Our regular featured content-
These featured articles-
Follow us on Twitter @StarsHollowGzt
This is an Open Thread
Aug 14 2012
Our regular featured content-
These featured articles-
Follow us on Twitter @StarsHollowGzt
This is an Open Thread
Aug 14 2012
The ad’s cynicism contributes to a phenomenon that increases each year, and that is that we are becoming a nation that believes nothing. Not in nothing, but nothing we’re told by anyone in supposed authority.
A closer look at Paul Ryan’s federal budget plan
By David Lauter and Lisa Mascaro, Washington Bureau, Los Angeles Times
August 14, 2012
Under Ryan’s plan, which has passed the Republican-controlled House twice in slightly different versions, the Internal Revenue Service would tax the wealthiest Americans less, but many of the poorest ones more; Medicare would be transformed; Medicaid would be cut by about a third; and all functions of government other than those health programs, Social Security and the military would shrink to levels not seen since the 1930s.
The Ryan plan would not balance the federal budget for another 28 years at least, according to an analysis by the nonpartisan Congressional Budget Office. … It’s also partly because Ryan’s proposed tax cuts considerably outweigh even his ambitious spending reductions.
Ryan himself concedes that his plan would not balance the budget this decade, predicting it could be balanced by the “mid-to-early 2020s” because his plan would ignite rapid economic growth. Like his onetime mentor, Jack Kemp, the 1996 Republican vice presidential nominee, Ryan argues that the key to economic growth is not balancing the budget but lowering tax rates.
In the more than two years since his budget was unveiled, Ryan has not specified any tax breaks he would eliminate. Independent analyses have shown that offsetting the tax cuts would require changing things such as the mortgage interest deduction, the tax exclusion for employer-financed health insurance or other popular tax preferences widely used by middle-income households.
Ryan would shift Medicare from a system in which everyone gets the same set of benefits, paid for by tax funds, to one in which the government would give each senior citizen a fixed amount of money.
Ryan would also gradually lift the Medicare eligibility age from 65 to 67 by 2034.
Ryan’s plan would keep the tax cuts enacted under President George W. Bush and add an additional $4.5 trillion in cuts over the next decade. It would do that by replacing the current six tax rates with two – 10% and 25%. It would also eliminate the Alternative Minimum Tax and cut corporate taxes.
The net result would be a tax increase for the bottom fifth of households and a big tax cut at the top, according to the Tax Policy Center, a nonpartisan Washington think tank.
In many cases, low-income households would see a tax increase of $100 or less, but some would be hit harder. Among households earning between $10,000 and $20,000 a year, about 1 in 5 would get a tax increase averaging over $1,000, the Tax Policy Center analysis showed. Households earning more than $1 million a year would get nearly 40% of the benefits of the plan, with a cut averaging about $265,000. Ryan has not challenged those figures.
Ryan would increase the military budget by $300 billion over the decade.
Ryan would keep in place the across-the-board cuts on the domestic side and deepen them by $700 billion more over the decade.
Some of the domestic spending cuts are spelled out in Ryan’s blueprint – a cut in food stamps, for example, that would impose new limits on the length of time recipients can receive aid. Like Medicaid, the food stamp program would become a grant to the states, giving local jurisdictions more say in how the money is spent. Pell Grants for college students would similarly be capped, with new requirements that make only lower-income students eligible. Worker training programs would also be reduced.
Overall, the CBO said in its analysis that under Ryan’s budget, spending on defense and all domestic programs other than Social Security, Medicare and Medicaid would fall to 6% of the total economy by 2030, about half the current level. That would mean a smaller share of the economy going to federal domestic spending other than entitlements than at any time since the New Deal.
Culture Of Fraud
August 10, 2012, 5:10 pm
The big story of the week among the dismal science set is the Romney campaign’s white paper on economic policy, which represents a concerted effort by three economists – Glenn Hubbard, Greg Mankiw, and John Taylor – to destroy their own reputations.
Romney’s tax plan is now a demonstrated fraud – big tax cuts for the rich that he claims would be offset by closing loopholes, but the Tax Policy Center has demonstrated that the arithmetic can’t possibly work. He turns out to have been dishonest about when he really left Bain. And on and on.
Is it really surprising, then, that the economists who have decided to lend their names to the campaign have been caught up in this culture of fraud? Maybe some of them were initially reluctant, or thought they could support the campaign with selective renderings of the truth. But the pressure was on to be team players, to give the campaign material it could use – and so, one day, they all ended up putting their names to a report that is just plain dishonest, in ways that can be and have been easily documented.
Galt / Gekko 2012
August 11, 2012, 3:45 pm
What I do know is that anyone who believes in Ryan’s carefully cultivated image as a brave, honest policy wonk has been snookered. Mark Thoma reviews selected pieces I’ve written about Ryan; he is, in fact, a big fraud, who doesn’t care at all about fiscal responsibility, and whose policy proposals are sloppy as well as dishonest. Of course, this means that he’ll fit in to the Romney campaign just fine.
The Ryan Role
August 13, 2012, 5:24 am
Look, Ryan hasn’t “crunched the numbers”; he has just scribbled some stuff down, without checking at all to see if it makes sense. He asserts that he can cut taxes without net loss of revenue by closing unspecified loopholes; he asserts that he can cut discretionary spending to levels not seen since Calvin Coolidge, without saying how; he asserts that he can convert Medicare to a voucher system, with much lower spending than now projected, without even a hint of how this is supposed to work. This is just a fantasy, not a serious policy proposal.
What Ryan is good at is exploiting the willful gullibility of the Beltway media, using a soft-focus style to play into their desire to have a conservative wonk they can say nice things about. And apparently the trick still works.
Romney/Ryan: The Real Target
August 13, 2012, 1:54 pm
Like Bush in 2000, Ryan has a completely undeserved reputation in the media as a bluff, honest guy, in Ryan’s case supplemented by a reputation as a serious policy wonk. None of this has any basis in reality; Ryan’s much-touted plan, far from being a real solution, relies crucially on stuff that is just pulled out of thin air – huge revenue increases from closing unspecified loopholes, huge spending cuts achieved in ways not mentioned. See Matt Miller for more.
So whence comes the Ryan reputation? As I said in my last post, it’s because many commentators want to tell a story about US politics that makes them feel and look good – a story in which both parties are equally at fault in our national stalemate, and in which said commentators stand above the fray. This story requires that there be good, honest, technically savvy conservative politicians, so that you can point to these politicians and say how much you admire them, even if you disagree with some of their ideas; after all, unless you lavish praise on some conservatives, you don’t come across as nobly even-handed.
So that’s the constituency Romney is targeting: not a large segment of the electorate, but a few hundred at most editors, reporters, programmers, and pundits. His hope is that Ryan’s unjustified reputation for honest wonkery will transfer to the ticket as a whole.
Paul Ryan’s Budget Priorities: Transforming Government
By: David Dayen, Firedog Lake
Monday August 13, 2012 8:15 am
In fact, the Romney campaign has said that they would never reduce defense spending below 4% of GDP, which means the entire discretionary budget would have to have a negative rate of spending. That includes everything the government does outside of mandatory spending and things like Social Security with a dedicated funding stream. Ryan would also slash spending on mandatory programs for the poor. In fact, in his initial budget, 2/3 of all the spending cuts would hit the poor directly.
Tim Murphy has all of this in chart form. The bottom line is this: Ryan’s priorities have nothing to do with balancing the federal budget. His budget doesn’t do so for over 20 years. He voted for every single budget-busting program of the Bush Administration and he believes in federal spending to support his home district. Balancing the budget is a convenient crutch for his real goal – changing the way government works entirely. He thinks the poor don’t have a safety net, but a hammock. He wants to sever that hammock from the tree, and sever the relationship between government and its neediest citizens. He wants to either privatize government services or end them. Period, end of sentence.
But it’s not just Ryan and Romney, these are Democratic goals too and they’d much rather talk about who cuts less than about massive income inequality, stratification of social class, permanent unemployment, decaying infrastructure, and the humanitarian needs of the 99.9% of us who keep you in your phoney baloney jobs you ungrateful bootlickers.
The Great and Narrow Fiscal Debate of 2012
By: David Dayen, Firedog Lake
Monday August 13, 2012 9:35 am
(T)his is not only a debate we shouldn’t be having at a time of mass unemployment, but a debate the public doesn’t want in a time of mass unemployment. The media have done yeoman work in trying to conflate “the economy” with “the deficit” – and considering that we could actually use a higher deficit right now for stimulative reasons, this is partially true – but that’s not the debate we’re going to be having. We’re going to talk about what the role of government should play 20 years in the future, rather than what it should play right now when we have an unemployment crisis.
It’s a choice between one distinct ideology, and a technocratic center which doesn’t reflect the core belief of the party as it has been defined over the years. The part of the debate that believes Social Security needs to be adequate to provide for retirement and not cut from its already puny benefit – that will not get a hearing. The part of the debate that says that Medicare and Medicaid do a better job of controlling health costs than private insurance, and that they should be expanded and joined for a single-payer program, starting with allowing people to buy in to Medicare – that will not get a hearing. The part of the debate that says that in a time of mass unemployment, government must be the spender of last resort to increase aggregate demand and create jobs – that will not get a hearing. This great deception, that the pole of the debate represented by the Administration represents the [left]ward pole, will only facilitate a post-election move to cut safety net spending, as the “wise responsible middle course.”
I don’t think that the electoral outcome will give running room for policies to deal with mass unemployment – that seems like a rabbit out of the hat. It seems much more likely it will give running room for the policies that would naturally arise out of a two-month debate where one side wants to end a substantial portion of the safety net, and the other side merely wants to cut it in the spirit of compromise as part of a grand bargain.
Erskine Bowles Heaps Praise on Paul Ryan in 2011 Video
By: David Dayen, Firedog Lake
Tuesday August 14, 2012 7:35 am
Just avail yourself of Erskine Bowles, floated as a potential replacement at Treasury in an Obama second term, the “liberal” half of the Bowles-Simpson catfood commission, singing the praises of Paul Ryan, a year after Ryan rounded up his fellow House Republicans on the commission and denied the votes necessary to pass the deficit plan because they would have been considered a violation of the Norquist pledge, as a tax increase.
Aug 14 2012
Since Saturday’s announcement of the right wing darling Rep. Paul Ryan (R-WI) as Gov. Mitt Romney’s choice for his Vice President, the number one concern has been Ryan’s budget that would end Medicare as we know it, end federal funding of Medicaid and privatize Social Security. Those proposals are unacceptable for the majority of voters. But voting to reelect Barack Obama won’t protect those programs either. Pres. Obama and the Democrats have agreed to cuts and changes to those programs that are equally unacceptable. Mr. Obama has even lamented that he has not been given “enough credit for their willingness to accept cuts in Medicare and Social Security.” Even more worrisome is the person whose name has been bandied about as Treasury Secretary Timothy Geithner’s replacement, none other than the co-chair of the infamous Cat Food Commission, Erskine Bowles. Ezra Klein, Beltway insider and Washington Post political analyst, is betting on Mr. Bowles appointment if Pres. Obama is reelected:
For the Obama administration, Bowles has a number of qualifications. For one thing, Republicans adore him. Ryan has called him “my favorite Democrat.” Appointing Bowles to be Treasury Secretary would ensure a smooth confirmation, and it would be interpreted as a sign of goodwill and “seriousness” both by Republicans and by the media. Coming after a bitterly partisan election and at the outset of a hugely consequential series of negotiations, that could have real appeal to the White House.
One reservation you often hear when playing the “who will be the next Treasury Secretary” guessing game is, “but they have no market experience.” For better or worse, it’s considered crucial that the Treasury Secretary understand, and be capable of working with, markets. Bowles was an investment banker before he entered politics, and he currently serves on the board of directors for both Morgan Stanley and GE. He’s also personally beloved by Wall Street, where “Simpson-Bowles” has deep and fervent supporters, including many who have no real idea what’s in it. Appointing Bowles would be a signal to them that Washington is getting serious. [..]
There are downsides to Bowles, too. He’ll want the White House to go further than they’ve been willing to go on long-term health costs. But they’re prepared to do that once taxes are on the table. He’s also quite disliked by the left, which frequently refers to the Simpson-Bowles Commission as “the Catfood Commission.” That’s a drawback, but the Obama administration has always prized holding the center over placating the left. Indeed, Obama, who ran in 2008 as a post-partisan uniter and is unexpectedly and unhappily having to run a much more traditional and partisan campaign in 2012, might see that as a benefit. If he can press the reset button after this election, he’s going to do it.
Just what this country needs, another corporatist Wall St. buddy and former bank executive heading Treasury who, as Dean Baker points out, Mr. Bowles has been working to cut Social Security for 15 years:
While Simpson has seized the spotlight, it may prove to be the case that Erskine Bowles, his co-chairman, poses the greater threat to Social Security. The reason is simple: Bowles is the living embodiment of the rewards available to politicians who would support substantial cutbacks or privatization of the program. [..]
Bowles is an unsuccessful politician, having twice lost in runs for the Senate in North Carolina.
Yet, he is very successful financially. He pockets $335,000 a year as a director of Morgan Stanley, one of the huge Wall Street banks that was rescued by taxpayer dollars in the fall of 2008. He likely pockets a similar sum from sitting as a director of GM, another company rescued by the government.
This means that Bowles pockets close to $700,000 annually (@600 monthly Social Security checks) from attending eight to twelve meetings a year. This must look like a pretty attractive deal to current members of Congress. In other words, the message Bowles is sending members of Congress is that if you betray your constituents and vote to undermine Social Security, you will be amply rewarded even if the voters give you the boot.
Bowles has also lied to about Social Security’s solvency:
What we’ve done is make Social Security solvent for the next 75 years. As you all know, Social Security runs out of money in 2037. We’re not making it up. That’s the law.
Think Progress‘s Zaid Zilani debunked that lie:
Social Security is currently projected to be fully solvent until the year 2037. After that, it is expected to be able to pay out 75 percent of benefits until 2084, which basically equals full benefits, once inflation is accounted for. There is no threat of the program running out of money any time soon – certainly not in 2037. That does not mean that there aren’t positive and progressive changes that could possibly be made to the system.
As for Medicare and Medicaid, Dayen debunks the myth about the cost effectiveness of those programs:
The New England Journal of Medicine reports that Medicare and Medicaid spending has decelerated in recent years, and not just because of the Great Recession. The public programs have seen their cost growth slow significantly compared to private health insurance. And this is expected to continue for the coming decade.
This is so important because, as Paul van de Water of the Center on Budget and Policy Priorities explains, the public debate has focused on transforming Medicare and Medicaid in the coming years, constraining cost in the very programs that are the most cost-efficient. If anything, the opposite should be true, and more and more of the system should be converted into public programs to increase the risk pool, allow for greater bargaining leverage on prices, and provide stability. [..]
The Obama campaign would have voters believe that Mitt Romney and Paul Ryan would destroy the Social Safety net but the idea of Erskine Bowles as Treasury Secretary would be just as bad for out social safety net. Mr. Bowles and his “Catfood Commission” are “grand bargains” we don’t need.
Aug 14 2012
This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.
Find the past “On This Day in History” here.
August 14 is the 226th day of the year (227th in leap years) in the Gregorian calendar. There are 139 days remaining until the end of the year.
On this day in 1935, President Franklin D. Roosevelt signs into law the Social Security Act. Press photographers snapped pictures as FDR, flanked by ranking members of Congress, signed into law the historic act, which guaranteed an income for the unemployed and retirees. FDR commended Congress for what he considered to be a “patriotic” act.
U.S. Social Security is a social insurance program that is funded through dedicated payroll taxes called Federal Insurance Contributions Act (FICA). Tax deposits are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund.
The main part of the program is sometimes abbreviated OASDI (Old Age, Survivors, and Disability Insurance) or RSDI (Retirement, Survivors, and Disability Insurance). When initially signed into law by President Franklin D. Roosevelt in 1935 as part of his New Deal, the term Social Security covered unemployment insurance as well. The term, in everyday speech, is used to refer only to the benefits for retirement, disability, survivorship, and death, which are the four main benefits provided by traditional private-sector pension plans. In 2004 the U.S. Social Security system paid out almost $500 billion in benefits.
By dollars paid, the U.S. Social Security program is the largest government program in the world and the single greatest expenditure in the federal budget, with 20.8% for social security, compared to 20.5% for discretionary defense and 20.1% for Medicare/Medicaid. Social Security is currently the largest social insurance program in the U.S., constituting 37% of government expenditure and 7% of the gross domestic product and is currently estimated to keep roughly 40% of all Americans age 65 or older out of poverty. The Social Security Administration is headquartered in Woodlawn, Maryland, just to the west of Baltimore.
Social Security privatization became a major political issue for more than three decades during the presidencies of Gerald Ford, Jimmy Carter, Ronald Reagan, George H. W. Bush, Bill Clinton, and George W. Bush.