new deal Archives - Where Is The Outrage?

A Call for Economic Action

Over the last several years, I’ve really tried to focus my blog away from softer, feel-good issues and try to focus on the economy. I felt that by studying the economy and economic principles, I could make some sense out of our political decisions. So, with the election of Barack Obama I began to write more and more about a stimulus package. The more I read, the more it seemed that thoughtful decisions regarding the stimulus were being thrown out the window in favor of political expediency. Almost as soon as the stimulus package was passed, backlash over “government spending” started. All of the sudden, government spending became a bad idea. The fact that the government spending aimed to help Americans didn’t matter. This was bad.

Slowly, a tidal wave of austerity began to sweep through Washington and across the country. It is really unclear to me why everybody became convinced that the best way to fix the economy was to cut government spending. Cutting government spending was supposed to be better than the Lone Ranger’s silver bullet. Everything was going to be better once we were able to simply cut government spending. Consumer confidence would soar. Everyone would be happy.

Over the last 24 months we’ve not seen any of the great benefits that were supposed to come from austerity. The unemployment rate is still unacceptably high. Businesses are making money, but they’re not hiring. We’ve seen economists singled out by conservatives as geniuses only to find out that their data were flawed and their conclusions were wrong. We’ve seen European austerity measures completely and totally embraced and we have seen no true economic growth. If anything, we’ve seen economic contraction.

We need a new New Deal. We need an economy that is going to work for all of us. We need an economy that incentivizes those who work hard. We need an economy that doesn’t take advantage of those who are undereducated. We simply need a better economy.

By ecthompsonmd|2013-05-09T22:01:59-04:00May 8th, 2013|Economy|2 Comments

More Badness from Globalization

It should be no surprise to anyone that we are more connected with our brothers across the ocean than ever before. With the Internet and various treaties and whatnot, it is now possible for me to order olives in Greece and have them delivered, here, next week. While this is sweet, this benefit also comes with a downside. Our financial markets are more interconnected than ever. This means it actually matters what happens in the European Union. If Europe falls into a deep, deep recession, our economy will stagnate. (I know some of you are asking how it could stagnate even more, but take my word for it, can.)

The news out of Europe is really awful:

The government of Prime Minister George Papandreou teetered on the verge of collapse on Tuesday, threatening Greece’s adherence to the terms of a new deal with its foreign lenders and plunging Europe into a fresh bout of financial turmoil.

Several lawmakers in the governing Socialist Party rejected Mr. Papandreou’s surprise plan for a popular referendum on the Greek bailout, raising the possibility that he will not survive a no-confidence vote scheduled for Friday that depends on his holding together a razor-thin parliamentary majority. Mr. Papandreou was holding an emergency cabinet meeting Tuesday evening to save his government, but the opposition and some members of his own party were calling for new elections immediately.

The impasse in Athens seemed likely to delay — and perhaps scuttle — the debt deal that European leaders reached after marathon negotiations in Brussels last week. Financial markets cratered on Tuesday for the second straight day, wiping out the gains since the Brussels deal was announced last week. Some analysts said that Greece was now coming closer to a messy default on its debt, and perhaps a departure from the zone of 17 countries that use the euro as their common currency.

By ecthompsonmd|2011-11-01T20:15:29-04:00November 1st, 2011|Economy, Foreign Affairs|Comments Off

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