Category: finance



But much more of the increase in the deficit was because of tax cuts under George W. Bush, Medicare Part D (which expanded coverage for prescription medicines) and – most of all – the financial crisis that brought down the economy and sharply reduced tax revenue starting in September 2008.

Our modern debt surge is much more about declining federal government revenue than it is about runaway spending. If you believe strongly that our fiscal issues are primarily about “runaway spending,” please read our book.

The smart approach is to begin the long and not-so-nice work of controlling deficits while allowing the economy to grow.

http://economix.blogs.nytimes.com/2012/04/05/is-there-a-fiscal-crisis-in-the-united-states/

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FROM the 1940s to the 1970s, organized labor helped build a middle-class democracy in the United States. The postwar period was as successful as it was because of unions, which helped enact progressive social legislation from the Civil Rights Act to Medicare. Since then, union representation of American workers has fallen, in tandem with the percentage of income going to the middle class. Broadly shared prosperity has been replaced by winner-take-all plutocracy.

 

 

http://www.nytimes.com/2012/03/01/opinion/a-civil-right-to-unionize.html?scp=1&sq=a+civil+right+to+unionize&st=cse


Outrage Index: Near Majority Blames GOP For Frustration With Washington | TPMDC.


Because [corporations] have become so international and global in nature, it’s highly questionable whether governments can actually control corporations to a sufficient degree to prevent them from controlling governments,”

 

Corporate Power Decried By Former Lawmaker.


Hamsher calls S&P a “kingmaker” and this isn’t an exaggeration given the effect their actions are having. Either way, they will shoot the economy in the head. Either the negotiators come up with package that suits their demands, which will lead to steep enough cuts that the economy will weaken in 2012, making an Obama loss highly probable.

 

EconoMonitor : EconoMonitor » Has S&P Become Our Rupert Murdoch?.


msnbc.com Video Player.


The Bush tax cuts did the opposite: $3 trillion worth of tax cuts were predicated on the premise that we were returning the people “their” money. As it turned out, the money wasn’t there to return. Even without the tax cuts, the wars, or anything else, the government would have entered 2011 with $1.3 trillion in debt, not $2.3 trillion in savings. Basically, in the grip of careless enthusiasm about the economic future, we borrowed $3 trillion from bond markets and handed it out to citizens in rough proportion to how rich they already were. In the middle of a recovery. This is not a useful thing for the government to do.

 

 

Deficits: There never was a surplus | The Economist.


Washington’s spending has recently been higher as a percentage of the nation’s economic output than at any time since World War II. But by the same measure, Washington’s revenues are the lowest in more than 60 years.

So does the U.S. have “a spending problem,” as Republicans keep repeating in the current debate over how to reduce the nation’s record deficits? Or is the problem that taxes are not high enough? Those questions frame a long-running partisan debate, and as usual we won’t offer an opinion one way or the other. But for those seeking their own answers, we can offer some fiscal history and factual context.

Some key facts we think are worth considering:

 

Fiscal FactCheck | FactCheck.org.


Liaquat Ahamed: U.S. taxes are too low | Video | Reuters.com.


Yes, the rest of the world is watching this embarrassing debt ceiling nonsense, and it is growing dismayed. 

Der Spiegel has a roundup of commentary in German newspapers about the fight, and the universal message is this:

The US is holding the entire world hostage, and it’s the Republicans that are playing with fire.

Read more: http://www.businessinsider.com/its-official-the-whole-world-thinks-republicans-are-dangerous-maniacs-2011-7#ixzz1SCJ8FzLA

 

 

IT’S OFFICIAL: The Whole World Thinks Republicans Are Dangerous Maniacs Threatening Everyone.


What Ben Bernanke should’ve said – Ezra Klein – The Washington Post.


And for the third straight year, American families and businesses will pay less in federal taxes than they did under former President George W. Bush, thanks to a weak economy and a growing number of tax breaks for the wealthy and poor alike.

Taxes (As A Percentage Of Economy) Drop To Lowest Level In 60 Years.


The demagogues would have the public believe that Social Security is unsustainable, that it is some kind of giant contributor to the federal budget deficits. Nothing could be further from the truth. As the Economic Policy Institute has explained, Social Security “is emphatically not the cause of the federal government’s long-term deficits, since it is prohibited from borrowing and must pay all benefits out of dedicated tax revenues and savings in its trust funds.”

Raising False Alarms – NYTimes.com.


Recovery Act: How Obama’s Stimulus Is Changing America – TIME.

Yes, the stimulus has cut taxes for 95% of working Americans, bailed out every state, hustled record amounts of unemployment benefits and other aid to struggling families and funded more than 100,000 projects to upgrade roads, subways, schools, airports, military bases and much more. But in the words of Vice President Joe Biden, Obama’s effusive Recovery Act point man, “Now the fun stuff starts!” The “fun stuff,” about one-sixth of the total cost, is an all-out effort to exploit the crisis to make green energy, green building and green transportation real; launch green manufacturing industries; computerize a pen-and-paper health system; promote data-driven school reforms; and ramp up the research of the future. “This is a chance to do something big, man!” Biden said during a 90-minute interview with TIME.

Read more: http://www.time.com/time/nation/article/0,8599,2013683,00.html#ixzz0y78ROJON


James Roosevelt: Social Security at 75: Crisis Is More Myth Than Fact.

The truth is that Social Security is completely solvent today, and will be into the future because it has a dedicated income stream that covers its costs and consistently generates a surplus, which today is $2.5 trillion. Estimates are that the Social Security surplus will grow to approximately $4.3 trillion in 2023, and that reserves will be sufficient to pay full benefits through the year 2037. After 2037, Social Security would still be able to pay for 78 percent of benefits even with no adjustments to revenues or benefits.

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