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I’m not hopeful

I never liked that old story of the Engine That Could. There are some things that the power of positive thinking simply won’t fix. Several weeks ago, I was sort of hopeful that some sort of deal would be made. The deal might be crappy, yes, but at least the economy wouldn’t implode. With each day, as reasonable and downright awful deals have all ended up in file 13, I’m getting less and less hopeful that our dysfunctional Congress can do anything that really helps the American people. So I went from I think they can to I think they are morons. I think that they are morons.

Rumors of a new, new deal have been circling since this morning.

From TPM:

The deal works like this:

It guarantees the debt limit will be hiked by $2.4 trillion. Immediately upon enactment of the plan, the Treasury will be granted $400 billion of new borrowing authority, after which President Obama will be allowed to extend the debt limit by $500 billion, subject to a vote of disapproval by Congress.

That initial $900 billion will be paired with $900 billion of discretionary spending cuts, first identified in a weeks-old bipartisan working group led by Vice President Joe Biden, which will be spread out over 10 years.

Obama will later be able to raise the debt limit by $1.5 trillion, again subject to a vote of disapproval by Congress.

That will be paired with the formation of a Congressional committee tasked with reducing deficits by a minimum of $1.2 trillion. That reduction can come from spending cuts, tax increases or a mixture thereof.

If the committee fails to reach $1.2 trillion, it will trigger an automatic across the board spending cut, half from domestic spending, half from defense spending, of $1.5 trillion. The domestic cuts come from Medicare providers, but Medicaid and Social Security would be exempted. The enforcement mechanism carves out programs that help the poor and veterans as well.

If the committee finds $1.5 trillion or more in savings, the enforcement mechanism would not be triggered. That’s because Republicans are insisting on a dollar-for-dollar match between deficit reduction and new borrowing authority, and $900 billion plus $1.5 trillion add up to $2.4 trillion.

However, if the committee finds somewhere between $1.2 and $1.5 trillion in savings, the balance will be made up by the corresponding percentage of the enforcement mechanism’s cuts, still in a one-to-one ratio.

I’m not sure how this is much different than what we have seen before. I just don’t understand how even thinking about cuts to the social safety net helps the American people. Do you?

By |2011-07-31T19:04:40-04:00July 31st, 2011|Budget, Congress, Obama administration|5 Comments

Standing with Martin Luther King and strong unions

April 4, 1968, Martin Luther King was shot, assassinated at the Lorraine Hotel in Memphis, Tennessee. Martin Luther King was not in Memphis, Tennessee for tax cuts for the rich. He wasn’t there to cut domestic spending programs. Martin Luther King was there to stand up for sanitation workers. The sanitation workers were protesting unequal wages and abysmal working conditions. In essence, Martin Luther King was supporting a union walkout.

Today, more than 40 years later, unions continue to be under attack. They’re under attack from multiple sides. There are people who just don’t understand how unions work and why they’re beneficial. There are Americans who always stand with the rich and powerful and these Americans understand that the only way to level the playing field is if all the workers speak in one voice – unions.

Now, more than ever, we need unions. A report in the Washington Post today reveals that wages are stagnant and inflation is squeezing Americans and not squeezing big business. Their profits are up. The only way that we can raise our standard of living is by standing together and demanding fair wages. Sure, there are some corporations that are rich and generous. They will always pay a living wage. Unfortunately, they are in the minority. The majority of corporations are out to squeeze workers to increase profits. Strong unions can fix this. Strong unions are needed now more than ever. I stand with Martin Luther King and tens of thousands of Americans who believe that strong unions are a requirement for a strong vibrant middle class.

By |2011-04-05T09:18:14-04:00April 5th, 2011|Economy|Comments Off on Standing with Martin Luther King and strong unions

The False Foundation Of the Conservative Tax Rant

The last several days (here and here), I’ve been dissecting this e-mail that I got from a friend of mine. The e-mail is something that we’ve all seen. It is an over the top treatise which is designed to get us emotionally charged over our tax burden. I have a few final thoughts on this e-mail.

The author of this e-mail is trying to tell us that $1 billion is just an enormous sum of money. On one hand, $1 billion is a lot of money. If the average American family takes home approximate $40,000 a year, $1 billion is 30,000 times greater than the average family’s median income. Yet, there’s over 300 million people in the United States. $1 billion is just a little over $3.33 per person. The average salary for the top 10 highest paid hedge fund managers is over $1 billion apiece. This is $1 billion per year for one man (one guy is getting paid over $2.5 billion per year). Exxon Mobil‘s quarterly income for the last quarter was $12.8 billion.

Things are expensive. We’ve seen conservatives rail against domestic spending. They talk about how spending is so wildly out of control but I have yet to see a conservative stand up and say we’re spending too much on the military. The F-22 raptor is one of our flying marvels. It is an amazing fighter jet. It is a third-generation Stealth fighter in our military arsenal. As we sit here and debate the wild spending in Congress let’s consider this third-generation Stealth fighter. No other country in the world has developed a first-generation Stealth fighter. As far as I know, no radar has been able to detect our first or second generation stealth planes yet, we continue to spend money on these technological marvels. Each one of these planes F-22 cost $187 million apiece. For $1 billion, you can have four planes. We won’t even talk about the more expensive fourth-generation F-35 Joint Strike Fighter Lightning II which is more expensive. Our nuclear aircraft carriers cost almost $200 million apiece. The budget for the Pentagon when you add in the supplemental spending on both Iraq and Afghanistan is almost $1 trillion.

We are overtaxed. This a common refrain heard from conservatives and the foundation of their anti-tax rhetoric. This refrain is basically a re-wording of Ronald Reagan’s famous, “the government is the problem.” Yet, I think that any thoughtful review of the tax code which show that our tax burden is actually less than it was 20 or 30 years ago. John F. Kennedy cut the upper tax rate from 90% down to approximate 70%. Nobody pays anywhere near this in federal income tax anymore. The average American currently pays approximately 18% of their income to the federal government. There is the myth that over 40% of Americans don’t pay any federal tax. That number is incorrect. More than 75% of Americans pay some federal tax. If you add up all of the taxes that Americans pay, this would include federal, state and local taxes, Americans pay $3.8 trillion or 27% of our gross domestic product. If you look at the 30 richest countries in the world we ranked 25th in tax burden. Only Mexico, Turkey South Korea and Japan have lower tax rates. So, it’s hard for me to believe that were overtaxed.

I know that many Americans believe that were paying more in taxes. The question is why? Why do Americans feel like the government is vacuuming up every last penny that we have? The problem is wages. Our wages have not kept up with expenses. We are paying more and making relatively less. Because we’re having more and more trouble making ends meet we start looking around for reasons why. The reason is our work is not being valued. Almost nobody is getting paid more, in absolute dollars, than they were paid 20 or 30 years ago. This is our problem in the US. We need to get a pay raise. Without a significant pay raise, conservatives will continue to whine about taxes as if that is the problem. In a nutshell, we are working harder and getting paid less for our efforts.

By |2011-01-14T13:34:11-04:00January 14th, 2011|Party Politics, Taxes|Comments Off on The False Foundation Of the Conservative Tax Rant
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