Archive for category Deficit
Republicans: Let’s Get Rid of Social Security and Medicare
Posted by Richard Warnick in 2010 Elections, Conservatives, Deficit, Federal Budget, National Politics, Republicans, This Blog, congress on February 8th, 2010
Republicans have been trying to get rid of this country’s social safety net ever since it was first enacted. Now, they have a new proposal to benefit the wealthy at the expense of the working/middle class.

Rep. Paul Ryan (R-WI), the ranking member of the House Budget Committee, recently introduced the Roadmap for America’s Future Act of 2010. In a nutshell, this plan would:
- Privatize Social Security and Medicare for everyone under age 55, and increase the retirement age to 70
- Impose a freeze on non-security discretionary spending from 2010-2019
- Cap the top income tax rate at 25 percent for everyone who makes $50,000 or more
- Eliminate income and payroll tax exclusions for employment-based health insurance starting next year
“The Roadmap would put the federal budget on a sustainable path, generating an annual budget surplus of about 5 percent of GDP by 2080,” the CBO wrote in its analysis. Hey, that’s only 70 years from now! [It turns out that the CBO analysis is actually bogus - see update below]
Ironically, the spending freeze is similar to the one President Obama recently proposed, that Republicans and Democrats immediately denounced.
The House will vote down Rep. Ryan’s proposal, but really I think it deserves a series of town hall meetings. Let’s take this plan to the people and let them express their candid opinions in open forums across the nation!
Michelle Bachmann thinks the Republican Party ought to go all the way with this. Over the weekend she said, “[W]hoever our nominee is, is going to have to have a Glenn Beck chalkboard and explain to everybody this is the way it is.”
UPDATE: Josh Marshall speculates on whether the Dems can make this year’s election a choice between Ryan’s ideas and their own.
UPDATE: The CBO analysis of Rep. Ryan’s proposal is bogus. The right-wing fantasy of supply-side benefits resulting from tax cuts for the rich were simply assumed without evidence.
For their analysis Ryan provided CBO with a remarkable assumption: he asked CBO actuaries to assume that the major tax cuts he calls for won’t create any change in federal revenue over the next two decades–at all.
Death by a Thousand Paper (Dollar) Cuts
Posted by shane in Bush Administration, Bush Failures, Deficit, Democracy, Economy, Hypocrisy, Party Politics on February 1st, 2010
The moon base, as Richard has pointed out, is history. We just can’t afford it.
As a geek at heart, I feel bad about that, but the truth is that unmanned missions do a better job. I am a geek, but also a Daoist, and frankly many sensitive to the ideas have been advocating sharpening our senses (radio telescopes for example) and sending remote senses (unmanned craft) rather than spending extra time money and effort just to say “Kilroy was here” on other planets for over 60 years now.
A little sad, but not terribly.
Frankly, we have bigger problems.
Read the rest of this entry »
Senator Hatch: Under Bush, ‘It Was Standard Practice Not to Pay for Things’
Posted by Richard Warnick in 4th Estate (Media), Bush Administration, Conservatives, Deficit, Orrin Hatch, Rachel Maddow, Republicans, This Blog, Utah Politics on December 29th, 2009
First of all, a big thank you to Rachel Maddow for coming to work this week. She has the best show on MSNBC. This post is for those who missed her last night.
Visit msnbc.com for breaking news, world news, and news about the economy
I always say that the definition of a gaffe is when a politician accidentally speaks the truth, especially when it’s politically disadvantageous. Senator Hatch gave us a great gaffe, as reported last Friday by the Associated Press (emphasis added):
All current GOP senators, including the 24 who voted for the 2003 Medicare expansion, oppose the health care bill that’s backed by President Barack Obama and most congressional Democrats. Some Republicans say they don’t believe the CBO’s projections that the health care overhaul will pay for itself. As for their newfound worries about big government health expansions, they essentially say: That was then, this is now.
Six years ago, “it was standard practice not to pay for things,” said Sen. Orrin Hatch, R-Utah. “We were concerned about it, because it certainly added to the deficit, no question.” His 2003 vote has been vindicated, Hatch said, because the prescription drug benefit “has done a lot of good.”
Of course, that was a big understatement when you consider not only Medicare Part D but Bush’s tax cuts for the rich, military operations in Iraq and Afghanistan, and the Wall Street billionaire bailout. For all of these, 100 percent of the cost was simply added to the federal budget deficit. The Bush administration doubled the National Debt to more than $10 trillion.
To their credit, some conservatives have criticized the Bush administration’s fiscal irresponsibility. Bruce Bartlett, an official in the administrations of Ronald Reagan and George H.W. Bush, now a columnist in Forbes:
The human capacity for self-delusion never ceases to amaze me, so it shouldn’t surprise me that so many Republicans seem to genuinely believe that they are the party of fiscal responsibility. Perhaps at one time they were, but those days are long gone.
America’s Lost Decade
Posted by Glenden Brown in Bailout, Deficit, Economy, Poverty, This Blog, Unemployment on October 2nd, 2009
Big hat tip to Barry Ritholz.
The economic picture is not pretty. September 09 job losses were more than expected – 263,000. While that’s better than last winter it’s still ugly. Don’t forget – the US needs to add around 1.3 million jobs per year just to keep up with population growth. From December 2007 to August 2009, the US lost over 7 million jobs. That means the actual job deficit is the number needed to keep up with population growth plus the number lost. So even a return to 2007 employment levels would be insufficient. It gets worse.
In 2009, the US economy had 1.3 million fewer jobs than in 1999. That is the worst decade since the Great Depression – in fact it is the only decade since the Great Depression that the US had an absolute loss of jobs. Other economic measures suggest that the current Great Recession has wiped out many if not all of the economic gains made since 1999.
Even in the most positive light, those economic gains were less the stellar. The Recession that began in March of 2001 was followed by a long, dreary “jobless recovery” during which even though GDP was increasing, relatively few private sector jobs were being created. From Rutgers:
There are no simple or singular explanations for this underperformance. On the positive side, corporate America may have been much more disciplined in its hiring in reaction to the excesses of the preceding 10-year expansion, when robust job creation may have been partially due to overstaffing. This would suggest a much more efficient economy. Or, perhaps productivity gains enabled economic output to grow with fewer staffing additions, again suggesting a more efficient overall economy.5 On the negative side,
outsourcing of economic functions to lower-cost nations may have finally taken its toll, reducing job opportunities for Americans. Or, soaring health-care costs may have become a much more significant inhibitor to job creation. Whatever the reasons, the weakness of job growth during the most recent expansion does not portend that the nation will have a robust employment bounce when the current recession comes to an end. Moreover, as noted previously, the United States did not go on an undisciplined overstaffing binge during the 2001–2007 expansion. Thus, not having to correct such excesses should have moderated the employment consequences of the current economic downturn. That was certainly not the case, since the nation has just experienced the worst employment losses since the Great Depression. And the recent pattern of jobless and job-loss economic recoveries, as discussed below, raises questions about the timing of a post-recession employment rebound.
AND:
To put this new millennium experience into perspective, during the final two decades of the twentieth century, the nation gained a total of 35.5 million private-sector jobs. During the current decade, America appears destined to lose more than 1.7 million private-sector jobs.
What we’re facing is the dynamic Paul Krugman described in The Return of Depression Economics – a sustained period of poor economic performance. Consider that in the 1930s, even though GDP recovered to 1929 levels, employment did not. Economic performance in the 1930s was problematic; unemployment dropped from 25% to 14% between 1933 and 1936, a truly dramatic improvement but 14% unemployment is still devastatingly high. The Great Recession that began in 2007 evolved through 2008 into a collapse of financial markets. Paul Krugman and Brad DeLong have both argued that the economic events we’ve lived through were not unpredictable; they were in fact predicted and were in fact that obvious outcome of the regulatory and economic choices that America has made over that last 30 years.
The outcome has been the worst job market in 70 years. The economic dislocations of the Great Recession are going to take time to erase:
From the Rutgers Report:
As noted above, the nation’s August 2009 private sector employment deficit is 7,047,000 jobs simply because of employment losses directly caused by the recession. In addition, during the 20-month recession to date, another 1,534,000 private-sector jobs were needed, but were not added, to accommodate labor force growth.11 This raises the August 2009private-sector employment deficit to 8,581,000 jobs. It is further assumed that employment losses (totaling 500,000 private-sector jobs) will continue to December 2009, an assumption that could be optimistic.12 Labor force growth during this four month period (September through December) will require an additional 310,000 jobs. Therefore, between August 2009 and December 2009, the employment deficit could grow by an additional 810,000 private-sector jobs, bringing the total December 2009 employment deficit to just under 10 million (9,390,000) private-sector jobs. Thus the nation is confronting an extraordinarily long and difficult recovery period.
Barry Ritholzt sums up the news with this sentence:
The “Harsh Arithmetic of the Employment Deficit” means that we will not likely return to 2007 employment levels until (ugh) 2017.
That’s eight years kids. To my eyes, that kind of long term employment outlook is not simply grim, it must not be allowed to remain unaddressed. We need jobs and if the private sector can’t provide them, maybe it’s time to create the new WPA and CCC.
Recession traffic
Posted by Glenden Brown in American History, American People, Deficit, Economy, Unemployment on April 20th, 2009
I don’t have numbers to back this up but I can’t shake the feeling that the traffic on my commute is markedly less than it was six months ago and definitely less than a year ago. Almost every morning, I drive down Fifth South to the freeway. Not so long ago, the traffic was heavy the entire way. Now, it’s only heavy at the State Street intersection. Given that unemployment in Utah has doubled (albeit that means a change from 3% to about 6%) it’s amazing the difference.
I realize when making decisions you need to examine the marginal impact of what you’re doing – for instance if you increase your marginal costs by 5% by adding some process but you generate a marginal savings of 6% it’s a good decision. The marginal impact of 3% additional unemployed persons on traffic seems – at least from my non-scientific observation – to be significant.
But, for every car not on the road – making my commute easier – there is a person without a job. That means a household under financial pressure. Every job lost is a personal and family tragedy. Read the rest of this entry »




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