Tag Archives: deficit

Sequester? Let it happen…

I’m a Democrat. I’m a liberal. I’m also a Federal employee. However, I’m also increasingly thinking that it wouldn’t be that bad of a thing if the automatic spending cuts in the “sequester” are allowed to take effect.

It really isn’t a lot of fun trying to manage a project right now in the Federal government. Uncertainties over budgets make it incredibly difficult to make even short-term plans, much less longer-term plans. Agencies are already bracing themselves for cuts, so “frills” like travel, hiring, or needed equipment are increasingly difficult to get approved. If the sequester happens, nearly all programs and agencies funded through discretionary spending will be cut by 8.4%. That’s a big number, especially given that we’re already several months into the Federal government’s fiscal year. It will have a real, and very painful impact on agencies, including mine.

And still, I say…let it happen. Unlike the idealogues who run the Republican party, even as a very liberal Democrat, I’m quite pragmatic about the deficit. Republicans say that it has to be managed ONLY through budget cutting, a ridiculous, and frankly, quite impossible task. Democrats, on the other hand, have shown they are much more realistic on the deficit, having already agreed to very signficant budget cuts as part of the debt limit deal last year, and putting more on the table in the attempt to reach a “Grand Bargain” on the sequester and deficit. But Democrats have been balanced, realizing it’s impossible to cut deficits without also raising revenue.

It’s that “balanced” view that leads me to believe the sequester isn’t necessarily a horrible thing. There has to be a balanced and pragmatic approach to cutting the deficit. A VERY big part of that has to be a realistic view of the Defense budget. We spend more on defense than the rest of the world combined, but yet Defense cuts have been generally taboo for Republicans. In the Sequester, Defense takes an unprecedented 9.2% cut. If negotiations to avoid the sequester occur, you can bet the farm that Republicans won’t agree to anything unless it drastically decreases the amount of Defense cuts. The sequester may be the ONLY mechanism that finally gets the U.S. to cut its bloated defense department. The sequester may be the ONLY mechanism that gets the U.S. to take a more realistic view on the role of the U.S. military in the 21st century.

There are also some political advantages to Democrats for allowing the sequester to happen. Republicans have only ONE party message, one platform…CUT GOVERNMENT. They don’t even have a plan for WHAT to cut, their only message in the last several years is to cut, cut, cut, and when asked about details, they hem and haw, and lately, have even had the gall to say that it’s up to DEMOCRATS to decide what to cut.  It’s a ridiculous platform to begin with, but given the hollowness of the Republican party and COMPLETE lack of any other party message, if the sequester is allowed to happen, Republicans are suddenly left without ANY party message.  Democrats would have already agree to billions of dollars of cuts last year’s debt ceiling negotiations.  Massive cuts would occur with the sequester.  Suddenly, the ONLY message that Republicans seem to have is irrelevant.

As I said, cuts would hurt, and not just for those of us in the Federal government.  It’s a horrible time to cut spending, given that the economy is finally just getting back on its feet.  Economists have stated the sequester would likely reduce GDP by a full percentage point for the next few quarters.

But the pragmatic side of me states that across-the-board spending cuts would force agencies to streamline, which isn’t necessarily a bad thing.  The pragmatic side of me says a short-term hit to the economy is worth it, IF it gets the U.S. to take a more realistic look at our military spending.

Sequester?  Just let it happen…

Gingrich Tax Plan: Cut Rich Tax Rate by over half

Newt Gingrich

Newt Gingrich and the rest of his rich buddies would be laughing all the way to the bank, under Gingrich's proposed new tax system.

Newt Gingrich has been criticized by many in the Tea party, and by conservatives in general, for being too moderate.  With the analysis of Gingrich’s proposed tax plan, conservative wackos have nothing to worry about.  Gingrich is showing he’s just like the rest of the completely unrealistic GOP candidates, and will do anything to pander to the wacko right who believes taxes and government are the root of all evil.

Gingrich’s plan would allow you to keep your current taxes, or, take a flat 15% tax.  So in theory, nobody’s taxes go up!!  Consider, however, that the richest Americans currently have a tax rate of 35%.  That would go down to 15%!  Plus, Gingrich proposes no taxes on capital gains, and no estate taxes, two taxes that currently largely affect the wealthy.  The net result?  MASSIVE tax cuts for the rich, far beyond what even most other wacko Republican candidates are offering.  The richest 0.1%?  They would receive an AVERAGE of a $2 million cut in their taxes!! 

The poorest people in America?  ONLY 20% would receive ANY kind of tax benefit!!! And the average tax benefit for those few, lucky poor folks who WOULD get a tax cut under Gingrich?  A whopping $63 a year!!

There is just one SLIGHT problem with Gingrich’s plan.  Under the plan, tax revenues would drop by at least 35%, adding at least $1 TRILLION a year to the deficit!!  Considering the debt-reduction committee couldn’t agree on that much savings over TEN years, adding a trillion a year to the deficit doesn’t seem too smart now, does it?

But then again…who ever accused the GOP of being smart?

Capital Gains Taxes and the GOP

Capital Gains Rates Change

Capital gains tax rates have fallen from a high of 38% to a 40-year low rate of 15% right now. 50% of ALL capital gains go to the 0.1% richest Americans...but yet the GOP wants to cut or eliminate capital gains taxes.

This recent article highlights the incredible effect capital gains have on wealth distribution in the U.S.    The highest 0.1% of income earners in the U.S. receive a staggering 50% of all capital gains in the U.S.   Of the Forbes 400 highest earners, 60% of income comes from capital gains.  The capital gains tax rate used to be nearly 40%, but over the last 30 years, that number has been whittled down to only 15%…to the GREAT delight of the uber-rich, as their share of the American pie continues to grow, at the expense of the rest of us.

Despite the incredible role capital gains (selling property or selling investment shares) have played in fueling the growing income disparity in the U.S., capital gains taxes have been a major talking point for the GOP, including GOP presidential candidates.  A majority of GOP candidates have proposed COMPLETELY eliminating the capital gains tax.   Eliminating the capital gains tax would cost Federal coffers about $100 BILLION a year, or $1 trillion over 10 years.  The “super committee” currently is trying to find a way to reduce the deficit by $1.2 trillion over 10 years…and has pretty much admitted it will fail to find a way to do so.  But yet despite our economic distress, despite the inability of Congress to find ways to reduce the deficit, many in the GOP are calling for a complete elimination of a tax on the uber-rich, which would effectively WIPE OUT any deal the super committee might come up with.

Somehow, our economy survived, and thrived, when capital gains taxes were over twice as high as they are today.  But for the GOP and their uber-rich puppet-masters, it evidently isn’t enough to greatly reduce the capital gains tax, they would like to completely eliminate the tax.   Leave it to Republicans to focus on cutting a tax that primarily benefits the richest 300,000 Americans.

Supercommittee Deadline…or Lack Thereof

Kick The Can

Deadlines? We don't care about stinkin' deadlines!! After all, John McCain said Congress makes the rules...they can break 'em too. And once again, Congress kicks the can down the road.

The “super committee” charged with finding $1.2 trillion in budget savings over the next decade still doesn’t seem close to a deal.  Congress’s automatic “trigger” is supposed to automatically cut a certain percentage across all government agencies in January 2013, if the committee doesn’t reach a deal.  The trigger was put in place to supposedly pressure Congress to actually reach a deal.  It’s been assumed that Republicans would balk at the automatic cuts to the Defense Department that would take place without a deal, and thus force them to negotiate.

Nope.  “The Congress is not bound by this,” said Sen. John McCain. “It’s something we passed. We can reverse it.”  Let’s see…earlier in the year, Congress brought us to the brink of default on our debt, all because of a lack of ability to agree on budget issues.  They installed this trigger to force them reach a deal…but the deadline is 5 days away, and no deal is in sight.  So, according to McCain, it’s no big deal!  THEY made the law, THEY made the trigger, so they can simply undo it!! After all, they’ve been SO successful in reaching budget agreements lately, they can just get rid of the deadline, get rid of the automatic trigger, and once again, kick the can down the road while we continue to head towards economic ruin.  They’re SURE to reach a deal NEXT year, right, Sen. McCain?

Pathetic.  Given the market’s reactions to debt issues in Greece, and now Italy, you’d think Congress would be paying attention to the grave implications of refusing to tackle the issue in the U.S.   But no, Republicans are too driven by dogma, and the next election, to worry about actually governing.  They continue to continue to fight EVERY effort to raise new revenue.  Their latest “concession” included a lowering of the highest tax bracket, and making the Bush tax cuts permanent.   They continue to act like puppets for corporate CEOs, doing everything they can to keep the status quo, to continue to perpetuate the gap between rich and poor, no matter the consequences for the country. 

It would be a complete shock at this stage if the super committee came up with a deal next week.  The deadline means nothing to Congress, as McCain noted.  The new deadline when the clock strikes midnight at the end of 2012, when the Bush tax cuts expire if Congress doesn’t do anything.  If Congress doesn’t do anything, the automatic $1.2 trillion in cuts also kick in that January. 

In other words…probably the BEST case scenario to reduce the deficit is for Congress to do nothing…which seems to be their specialty.  Maybe there’s hope after all.

Taxing the Rich "Bad Economics"?

Deficit Surplus Graph

A booming economy, and a budget surplus prior to the Bush tax cuts. But Paul Ryan says raising taxes on the rich is "bad economics".

Paul Ryan is (of course) ripping Obama’s plans to raise taxes on the rich.  Ryan says the plan is good politics, but “bad economics”.   One thing I have to admit….Republicans have mastered the ability to control the national political dialogue.  Just 3 years after the recession, Republicans have somehow turned the political discussion away from Wall Street, away from corporate greed, and away from the economic effects of the Bush tax cuts, and focused the entire political debate on the size of government and the supposedly negative impact taxes are having on the economy.

The graph on the top of this NY Times article shows just how much of the deficit is due to the Bush tax cuts.  Simply letting the Bush tax cuts expire at the end of 2012 brings the long-term deficit down to a sustainable level.  How to fix the deficit issue?  LET THE TAX CUTS EXPIRE and the debt issue is largely taken care of.  But yet the Republicans have been able to frame the entire debate on the debt on cutting spending, and have somehow made raising taxes completely off limit.

Clearly the economy did just fine under the tax rates under the Clinton administration.  There was no “uncertainty” or reluctance to hire due to tax rates, as Paul Ryan says will happen if Obama is allowed to raise taxes on the rich.  Poll after poll shows the public as a whole wants a balanced approach to reducing the deficit, including support for raising revenue through higher taxes.  Even a very large majority of Republicans recognize the need to both cut spending and raise taxes.  

What’s very clear…the statement is true that one party’s stance on taxes is “good politics, but bad economics.”  But clearly Ryan and the Republicans should be pointing the finger at themselves, not at Obama and the Democrats.

Perusin' & Musin'

Perusin and Musin'Some random thoughts from perusin’ the web…

Our feathered Dinosaurs FriendsFeathers preserved in amber from the end of the Cretaceous period show that at least some dinosaurs were indeed feathered.  “Feathers” & Folly is going to have to expand scope, and I’m going to have to start talking about dinosaurs as well as birds.

Obama – Be prepared to pay “your fair share” to cut deficitIn his Saturday radio address, Obama said Americans must be prepared to pay their fair share to cut the deficit.  That’s called REALITY.   On the other hand, we have John Boehner announcing this week that any new tax increases are off the table for the debt committee.  That’s called DELUSIONAL.   The fight over the debt committee’s work is shaping up to be just as painful as was the fight to raise thte debt limit, as the GOP refuses to acknowledge reality, and refuses to negotiate.

Pat Robertson – Divorce your spouse with Alzheimer’s – Pat Robertson gave advice this week that it’s justifiable to divorce your spouse if they have Alzheimer’s.   So much for Christian values and “till death do us part”.  It’s a horrible situation when a spouse gets Alzheimer’s, but I don’t care if it’s “like death” or not, divorcing a spouse because of an illness sure doesn’t sound “Christian” to me.

U.S. to Veto Palestine State Recognition in U.N. – The Palestinian president is taking his case for recognition of a Palestinian state to the U.N.  For reasons I won’t even pretend to understand, the Obama administration says the U.S. will veto that recognition in the Security Council.  The U.S. has been involved in peace talks between Israel and Palestinians for 20 years, and where has it gotten things?   A U.S. veto will spark Muslim outrage in the Middle East, and further strengthen the Muslim view of the U.S. as a villain and an obstacle to a Palestinian state.

Husker prediction – My prediction for today’s Nebraska game against Washington…After a rather pathetic defensive showing last week, a more fired up defense plays well, slowing down the run enough to be effective, and rattling a young Washington QB making his first start on the road.  On offense, Nebraska again struggles, but makes a few big plays.  Close game going into the fourth quarter, but Nebraska wins by a touchdown.   Nebraska 23, Washington 16