This is not the problem

A friend of mine shared this on his Facebook page, and it makes me very sad. I would have thought he knew better.

The problem, of course, is that this assumes that most government spending is about sending your tax dollars to some unworthy welfare cheat. That’s far from the truth.

Most transactional payments – sending money from taxpayers directly to other Americans – are in the form of Medicare and Social Security, programs that people have paid into their entire lives in order to have some semblance of security in their so-called Golden Age.

Welfare, as popularly defined, is a very small portion of the federal budget. Defense spending dwarfs it. We spend more on defense now, inflation-adjusted, than we did during the height of the Cold War, even though there is not a major adversary (or ally, for that matter) spending a fraction of what we do on our military. Foreign aid, another popular target for reduction, is a minuscule portion of the federal budget.

Most of government spending – and, therefore, what most of your tax dollars go to – is either on the military, Social Security and Medicare REPAYMENTS, infrastructure that benefits us all (education, highways, food safety, etc.) and subsidies to special interests. How about instead of attacking the elderly and children (the primary beneficiaries of the kind of spending most people unthinkingly bemoan, we look at the billions going to oil subsidies or counterproductive ethanol subsidies, or the loopholes that allow hedge fund managers to pay a fraction of the income tax rate you and I pay.

The five sentences in this photo bear no resemblance to current American reality, which is this: Tax rates are, and have been, at historically low levels, both actual and as a rate of GDP, since 2001. Does anyone – ANYONE – out there think that the period between 2001 and now represents a golden age of American prosperity? The problem here isn’t that 50 percent of Americans don’t pay income tax, the problem is that 50 PERCENT OF AMERICANS DON’T EARN ENOUGH TO QUALIFY TO PAY INCOME TAX. Fix that problem, and most of the other problems in this nation will take care of themselves.

What Obama didn’t say

President Obama gave a speech here in Roanoke last week in which he discussed all of the things that lay the foundation for individual success in America. Nothing he said should have been controversial:

If you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there.

If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business — you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.

The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.  There are some things, just like fighting fires, we don’t do on our own.  I mean, imagine if everybody had their own fire service.  That would be a hard way to organize fighting fires.

So we say to ourselves, ever since the founding of this country, you know what, there are some things we do better together.  That’s how we funded the GI Bill.  That’s how we created the middle class.  That’s how we built the Golden Gate Bridge or the Hoover Dam.  That’s how we invented the Internet.  That’s how we sent a man to the moon.  We rise or fall together as one nation and as one people, and that’s the reason I’m running for President — because I still believe in that idea.  You’re not on your own, we’re in this together.

I sure don’t see anything for even conservatives to get upset about there. The whole notion of the American dream, after all, is that America is a land of unique opportunity for individual success. What creates that opportunity? It is not merely individual drive and determination, it is the American foundation: the ability for everyone to receive a good education, a massive public infrastructure that allows commerce to thrive, a strong middle class that provides the world’s largest market for goods and services.

But the lack of anything controversial never stops conservatives these days, who are extremely adept at manufacturing controversy. They seized on one sentence and wrenched it completely out of context: “If you’ve got a business — you didn’t build that.” That, of course, refers to the foundation Obama was discussing: The education system, the unbelievable American system, infrastructure. It did not refer to the business itself. But that didn’t stop Fox & Friends, Rush Limbaugh and even Mitt Romney himself from claiming differently and using that line to attack Obama and his understanding of America and American business.

Romney’s take was especially craven:

The idea to say that Steve Jobs didn’t build Apple, that Henry Ford didn’t build Ford Motor, that Papa John didn’t build Papa John Pizza, that Ray Kroc didn’t build McDonald’s, that Bill Gates didn’t build Microsoft, you go on the list, that Joe and his colleagues didn’t build this enterprise, to say something like that is not just foolishness, it is insulting to every entrepreneur, every innovator in America and it’s wrong.

Of course that’s wrong. Obama didn’t say that Steve Jobs didn’t build Apple or Henry Ford didn’t build Ford Motor. What he did say was that neither Apple nor Ford could have been as successful without the things Americans did together through their government. Without the government-created technological advances, including the Internet, or taxpayer-financed roadways, neither company would have thrived to the extent it did.

This is a manufactured controversy, but it is also an enlightening one. The only way one-percenters like Romney can justify their existence and their immense wealth is to claim that they have unique value, that what they bring to the table is worth 400 or 500 times the average American. What Obama is saying is that American success is only possible because we are all in this together, and because we all work together to create the foundation for individual success.

I think Obama understands America a hell of a lot better than they do.

Republicans have blocked Obama’s jobs policies

Republicans have had to tread carefully not to seem too gleeful about today’s lackluster jobs news: The economy gained only 69,000 new jobs in May.

This is bad news to most Americans, of course, but good news for Republican efforts to unseat President Obama. And Mitt Romney wasted no time trying to lay the blame for the bad news on Obama’s doorstep in a hastily released statement:

Today’s weak jobs report is devastating news for American workers and American families. This week has seen a cascade of one bad piece of economic news after another. Slowing GDP growth, plunging consumer confidence, an increase in unemployment claims, and now another dismal jobs report all stand as a harsh indictment of the President’s handling of the economy. It is now clear to everyone that President Obama’s policies have failed to achieve their goals and that the Obama economy is crushing America’s middle class.

There is one small problem with the notion that today’s numbers prove that Obama’s policies have failed: Republicans have controlled the U.S. House and engaged in all-out abuse of the filibuster in the Senate for well over a year. Obama has proposed new jobs creation policies, most notably last year’s American Jobs Act, which independent economists said would lead to the creation of more than 1 million jobs this year. The House refused to take it up, and Republican senators filibustered it.

Obama was able to pass meaningful stimulus soon after he took office. Though the common wisdom is that the stimulus failed, the fact is that the stimulus turned around a horrific jobs situation in which the nation was hemorrhaging hundreds of thousands of jobs a month and helped create sustained, if weak, private sector job growth. But the stimulus spending has dried up, and, clearly, the economy isn’t recovering on its own.

Republicans were more than happy to take credit for a good month of job growth in February 2011, a month after they took control of the House (but had yet to pass any jobs legislation; which remains the case to this day). Romney and other Republicans need to understand that they are co-owners of this economy now, and their obstructionism is the main reason why Washington not only hasn’t taken steps to stimulate job growth but has intentionally undermined public sector employment.

You can’t blame Obama’s policies for the sluggish economy when you refuse to even consider passing any job creation idea Obama has proposed. Pass the American Jobs Act. If the economy isn’t better by November, then you can blame Obama.

Women can’t be well-off without a man ‘in possession of a good fortune’?

James Taranto, the right-wing newspaper columnist and author of the daily “Best of the Web,” always struck me as a bit sexist, what with his constant references (borrowed from Limbaugh) to, for instance, a “blogress” when discussing a female blogger or “reporter-ette”. But the last item in today’s Best of the Web takes the cake. Discussing research that found an inverse correlation between obesity rates and the value of one’s home among women, but not men, Taranto concludes that researchers missed the obvious: Rich men apparently like hot (presumably thin) wives.

For each $238,000 drop in property value, the report found, obesity rates went up 80 percent among women. Taranto quotes various theories about why the effect would be more pronounced among women: Women are more influenced by the home environment; higher-priced homes tend to be in more walkable neighborhoods or closer to grocery stores; obesity in women is more related to financial insecurity.

All that overlooks what to Taranto seems obvious:

No one seems to have thought of the most obvious explanation. As Jane Austenobserved: “It is a truth universally acknowledged, that a single man in possession of a good fortune must be in want of a wife.” Imagine a man in possession of a good enough fortune to buy a snazzy house in Seattle. Now think about what his wife would look like.

I guess in Taranto’s world, the only women who live in nice houses are those married to men who were already “in possession of a good fortune.” Perhaps Taranto has already forgotten Cindy McCain who certainly did not need John McCain to afford too many snazzy houses to count. I guess the thought of a woman earning her own good fortune is just beyond Taranto’s ken.

The jobs record

Guess who oversaw the net creation of more private sector jobs during his first term, George W. Bush or Barack Obama? I’m guessing most people would guess Bush. Heck, I would guess Bush. After all, Obama came in during the middle of an economic free-fall while Bush inherited a robust economy.

But we’d all be wrong. During Obama’s first term (so far), the economy has created 35,000 private-sector jobs. It’s a small number, to be sure, but it is a positive number, which is remarkable given that more than 2 million private sector jobs were lost in 2009 before Obama’s policies could even take effect.

What about Bush? During his first term, the economy lost a net of 913,000 private-sector jobs. That’s with every tax cut he asked for.

Well, what about public-sector jobs? Surely the Marxist-socialist, economy-destroying Obama has loaded the government with new jobs. Right? Wrong. So far, state and federal governments have shed 607,000 jobs since Obama took office. How’s that compare to Bush’s small-government record? Well, during Bush’s first term, more than 900,000 public jobs were added.

Also interesting is this: Mitt Romney now believes the economy should be adding 500,000 jobs a month if Obama were doing a good job. What was the average job creation during the Bush administration? 66,000 per month, or about half of April’s job performance, which Romney wrote off as “terrible.” Yet Romney’s economic proposals almost completely echo Bush’s, only with even more tax cuts.

How’d that work out for us last time?

Zero for three

In response to President Obama’s announcement that he’ll give a speech in Ohio tonight about the economy, Ohio GOP communications director Christopher Maloney had a churlish response:

Try as he might, Barack Obama can’t change history and make voters forget that he spent the last three years pursuing failed policies which have slowed our state’s economic recovery, threatened our domestic manufacturing base, and placed tens of thousands of Ohio jobs at risk.

Not only was the response churlish, it managed to get all three facts wrong: The economy in Ohio, and the rest of the country, is doing far, far better than the free-fall that Obama inherited. Obama saved a good portion of the nation’s manufacturing base, and undoubtedly thousands of Ohio jobs, when he bailed out the auto industry – a tremendously successful policy that continues to reap untold economic dividends for the nation, including the first increase in manufacturing jobs the nation has seen in a decade.

It’s pretty sad when all the GOP can do is attack President Obama with lies.

Republicans finally found a tax increase they like

I thought I had Republican orthodoxy down pretty clear: No tax increase is ever acceptable and allowing a tax cut to expire is the same as a tax increase.

That, anyway, is how the GOP feels about the Bush tax cuts, which had a built-in expiration date. Any talk of letting those cuts expire – even just the portion of cuts aimed at the highest incomes – resulted in shrieks of agony and anguish.

But, suddenly, that orthodoxy seems confused. There is a tax cut that Republicans – at least the radical Republicans in the House – not only are ok with allowing to expire, they’re practically demanding it.

It’s a working class tax cut: President Obama, congressional Democrats and Senate Republicans all want to extend the payroll tax cut enacted last year. That tax cut shows up in most American’s paychecks, and especially benefits those making under $100,000 (because you only pay Social Security taxes on the first $100,000 or so of income). Democrats wanted to pay for it with a minuscule increase on taxes for millionaires, but Republicans rejected that.

Still, the Senate came to a bipartisan agreement to extend the tax cuts for two months while Congress worked on a way to pay for it for the rest of the year. The Senate leadership endorsed the plan, and it passed with 89 votes – an unheard of level of unanimity in today’s partisan gridlock.

House Speaker John Boehner had asked Senate Minority Leader Mitch McConnell to work out an agreement with Majority Leader Harry Reid. Read and McConnell did their part. But it turns out that Boehner once more was unable to lead his radical caucus. They don’t like this tax cut, for reasons they really can’t seem to explain. In order to pass it, they’re insisting on all sorts of political concessions they couldn’t otherwise win – like forcing President Obama to move ahead on the Keystone Pipeline (a really bad idea for many reasons). In other words, once again, Republicans are taking political hostages. If they don’t get what they want, the deal may crash (unless a couple dozen sensible Republicans can be found in the House to vote for what Republicans usually love to vote for: a tax cut.) As a result, your paycheck will be smaller in January, as will everyone else’s. That will stifle economic demand and perhaps snuff out the floundering recovery. As Ezra Klein said, “That’s when the 112th Congress stops being bad at its job and becomes an active impediment to the recovery.”

Republicans may think that will be good for their efforts to retake the White House, but I think they’re wrong. Even though a bad economy usually hurts the incumbent president, the Republican presidential primary is a joke. Newt Gingrich is a frontrunner? In what messed-up universe is that even possible? The Republicans clearly don’t have a viable candidate to face Barack Obama. Tearing down the American economy won’t change that, especially since more Americans are coming to the stunning realization that Republicans appear to want to hurt the economy on purpose for purely partisan political gain. If that realization holds through November, I doubt Americans will be in the mood to reward the GOP at the ballot box.

Hopefully, Americans will also remember that, while congressional Republicans brought the nation to the brink of economic catastrophe during the debt ceiling debacle over their refusal to slightly increase taxes on the wealthy as part of a huge deficit-reduction deal, House Republicans are now fighting to increase the taxes of American workers.

Here we are again

I’ve been posting only sporadically for months. Partly, that’s been because my day job got a lot busier, but part of it I’m coming to realize was burn-out with the debt ceiling issue. That’s what was consuming most of my attention and posts. It was an important issue, and I tried to highlight what I saw as the most important aspects of it: 1) It was a manufactured crisis. Congress had been raising the debt ceiling without drama for dozens of years. Many of the same Republicans now refusing to raise it without a massive deficit-reduction agreement had voted to raise it seven times during the Bush presidency without batting an eye. 2) This manufactured crisis was an act of stunning, irresponsible insanity by one party that refused to negotiate the deficit-reduction agreement they demanded in good faith. They turned down multiple deals, any one of which would have been the most conservative approach to deficit-reduction ever passed with far greater ratios of spending cuts to tax increases than ever contemplated. This despite the fact that cutting government spending in the midst of the lingering after-effects of the Great Recession is, in itself, a pretty insane idea.

So, finally, Congress lurched to an irresponsible solution: The debt ceiling would be increased enough to get through to 2013 without another hostage crisis, but a congressional super committee was charged with finding a grand bargain to reduce the deficit by another $1.5 trillion – on top of a deal hammered out that cut nearly $2.1 trillion in spending. If the super-committee failed, both sides would have to swallow a poison pill in the form of automatic triggers: painful spending cuts in both social programs and defense spending.

But, predictably, the super committee ran into the same problem that Congress did during the debt-ceiling debate: Republican refusal to even consider tax increases. The entire deal would have to depend on deep cuts to Medicare and other social programs that benefit the poor and the elderly. The closest Republicans would come to a tax increase was to offer to close a few loop holes dealing with write-offs for corporate jets – but even that came at the cost of guaranteeing the extension of Bush tax cuts at a cost to the deficit of $3.7 trillion. So they offered up $3 billion in revenue increases for a guarantee for $3.7 trillion in revenue decrease. That’s how Republicans compromise.

So, essentially, we’re at the same point we were when my blogging idled: One party is demonstrably insane, refusing all attempts at reasonable negotiation, no matter the consequence to the economy or the nation. I’m starting to wonder if I cut back on the blogging because I was busy – or because writing about this crap is so depressing. Especially since, despite what Republicans say, none of this is actually about reducing the deficit. If it were, Congress could do nothing and practically eliminate the deficit within the next five years, as demonstrated by this enlightening chart from Talking Points Memo.

Doing that would require no massive cuts to Medicare, not cuts to Social Security, no further cuts at all. This is not the ideal course of action. Allowing the Bush tax cuts to expire would hit a lot of people who can’t really afford a tax increase right now. Phasing out the Bush tax cuts totally is, I’m convinced, the best course of action, but it should be done responsibly and over time, not in one shocking move during the midst of a fragile recovery.

If Congress were acting in the best interest of the nation rather than concentrating on partisan politics, the super committee would have come up with a balanced plan that reduced the long-term deficit through a balanced mix of spending cuts, tax increases and entitlement reforms while focusing in the short term on a large economic stimulus like President Obama’s jobs act that would put people to work rebuilding the nation’s crumbling infrastructure and injecting cash to the states to keep them from having to make further public sector job cuts that have been acting as a real drag on the economy.

The chances of that happening are effectively zero. The nation’s best hope right now is for the American people to see the GOP for what it has become and repudiate it absolutely in 2012.

But the 2012 election is a long way away. We need action now.

Obama’s economic plan vs. the GOP’s

I wonder if the general public understands this: President Obama’s proposed American Jobs Act has the potential to prevent a new economic recession in 2012.

Meanwhile, the Republican prescription for the economy – immediate government spending cuts and a tax hike on middle class Americans (a result of ending the payroll tax holiday), eroding jobless benefits, etc. – would almost certainly cause a new recession.

That, anyway, is the conclusion of a disparate group of economists surveyed by Bloomberg News to assess the plans.

Why would Republicans propose a course of action that almost any economist would say is bound to result in immediate economic contraction? It could be the sudden bout of fiscal conservatism that seems to temporarily grip the party whenever a Democrat holds the White House. Or it could be the knowledge that the American electorate is more likely to punish the president than Congress when the economy is suffering during an election year.

It would be nice to think that Republicans wouldn’t put their political fortunes ahead of the American economy, but the evidence is pretty convincing that’s exactly what they’re doing.

Get rid of the dollar bill

At last, a Republican proposal I can wholeheartedly support: Doing away with the dollar bill and replacing it with dollar coins.

Dollar coins haven’t exactly taken off in the United States, though they’re common in Europe and other nations. A group of Republicans overcame their distaste for anything vaguely European, though, and recommended the one thing that will guarantee widespread acceptance of dollar coins: Getting rid of dollar bills.

For way too long, the government has clung to the irrational belief that it needed to wait until consumers of currency were ready to make the change on their own. It offered up an array of dollar coins it hoped would spur acceptance. The government has mandated the production of a certain number of dollar coins every year since 2007. But the dollar bill is still available, and Americans are creatures of habit. So the dollar coins have been piling up in the Treasury, to the tune of more than $1 billion.

The solution is simple: Quit making dollar bills. Once the bills currently in circulation wear out, Americans will have no choice.

Maybe you think the government shouldn’t thwart the desire of American citizens. But maybe you’d think different if you realized that Americans addiction to paper dollars costs the government $184 million a year. That’s the cost of replacing bills that wear out so much sooner than coins.

I’ve never understood the resistance to dollar coins. As long as you design them so they aren’t easily confused for quarters – like the ill-fated Susan B. Anthony – it can be incredibly convenient to have a couple hanging around in your change pocket. And just think how much more your change jar will be worth when you cash it in with an assortment of dollar coins spread throughout.

Most times, I believe in consumer choice. But when it comes to paper versus coins, consumers have been making the wrong choice for years, and it’s been costing the government – and taxpayers – billions of dollars.

The government should stop accommodating that. Eliminate the dollar bill, and save billions. The sooner, the better.