Whose Sequester Is It Anyway?

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John Liming looks at the sequester and where the blame lies.

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Some of the Right Wingers are losing no time in making sure America will blame any sequester and it’s consequences onto President Obama – and what else could any reasonable person who has watched the Right at work before expect them to do?

We do understand, I think, that if the sequester is allowed to kick in, much of the progress we have achieved in our economic growth and recovery will be undone and there is every possibility that we will slide back into a worse recession than the one we are just now working our way out of.

But the way I see it is that there are too many Republicans who simply do not care what happens to the economy.  I think they are frothing-at-the-mouth angry because they couldn’t force their will onto America and grab the vast social security trust fund and other riches waiting to be grabbed and converted into privatized money makers for millionaires and billionaires.

Before any Right Wingers start pointing fingers about sequesters, they ought to recall that Congress passed the damned idea long before the president put his signature to it.  It may have been the president’s idea originally (But I have nothing to use to back that up)  as some Republicans are now whining, but I am wondering how anything this president ever thought might be a good idea got past the “We’re gonna make sure this president is a one term president” crowd?

They have obstructed on everything else – why didn’t they obstruct on the sequester?

Must have thought it was a helluva good idea or something – maybe they saw a future opportunity in the potential for exploiting it – I really cannot believe they were following the president’s “Leadership” on the issue.

We know that a so-called “Super Committee” was formed to address measures that would avoid sequester but Republicans reportedly could not bring themselves to close some tax loopholes for the rich or allow for any increased revenues that might cost as few dollars in taxes, so the Super Committee was a failure – Right Wing obstructionism plain and simple as I see it. ( The old, “Our way or the highway thing”?)

If a sequester happens I think it can rightly be called a “Gift from the right wing” because it was their well-documented refusal to work on compromise in the super committee that caused  that thing to go down in flames and open the door to the fiscal tragedy which is scheduled to start on March 1st, 2013.

 

John Liming publishes the American Liberal Times.
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The One Trillion Dollar Coin

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Is the platinum $1 trillion dollar coin scheme being bounced around as a ploy to counter Republicans threat to refuse to increase the debt ceiling, taking politics into the realm of the absurd? Yes, of course it is…but I’m still with Paul Krugman on this one.

Should President Obama be willing to print a trillion dollar platinum coin if Republicans try to force Americans into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives, one that is silly but benign the other that is equally silly, but both vile and disastrous. The decision should be obvious.

Republicans, of course, are crying bloody murder and one House member, Greg Walden, is proposing to introduce a bill that would outlaw the minting of coins as a means to balance the budget.

“This scheme to mint trillion dollar platinum coins is absurd and dangerous, and would be laughable if the proponents weren’t so serious about it as a solution. I’m introducing a bill to stop it in its tracks,” Walden said in a statement issued on Monday. “My bill will take the coin scheme off the table by disallowing the Treasury to mint platinum coins as a way to pay down the debt.”

The irony in Walden’s statement is astounding. Republicans feel no shame in proposing to force a default on America’s economic responsibilities by refusing to increase the debt ceiling. This is their way of blackmailing the president into passing their wishlist of economic policies. And somehow, in their twisted view of reality, this is not “absurd and dangerous”…but issuing a $1 trillion dollar platinum coin is?

Look, the $1 trillion dollar coin is dumb but you have to keep in mind that you’re dealing with a political party that has become completely unhinged and divorced from reality. There is no playing nice with Republicans. There is no sitting down with them and discussing important matters in an adult and rational manner. You can (and should, I imagine) try but don’t become flustered when you walk away completely flustered and covered in slime.

A $1 trillion dollar platinum coin? Sure, why not. If it does little more than screw with Republicans’ heads, then it’s a worthwhile effort.

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Would A $15 Minimum Wage Work?

Jobs Cityscape   -   http://mariopiperni.com/

Diana McGinness believes so.

“Cut, cut, cut entitlements!”

“Reduce the debt!”  We need to broaden the base (i.e more taxes on the 47%)!

“Reduce the size of government!”

Turn on any cable news network and that’s all you’ll hear.

And the only answers the politicians have are:  raise more taxes and/or cut entitlements (not defense, of course) or both.

We hear the GOP wants to cut food stamps and other programs that help the poor.  That something must be done with SS and Medicare because they’re going broke and Medicaid needs to be cut back, too, because we just don’t have the money.  And the Democrats refuse to let these programs take a hit.

People are tired of paying taxes to help the “lazy 47% who don’t pay taxes, is the complaint.

The economy is too sluggish, it’s not growing!

So we’re in gridlock as usual with no answers that either side is willing to accept.

Is there an alternative?  Maybe.

What if we could add  $169,260,000,000 to the economy?

Add $25,389,000,000 to the treasury each year in the form of taxes (without increasing anyone’s taxes.  Over 10 years, that’s $2.5 trillion add to the Treasury that could be earmarked to reduce the debt/deficit.

Reduce the costs of programs providing food stamps, housing vouchers, and the big one – Medicaid?

Collect $10,494.120,000 more annually in FICA premiums to shore up Social Security and Medicare.  That’s over $1 trillion in 10 years, that would surely strengthen each of these programs for the coming years without making major changes in the program.

How, you ask?

Increase the minimum wage to $15.00.

Using 2010 numbers, the poverty level for 1 person under 65 was $11,344.  That’s someone making $218.15 per week, or $5.45 an hour.  The working poor receive assistance in the form of housing vouchers, food stamps, and Medicaid and pay little, if anything in the form of federal taxes.

Using the federal minimum wage in 2010 of $7.25 and the then number of working people making poverty level or less in wages of 10,500,000 you can extrapolate those numbers as follows:

10,500,000 x $7.25 per hour for 40 hours @ 52 weeks = $158,340,000,000 in wages annually. FICA at 6.2% for these workers would contribute $9,817.080.000 to SS/Medicare. Of course, some of these are part-time jobs, so this is merely an example.  But for every person who can be removed from government assistance, that’s less tax dollars needed to support them.

And if you think a person flipping burgers doesn’t deserve $15 per hour, consider how much of your tax dollars are going to subsidize their wages so they can be paid $7.25 to flip those burgers.  One way or the other, the consumer/tax payer is paying a considerable amount to get that burger flipped.

Now change the minimum wage to $15.00 per hour and extrapolate the numbers:

10,500,000 x 15.00 per hour 40 hours @ 52 weeks = $327,600,000,000 in wages annually.  FICA would be a contribution of an additional $10,494,120,000.  Over 10 years that would be over $1.4 Trillion dollars.

With a 15% tax rate, those wages would contribute $25,389,000,000 annually in revenue to the Treasury and could be targeted to directly reduce the debt.  Over 10 years that would be a $2.5 Trillion deduction, in addition to the reduced expenditures for food stamps, housing vouchers, and Medicaid.

Add an additional $169,260,000,000 increased purchasing power to the economy.

Increasing the minimum wage would also add to the treasuries of states in the form of sales tax, income tax, among other taxes these dollars would generate.

A two-person working household could generate $30 per hour providing them income to save and possibly purchase a home.

The counter-argument will be that increasing the minimum wage will reduce jobs.  There are many studies that disprove that argument. There are several papers (links here) that refute that argument.

The other counter- argument will be that the cost of everything will go up and the jobs will move overseas.

First, these are service industry jobs…now 7 out of 10 in the U.S.  – it’s going to be hard to ship them overseas.  Are you going to order your burger from the McDonald’s in China and have it flown over to the pick up window?  I think not.  Nor is the Wal-Mart worker going to be shipped over there either so you can restock the shelves yourself.

As for the cost…two things to consider.  Are you going to pay $15-30 for a McDonald’s Big-Mac?  I think not.

Prices are determined based on the floor (the lowest price a seller can sell a product for) and the ceiling (the highest amount a consumer is willing to pay), and on competitor pricing.

And while the prices may go up — if the consumer is willing to pay and competitors are not competing — the consumer/taxpayer is already paying.  If the end game allows your taxes to be reduced and you, the consumer, have the freedom to choose where you will make your purchases — based on competitive prices and your willingness to pay and the fact that you have more money to spend then haven’t we all won?

When you look at the trillions of dollars that are currently not being invested in our economy via our workers, but are sitting on the shelf waiting to invest…the only question I have is is – who better to invest in than the workers and our economy?

An interesting idea but my concerns would be the impact a $15 minimum wage would have on American competitiveness in global markets. Diana addresses this point.

Yes, that is an argument for manufacturing jobs – but most of those are gone already – some are coming back because, in part, the Chinese are demanding higher wages.

But the service industry jobs are what I’m referring to – they can’t take those overseas.  And with so many of our jobs now in that category (7 out of 10) and these being the lowest paying jobs out there, it’s a place to begin.

Your thoughts?

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Fiscal Deals and The Disintegrating GOP

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If you’re just now recovering from your New Year’s Eve bash and missed the latest installment of America Does Another Fiscal Crisis  (aka: The GOP Does Stupid), here’s a summary.

  • The Senate signs a compromise bill after an agreement was reached at 2 AM January 1.
  • 89 yeas. 8 nays.
  • At 10 PM on the same day, the House approved the deal. While only 85 Republicans signed on to the deal, it was enough to push the vote through the House.
  • Taxes go up for individuals earning more than $400,000 and couples bringing in more than $450,000. In all, $600 billion in new tax revenue.
  • Everyone else? The Bush tax cuts stay in place permanently.
  • Unemployment benefits are extended for a year.
  • Dems get a few other goodies they battled hard for (e.g. wind-industry tax credit) but the deal is not close to what they had hoped for. The $620 billion in new tax revenue over 10 years is a far cry from the $1.6 trillion they wanted.
  • As for Republicans, they got a few of things they were looking for – an end to the payroll tax break as well as no new stimulus spending. But for many in the party, it just wanted enough. A civil war has broken out in the party with many conservatives believing that Boehner needlessly caved in to Dems demands. Boehner and Paul Ryan voted for the deal, BTW. Eric Cantor voted against it.
  • Conservative Todd Starnes’ view of the deal kind of sums it up for Malkin, Drudge, Gingrich and the rest of the clowns who are screaming bloody murder.

For a full-on study of what a right-wing nutjob sounds like, take a look at Starnes’ twitter feed. Not pretty and typical of what delusion, ignorance and Fox News can do to a mind.

So that’s where it now stands. The immediate crisis is over but a new one will soon begin with the debt ceiling extravaganza right around the corner. A number of teabagging Republicans will do their moronic best to once again bring American and global markets crashing. I like how mistermix over at BalloonJuice describes the fools.

…we have a third party in DC. It has 150 votes in the House and 5 in the Senate. They stand for nothing, are led by nobody, and will obstruct everything, and we’re stuck with them for at least two more years.

So true.

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Dismantling Another Republican Talking Point

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Mitt Romney has been fond of claiming that President Obama promised that the stimulus bill would lower unemployment rates and that by 2012 the rates “would be in the 6% range.” Other Republicans have also repeated the Republican talking point. Diana McGinness has her say on the matter with the help of a few facts from the folks at Politifact.

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Has anyone noticed how the numbers keep dropping on what “Obama promised” on the unemployment numbers?

“We were promised. The president said we would keep unemployment under 8.5 percent (if the stimulus passed).”

Eric Cantor on Wednesday, July 8th, 2009 in a PBS interview.

The stimulus bill “promised to keep unemployment under 8%.”

George Allen on Thursday, February 17th, 2011 in a press release.

Team Obama said in ’09 stimulus would have unemployment below 6% by 2012

Sean Higgins on August 3, 2012 | 3:15 pm

From Politifact (see George Allen link above):

But what we saw from the administration in January 2009 was a projection, not a promise. And it was a projection that came with heavy disclaimers.

“It should be understood that all of the estimates presented in this memo are subject to significant margins of error,” the report states. “There is the more fundamental uncertainty that comes with any estimate of the effects of a program. Our estimates of economic relationships and rules of thumb are derived from historical experience and so will not apply exactly in any given episode. Furthermore, the uncertainty is surely higher than normal now because the current recession is unusual both in its fundamental causes and its severity.”

There’s also a footnote that goes with the chart that states: “Forecasts of the unemployment rate without the recovery plan vary substantially. Some private forecasters anticipate unemployment rates as high as 11% in the absence of action.”

That’s not a promise. It is an estimate and an admission that these predictions may not be accurate. And the administration has acknowledged its projections were wrong.

Does the GOP really think we are this stupid or have absolutely NO memory from one day to the next?  Do they think we all suffer from Alzheimer’s?

 

Diana McGinness publishes Politics Unspun.
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