We're aware that you're tired of the debt ceiling talk - and frankly, after covering it extensively over the last six weeks, we are too. As we've often reminded you though, dear reader, anything worth doing is worth doing well. For us, that includes cleaning up a few questions and comments put forward by some of our readers.
One reader thought we should cut off the perks for our elected representatives and base their salaries and benefits on the economy, "so that when they screw up the economy for us, it will affect them in the same way." We wish that were true, but sadly, that would likely only cause more graft and favors to be sold on Capitol Hill, not less.
One reader asked one of our staff if we thought Tea Partiers are really terrorists. For that, we simply defer to our colleague at Slate, Dave Weigel, who said on Tuesday, "If you don't want your opponent to label you a hostage-taker, here's an idea: Don't take hostages."
The biggest question we've heard so far is: Who won?
There are a ton of different answers to that question, depending on how someone is trying to spin it - or what their perspective is. Short-term, long-term, left, right, or terrorist Tea Bagger, the list of winners and those claiming victory includes almost everyone.
Everyone except the continually shrinking middle and working classes. They lost - and that includes most of you, our readers.
Wall Street didn't find much to cheer about in the new law Tuesday, even though its passage staved off a fiscal catastrophe. The economic news at the end of last week was horrible, in large part because of state and local governments having to make draconian budget cuts over the last six months. With this deal, it looks like that will only get worse. Because local and state governments have been firing more local people (since they no longer have Federal stimulus dollars to cushion them), people are spending less. Even with lower gas prices in June, consumers kept their wallets in their pockets.
While two of the three major credit ratings agencies did NOT downgrade America's credit, they did put the country on a kind of fiscal probation, warning the kind of shenanigans caused by nearly a decade of immature budgetary irresponsibility, capped off by Tea Party antics, will not be tolerated again. In an unusual way, most Americans agree with the credit ratings agencies, that lawmakers have been acting like 'spoiled children', especially since the last election.
Meanwhile, what was missing from the new law was help for jobs and the unemployed - both things that would help the middle class.
What was also missing from this new law - at least in the short term - was higher taxes on the rich and the closure of tax loopholes for corporations. There is no need to argue either of these points. Tax rates are some of the lowest they've been in nearly sixty years, in large part thanks to the loopholes built in primarily for the rich. Further, corporations like G.E. and Amazon paid effective tax rates near zero last year. While those problems might be addressed by the Congressional Debt committee established by this new law, that won't help create more jobs in the short term for the people who need them now, not sometime down the road.
The fact is, there are a lot of things that could have and should have been done over the last eight to ten years on the subject of debt, and paying our debts - but none of them were done.
Now, the debt is due, and it must be paid - by ALL Americans, one way or another. While those who lost the most in this fight may be the middle class, we can tell you this much: there really weren't any winners in this war.
Wednesday, August 3, 2011
Tuesday, August 2, 2011
We Now Return You To Your Regular Programming, Already In Progress...
And just like that, the great battle of the debt ceiling is done.
No, the bill hasn't officially passed through the Senate, or been signed by the President this morning - but the likelihood that it will be a law before three o'clock this afternoon is pretty high.
We're extremely glad this whole debacle is past, for now. Hopefully, our government can begin moving towards more jobs-related actions, since this bill did nothing on jobs or to help the unemployed. There are some signs that Democratic members of Congress already have begun to do so. The entire time this massive debt debate has been going on, the economy has continued to flicker in the background, like some Laurel & Hardy short where the problem seems obvious to everyone but them.
Still, the argument is basically over - but you may not have had the time to dig into the bill as some of us have. Before this subject gets filed away for a little while, we thought we'd give you a quick post-skirmish analysis. Think of this as a Cliff's Notes for the bill that was passed after all that fighting.
To start with, for those on the right who wanted cuts in entitlement programs? They didn't get them. For those on the left who wanted tax revenues from the wealthy, they didn't get what they wanted either.
After digging into the bill, it's fairly easy to see that the Republicans seem to have traded the appearance of winning the politics on this issue for the substance that the Democrats actually gained.
Yes - the bill still has a two-phase process. No, passing a Balanced Budget Amendment (BBA) isn't a requirement of either phase. Yes, there is a provision for attempting to pass a BBA (which is highly unlikely). Yes, both phases give the power to raise the debt ceiling to the President (even though that power constitutionally is the responsibility of Congress). Yes, both phases are subject to a "vote of disapproval" from the House & Senate, as Sen. McConnell initially proposed. No, neither vote of disapproval is expected to be anything other than a formality.
When all phases are complete, the debt ceiling will be raised to a minimum of $2.1 trillion, but no higher than $2.4 trillion.
After the bill is signed today, about $1 trillion in cuts will be locked in immediately - but the cuts are heavily back-loaded, with most of them not beginning until 2013 or 2014, and not ending until 2022. Only about $22 billion dollars in cuts will come from 2012 spending budgets - the same cuts that President Obama and Speaker Boehner began discussing about a month ago, and agreed on publicly over a week ago.
A committee will be formed, made up of twelve members, six from the House and six from the Senate. Each leader - Reid, Pelosi, Boehner, and McConnell - will choose three committee members. The committee will be tasked with finding $1.2 trillion in debt reduction savings from the Federal budget. There will almost certainly be massive closing of tax loopholes, which is allowed. Some form of tax increases are also almost certain.
If the committee doesn't reach it's goal in finding $1.2 trillion dollars in savings by this Thanksgiving, and Congress doesn't follow the committee's recommendation, then an automatic trigger kicks in, which automatically cuts $1.5 trillion from the budget, half of which would be from defense.
Programs for the poor and elderly, including Medicaid and Social Security, will be exempt from these cuts. Medicare payments to providers could be hit in a small way - but not to Medicare recipients.
In short, this agreement allows Congress to FINALLY get moving on the most important job they've all been avoiding so far, the single biggest thing that could solve both our debt problems and the economy - job creation.
Of course, Congress will get going on that right away... as soon as their FIVE WEEK summer vacation is over. After all their fine work in Washington, be sure to tell them how you feel about their job performance when you get the opportunity.
No, the bill hasn't officially passed through the Senate, or been signed by the President this morning - but the likelihood that it will be a law before three o'clock this afternoon is pretty high.
We're extremely glad this whole debacle is past, for now. Hopefully, our government can begin moving towards more jobs-related actions, since this bill did nothing on jobs or to help the unemployed. There are some signs that Democratic members of Congress already have begun to do so. The entire time this massive debt debate has been going on, the economy has continued to flicker in the background, like some Laurel & Hardy short where the problem seems obvious to everyone but them.
Still, the argument is basically over - but you may not have had the time to dig into the bill as some of us have. Before this subject gets filed away for a little while, we thought we'd give you a quick post-skirmish analysis. Think of this as a Cliff's Notes for the bill that was passed after all that fighting.
To start with, for those on the right who wanted cuts in entitlement programs? They didn't get them. For those on the left who wanted tax revenues from the wealthy, they didn't get what they wanted either.
After digging into the bill, it's fairly easy to see that the Republicans seem to have traded the appearance of winning the politics on this issue for the substance that the Democrats actually gained.
Yes - the bill still has a two-phase process. No, passing a Balanced Budget Amendment (BBA) isn't a requirement of either phase. Yes, there is a provision for attempting to pass a BBA (which is highly unlikely). Yes, both phases give the power to raise the debt ceiling to the President (even though that power constitutionally is the responsibility of Congress). Yes, both phases are subject to a "vote of disapproval" from the House & Senate, as Sen. McConnell initially proposed. No, neither vote of disapproval is expected to be anything other than a formality.
When all phases are complete, the debt ceiling will be raised to a minimum of $2.1 trillion, but no higher than $2.4 trillion.
After the bill is signed today, about $1 trillion in cuts will be locked in immediately - but the cuts are heavily back-loaded, with most of them not beginning until 2013 or 2014, and not ending until 2022. Only about $22 billion dollars in cuts will come from 2012 spending budgets - the same cuts that President Obama and Speaker Boehner began discussing about a month ago, and agreed on publicly over a week ago.
A committee will be formed, made up of twelve members, six from the House and six from the Senate. Each leader - Reid, Pelosi, Boehner, and McConnell - will choose three committee members. The committee will be tasked with finding $1.2 trillion in debt reduction savings from the Federal budget. There will almost certainly be massive closing of tax loopholes, which is allowed. Some form of tax increases are also almost certain.
If the committee doesn't reach it's goal in finding $1.2 trillion dollars in savings by this Thanksgiving, and Congress doesn't follow the committee's recommendation, then an automatic trigger kicks in, which automatically cuts $1.5 trillion from the budget, half of which would be from defense.
Programs for the poor and elderly, including Medicaid and Social Security, will be exempt from these cuts. Medicare payments to providers could be hit in a small way - but not to Medicare recipients.
In short, this agreement allows Congress to FINALLY get moving on the most important job they've all been avoiding so far, the single biggest thing that could solve both our debt problems and the economy - job creation.
Of course, Congress will get going on that right away... as soon as their FIVE WEEK summer vacation is over. After all their fine work in Washington, be sure to tell them how you feel about their job performance when you get the opportunity.
Monday, August 1, 2011
Get Busy Livin' Or Get Busy Dyin'
As these words hit your e-mail box today, we don't know if there is a final debt and budget deal in place yet for the United States. Yes, a deal was announced last night - but it isn't over until all the votes are counted.
Frankly, we're not sure it matters all that much anymore. Even the head of the International Monetary Fund has acknowledged, America's financial reputation is already severely damaged, thanks to this unnecessary debt & budget debacle. One ratings agency says the deal won't prevent a credit downgrade for the U.S.
What few details about the latest "last ditch" bill that have come out are not promising. The deal will cost jobs, will lose the federal government revenue, and will squeeze the states even further - which will only make things worse at the local level.
As Paul Krugman, one of the smartest economists in the world right now, has said time and time again, we are doing exactly what we should NOT be doing at this point: cutting government spending in the near term. In fact, all the numbers and facts say there will likely be NO better time for America to borrow money - in the SHORT TERM - so that we can usefully and measurably fix our infrastructure, invest in our nation, and plan for long-term debt reduction.
Investing in ourselves would create jobs in the private sector right away, as it always has in the past, which would also help fuel the one sure cure for our long-term debt problem: economic growth.
Of course, doing so would mean both Republican and Democratic leadership, as well as our President, would have to do something they seem to have found impossible the last few years: Tell the political terrorists in the extremist, regressive right to take a hike.
We don't say that hyperbolically. The extremist right has taken a new approach, absolutely not intended by the founders or the Constitution: extortion politics. Why wait and do things slowly, through procedure, when holding a political gun to the head of anyone who disagrees with you is so much faster and easier? That idea sounds really good until it's the guys on the OTHER side trying to shove through legislation that will have long-term negative effects on everyone. Even well-known hyper-conservative commentator Charles Krauthammer says, "...trying to force the issue — trying to turn a blocking minority into a governing authority — is not just counter-constitutional in spirit but self-destructive in practice."
It hasn't helped that our President has acted so weak, stubbornly refusing to understand that his opposition views him as an enemy, not as a partner in governing. Mr. Obama has been "left at the alter" by the GOP so often, the defense that Mr. Obama is "playing 11-level chess" seems far less likely than the fact he's simply, willfully, politically naive.
A feckless media is also to blame, as any insane tea bagger fool can swing around like a monkey on a pole and have every so-called news agency within fifty miles covering them. Meanwhile, when a progressive rally with significant numbers occurs, most of the media doesn't even bother to cover it. There is definitely media bias in America - but anyone who tells you it's liberal is still living in the 1970s.
The final failure has been that of individuals on both ends of the political spectrum. On the left, Democrats grumble, but they still support their President blindly, by ridiculously high margins. Even more responsible for this failure are the Republicans, who conscripted the Tea Party folks into their own political organization - but then failed to control the extremist Tea Bagger movement within the Tea Party.
It's time – long, long, long past time, actually - for Americans to get their lazy asses off their couches, to talk with their neighbors, to educate themselves on the issues, to stop being TOLD what to think by professional bloviators, and to get involved again in governing their country. The extremists MUST be minimized to the proper representation of their numbers in the greater population. The rules must be followed by all parties and individuals - and heavy penalties need to be levied by the offenders' own party to keep political terrorism from becoming the defacto method of governing.
Americans must get busy repairing the economic and political damage that its citizens have allowed over the last thirty-plus years -- or we Americans may as well disband this union-in-name-only of states that we occupy, and sign the death certificate of this great experiment we've proudly called the United States of America.
Frankly, we're not sure it matters all that much anymore. Even the head of the International Monetary Fund has acknowledged, America's financial reputation is already severely damaged, thanks to this unnecessary debt & budget debacle. One ratings agency says the deal won't prevent a credit downgrade for the U.S.
What few details about the latest "last ditch" bill that have come out are not promising. The deal will cost jobs, will lose the federal government revenue, and will squeeze the states even further - which will only make things worse at the local level.
As Paul Krugman, one of the smartest economists in the world right now, has said time and time again, we are doing exactly what we should NOT be doing at this point: cutting government spending in the near term. In fact, all the numbers and facts say there will likely be NO better time for America to borrow money - in the SHORT TERM - so that we can usefully and measurably fix our infrastructure, invest in our nation, and plan for long-term debt reduction.
Investing in ourselves would create jobs in the private sector right away, as it always has in the past, which would also help fuel the one sure cure for our long-term debt problem: economic growth.
Of course, doing so would mean both Republican and Democratic leadership, as well as our President, would have to do something they seem to have found impossible the last few years: Tell the political terrorists in the extremist, regressive right to take a hike.
We don't say that hyperbolically. The extremist right has taken a new approach, absolutely not intended by the founders or the Constitution: extortion politics. Why wait and do things slowly, through procedure, when holding a political gun to the head of anyone who disagrees with you is so much faster and easier? That idea sounds really good until it's the guys on the OTHER side trying to shove through legislation that will have long-term negative effects on everyone. Even well-known hyper-conservative commentator Charles Krauthammer says, "...trying to force the issue — trying to turn a blocking minority into a governing authority — is not just counter-constitutional in spirit but self-destructive in practice."
It hasn't helped that our President has acted so weak, stubbornly refusing to understand that his opposition views him as an enemy, not as a partner in governing. Mr. Obama has been "left at the alter" by the GOP so often, the defense that Mr. Obama is "playing 11-level chess" seems far less likely than the fact he's simply, willfully, politically naive.
A feckless media is also to blame, as any insane tea bagger fool can swing around like a monkey on a pole and have every so-called news agency within fifty miles covering them. Meanwhile, when a progressive rally with significant numbers occurs, most of the media doesn't even bother to cover it. There is definitely media bias in America - but anyone who tells you it's liberal is still living in the 1970s.
The final failure has been that of individuals on both ends of the political spectrum. On the left, Democrats grumble, but they still support their President blindly, by ridiculously high margins. Even more responsible for this failure are the Republicans, who conscripted the Tea Party folks into their own political organization - but then failed to control the extremist Tea Bagger movement within the Tea Party.
It's time – long, long, long past time, actually - for Americans to get their lazy asses off their couches, to talk with their neighbors, to educate themselves on the issues, to stop being TOLD what to think by professional bloviators, and to get involved again in governing their country. The extremists MUST be minimized to the proper representation of their numbers in the greater population. The rules must be followed by all parties and individuals - and heavy penalties need to be levied by the offenders' own party to keep political terrorism from becoming the defacto method of governing.
Americans must get busy repairing the economic and political damage that its citizens have allowed over the last thirty-plus years -- or we Americans may as well disband this union-in-name-only of states that we occupy, and sign the death certificate of this great experiment we've proudly called the United States of America.
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