The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age
    Watt Childress's picture

    Two Santa Clauses or none?

    By Watt Childress on Wed, 12/15/2010 - 1:20am |

    There are some things Americans know about ourselves without having to hear it from pollsters. We know we love Santa Claus, for example. When offered a choice between having no Santa for Christmas, or having twice as much Santa, we’ll grab the latter.

    So it goes with recent polls showing support for the $858 billion dollar tax-cut and spending deal brokered by President Obama and lead Republicans. A random sampling of 1,011 adults by the Pew Research Center found that two-thirds of respondents favored the deal. That parallels the results of a random sampling of 1,001 adults by ABC News. According to pollsters, most Americans would rather extend the Bush tax cuts and extend jobless-benefits for the long-term unemployed rather than do neither.

    That’s the choice presented by Obama and Republicans. Two Santa Clauses (with lots of earmarked presents) or none. Take it or leave it.

    At the same time these polls were reported in the press, financial analysts warned the deal could prompt budget-busting debt, a fall in our nation’s credit rating, and bond market jitters.

    Private sector debt fell by $165 billion in the third quarter. That is just a quarter of the rate of decline a year ago, Capital Economics notes. But what’s more, government debt issuance more than canceled out that drop, expanding by $380 billion during the period ended in September.

    That gap, if you can bear it, stands to get even bigger in coming quarters should Congress approve the deficit-expanding tax deal reached this month by the White House and congressional Republicans.

    That shift is not exactly reassuring the many fiscal hawks who warn that U.S. profligacy will not end well. They say the wider the budget gap, the bigger the mountain of debt sitting atop U.S. assets. Both of those trends, they claim, will push the dollar toward collapse in an inflationary crisis reminiscent of a banana republic.

    If leaders are unwilling to take time to think about such consequences now, what makes us think they’ll do so after they’ve fast-tracked this deal?

    The two Santa Clauses theory of government has defined America’s ruling class for 30-plus years. It was first advanced by political economist Jude Wanniski as a strategy for putting Republicans in office. The theory states that, in democratic elections, if one party courts voters by proposing more spending, a competing party can’t win by proposing less spending. Wanniski convinced Republicans to become the tax-cutting Santa Claus to the Democrats’ tax spending Santa Claus.

    If he were alive today, perhaps Wannisky would say — behind closed doors — that the only problem with this deal is that Obama isn’t a Republican. Otherwise, it doesn’t seem that different from the deals struck when Republicans controlled both the legislative and executive branches of government. Cut taxes, borrow money, and spend.

    Cross-posted at FireDogLake.com and RedState.com.

     

    Comments

    This may confuse the ipolling ssue a little, but the A,erican public will never hear this; the other polls neatly tell us what we believe, and we will follow the meme all the way to SS insolvency.

    http://tpmdc.talkingpointsmemo.com/2010/12/do-americans-support-obamas-tax-cuts-deal.php?ref=fpb

    Ho! Ho! Ho!  Merrrrrrrrrrrry Christmas!


    by we are stardust on Wed, 12/15/2010 - 7:19am

    Good morning Starshine! Sure wish Americans could wake up to real choices rather than manipulative polls spun by the drive-by media.

    http://www.youtube.com/watch?v=nmZqb2VVc48


    by Watt Childress on Wed, 12/15/2010 - 7:35am

    ;o)

    And pretend the shades are blinders....     ;o)

    And what in da woild are you doing up so early???


    by we are stardust on Wed, 12/15/2010 - 7:47am

    Sometimes I wake up in the wee hours, then can't fall back asleep because I get to thinking about all the wonderful reasons to be hopeful. I imagine all the special things powerful people are doing to the earth. Makes me feel like a kid again, anxious for Santa to bring in all the loot.

    Also, I got up to call some senators. Left a message on Ron Wyden's machine urging him to vote against the Obama-GOP tax deal. Jeff Merkley's office said he is definitely opposed to the current legislation.


    by Watt Childress on Wed, 12/15/2010 - 12:40pm

    To look at more than one side of this, here is something else from the article you quoted (which I assumes means that you give the views expressed in it some level of credibility) [emphasis mine]

    Yet as irresponsible as this might sound, there is an argument in favor of this unexpected pause in our deserved march to austerity -- which is that it just maybe could keep the economy staggering forward for a while as the search for a new growth engine goes on.

    The observation that American consumers have stopped adding to savings and have returned to spending is admittedly unnerving, because it was our profligacy [later in the article he asserts it was the banks who were worse culprits] that put us in this fix in the first place. Everyone will be rightly concerned if the saving rate dives back toward zero and debt levels start climbing again.

    But for now, a bit more spending and a bit less scrimping could pave the way to better growth and, Ben Bernanke no doubt hopes, more of the same down the road. And as he knows, it is only through higher growth that we will be able to overcome climb our unhappy debt mountain.

    If one is going to use the deficit and debt as a means of undermining the compromise deal, then one can't turn to more huge government stimulus packages as means of generating that necessary growth.  The only option is to hope for the private sector to kick into gear somehow.   But this was pretty much why the Repubs had Obama over a barrel.  While one could say that taxing the top 2% would help the deficit and wouldn't harm the economy, one couldn't say that it would stimulate higher growth. Before Obama made the compromise deal he did have Pelosi, Reid et al. and asked them for a solution to this problem - they apparently didn't come up with anything.

    Chances are pretty slim though this measure and other things considered are going to be enough. Which means in order to avoid "inflationary crisis reminiscent of a banana republic" we will have to start turning to austerity measures.  Now hopefully the voters in 2012 will send as many politicians as possible who will look to cut the military first, and everything else second.  I'm not very hopeful for that either.  The issue at hand is that while the top 2% can do a hell of a lot more in terms of fixing the debt problem (as can slicing the military budget in half), the rest of the people, especially those at the top of the 98% are also going to have to do something.  And that is when we discover all too well that democracy (at least as it practiced here in America) doesn't necessarily drive great policy.  Which your blog nicely points out.


    by Elusive Trope on Wed, 12/15/2010 - 12:43pm

    If one is going to use the deficit and debt as a means of undermining the compromise deal, then one can't turn to more huge government stimulus packages as means of generating that necessary growth.

    Why so? If this compromise doesn't go through ... we end up with A TRILLION dollars surplus over the next ten years to invest in just such packages. To me the arguments go hand in hand.

     


    by kgb999 on Wed, 12/15/2010 - 1:04pm

    Well, to fully respond I would need to know how this particular surplus figure is derived, and in particular what would happen in the here and now when you say "if this compromise doesn't go through."  (i.e. all tax cuts expire, just those for the wealthy expire, and so on)


    by Elusive Trope on Wed, 12/15/2010 - 2:11pm

    "Now hopefully the voters in 2012 will send as many politicians as possible who will look to cut the military first, and everything else second."

    Hopefully active citizens can bring pressure on leaders between now and 2012 to start cutting waste from military and transportation. Those areas of entitlement spending have been given a pass by conservatives. Time to join forces with progressives and clean up our act.

    I'm big on re-directing existing revenues to priority public needs. Focus on better spending rather than new spending. Here's an example. Right now, school districts in Oregon are dependent upon our general fund to pay bus expenses. Why aren't busses for school children considered a mass transit expense? Why aren't we prioritizing transportation dollars for that existing purpose rather than earmarking it for new infrastructure to nowhere?

    We've heard a great deal about "shovel-ready" with respect to stimulus spending. If existing transportation dollars were used to help offset school bus costs, our school budgets would be in better shape. We'd be more "blackboard-ready." A few less teachers would be out of work. A few more vital public servants would be able to contribute to the economy.

    Just an example. Good to hear from you on this, AT.


    by Watt Childress on Wed, 12/15/2010 - 1:20pm

    I don't get it. Our transportation infrastructure is crumbling too. As a society we are accepting being placed in a situation where if we are to educate our population we can not have roads and safe bridges?

    Fuck that. Tax the bastards and fix our shit. 80% of the nation is on board. Jesus. Ultimately the timidity and small-vision of the Democrats is every bit as much to blame for our current situation as the the GOP dutifly fighting for the interests they always have fought for. They aren't the ones who have changed ... the people who used to check them have.


    by kgb999 on Wed, 12/15/2010 - 1:53pm

    Peace, KGB. I'm not suggesting that we stop taking care of our roads, bridges, and other infrastructure. In fact I've been advocating that we take better care of those things for ten years.

    What I'm saying is that under cover of transportation spending legislators have loaded their districts with new pet projects at the expense of existing transportation needs. And yes, I believe school busses are a legitimate priority.

    Once we've funded our core services, then by all means advocate for raising new revenues for pet projects (start by closing politically-driven loopholes). But we should do it in that order. Fund the greens, meat, and potatoes. Then, if we can afford it, ice cream.


    by Watt Childress on Wed, 12/15/2010 - 5:03pm

    Not convinced on this one. I see where you are coming from - just not buying it. You are accepting (what I consider) a false premise of scarcity. There genuinely is no such thing. We have as many global resources as we ever have - fake money isn't real. And while it isn't in the manufacturing sector we have as many national resources as we ever did as well. By sheer numbers the "economy" is doing OK. Some folks are making TONS of money - hand over fist - and generally speaking we are still doing quite well in the global competition.

    The real problem we have as society is that while our economy is doing decent numerically, the people getting the money has shifted to people who no don't invest in society. They have put us into this competition for scraps ... as someone without children, why aren't the roads I need to make a living the "meat and potatoes" and buses for some other person's kid the ice cream (let them drive their own damn kid)? I don't necessarily believe this - but it feels systemically like the powers that be are are imposing on society the same basic philosophy of a small-time sheriff setting the inmates against each other so they don't cause trouble for "the man".

    These are all fixed recurring costs we're talking about - not something you can cover and then say "sweet! next investment." Tightening our belts is never going to even fund the greens, meat and potatoes because we're addressing the wrong problem. If 50% of our economy just shifted to people who don't pay taxes ... you aren't ever fixing that with middle-class austerity.


    by kgb999 on Wed, 12/15/2010 - 6:39pm

    Surely we agree on the need to conserve natural resources and taxdollars. But if not, hey, I still think if we sat down with a beverage we would find common ground on transportation spending. (In fact, if I'm wrong I would buy you double drinks).

    Some crony capitalists are making big money by routing revenues from government budgets into their private bank accounts. Military contractors are raking it in. Same goes for some highway contractors and real estate speculators who are influencing transportation spending.

    I want to redirect funds that are currently earmarked for/by such interests to things like school busses and fix-it-first block grants for existing infrastructure. Put those in the reverse order if you like. Add enforcement of traffic safety laws (another legitimate transportation expense that isn't funded by transportation revenues). Point is, I'd rather see taxdollars spent on those kinds of things than Bridges to Nowhere. To me, that's not "middle-class austerity." It's reforming public budgets to support priority public needs.


    by Watt Childress on Wed, 12/15/2010 - 8:18pm

    The only option is to hope for the private sector to kick into gear somehow.   But this was pretty much why the Repubs had Obama over a barrel.

    Which is highly unlikely as businesses has no real motivation outside of high quarterly profits, which they can achieve without production. And Asia, especially China, is rapidly taking consumer as well as commercial business away at a record pace.


    by cmaukonen on Wed, 12/15/2010 - 2:19pm

    Yup.  As I said the chances are slim.  The dominance we achieved after WWII because everything else was in the crapper has finally faded into the good night.  And it won't return.  Decades of neglect, selfishness, corruption and a lack of long-term vision and willingness to sacrifice (e.g. we'll lose this bomb factory here so they can put in a high speed rail over there) has put us in a spot where I seriously doubt we can find a way to get out of it in such a way we can return to those heady days of the American middle class.  Now we're in survival mode, treading water, and low information voters are not going to help get the right people in there to do the job (on a local to national level). 


    by Elusive Trope on Wed, 12/15/2010 - 2:42pm

    In my book, survival mode means we can't afford two Santa Clauses.


    by Watt Childress on Wed, 12/15/2010 - 5:05pm

    Sometimes survival means taking extraordinary risks, all or nothing baby, and sometimes it means playing it safe, accepting one's losses and hunkering down for the long haul.  Getting the country to decide which path to Santa Claus to take is the kicker, especially when they want to go down both paths.


    by Elusive Trope on Wed, 12/15/2010 - 5:25pm

    Dear God in heaven.  You are really buying into the phony 'austerity measures need' meme?  I can't think of another dividing line more clearly separating Progressives from Third Way Dems.  There is not an economist worth his/her salt who believes that this is a time to cut deficits, as long as the spending is designed to regenerate the economy.  All of the recent policy has been designed to make the case for 'austerity'.  Hey, it's working out so well in Europe, isn't it? 

    The tax cut increases the deficit; it's marginanlly arguable that SS tax cut holidays will be a bit stimulative, but it also means SS is that much closer to insolvency.  The cuts for the wealthy aren't one bit stimulative, even David Stockman, the freaking author of  Reagan's trickle-down economic theory says so!  Greensapn says so (not that he's an economist worth his salt), and even Bernake is worried, and is begging for a big jobs stimulus!  Black, Reich, Salmon, Roubini, Kwak, Yves Smith are ALL stomping up and down about this crap plan, and its true purpose being to drive the debate to cut our social safety nets.  And more.

    Oh please, oh, please: don't accept the framing on the deficit and debt!  There is good debt (stimulus with multiplier effect) and bad debt (parking money in corporations, banks, and it the uber-wealthy's portfolios!  Doing nothing to stimulate the economy.

    Ah, bugger.  I should save my breath.  Sorry for the interruption. But please read around the web.  Google a few pertinent questions.


    by we are stardust on Wed, 12/15/2010 - 3:47pm

    You've mistaken my assessment of the situation as what I've boughten into.  As I said in the original comment, I doubt this measure or much of anything else will stimulate the economy as it currently is set up.  The tax breaks are not stimulative (since they've already been in place for years).  The only justification (and debateable whether legit) is that the breaks avoid decreasing incentive to invest and risk liquid assets.  Since the basic concept of the stimulus is basically a one-shot deal, the fundamental idea of long-term sustainable growth is in the private for-profit sector.  If holding back on increasing taxes facilitates the likelihood of investment by this sector into sustainable industries, then it can be said to regenerative action.   

    Personally I am not that concerned about the deficit at this moment and would be for another (even larger) stimulus composed solely of endeavors that generated jobs.  I would add that those who keep howling about the deficit increase as a reason not give the wealthy a tax break tend to maintain the need to think reduction first spend second atmosphere. 

    And it is this atmosphere that I am addressing.   I let my representatives know what I think, although I don't think Pence really cares what I think,  Which kind of the point.  As soon as the first stimulus went through, everything had to be budget "neutral."  In spite of my phone calls, etc the political will to go for another stimulus is much less than there was for making the first one larger than it was.  Since too many Americans already have that no tax fever, the Republicans can create stalemate (and score political points) by blocking the Dems efforts to bring forth another one.  And the mythical bully pulpit is not going to save the day on this one, not right now. 

    So the reality is most likely that the economy will continue to sputter and spit forward.  The deficit hawks will grow more shrill and we will see the beginning of austerity measures.  Do I like it? No.  But given next year's House of R, we won't see any government-funded stimulus that isn't DOA as soon as it hits the committees.  Unless, there is a significant shift in the voters.  But I won't hold my breath.


    by Elusive Trope on Wed, 12/15/2010 - 4:27pm

    Trope I like your overall assesment. In order to stop sputtering and spitting in an old economic system we need massive spending in infrastructure, education and technology. While the stimulus in this package is mild and might be enough to re-elect Obama, it won't address the fundamental restructuring we need. Unfortunately the large monopolistic special interest groups such as military-industrial, finance, and health care elect enough Republicans to sustain their tax breaks and monopolistic practices while denying necesaary capital spending. The only way to get the necessary capital spending for the economy is to break the monopolies and their influence on elections. The health care bill seems only to entrench the health care monopoly. And it doesn't appear that Obama is worried about the finance giant. It seems we continue to await the ressurection of Teddy Roosevelt. Until then we will have to hope that private sector spending within a shop-worn economic structure will somehow allow us to muddle on.   


    by Oxy Mora on Wed, 12/15/2010 - 6:49pm

    I agree with you about spending money in infrastructure, education and technology which makes sense in both the short-term and long-term.  Regarding the later impact, the evidence shows that for every dollar spend in early childhood (0 to pre-K) education, the community sees a 7 dollar return on investment.  [Which brings up the environmentalist Hazel Wolf adage that if you want to convince an economist of something then you have to talk to him or her like an economist.  If we want to convince those who see through the prism of financial benefits, things like ROI, rather than appeals to a sense of humanity.  But I digress.]

    I would quibble with your take on the large monopolistic special interest groups electing enough Republicans.  It is the people who elect these viruses.  It is because too many of the voters make their political decisions based on things like monopolistic-special-interest-funded 30 second commercials and their rush-induced friends that we get the government that we've got.

    I don't think Obama is not worried about the finance giant, but has accepted it as a reality that must be accommodated.  That may be defeatist in some people's eyes.  But the only ones who can change the dynamic are the people.  As long as people keep sending folk like Pence (as they do in my district) back to D.C., the powers to be know they don't have to give an inch. 

    I would say this, too.  Bobby Kennedy was our last real chance at having a Teddy.  And look how that ended.


    by Elusive Trope on Wed, 12/15/2010 - 7:20pm

    '...Defeatist in some people's eyes'.  Count me among them, Trope.  It is the President who appointed the Financial Inquiry Commission that is looking anywhere but at the Big Banks and the fraud that is at the core of much of the meltdown.  You and far too many others  give him a pass.  Or prefer to remain ignorant, and blame it on 'the people' once again.  You pretend to forget that one week of the (admitted) costs of the (everyone knows, but the pretenders) failed war in Afghanistan equals the cost of Unemployment Compensation extensions for all but the 99-ers. 

    You 'accept that "Obama is not worried about the finance giant, but has accepted it as a reality that must be accommodated."  That is where much of the problem lies, IMO.  You have given him too many passes in the name of 'pragmatic reality.'  You, and so many others, not fomenting for the change he promised, I suppose, in order for Dems to get re-elected; I never quite grasp the concept.

    You wonder why some of us, what, "Radical Lefties" (which used to be Just the Left), are pissed at this deal on tax cuts.  It's because Obama and the corporatist Dems you assure us were the only ones who could be elected (no matter that the DLC greatly funded them, rather than other non-corporatist populist Dems with higher approval among the electorate, and Opps! some of them lost in the general election) have a track record of acceding to Republican framing, and Republican demands, and Republican trickle-down economics; a long line of 'compromise' y Obama who negotiates in his mind, and gices away the store time after time.  This particular deal didn't occur in some vacuum: it's a pattern by now, hence the furor.

    Many of us are left to conclude that the health of the nation really doesn't matter; Obama is getting the program he has concluded is advantageous to his re-election or something, no matter what the cost to the rest of us.  And your acceptance, I think, aids him, and them, with all due respect.  But you do go out on a limb in shifting the onus of the argument continually, leaving us (or certain ones of us) to respond. And then you come back with walls of words that obfuscate the issues.  Why do I respond to you might be a good question.  (The devil makes me do it, might be the only weak response I could give.)   ;o); or not.


    by we are stardust on Wed, 12/15/2010 - 9:27pm

    You make an awful lot of assumptions without seeming to read everything Trope (and others) says.  If you think he and people who feel as he does (me included) "pretend to forget that one week of the...costs of the...failed war in Afghanistan equals the cost of Unemployment compensation extensions", etc. etc. well we don't pretend to forget.  We don't forget. 

    As for the "other non-corporatist populist Dems" with "higher approval among the electorate", can you please clarify that? 

    On another point, I don't think Obama "is getting the program he has concluded is advantageous to his re-election or something", on the contrary I think he is getting the program he has concluded to be the best for the country as a whole, based on the limits he is under. 

    Lastly, I can't help but chuckle over your "walls of words that obfuscate" comment when half the time I can't make heads or tails of the meaning behind your own comments.  Putting down one commenter's way of speaking when one has one's OWN way of speaking is rather....well, nitpicky. 

    My apologies for jumping in but I sometimes do that, as you know.  No offense intended. 


    by LisB on Wed, 12/15/2010 - 9:40pm

    Fine to jump in. Lis, as you do, but that uyou can't make heads nor tails doesn't worry me much.  That the DLC oftendecides which Dems to give buckets of moeny to in a primary matters greatly, and almost always determines the winner.  Too many times the populist, with the approval of the most Dems in a state or district, gets aced out by the natonal Democratic Party.  I'd guessed you'd know that, no offense intended.  It's happened far too often in my state of Colorado, and other states: the Party got whom they wanted at the expense of whom the activist populist Dems preferred, then that candiate often lost the general.  Which has meant, the Party is ratcheting ever rightward.  No need to guess why, IMO.

    I think you are much like Obama when you grant that he can do no more. It leaaves zero room for vision, for principle, for "I have a dream" rhetoric.  You tell us what cannot happen instead.  Feh!

     


    by we are stardust on Wed, 12/15/2010 - 10:09pm

    And when things do happen, you tell me that they suck and we should've gotten more/better/bigger, etc. Hopefully someday we'll find a happy medium. :)

    by LisB on Wed, 12/15/2010 - 10:16pm

    It's also your way to have the last word; have it, on the house.  ;o)


    by we are stardust on Wed, 12/15/2010 - 10:49pm

    LOL....thanks! Actually, I think that's a bad habit that many of us share. So, in turn, I'll let you have the last word, should you be so inclined.

    by LisB on Wed, 12/15/2010 - 11:02pm

    .


    by we are stardust on Thu, 12/16/2010 - 12:07am

    Readers mistake the intent of this post if they think I'm blaming Washington's piss-poor performance on citizens. The two Santa Claus theory preys upon a popular weakness. In effect, it is a predatory strategy for amassing or protecting political power. 

    Leaders of both parties should be ashamed of this deal.

     


    by Watt Childress on Thu, 12/16/2010 - 1:37am

    I'm not sure if your comment is addressed to me or to Stardust, so I'll just say that I lay the blame of everything under the sun on both politicians AND people.  :)  That was a joke.

    G'night, Watt.

     


    by LisB on Thu, 12/16/2010 - 1:54am

    Hey Stardust. I understand your reply was intended for AT, who has his own separate opinions. Yet in some ways I have to accept that parts of what you say apply to me.

    I understand your point about good debt/bad debt. I think about it as good spending/bad spending. Maybe good budget/bad budget would be an even better framing.

    It looks like many liberals assume that 1) America's spending priorities are already right; or 2) they're not right, but they can't be changed. And as a result of that assumption many liberals have conceded that the only way to get good spending is to raise taxes or go deeper into debt.

    I don't except either of those assumptions. I believe our budget priorities are riddled with politically-driven spending that benefits crony capitalists rather than taxpapers. And I believe we can do something about it, if progressives and conservatives learn to work together.

    A big if, sure. But no bigger than some of the other ifs raised in this thread.

    The first step is trying to re-establish dialogue. I'm working on that, and am grateful for your words of wisdom as I stumble forward. Thanks for mentioning David Stockman. I know he's not popular now on either the right or left. But he did at one time play reindeer games with those who pull the sleigh for the two Santa Claus theory. And he's come around to seeing that it doesn't fly.

    The theory may still win elections, unfortunately. But sooner or later, even die-hard partisans will realize it isn't sustainable to starve the beast while carving the beast.


    by Watt Childress on Wed, 12/15/2010 - 6:08pm

    I appreciate what you're trying to do at Redstate, Watt.  But when so many 'Liberal/Centrists' buy into the framing above, we are doomed.  They aren't going to come around without leadership making the case.  Austin Goolsbee's WhiteHouse.gov drawing board teaching the tax cut was taken apart as disingenuous (at best) by James Kwak. 

    http://baselinescenario.com/2010/12/10/who-wanted-what/

     'It looks like many liberals assume that 1) America's spending priorities are already right; or 2) they're not right, but they can't be changed. And as a result of that assumption many liberals have conceded that the only way to get good spending is to raise taxes or go deeper into debt."---If you're talking about the Prez and Congress, I think they really don't care what they're doing to us; if they opened their bloody eyes to the economic realities, they wouldn't buy the framing; they'd be out teaching people in front of the cameras how it really is.

    If the President cared about the economy, he wouldn't be letting the Fed and Geithner keep throwing money at Wall Street, he'd be making sure his fancy blue-ribbon commission would be investigating the big banks, not the small fry, and putting the fraudsters in prison, as in the S & L days.  You know why no one is lending or investing?  No one has any confidence in the balance sheets of the Big Banks, they hold so much toxic debt, and no one will tell how much!  Especially Geithner wants to keep it secret! 

    Once this deal was announced, the bond market tanked: they know what it's likely to do to the economy over the next couple years.  And today Moody's, the biggest ratings agency, responsible for the AAA ratings of some of the worst of the derivatives offered, reversed itself from its position of last week, and now says the deal may cause US bonds to lose their AAA rating.  Christ.  (And yes, arguments about the importance of that are shrill on either end of the spectrum, but still.)

    And Democrats are already signing letters in support of many of the Catfood Commissions recommendations.  "Leave no revenue stream untouched" has been said on the boards in abject misery and cynicism, and it's the truth.  The fact is, at the current rate of GDP growth, it's estimated (without more crises, of which there are plenty forecast) that it will take 13 years to get unemployment back to pre-meltdown levels.  And if the Big Banks continue on their merry way, more and more people will lose their houses, thus their only security.  Sorry.  I am so pissed.


    by we are stardust on Wed, 12/15/2010 - 6:51pm

    No need to apologize. So much of what you say here rings true to me. And with the absence of truth-telling in Washington, all we can do is keep ringing!

    Last time I checked, there was one recommend and no comments for this cross-post at RedState. Nothing was happening at FDL either. Don't know what that says, if anything. But I'll keep cross-posting little ditties in hopes of rebooting dialogue.


    by Watt Childress on Wed, 12/15/2010 - 7:23pm

    Star, the bond market has a mind of its own with lots of cross trends including investors seeing the economy picking up so sell bonds and buy stocks. As far as the Moodys blurb, this to my mind is part of a tacit financial community alarmist narrative designed to feed into the deficit reduction cum cut SS movement. Granted the "package" will be driving up the deficit so that feeds the hysteria. I agree that the tax package potentially puts SS in the cross hairs of deficit hawks. But much will depend upon Obama's and Democrats ability to differentiate the arguments. 

    As far as SS is concerned the hysteria to fix it now is unwarranted. There is no immediate problem. Orzag himself calculated that benefit payments now are 5% of GDP. Guess what he projected that ratio to be in 5050?. Would you believe 6% of GDP?. Wow, a 1% increase in a half century. Now that's a real problem--compared to the war machine, a voracious health care industry and a finance industry which is most likely headed for another crisis and bailout. As Rob Johnson pointed out in an article for the Roosevelt Institute, Social Security is not a whale, it's a minnow.

    Obama got himself, us, into a corner, I take that as a given. So the question now is how to get out. What's really needed is massive infrastructure spending and reform of the "oligopolies".I think this structural reform is going to be painfully slow.  I dislike it. In fact I am pissed. But not getting this old economy moving one more time and thus allowing Republicans and tea partiers to take the Presidency again is a worse outcome.  


    by Oxy Mora on Wed, 12/15/2010 - 11:44pm

    I'll have to read again tomorrow, Oxy.  Time for bed, and my brain is on Duh.  ;o)  Dylan Ratigan's campaign is interesting.  I'll find it tommorow.  Sleep well.  But Moody's has an agenda; Hess, I think?


    by we are stardust on Thu, 12/16/2010 - 12:06am

    Look, all I want to know is DO I GET A FRICKIN PONY OR NOT out of all of this?


    by Richard Day on Wed, 12/15/2010 - 2:08pm

    Where are you going to keep THAT??? Shoot for a 29" widescreen monitor and a new video card! (you won't be sorry; and it won't poop in your bedroom or anything)


    by kgb999 on Wed, 12/15/2010 - 2:36pm

    Obviously Richard, kgb has joined into a some coalition with Ponies? We Don't Need No Stinking Ponies (R) and shouldn't be trusted.*

    * I do from time to time forget which thread I'm on.


    by Elusive Trope on Wed, 12/15/2010 - 2:58pm

    Okay, okay....maybe a great big picture of a pony? Or one of them carnie ponies?

    Besides I already got one of those 8 year old 29" screens that weighs a thousand pounds, so there!!!


    by Richard Day on Wed, 12/15/2010 - 3:30pm

    We all get pony turds from this deal, as best as I can tell. And the dealmakers proffer it as evidence there's a pony in there somewhere.


    by Watt Childress on Wed, 12/15/2010 - 9:45pm

    Howard Dean, deficit hawk, agrees with you.


    by artappraiser on Wed, 12/15/2010 - 2:28pm

    When someone like Howard Dean is saying this:

    This is a short-term Washington fix," former DNC header Howard Dean declared on CBS's "Face the Nation." "It does nothing about this biggest long-term threat to America, which is the deficit. I don't hear Republicans or Democrats talking about the deficit. There is no pain in this agreement. This is the easy way out for everybody, much as everybody is complaining, hooting and hollering, this is an inside-the-beltway fuss and somebody needs to do something about the long-term problems to this country. It is not in this bill."

    "The thing that bothers me about it is we have yet to deal with the biggest problem that is facing this country, which is the size of the deficit, and nobody is doing anything about it," the former Vermont Governor added later. "It is easy to promise everybody tax cuts all the time. You have got to make some cuts if you are going to do that."

    It really hard to say that the atmosphere is conducive to talking about another huge stimulus package that will increase the deficit.


    by Elusive Trope on Wed, 12/15/2010 - 4:37pm

    Thanks for the link. I hadn't seen that. Go Dean.


    by Watt Childress on Wed, 12/15/2010 - 5:43pm

    Watt Childress,

    I have read the post and all the comments and I am not sure from all this whether you support tax cuts for the very rich or not. Do you?

    In the spirit of the dialogue you call for between liberals and conservatives, I have two other questions.

    Do you think the Federal government should be regulating the financial markets? After all, it is only the dimensions of that market that allow either one of the Santas you describe to drive their sleds.

    Do you think there should be a "progressive" tax structure where the wealthy pay a greater percentage of tax than less wealthy people?


    by moat on Wed, 12/15/2010 - 7:38pm

    Hey Moat,

    1) In 2001 Bush had a big press conference to announce his first round of tax cuts. The next day, as I recall, he quietly stepped behind closed doors and authorized a big hike in the federal debt limit. I do not support extending any of the Bush tax cuts unless leaders are prepared -- up front -- to say exactly where they're going to cut spending. They're not, so I'm against the extensions.

    2) I definitely believe in regulating the financial industry. Not window dressing, but real enforceable standards that prevent moral hazards among the money-lenders.

    3) Tiered tax structure? I can live with it. I've listened to lots of arguments between citizens of all stripes over their favorite forms of taxation. Methinks we need more detailed discussions about spending priorities.

    How 'bout you? What are your answers to your questions?


    by Watt Childress on Wed, 12/15/2010 - 8:13pm

    1) I would let the tax cuts on the top bracket expire immediately. I would let the middle group keep the present rate until (if) the recession is over because they will actually spend that money and act as a stimulus to a market exchanging fungible goods. I recognize that we cannot permit ever expanding debt but until we can evaluate what the value of leveraged assets are, what does that accumulation of borrowed money actually represent? For instance, if taxpayers bail out a bank, isn't that paying for a certain kind of debt? But since taxpayer money is being used to stop that super leveraged debt from shutting down the system, why is the money borrowed to do that suddenly real money that better be repaid or there will be hell to pay while the assets being saved are mysterious beings only understood by 142 people? In other words, there is a double standard being used that should be the first thing to be addressed.

    2) I agree with your #2 but think it has to happen before the issues in #1 can be based on the actual costs for what spending is being spent upon.

    3) I wouldn't mind a flatter tax on personal income if corporate taxes were more related to how much or little investment of their profits are used to develop infrastructure/enterprise. If a company wants to send all their dough to a financial instrument, fine. Let Uncle Sam get a meaty chunk before they start playing. If we are going to have people pay for the actual cost for things, what that cost is becomes the central question, not paying off borrowed money as a condition divorced from everything else that is going on.


    by moat on Wed, 12/15/2010 - 10:06pm

    That santa brings most of our tax dollars to the incredibly huge military budget to support to wars being fought over resource extraction is not exactly in the news either. Nor that multi national corporations don't pay their share of taxes.  The debate is always whether to leave the poor some crumbs or rip off the last blanket of the homeless man- never to take money from huge industrial polluting industries and redistribute the wealth to health and education or to stop global warming from destroying life as we know it.  We cannot look to the people who created this system to fix it- for most millionaire senators and representatives it works just fine.


    by Ginger (not verified) on Wed, 12/15/2010 - 8:47pm

    Word! Looks like it's up to us.


    by Watt Childress on Wed, 12/15/2010 - 8:58pm