The Game in a Nutshell

Bailouts put the private debts onto the public (tax payer) balance sheet. Now Congress and the White House are poised to finish the job by putting that debt onto the backs of America's most vulnerable people.

For Your Convenience:

• Contact the Broadcast Media
• Contact the Newspapers
• Contact the US Senate
• Contact the House of Representatives

Sources:

Too Funny: Exploding Whale

Voices Faulting G.O.P. Economic Policies Growing Louder

In case you missed this one, it was one of the most popular NY Times pieces a few days back:

Voices Faulting G.O.P. Economic Policies Growing Louder

Fact-based world is intruding on the fantasy-based polices being pushed by Republicans. The S&P US Downgrade report is one of the voices.

For Your Convenience:

• Contact the Broadcast Media
• Contact the US Senate
• Contact the House of Representatives

Sources:

Co-opted Democrats

In a column in The Washington Post on Friday, Bill Gross, who runs the giant bond-trading firm Pimco, lashed out at Republicans and “co-opted Democrats” for setting aside widely accepted economic theory.

“An anti-Keynesian, budget-balancing immediacy imparts a constrictive noose around whatever demand remains alive and kicking,” he wrote. “Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy. It will not.”

For Your Convenience:

• Contact the Broadcast Media
• Contact the US Senate
• Contact the House of Representatives

Sources:

Standard and Poor's on Bush Tax Cuts

S&P would upgrade the US to "stable" if the Bush tax cuts for the rich were allowed to lapse:

Our revised upside scenario--which, other things being equal, we view as consistent with the outlook on the 'AA+' long-term rating being revised to stable--retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating.

Sources:

United States of America Long-Term Rating Lowered To 'AA+' On Political Risks And Rising Debt Burden; Outlook Negative [pdf] Standard and Poor's, Primary Credit Analyst:
Nikola G Swann, CFA, FRM, Toronto, August 5, 2011.

Talking Point: US Government Debt and Jobs

Job, Jobs, Where are the Jobs?

The talking point is simple. Average Americans are not spending money, and the economy is stalled, because they don't have much money. It's no use giving tax breaks and low interest rates to product manufacturers, because the people who would normally buy their products don't have money. People need jobs.

It is debatable whether the American public is responsible for 70% of domestic spending on goods and services, but by sheer number their spending potential is huge. They might make up 70% of domestic spending if they had money to spend, but they don't have good jobs.

Why not? Government policies over the past several decades, supply-side (trickle-down) tax policies and corporate globalization policies, have created a record wealth gap. A study by three Citigroup analysts indicates that the top 1% of Americans earn as much annual income as the bottom 60% and the top 1% possess as much wealth as the bottom 90% of Americans. The analysts concluded “economic growth [in the US] is powered by and largely consumed by the wealthy few.” [1] This is borne out by recent statistics showing that growth in domestic product sales have declined at discount stores and have grown in high-end stores and luxury products.

The Solution:

The government needs to set policies to put money in the pockets of average Americans, and I'm not talking about a $600 check; it needs to be tens of thousands per year, which simply put means temporarily creating jobs. The money for these jobs needs to come from the places that it is being hoarded: The richest 1% of Americans and transnational corporations who have benefited greatly from government policies over the past few decades.

After people have had government-sponsored jobs for several years, they will have the money to buy more products and services they need. This will create a market for private sector products and, in turn, support more jobs in the private sector. Eventually, the government can get out of business of job creation.

And yes, these jobs will require more government revenue in the near-term, but will also generate new revenues. In the long run, we'll be more likely able to pay down the US Government debt.

Agree? Let policy makers know:

• Contact the Broadcast Media
• Contact the US Senate
• Contact the House of Representatives

Update: Listen to a professional, Bill Gross, founder and co-chief investment officer of the investment management firm Pimco. "America’s debt is not its biggest problem", Washington Post, August 10, 2011.

Sources:

1. Can the Middle Class be Saved? Atlantic Monthly, September, 2011.

Talking Point: Debt and Medicare

Are Medicare & Medicade the Problem?

First, Medicare is not part of the general budget deficit & associated debt problem. That's because Medicare, like Social Security, has a dedicated fund separate from the general fund. It should be managed as a separate dedicated fund, not lumped into the general budget debate.

Second, if we spent per capita what every other industrial nation spends on health care, we would not have a long-term Medicare solvency problem. If we simply focus on cutting Medicare and Medicaid, we’re just shifting the rising costs to those least able to pay them: the elderly, the disabled and the poor, or people on their death bed. Is that the American way?

Solutions: First, we need to cut health care costs (not services). Second, in the next few decades, we all need to pay a little more out of our FICA payroll deductions to cover the fact that the baby boomers are reaching old age (maybe from 1.45% to 1.75% or something). After the wave of baby boomers passes, the deductions could decrease. Finally, if Congress insists on mixing the dedicated fund of Medicare with the general fund, then we should insist on cutting corporate welfare and increasing revenue from corporate profits to help meet Medicare's needs.

Wanna take Action? Start by calling Senator Kerry's office and tell him to get better control of his message (He is one of the super committee members). Here's a recent statement of his:

... the real problem for our country is not the short-term debt. We can deal with that. It’s the long-term debt. It’s the structural debt of Social Security, Medicare and Medicaid, measured against the demographics of our nation.

Unfortunately, his statements are playing into the hysteria that is enveloping the mentality that these safety nets should be cut. We need to re-frame the debate.

For Your Convenience:

• Contact the US Senate

Sources:

DemocracyNow! August, 12, 2011.

Hourglass with Sand in One Side

I posed the following one Paul Krugman's blog:

Why is it that I have the strong image of an hourglass with all the sand trapped in one end when I think about our current economic situation? If this analogy is useful, what is the analogue of turning the hourglass over in this case?

We'll see if he responds.

Sources:

Wall Street Crash

"The Wall Street crash doesn't mean there will be any general or serious business depression."
-- Business Week
November 14, 1929

Sources: "The working person's history of the great depression," Show me the Money, Issue 10, Autumn 2001.

Once Upon a Time

"The outlook is for the end of the decline in business during the early part of the 1931, and steady... revival for the remainder of the year."

-- The Harvard Economic Society's Weekly Letter,
November, 15, 1930

Note: In 1931, the economic squeeze of the depression forced the Harvard Economic Society to suspend publication of the Weekly Letter.

Source: "The working person's history of the great depression," Show me the Money, Issue 10, Autumn 2001.

Final Push in Wisconsin

Did you know... "Last weekend, a fire burned down a local Wisconsin headquarters of the campaign to recall Republican senators." That is according to Alan Grayson, former U.S. Congressman.

This coming Tuesday is the recall election that will send a message across the nation and around the world. Now is the time for the final push in the bell weather state of Wisconsin.

I can chip in $4 to fuel the recall campaign in the final days.

Second Helicopter in Two Weeks

I don't remember hearing about another helicopter shot down less than two weeks ago in Kunar province. A search of Google news and Google suggests it was mentioned by obscure outlets. This post, with "Kunar" and "Helicopter" in the labels list will rank high on Google 'cuz there ain't no competition.

I guess that's par for our debilitated, commercial mainstream media; a US helicopter gets shot down and it isn't news if no Americans die.

I'm reminded of Orwell and the perpetual war.