Cause and Effect?

Of course the recent job numbers now reveal that Obama has destroyed the economy (at least according to some conservative voices).    Here is a revealing chart:

 

 

This chart shows private sector job growth.  Red is during the last year of the Bush administration and blue is the Obama administration.   The blue line to the far right is May of 2011.   April 15 was when the 2011 budget was finally passed.   The budget that cut spending.  What is the fallacy?   Post hoc ergo propter hoc.  And, let us admit, the budget did not cut all that much spending.  But there is this:

About $8 billion in immediate cuts to domestic programs and foreign aid were offset by nearly equal increases in defense spending

But cuts in government spending are not the only thing the Republicans have managed to do that might influence economic and job growth.

There is the dreaded “uncertainty”.  This concept is a favorite of Republicans when, for example, there is a possibility that the top tax rate might or might not go from 35% to 38% and job creators sit on their money instead of create jobs with it since they do not know what the tax rate will be.  I think that “uncertainty” is bunk, but…

What of the uncertainty of whether the US is going to pay its debt or not?  Ever since the 2011  budget passed, the Republicans have made all kinds of noise that they will let the government go into default if they do not get their way.  Does this not create uncertainty?   I suggest this creates a hell of a lot more uncertainty than the possibility that the top tax rate might go up!

Cause and effect?  Ithink things were going along pretty good there until the Republican house finally started influencing what was happening.

Indoctrination Camps

Steve Benen at the Washington Monthly has a post up about the Republicans who want to do away with public schools.  He quotes Rick Santorum talking about Mussolini’s Fascist Italy.  His uncle

used to get up in a brown shirt and march and be told how to be a good little fascist….I don’t know, maybe they called it early pre-K or something like that, that the government sponsored to get your children in there so they can indoctrinate them.

The upshot here is that there are several Republicans who are increasingly willing to talk about doing away with public schools altogether.  This amounts to a willingness to do away with universal education (since they would eventually want to cut the vouchers to less than what schools charge).

What’s funny here is when have the schools not been about indoctrination as well as education? When I was in school, we said the Pledge of Allegiance (“under God”) every day.  What is that if not indoctrination?

Conservatives have lost the battle over control of the indoctrination message and their final last ditch effort is to do away with public education altogether in hopes that the vast majority of private schools will indoctrinate the way the Conservatives want.

To recap:  when the complaint is that the schools are indoctrinating, they mean the schools are indoctrinating the wrong thing.

When they want to do away with public schools, they want to do away with universal education.

 

What Were They Thinking?!?

My normal response to the question “What was he thinking?” (or a variation thereof) is that there was no thinking involved.  But is it possible there was no thinking involved on the part of the Republican House members when they passed the Ryan budget?  If there was thinking, what could it be?

All but four of them voted to destroy Medicare, slash lots of spending that people like, and lower taxes on the wealthy!  They did this even though there was not a chance in hell of the budget becoming law.  Next year they have to run for reelection while defending this vote.  I assume the primary defense will be “There was no way it would become law, so it was safe to vote for it” which, I am sure, will make everyone feel better about it.

The interesting thing about the Ryan budget is that if it actually passed the Senate and the President signed it, it would make the deficit worse.  Why?  Because there is no way the “end medicare as we know it” portion would remain intact.   The spending cuts the budget lays out would not remain intact.  But you can bet your boots the tax cut for the wealthy would stay.

And the deficit would explode.

The deficit is a serious issue, but it can not be solved by pretending that political realities no longer exist.

 

Government Shutdown Avoided and Guaranteed

As I write, the news is that an agreement has been reached for the budget for the fiscal year (or what’s left of it).  This is good news, though it was purchased by the Democrats giving up far more than they should have.

Apparently, the House will not be able to pass the compromise without Democratic votes as the Tea Party members feel House Speaker  John Boehner gave up too much (he got more than his opening bid!).  Which brings up the question, is Boehner an historically weak Speaker, or an exceptionally clever one?

I can not decide if the Democrats should give just enough votes for it to pass or if they should vote for it unanimously (or as unanimously as they can).

Now comes the hard part: next year’s budget.   I see just two possibilities.  One, no agreement is reachable and the government shuts down.  I think this outcome is guaranteed.  There is one alternative.  Boehner could pass a budget with the 192 Democratic votes and 25 Republican votes (including his own).  This requires Boehner to be willing to lose his job as Speaker.  It also requires that he and the other 24 Republicans face a Tea Party opponent in his primary.   I see this as the only hope of avoiding a shutdown.

If we get through this fall, with or without a shutdown, then we have just one budget left for this congress, and that would be on the table during the election!  That will be interesting!!

Seventy Three Billion

On this morning’s Face The Nation, Senator Harry Reid says that a number has been reached for the amount of cuts to make in negotiations to prevent a government shutdown.  The number he gives is $73 billion.    This is the first time I’ve heard that number.   I’ve been reading all week that the number is $33 billion.   This number would make the Republicans very happy since they’ve been wanting $61 billion.  Of course, they would still want the cuts to be where they want them to be!

My guess is that Reid misspoke.    I am disappointed that Bob Schieffer let that number pass without asking about it.   In the blogs I read I do not see any immediate reactions to that number.

Reid comes up with the number at the 5:55 mark of the video.

 

UPDATE:

A commenter, Joe Friday, at Steve Benen’s blog at The Washington Monthly explains that Reid was simply using a different baseline and the $78 billion and $38 billion dollars are the same.

Assuming this is correct, this then is a continuation of the seemingly eternal problem the Democratic Party has with messaging.  I pay a reasonable amount of attention and Reid’s number confused me.  I guess I could be the only one who was (is?) confused…but if the same baseline was used consistently, maybe more people would understand…..

Maybe….

??????

Where Would It End?

I have been thinking about a post pondering just how far today’s Republicans would go if allowed.  What year of the calendar they would like this to be?  1950?  1920?  Maybe 1890?

Crush the unions, erect barriers to voting, deeply cut the regulatory “burden”, eliminate public schools…

But to get to 1920 they would have to disenfranchise women.  Surely THAT would be a bridge too far…

And maybe it is.

But I would have thought that the weakening of and/or elimination of child labor laws would be a bridge too far.  Wrong! Among other fun ideas at the link is this:

Missouri State Sen. Jane Cunningham (R) introduced a bill which would “eliminate[] the prohibition on employment of children under age fourteen. Restrictions on the number of hours and restrictions on when a child may work during the day are also removed.

It is a bit unfair to lay the blame for all of these policy initiatives at the feet of ALL Republicans.   But at the same time, when is the last time you heard a Republican leader or national figure stand up against any of these ideas.

Political Battles Never End

I was just reading Steve Benen’s blog at The Washington MonthlyHe has an entry complaining about those Republicans who are working on how they might reinstate Don’t Ask, Don’t Tell. I disagree with his complaint on two counts.

First, history, especially recent history, teaches us that political battles never end.  Wisconsin has passed the law stripping public service workers of almost all their collective bargaining rights, but the opponents of that law are still working hard to overturn it.  I do not believe I have seen any complaints from Steve about that.

Second, polls have shown that the majority of Americans wanted Don’t Ask, Don’t Tell repealed.  So I say let the Republicans go on record as wanting to repeal it.  As Americans want jobs, the Republicans continue to pursue agendas that either have no effect on jobs or would cost jobs.  If the Democrats come up with any decent messaging at all, they should storm back to large majorities in 2012.

Why the Deficit Does and Does Not Matter

Saturday night I was at a charity casino night.  Buy a ticket, get an assortment of chips and try and increase them.  I got my initial chip allowance of “$30,000”  and headed for the roulette wheel.  At the end of the evening I had “$740,000” in chips.

This was not entirely luck.  I used a system.  One chip on odd.  When I won,  I bet one chip on odd again.   When I lost, I doubled the bet.  So two chips, then four, then eight, etc.   Sooner or later the ball was going to land in an odd number and I would win.  (Try this with real money at your own risk).   After a while, instead of starting the process with a “$1,000” chip, I started with a “5,000” chip.  I raised the initial amount once I felt comfortable that I had enough money to survive a likely (i.e. short) losing streak.  Eventually, I was starting with a “”$15,000” bet.

I believe the closest I came to bust was when, starting with a “$15,000” bet, I did not win until I had bet “$120,000”.  So I had lost three times in a row.   If I had lost that fourth time, I would have been starting over.  I did not have anywhere near “$240,000” in chips left to double my bet with again.

What does this have to do with the deficit?  As long as there are various entities ready and willing to buy bonds from the United States, then the deficit is not a problem.  But when there is no more money to put back us….

This years deficit is irrelevant.  It might be made relevant if the government decided to spend three or four more trillion this year (maybe a little less, maybe a little more), but given the probable deficit, even with no cuts from congress, the deficit is irrelevant.  Next year’s is too.

The people making the decisions on whether to buy or not buy our debt are fully aware of the projected deficits.   But even so, they still loan us money.  This tells us that the marketplace (where conservatives usually worship) believes that our present deficits are not that much of an issue.

However, it is reasonable to assume that at some point the total debt combined with the projected deficit will become too much for those decision makers and they will start putting their money elsewhere.   Then we are screwed (just as I would have been screwed if the wheel came up even four times in a row).  The money will no longer be there.

In the meantime, the economic recovery continues, slower than we would like, but continues none the less.  Some of the reason for this growth is a large federal government spending deficit.  That deficit is stimulative.  Continuing economic growth is very important for the deficit/debt issue as a strong economy will do much to ameliorate the problem.

The Republicans want to slash current spending which will have a depressive effect on the economy and cost jobs and will have a small effect on the current deficit and might easily increase the deficit over the next couple of years (due to the slowed economy).    It is difficult to understand exactly what the Republican objective is other than they want to handicap the economic recovery hoping for a double dip recession and that the voters blame Obama.

It is their only hope for winning the white house in 2012.

Delegating Powers to the Vice President in the Mubarek Administration

OK, that does not roll off the tongue as nicely as rearranging deck chairs on the Titanic.  But either metaphor serves in the case of our elected federal officials and the deficit.

Let us begin with an old chart from the Congressional Budget Office via our, ahem,  good friend Ross Perot:

This chart is a bit dated, but the curves have not changed much.  Future deficits are the result of medicare/medicaid and interest.  The last being the same as saying future deficits are the result of future deficits.   If future deficits can be brought under control, then the interest payments will take care of themselves.

Want something more recent?

This is from February 25th, 2011.  It assumes that the Bush tax cuts will expire and that the Obama stimulus tax cuts also expire.   Note that the growth of health spending goes from over eight percent of GDP to 12% of GDP while the total deficit at that point is 3.2 percent of GDP.   So the entire projected deficit in 2021 could be attributed to the growth of medical spending.

The Affordable Care Act (Obamacare) actually includes several measures intended to bring down medical costs.  The CBO grades the Act as lowering the deficit even though they did not take many of the cost saving  measures into consideration on the grounds that the measures had not yet shown they would work (they were not even law at the time…).

So the only serious deficit reduction effort in Washington today is the Democrats defense of health reform.  Obama freezing spending and the Republicans talk of cutting spending amounts to nothing more that delegating powers to the vice president in the Mubarek administration.

Oh yes.  If you want to clear up the short term deficits, this chart might prove useful:

 

For good or for ill, the spending that the Republicans want to cut is there for a reason.  People like it.  That spending is popular.  War, the Bush tax cuts, and the recession drive the short term deficit.

Even if the wars end tomorrow, the savings there will be minimal.   Something else will come along.  It always does.

Many of the cuts the Republicans propose would actually weaken the economic recovery and so increase the deficit.

The Bush tax cuts should be allowed to expire.  All of them.

Everybody’s Scratching Somebody’s Back

Some of the message coming from various Republicans lately is that the public employee unions give the Democratic Party an edge since the Democrats are supposedly happy to give the unions whatever they want and then the unions provide the dollars and the votes to elect the Democrats.  A fine circle of back scratching.

In the first place, if this was such an effective dynamic, how did a Republican get elected to the Wisconsin governorship?  Why are there any Republican office holders anywhere?  And, why is it that

over the last fifteen years the pay of public-sector workers, including teachers, has dropped relative to private-sector employees with the same level of education – even including health and retirement benefits.

(Yes, I just used that a couple of posts previously…)

I suppose it is all hunky dory that big business and the wealthy give loads of cash to Republicans who vote to give them tax deductions and tax cuts, and to ease the regulatory burden.   It is so much easier to make money when one is free to pollute the environment,  treat employees as expendable assets, and customers as people to swindle.