Tag Archives: deficit

GFY, S&P

27 Wednesday Jul 2011

Posted by in economy, Financial Crisis, Wall Street

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As the extortionists at Standard and Poor’s threaten a credit rating downgrade, not just if the debt ceiling isn’t raised but if the deficit isn’t cut by $4 trillion, Robert Reich points out that if the crooks at S& P had done their effin’ jobs the deficit and debt that they demand be cut wouldn’t be where it is today:

“Who is Standard & Poor’s to tell America how much debt it has to shed in order to keep its credit rating? Standard & Poor’s didn’t exactly distinguish itself prior to Wall Street’s financial meltdown in 2007. Until the eve of the collapse it gave triple-A ratings to some of the Street’s riskiest packages of mortgage-backed securities and collateralized debt obligations.”

A practice from which S&P profited handsomely:

“S&P’s net annual revenues from ratings nearly doubled from $517 million in 2002, to $1.16 billion in 2007.”

And what happened to those securities S&P stamped AAA?

“…90% of the subprime-backed mortgage securities S&P and its competitors rated AAA in 2006-2007 – which means they’re as sound as Treasury notes – were later downgraded to junk bond status.”

Back to Reich:

“Standard & Poor’s (along with Moody’s and Fitch) bear much of the responsibility for what happened next. Had they done their job and warned investors how much risk Wall Street was taking on, the housing and debt bubbles wouldn’t have become so large – and their bursts wouldn’t have brought down much of the economy.

Had Standard & Poor’s done its job, you and I and other taxpayers wouldn’t have had to bail out Wall Street; millions of Americans would now be working now instead of collecting unemployment insurance; the government wouldn’t have had to inject the economy with a massive stimulus to save millions of other jobs; and far more tax revenue would now be pouring into the Treasury from individuals and businesses doing better than they are now.

In other words, had Standard & Poor’s done its job, today’s budget deficit would be far smaller.

And where was Standard & Poor’s…during the George W. Bush administration – when W. turned a $5 trillion budget surplus bequeathed to him by Bill Clinton into a gaping deficit? Standard & Poor didn’t object to Bush’s giant tax cuts for the wealthy. Nor did it raise a warning about his huge Medicare drug benefit…or his decision to fight two expensive wars without paying for them.

Add Bush’s spending splurge and his tax cuts to the expenses brought on by Wall Street’s near collapse – and today’s budget deficit would be tiny.

Put another way: If Standard & Poor’s had been doing the job it was supposed to be doing between 2000 and 2008, the federal budget wouldn’t be in a crisis — and Standard & Poor’s wouldn’t be threatening the United States with a downgrade if we didn’t come up with a credible plan for lopping $4 trillion off it.”  

So why in the hell is anybody listening to what Standard and Poor’s has to say? If we had a Justice Department that was actually interested in justice, the S&P analysts would be behind bars instead of issuing threats.

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Why Is This So Damn Difficult?

09 Saturday Jul 2011

Posted by in Afghanistan, budget, economy, Iraq, Medicare, Obama, Politics, Social Security, Taxes, Unemployment, Wall Street

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This is so simple it’s ridiculous. The three major causes of the dramatic increases in debt and deficit are:

1) The Bush, now Obama, tax cuts.

2) The wars in Iraq and Afghanistan.

3) The financial collapse caused by Wall Street greed.

Ending the tax cuts just for those making over $250,000 will bring in $700 billion over 10 years. The wars cost about $140 billion a year. End both and we save $1.4 trillion over the same 10-year period. A financial transaction tax of just one quarter of one percent will result in $150 billion a year, $1.5 trillion over 10. There’s $3.6 trillion over 10 years, which is just about the same amount the debt ceiling dealers are talking about cutting spending. And we haven’t touched Social Security, Medicare, Medicaid, education, etc. Yet none of these three are even on the debt ceiling/spending cut/revenue increases negotiating table. Why?

The American Society of Civil Engineers estimates the cost of repairing our crumbling infrastructure to be $2.2 trillion over 5 years. Do you see where I’m going here? Take the money we’ve saved, not from cutting the safety net out from under our most vulnerable who had nothing to do with the debt explosion and who did not benefit from it, but from the root causes and from those who did.

The result is millions of Americans have jobs. They’re paying income taxes, Social Security taxes, Medicare taxes. They no longer need unemployment, food stamps, or other forms of government assistance. They’re buying stuff, which creates demand for stuff, which creates more jobs, which creates more demand for stuff. And so on, and so on, and so on. Why is this so damn difficult?

But what do we get from our “leaders?” Gobbledegook and gibberish. Like President Obama’s remarks yesterday after the release of the horrible job numbers. Things like streamlining the patent process, advancing more so-called free trade agreements (which costs jobs rather that create them) and this:

“[T]o put our economy on a stronger and sounder footing for the future, we’ve got to rein in our deficits and get the government to live within its means, while still making the investments that help put people to work right now and make us more competitive in the future.

The sooner we get this done, the sooner that the markets know that the debt limit ceiling will have been raised and that we have a serious plan to deal with our debt and deficit, the sooner that we give our businesses the certainty that they will need in order to make additional investments to grow and hire and will provide more confidence to the rest of the world as well..”

Beside the fact that this is straight of the Republican playbook for economic growth, it’s nonsense (but I’m being redundant). Live within our means while making investments? What the hell is that? Give businesses the certainty they need? Businesses don’t need certainty, they need customers. Customers create jobs, not the ever-elusive confidence unicorn. Why is this so damn difficult?

The president’s mouthpiece at the Council of Economic Advisers, Austan Goolsbe offered more of the same:

“Today’s report underscores the need for bipartisan action to help the private sector and the economy grow – such as measures to extend the payroll tax cut, pass the pending free trade agreements, and create an infrastructure bank to help put Americans back to work.  It also underscores the need for a balanced approach to deficit reduction that instills confidence and allows us to live within our means without shortchanging future growth.”

*Sigh* Can’t anybody here play this game?

The Deficit Reduction Dog and Pony Show, Cont’d

05 Tuesday Jul 2011

Posted by in Deficit, economy, Obama, Politics, Taxes

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Further proof that the deficit reduction talk in DC is just a dog and pony show:

“In a Wednesday news conference, the president especially pounded a depreciation provision for corporate jets, mentioning it six times.

“I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up that tax break that no other business enjoys,” Obama said. “I don’t think that’s real radical. I think the majority of Americans agree with that.”

But as it turns out, ending the jet tax break would only save around $3 billion over a decade, while rolling back tax expenditures for oil-and-gas would bring in roughly $21 billion and a proposal aimed at hedge fund managers would collect some $15 billion over that same time span.

According to estimates from last year, ending the Bush tax cuts for income over $250,000 for couples would have brought an extra $700 billion into the Treasury.”

If they were serous about reducing the deficit they would, as Willie Sutton once said, go where the money is. But where the money is is also where the large campaign contributions is, so that ends that.

Vote to Repeal Health Care Reform Not Meaningless At All

20 Thursday Jan 2011

Posted by in budget, Congress, Conservatives, health care, Politics, Republicans

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My first inclination is to call the Republican vote to repeal health care reform yesterday meaningless, since it’s unlikely to even come up for a vote in the Senate and faces a certain presidential veto even if it did,  but it actually wasn’t meaningless at all. It told us everything we need to know about today’s Republican party. Since they offered no alternative, only a “no” to the current law, the message was loud and clear.

Republicans are in favor of denying coverage to people with pre-existing conditions. Republicans are in favor of Americans going bankrupt because of medical expenses. Republicans are in favor of insurance companies cancelling your policy for any reason, real or imagined, as soon as you get sick. Republicans don’t give a damn about the deficit. Republicans will lie about, distort, and ignore facts and figures that don’t support their positions.

Here it is straight from the horses mouths. Steve King sees the pre-existing conditions provision as a “minor thing”:

“Rep. Steve King (R-Iowa) claimed Wednesday that he wasn’t worried about eliminating the popular preexisting conditions provision of the health care bill through the current GOP effort to repeal the law…This is too many pages, it’s too cluttered, it’s too big an argument to allow it to turn on one or two minor things.”

Phil Gingrey brushes aside the HHS report which says that up to 129 million Americans have a pre-existing condition that would deny them coverage, saying that number must include people with “hangnails and fever blisters” and that “if you believe those statistics, I’ve got a beach I can sell you in Pennsylvania.”

Gingrey is only following his leader. Speaker Boehner on the CBO report which says repealing health care will increase the deficit by $230 billion:

“…Boehner told reporters: “I do not believe that repealing the job-killing health care law will increase the deficit.” The budget experts are “entitled to their opinion,” added Boehner.”

The “job-killing” part of the statement is a distortion of another CBO report on whether or not health care reform would lead to job losses. But Republicans have never been ones to let facts get in the way of a good lie, See “death panels” and “pull the plug on Grandma.”

Paul Krugman gets down to the nitty-gritty:

“The key to understanding the GOP analysis of health reform is that the party’s leaders are not, in fact, opposed to reform because they believe it will increase the deficit. Nor are they opposed because they seriously believe that it will be “job-killing” (which it won’t be). They’re against reform because it would cover the uninsured — and that’s something they just don’t want to do. And it’s not about the money…the modern GOP has been taken over by an ideology in which the suffering of the unfortunate isn’t a proper concern of government, and alleviating that suffering at taxpayer expense is immoral, never mind how little it costs.”

Heckuva Job, Mr. President

30 Tuesday Nov 2010

Posted by in budget, Congress, economy, Obama, Politics, Republicans, Taxes, Wall Street

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Good call, Mr. President. You’ve hit on the reason for the $1.3 trillion deficit. Nothing to do with the crooks savvy businessmen on Wall Street or wars that never end or tax cuts for the top 2 percent. It’s the Social Security Customer Service Reps making $35,000 a year. It’s the USDA Agricultural Inspector making $30,000. It’s Correctional Officers making $46,000. It’s those greedy Air Traffic Controllers pulling down the astronomical sum of $93,000 a year.

They all just make too damn much money, and denying them a whopping 1.4% increase is surely the solution to all our budget woes. Never mind that their health insurance premiums are scheduled to go up 7.2% next year so that a wage freeze amounts to a wage cut, not a freeze.

But hey, the Republicans love you for it, and apparently that’s what matters most. They always love it when you start making concessions before you even get to the bargaining table. A tactic that paid off so well in health care reform, why not use it again when it comes to deficit reduction.  Oh, by the way, what did you get in exchange for conceding this issue to the GOP? Absolutely nothing—as usual.

This just in, sir. Republicans don’t give a flying pile of horse manure about reducing the deficit. If they did, they wouldn’t be insisting on an extension of the Bush tax cuts which, given the prior record of your negotiating skills, I fully expect to see happen to some degree at today’s capitulation session bi-partisan meeting with Republican leadership.

Here’s an early “heckuva job” on that, too.

Making Sense of the Tax Cut Extension Contradictions

11 Saturday Sep 2010

Posted by in Congress, Democrats, economy, lobbyists, Obama, Politics, Republicans, special interests

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A couple of things don’t make sense in this debate over letting the tax cuts for the top 2% expire. Don’t make sense on the surface, that is. Dig a little deeper and it becomes perfectly clear.

Why is there such angst in Congress about raising taxes on the wealthy? Members of both the House and the Senate in both parties say they are so concerned with the deficit, but yet extending the cuts will add about $700 billion to the deficit. Many say raising taxes will kill job creation, but those same cuts led to little or no job creation during the 9 years they have been in effect. So what’s the big deal about raising taxes on millionaires?

Because they would be voting to raise taxes on themselves. One percent of Americans are millionaires, but 44% of the members of Congress are millionaires—237 out of 535. They would be voting not only to raise taxes on themselves, but their friends, their associates, and most importantly to them, the people who write the large campaign contribution checks.

Here’s the other thing that doesn’t appear to make sense. Naturally, most Republicans are against letting the cuts expire, for no other reason than that President Obama is in favor of it. But why are an increasing number of Democrats coming out in favor of an extension? Besides the fact that many if them are included in that number of millionaires, that is.

I know some probably get tired of me beating the drum for the importance of organized labor, but unions were once the largest constituency group and voting bloc who stood up and spoke out for working and middle-class people. Into the “vacuum” left by decreasing union membership and its influence on politicians and policy has stepped corporate interests and their money. From Winner-Take-All Politics via Kevin Drum at Mother Jones:

“Unions…are the particular focus of business animus. As they decline, they leave a vacuum. There’s no other nationwide organization dedicated to persistently fighting for middle class economic issues and no other nationwide organization that’s able to routinely mobilize working class voters to support or oppose specific federal policies.

With unions in decline and political campaigns becoming ever more expensive, Democrats eventually decide they need to become more business friendly as well. This is a vicious circle: the more unions decline, the more that Democrats turn to corporate funding to survive. There is, in the end, simply no one left who’s fighting for middle class economic issues in a sustained and organized way. Conversely, there are lots of extremely well-funded and determined organizations fighting for the interests of corporations and the rich.”

In my opinion, this also explains why some who vote Republican and support Republican policies, other than those who are simply anti-anything Obama related, are against raising taxes on the wealthy even though very few would be affected by an increase on those making over $250,000 a year. They’ve bought into the corporate-interest saturated media theme that unions are evil and that the wealthy special interests are looking out for them.

Kyl: No Need to Pay For Tax Cuts

13 Tuesday Jul 2010

Posted by in budget, Congress, Conservatives, economy, George W. Bush, Politics, Republicans

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Given their history, why anybody would give one ounce of credibility to any Republican and their faux concern about deficits is beyond me. But for those few amnesiacs who did, John Kyl should have cleared that up yesterday with this:

“Surely Congress has the authority, and it would be right to — if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs. You do need to offset the cost of increased spending, and that’s what Republicans object to. But you should never have to offset cost of a deliberate decision to reduce tax rates on Americans.”

Two other deficit hypocrites, Judd Gregg and Eric Cantor chimed in:

“Sen. Judd Gregg (N.H.), the top Republican on the Senate Budget Committee, joined House Minority Whip Eric Cantor (R-Va.) in pushing for the extension of a series of taxes set to expire at the end of this year, including a series of cuts for households making more than $250,000 per year.

“If you want to do something to stimulate the economy, you could make clear that tax rates aren’t going to go up at the end of the year,” Gregg said during an appearance on CNBC. “If this administration really wants to stimulate, say they’re going to continue those tax rates — all those tax rates.”

Never mind that when it came to extending unemployment benefits Gregg said, “we are on the path of passing on to our children a nation which they will not be able to afford as a result of the massive debt which is being put on their backs.”

That was over $33 billion. Extending the Bush tax cuts for the wealthy will cost about $700 billion.

But, but, but, extending the tax cuts will “spur” and “stimulate” the economy, right? If this sounds familiar, here’s why. January, 2004:

“The tax relief the president has given to this economy is working,” Commerce Secretary Don Evans told CNN’s “Late Edition.” “On three separate occasions over the last three years, he’s provided additional tax relief for American workers, American families, businesses across America, and guess what? It’s working. The results are showing that it’s working.”

…Treasury Secretary John Snow predicted that hiring will pick up in 2004.

“All the evidence points in that direction,” Snow told ABC’s “This Week.” “And everything we know about economics indicates that, as you get an economy into high gear, as you get a strong recovery under way, it does translate into jobs.”

The result? “The worst private sector jobs record of any administration in 75 years.”


The Bushies were right about one thing. The tax cuts did work—if you happen to be in the top 1%, that is.

One Vote

01 Thursday Jul 2010

Posted by in Congress, Democrats, economy, Politics, Republicans, Unemployment

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One vote. That’s all more than 2 million Americans needed to have their unemployment benefits extended. One vote.  That’s all that was needed to prevent the unprecedented action by Congress of failing to extend benefits when unemployment is anywhere near our current rate of 9.7%, the previous high being 7.2% in 1983. One vote

Senate Majority Leader Harry Reid had the votes of 57 Democrats, counting his own. He even had the votes of 2 Republicans, Olympia Snowe and Susan Collins. And in the post-January 20, 2009 climate of Washington, D.C. that is a major accomplishment. He needed one vote to get the sixty necessary to break the filibuster and pass the extension before the Senate recessed until July 12. One vote.

Unfortunately, not only for Senator Reid but more importantly for those 2+ million Americans, that one vote was, and is, in the possession of possibly the biggest damn fool ever to occupy space in the Senate chamber, Ben Nelson of Nebraska.

Nelson’s reasons for his opposition:

“Tough choices are possible and necessary to not add to the deficit,” Nelson said. “Some also say we need more emergency spending now to keep the recovery going. But in my view it could jeopardize the recovery and would add to our already enormous deficit, likely to be around $1.4 trillion for the second year in a row…. Congress should provide additional unemployment benefits but not as a bailout to the states that worsens the deficit and passes the bills onto our children.”

Do you know who’s making tough choices, you idiot? The long-term unemployed who now have to spend July 4th weekend wondering how, or if, they’ll be able to keep their house, or pay the rent, or keep the lights on. They’re not worried about passing bills on to their children; they’re worried about being able to feed their children.

The Real Cost of Killing the Tax Extenders Bill

24 Thursday Jun 2010

Posted by in budget, Congress, Conservatives, economy, George W. Bush, Politics, Republicans

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The confederation of hypocrites and liars in the United States Senate, aka the Republican caucus plus Ben Nelson, voted today for the third time to kill the “tax extenders” bill which would have extended unemployment benefits, several tax credits, and Medicare funding to states facing budget crises.

Sens. Susan Collins of Maine, George Voinovich of Ohio, John Kyl of Arizona, and Ben Nelson of Nebraska all cited the cost of the bill and what it would add to the deficit, about $33 billion, as the main reason for their “no” votes.

Nice to see this new-found consternation about deficits from these four hypocrites. All four voted for the Bush tax cuts in 2001 and 2003, which cost approximately $2.5 trillion, not one dime paid for, all deficit financed. All four voted for Medicare Part D, also in 2003, which cost another trillion dollars, not one cent paid for.

Since these 4 are so concerned about cost, let’s take a look at what the price of their action today will be. From Suzy Khimm at Mother Jones:

“In addition to the millions of Americans who stand to lose unemployment benefits, a huge number of private and public sector employees will lose their jobs due to state budget cuts. Without federal help, states will have to pour in more money to prop up Medicaid, forcing them to make cutbacks in other parts of the budget. As a result, Moody’s chief economist estimates that 200,000 jobs could be axed without federal Medicaid support, and the Center for Budget and Policy Priorities puts the number as high as 900,000—jobs belonging to teachers, firemen, police, and social workers, among others.”

The Wonk Room has more:

“[The Atlantic’s Derek] Thompson pointed to a Center on Budget and Policy Priorities report stating that “without the extended Medicaid funding, Pennsylvania plans to cut funding for domestic violence prevention in half, eliminate all state funds for addressing substance abuse and homelessness, cut funding for child welfare by one-quarter, and cut payments to private hospitals, nursing homes, and doctors across the state — among other steps.” But Pennsylvania is not the only state that will have to take dramatic steps if Congress doesn’t act.

Arizona would have to cut funding for its state court system, Colorado’s likely cuts “include eliminating state aid for full-day kindergarten for 35,000 children, eliminating preschool aid for 21,000 children, and increasing overcrowding in juvenile detention facilities,” while New Mexico “could eliminate a wide range of Medicaid services, including emergency hospital services, inpatient psychiatric care, personal care assistance for the disabled, prescribed medications, and hospice care.”

Mark Zandi, chief economist of Moody’s Economy.com, estimated that 200,000 jobs could be at stake in this debate over Medicaid funding. “If state governments don’t get additional help from the federal government in the coming fiscal year, then the job losses will be at least that large — in all likelihood, measurably larger than that,” Zandi said.”

Do the deficit hypocrites care? Hell no. A pox on all their houses.

Senate Turns Down Extension of Unemployment Benefits

17 Thursday Jun 2010

Posted by in budget, Congress, Democrats, economy, Politics, Republicans

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The Republicrats in the Senate gave a big middle finger to the long-term unemployed yesterday, as 12 Democrats joined all the Republicans in voting down the extension of unemployment benefits, citing their hypocritical concerns about increasing the deficit as the reason:

“I’ve said all along that we have to be able to pay for what we’re spending,” said Sen. Ben Nelson, a Nebraska Democrat who voted against the bill. “$77 billion or more of this is not paid for and that translates into deficit spending and adding to the debt, and the American people are right: We’ve got to stop doing that.”

Funny, Sen. Nelson didn’t have any problem with deficit spending when he voted for $165 billion to fund operations in Iraq and Afghanistan for 2008 and 2009.

Sen. Diane Feinstein (D-CA) also voted again the extension over her concerns that unemployment benefits are so generous that they encourage people to not look for a job:

“We have 99 weeks of unemployment insurance,” Feinstein said. “The question comes, how long do you continue before people just don’t want to go back to work at all?”

Right DiFi, the unemployed are getting fat and happy living on benefits that are about one-third of their previous wages. This coming from the ninth richest member of Congress whose assets in 2005 were estimated at $40 million. And oh by the way, whose husband, Richard Blum, just happens to own two defense contractors that benefitted greatly from Sen. Feinstein’s time as chairman of the Military Construction Appropriations subcommittee.

Feinstein was echoing what Congressman John Linder (R-GA) said last week:

“Georgia Republican Rep. John Linder suggested Thursday that extended unemployment benefits keep people from looking for work…”[N]early two years of unemployment benefits are too much of an allure for some,” said Linder.”

OK, Rep. Linder, let’s apply your logic to the Pentagon. Since you also voted for the $165 billion in funding for Iraq and Afghanistan, isn’t that “too much of an allure” for the continuation of both wars? Let’s cut off their funding and end their addiction.

Last but not least, Sen. Orrin Hatch (R-UT) turned up the stoopid yesterday with his proposal that the unemployed undergo drug tests in order to receive benefits. Right, Orrin. The 46% of the unemployed who have been out of work for more than 6 months, the highest number since the Labor Department started keeping that statistic in 1948, would rather sit around the house, get high and watch the tube than go to work. Idiot.

I propose that members of Congress undergo drug testing. Or maybe more appropriately, brain scans.