Stop the "Too Much Tax" Myth

(Source: The Globe and Mail)

A Call for a Constitutional Convention

Laurence Lessig  February 4, 2010

For the Framers imagined a time when the government might be captured. And they created a mechanism to respond to that capture. If 2/3ds of the legislatures of the states demand it, Congress must call a convention. That convention then must meet and deliberate about amendments to the constitution. If it agrees, it then proposes amendments to the states. 3/4ths of the states must then ratify any amendment before becomes law. Thus, 12 states of 50 have the power to veto any change, meaning no change could happen unless it appealed to a solid group of Red States and a solid group of Blue.

Rebooting Democracy by Laurence Lessig

09 April 2010: Lecture at Brown Democracy Matters event. This is a revision and update of the lecture given 27 March 2010, refining and extending the call for a convention.



Why Voters Tune Out Democrats

Great article by Stanley B. Greenberg. Some excerpts:

In analyzing these polls in the United States, I see clearly that voters feel ever more estranged from government — and that they associate Democrats with government. If Democrats are going to be encumbered by that link, they need to change voters’ feelings about government. They can recite their good plans as a mantra and raise their voices as if they had not been heard, but voters will not listen to them if government is disreputable.

But a crisis of government legitimacy is a crisis of liberalism. It doesn’t hurt Republicans. If government is seen as useless, what is the point of electing Democrats who aim to use government to advance some public end?

Government rushes to help the irresponsible and does little for the responsible. Wall Street lobbyists govern, not Main Street voters. Vexingly, this promotes both national and middle-class decline yet cannot be moved by conventional democratic politics. Lost jobs, soaring spending and crippling debt make America ever weaker, unable to meet its basic obligations to educate and protect its citizens. Yet politicians take care of themselves and party interests, while government grows remote and unresponsive, leaving people feeling powerless.

The Democrats have to start detoxifying politics by proposing to severely limit or bar individual and corporate campaign contributions, which would mean a fight with the Supreme Court. They must make the case for public financing of campaigns and force the broadcast and cable networks to provide free time for candidate ads. And they must become the strongest advocates for transparency in campaign donations and in the lobbying of elected officials.

If they want to win the trust of the public, Democrats should propose taxing lobbyist expenses and excessive chief executive bonuses and put a small fee on the sale of stocks, bonds and other financial instruments. By radically simplifying the tax code to allow only a few deductions, the Democrats would generate new revenue and remove the loopholes that allow special interests to win favorable treatment. The ordinary citizen, according to our surveys and focus groups, feels there is no way to play that game and views simplifying the tax code as an important reform.

To show that government can protect the nation’s interests, Democrats should advocate policies that would control the borders and address problems of undocumented workers.

Rather than treating deficit reduction as an “eat your peas moment,” progressives should embrace the liberal think tanks’ bold deficit plans, which would raise taxes more and defend progressive priorities.

Recently, it has been the conservatives, the Tea Party members and the anti-immigrant groups who understand the anger with government, and rush in to exploit it. Perhaps now, with the debacle in Washington, liberals will become instinctively angry with this illegitimate government and build their politics from there.

Who are "Disaffecteds" and why in the world would they vote Republican?

Jonathan Chait

Robert Christian points out that one clue to the GOP's failure in the New York special election can be found in the Pew political typology. The key group Corwin lost ground with seems to corresponds to what Pew calls "Disaffecteds." Who are "Disaffecteds"? Pew explains:

The most financially stressed of the eight typology groups, Disaffecteds are very critical of both business and government. They are sympathetic to the poor and supportive of social welfare programs. Most are skeptical about immigrants and doubtful that the U.S. can solve its current problems. They are pessimistic about their own financial future. ...

Defining values: A majority believe that the government is wasteful and inefficient and that regulation does more harm than good. But nearly all say too much power is concentrated in a few companies. Religious and socially conservative.

Who they are: About three-quarters (77%) are non-Hispanic white and two-thirds (66%) have only a high school education or less. Compared with the national average, more are parents (44%). Fully 71% have experienced unemployment in their household in the past 12 months. About half (48%) describe their household as “struggling.”

Disaffecteds tend to lean pretty heavily toward the Republican Party:


Paradoxically, though, they're more resistant to cutting Medicare and Social Security than any other group, including any of the groups that make up the Democratic base:



If you can't read that, only 15% of Disaffecteds favor cuts to Medicare or Social Security to reduce the deficit. Even 26% of "Solid Liberals" favor this.

So here you have a key part of the Republican base, whose swing toward the GOP in 2010 was a crucial factor in the party's success. And this group opposes cutting Medicare more staunchly than any other group. The Ryan plan seems almost designed to blow up the Republican coalition.

The Debt Ceiling Crisis And The Failure Of The Establishment

Good snippet from Jonathan Chait:

The main problem is that the Republican Party does not actually care very much about the deficit. It cares about, in order: Low taxes for high-income earners; reducing social spending, especially for the poor; protecting the defense budget; and low deficits. The Obama administration and many Democrats actually do care about the deficit and are willing to sacrifice their priorities in order to achieve it, a desire that was on full display during the health care reform debate.

Just what is Cut, Cap, and Balance?

Good article from Blue Wave News:

Summary:

• Make it near impossible to implement stimulus spending in a recession. In fact, it would almost certainly require severe budget cuts in the very programs that help people the most during a recession.
• It would create a disincentive to implement possible stimulative tax cuts as it would take a 2/3 vote to repeal them (assuming one couldn't just sunset them).
• It would make it difficult for the government to provide disaster relief in the case of a major hurricane, earthquake, flood, drought, or other natural disaster as it would require a 2/3 vote to do so.
• It would make some common sense fixes to Social Security difficult, by making any vote to raise or eliminate the payroll tax cap subject to a 2/3 vote, putting the sustainability of Social Security into even further question.
• The Patient Protection and Affordable Care Act would almost certainly have to be repealed. This would actually make it harder to balance the budget, as the PPACA has the net effect of lowering the deficit, but it would violate the 18% of GDP provision.
• It would almost certainly require that any steps to be taken to lower the national debt would have to be taken by spending cuts only.
• If the GOP cut taxes with the argument that it would increase revenue - and were wrong - it would be nearly impossible to reverse as it would take a 2/3 vote to do so.
• However, it would make it (relatively) easy for a party who controls Washington to do something such as Invading Iraq again, as it would only take a 3/5 vote of both Houses to declare doing so a "imminent and serious military threat to national security." - but would make it difficult to pay for such action by raising taxes as 2 of the 3 amendments wouldn't waive the 2/3 vote to raise taxes provision, even in a time of war.
• It would make the US much like California in that it would take a 2/3 vote to do any sort of real budget reforms. This situation was a large reason why California faced one of the biggest budget deficits in the nation.
• It would encourage Congress to balance the budget using budgeting tricks, similar to what is happening in many states with balanced budget amendments right now, making the nation's financial situation less stable, not more stable.

Just another example of how the Tea Party is bent on bringing down the federal government...

Tea Party Terrorists

It seems that the Tea Party is trying to bring down the American Government. They're a bunch of anarchists, trying to destroy our economy, trying to destroy Medicare, Social Security and Medicaid. I guess I'm not the first to think this. Chris Mattews tonite asked "The Tea Party is threatening to bring down our economy if they don't get what they want. What's next? Are they going to try to bring down our power grid?"

Thomas Friedman recently compared the Tea Party to Hezbollah in the NYTimes opinion pages.

And finally, Why The GOP Aims To Sink The Economy

New High: 46% Think Most in Congress Are Corrupt

From Rasmussen Reports:

Voters are more convinced than ever that most congressmen are crooks. A new Rasmussen Reports national telephone survey finds that 46% of Likely U.S. Voters now view most members of Congress as corrupt. Similarly, a whopping 85% of voters think most members of Congress are more interested in helping their own careers than in helping other people. That’s a record high for surveys stretching back to early November 2006. 

RootStrikers

Money is corrupting our democracy. Our country's founders intended our government to be dependent upon the people alone—but today, lawmakers spend up to 70% of their time raising money for their reelection campaigns. In 2010, it cost an average of $8.5 million to win a Senate seat. Barack Obama is expected to spend over $1 billion on his reelection campaign. Where do we think this money comes from?

We need a democracy that's dependent on the people, not the funders. Government won't change itself. We need a grassroots movement to fight the corrupting influence of money in politics.

Thoreau wrote, "There are a thousand hacking at the branches of evil to one who is striking at the root." The root of our political evils is money. Our goal is to build a network of rootstrikers—to talk about this issue, clearly identify the problem, and work together towards practical reforms.



Rootstrikers is a project of Fix Congress First, a nonprofit organization founded in 2008 by Lawrence Lessig and Joe Trippi to fight the corrupting influence of money in politics.

Scott Walker is Evil

Voters in Wisconsin are screwed.  Like many Republican Governors around the nation – Governor Scott Walker jammed a restrictive voter ID law through his state legislature earlier this year requiring people to show a drivers license or other form of photo ID in order to vote.  These sorts of laws have been proven to disenfranchise poor, elderly, and college-age voters who don’t drive a car – and who also tend to vote for Democrats.  But Walker argues this isn’t about politics – it’s about curbing voter fraud – which is a non-issue that happens less often than people getting struck by lightning.  But unlike other Republican Governors – Scott Walker is going one step further to REALLY screw over voters in his state.  Walker is now closing DMV offices around Wisconsin – making it even harder for people to get the photo IDs that are now needed to vote.  And guess which DMV offices he’s closing? The ones in Democratic areas of course!  And he’s expanding hours of DMV offices in Republican areas.  Despite what Walker says – this move IS just about politics.  With Republicans state lawmakers facing 6 upcoming recall elections – and Walker himself likely facing a recall next year – it’s obvious the Governor is doing everything he can to keep his job – and chipping away at the core of democracy itself in the process. 

Open Letter to the Republicans

I'm sick of hearing "raising taxes on the rich is a job killer". That's BS and you know it. The rich spend what they want to spend, regardless. Give them yet another tax cut and it just goes into their hedgefund or off-shore account. Even the Wall Street Journal says it's the working class that creates jobs. A survey of 53 economists found that it’s the people who spend money – those in the working class – who are the actual job creators. As most economists point out – if people are spending money – then demand goes up – and CEOs have no other choice but to hire more people to make products to meet that demand.

A don’t give me that line about poor small businesses. The fact is most small businesses are doctors, lawyers and wall street types. When we were running our small business, taxes were the least of our concerns. We probably paid some corporate taxes, but my wife and I didn’t have any money until we sold the business.

The working class hasn’t made any gains since Reagan got in office. Almost all the gains have gone to the super rich. The top 1% used to take in about 10% of total income, now it takes home 20% and they now have 40% of our nation’s entire wealth. These are the people you work for. You couldn’t care less about the average person any more. It’s all about the money with you. Who’s gonna finance my next campaign? Which corporations are paying me to screw over the middle class this week? How can you sleep at night?

How has the CEO/employee pay gap changed?

By Dylan Matthews

The early ’90s and early ’00s recessions led to downticks in the ratio, with the latter drop being more dramatic, presumably because of the collapse of dot-com executive pay when the tech bubble burst. A similar drop has happened due to the financial crisis.

According to the EPI figures, the average CEO received $8,917,000 in compensation in 2009, while the average production worker got $48,130. If this 185.3 ratio were narrowed to 1965’s 24.2 figure solely by increasing average production worker pay, then the average production worker would get around $368,471. If it were narrowed solely by reducing average CEO pay, then the average CEO would get $1,164,746 a year.

If achieving that kind of ratio again is even possible, it would come about through a combination of the two, but most likely the shift would come primarily through lower CEO pay. One could imagine a very steeply progressive income tax with rates that keep rising for incomes over $1 million taking a big bite out of a nearly $9 million compensation package. By contrast, it is difficult to conceive of a policy change that would lead the average manufacturing worker to increase their pay nearly eightfold without changing executive pay.

Obama's move to the right: Tax Increases over 10 years if Congress passes...

By Ezra Klein

Obama’s and Bush’s effects on the deficit in one graph

By Ezra Klein

 

What’s also important, but not evident, on this chart is that Obama’s major expenses were temporary — the stimulus is over now — while Bush’s were, effectively, recurring. The Bush tax cuts didn’t just lower revenue for 10 years. It’s clear now that they lowered it indefinitely, which means this chart is understating their true cost. Similarly, the Medicare drug benefit is costing money on perpetuity, not just for two or three years. And Boehner, Ryan and others voted for these laws and, in some cases, helped to craft and pass them.

To relate this specifically to the debt-ceiling debate, we’re not raising the debt ceiling because of the new policies passed in the past two years. We’re raising the debt ceiling because of the accumulated effect of policies passed in recent decades, many of them under Republicans. It’s convenient for whichever side isn’t in power, or wasn’t recently in power, to blame the debt ceiling on the other party. But it isn’t true.

Hot Dog

Means-testing Medicare is a bad idea

by Paul Krugman:

The usual argument against means-testing — which is entirely valid — is that it (a) doesn’t save much money and (b) messes up a relatively simple program. The reason it can’t save much money is that there are relatively few people rich enough to be able to afford major cost-sharing. Meanwhile, the good thing about Medicare, as with Social Security, is precisely that it doesn’t depend on your personal financial status — you just get it. Means-testing would turn it into something much more intrusive, like Medicaid. The third point is, if you want the well-off to pay more, it’s just better to raise their taxes.

Why Medicare is the Solution - Not the Problem

by Robert Reich

Medicare isn’t the nation’s budgetary problems. It’s the solution. The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Medicare offers a means of reducing these costs — if Washington would let it.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That’s almost two and a half times the average of other advanced nations.

Yet the typical American lives 77.9 years – less than the average 79.4 years in other advanced nations. And we have the highest rate of infant mortality of all advanced nations.

Medical costs are soaring because our health-care system is totally screwed up. Doctors and hospitals have every incentive to spend on unnecessary tests, drugs, and procedures.

America spends $30 billion a year fixing medical errors – the worst rate among advanced countries. Why? Among other reasons because we keep patient records on computers that can’t share the data. Patient records are continuously re-written on pieces of paper, and then re-entered into different computers. That spells error.

Meanwhile, administrative costs eat up 15 to 30 percent of all healthcare spending in the United States. That’s twice the rate of most other advanced nations. Where does this money go? Mainly into collecting money: Doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policy holders.

A major occupational category at most hospitals is “billing clerk.” A third of nursing hours are devoted to documenting what’s happened so insurers have proof.

So what’s the answer? For starters, allow anyone at any age to join Medicare. Medicare’s administrative costs are in the range of 3 percent. That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it’s way, way lower than the administrative costs of individual insurance (40 percent). It’s even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.

In addition, allow Medicare – and its poor cousin Medicaid – to use their huge bargaining leverage to negotiate lower rates with hospitals, doctors, and pharmaceutical companies. This would help move health care from a fee-for-the-most-costly-service system into one designed to get the highest-quality outcomes most cheaply.

Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced.

Let me say it again: Medicare isn’t the problem. It’s the solution.

11 days until disaster, three options to prevent it

11 days until disaster, three options to prevent it

By Ezra Klein

 
If we convince Standard Poor’s that our political system has failed, they will downgrade our credit within three months. If they do that, interest rates on our debt will spike, perhaps by 50 basis points, perhaps by more. An easy rule of thumb is that if interest rates rise by 50 basis points, we will lose 600,000 jobs in this country.

At this point, there are three serious options on the table. A $4 trillion deal that includes some revenues, a $1 trillion-$2 trillion deal that’s all spending cuts but leaves much of the job until after the election, and a deal in which Republicans don’t come to a negotiated agreement with President Obama but they grant him the authority -- and let him take the blame -- for raising the debt ceiling. Those are our three options, and Congress needs to pick one. Time is running short.

Thom Hartmann: Secrets the Rich don't Want You to Know

Thom Hartmann News for July 22, 2011

Universal Health Care: Can We Afford Anything Less?

by Gerald Friedman:

The rising cost of health care threatens the U.S. economy. For decades, the cost of health insurance has been rising at over twice the general rate of inflation; the share of American income going to pay for health care has more than doubled since 1970 from 7% to 17%. By driving up costs for employees, retirees, the needy, the young, and the old, rising health-care costs have become a major problem for governments at every level. Health costs are squeezing public spending needed for education and infrastructure. Rising costs threaten all Americans by squeezing the income available for other activities. Indeed, if current trends continued, the entire economy would be absorbed by health care by the 2050s.

America’s military in two graphs

by Ezra Klein

America spends shockingly more than everyone else:

But the Economist slices the data in a different way today and looks at total military personnel. There are two things worth looking at here: first, the length of the line, which shows the total number of people in uniform, and second, the number on the right, which shows how many citizens out of a 1,000 are part of the military.

The most important graph in health-care policy

From Ezra Klein:

It shows that we pay more than any other health-care system and, to add insult to injury, have ended up with more government than most of our competitors, too. It’s the worst of both worlds: a government-run health-care sector that is larger than the international norm, a private health-care sector that’s vastly larger than anything else out there and vast inefficiencies caused by the overlap and poor coordination between the two. 

In other countries, the government is empowered to “say no” in the form of driving extremely hard bargains with doctors, hospitals, drug manufacturers and others. That right there is the basic difference between us and everyone else. And if you take it seriously, it explains a lot of what’s going on.

In Canada, you either sell your drug for what the Canadian government is willing to pay, or you don’t sell your drug. That’s true in pretty much every country. And it turns out that providers are willing to offer health-care services for far less than what they charge Americans. Peruse these graphs if you want some proof. But because there’s no government saying no to their prices in America, they can basically charge us whatever they want, as we have enormous trouble saying no on our own.

An open letter to President Obama

Dear Mr. President,

As a life long democrat, who volunteered my time to help elect you, I'm very disappointed in your administration. You're too timid. You weren’t timid with the Somali pirates or Osama bin Laden, so why are you timid domestically? In searching the web, the best explanation I can find is in one of your quotes:

"When I say something the markets react, all of society reacts, other countries react. I've got to be careful with what I say. I can't just say it for brinkmanship. I've got to say it in a way so that I get what I want said, but I don't upset markets and so on."

If you speak the truth, the markets will respond positively. If you spout crazy nonsense like the Republicans do, the markets and the people will respond negatively.

Why don’t you like to “own” a plan? Why do you play second fiddle to Congress? Why don’t you use the bully pulpit more? Why doesn’t our leader lead?

Perhaps I’m being too critical. I know our political system is broken. There’s been a corporate takeover of America. Many members of Congress are corrupt, selling off votes in return for large campaign contributions. This is destroying democracy. Fix this problem and all other problems are infinitely easier to solve. Isn’t there anything you can do about this? Why don’t you at least sign the executive order to require disclosure of political spending by government contractors?

Regarding the deficit, I’m sure you realize healthcare is the biggest problem. My wife and I pay $12,000 per year for health insurance, with a $10,000 deductible. And we’re perfectly healthy!?! The drug companies and insurance industry have half the Congress on their payroll and are bankrupting our country. Medicare for All with some teeth to control costs and the power to take on Big Pharma is the only way to prevent financial ruin. You took that option off the table before negotiations even began, and now you’re talking about RAISING the Medicare eligibility age?!?

After decades of giving corporations and the rich everything they want, our economy is in ruins. As Warren Buffett said, "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning." Trickle down economics doesn’t work.  A healthy middle class means a healthy economy. Please push for a WPA-style jobs program to fix the infrastructure, and other jobs programs. Don’t break your campaign promise and expand NAFTA to Colombia-Korea-Panama. You’re just giving away more American jobs in return for corporate contributions to your campaign.

Finally, please have dinner with Paul Krugman. Your rhetoric about austerity and business confidence is right-wing nonsense. Your emphasis on austerity is already causing unemployment to rise, and may well cause a premature end to your presidency.

I sincerely wish you the best,

James Crist

Madison, WI

The dangers of being wrong on Keynes

Christina Romer: "Suddenly, it’s like we’re back in the 1930s.”

via Ezra Klein:

Your plate and climate change in one graph

An interesting article by Ezra Klein discusses the impact of processing various foods on CO2 levels. Lamb and cheese produce a suprisingly large amout of CO2...

Even the WSJ knows it's the working class that creates jobs

Thom Hartmann: Time to blow a hole in the Republican argument that millionaires and billionaires are the job creators in America.  Even the Wall Street Journal is questioning the logic after a survey of 53 economists – in which the majority concluded that it wasn’t “lack of certainty” in Washington that’s preventing CEOs from hiring – but instead it’s lack of demand on Main Street.  Time and time again – Republicans argue that we need to give rich people money through tax cuts so that they can go out and hire more people.  Yet today - with tax rates for the rich at their lowest levels in 50 years – unemployment is still tragically high.  Why is that?  Because rich people aren’t job creators!  It’s the people who spend money – those in the working class – who are the actual job creators.  As most economists point out – if people are spending money – then demand goes up – and CEOs have no other choice but to hire more people to make products to meet that demand.  That’s why a debt-limit deal that’s made up of spending cuts that take money out of the pockets of working class Americans is not good for the economy – it’s harming our nation’s REAL job creators!  It’s time for our lawmakers to take an Econ 101 class.

Obama makes his case to the left

Obama:

If you are a progressive, you should be concerned about debt and deficit just as much as if you’re a conservative. And the reason is because if the only thing we’re talking about over the next year, two years, five years is debt and deficits, then it’s very hard to start talking about how do we make investments in community colleges so that our kids are trained. How do we actually rebuild $2 trillion worth of crumbling infrastructure.

If you care about making investments in our kids, and making investments in our infrastructure, and making investments in basic research, then you should want our fiscal house in order so that every time we propose a new initiative, somebody doesn’t just throw up their hands and say “more big spending, more government.”

It would be very helpful for us to be able to say to the American people: “Our fiscal house is in order. So, now the question is, what should we be doing to win the future, and make ourselves more competitive, and create more jobs, and what aspects of what government’s doing are a waste, and we should eliminate.” And that’s the kind of debate that I’d like to have.

Yeah, well we won't have our fiscal house in order until we have Medicare for All with a progressive premium plan, incent doctors to cure patients, remove the incentive to run extra tests and give Medicare the ability to negotiate fair prices for drugs. Instead, Obama is trying to RAISE the eligibility age for Medicare?!? He's going the wrong way!

How different are taxes and spending?

From Ezra Klein:

This morning, on “The Diane Rehm Show,” EPI’s Larry Mishel made a good point: The Republicans argue that increasing taxes by a dollar hurts the economy while cutting spending by a dollar helps the recovery, he said. That means they believe that taking a dollar out of a rich person’s pocket through taxes hurts demand while taking it out of a poor person’s pocket by cutting unemployment insurance doesn’t. He suggested there’s not a whole lot of evidence to support this claim.

But remember that Republicans also say that cutting tax expenditures counts as a tax increase. That implies that cutting a $1 billion subsidy for low-income housing will help the recovery while shaving $1 billion off of a tax break that subsidizes low-income housing purchases would impede the recovery. Can anyone defend that claim? Would anyone even like to try?

The line between taxes and spending is simply not as bright as some like to claim. This morning, economist Greg Mankiw put it forthrightly: “It is just as important to focus on stealth spending implemented through the tax code as on explicit spending,”

McConnell to Obama regarding the debt ceiling: You drive, we'll carp

Since the Republicans haven't been able to talk the Democrats into crippling Medicare, Medicaid and Social Security, they now want to just avoid having to vote to raise the debt ceiling. Their new plan is you drive, we'll carp. Read more here:

U.S. CEO Pay Increases By 23 Percent From 2009 to 2010

A study conducted for The New York Times by Equilar, an executive compensation data firm based in Redwood City, California, has found the median pay for CEOs at the 200 large U.S. companies last year averaged $10.8 million, an increase of 23 percent from 2009. While CEOs earned an average of $207,690 per week last year, the typical American worker took home $725 per week at the end of 2010, a slight increase from a year earlier. Viacom CEO Philippe Dauman was the highest paid CEO making $84.5 million last year. CBS Corporation CEO Leslie Moonves received a 32 percent pay raise, resulting in $57 million in earnings.

Republicans say protecting tax cuts for wealthy is more important than the deficit

This from Jonathan Cohn at The New Republic:

Does anything matter to Republicans more than protecting tax cuts for the very wealthy? Developments of the last 18 hours suggest very strongly that the answer is no.

As you have probably heard by now, House Speaker John Boehner on Saturday evening informed President Obama that he was no longer interested in pursuing a “grand bargain” on deficit reduction. Such a large deal would have required Republicans to agree to new revenue, in some form. And at least some of that money would have come from higher taxes (in terms of total collections, if not rates) on the very wealthy. No matter how big the Democratic concessions, no matter how risky the prospect of postponing a deal on the debt ceiling, they were not willing to embrace a package that meant higher taxes, particularly taxes on the wealthy.

On the News With Thom Hartmann: Brzezinski Warns Wealth Gap May Lead to Uprising in US Streets, and More

Thom Hartmann: The President is trying to pitch a $4 trillion deficit reduction package over the next 10 years – that slashes away at programs mostly affecting the working class and even cuts up the social safety net in America – trimming $400 billion from Medicare and Medicaid.  All of these tough cuts will be in exchange for closing a few tax loopholes for corporations, millionaires, and billionaires.

Oh, we can't tax the rich, it'll kill jobs!

Bush Tax Cuts Failed To Deliver from PoliticalCorrection.org

During Bush Years, Household Income Declined For First Time On Record. According to a report by the Center for American Progress: "The Bush economic cycle saw the first decline in median household incomes of any cycle since 1967, when the Census Bureau began tracking household data."

[Center for American Progress, February 2009]

Center on Budget and Policy Priorities:

Proponents of extending President Bush’s 2001 and 2003 tax cuts for people with incomes over $250,000 argue, in part, that allowing them to expire after 2010 would weaken the economy by hurting small businesses. In reality, however, extending the tax cuts would do little for small business because only the top 3 percent of people with any business income, let alone income from a small business, would benefit. [1] Over the long term, an extension would likely harm the economy — and thus small business — by adding about $1 trillion to deficits and debt over the next decade and even larger amounts in subsequent decades.

Opponents of letting the high-income tax cuts expire on schedule often cite the potential impact on small-business job creation. But when CBO analyzed the job-creating efficiency of various stimulus policies, extending the high-end Bush income tax cuts came in dead last.

In fact, during the 1950s and early 1960s, when America experienced its most impressive stretch of sustained growth, marginal tax rates on the rich were the highest they've ever been -- 91 percent for the top bracket. Meanwhile, during the last decade, when top tax rates were at one of their lowest points in recent history, the US economy experienced its slowest annual growth rate since the Great Depression.

An additional problem with extending the Bush high-income tax cuts to aid small businesses is that it would be very poorly targeted. Most small businesses are just that — small — so their incomes are not high enough to face the top marginal rates. Allowing the two top tax rates to return to their pre-2001 levels would have no impact whatsoever on 97 percent of taxpayers with business income, according to the Joint Committee on Taxation.[5] Only the top 3 percent of such taxpayers are in the top two brackets.
Those who claim that raising the top rates would seriously harm small businesses also tend to rely on an extremely broad definition of “small business.” Because the IRS does not publish specific, satisfactory data on the taxes that small businesses pay, analysts are left to examine various sources of business income that individuals receive. Some analysts define any taxpayer who shows any business income on a tax return — including passive income that very wealthy investors secure — as a small business. Defining small businesses in this manner greatly overstates the actual number of small businesses, particularly among households with very high incomes.[6]

For example, most Americans would not describe the nation’s wealthiest 400 individuals, some of whom are billionaires, as small businesses. Yet the “Top 400” individuals have a great deal of money to invest and consequently receive significant business income — which means that they qualify as “small business owners” under the broad definition of the term. The 400 highest-earning taxpayers received nearly $17 billion in S corporation and partnership income in 2007 (the most recent year for which we have these data) — an average of $83 million each, according to the IRS. [7] In addition to the wealthiest 400 taxpayers, the following types of individuals are commonly included in the definition of “small business” used in tax debates:

• partners in very large corporate law firms,
• partners in lucrative medical practices, and
• Wall Street bond traders who receive multi-million dollar bonuses and invest some of their income in investment partnerships.

The commonly used definition of “small business” also includes many wealthy executives of the nation’s largest corporations and financial institutions, who are considered “small business owners” if they rent out their vacation homes.[8]

Why does Obama keeps talking nonsense about economics?

Paul Krugman speculates as to why Obama is talking like a stupid Republican. Obama:

Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.

That's a wow statement. It's profoundly uneconomic. Government doesn't face the same borrowing constraints as a household. It seems clear that the government can afford current levels of spending. It wasn't that long ago that government revenues were far higher than they currently are. Neither the invisible bond vigilantes nor the confidence fairy have made an appearance. It seems quite clear that cutting government will be a net negative for the current economy.

Sign of racism?

According to the Daily Kos/SEIU Weekly State of the Nation Poll, white people are the only ethnic group to have an unfavorable opinion of Barack Obama. 51% of all people polled had a favorable opinion, but only 41% of white people had a favorable opinion. All other ethnic groups were over 50%.

Despite what republicans say the stimulus bill created about 2.5-2.7 million jobs

Ezra Klein: Most authorities don’t think the stimulus failed. The nonpartisan Congressional Budget Office, for instance, says it created between 1.2 million and 4.6 million jobs “compared to what would’ve happened otherwise.” IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com all estimate that the laws ultimate impact will be roughly 2.5 million jobs. Economists Mark Zandi and Alan Blinder put it at 2.7 million jobs.

The Sorrow and the Pity of Another Liquidity Trap: Brad DeLong

Brad DeLong gives a good explanation of why interest rates will remain low as long as there is slack in the economy.

Paul Krugman's definition of a liquidity trap is, purely and simply, a situation in which conventional monetary policy — open-market purchases of short-term government debt — has lost effectiveness.

Krugman said back in the 90s that even if the Fed printed lots of money (not really, of course; we’re talking mainly about bank reserves), it would not be wildly inflationary. And he also said that even very large government deficits would not cause soaring interest rates as long as the economy stayed depressed.

SCOTUS: Roberts Five strike another blow for plutocracy

So public financing is ok, but more public financing of "triggered" funds to keep up with non-public financed candidates is not ok. The SCOTUS wanted to do just enough damage to public financing to render it useless. But after Citizens United, why even try to hide the fact that they're corporate whores?

Read Americans for Campaign Reform

As Larry Kachimba said: In Arizona Free Enterprise Club v. Bennett, 10-238 (June 26, 2011) (5-4) five Supreme Court justices eviscerate the only effective alternative to limits on election expenditures: public campaign finance. Under its surreal "money is speech" doctrine, the Supreme Court has since 1976 invalidated effective limits on money in politics as a restriction on speech. Now it holds that the public cannot spend its money to match private electioneering expenditures to level the playing field between public interest and special interest in order to control political corruption.