Sirius Weekly Thread Week April 12

[john]

You have to read. "Looks like they are going to eventually have to drop the line".

Are you saying we wont get most of our money back and that the Govt will continue to be in the car owning business? You did read the article now didnt you?

You dumb twit, you did not even comprehind what I just wrote. THE GOVERNMENT DID NOT HAVE TO GET INVOLVED IN THE FIRST PLACE. Bond holders would have been holding the assets those assets are useless and WORTHLESS unless they are ether sold to someone who can use them (ie: would need more people to run them) or a new company is formed from the ashes. That then new company comes out stronger because they can start new without all the terrible union contracts.

[john]

Things are looking up. Financial reform bill will be passed. Then hopefully we can move onto energy and immigration bills. Steady progress on many fronts.
Obviously we have to work on bringing unemployment down from the Bush recession and that one will take a long time. We had to spend our way out this recession. Almost ALL economists (conservative and progressive) agreed. They may not have agreed on the amounts and the particular programs but they were in agreement that spending as opposed to tax cuts for the rich were the way to go. And by the way 95% of the middle class got tax cuts this year. i'm sorry to be a bearer of the facts.
First you spend then you cut deficit not the other way around. All those Republicans who let the deficit rise and who supported dishonest accounting to boot under Bush have know discovered a new religion on deficits. Hypocrisy at best. Under McCain/Palin we would probably be at closer to 11% to 12% unemployment.

Here is the same question that you never answer. What was it about the bush tax cuts that cuased this recession again. I seem to recall after he put them into place we had the shortest shallowest reccesion IN HISTORY, Ho and by the way that was the clinton recession he was handed. Along with a huge terrorist problem that caused 911 which took 1.5 trillion out of the economy. Yet somehow from out of all that devastation we had the shortest shallowest recession IN HISTORY. That is how Bush handled his recession. We are now seeing how Obama is handling his. Once again Obama deficit spending will be more in his FIRST 20 MONTHS then Bush did in ALL of his 8 YEARS.

[Havakasha]

You dumb twit, you did not even comprehind what I just wrote. THE GOVERNMENT DID NOT HAVE TO GET INVOLVED IN THE FIRST PLACE. Bond holders would have been holding the assets those assets are useless and WORTHLESS unless they are ether sold to someone who can use them (ie: would need more people to run them) or a new company is formed from the ashes. That then new company comes out stronger because they can start new without all the terrible union contracts.

Wrong as usual! the Govt DID have to get involved if you believe what most believe. Too bad we cant set up alternative universes to prove my points.
Were you part of the Bush economic team that brought us the 2nd worst recession in our history?

[Big Ben]

I am a business owner and I can tell you the tax code if screwed. My accountant says I am in the sweet spot for a Sub S chapter LLC. I pay myself around 3000-4000 per month for being an owner operator, and let me tell you if you were earning 36-40k W-2 style you would not be living the lifestyle I am. My friends joke around about all of my purchases, even though majority are business related. I have been in business since September of 2002 and it took over 5 years to get to this point. I make a pretty sizable purchase every quarter, mainly because of the tax code. I then deduct the purchase price from my operating bring down my earnings, and I depreciate it. Small business owner have way more flexibility then W-2 earners. I always tell my rich, ie higher w-2 earners, its not what you make its what you keep.

As for GM, they make garbage products and their entire fleet of cars are ugly. Our running joke about GM is the Pontiac Grand Prix, how do you leave a car lot in a grand prix and feel good about yourself? How, its ugly. If it was a hand me down or you got a steal then your off the hook, but if you walk onto a lot and leave with Pontiac there is something wrong with you.
One point missing about the bailouts for the car industry is how the hell do you get that far in the hole. I can tell you paying too much and making products too expensive and making products people don't want, kind of like a cobalt. If my F250 with two and half inch lift kit with 37 inch all terrain Nitto Terra Grappler's, with a monster Warn grill and winch/air compressor, hits you, your done. I might just roll over the entire car. Small vehicles are death traps. Buy a Ford, short the stock.

[Atypical]

The drumbeat about deficits has reached deafening levels. The president warns about "out of control" spending. Fed Chair Ben Bernanke calls for bringing deficits down. The opinion pages bristle with rants about the U.S. turning into Greece, headed to default. Next week, the first session of the president's "National Commission on Fiscal Responsibility and Reform" will convene. The next day, shamelessly, the two co-chairs and the staff director (all committed deficit hawks) will grace a forum sponsored by the Peterson Foundation, established by Wall Street billionaire Pete Peterson largely to gin up hysteria about America's long term deficits.

Premature Ejaculation

This potion is being served long before its time. Sure, deficits are big and the projections are scary. But the economy is struggling to get out of a big hole. Unemployment is still near 10%. Foreclosures are still rising. Banks aren't lending; businesses aren't hiring. Deficit spending is critical to what little growth we've seen.

The president and the Congress should be focused on jobs, not deficits. Ironically, when pushed, most of the purveyors of the hysteria agree. Bernanke admits we shouldn't roll back the spending too soon, and is keeping interest rates (for the banks) near zero. David Walker, head of the Peterson Foundation, agrees deficits might be larger in the short run to create jobs and help get the economy going. But these cautions can't be heard amid the clamor about deficits.

The Elite's Big Fix

Consider this another example of Naomi Klein's "shock doctrine." Not wanting to let the crisis go to waste, an elite consensus is congealing on how to bring the deficits down.

Call it the big fix. "Everything is on the table," we're told. That's code for a trade-off. Republicans accept tax increases; Democrats accept spending cuts.

But the fix is in the details. On the revenue side, the favored vehicle is a value added tax (VAT). The VAT is essentially a hidden sales tax, levied at each stage of a product's production. Conservatives, who, unlike Dick Cheney, believe deficits matter, accept it because it is regressive, taxing spending, not investment or wealth. Liberals accept it because it is hidden, and could generate a lot of revenue.

The debate has already begun around the VAT. John McCain, in his new guise as conservative partisan, brought a resolution to the Senate denouncing the VAT as a "massive tax increase that will cripple families on fixed income." Eighty-five Senators voted for the non-binding resolution, including all six members of the President's Commission. The administration has since denied that it has any designs on a VAT. But these protestations are simply reflections on how serious the move towards a VAT has become.

On the spending side, cuts in Social Security, Medicare and domestic spending are targeted. The Republican co-chair of the President's Commission, former Senator Alan Simpson is an infamous scourge of Social Security. The Democratic co-chair Erskine Bowles favored the Clinton effort to privatize it. The deal is foreshadowed by the president's budget which calls for a three year freeze on domestic discretionary spending, and "pay-go" limits on entitlements, insisting that any increase in entitlements be paid for.

All this is wrapped in gauzy poll designed packaging. A VAT will sold as a corporate tax reform. Entitlements, we're told, must be brought under control as the boomers age. Domestic spending is rife with waste, fraud and abuse.

Stuff and Nonsense

There's only one problem with this consensus -- it is both wrong-headed and dangerous. It ignores how we got into this hole, is blind to the challenges the country faces, and offends the values that made this country great. Here's a little common sense:

1. Ignore False Prophets

As Dean Baker has pointed out, the elite deficit agenda is being peddled by the same folks that profited from the bubble bust economy that drove us over the cliff. Wall Street moguls Pete Peterson and Robert Rubin, leaders of the effort, have preached against deficits for years, arguing that they would eventually lead to recession. They never uttered a word about the housing bubble, the financial casino, the excesses and frauds of Wall Street that actually blew up the economy. They made a lot of money along the way. But their profits don't make them sound prophets.

2. Get the Question Right First

The question isn't how we raise taxes, cut spending and balance the budget. The question is how we return to an economy of full employment with a broad and prosperous middle class. If we create a prosperous and growing economy, wages will go up, revenues will go up, spending on unemployment and misery will go down, and budgets will come into greater balance. Growth is an essential precondition to sound finances. We last had debt of this size relative to the economy at the end of World War II. We invested in the GI Bill and educated a generation. We built the interstate highways. We transferred war industries to private companies. We launched the Marshall Plan, and created markets for products in Europe. And we grew our way out of the debt burdens over time, as we built the middle class society that was America's pride.

3. Wrong diagnosis, wrong remedy

To understand what remedy is, you've got to have a clear view of what the problems are. The irony of the elite consensus is that in every particular, it ignores the problems we face, and calls for remedies that would make things worse.

Consider:

We don't have an "entitlements problem." Social Security is in surplus and, if the economy grows and workers capture a fair share of the productivity they help generate, Social Security will be in surplus as far as the eye can see.

We also don't have a "Medicare problem." We have a broken health care system. The source of virtually the entire long term projected deficits comes from soaring health care costs. We're spending 50% more than other industrial countries per capita and getting worse results in terms of good health. The new health care reform does offer some hope of reducing the rate of cost increase. A single payer system -- extending Medicare to all - would do far more. But the problem isn't entitlements or greedy geezers, but a broken health care system.. Cutting Medicare and Social Security won't solve that problem.

Consider:

We now suffer Gilded Age inequality. The wealthiest 1% of Americans not only pockets 21% percent of the national income; they hold more than one-third of the privately held wealth. Plus they've enjoyed the largest tax cuts over the last decades. IRS figures show that the wealthiest 400 Americans -- averaging over $263 million in income in 2006 -- now pay taxes at a rate (17%) lower than their chauffeurs.

Yet the elite consensus is pushing a VAT that will burden the working and middle class far more than the wealthy. Instead we should be talking about increasing top end tax rates, taxing unearned income at the same rate as earned income (last done when Reagan was president), and cracking down on tax avoidance schemes, levying a speculation tax on short-term financial speculation, reviving the estate tax. And of course, we need to set a "price on carbon," a regressive tax no doubt, but one that at least is focused on taxing spending on what we need to reduce.

Consider:

On the spending side, we spend almost as much on the military as the rest of the world combined. We spend more to defend South Korea than the South Koreans do. We police the world and maintain an empire over some 750 bases. And, the military is by far the largest cesspool of waste, fraud and abuse in government. The Defense Department's books are in such disarray that none of the services can be audited, much less pass an audit.

At the same time, we have a debilitating domestic public investment deficit that is rapidly getting worse. As the president has said, we need to build a new foundation for our economy. And that requires investing in education and training so our children get the best education in the world; investing in research and development so we remain on the cutting edge of invention and science; building a 21st Century infrastructure - from a smart electric grid, to fast trains, cutting edge broadband, and renewable energy. And we've got to rebuild a basic infrastructure - from schools to sewers to bridges - that is aged and literally falling apart. Sure, if the Congress is ready to take on entrenched interests, we can cut a lot of fat out of domestic spending (consider subsidies for Big Oil, Big Agra, and Big Pharma for starters), but in the end we should be spending more, not less on vital domestic investments.

So it makes no sense at all to focus on domestic spending cuts, and leave the military off the table.

Beware Bipartisan Blight

Most Americans want the two parties to work together to solve problems. But when the parties come together to do something big, Americans should be particularly vigilant. Too often, that reflects a strong elite consensus, willing and able to purchase support on both sides of the aisle.

The elite consensus described above already has a lot of momentum and money behind it. You'll see publicists from AEI on the corporate right joining those from the Center for American Progress, on the center-left. Clinton's former Treasury Secretary Robert Rubin joining Nixon's former Commerce Secretary Pete Peterson. Editorial boards will echo established authority.

[Atypical]

But trust your common sense. The reality is that they have it wrong. If we follow their advice now, we're likely to suffer a renewed recession. And their prescriptions will make America more unequal and less secure. We'll continue to squander resources across the world, while failing to build a sound foundation for the future at home. America's broad middle class, the pride of our democracy, will continue its decline. And our politics and our lives will get nastier and more brutish.


This post is part of the two-week long Virtual Summit on Fiscal and Economic Responsibility for People Who Did Not Wreck the Economy,, hosted by Campaign for America's Future

[Havakasha]

No tax cut here. Cut uncle sam an $800 check last week. That's what you get for making middle class money and being responsible and keeping your mortgage up to date, taking care of your kids.....

I'm sick of this "rich" stuff. My house pulls in ~$170,000 a year and we can't afford new siding, a shed or internal doors without borrowing. And I have to write Obama a check. Screw him.

This is all because of the Bush recession and the fact that they didnt fix ANY of the structural problems in our economy.
i love how you are blaming Obama for all this. Been in office for a little over a year. Handed the 2nd worst recession in our history. Something tells me you got a little bias. Did you scream and kick when Bush brought you record deficits and a major recession. The middle class stood in place for those 8 years. The facts of the present middle class tax cuts are just that. The rich got plenty of tax cuts and favors in the previous 8 years which helped to bring us our present deficits. I dont have a problem paying my fair share and neither should you.

[john]

No tax cut here. Cut uncle sam an $800 check last week. That's what you get for making middle class money and being responsible and keeping your mortgage up to date, taking care of your kids.....

I'm sick of this "rich" stuff. My house pulls in ~$170,000 a year and we can't afford new siding, a shed or internal doors without borrowing. And I have to write Obama a check. Screw him.

Hummm I guess Havasucker doesn't think the middle class smokes ether. Humm what was it they raised the tax, Ho thats right it was almost a dollar a pack. Ho I guess the middle class doesn't drink ether. Yes folk it was call the sin tax and for most of us that cost you everything that Obama tax cuts gave to you. I hate to beat a man when he is down but Havasucker must think the middle class doesn't ever need hip replacements or pace makers ect., ect., ect., Ho lets not forget who do you think is going to pay for all those losses all the companies are now saying health care is costing them????? thats right you me and the middle class. Does the middle class use electricity, Hummm, what was it that Obama said again about what would happen to your elect bills with his Cap and Tax bill!!!!!! Ho thats right "They would necessarly SKYROCKET".

Your going to love this one:

http://www.youtube.com/watch?v=HlTxGHn4sH4


If that was not good enough here they are admitting it again.

" White House Admits Obama Energy Tax Will Increase Average Electric Bill By $1800 Per Year"

http://www.examiner.com/x-2304-DC-Re...-1800-Per-Year

[Havakasha]

I am a business owner and I can tell you the tax code if screwed. My accountant says I am in the sweet spot for a Sub S chapter LLC. I pay myself around 3000-4000 per month for being an owner operator, and let me tell you if you were earning 36-40k W-2 style you would not be living the lifestyle I am. My friends joke around about all of my purchases, even though majority are business related. I have been in business since September of 2002 and it took over 5 years to get to this point. I make a pretty sizable purchase every quarter, mainly because of the tax code. I then deduct the purchase price from my operating bring down my earnings, and I depreciate it. Small business owner have way more flexibility then W-2 earners. I always tell my rich, ie higher w-2 earners, its not what you make its what you keep.

As for GM, they make garbage products and their entire fleet of cars are ugly. Our running joke about GM is the Pontiac Grand Prix, how do you leave a car lot in a grand prix and feel good about yourself? How, its ugly. If it was a hand me down or you got a steal then your off the hook, but if you walk onto a lot and leave with Pontiac there is something wrong with you.
One point missing about the bailouts for the car industry is how the hell do you get that far in the hole. I can tell you paying too much and making products too expensive and making products people don't want, kind of like a cobalt. If my F250 with two and half inch lift kit with 37 inch all terrain Nitto Terra Grappler's, with a monster Warn grill and winch/air compressor, hits you, your done. I might just roll over the entire car. Small vehicles are death traps. Buy a Ford, short the stock.

I was never a fan of GM. I completely agree that they messed up. I wanted them to go for small cars and hybrids long before they (and all others) have seen the light. All im arguing is that it looks like the govt made the right bet to support them. Time will tell of course but its starting to look positve as the automobile industry recovers. In the future i hope GM changes their business model and innovates. They have an opportunity to completely reshape their company.

[SiriuslyLong]

This is all because of the Bush recession and the fact that they didnt fix ANY of the structural problems in our economy.
i love how your blaming Obama for all this. Been in office for a little over a year. Handed the 2nd worst recession in our history. Something tells me you got a little bias. Did you scream and kick when Bush brought you record deficits and a major recession. The facts of the middle class tax cuts are just that. I dont have a problem paying my fair share and neither should you.

My problem is Obama's policies. He's looking to hand out everything, and from my perspective, he's getting it from me - not the rich, not the irresponsbile, but from guy who takes care of his kids, helps them with their homework, pays his bills on time.......

I'll go back to where I began. Had my taxes been eliminated for say one year, I could have purchased needed things, and increased my savings. I'm not going back to Bush; there's enough $hit going on right now. I'm sure the Treasury held another auction today -- for example.