FIGHTING REALITY

From time to time I get into e-mail exchanges with friends and colleagues that help me understand why America is so lost when it comes to policy debates. Simply put, many people exist in an intellectually bankrupt world, where their reality checks bounce ... on a regular basis.

Recently I got into an exchange with a friend who argued that there was no money in the social security trust fund. He was responding to my point that social security is not "broke" because the federal government owes the social security trust fund trillions of dollars. It's owed trillions because every single administration (Democrat and Republican) has drawn from social security surpluses to fund yearly budgets.

My point was that social security is flush with cash as long as the federal government honors its financial responsibilities and repays the trillions it has borrowed (often listed under "intragovernmental" holdings).

My friends response? It was straight from the republican book of magic numbers. He argued that what the government owes social security isn't real money since, as President Bush once put it, the promise to pay is nothing more than an IOU. So, ta da, there's no money, we're broke ... and it's all President Obama's fault.

I responded by pointing out that if the trillions the feds owe social security are simply IOUs (blue slice on pie chart below) then he just solved our national debt problem. Why? Because the promise to repay those who lend us money to run the government every year are also IOUs (other colors on the chart below).

I argued that if we don't have to pay back the nearly $2.7 trillion we "borrowed" from social security (because they're IOUs) then we should not have to pay the IOUs on our national debt either. So, ta da, no budget problem. Pretty simple, right?

After grudgingly acknowledging his failed logic my friend did what most Fox News watchers do. He switched topics.

He began by saying that our real problem is not that social security is broke but that President Obama and the Democrats are to blame for our debt mess because President Obama isn't taking responsibility for the economic condition of our nation.

Huh?

To make his point (forget that there really wasn't one except to change topics) my friend argued that Senate Democrats are irresponsible for not passing a budget (resolution) in over two years. This, according to his logic, is the height of irresponsibility. He added that at least President Bush's budget deficits can be explained by the fact that he had to deal with two wars, Katrina, and market bubbles.

I thought to myself, Didn't President Obama inherit two wars and have a bubble-induced financial Katrina dumped on his lap? So I sent my friend these comments ...

* ... why does President Bush - who inherited budget surpluses (yes, they were real) and who blew through projected surpluses of $5.6 trillion - get excused for his tax cut driven budget deficits but President Obama - who inherited trillion dollar deficits, two wars, and a collapsed market - have to accept responsibility for what was dumped in his lap? Strange.

* ... If we want to point fingers because there is no budget from Senate Democrats then we need to ask why every major budget proposal now requires a filibuster proof vote (which requires 60 votes to pass) when this has NEVER been a requirement for any president in the past?

* .. Let's get real, Senate Dems can not pass a budget resolution this year for two reasons: First, filibuster, filibuster, filibuster ... Senate Republicans have made it clear that they will filibuster (60 votes) anything they don't like ... Republicans won't cooperate on anything the Senate Dems pass because they want President Obama to look bad. Period. Second, this years budget was effectively completed when the debt limit bill passed last August (keep in mind that Appropriations take up discretionary spending). So, long story short, we do not need a budget resolution this year because Republicans already signed off on debt limit spending.

My friends response? He changed the subject. Again.

There's more, but you get the point. You can't argue with people who are more interested in either creating a strawman argument that only they understand or who want to believe that the world they see is reality.

If I get time I'll be posting about similar conversations I've had in future posts. While they're entertaining, they're also a bit disturbing.

- Mark

SO, WHERE'S THE TEA PARTY ON THIS ONE?

Via Think Progress we learn that thirty big corporations in America actually spent more money lobbying Congress between 2008 and 2010 than they paid in taxes (hat tip to Tom for the link).

What has all that lobbying gotten corporate America over the long-term? In a few words corporate profits have soared (money once set aside for taxes suddenly becomes "revenue"). Just as importantly, corporations now pay a smaller share of taxes into our economy (as a percentage of GDP) than they did in the past. Check it out ...

All of this helps explain why middle America's income tax (what you earn) and payroll tax (social security, medicare, etc.) payments have remained relatively stable or grown (payroll). Middle America is told that they need to keep paying their share of the bills, while America's richest Americans have convinced most Americans that their tax load has to go down ... for the good of the nation. Trickle down, you know.

Long story short? Our debt problem is largely A REVENUE PROBLEM. And it's caused by a group of people who think shifting the responsibility of maintaining our great nation on to others (the middle class) is a good idea (and it is, for them).

Think about it. As I explained (or tried to explain) to Republican Mark Abernathy during one of our KGET 17 sparring matches, spending as a percentage of GDP has remained relatively stable over the years, and only started to surge under President Reagan's trickle down policies.

At the end of the day, by reducing their tax burden, while maintaining (or raising) the tax load on ordinary Americans, what we're seeing is one of the greatest wealth transfers in human history. Seriously.

Not only do the top 1% and those at the top of corporate America's food chain get to keep more, but someone's going to have to pay for the $14 trillion that's been added to our national debt since 1980 (when it was only $907 Billion). And you can bet your life that the top 1% don't think it should be them.

So, my question is, where's the Tea Party on this one?

- Mark

WHY IS THIS STILL NEWS?

- Mark

PRISON INC. USA

The United States has less than 5% of the world's population. Yet, we have 25% of the world's total prison population. OK, let's hear it, "We're #1, we're #1 ..."

How much does our punitive and wasteful prison culture cost America? Think about this: If California emptied its prisons today and sent every inmate to college in California we would save almost $7 billion per year. Check it out ...

Created by: Public Administration


Here are a few more numbers ...

Now, I'm not saying that we should empty our prisons, but we definitely need to have a discussion about our priorities. And, yes, the Tea Party should be all over this issue too.

- Mark

PAX AMERICANA, THROUGH LATIN AMERICA'S EYES

It's incredible how our world changed in just one generation. It was 1980. I was in junior college when I started studying politics and international relations. The United States was engaged in a cold war, paying for the defense of the west, and staring down the Soviet Union as it was crumbling into history. The American Peace, or Pax Americana, was in full bloom.

South of the border, most of Latin America was dominated by corrupt regimes and crony capitalists. The region's growing debts insured that the United States would wag it's finger at our neighbors to the south, as if they were broken step-children. And why not? The U.S. had a debt to GDP ratio that was just above 30% (we owed about $979 billion then) while most of Latin America had debt to GDP ratios that hovered between 35-60%, which would be even higher when set against declining export earnings in the 1980s. Though debt ratios didn't approach 100% for most of the region in the 1980s, declining export earning contributed significantly to Latin America's Lost Decade.

And we continued to wag our finger through it all.

How things have changed in just one generation.

There's no longer a cold war, but the United States continues to spend lavishly on military budgets like drunken sailors. We are spending far more money on defense than the next 17 militaries, combined. Worse, we spend 6 times more than our presumptive enemies China, Korea and Iran put together (we might be spending more than $1 trillion a year on defense).

And for what? To defend ourselves from terrorists who killed fewer Americans in 2010 (15, most in Afghanistan) than dog bites (34) or lightening (29)?  Combined with the incredibly irresponsible trickle down borrow-and-spend policies initiated by President Reagan (then carried on by both Bushes), and it should come as no surprise that America now finds itself in a financial mess. We've been spending and cutting taxes recklessly, while subsidizing crony capitalists, and pursuing foreign demons that don't warrant the expenditures.

How big is the mess? The U.S. now finds itself with a debt to GDP ratio that hovers over 95%. This is far worse than any of the major economies in Latin America today. Bolivia, run by socialist president Evo Morales, recently posted a 3.7% budget surplus (in 2010) and felt comfortable enough to lecture the United States on it's finances.

And while capacity to pay is as important as ever (the U.S. still retains the capacity to pay), the recent stupidity we saw over the debt ceiling is not encouraging. The Tea Party's fake populism and manufactured rage are encouraging the Barbarians at the Gate to question the credibility of the United States.

Today, even though annual budget deficits in the United States have only averaged about 10% of GDP after the 2008 market collapse (not bad considering what happened) ...

... total debt to GDP ratios in the United States have risen so fast it's now approaching 100% of GDP. This is quite a swing from when it was just above 30% when President Reagan entered the White House. No wonder Ecuador's socialist president lectured the United States on it's finances. Simply put, he can.

Why is all of this important? Because apart from the faux populist outrage we're getting from the Tea Party cranks (where were these guys when Reagan tripled and Bush II doubled our national debt?), we now have to deal with a world that has less confidence in America.

The world sees a country that seems more concerned with empty tax cuts, crony capitalism for Wall Street, and endless foreign wars than it is with fiscal responsibility and global leadership. They see a nation run by Wall Street kleptocrats, who are guided by ideologues pushing a failed ideology. Worse, many have a sense that they are seeing an empire in decline.

This helps explain why leftist-socialist presidential candidates have had found success in Argentina, Brazil, Chile, Bolivia and Venezuela. While there's much to admire in this country, it's no longer easy for  Latin Americans to point to the United States' economic model as the path to follow. How can it be when fraud and incompetence on Wall Street are rewarded with bailouts and bonuses?

Yet, the United States continues to prod and push Latin America on issues ranging from drugs to immigration when, as any Latin American will tell you, it's U.S. policies and habits that encourage both. The Bush administration even tried a cold war tactic when they participated in (led?) an attempt to remove Venezuela's Hugo Chavez from power in 2002, even though he had been popularly and legitimately elected president. While it wasn't picked up by America's media, political insiders understood that the U.S. had a hand in the attempt to oust Chavez from power by bankrolling Venezuelan groups opposed to Hugo Chavez.

Then there's the hypocrisy of our response to the 2008 market crash.

History tells us that if any of our neighbors to the south had experienced the same market meltdown that we did in 2008 that our response would have been much different. Apart from demanding strict austerity measures we would have pressured Latin American officials to make big changes in the way government bureaucrats and their crony capitalists did business. Our response to our own meltdown, however, was to spend lavishly and to cover up for Wall Street with taxpayer backed bailout funds.

How we reacted to our market meltdown in 2008 is one of the reasons why I wrote, tongue-in-cheek, that it's a good thing we don't have a U.S. Embassy in the United States.

In the past - using the U.S. Embassy as a base to direct events - the U.S. initiated coups and forced unwanted leaders from power for lesser offenses throughout the world. With this in mind, in 2009, after being asked about the evolving economic mess in the United States, Chile's then President (2006-2010) Michelle Bachelet joked:

The reason why in the United States there has never been a coup d'etat is because, in the United States, there is no United States embassy.

President Bachelet may have been joking (she issued an apology later), but the point was made. After 30 years of pursuing budget busting tax cuts and unrestrained neoliberal policies in the United States, we are now experiencing what Latin America did when it embraced free market policies under corrupt regimes in the 1980s: economic instability and financial collapse.

What's worse, in many ways we've done nothing to rectify the issues that have altered our economic landscape in just one generation. This is unfortunate because, while our media ignores how it's all tied in to the American Peace, Latin America is picking up on the new realities of Pax Americana in the 21st century.

I'll be touching on this, and other issues, in my Politics of Latin America class this winter. Stay tuned for updates.

- Mark

OUR NATION'S POWDER KEG

Broadly speaking, our nation's economy is in trouble for two reasons. First, we failed to seize the moment and fix what caused the economic collapse in 2008. Second, our largest economic players seem to be paralyzed by ideological stupidity, which surrounds Washington and, to a lesser degree, Wall Street.

It's really that simple.

On one level, as I explained last week, a second market collapse is around the corner because our national economy continues to be threatened by an explosive brew of reckless deregulation, irresponsible tax cuts, and Wall Street's gambling and speculation. For many "investors" the focus is on short term yield and wealth extraction, not wealth creation. What we had before 2008 is essentially what we have today. This is structural, and won't go away with a simple capital gains cut, or with the congress we currently have.

This is our nation's economic powder keg.

The short-term factors that will light the powder keg are tied to three institutions that can put significant financial resources into action, but are paralyzed by ideology and each others inaction.

Specifically, as we saw during the debt ceiling fiasco, we now have a House of Representatives that's governed by historical and economic illiterates. The GOP's (deliberate) failure to understand cause and effect explains why they're ignoring how we got into this mess, and are doubling down on their "Let's-get-Obama-so-say-no" strategy. They're using our nation's debt (which Reagan tripled and Bush II doubled) as a political weapon, and will continue to fight President Obama on any program of substance, regardless of what it will do for the economy.

The GOP wants President Obama to fail, and don't care if they take the country down in the process. It's that petty.

This extremism is one of the reasons John Boehner and Majority Whip, Kevin McCarthy, couldn't round up enough votes for a debt ceiling deal that the GOP wrote, and then had to rely on former Speaker, Nancy Pelosi, to get the votes they needed to avoid default. The Tea Party and their GOP hosts don't want to give the president anything, and are prepared to wreck the country in the process. It's not Sherman, but it's scorched earth policy at its political best ...

Then we have the private sector sitting on trillions of dollars, much of which (especially for the banks) was made possible because of taxpayer backed bailouts and stimulus programs. Ingrates.

Throw in the fact that the Federal Reserve decided not to inject more money into the economy last Tuesday (in part because the Fed is staffed with ideologues), and it's easy to see why we're virtually guaranteed another recession, or worse.

So there you have it. On one level we did nothing to fix the problems that caused the 2008 market meltdown. This is the powder keg. On another level we're watching as the biggest institutions with the means to help our nation - the private sector, the Federal Reserve, and Congress - sit on the sidelines. They are the kids playing with matches.

Unless something significant happens to change these dynamics over the next two years, I can't seem to find a silver lining in any of this. I hope I'm wrong.

History suggests I'm not.

- Mark

GOP PRESIDENTIAL DEBATE ... A TRIBUTE TO THE BUSH TITANIC

If you watched the GOP debate last night you probably got the same sense that I did. They're a shipwreck waiting to happen. The entire class of republican presidential hopefuls not only ignored what happened the last time we tried Bush's failed policies, they demonstrated that they're committed to rearranging the deck chairs from the Bush-Titanic. 

And unlike Skipper Bush, who operated in the dark, these guys have the light of hindsight. But they choose to ignore it.

A couple of things struck me from last nights debate.


* As a party, the GOP is tethered to a failed ideology.

* When the entire GOP panel rejected a moderators mythical budget proposal that would include $10 in cuts for $1 dollar in new tax revenue, the GOP field proved they're Grover Nordquist's political slaves, rather than genuine public servants.

* No candidate is prepared, at this time, to practice the bi-partisanship displayed by their hero Ronald Reagan, who raised taxes 11 times, then raised the debt ceiling 17 times (while effectively tripling our national debt).


In a few words, after watching President Bush blow through more than $5 trillion in projected budget surpluses with his budget busting trickle down policies, the current crop of GOP presidential hopefuls are more than happy to pursue the same failed course. Their tribute to the Bush Titanic last night made this very clear.

The only problem is that if one of these deckhands from the Bush Titanic gets into the White House the result is predictable: more tax breaks for the rich, and budget cuts for the rest of us.

In spite of their party's recent policy record, for the GOP it's full steam ahead. They want everyone to forget about the ship at the bottom of the sea, and to ignore the financial icebergs even Ray Charles could see. Simply mind numbing. Seriously. Even Captain Crunch is perplexed by the GOP's willingness to ignore what happened on the Bush Titanic.

The only potential bright side here is that the American public is starting to demonstrate that they are smarter than the GOP presidential hopefuls believe. But then again, they did vote for the Bush Titanic, twice.

Sigh ...

- Mark 

DYLAN RATIGAN EXPLAINS (in part) WHAT'S WRONG WITH AMERICA

MSNBC's Dylan Ratigan goes off on his panel - and gets pretty emotional - but nails it with what's wrong with politics in America in this clip (the fireworks start at 4:20). He blames both parties for wanting to kick the can down the road, all the while watching as the banks, Wall Street, and America's economic elite extract wealth from the American taxpayer.

I write about wealth extraction over wealth creation to help explain the myth of the free market in my book.

Kudos to my friend Seven for spotting and posting this clip on his FB site.

- Mark

WHY CAN'T THE GOP UNDERSTAND THIS STUFF?

Yesterday I appeared on Bakersfield's local KGET Channel 17 News to discuss the budget debate going on in Washington.

I appeared with California's Republican king maker, writ large, Mark Abernathy. During the course of our discussion Abernathy spoke about revenues as a percentage of GDP under Reagan. Or at least that's what I heard him say he was talking about.

I wasn't sure where Abernathy was going so I chimed in, reminding him that although Reagan raised taxes (payroll) that revenues as a percentage of GDP actually went down under Reagan. And this was after Reagan promised that tax revenues would go up because of his trickle down economic policies. Abernathy then corrected me, saying he was actually talking about "spending" as a percentage of GDP (I'm waiting for a copy of the tape).

I thought to myself, "Huh ... I heard revenue" but decided to play along.

In fact, I was more than happy to play along and talk about spending as a percentage of GDP under Republican presidents because, quite frankly, they exploded. Unfortunately, we ran out of time, so I couldn't do a proper smack down on Abernathy and his take on spending (or revenues) as a percentage of GDP.

As luck would have it, as if on cue, Barry Ritholtz posted this easy to read spending as a percentage of GDP chart today. It's not good news for Mr. Abernathy.

Long story short? As I was trying to explain, spending as a percentage of GDP went up under President Reagan (which is one of the reasons I wasn't sure where Abernathy was going with his Reagan story). Making matters worse for Abernathy is that (as I was also going to explain), revenues also dropped under Ronald Reagan - as they did under President Bush II.

Now, ask yourself, "What would happen to my household budget if my income dropped while my expenses went up?" This isn't rocket science.

So, why doesn't the GOP understand any of this?

- Mark

WHY THE GOP LEADERSHIP LOST CONTROL

So it went down to the wire and the GOP leadership couldn't even control their own party. After blustering about the budget bill they would pass - and then, in their minds, force onto President Obama's desk - the GOP leadership failed to get enough fellow republicans to support their own budget plan. Incredible.

How does this happen, you ask? It happens, in part, because the current GOP leadership has a history of puffing their chest out in empty displays of machismo and false bravado, and then thinking that it counts for real substance.

Think about it. First we had this intellectually empty display of political PR, colored by a book title filled with Western machismo ...

Gun-slinging tough guys, right? But for the serious student of public policy the book reminded them more of this... 

Then we watched as majority whip - and Bakersfield's own - Kevin McCarthy, used this film clip to get his team on board with the budget ...

Wow. Stand back. Don't go into a dark alley with these guys, right?

The reality is that no amount of Hollywood-inspired tough guy bravado can hide the fact that the current GOP leadership is led by corporate errand boys. Worse, they do the bidding of a Speaker who seems more comfortable crumbling emotionally like this ...

Then, for good measure, we heard about Speaker Boehner using more tough guy language. He actually told fellow Republicans to "Get your ass in line," only to watch as GOP lawmakers ignored his "laying down the law" ultimatum. At the end of the day, only Boehner knows what his fellow Republicans saw, and why they rejected his last minute police-like command ...

I know, I know ... what they're discussing in Washington deserves better then the caricatures I've presented above.

Then again, there are times when you get what you deserve when you create an image of yourself that doesn't fit with reality ...

Just saying.

- Mark

YUP, THE DEBT BELONGS TO BUSH & THE GOP ...

I've posted some of these charts before. This is from The Atlantic, "The Chart That Should Accompany All Discussions of the Debt Ceiling."

- Mark

HAPPY TAX CUT ANNIVERSARY!

Happy Anniversary! Almost 10 years ago today, on August 1, 2001, the Associated Press reported that the Treasury Department began borrowing $51 billion in order to pay for the first round of Bush tax cuts’ rebate checks.

While Democrats consider cutting entitlements and other programs, the GOP plans on celebrating by convincing each other that keeping the Bush tax cuts (especially for the rich) will fix what's ailing our country. Read about it here.

The really incredible thing is that if the rich and corporations paid taxes at the same level they did in the 1960s our budget debt would disappear.

- Mark

WHY CAN'T THE GOP DO THE MATH?

Recently I wrote a couple of op-eds for our local paper, the Bakersfield Californian. There were several responses from community members, one of which said President Bush's annual budgets only added a little over $2 trillion to our national debt. Huh?

Hey, I have an idea. Let's do the math.

     5.6 trillion          (our national debt, December, 2000)

+    ???????            (big mystery ...)

= 10.6 trillion          (our national debt, December, 2008)

Now, try as hard as I can, I can't seem to see how our national debt grows to $10.6 trillion in 2008 by adding only 2 trillion to what we owed in 2000. Can you? This is a real puzzler. So, let's make it even simpler. Does 5 + 2 = 10?  Hmmmm ... I know, tough one.

 

Time to call Stephen Hawking or John Nash ...

All kidding aside, a simple Google search of the Treasury Department, or even Wikipedia, would have showed my friend that President Bush's annual budget deficits added much more than $2 trillion to our national debt.

My guess is that my friend was playing with the rhetoric. He did write that "Bush's annual budget deficits (added to the national debt) totaled $2.006 trillion." This might give him leeway (in his mind) to argue "If you look at President Bush's annual budget proposals you'll see ...". Cute.

Unless you're a professional psychologist, it really serves no purpose to try and understand or explain the logic behind this kind of thinking. So I won't. But as a student of politics, and as an American who doesn't want to see our country driven off a financial cliff, I also understand we can't solve our budget problems by sticking our head in the sand, or being cute with the math.

The real problem with being cute with the numbers, and the subsequent factual disconnect in the GOP, is that it's been going on for some time now.

For the better part of two decades the GOP has conveniently forgotten that President Reagan raised taxes 11 times, raised the debt ceiling 17 times, and effectively tripled our national debt from $950 billion in 1981 to $2.7 trillion at the end of his presidency. Yet, the GOP persists in the idol worship of Reagan, calling him a tax cutting fiscal conservative!

The math isn't very difficult here (who can't count to 11, 17, or 3?), so why the disconnect?

More recently, I had a friend (who's a conservative republican) argue - as do many other republicans -  that the Clinton surpluses weren't real. I know that this mind-set is a way for the GOP to ignore that the Bush administration blew through $5.6 trillion in projected budget surpluses after 2001. Still - and although I'm nobodies idea of an accountant - I decided to explain the math behind the Clinton surpluses. I took my time and explained on my blog (very slowly) why my friend might not believe Clinton's surpluses were real. Then I explained (very slowly) why the Clinton surpluses were real (the key is distinguishing between annual revenue and total debt).

It didn't make a dent. Sigh.

Like Galileo's colleagues (and the Church), who refused to look through his telescope for fear of what it might do to their narrow-minded world views (they were afraid of learning that the earth moves), many in the GOP are afraid of what looking at the facts will do to their world.

So, they play games, and refuse to do the math.

This explains why, in spite of evidence to the contrary, many in the GOP can say with a straight face that President Obama created our trillion dollar deficits. They don't do the math, which allows them to ignore what unfunded wars ($300 billion), unfunded insurance giveaways ($70 billion), unfunded bailouts ($350 billion), unfunded tax cuts ($300 billion), and the unfunded costs associated with financial losses from the market collapse ($250 billion) have done to our budget numbers since 2008.

Worse, like the petulant kid in the back of the room, the GOP blames the guy next to him for the problems they caused.

At the end of the day, President Reagan effectively tripled our national debt. Then President Bush II doubled it (and he started with annual budget surpluses!), and left a mess for President Obama to clean up. The GOP ignores these inconvenient truths, and then fail to do the math because it's politically convenient not to. 

Our problem now is that it's threatening the financial stability of our republic. Whatever happened to America First?

- Mark

PRESIDENTS AND THEIR DEBTS

The NY Times has an excellent collection of essays that discusses U.S. presidents and their debts. Richard Reeves' "Reagan's Deficit Dreamscape" is wonderfully written, easy to understand and, more importantly, reminds everyone that Reagan started the "borrow and spend" policies that have put us in a hole today. But my favorite is David Kennedy's "FDR, Budget Hawk." It's short, to the point, and dispels any notion that conservatives have about FDR being a spend thrift. 

They're all excellent, so I hope you can find the time to read some of them.

- Mark  

WHAT WOULD REAGAN DO?

Some may find this hard to believe, but I voted for Ronald Reagan in 1980. While it was a gut-wrenching, last minute, decision there are many reasons that I voted for Reagan instead of Jimmy Carter (yes, youth played a role). Hindsight, and the results of his disastrous trickle down policies, tell me that I should have voted for Carter.

Still, one of the things I found attractive about Reagan was that he came across as witty (instead of arrogant) and had made his own way in life (unlike you know who). Another thing I saw was that Ronald Reagan had learned lessons from a life that included living with an alcoholic father during the Great Depression, which made flexibility and adaptability critical to his survival. This carried over into his political world.

Unfortunately, in spite of claiming that they are part of the Reagan legacy, adaptability and flexibility are not the qualities we're seeing from our Tea Party hijacked Republican Party (a party Reagan likely would neither fit into, nor recognize). This is especially the case when it came to the budget process. Check out this classic Reagan quote on the budget now making the rounds:

"Congress consistently brings the government to the edge of default before facing its responsibility. This brinkmanship threatens the holders of government bonds and those who rely on Social Security and veterans benefits. Interest rates would skyrocket, instability would occur in financial markets, and the federal deficit would soar. The United States has a special responsibility to itself and the world to meet its obligations. It means we have a well-earned reputation for reliability and credibility – two things that set us apart from much of the world."

 You can also listen to it here ...

The point is, Ronald Reagan loved this country, which made him adaptable, not a radical.

Indeed, former Senator Alan Simpsom (R-WY) likes to remind people that Reagan raised taxes 11 times in order to get his budgets in order (he raised taxes as governor of California too). To be sure, Reagan nearly tripled the federal budget deficit, but he understood that there was a certain responsibility to governing. This is one of the reasons he was able to sleep at night after he gave amnesty to 3 million undocumented immigrants and their families, while presiding over a federal government that increased in size under his watch.

If the GOP listened to their inner Reagan, instead of to their Tea Party hoodlums, they would understand why it's necessary to raise revenues. Especially after they increased government spending to cover wars, depression economics, corporate bailouts, and assorted programs that Congress signed off on.

 
The GOP needs to channel their inner Reagan, and ask, "What would Reagan do"?
 
- Mark

OUR POLITICAL NEROS ARE FIDDLIN' ...

In the "I can't believe I missed this when it came out" deparment ...

If you don't like the budget proposal offered by the Democrats (not) then this article is for you. If you don't like the budget proposals offered by the Republicans then this article is for you. Either way, conservative columnist David Brooks is on to something as he takes it to both the Democrats and the Republicans.

But this is my favorite segment ...

The Republican growth agenda — tax cuts and nothing else — is stupefyingly boring, fiscally irresponsible and politically impossible. Gigantic tax cuts — if they were affordable — might boost overall growth, but they would do nothing to address the structural problems that are causing a working-class crisis.


Republican politicians don’t design policies to meet specific needs, or even to help their own working-class voters. They use policies as signaling devices — as ways to reassure the base that they are 100 percent orthodox and rigidly loyal. Republicans have taken a pragmatic policy proposal from 1980 and sanctified it as their core purity test for 2012.


As for the Democrats, they offer practically nothing. They acknowledge huge problems like wage stagnation and then offer... light rail! Solar panels! It was telling that the Democrats offered no budget this year, even though they are supposedly running the country. That’s because they too are trapped in a bygone era.


Mentally, they are living in the era of affluence, but, actually, they are living in the era of austerity. They still have these grand spending ideas, but there is no longer any money to pay for them and there won’t be for decades. Democrats dream New Deal dreams, propose nothing and try to win elections by making sure nobody ever touches Medicare.


Covering this upcoming election is like covering a competition between two Soviet refrigerator companies, cold-war relics offering products that never change.

Long story short? Our political system is broke, and our political Neros - from both sides of the political aisle - are fiddling while Rome burns.

I'll go along with that.

- Mark

GOP ... STILL CRAZY (STUPID) AFTER ALL THESE YEARS

The republican party persists in pushing the notion that the budget mess is all Obama's fault, and are poised to push America over a financial cliff to make their delusional points. If you want to see in graphic form how President Bush and the GOP recklessly blew through $5.6 trillion in projected budget surpluses, and then gave us our current budget mess, check this out ...



Also, if you want a little "10th anniversary" light reading on the impact of Bush's budget-busting tax cuts, click here.

No wonder the rest of the world thinks the GOP is made up of "dangerous maniacs." The world sees something many Americans don't seem to understand: Republicans are crazy stupid when it comes to tax cuts and the budget (seriously, who introduces a budget with no numbers and then passes a resolution that says if the Senate doesn’t pass a House spending bill, the House spending bill becomes the Law of the Land?).

The rest of the world now thinks the GOP is made up of nut jobs. Via Digg, read all about it here.

- Mark

P.S. In the spirit of the craziness, time for some Patsy Cline ...

RANDOM THOUGHTS (and links)

* Ha, ha, ha, ha ... I love happy endings that involve morons getting their clocks cleaned. Via Digg, check this out.

* I've been saying this about taxes and our deficits for some time now. But it's nice to get updated (or is that corrected?) tax revenue figures.

* Speaking of the "Update-Mistake" department, this is a big one. It turns out that tax expert David Cay Johnston fell into a tax accounting spider hole, and used what he thought he found in an article. At least he explains what happened. You'll understand too once you read the "Checking the Records" section of his mea culpa. (And Kudos to Johnston for, once again, helping us understand why the U.S. doesn't always collect the taxes it is owed.)

* Eric Cantor's account of President Obama "walking out" of budget negotiations - after Cantor actually did so last month - is in line with his claim that his offices had been fired at when, in fact, it was random gunfire. Then, as now, Cantor's trying to personalize and use headline news to score cheap political points. What a drama queen.

- Mark