Tag: stimulus

Cross posted from The Stars Hollow Gazette

Journalist David Cay Johnston, Sen. Sherrod Brown (D-OH) and MSNBC host Ed Schultz all agree that now is the time, and in some cases past time, to invest in the collapsing and crumbling bridges, road, rails and public buildings.

Pay to Fix America’s Crumbling Infrastructure Now, or Pay More Later

by David Cay Johnston

The I-5 disaster in Seattle reflects the dire state of our bridges and highways. But it may never be cheaper to replace these aging arteries than it is now.

“We cannot hope to have an A+ economy with a C-level infrastructure,” said James Chae, president of the (American Society of Civil) engineering society’s Seattle section. [..]

State and local governments spent $156 billion on highways in 2010, roughly a penny out of each dollar of America’s gross domestic product.

Right now, governments can borrow at the lowest interest rates in 700 years. Roughly 25 million people are involuntarily forced into part-time work, are looking for work, or have given up because they cannot find a job.

We must either update our infrastructure or face a future that is both more dangerous and poorer, as more bridges collapse, pipelines leak and explode, and the movement of goods and people becomes less efficient. We could increase our spending and reap big dividends in jobs and the taxes they generate, improved safety, and a more efficient economy.

Why put off until tomorrow what is cheaper to do today?

MSNBC’s Ed Schultz, host of “The Ed Show,” discussed the problem of cutting spending on rebuilding the nation’s infrastructure with Sen. Brown.

Cross posted from The Stars Hollow Gazette

One of the reasons that the Republicans lost so badly in 2006 and 2008 and the reason the Democrats took such a dive in 2010 was the economy. Since then the job approval rating of Congress has plummeted with the Republicans fairing worse than the Democrats but only slightly. In regards to the economy the public in general doesn’t think that President Obama is doing such a great job, either. People are worried about jobs, good jobs not deficits. Deficit and the national debt are not what is holding back the economy, it’s jobs.

The Republicans in the House seem to be intent on killing more jobs with its latest suicide pact that would cut everything from taxes for the wealthy, food stamps, destroy Medicare, and spending cuts. As Roger Hicky in his Huffington Post article point out, the Republican budget clearly rejecting what the American public wants.

The only thing that could save Republicans would be if Democrats, like Oregon Senator Ron Widen or House Democratic Whip Steny Hoyer, persuaded their party to ignore American public opinion and join with the GOP in destroying Medicare, cutting Social Security, and slashing public spending in a way that cripples the economy and rewards the wealthy. That’s what the Ryan Republican budget would do, and Democrats — and Americans who believe in majority rule — need to explain the extreme nature of this budget to the American people. [..]

So, the brand-new Ryan Republican budget, so very like last year’s Ryan budget, is already unpopular with the American majority, in all of its major elements. Progressives and Democrats should immediately publicize its many unpopular pieces so the public knows about them all. We should immediately demand to know whether the Republican candidates for president embrace it. And we should keep a wary eye out for Democrats who are willing to give the Republicans cover. When the Paul Ryan Republicans — enemies of everything the American majority believe in — are putting a gun to their heads and are about to pull the trigger, progressives should get out of the way and publicize the results — from now until the November elections.

It is obvious from the results of these kinds of cuts in Europe, austerity budgets don’t work. The Occupy Wall Street movement changed that conversation six months ago.

If Obama and the Democrats are smart, they’ll listen to the American public, sit back and let the Republicans pull the trigger.

Up Date: Ezra Klein, writing in the Washington Post, sums up Ryan’s latest version of a “budget plan” in one sentence:

Ryan’s budget funds trillions of dollars in tax cuts, defense spending and deficit reduction by cutting deeply into health-care programs and income supports for the poor.

The last I checked that isn’t going to win them any elections but you never know when the Democrats will ride into save the day. Calling Ron Wyden.

Cross posted from the Stars Hollow Gazette

David Dayen may have hit the nail on the head when he wrote about the latest Super Committee’s wrangling over using Social Security to pay for the 1%’s tax cuts:

I don’t have to tell you about how Social Security never contributed one penny to the deficit. It holds a surplus of $2.6 trillion, and the elites just don’t want to pay off the trust fund because that might mean higher taxes on rich people. A bargain was made 30 years ago to build up the trust fund and pay for the baby boomers’ retirement, and now they want to renege on that deal and take the money out of the hides of old pensioners.

I assume that the effort here is to move to chained CPI, which will lead to a reduction in benefits. It’s also a regressive tax increase. If the leaders in Washington think that a public already out in the streets over inequality, Wall Street greed and corporate control of government will meekly accept that, they’re just wrong.

Of course, members of Congress won’t really have to worry about their benefits getting cut. That’s because they’re mostly fabulously wealthy and won’t be burdened as much as the other 99% by a more meager Social Security check every month.

The front page article in the Washington Post that got everyone’s dander up this week is so blatantly wrong that is a bold faced lie that has been debunked numerous times. Economist Dean Baker was much kinder saying that the “Washington Post Discards All Journalistic Standards In Attack on Social Security”:

Cross posted from The Stars Hollow Gazette

To join the Tea Party. Nomura economist Richard Koo gives decent marks to Obama’s jobs plan,:

Arguing need for longer-term fiscal consolidation is irresponsible

The insistence that fiscal consolidation is necessary in the longer term is like the doctor who, faced with a patient who has just been admitted to the intensive care ward, repeatedly questions the patient about his ability to afford the treatment. This is both lacking in decency and irresponsible.

If the patient loses heart after learning the cost of the treatment, he may end up spending even longer in the hospital, leading to a larger final bill. Completely ignoring the policy duration effect of fiscal policy and constantly insisting on longer-term fiscal consolidation was what prolonged Japan’s recession.

For instance, it was because Japan’s policymakers refused to give up the medium-term fiscal consolidation target of achieving a primary fiscal balance by 2011 that the government stumbled from fiscal stimulus to fiscal retrenchment and back again and, ultimately, was unable to meet its fiscal targets even once in the last 20 years.

That is why Japan’s recession lasted as long as it did and why the nation’s debt has risen to some 200% of GDP.

What digby said:

With some notable exceptions, most people still believe that that there will be a hangover of debt which will have to be dealt with at some point. But the confidence fairy died some time back and the only other reason for worrying about it at this point is to get some Shock Doctrine benefits out of the current situation. But as Koo points out, this actually hurts the economy even more.

Paul Krugman eulogizes the “confidence fairy’s” death:

In the first half of last year a strange delusion swept much of the policy elite on both sides of the Atlantic – the belief that cutting spending in the face of high unemployment would actually create jobs.

Herr Professor points out that past analysis  of austerity measures by the IMF is contradictory and even worse in the current economic climate:

   The reduction in incomes from fiscal consolidations is even larger if central banks do not or cannot blunt some of the pain through a monetary policy stimulus. The fall in interest rates associated with monetary stimulus supports investment and consumption, and the concomitant depreciation of the currency boosts net exports. Ireland in 1987 and Finland and Italy in 1992 are examples of countries that undertook fiscal consolidations, but where large depreciations of the currency helped provide a boost to net exports.

   Unfortunately, these pain relievers are not easy to come by in today’s environment. In many economies, central banks can provide only a limited monetary stimulus because policy interest rates are already near zero (see “Unconventional Behavior” in this issue of F&D). Moreover, if many countries carry out fiscal austerity at the same time, the reduction in incomes in each country is likely to be greater, since not all countries can reduce the value of their currency and increase net exports at the same time.

   Simulations of the IMF’s large-scale models suggest that the reduction in incomes may be more than twice as large as that shown in Chart 2 when central banks cannot cut interest rates and when many countries are carrying out consolidations at the same time. These simulations thus suggest that fiscal consolidation is now likely to be more contractionary (that is, to reduce short-run income more) than was the case in past episodes.

Like Dr. Krugman and digby said, we’re doing it wrong.

Cross posted from The Stars Hollow Gazette

President Obama is going to lay our his jobs plan before Congress on Thursday night and most will not even bother to listen. Why? it seems the President has a credibility gap. He says one thing and does another. His plan to pump $300 billion into the economy with tax cuts, infrastructure spending and direct aid to state and local governments.

WASHINGTON — The economy weak and the public seething, President Barack Obama is expected to propose $300 billion in tax cuts and federal spending Thursday night to get Americans working again. Republicans offered Tuesday to compromise with him on jobs – but also assailed his plans in advance of his prime-time speech.

snip

According to people familiar with the White House deliberations, two of the biggest measures in the president’s proposals for 2012 are expected to be a one-year extension of a payroll tax cut for workers and an extension of expiring jobless benefits. Together those two would total about $170 billion.

The people spoke on the condition of anonymity because the plan was still being finalized and some proposals could still be subject to change.

The White House is also considering a tax credit for businesses that hire the unemployed. That could cost about $30 billion. Obama has also called for public works projects, such as school construction. Advocates of that plan have called for spending of $50 billion, but the White House proposal is expected to be smaller.

Obama also is expected to continue for one year a tax break for businesses that allows them to deduct the full value of new equipment. The president and Congress negotiated that provision into law for 2011 last December.

Though Obama has said he intends to propose long-term deficit reduction measures to cover the up-front costs of his jobs plan, White House spokesman Jay Carney said Obama would not lay out a wholesale deficit reduction plan in his speech.

The majority of the tax cuts are payroll tax cuts that will siphon off more from the social safety net feeding the Republicans rhetoric that the big three are broken and adding to the deficit. The rest of the plan would only put less than $50 billion into jobs.

Does any of this sound familiar? As Atrios puts it:

The problem that arises is that if you start beating the deficit drum, then you haven’t made voters “trust you” on the deficit, you’ve made the case to voters that they should elect the Republicans who will be better on this very important issue … If you make the case that Republican issues are important, you’re making the case for … Republicans.

Much like Matt Taibbi: “I just don’t believe this guy anymore, and it’s become almost painful to listen to him”

There’s a football game you can get ready to watch instead.

Cross posted fromThe Stars Hollow Gazette

The former vice chair of the Federal Reserve and member of the President Obama’s Deficit Commission (aka Cat Food Commission), Alice Rivlin joined  a panel discussion about what should be included in the Obama’s jobs initiative.

Most of what she has suggested will not create jobs and will just put our social safety nets at further risk of being cut or completely dissolved. The idea that a one years payroll tax holiday for both employers and employees is ridiculous on its face. Not only have tax cuts not produced jobs over the last eleven years but this particular tax cut will put Social Security at even further risk. Nor will the idea that so-called “reform” of Social Security  and Medicare would “grow the economy”.

Economist Dean Baker examines President Obama’s “widely hyped upcoming speech on jobs after the Labor Day weekend.” He states:

At the top of the list of job-creating measures is extending the 2 percentage-point reduction in the social security payroll tax. This provides no boost to the economy, since it just keeps in place a tax cut that was already there, but if the cut is allowed to end at the start of 2012, it will be a drag on growth.

As it stands, the social security programme is being fully reimbursed for the lost tax revenue, but there is always the possibility that Republicans will use this as a basis for attacking the programme. Given President Obama’s willingness to support cuts to social security, it is understandable that this part of his jobs agenda doesn’t generate much enthusiasm.

snip

There are also reports that President Obama may propose some sort of tax subsidy for job creation. Such a subsidy can be bad or not so bad. One of the proposals, temporarily eliminating the employer side of the payroll tax, is a great plan – if your intention is to give still more money to business and undermine social security.

There is extensive research showing that increases in the minimum wage of 15-20% have no measurable impact on employment. If raising the cost of labour by 15-20% doesn’t reduce employment, then we can’t think that reducing the cost of labour by 6.2% as a result of temporarily eliminating the payroll tax will increase employment. (Sorry, Mr President, logic can be cruel.)

(emphasis mine)

Nor will the creation of an infrastructure bank:

This would allow the government to treat long-lived infrastructure investment as capital expenditures depreciated over their expected lifetimes, rather than expenditures to be paid for in full in the years the construction takes place. This is good policy and accounting (it is the same approach used by both private businesses and state governments), but it is not going to create many jobs and certainly not in the next couple of years.

The there are all those trade agreements with Panama, South Korea and Colombia, that as Baker says, “even their supporters can’t claim with a straight face that they will generate any noticeable number of jobs.”

We so screwed.

From the Center for Public Integrity

The administration has awarded more than 179,000 “categorical exclusions” to stimulus projects funded by federal agencies, freeing those projects from review under the National Environmental Policy Act, or NEPA. Coal-burning utilities like Westar Energy and Duke Energy, chemical manufacturer DuPont, and ethanol maker Didion Milling are among the firms with histories of serious environmental violations that have won blanket NEPA exemptions.

Some polluters reported their stimulus projects might cause “unknown environmental risks” or could “adversely affect” sensitive resources, the documents show. Others acknowledged they would produce hazardous air pollutants or toxic metals. Still others won stimulus money just weeks after settling major pollution cases. Yet nearly all got exemptions from full environmental analyses, the documents show.

The Center for Public Integrity found some “ironies” in the fine print, and Obama’s stooges made a few excuses, but IMHO the scale of this thing makes any kind of commentary more or less superfluous.

179,000 “categorical exclusions” from environmental regulations!

As if we didn’t have enough volatile “wedge issues” to put the Nation on Perpetual Pause — Karl Rove has decided to stink up the place, with yet another outrageous Word Bomb …

GOPers Revise History: Say Dems Have Tax Hike Ticking Time ‘Bomb’

Christina Bellantoni, TPMDC — August 19, 2010

Karl Rove’s Crossroads GPS this week detailed the “seven public policy initiatives” that will be most important for Congress next year. The group runs ads against Democrats across the country.

On the list at No. 1: “Stop the Obama tax hike time bomb scheduled to detonate on January 1, 2011.”

That’s not a typo. Rove’s group is claiming that Obama set the timer on that so-called “bomb.”

Talk about Revisionist History — of course consider the source — wasn’t it Rove, who claim to have the “Real Numbers” a few years back …

There are two very important, and full of real facts, op-ed’s in the San Francisco Gate this Sunday morning that should be read and absorbed.

We hear very little, actually almost nothing, about the present costs, nor long term costs, of our long occupations of choice. Especially by those that held the power and readily rubber stamped what their same political party administration wanted. Nor did they feel much need in holding congressional hearings, investigations nor much oversite, not much heard when reports of billions just went poof nor when private contractors on their no bid contracts kept wasting money on shoddy work and much more, while they held the power. They weren’t the only ones, even their supporters and talking heads readily supported everything they did and didn’t do.

This, directly below, as well as the continuing political? propaganda speak from a certain group that still wear the banner of a once political party, their media mouth and sponsor on 24/7 TV, their so called think tanks and those that want to leave the previous administration in the dust, after agreeing with everything it did, In Our Names, but now don’t want anyone  to think they’re associated with that eight years plus so they formed the so called TEA party or as many did even before that started calling themselves libertarians, Has Been Eating At My Craw!!

Summertime Blues: Senator Tom Coburn, M.D., Senator John McCain A u g u s t  2 0 1 0

100 stimulus projects that give taxpayers the blues 74 page PDF, but there’s plenty of articles, by reliable sources, to read all about without downloading.

Remember this guy ?    

Only very rarely has a person to the same extent, …..  captured the world’s attention and given its people hope for a better future. His diplomacy is founded in the concept that those who are to lead the world must do so on the basis of values and attitudes that are shared by the majority of the world’s population.

Fresh off of letting the former Minerals Management Services oil bomb a third of our nation’s seafood supply from the Gulf of Mexico into oblivion through regulatory neglect, and letting the EPA perform the world’s largest biology experiment with Corexit spraying,

He’s come up with a great new manufacturing stimulus program to end our nation’s economic malaise of millions of unemployed.

And Dept of Defense Secretary Gates is enthusiastic, saying it will “build high walls around a smaller yard” by narrowing in on the nation’s “crown jewels.”

What could this be ?   Is it a bird, is it a plane, no, it’s more than that,  it’s

  Enlarging the United State’s market share of the international weapons exporting business !  He’s going to double it by 2015.  That would take us from 30% of the market to 60% of the world market.    

What could possibly go wrong ?

India, which currently is seeking 126 fighter-jets worth over $10 billion, 10 large transport aircraft worth $6 billion, and other multi-billion dollar defense sales, could be among the possible beneficiaries. Allies seeking advanced U.S. weaponry and equipment, who now often buy elsewhere due to the cumbersome U.S. approval process, would draw immediate benefit from the reforms, U.S. officials said.

Isn’t this the world’s largest multicultural Asian democracy which currently is embroiled with a little misunderstanding with its Muslim neighbor, Pakistan, which we just happen to be giving money to with one hand, and droning with the other ?  

Although a “Democrat” in the House,  Berman,  is writing a version of the bill, others are also expressing enthusiasm for their kind of stimulating one stop shopping Mall of the Americas experience.   And there will be seasonal sales, and back to school specials, as the boring old technology is rotated to the clearance racks and the new, stylish and advanced technology is put on the front of the aisles.

Rep. Donald Manzullo, R-Ill., represents a district with aerospace and other manufacturers, and said reform is needed for the survival of U.S. manufacturing.

“We can begin to manufacture our way out of this recession by reforming our export controls,” Manzullo said in a speech at the American Enterprises Institute, a conservative think tank.

Okay, they’re a little bit worried about who might get the clearance rack weapontry items, but not too much.

Ah, streamlining ! Transparency !  Hope and Change !

Your kid didn’t need that publik skoolun fer kollage anyway. Call your local recruitment office now and reserve him or her a space for 2015.  They’ll leave the lights on for ya.