Great blog post that maps out where the 12 members of the debt super committee stands ideologically versus each other. Worth the quick read.
Showing posts with label Debt Ceiling. Show all posts
Showing posts with label Debt Ceiling. Show all posts
Friday, August 12, 2011
S&P Report Cites Bush Tax Cuts as a Reason for Downgrade - CTJ
As I blogged about earlier this week, a number of critics have placed the blame for the S&P downgrade squarely on the policies of the Bush Administration. Similarly, Citizens for Tax Justice also cites the S&P report claiming the Bush Tax Cuts as a reason for the downgrade.
Citizens for Tax Justice also has four new policy briefs on how taxes work, which are worth the read.
Citizens for Tax Justice also has four new policy briefs on how taxes work, which are worth the read.
Thursday, August 11, 2011
Pimco Founder: A Balanced Budget will not produce a balanced economy.
Great op-ed piece in The Washington Post by Bill Gross, founder and co-CIO of the investment management firm Pimco. The whole quote is:
"...an anti-Keynesian, budget-balancing immediacy imparts a constrictive noose around whatever demand remains alive and kicking. Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy. It will not."
Mr. Gross also makes the following astute observation:
"But while our debt crisis is real and promises to grow to Frankenstein proportions in future years, debt is not the disease — it is a symptom. Lack of aggregate demand or, to put it simply, insufficient consumption and investment is the disease. Debt has been simply an abused sovereign and private market antidote to sustain it. We and our global market competitors are and have been experiencing a lack of aggregate demand for several decades. It is now only visibly coming to a head, as the magic elixir of leverage is drained and exhausted."
This is a must-read article!
"...an anti-Keynesian, budget-balancing immediacy imparts a constrictive noose around whatever demand remains alive and kicking. Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy. It will not."
Mr. Gross also makes the following astute observation:
"But while our debt crisis is real and promises to grow to Frankenstein proportions in future years, debt is not the disease — it is a symptom. Lack of aggregate demand or, to put it simply, insufficient consumption and investment is the disease. Debt has been simply an abused sovereign and private market antidote to sustain it. We and our global market competitors are and have been experiencing a lack of aggregate demand for several decades. It is now only visibly coming to a head, as the magic elixir of leverage is drained and exhausted."
This is a must-read article!
Tuesday, August 9, 2011
Republicans/Tea Party own this downgrade (says pretty much everyone.)
Noahpinion has an interesting read. Very well said:
"Debt is now approaching 100% of GDP...If the Reagan-Bush I debt runup had not occurred, we would only be at 70%. If the Bush II tax cuts had not occurred, we would probably be around the same level or slightly higher. If neither Republican debt binge had occurred, anyone who tried to question U.S. solvency would be laughed out of the room."
Along the same lines, Joe Nocera writes in today's column pretty much the same thing:
"The downgrade, after all, was less about economics than politics. S.& P. was frightened by the same thing that has scared most Americans: the spectacle of an unyielding minority of Tea Party Republicans ready to push the country into default rather than accept even modest tax increases to help bring down the deficit. “The effectiveness, stability, and predictability of American policy-making and political institutions have weakened at a time of ongoing fiscal and economic challenges,” wrote S.& P. in its downgrade report. Who can disagree?
Has any president in American history left behind as much lasting damage as George W. Bush? In addition to two unfinished wars, he also set us on the path to our current financial mess. The Bush tax cuts, which turned a surplus into a growing deficit, have been disastrous."
That's why Peter Orszag's recommendation to let the Bush Tax Cuts expire makes sense:
"...the most straightforward way to raise the needed revenue is to allow all of the 2001/2003 tax cuts, not only those for high-earners, to expire at the end of next year. That would lower the 10- year deficit by more than $3 trillion. (Democrats who bemoan the role of the tax cuts in driving up the deficit but then favor extending the vast majority of them are suffering from cognitive dissonance.)"
At some point the Republican Party needs to say enough is enough to the Tea Party. Unfortunately I can't imagine a day when that will actually happen.
"Debt is now approaching 100% of GDP...If the Reagan-Bush I debt runup had not occurred, we would only be at 70%. If the Bush II tax cuts had not occurred, we would probably be around the same level or slightly higher. If neither Republican debt binge had occurred, anyone who tried to question U.S. solvency would be laughed out of the room."
Along the same lines, Joe Nocera writes in today's column pretty much the same thing:
"The downgrade, after all, was less about economics than politics. S.& P. was frightened by the same thing that has scared most Americans: the spectacle of an unyielding minority of Tea Party Republicans ready to push the country into default rather than accept even modest tax increases to help bring down the deficit. “The effectiveness, stability, and predictability of American policy-making and political institutions have weakened at a time of ongoing fiscal and economic challenges,” wrote S.& P. in its downgrade report. Who can disagree?
Has any president in American history left behind as much lasting damage as George W. Bush? In addition to two unfinished wars, he also set us on the path to our current financial mess. The Bush tax cuts, which turned a surplus into a growing deficit, have been disastrous."
That's why Peter Orszag's recommendation to let the Bush Tax Cuts expire makes sense:
"...the most straightforward way to raise the needed revenue is to allow all of the 2001/2003 tax cuts, not only those for high-earners, to expire at the end of next year. That would lower the 10- year deficit by more than $3 trillion. (Democrats who bemoan the role of the tax cuts in driving up the deficit but then favor extending the vast majority of them are suffering from cognitive dissonance.)"
At some point the Republican Party needs to say enough is enough to the Tea Party. Unfortunately I can't imagine a day when that will actually happen.
Thursday, August 4, 2011
Myths and Facts About the Debt-Ceiling Compromise (according to The White House)
Not sure if this effort on the part of the White House is meant to assuage nervous supporters or convince undecided independents but the White House is in full campaign mode defending and explaining President Obama's actions in the debt ceiling debate with both an FAQ page and an infographic describing the agreement.
Wednesday, August 3, 2011
How Clinton Handled His Debt Ceiling Crisis Better Than Obama | The New Republic
Many people I know would agree with this but The New Republic does add some caveats to its assessment, including this very important point:
"THE MOST CRUCIAL difference between Clinton’s debt limit battle and the current crisis is that, in 1996, the Republicans were bluffing. No Republican seriously considered defaulting on the debt to be a viable option."
My how times have changed...
"THE MOST CRUCIAL difference between Clinton’s debt limit battle and the current crisis is that, in 1996, the Republicans were bluffing. No Republican seriously considered defaulting on the debt to be a viable option."
My how times have changed...
Why The Math Doesn't Work
Ezra Klein starts off clearly:
"There are now two sides in the American tax debate: the Republican Party, which refuses to have a serious conversation about taxes, and the Democratic Party, which . . . refuses to have a serious conversation about taxes."
...then goes on to explain why the math doesn't work:
"The debt-ceiling deal simply proves the point. Let’s say the spending cuts go exactly as the Republicans hope: We cut $900 billion now and $1.5 trillion later. That’s more cuts than the White House says it would ever agree to, but ignore that for a moment. Now let’s say the tax side goes according to the White House’s plan: Most of the Bush tax cuts are extended, but the break for income of more than $250,000 a year expires. Are we done?
I asked Jim Horney of the Center on Budget and Policy Priorities to run the numbers. In 2021, that scenario would leave the debt above 75 percent of GDP — and growing. That’s well above the 60 percent of GDP most deficit hawks think we should shoot for, and it doesn’t leave us at all prepared to deal with costs related to the retiring baby boomers."
Definitely an informative read.
"There are now two sides in the American tax debate: the Republican Party, which refuses to have a serious conversation about taxes, and the Democratic Party, which . . . refuses to have a serious conversation about taxes."
...then goes on to explain why the math doesn't work:
"The debt-ceiling deal simply proves the point. Let’s say the spending cuts go exactly as the Republicans hope: We cut $900 billion now and $1.5 trillion later. That’s more cuts than the White House says it would ever agree to, but ignore that for a moment. Now let’s say the tax side goes according to the White House’s plan: Most of the Bush tax cuts are extended, but the break for income of more than $250,000 a year expires. Are we done?
I asked Jim Horney of the Center on Budget and Policy Priorities to run the numbers. In 2021, that scenario would leave the debt above 75 percent of GDP — and growing. That’s well above the 60 percent of GDP most deficit hawks think we should shoot for, and it doesn’t leave us at all prepared to deal with costs related to the retiring baby boomers."
Definitely an informative read.
Yes, "The Onion" strikes again...
You can always count on The Onion, even with this eerily accurate headline:
"Democrats, Republicans Celebrate Pitiful Excuse For Common Ground"
"Democrats, Republicans Celebrate Pitiful Excuse For Common Ground"
Monday, August 1, 2011
Friday, July 22, 2011
TheOnion.com: Congress Continues Debate Over Whether Or Not Nation Should Be Economically Ruined
You can always count on The Onion to get it right.
Friday, July 15, 2011
What Americans support (and don't support) in cutting the deficit
Check out the entire list. Here are the top five:
-- Placing a surtax on federal income taxes for people earning over $1 million a year: 81% acceptable
-- Eliminating spending on so-called earmarks for special projects and specific areas of the country: 78% acceptable
-- Eliminating funding for weapons systems the Defense Department says are not necessary: 76% acceptable
-- Eliminating tax credits for the oil and gas industries: 74% acceptable
-- Phasing out the Bush tax cuts for families earning $250,000 or more per year: 68% acceptable
-- Placing a surtax on federal income taxes for people earning over $1 million a year: 81% acceptable
-- Eliminating spending on so-called earmarks for special projects and specific areas of the country: 78% acceptable
-- Eliminating funding for weapons systems the Defense Department says are not necessary: 76% acceptable
-- Eliminating tax credits for the oil and gas industries: 74% acceptable
-- Phasing out the Bush tax cuts for families earning $250,000 or more per year: 68% acceptable
Wednesday, July 6, 2011
More on the schism between 'Conservative' and 'Republican'
I blogged yesterday about David Brooks' column in The New York Times criticizing the Republicans' handling of the debt ceiling negotiations. The Economist also weighs in on the Brooks column:
"In all probability, America won't default; it's still difficult to imagine that it cold come to that. The bigger danger, I think, is that the Republican strategy will either lead Democrats to accept short-term cuts large enough to endanger recovery or will result in a short period of "prioritisation", in which spending is suddenly and dramatically cut back to prevent a default once the money runs out (on or about August 2nd). America may make it through this episode with its credit rating intact and still sustain significant economic damage."
"In all probability, America won't default; it's still difficult to imagine that it cold come to that. The bigger danger, I think, is that the Republican strategy will either lead Democrats to accept short-term cuts large enough to endanger recovery or will result in a short period of "prioritisation", in which spending is suddenly and dramatically cut back to prevent a default once the money runs out (on or about August 2nd). America may make it through this episode with its credit rating intact and still sustain significant economic damage."
Tuesday, July 5, 2011
The schism between 'Conservative' and 'Republican'
Conservative New York Times columnist David Brooks lays out why the Republican Party is no longer a "normal political party":
"If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases.
A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.
The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.
This, as I say, is the mother of all no-brainers.
But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.
The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no."
Brooks always referred to himself as a 'Conservative' first and then a 'Republican', which is an interesting distinction because it gives some legitimacy to his ability to distance himself from the party unlike other conservative columnists. As a columnist for what is considered a left-leaning New York Times, he has jokingly called himself "The Rabbi of Mecca".
His column is believed to be a must-read for President Obama so one wonders if his audience for today's column consists of New York Times readers or just one American President?
Richard Cohen of the Washington Post echos similar sentiments, referring to the GOP as "a grand old cult".
"If the Republican Party were a normal party, it would take advantage of this amazing moment. It is being offered the deal of the century: trillions of dollars in spending cuts in exchange for a few hundred million dollars of revenue increases.
A normal Republican Party would seize the opportunity to put a long-term limit on the growth of government. It would seize the opportunity to put the country on a sound fiscal footing. It would seize the opportunity to do these things without putting any real crimp in economic growth.
The party is not being asked to raise marginal tax rates in a way that might pervert incentives. On the contrary, Republicans are merely being asked to close loopholes and eliminate tax expenditures that are themselves distortionary.
This, as I say, is the mother of all no-brainers.
But we can have no confidence that the Republicans will seize this opportunity. That’s because the Republican Party may no longer be a normal party. Over the past few years, it has been infected by a faction that is more of a psychological protest than a practical, governing alternative.
The members of this movement do not accept the logic of compromise, no matter how sweet the terms. If you ask them to raise taxes by an inch in order to cut government by a foot, they will say no. If you ask them to raise taxes by an inch to cut government by a yard, they will still say no."
Brooks always referred to himself as a 'Conservative' first and then a 'Republican', which is an interesting distinction because it gives some legitimacy to his ability to distance himself from the party unlike other conservative columnists. As a columnist for what is considered a left-leaning New York Times, he has jokingly called himself "The Rabbi of Mecca".
His column is believed to be a must-read for President Obama so one wonders if his audience for today's column consists of New York Times readers or just one American President?
Richard Cohen of the Washington Post echos similar sentiments, referring to the GOP as "a grand old cult".
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