Archive for August, 2011

What “cutting spending” means

Can we just think for a second about Republicans’ plan to “fix” the economy? You know what their plan is. Republicans say we need to lower taxes on the rich (not the poor) and cut spending to create  jobs. Recently, their efforts have been directed toward cutting government spending. And I’m not talking about the old “cutting waste, fraud and abuse” line that every politician uses compulsively. That’s important but its not what Republicans want to do. They just want total government spending cut down.

Here’s  the big question: how does cutting spending create jobs? The thing is, when you cut funding for NPR, the EPA or what have you, that means that the EPA has to cut its budget and Joe the EPA guy loses his job. How does firing Joe help other people get employed?

Its pretty clear how firing Joe hurts other job-seekers. They now have to compete against one more person for their next job! How does the government firing Joe help Best Buy, for instance, hire more workers? Again, its pretty clear how firing Joe will hurt Best Buy. Joe was going to buy a new plasma screen TV for his family, but now that he’s laid off he can’t afford it anymore. I’m seeing plenty of ways that firing Joe and his 1,000 EPA buddies will hurt the economy, so how would it help the economy?

In the GOP’s weekly address on April 23 of this year, Sen. Mike Johanns tried to explain how cutting spending (firing people) would somehow help the economy:

The current record-setting deficits – and the $14 trillion plus in accumulated national debt – are serious impediments to job creation because they have a ripple effect right to Main Street.

Our job creators can’t thrive in an environment where creditors pull back because of our government’s debt, because without credit, small businesses can’t grow.

Our debt threatens to devalue the dollar which will lead to increased costs and interest rates, which has a chilling effect on small business growth.

Ah, so that’s  how firing government workers will somehow “create jobs.” Republicans are saying that, in a roundabout way, eliminating government jobs will “create” jobs in other sectors because our debt is keeping businesses from hiring. Apparently, investors don’t want to lend money and our debt is causing high interest rates. This is what Johanns says is hurting growth. Of course, that’s all nonsense.

from The Washington Post/Ezra Klein

The graph on the left shows what kind of interest rates the US government is paying on its debt. Johanns says that our large amount of debt should be leading to “increased costs and interest rates.” What we are seeing is quite the opposite. Currently, the US has record low interest rates on its debt. How low? Well, once those lines on the graph go below zero, that means that investors are actually paying the US government to hold their money. You read that right. Right now investors want to buy the US government’s debt so badly that they are willing to actually pay the government for the opportunity to hold its debt for a few years. This is the exact opposite of what Johanns says should be happening.

So now we’re back to the start. How does cutting government spending help the economy? It doesn’t. It hurts the economy because cutting government workers just adds more bodies to the legions of the unemployed. Increasing unemployment right now is an economic recipe for disaster. Cutting spending will not lower interest rates (they’re already below zero, how much lower can they go?) or help anybody on “Main Street.”

Cutting spending is not an economic plan. It is an ideological position. If you favor reduced government spending, that’s fine. Just don’t pretend that it will create  jobs. Republicans’ plan will just put more people out of work, take money out of consumers’ hands, raise the number of people drawing unemployment benefits, and increase the number of people looking for even more scarce jobs.

What does the Tea Party stand for?

I’ll admit it, there are some things that I get about the Tea Party, but mostly, the thinking of Tea Party members is somewhat of a mystery to me. I understand the populist anger against an increasingly dysfunctional government and an anemic economy. What I don’t understand is Tea Party politicians’ proposed solutions to our problems.

Mostly, this is because the Tea Party very often contradicts itself and their actions rarely live up to their rhetoric. In theory, the Tea Party is in favor of low taxes, cutting the deficit, setting the Constitution as the revered document at the center of government, giving the government back to “We the People” (as opposed to special interests) and promoting states’ rights.

Now that the Tea Party has elected many members to Congress and has a couple preferred Presidential candidates, we can judge how its actions match up to its stated goals. The results are not pretty, and mostly just confuse me.

States’ rights

The Tea Party may claim to be for this in theory, but in practice, it gets more complicated. Turns out, two of the Tea Party’s favored candidates for President, Michele Bachmann and Rick Perry, do not want states to decide on the legality of gay marriage. After initially endorsing states’ rights il/legalize gay marriage, both have said that they favor a national, constitutional amendment against gay marriage. On abortion as well, Perry and Bachmann have taken stances that appear to indicate that they want abortion to be illegalized on the national level. These stances have not hurt them with the Tea Party base at all and have probably helped the two candidates. On these issues, it appears the Tea Party opposes states’ rights when it is otherwise convenient for them.

Giving the government back to “We the People”

Tea Party members seem to have quickly forgotten all that talk of getting rid of special interests in Washington. Dana Milibank recently looked into the only bill that Tea Party Rep. Austin Scott of Georgia has proposed since entering Congress. Scott filed his bill on behalf of a big agricultural grower in his district who was illegally discriminating against American workers to hire Mexican migrant workers. Scott’s bill would make it much harder, if not impossible, for abused workers to sue when their rights are infringed upon.

Likewise, Rachel Maddow recently chronicled the law adjustments and bureaucratic hoops Texas Gov. Rick Perry jumped through to let one of his top contributors build a uranium dump site in Texas. Nevermind the fact that this radioactive dump is built perilously close to a source of Texans’ drinking water.

It just seems that Tea Party politicians don’t care about sticking up for the little guy.

Putting the Constitution first

For a group that prides itself on its reverence for the Constitution, the Tea Party sure has a lot of proposed changes to the Constitution. In particular, Tea Party members seem to want to repeal amendments 14, 16 and 17  to the Constitution and to add a few more, for good measure. What kind of “Constitutionalist” party is this? It seems like Tea Party types would rather scrap the whole thing than put the Constitution up on a pedestal. How can a movement say that it wants it government to be “based on the Constitution” when it also wants the Constitution to be changed so fundamentally?

Lower Taxes

The Tea Party has staked its entire populist message on the fact that it wants low taxes. This is one of the hallmarks of the Tea Party movement. Which is why I find it very curious that the Tea Party arose in a period where taxes are lower than they have been in modern history. Taxes (which Tea Partiers claim are too damn high) are at their lowest point since 1950. How very curious…

The other contradiction that has recently emerged is that Tea Partiers do not actually want lower taxes, well at least not if you’re poor. Turns out, Tea Partiers want to raise taxes on the poor. The Tea Party only wants lower taxes for corporations and the rich.

Cutting the Debt

Tea Party members always lament the deficits  that the government has  been running in recent years. However, they also stand in the way of solving those deficit problems in a responsible fashion. The Tea Party wants to continue the irresponsible Bush tax cuts, which is the principal driver of our long term debt. They also want to eliminate the IPAB which, contrary to the Tea Party’s claims, is about the best chance we have for getting our Medicare costs under control.

The Tea Party does not really want to deal responsibly with our mounting fiscal issues. Their proposed solutions are to cut spending on the poor and vulnerable, cut investment in the future and to privatize and voucherize Medicare. I suppose this could just be considered a policy difference between myself and the Tea Party on how to reduce the debt. But when your policy proposal for fixing the debt involves implementing or repealing policies that will reduce the debt and then using the fiscal calamity that results from your policy choice to justify huge structural changes to American society, I think its safe to say you are not serious about debt-reduction.

The only explanation I have for all these contradictions is that the Tea Party is not a a new political movement, but rather a revival and re-invigoration of far-right wing thinking, and Republican politics.

Republicans want to raise taxes on the poor, lower taxes on the rich

I really wish we lived  in a world where both political parties had convictions and fought for them. That way, even when you would disagree with someone, you still knew that your disagreement was simply the result of philosophical differences. You’d still be able to rest comfortably knowing that both parties wanted what was best for the country. Obviously, this is not the state of American politics today.

Republicans are the party of low taxes, right?? Well, no more. Republicans have come out opposed to a proposed payroll tax cut. This tax cut would affect almost every working American and would be one of the best ways to stimulate the economy. So what’s the problem, GOP? The problem is that President Obama supports this tax cut. So, throw all of your pre-conceived notions about the GOP out the window. The Republican Party cares nothing for the good of the country (or even for one of their party’s central tenets!) if it means they have to agree with President Obama.

Ezra Klein tackles this Republican hypocrisy, thoroughly dissecting 3 possible explanations for why the GOP is suddenly against tax cuts, here are the excerpts:

One possible answer is that (1)a large tax increase in an election year is good for them because it’s bad for President Obama and the economy. But that’s a pretty cynical explanation. Another is that (2)they care more about tax rates on the rich than they do about tax rates on the poor. But they resist that argument. The real answer, Republicans says, is that (3)they just don’t like temporary tax cuts.

But that claim does not stand up to scrutiny, as he concludes:

…In other words, Republicans have frequently fought for temporary tax cuts. When offered the choice between a larger temporary tax cut and a smaller permanent tax cut, as happened in 2001 and 2003 and 2010, they have opted for the temporary tax cut. Now that Obama has come to endorse a temporary tax cut, they have stopped supporting it — a pattern we’ve seen on many other issues, as well. But the idea that the party has had some steady, policy-based objection to temporary tax cuts just doesn’t fit the record.

So, with explanation 3 completely debunked, we  are right back at examining explanations 1 and 2. Ezra tends to lean toward explanation 1, that Republicans want to increase payroll taxes because raising taxes on the poor and middle class will hurt the economy and thus hurt Obama’s chances of winning the election in 2012. There’s a very good chance he is right, but I also think there’s something to explanation 2: that Republicans just don’t care taxes on the poor and middle class so much as they care about taxes on the rich.

The thing about the payroll tax cut is that most of the money would go to the working poor and the middle class, not the rich. Republicans don’t really care so much about taxes on the poor (see: The Bush tax cuts or this article) but love tax cuts for the rich. I think that Republicans would jump on a chance to massively lower taxes on the rich, even if it was Obama who offered them that chance. To be sure, it would be a tough choice for them, if that situation ever arose. The two most important things to Republicans are destroying President Obama and lowering taxes on the rich, country be damned.

Blacks, Whites and race relations in the age of Obama

Gallup just put out a poll which surveyed whether Americans though race relations had improved, diminished, or stayed the same since the election of Obama. It found that fewer Americans thought Obama’s election had improved racial relations than thought so in 2009 when an identical poll was taken. But the thing that struck  me the most about the poll was the difference in how people of different races  answered the question. It wasn’t what I had expected.

On the whole Americans were more likely to say racial relations had  gotten better than had gotten worse since Obama took office. But 48 percent of blacks thought things were better, while only 31 percent of whites thought so. Keeping in mind that black are obviously the more disadvantaged party in racial relations, what does this mean?

Do blacks now see themselves as more equal to and more accepted by their white neighbors, while whites tend to think that nothing has changed? Are blacks seeing more avenues for success in society because a black man has reached  the White House, while whites see society the same since Obama took office? Are whites dismayed by the growing minority populations in America while blacks see their dawn just around the corner? Do blacks see their position in society rising while whites see a relative decline for themselves?

Its fascinating to speculate about what the causes of this disparity might be. And of course its important to remember that people answer questions like this in different ways for different reasons, so there is no one answer to the question I’ve posed. It could be as simple as saying that blacks are more likely to approve of Obama’s job as President while white are more likely to disapprove, so this dynamic spills over into any broad questions that mention his name. I don’t know. Feel free to leave a comment with any ideas you have on the subject.

If the Tea Party loves the Constitution so much, what are all these proposed amendments?

One of the myths surrounding the forming of the Tea Party in 2009 is that thousands or millions of Americans were horrified by how far the US government had strayed from the Constitution. These patriots wanted their government to “return” to a strict adherence to the words of the US Constitution. As explained by Freedom Works, a Tea Party group,

“The Constitution of the United States was promulgated and enacted by the most knowledgeable political philosophers and citizen-politicians in the history of the world… Starting with the Constitution, the law prevails, not the proclamation or arbitrary decision of a ruler, government bureaucrat, the enforcer or judge…

Without a doubt, this renewed interest in the Constitution has occurred because Americans know the federal government is out of control.  Outraged by corruption and special interest politics, Americans want smaller and limited government.”

Rather than being “outraged by corruption,”  it seems many Tea Partiers took a look at the Constitution and were outraged by what they saw there. For a group that seems to view the writers of the Constitution as demi-gods, Tea Partiers have a lot of proposals to change  what’s written in the Constitution.

For instance, I have heard lots of conservatives who would like to change the seventeenth amendment, so that we can no longer elect our Senators. They would rather Senators be elected by politicians in state legislatures.  It seems really strange that a movement which bills itself as the result of “the people” rising up against government wants to take power from the people and hand it to… the government.

Next, there are many Tea Partiers who want to change the fourteenth amendment, which famously gave citizenship to blacks after the Civil War freed them from slavery. It seems that many Tea Party members found out that this provision also gives citizenship to everyone born in America, even the children of illegal immigrants. As Dahlia Lithwick counters, “for many more Americans, the 14th Amendment represents what is best, not worst, about the constitution: its acknowledgement of human dignity and inclusivity, as well as the possibility for self-correction in the interest of forming a more perfect union.” That the Tea Party would seek to change an amendment so central to righting the wrongs inherent in our original Constitution, shows that something is sorely lacking in their world view.

Rick Perry, one of the Tea Party’s favored candidates for President has lain out seven  proposed changes to the Constitution. He  and many conservatives would like to see the sixteenth amendment repealed. The 16th allows the federal government to levy an income tax. Getting rid of this amendment would end one of the only forms of progressive taxation that we have in this country. All that would be left would be regressive taxes, which draw more revenue from the poor and middle class than from the rich. Apparently, all the Tea Party’s talk about lower taxes was only about lower taxes for the rich.

Add in the fact that the Tea Party is also pushing for a balanced budget amendment, and what you have is quite a confusing movement. On the one hand the Tea Party claims that the Constitution is practically a sacred text that deserves to be revered by politicians. On the other hand, Tea Party politicians and activists are claiming that there are many flaws in the Constitution and are actively pushing to amend  the Constitution in many ways. If this were any other movement, news coverage would say that this group was “hostile to” or “actively campaigning against” the Constitution.

I guess it just goes to show you that the Tea Party is no more “pro-Constitution” than progressives are. The Tea Party, like any other group, is pro-the parts of the Constitution that it agrees with, and anti-the parts of the Constitution that it doesn’t agree with.

What taxes do Republicans like?

I’ll save you from having to read until the end: whatever you can say about them, Republicans like regressive taxes and dislike progressive taxes. Or perhaps I should say: all the taxes that Republicans are in favor of draw their revenue disproportionately from the poor (regressive taxes) while all the taxes that they want to abolish draw their revenue disproportionately from the rich (progressive taxes). Either way, if you make something north of $200,000 every year, Republicans (who represent most conservatives now) want to lower your taxes. If you make less than that, then Republicans want your taxes to stay the same or increase. Explained below. Continue reading

Is the US tax system fair?

Warren Buffett, the mega-billionaire investor, recently wrote an editorial in the New York Times entitled “Stop Coddling the Super-Rich.” In it he argues  that the  rich should pay a higher amount in taxes than they currently do. He uses himself as an example, saying that he only paid 17.4% of his income in taxes last year. He also argues that “people invest to make money, and potential taxes have never scared them off.” Buffett himself invested very heavily and made lots of money in the 1990s and 1980s, when taxes were higher than they are now.

Against Buffett, we have people who divide Americans into two camps of “tax  payers” and “tax eaters,” while you can barely listen to a Republican talk about taxes without hearing them say that 50 percent of Americans pay no income taxes. That leads us to the question: is our tax system fair? Continue reading