April 17, 2011 archive

Robert Pollin is Professor of Economics at the University of Massachusetts in Amherst, and is a founding co-director of the Political Economy Research Institute (PERI).  His research centers on macroeconomics, conditions for low-wage workers in the U.S. and globally, the analysis of financial markets, and the economics of building a clean-energy economy in the U.S. His books include A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the US and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.

In February 2010 Pollin talked with Paul Jay of The Real News Network and during the interview outlined a careful combination of job-generating public investments, incentives to mobilize private investment, and policies that protect economically vulnerable populations that can create the economic, regulatory and policy environment that Obama could have already been using to create 18 million jobs and lower the unemployment rate to only 4 percent by 2012 – a proposal that has never been given any serious consideration by the Obama administration, policy makers or mainstream media.

Instead the Obama administration chose to continue listening to people like Ben Bernanke whom Obama had re-nominated as Federal Reserve Chairman in August 2009, and who, as the top bank regulator in the country, had played a central role in the creation of the ongoing economic crisis we are experiencing.

In another interview published today, Pollin again talks with Paul Jay discussing Obama’s speech the other day in which he made clear that he is more or less taking on the argument that the big problem is the debt and that austerity for the masses is his plan for reducing it, pointing out that Obama is accepting the notion of the debt being a bigger problem than a recession, that Obama’s premise is “wrong to begin with”, and that:

CBS Sunday Morning did an interesting report on our tax system as we approach tomorrows filing date.

April 17, 2011 The U.S. tax code: A “huge convoluted mess”

Complaining about taxes is as old as America itself, but as the debate rages over fairness of taxes, some millionaires say, tax us more

Cross Posted from The Strs Hollow Gazette

Will there be another “cave exploration by our Spelunker-in-Chief? Despite President Obama speech on Wednesday and his demand request for a “clean bill” to raise the debt ceiling, there are those who have their doubts about Obama resolve to stand his ground considering his past capitulations in the name of bipartisanship for the last two years.

Now Sen. Jim DeMint (R-SC) has threatened to filibuster the bill should it not contain “other fiscal reforms” like a balanced budget amendment.

A top conservative senator on Thursday indicated he is willing to go to extreme lengths to prevent a vote on raising the debt ceiling, even if it hurts the Republican Party politically.

Sen. Jim DeMint (R-S.C.) said on the conservative Laura Ingraham Show he is considering filibustering an upcoming vote to raise the nation’s $14.3 trillion debt limit if it doesn’t contain other fiscal reforms.

While the Senate Minority Leader Mitch “The Human Hybrid Turtle” McConnell (R-KY) has said that the ceiling should be raised to avoid the dire consequences, he would like to see it passed with only Democratic votes.

Mr. McConnell is discouraging his colleagues from filibustering a vote to increase the federal debt limit because he knows that, if push came to shove, some of his colleagues would almost certainly have to vote yea. He’d rather it pass in a 51-vote environment, where all of the votes could come from Democrats, than in a 60-vote environment, where at least seven Republicans would have to agree to a cloture motion.

In the same New York Times article by Nate Silver the consequences of failing to raise the debt ceiling would lead to another recession:

If the Congress does not vote to increase the debt ceiling – a statutory provision that governs how many of its debts the Treasury is allowed to pay back (but not how many obligations the United States is allowed to incur in the first place) – then the Treasury will first undertake a series of what it terms “extraordinary actions” to buy time. The “extraordinary actions” are not actually all that extraordinary – at least some of them were undertaken prior to six of the seven debt ceiling votes between 1996 and 2007.

But once the Treasury exhausts this authority, the United States would default on its debt for the first time in its history, which could have consequences like the ones that Mr. Boehner has imagined: a severe global financial crisis (possibly larger in magnitude than the one the world began experiencing in 2007 and 2008), and a significant long-term increase in the United States’ borrowing costs, which could cost it its leadership position in the global economy. Another severe recession would probably be about the best-case scenario if that were to occur.

The bill will not get to the Senate until sometime in May. When it does reach the “upper” chamber, it most likely will be loaded with hundreds of riders from the House Tea Party Republicans. The President and the Senate Democratic leaders have a limited choices. However, if that choose  to  stand their ground and push for that “clean bill”, there could be “savior”, Wall St., which stands to lose billions or more if the US  defaults on its debt. As David Dayen at FDL suggests this is a plausible solution. But is it possible  considering Obama’s inability to win at this “Congressional Game of Chicken”?