Replies to post #121689 on Tornado Alley (PROG)

[StephanieVanbryce]

Yes, They’re Frauds

December 28, 2010, 1:08 pm

From CBPP, House Republican Rule Changes Pave the Way For Major Deficit-Increasing Tax Cuts, Despite Anti-Deficit Rhetoric: [ http://www.cbpp.org/cms/index.cfm?fa=view&id=3359 ]

House Republican leaders yesterday unveiled major changes to House procedural rules that are clearly designed to pave the way for more deficit-increasing tax cuts in the next two years. These rules stand in sharp contrast to the strong anti-deficit rhetoric that many Republicans used on the campaign trail this fall. While changes in congressional rules rarely get much public attention, these new rules — which are expected to be adopted by party-line vote when the 112th Congress convenes on January 5 — could have a substantial impact and risk making the nation’s fiscal problems significantly worse.

I hear that a lot of journalistic insiders were annoyed when I began calling out self-styled deficit hawks like Paul Ryan as flim-flammers. But they are; nobody, and I mean nobody, in a position of influence within the GOP cares about deficits when tax cuts for the affluent are on the line. Deficit hawkery is just a stick with which to beat down social programs.

http://krugman.blogs.nytimes.com/2010/12/28/yes-theyre-frauds/?pagemode=print

[StephanieVanbryce]

GOVERNMENT JOBS exploded & exploding ..!!!! .................;)

THE PUBLIC-SECTOR DRAG ON THE JOB MARKET.... The New York Times' David Leonhardt noted today that there's some "renewed hope" on the economy, but optimism that existed when 2010 got underway faded over the spring. Growth that appeared to be picking up fell victim to "a combination of the debt troubles in Europe, the fading of stimulus spending and the usual caution by businesses and consumers after a financial crisis."

Of particular interest, though, was this chart, flagged by Ezra Klein, that accompanied the Leonhardt piece.



You'll notice that total job growth obviously hasn't kept up with population growth, and given the hole we fell into in 2008, we'll need to do far better than just that baseline anyway. Also notice, though, that private-sector employment has been the strongest part of the economy, whereas public-sector employment has been undermining the economy by shedding jobs.

As Ezra put it, "If the line for government jobs looked more like the line for private jobs, the labor market would be in much better shape right now."

Quite right. But let's also note that this picture is in keeping with the Republican economic model. Indeed, one of the great ironies of 2010 is that Democrats haven't been able to pursue their economic agenda, despite congressional majorities, but they've been blamed for the slow and fragile recovery.

Put it this way: if the GOP had its way in 2010, what would the party's preferred economic agenda look like? Republicans would want Bush-era tax rates, cuts to public-sector employment, no additional aid to states and municipalities, no additional stimulus, and relying on the private-sector exclusively to generate job opportunities.

If this sounds familiar, it's because Republicans have largely gotten their way for much of 2010, blocking Democratic efforts to do more of what works. Consider how much worse the above chart would have looked, for example, had it not been for the Recovery Act.

I mention this because, to hear GOP officials tell it, the nation has endured a failed experiment in Keynesian economics. That's silly -- we've had some progressive policies at the federal level, which proved effective, but have been counteracted by conservative, Hoover-like policies at the state and local level. It's quite a racket -- Republicans could have allowed Democrats to save public-sector jobs and improve the economy, but refused, and then complained about the weak job numbers.

Adding insult to injury, we see hacks like Gov. Tim Pawlenty (R-Minn.) running around blatantly and shamelessly lying about all of this, arguing to voters that the private sector is losing jobs while public-sector jobs are "booming" -- which is the exact opposite of reality.

Embedded Links
http://www.washingtonmonthly.com/archives/individual/2010_12/027299.php

[StephanieVanbryce]

Deficit Hypocrisy

December 29, 2010

It was not long ago that Republicans succeeded in holding unemployment benefits hostage to a renewal of the high-end Bush-era income tax cuts and — as a little bonus — won deep estate tax cuts for America’s wealthiest heirs. Those cuts will add nearly $140 billion to the deficit in the near term, while doing far less to prod the economy than if the money had been spent more wisely.

That should have been evidence enough that the Republican Party’s one real priority is tax cuts — despite all the talk about deficit reduction and economic growth. But here’s some more:

On Dec. 22, just before they left town for the holidays, House Republican leaders released new budget rules that they intend to adopt when they assume the majority in January and will set the stage for even more budget-busting tax cuts.

First, some background: Under pay-as-you-go rules adopted by Democratic majorities in the House and Senate in 2007, tax cuts or increases in entitlement spending must be offset by tax increases or entitlement cuts. Entitlements include big health programs like Medicare and Medicaid, for which spending is on autopilot, as well as some other programs for veterans and low-income Americans. (Discretionary spending, which includes defense, is approved separately by Congress annually.)

The new Republican rules will gut pay-as-you-go because they require offsets only for entitlement increases, not for tax cuts. In effect, the new rules will codify the Republican fantasy that tax cuts do not deepen the deficit.

It gets worse. The new rules mandate that entitlement-spending increases be offset by spending cuts only — and actually bar the House from raising taxes to pay for such spending.

Say, for example, that lawmakers want to bolster child credits for families at or near the minimum wage. One way to help pay for the aid would be to close the tax loophole that lets the nation’s wealthiest private equity partners pay tax at close to the lowest rate in the code. That long overdue reform would raise an estimated $25 billion over 10 years, but the new rules will forbid being sensible like that.

Even worse, they direct the leader of the House Budget Committee to ignore several costs when computing the budget impact of future actions, as if the costs are the natural course of politics for which no payment is required.

For example, the cost to make the Bush-era tax cuts permanent would be ignored, as would the fiscal effects of repealing the health reform law. At the same time, the new rules bar the renewal of aid for low-income working families — extended temporarily in the recent tax-cut deal — unless it is fully paid for.

House Republicans obviously believe they have a good thing going with voters by sanctifying tax cuts and demonizing spending. That’s been their approach for 30 years after all, and it unfailingly rallies their base.

The challenge for President Obama and Democratic lawmakers is not to get drawn into that warped mind-set. They need to present an alternative, including investments — in energy, technology, infrastructure and education. They also need a plan for long-term deficit reduction that recognizes what the Republicans ignore: Never-ending tax cuts make the deficit worse. Prudent tax increases need to be part of the solution.

http://www.nytimes.com/2010/12/30/opinion/30thu1.html?hp