creating the single largest deficit in world history (matched and exceeded only by the emergency stimulus package under President Obama).

So you tell me: which makes more sense? Giving a bunch-o-bucks to Paris Hilton to buy heroin, or a smaller sum to the family trying to choose between paying the mortgage or the car loan? Which is going to generate more economic activity?

History suggests that raising taxes on the rich has always, always, been the smarter move. As Harry Truman put it, "If you want to live like a Republican, vote Democratic." Historically, the largest spikes in economic activity have begun under Democratic presidents. The lone exception in the past 60 years was the Reagan "growth", which as it turns out was a roll of the dice on lower taxes across the board, but in reality was created by the deregulation of banks started under President Jimmy Carter which saw, much like this recent collapse, banks get too big and too greedy for their own good, and created an economic collapse that more than swamped the growth the expansion realized. So much for Reaganomics.

American history is filled with tales of, "if you just put money in the hands of the working and middle classes, things will get better." Give them Social Security, the elderly live longer, more productive lives. Allow them unemployment insurance, recessions become milder and shorter. Give them a tax cut, like Clinton did, and watch the economy soar, despite the fact that Clinton took the reins at a time when the economy was shakily returning from another Republican recession.

Those who take the most from a society have the patriotic duty to give back to that society that provides such strong support. The army and police departments protect them more, because the rich have more to lose. The roads are better in rich neighborhoods, because the rich have the resources to complain and the connections to complain effectively. Fires are fought faster in wealthy communities because firefighters are better paid, better trained and get better equipment. I could go on.

The price of premium service is to pay a premium price. If you have an expensive sports car, you don't put cheap gas in it, at least not if you want it to last. You use premium from a reputable service station. You'll pay more for parts and service, but you're getting better quality of both.

And one pays a premium in taxes because no one gets rich on their own. One takes advantage of government programs, and one reaps the benefits of government research. One gets back much more in return for the extra money one pays.

This isn't brain surgery. The rich should pay more.

 (Cross-posted to Simply Left Behind.)

A tale of two tax cuts

By Michael J.W. Stickings

With Republicans poised to retake control of the House and possibly the Senate, if not likely the latter, it can hardly be said that this is the best of times. And with a Democratic president who has alienated much of his liberal-progressive base, failing to govern up not just to the overly lofty expectations of his most enthusiastic, and enthusiastically deluded, supporters but even to the reasonable expectations of those of us who at least thought that he would stand up for basic liberal principles and advance a solidly liberal reform agenda, it feels even worse.

It is frustrating that Obama has been so inconsistent, consistent only in being overly cautious and overly friendly to a Republican Party that is obstructionist and trying to bring him down, often through a nefarious smear campaign that has sought to destroy him. It is frustrating that he can do the right thing and then the wrong thing, say the right thing and then the wrong thing, in rapid succession. To wit:

Obama has admirably come out against "any compromise that would extend the Bush-era tax cuts for the wealthy beyond this year," as the Times is reporting. Those tax cuts are not just unfair but also deeply irresponsible, not least in a time of fiscal difficulty.

And yet, as Robert Reich notes, Obama will "reportedly will propose two big corporate tax cuts this week," as if to counter his responsibility over the Bush tax cuts for the wealthy with yet more irresponsibility.

On the face of it, it would seem to make perfect political sense. Whatever his personal views, and whatever the views of his fellow Democrats struggling for re-election in November, Obama knows that the Bush tax cuts are deeply unpopular and that he can present himself, and his party, as populist at a time when angry, anti-establishmentarian populism would seem to go a long way. And with the corporate tax cuts, which are too technical to arouse much popular interest, let along outrage, he can present himself, and his party, as pro-business and presumably pro-growth at a time when the economy is struggling, there is widespread distrust of government, and government's ability to turn the economy around (even if it was the stimulus that pulled the country back from the brink and made the current recovery, however fragile, possible), thereby appealing to independents, conservative (Blue Dog) Democrats, and moderate Republicans who aren't comfortable with the direction their party has taken and who would vote Democratic but who have been scared off by the Republican propaganda about how Obama is a socialist.

So, yes, I get it. But do the corporate tax cuts make sense? Are they worth it -- not in political terms but in terms of long-term economic health, as well as in terms of jobs? No, says Reich:

Obama's proposed corporate tax cuts (1) won’t generate more jobs because they don't put any cash in worker’s pockets (as would, for example, exempting the first $20,000 of income from the payroll tax and making up the difference by applying the payroll tax to incomes over $250,000); (2) will subsidize companies to cut even more jobs; and (3) will cost $130 billion -- money that could better be spent helping states and locales avoid laying off thousands of teachers, fire fighters, and police.

Reich is politically savvy, though, and also gets what's going on:

So why is Obama proposing them? To put Republicans in a bind. If they refuse to go along he can justifiably say they have no agenda other than obstruction. After all, the only thing they've been arguing for is lower taxes. On the other hand, if Republicans agree to support these corporate tax cuts, Obama can claim a legislative victory that will help Democrats neutralize their opponents in the upcoming elections.

The proposals also make it harder for Republicans to argue the Bush income tax cuts should be extended for the richest 3 percent of taxpayers because small businesses need it. Obama's corporate tax cuts would appear to do the trick.

The White House probably figures even if Republicans agree to the proposed tax cuts, nothing will come of it. Congress will be in session for only about two weeks between now and the midterm elections so it’s doubtful these proposals would be enacted in any event.

But this cynical exercise could backfire if Republicans call Obama's bluff and demand the corporate tax cuts be put on a fast track and get signed into legislation before the midterms.

More troubling, Obama's whopping proposed corporate tax cuts help legitimize the supply-side dogma that the economy's biggest obstacle to growth is the cost of capital, rather than the plight of ordinary working people.

Reich's analysis, it seems to me, is right on the mark. In a way, this is typical of Obama. He is simultaneously too calculating and too cautious for his own good. Why not just make the populist and economically sensible argument against both the Bush tax cuts and against irresponsible corporate tax cuts generally? Why not stick to the basic liberal principle of fairness, or even to the supposed conservative principle of fiscal responsibility (a principle that many liberals endorse and that many conservatives, including Bush, ignore)? Why not stand with the people at a time of economic crisis, at a time when so many people have lost their jobs and can't put food on their table, instead of sucking up to an oligarchic establishment that hardly needs any help?

It's possible, of course, that Obama actually thinks he's doing the right thing. It's more likely, though, that he's just too political, that he filters everything, with Rahm Emanuel's help, through a political filter that slashes any and all sense of social and economic justice, or even policy consistency. The result is that he just seems weak and opportunistic, whether it's on health-care reform, the Afghan War, immigration, the Park51 community center, or any other issue, including tax cuts.

Which is not to say that Obama shouldn't think politically or make decisions without taking politics, including his own and Democrats' electoral well-being, into consideration, because, of course, the democratic reality is that you can't get anything done if you're never elected or if you get voted out of office. But enough is enough, and it's time, long past time, for this president, who remains fairly popular, to be not a pollster but a leader, to be attuned to what is politically expedient, sure, but more importantly to be willing to do what is right -- and actually to do what is right -- whatever the short-term implications of the moment.

Democrats, and especially the Democratic base, would respond to such leadership, based on those principles they hold dear and that supposedly Obama does too, by closing the enthusiasm gap and boosting their party's fortunes in November, but I suspect that many others would be appreciative as well, finally finding in Obama, still less than two years into his presidency, the voice of hope and bringer of change from whom so much seemed possible when he was elected to the White House.

How the Bush tax cuts are a winning issue for Democrats

By Michael J.W. Stickings

With the Bush tax cuts (on both the wealthy and middle class) set to expire, Democrats have a great opportunity to back Republicans into a corner and to win both politically and on policy, argues Jon Chait:

The key factor here is that, just as Republicans got to frame the debate in 2001 by combining the tax cuts into an up or down vote, Democrats can frame the debate now by separating the policies Republicans pretend to care about from the ones they actually care about. Republicans want to have a vote on the whole collection of Bush-era tax cuts. Democrats shouldn't give it to them. You hold a separate vote on the middle class portion and dare them to oppose it.

Basically, Democrats can push a vote on extending only the middle-class tax cuts. If Republicans filibuster it in the Senate because what they really want is an extension on upper-class cuts, it'll look like they support middle-class tax hikes and/or like their key priority is ("wildly unpopular") tax cuts for the wealthy, which it is, while Democrats will be able to make the case that they tried to extend the cuts but were blocked by an opposition party that cares more about the rich than about ordinary Americans. But if they don't, Democrats will be able to take credit for keeping middle-class taxes down and can avoid a vote on extending the upper-class cuts altogether while also criticizing Republicans for supporting tax cuts for the wealthy.

In other words, Democrats could come out of this with a winning political issue with which to hammer Republicans and either additional revenue or a more progressive tax code, each of which serves core Democratic interests (higher government spending or fairer taxation). 

In a way, it's a can't-lose situation. Except that Democrats usually find a way to lose. I hope Chait is right, but I fear that Democrats will mess this up somehow.

Nursery Rhyme Capitalism

By Distributorcap

Today on guess where -- Fox News -- Rep. Mike Pence (R - Indiana) became the latest in a series of cold-blooded, vultures who said that extending the Bush tax cuts [for the rich, white benefactors of the GOP] was a good thing, despite the effect they will have on the growing deficit. In fact, Pence said, foregoing that $678 billion in revenue would actually help the economy:

"The reality is that as you study -- when President Kennedy cut marginal tax rates, when Ronald Reagan cut marginal tax rates, when President Bush imposed those tax cuts, they actually generated economic growth, they expand the economy, they expand tax revenue," Pence said. "The point is we've got to get this economy moving again and we can't go back to the tax-and-spend policies of the Democrats or the tax-cut-and-spend policies of the prior administration." 

To Pence, cutting taxes for the rich and continuing to spend (on endless wars) is OK. Talk about spin (and bad math). This is just another way of professing the GOP love for trickle-down-your pants economics without mentioning the debunked and income-redistribution-to-the-wealthy tax plan of Reagan and Bush.

Of course before Pence even got to the campaign talking point of tax cuts, he began with the now now ingrained Rovian/Luntz meme that those poor unemployed people are just lazy bums sitting on their fat asses all day watching General Hospital, drinking beer and refusing to flip burgers at the local grease pit. Since they are just a bunch of good-for-nothings, they will just have to continue to wait for the $400 unemployment checks - because, according to Pence, we just cannot afford to help them. The GOP, who really do feel for those lazy, leaching bums, just cannot in good faith authorize or vote for the $33 billion it will cost to extend unemployment insurance without offsetting comparable spending cuts. [but don't touch wars or ask for tax increases!]

Sing a song of Mike Pence,
A pocket full of sighs.
Four and twenty tax cuts,
Baked in some lies.

When the lies were broadcast,
The House became a race;
Isn't this a dainty dish,
To set before our base?

The base is in their counting house,
Counting out their cash;
The whacks are with the teabags,
Toting guns to bash.

The Moose was in her garden,
Hanging $150,000 worth of clothes;
When down came an oil soaked pelican
And pecked off her nose.

Check this out for a great mashup on Pence by Bluegal

What will it take for America to realize that

1. Trickle down economics - aka tax cuts for Pence's rich Republican benefactors - simply do NOT work, all they do is put more money in the hands of the people who already control 95% of the money. Most people making under $100K or even $200K barely see a nickel of these tax cuts.
2. The Republicans - including Mike Pence - are primarily the ones that got us into this mess to begin with by pushing for unfunded and unnecessary wars and deregulating everything they could get their grubby hands on.

A few words about Trickle-Down-Your-Pants economics. On paper it sounds so great. Give more money to the smart (and rich) and they will invest it - in businesses, in companies and in research and development. But hold on - that is not what actually happened. The money ended up with the rich alright, but instead of investing it back in the economy and American society (which they started labeling "income redistribution") - they invested it with each other. 30 years of Reagan "trickle up" wealth redistribution just allowed the rich to gather more personal assets (like homes, cars, jewelry, hedge funds) instead of building plants, fostering energy independence, repairing infrastructure and a whole slew of other things that could have been accomplished on behalf of the US as a whole. And since billions in excess income proved to be not enough, the beneficiaries of trickle down Republican tax cuts created new (and ultimately way too risky) ways to make even more money. The new uber-class kept tossing the money wads back and forth to each other, somehow making obscene profits and purposely keeping those bucks out of reach from the proletariat, descamisados and regular Americans. While they had their fun, the middle class became a bunch of welfare queens driving Yugos.

The Congressional Budget Office stated that the 2001 and 2003 Bush tax cuts disproportionately benefited the wealthiest households. The tax cuts boosted the income of the top 1% of households (with average incomes over $1 million) by 10%. Compare this to a 2.3% increase for middle-income families with average incomes of $57,000 and a 1.6% increase for the bottom 20% of families, with average incomes of less than $17,000. (Here comes the lame argument about how the rich already pay a disproportionate amount of taxes, they control a disproportionate amount of the assets of this country).

Think about this - the unregulated "financiers" on Wall Street played cat-and-mouse with pension funds, insurance pools and securitized mortgages. 30 years of binge chugging finally led to an economic meltdown. Bush and company then bailed them out (as he walked out the door). The rest of the country - including the idiots who voted Republican because of a bunch of slogans like "we think government is too big" or "we will insure your right to own a gun" ended up losing their jobs, their homes and their life savings and watched as un- (and under-) employment drove towards depression levels. Two scant years later, the criminals who took us down this road are making more money than ever and those without jobs can't even get a $425 unemployment insurance check from Mike Pence.

This is Nursery Rhyme Capitalism at its best. The few who caused some of the greatest losses ever are rewarded the most, while those who actually produce real things of value, are punished the most severely.

The continued argument about deficit reduction just proves what an abomination Pence and his pals are. He and Kyl (who went on this rant last week) think debt just fine for to pay for the tax cuts for the wealthiest in the country, but debt for those who have been thrown into an economic tailspin due to the misbehavior of the wealthiest - well that is just too much red ink for the budget to handle.

And this is who America wants to run Congress again.

Little pop

By Carl

It ain't quite the Big Bang, but...

While the Large Hadron Collider gets all the attention (it never hurts a physics experiment's street cred when rumors spread that it might create a mini black hole and swallow up the Earth), a lesser-known particle collider has been quietly making soup—quark soup. For the field of experimental particle physics, in which progress has been at a near-standstill since the glory days of the 1970s (yes, the top quark was discovered in an experiment at Fermilab in 1995, but really, everyone knew this last of the six quarks existed), this counts as the most notable achievement in years: a discovery that doesn't merely confirm what theory has long held, but points the way to new revelations about the creation and evolution of the universe.

The reason for that accolade is that quark soup was last seen when the universe was 1 microsecond old, physicists reported at the annual meeting of the American Physical Society. It was created at the 2.4-mile-around Relativistic Heavy Ion Collider (RHIC) at Brookhaven National Lab on New York's Long Island, which smashes together gold ions traveling at nearly the speed of light. The result of the collisions is a tiny region of space so hot—4 trillion degrees Celsius—that protons and neutrons melt into a plasma of their constituent quarks and gluons, as Brookhaven describes here. The soup is 250,000 times hotter than the center of the sun, 40 times hotter than a typical supernova, and the hottest temperature in the universe today.

We note that nothing melted, no black holes were created and the air conditioning in the lab worked fine afterwards.

Interesting, things did not go according to prediction, thus proving that the universe is nowhere near the orderly, precisely designed place that so many people lackign imagination believe it to be.

Indeed, even at its most elemental level, the universe is chaotic and random.

Even more interesting developments, like a possible answer to why the universe even exists in the form it does, have been uncovered from this experiment (short answer: matter and anti-matter should theoretically exist in equal portions, but they obviously don't, since we're here).

This is Big Science, the kind of science we used to do regularly but have now ceded to the European and Asian scientific community.

Because, you know, tax cuts!

(Cross-posted to Simply Left Behind.)