Friday, July 29, 2011

Tea Party Dictators

According to the Committee for a Responsible Federal Budget, the "apples-to-apples" difference between the Reid budget (US$912 billion cut) and the Boehner budget (US$917 billion cut) is about US$5 billion over ten years, which is about a third of a percent of the national debt. Neither one even comes close to a balanced budget (the 2010 deficit alone is over a trillion dollars), much less the surplus that we need to pay down the debt. So where exactly do the Republicans get the gall to claim moral high ground in keeping the budget low?

In their religious fervor for small government, the Republicans and the Tea Party in particular have forgotten one crucial thing: we are a democracy. Regardless of whether their political views are correct or wrong, about half of the country disagrees, and we get the same vote per citizen as they do.

You want your political views to lord over ours? That's called a dictatorship. In a democracy, we compromise just enough to get the laws we like passed, just as Barack Obama weakened his health care bill to make it palatable to the right edge of his party. Bills that have no chance to pass the Senate or be signed by the President are just wastes of taxpayer money. If they stay on this road, they would not only ruin our credit, they could very well ruin our democracy itself.

Saturday, July 16, 2011

Three Republican Lies

One, that cutting taxes for the rich will result in investment and therefore create jobs. This is so obviously false it's not even funny. Go look at the yield on your savings account, and I'll be surprised if it exceeds 2%, which doesn't even keep up with inflation. In other words, not only are you not earning interest, you're paying the bank to keep your money. This also means that banks just can't lend out enough money to pay you good interest. Any rich person with a good thing to invest in would've already pulled all his money out of the banks to invest.

Two, that the debt limit is an immediate problem. The fact that treasury bills also pay only tiny interest right now means lots of people want to buy it, which they wouldn't without some confidence in the long-term soundness of the US economy. The debt itself is a problem, but not something that suddenly needs to be solved by August.

Three, that the debt can be paid down by cutting taxes. The math is very simple: when you have a debt and ongoing spendings, the debt can only be paid down if you have a surplus, and it's not enough to just lower the deficit. In other words, Republicans are saying that we must cut spending until we have a surplus (because they refuse to raise taxes), but they're also trying to cut taxes at the same time, which creates even more deficit.

The debt is US$14 trillion. The deficit is US$1.5 trillion. To get a US$500 billion surplus to start meaningfully paying down the debt (and even then we're talking decades), we must find US$2 trillion a year in decreased spending or increased taxes. Since the Republicans not only will not increase taxes, they want to decrease it, so we're talking about more than US$2 trillion in spending cuts every year, and the cuts better not come from the US$600-billion defense budget.

What will happen when you cut most of this US$2 trillion from Medicare, Medicaid, and Social Security? Do you imagine this won't force seniors to become financially-dependent on their children? Do you imagine this won't force poor people into desperation, some perhaps even into crime? Do you imagine this won't send sick people who can't afford treatment to their deaths? It's clear to me that the less painful way is to make up some of this gap with increased taxes, on the rich.

Why should the rich pay more taxes? For the simple reason that they are, by definition, the ones who benefited the most from our deficit spending all these decades. Lots of programs can be audited to decrease waste, but to think you can brutally cut benefits on the poor and elderly (which merely shifts the national burden instead of solving anything) and at the same time generously lower taxes on the rich to result in a budget surplus is simply cruel.

Saturday, July 2, 2011

Hitting the Ceiling

Why is there even an argument about the federal debt ceiling in Congress? The debt is an inevitable consequence of more authorized spending than there are taxes or fees to pay for them, not something that the executive branch created. In fact, the law that limits federal borrowing is in direct contradiction to the budget bills, which is why the debt ceiling has been raised over and over again.

The Republicans who are making an issue of the debt ceiling are either idiots who don't actually understand that they've already required the government to take on this debt, or playing politics with the credit-worthiness of the United States.

Want to control the debt? Work on the budget.

...

Earlier, Rep. Paul Ryan had proposed replacing Medicare with a voucher system for seniors to go find their own medical insurance providers. Since seniors are the least desirable demographic to cover - because they actually need health care - it's laughable to think that any insurance company would take them on.

Laughable, of course, unless there's some sort of federal law requiring them to, such as the Affordable Care Act. You know, the one Republicans call "ObamaCare" and want to repeal.

...

Update: The Economist has joined in with a scathing indictment of Republican politics:
It is because the vast majority of Republicans, driven on by the wilder-eyed members of their party and the cacophony of conservative media, are clinging to the position that not a single cent of deficit reduction must come from a higher tax take. This is economically illiterate and disgracefully cynical.