Our Contrived Fiscal Crisis and the President who buys into it …

Federal deficits always go up big and automatically during two events.  That would be wars and recessions.  We have had two wars going on for about 10 years now and we’ve had the deepest recession since World War 2.  Getting rid of the two wars and solving the residual problems of unemployment would eliminate any potential future fiscal crisis.  Any economist will tell you this.  It’s not a secret we keep from the world.  Passing huge tax cuts and laws that remove nearly all capital and all types of businesses incomes from the pool of revenue sources only exacerbates the revenues problems you get during recessions and expenditure run-ups that come from running wars.

We’ve had excessive war spending before.  Our country was born with a lot of money borrowed from the Dutch.  The Civil War and both World Wars–especially number two–placed our federal deficit and debt at astronomical levels of GDP.  Did our country crash and burn because of the actions of John Adams, Abraham Lincoln or the spending during World War 1 or World War 2?  Did you feel that life in the 1950s and 1960s and the children born then were oppressed by excessive debt?

Of course not.

Federal Debts and Deficits are functions of the size and health of the economy underlying the obligations.  We have plenty of taxable assets and businesses making money.  You can tell how risky the market for our Federal debt is by looking at the yields on Government bonds and Treasuries.  The current yields for Treasuries are listed right here. They are at near historic lows and they are still selling.  Nothing in that market indicates any reticence by any participant to buy American Debt obligations.  The ability to tax and raise taxes as well as print money is a unique function of government.  We can do both.  If we’d have let the Dubya Bush tax cuts just expire we would’ve closed the deficit gap and reduced the debt by more than anything than is on the table right now.  That would include the disingenuous and malfeasant Ryan plan. It also includes the the one that will come from the White House today at 1:35 est.

We need to put taxing capital back on the table.  That includes dividends, capital gains, and vast inheritances and trust funds.  We need to remove tax loopholes and subsidies to corporations.  We do not need to remove the last vestiges of safety nets standing.  There appears to be no one brave enough in Washington DC to say that but I will join the bow tie set in shouting just that.  It is time to stop subsidizing incompetent business owners and time to invest in the country and its people.  Washington DC has the nation’s priorities all wrong.

The White House provided no more specifics on the four steps to be offered in his afternoon speech at George Washington University. But an official said his plan would “borrow” from the recommendations of the 2010 fiscal commission that Obama empaneled, but whose proposals he never fully embraced.

“The president will make clear that while we all share the goal of reducing our deficit and putting our nation back on a fiscally responsible path, his vision is one where we can live within our means without putting burdens on the middle class and seniors or impeding our ability to invest in our future,” the official said.

Republicans–as eloquently stated by former budget Director David Stockman–have a tax fetish.   Republicans are refusing to put any taxes on the table.  Rand Paul is considering filibustering the increase in the debt ceiling. It appears some of these folks are so disturbingly ideological and economics-disabled that they will let the US go “bankrupt” in the only way possible it could do so.  They will allow the US to default on its debt obligations.  The Republican Party seems ruled by insane people at the moment.  The Democrats, however, are ruled by folks that appear to be playing into right wing memes to appeal to some independents.  So, why are we only left with poisonous choices?

Some of the Democratic base is finally waking up to the truth about Obama. He has no core Democratic values.  We’re about to see a Democratic president put the cornerstones of Democratic policy on the bargaining table in an effort to appease some folks during the re-election cycle.  I’m wondering if it’s all not just a little too late.  Ever since the real economists left the building, White House Policy has grown more and more Republican.

Key liberal groups, which helped elect Obama in 2008, are raising concerns that he has given up political ground to Republicans, allowing the message of reducing government to trump that of creating jobs and lowering the unemployment rate.

Seizing on Friday’s deal, which would cut $38.5 billion from the fiscal 2011 budget, activists on Tuesday threatened to sit out the 2012 presidential campaign if Obama goes too far with further cuts.

“The fundamental problem in our country right now is unemployment and a jobs crisis, not a deficit crisis,” said Deepak Bhargava, executive director of the Center for Community Change, an advocacy group for the poor. “It appears the president is fighting on the wrong terrain and is conceding that the only thing we should be talking about is how to bring down the deficit.”

The clash over government spending — coming as Obama prepares to make a major speech on fiscal discipline Wednesday — is the latest example of the frayed relations between the president and a broad coalition of union and activist groups.

The details of the budget compromise as well as the way that the Health Care Reform act was rammed through congress have shown that Obama is more than eager to get something, anything passed than to fight for reform that would actually reflect either public opinion or traditional Democratic Values. Poor black women from the District of Colombia were  nearly the first ones thrown under the budget cutting bus.  Which previous US Democratic President would have sold them out?

To get the trade-off on the policy riders, Democrats had to give on spending — to the tune of the largest budget cuts ever. There’s a $1.1-billion cut across the board for discretionary spending and dozens of nips and tucks all over government, from Justice Department programs to subsidies for co-ops in the new health care law to the Pell Grant program for low-income college students.

I am going to watch this speech.  I’m only hoping some of the disgruntled chat coming from real Democrats materializes into something substantive after it happens.

DeFazio said Monday that Democrats haven’t put enough pressure on Obama.

“That’s what the House did wrong in the last Congress, and in part why we lost is we never pushed back, no matter how wrong he was or how off-base he was; we never pushed back,” DeFazio told MSNBC.

“There are a number of us in the caucus now pushing back very hard on our leadership,” DeFazio said. “Who knows where they’ll end up, but maybe we can take enough D’s with us to make them uncomfortable and to make them stick with making the president act like a Democrat.”

The Democrats’ frustration with Obama is hardly new. Liberals were furious in December when the president caved to GOP demands that Congress extend tax cuts for the wealthiest Americans. More recently, many liberals have questioned the wisdom and constitutionality of launching military attacks on Libya with prior approval from Congress.

Behind closed doors, Democratic leaders are frustrated that Obama hasn’t been more involved in the big policy fights of recent months, including the spending battle.

The way to get to this President is through his re-election efforts and his ego.  Hopefully, a few groups will stop facilitating the cave-ins and start fighting for the country’s interests.   You can watch the President’s speech on CSPAN at this link. I have my bucket o’ Nerf balls ready and I’m warming up for the first pitch of the 2012 presidential campaign season.  Join me as we share the pain and none of the gain.

44 Comments on “Our Contrived Fiscal Crisis and the President who buys into it …”

  1. fiscalliberal says:

    “The way to get to this President is through his re-election efforts and his ego.:

    My first campaign was for Gene McCarthy againt Lyndon Johnson. I do not see anyone in the Democratic party showing any interest for a second candidate.

    The time is now to set down the parameters for continued support. If no one takes up the cause, we need to be prepared to sit the next election out.

    • dakinikat says:

      I’m a bit worried about what the Republicans will come up with … I’m mean right now there’s this tie between Huckabee and Trump! That’s a completely unacceptable outcome. I’m just distressed about those alternatives. I’m looking at a job in Basel Switzerland right now. I’ve just about considered that being an expat is the only option at the moment.

    • cwaltz says:

      If we support him I can almost guarantee in 2012 he will kick us in the teeth again and he won’t have the specter of re election hindering him to go after Social Security and Medicare. We need to primary him yesterday and if that fails launch a write in.

      A leopard doesn’t change it’s spots.

  2. Minkoff Minx says:

    Why is it every time I hear him give any speech it does not take long for me to fade out? And then it starts to sound like Peanuts…when you hear the adults talk…blah blah blah…

    And no, that is not meant as a comment on who is the adult in the room.

    • dakinikat says:

      His speeches never really tell the entire story but I am looking for some sign of how eager he is to privatize Social Security and Medicare and to make us retire well into our years where a lot of us really can’t work.

  3. Minkoff Minx says:

    I really hope that Obama is going to keep that promise about the Bush tax cuts…

  4. dakinikat says:

    I’m thinking the theme of “let’s have a conversation” isn’t exactly inspiring leadership.

    • cwaltz says:

      I’d be okay with a “conversation” if I could believe a single solitary thing coming out of the guy’s mouth.

      He usually does the opposite of what he says. Championing choice means throwing women under the bunch. Being a constitutional scholar means continuing Bush legacy on Guantanamo, and indefinite detention.

      Being for a public option and against a mandate means holding people hostage to the private insurers.

      Being for transparency means hiding behind secrecy and holding meetings with lobbyist across from WH.

      The guy talks a good game but at the end of the day I don’t want or need a gameplayer, I want a leader that fights for me and my family consistently. He ain’t it.

  5. dakinikat says:

    Highlights via TPM:

    * A debt failsafe that will be triggered if the debt-to-GDP ratio hasn’t stabilized, and begun to decline by mid-decade. This will include automatic spending cuts, and reductions in tax subsidies, but no tax increases. Social Security, Medicare, and low-income programs will be exempted. It will not tie the government’s hands in the event that an economic downturn requires fiscal stimulus.

    * Cuts to discretionary spending, compatible with those in the Bowles-Simpson recommendations.

    * Defense spending cuts, contingent on a thorough review conducted by Secretary Robert Gates, the Joint Chiefs of Staff, and Obama himself, and savings generated by winding down operations in Iraq and Afghanistan.

    * Strengthening the Independent Payment Advisory Board, created by the health care law to recommend and implement cost savings reforms to hold down the cost-per-Medicare-patient.

    * Simplifying the formula for providing federal matching funds to states for Medicaid, which would automatically increase in the event of a recession

    * This is a big one — Obama will propose using Medicare’s purchasing power to reduce prescription drug costs for seniors

    * Reductions in agricultural subsidies

    * Comprehensive tax reform, which reduces loopholes, simplifies the system, allows the Bush tax cuts for high-income earners to expire, and reduces the corporate tax rate.

  6. foxyladi14 says:

    sounds good.but his speeches always do. 😆

  7. TheRock says:

    I applaud all here that can actually stand listenning to him for more than 5 minutes. I remember that is how it was when Bush was in office. I listened to the major addresses because as he talked, my blood boiled. Same with Obumbles. Asshat.

    Dak, you made a comment above that being an expat might be the only solution. Last week, I seriously started looking for work in other countries. Health and Safety for an oil company in Africa or South America are my first choices. I figure if I am going to live in a third world, it may as well LOOK like a third world country.

    Or Hillary could win in 2012.

    Hillary 2012

    • Minkoff Minx says:

      Wow, that would be a big move rock…but I tell you, sometimes I wish there was a way for my family to expat ourselves.

      • TheRock says:

        Desperate times call for desperate measures. It is very painful watching this man dismantle all that makes America great week after week after week. And for what? His own personal glory?


        Hillary 2012

        BTW – How are you feeling? Any diet changes to go along with increased iron intake? Get better soon!!

  8. dakinikat says:

    The GOP is on talking back … what a bunch of loons! They’re still in trickle down, voodoo economics mode. Don’t they have any economists left to talk to them or they all in fairy tale land like Michelle Bachmann?

  9. dakinikat says:

    Here’s a list of what’s gone because of the Boehner/Obama ‘conversation’.

    This is the list of education/young people friendly things:

    The Losers
    * Every ED program (a 0.2%, across-the-board cut for all programs)
    * Striving Readers eliminated ($250 million)
    * Enhancing Education Through Technology (EETT) grants eliminated ($100 million)
    * $97 million cut to Safe and Drug-Free Schools
    * Smaller Learning Communities eliminated ($88 million)
    * $73 million cut for Teaching of Traditional History
    * Even Start eliminated ($66.5 million)
    * LEAP eliminated ($63.9 million)
    * Robert C. Byrd Scholarships eliminated ($42 million)
    * Arts in Education eliminated ($40 million)
    * National Writing Project eliminated ($25.6 million)
    * $25 million cut for TRIO
    * Reading is Fundamental eliminated ($24.8 million)
    * $20 million cut for state assessments
    * $20 million cut for GEAR UP
    * Literacy Through School Libraries eliminated ($19.1 million)
    * Teach for America eliminated ($18 million)
    * $15 million cut for English Language Acquisition State Grants
    * $13 million cut for Regional Education Labs
    * $13 million cut for Recordings for the Blind
    * Grants to Gulf Coast States eliminated ($12 million)
    * National Board for Professional Teaching Standards eliminated ($10.6 million)
    * $10 million cut for School Improvement Grants (SIG)
    * Special Olympics eliminated ($8.1 million)
    * Javitz Gifted and Talented program eliminated ($7.5 million)
    * $5 million cut for Comprehensive Centers
    * $5 million cut for Teacher Quality State Grants
    * Thurgood Marshall Legal Scholarships eliminated ($3 million)
    * STEM foreign language teacher training eliminated ($2.2 million)
    * Underground Railroad program eliminated ($1.9 million)
    * Close Up Fellowships eliminated ($1.9 million)
    * $1 million cut for ESEA evaluation

    Can you believe they defunded the special Olympics and Teach for America?

    • TheRock says:

      Shameful. Just shameful.

    • TheRock says:

      How can he say that education is one of his pillars when he cut so many education based programs? How do we compete with the Chinese, Japanese or the Indians when their graduates are so much smarter than ours?


    • Minkoff Minx says:

      So many of these programs are such a benefit. That cut to Special Olympics really makes me mad. That organization helped my brother so much…

  10. fiscalliberal says:

    Stenny Hoyer is not speaking on Dillon Ratigan. All over the place with no ecomuc facts, He did say the Republican’s do not want to pay when they buy.

    Easu to buy, seems to be the mantra. Need to start paying . Ratigan went after War. Energy, Health, Education and Banking efficiency it gad and creating the debt.

    Hoyer has a lot of issues to cloud the discussion.

    Some one said the White House said his speach was a framework for discussion. I would say, where is the priortized list and what is he going for. Looks like more of the same obfuscation

  11. Fredster says:

    Courtesy of Wonk…what Anthony Weiner tweeted before the speech:

    why im not president. my version: “the gop plan is a disaster and ill chew my arm off before i sign it”

    • dakinikat says:

      I love Anthony Weiner. I wish he were my congress critter. I would send him flowers daily for saying things like this.

      • BxDemFem says:

        I wish Anthony Weiner were my congress critter as well. We have the incomparable idiot, Elliot Engle, whose idiocy knows no bounds except when his financial interest are at stake.

    • Minkoff Minx says:

      Thanks for posting that, I wish Weiner was my rep too. All we have in Georgia are those damn Republicans.

  12. Fredster says:

    I got this in an email today. I posted it at TW and will paste in here also. Seems some Dems are waking up (?)

    Urgent! The White House announced that in a big speech today, President Obama will do what no Republican President has been able to do: Put Medicare and Medicaid on the table for potential cuts.

    Many former Obama volunteers, donors, and voters are deeply disappointed. A Democratic Congressman said on MSNBC on Monday that Obama needs to “act like a Democrat.”

    Will you sign this urgent pledge, which we’ll deliver to the Obama campaign?

    “President Obama: If you cut Medicare and Medicaid benefits for me, my parents, my grandparents, or families like mine, don’t ask for a penny of my money or an hour of my time in 2012. I’m going to focus on electing bold progressive candidates — not Democrats who help Republicans make harmful cuts.” Click here to sign.

    Below are some amazing notes from Obama volunteers who worked passionately for the President in 2008.

    Many people still want to believe in President Obama. But the White House needs to understand that their actions now will have real consequences for 2012. The level of grassroots enthusiasm will be determined by whether the President fights for bold progressive change — and takes cuts that hurt grandparents, the disabled, and kids firmly off the table.

    The White House will absolutely be watching the progress of this petition. And we’ll deliver the pledge signatures to the Obama campaign headquarters in Chicago.

    Please sign today — then, pass it to others who worked to elect President Obama in 2008.

    Thanks for being a bold progressive.

    – Adam Green, Stephanie Taylor, Jason Rosenbaum, Keauna Gregory, and the PCCC team.


    Susan Carpenter, Obama volunteer from Ohio:

    “Like many volunteers on his campaign, I was in love with the idea of Obama. I haven’t given up on him quite yet, but I’m mustering the energy to work on the resistance. He needs to know who we are.”

    John Rotolo, Obama volunteer from Florida:

    “I’m almost too heartsick to comment…I’m at a loss.”

    Barbara Louise Jean, Obama volunteer from Nevada:

    “It’s ludicrous to cut Medicare for seniors when Wall Street created this mess without being held accountable. At 69, I’ll be in financial trouble if Medicare benefits are lowered.”

    Joelle Barnes, Obama volunteer from Pennsylvania:

    “This is like a knife through my heart! This is a Republican thing!”

    Suzanne Fair, Obama volunteer from Maryland:

    “I know he has to compromise sometimes, but it seems that he is caving to the Republicans far too often. We elected him for real change and I would like to see him stand strong against the corporate rich.”

    Margaret Copi, Obama donor from California:

    “I contributed more to Obama’s campaign than I have to anything else in my life, but no more dollars from me and definitely not a moment of volunteer time, unless he makes huge shifts and starts to fight for the peoples’ interest.”

    Frankie Perdue, Obama volunteer from Colorado:

    “I do not think that Medicare/Medicaid and Social Security should be on the negotiating table at all. Have the corporations pay their fair share of taxes.”

    Deborah Finn, Obama volunteer from North Carolina:

    “This is wrong! We did not elect Obama to have him make cuts in valuable, important programs. He needs to stand up to the Republicans. And he needs to speak to the American people about why it is morally wrong to cut the programs.”

    Michaele Bonenberger, Obama volunteer from South Dakota:

    “This does not sound at all like the Barak Obama that I worked so hard to get elected in 2008.”

    Dotty Hopkins, Obama volunteer from California:

    “It makes it hard to gin up enthusiasm for 2012. More like hold your nose and vote again! As a former Obama volunteer, I’m already worrying about my lack of desire to do any campaigning and I’m on our County Central Committee for heaven’s sake.”

    The White House needs to hear your voice — sign our pledge today. Then pass it on to others.


    I gladly signed the petition.

    • TheRock says:

      I’m glad they are waking up, but I don’t feel sorry for them. When do we get to say ‘I told you so?’ They, with open eyes, chose a neophyte with no convictions over a true leader with a lifetime of experience.


      Hillary 2012

    • Fredster says:

      Oh Rock I don’t feel sorry for them in the least. I mentioned something over at the Widdershins about this possibly being a coup to get Obama out and la-t-da said “no, the coup was in 2008 when they took over the Dem Party.” I agreed and said okay, counter-coup then.

      • TheRock says:

        Amen to that. They stole my party with gangsters and thugs from Chicago. I really do want it back….


        Hillary 2012

  13. TheRock says:

    Oh and by the way, here is what that real leader was doing when Bumbles was speaking. Any wonder how his national addresses always coincide with Hillary’s?

    Hillary 2012


  14. Pat Johnson says:

    I just filled half my gas tank on $20.00. That’s half!

    I probably shouldn’t complain too loudly since I was charged $3.89 a gallon when some areas on the map are up over $4.00.


    • dakinikat says:

      Yup, it’s $3.70 here and I have two oil refineries fairly close. It’s expensive and suppose to go even higher. All that speculative money has to go some where.

      • Fredster says:

        From Bloomberg:

        Inventories of crude oil rose 1.63 million barrels to 359.3 million, the department said. Supplies were forecast to increase by 1 million barrels.

        Stockpiles at Cushing, Oklahoma, the delivery point for New York-traded West Texas Intermediate crude oil, gained 26,000 barrels to 41.9 million, the highest level since at least 2004 when the department began tracking stockpiles at the hub.
        ‘Plenty of Oil’

        “We have plenty of oil,” said Philip Silverman, a principal at Kingsview Management LLC, a commodity trading adviser in New York. “There are record stockpiles at Cushing, which shows that we’re not primarily trading on inventories.”


  15. Minkoff Minx says:

    I saw this headline on drudge and thought it was a joke, but I guess it isn’t. Joe Biden Falls Asleep | Biden Asleep During Obama Speech | Video | Mediaite

  16. Peggy Sue says:

    I listened to POTUS this afternoon [made myself late for a meeting] but I listened. That was a true performance. The only concrete thing he said is that he would refuse, refuse I tell you to extend the Bush tax cuts.

    Hello! He said that before, and then extended them anyway. The rest? Vague, nonspecific, all the buzzwords in place.

    The man can talk the Democratic talk but he doesn’t walk the walk. He’s going to use the Cat Food Commission as a guide. This is snooker-time all over again.

    Sorry, the man’s a liar, despite what he says or how pleasant he smiles. And that smile? That’s a crocodile smile.

  17. Fredster says:

    Tee-hee: GE got had!