Seven Big Economic Lies
Do tax cuts for the rich trickle down to the rest of us? And does taxing the rich hurt the economy? Is Social security a Ponzi scheme? Robert Reich, Secretary of Labor under President Bill Clinton, presents his list of seven popular-wisdom economic claims that are untrue. Feel free to debate.
Forgive the Debt of The 99 Percent?
“So my immodest proposal is simply this,” as posed by Alex Pareene on Salon.com:
Individuals and households in the bottom 99 percent who owe debt to any large financial institution that received federal government support during and after the 2008 crisis should see their debt forgiven. That would certainly stimulate the economy, as most people would suddenly find themselves with a great deal more money to spend on iPads (and food, and clothing, and housing, and healthcare). The debt can be forgiven by decree or if the government really wants to it can step in to pay it itself; I don’t much care either way. (Though it’d be nice to see it just wiped off the books, to enrage the banks.)
Let’s wipe the debt of the 99 percent off the books, tell the financial sector to eat it, and get on with our lives.
I’m by no means the first person to come…
Abolish Student Loan Debt?
Writing for the journal Reclamations, George Caffentzis wonders why there is no movement in the United States to abolish our increasingly oppressive system of institutionalized student loan debt:
Debt has had a crushing impact on the lives of those who must take student loans to finance their university education in the US. For tuition fees that have been so notoriously high in private universities now are rising in public universities so quickly they are far out-pacing inflation. Average loan debt per student in the US has been much higher than in Europe (with the exception of Sweden), though recent developments there would indicate that this gap may soon no longer exist (Usher).
We should also take into account the fraudulent way in which the loans have been administered by the banks and the vindictiveness with which those who have been unable to pay back have been pursued by collection agents. The most…
Where Does Debt Come From?
Via Naked Capitalism, a fascinating interview with economic anthropologist David Graeber about the history of debt over the last 5,000 years (and the oft-intertwined history of slavery):
Since antiquity the worst-case scenario that everyone felt would lead to total social breakdown was a major debt crisis; ordinary people would become so indebted to the top one or two percent of the population that they would start selling family members into slavery, or eventually, even themselves.
Well, what happened this time around? Instead of creating some sort of overarching institution to protect debtors, they create these grandiose, world-scale institutions like the IMF or S&P to protect creditors. They essentially declare (in defiance of all traditional economic logic) that no debtor should ever be allowed to default. Needless to say the result is catastrophic. We are experiencing something that to me, at least, looks exactly like what the ancients were most afraid of: a…
Protecting Their Prosperity
Aaron Cynic writes at Diatribe Media:
Even though the U.S. military spends more than 6 times that of our next competitor (China), the GOP is still pushing the narrative that any more cuts in spending to the Pentagon’s budget would be “disastrous” and spell “doomsday” for the military. The Hill reports House Armed Services Committee Chairman Buck McKeon (R-Calif) said he’d even be willing to support tax increases before more cuts to the military’s budget. Predictably, 13 freshmen Republicans on McKeon’s panel, many of which are Tea Party darlings, feel “enough is enough” and believe federal spending cuts need to come from entitlement programs.
McKeon said “It’s time to focus our fiscal restraint on the driver of our debt, not the protector of our prosperity.”
In addition to McKeon’s doomsday forecasting, Senator Saxby Chambliss (R-GA) also voiced concerns earlier this month regarding proposed defense spending cuts. In a letter to Defense Secretary Leon Panetta,…
Dylan Ratigan Blasts U.S. Political & Banking Ties and the Partisan Hacks’ Excuses (Video)
The Trouble With Too Much Democracy
Is America’s bigger problem the economic decline or it’s political decay? Andrew Potter writes in Axis of Logic:
The most telling moment of the recent standoff over talks to raise the American government’s debt ceiling came on July 22, when President Barack Obama called a press conference to announce that House Speaker John Boehner had backed out of the negotiations. “I’ve been left at the altar twice now,” Obama pouted. In case the image of the President as a jilted lover was not clear to everyone watching, he added that he had spent the previous day waiting for Boehner to return his phone calls.
The whole affair has left a lot of Americans in a state of bipartisan disgust, with citizens from all points on the political compass cursing out their elected representatives. Yet it doesn’t seem to have occurred to many people that there is something structurally flawed with a system…
The Kabuki Play On Capitol Hill Comes Right Before The Deal
Oh, the gnashing of the teeth. Oh, the flamboyant tactics. Oh, all the breaking news excitement on cable news as the debt ceiling countdown saga went down to the wire with an intense political confrontation of a kind we haven’t seen before…
Or maybe we had — in the TARP debate and so-called Obamacare vote, to cite but two moments of high political drama. Once again, all the key players knew the outcome but wanted to keep us guessing because it served everyone’s interests.
For Boehner and the boys on the GOP side it was the great leadership test subplot. He would prove how tough he was, demonstrate his leadership mettle, get equal time with the president, and even look presidential. The orange tan was gone. His moment had in the sunlight had come as he roped the Tea party kids into the politically correct corral. The Congressman from Ohio was now…
Putin Calls U.S. A ‘Parasite’ Over Its Debt
Just over its debt, Mr. Putin…? Richard Boudreux writes in the Wall Street Journal:
MOSCOW — Russian Prime Minister Vladimir Putin called the U.S. “a parasite” because of its huge debt load, evoking a term used by Soviet leaders to demonize people who didn’t work, study or serve the Communist state.
Russian Prime Minister Vladimir Putin, shown at a youth forum, on Monday labeled the U.S. ‘a parasite’ for its debt load. The term is steeped in Soviet rhetoric: Lenin invoked it after the 1917 revolution, and Stalin, himself denounced as a parasite by Trotsky, used the label against Jews, dissidents and others.
In a speech Monday, Mr. Putin said Russia and other countries should seek new reserve currencies to hedge against “a systemic malfunction” in the U.S. Both Russia and China in the past have questioned the dollar’s pre-eminence as a reserve currency and its role in international trade and investment.
Russia keeps…
Hardliners in Debt Talks Have Debt Problems of Their Own
Republican Senator Mike Lee of Utah.
So only a crackpot would question hypocrisy? Looks like the Tea Party is projecting a bit. CNN reports:
They’re hard-charging, compromise-damning members of Congress, and they’ve changed the debate in Washington over the size and spending of the government.
In recent days, Republican hard-liners in the debt ceiling talks have been vociferous in their rhetoric.
At a tea party rally, Sen. Mike Lee of Utah said his faction needs to push forward a balanced budget amendment and other measures “… in order to save our country from a Congress that for decades has been burying our children and our grandchildren, both born and unborn, under a mountain of debt.”
But according to recently released disclosure forms, Lee and others in his caucus have some significant personal debt of their own.
The documents — annual personal financial disclosure forms that were released in June — show that Lee had amassed at least…
Is Apple Holding More Cash Than The U.S.?
Photo: TheIronLion
Do US companies have more money than the US government? Recent financial figures show that Apple does. Via BBC News:
Apple now has more cash to spend than the United States government.
Latest figures from the US Treasury Department show that the country has an operating cash balance of $73.7bn (£45.3bn).
Apple’s most recent financial results put its reserves at $76.4bn (£46.9bn).
The US House of Representatives is due to vote on a bill to raise the country’s debt ceiling, allowing it to borrow more money to cover spending commitments.
If it fails to extend the current limit of $14.3 trillion (£8.7tn) dollars, the federal government could find itself struggling to make payments, and risks the loss of its AAA credit rating.
[Continues at BBC News]
Dooming Ourselves Deeper Into Debt
Aaron Cynic writes at Diatribe Media:
The showdown over the budget and the debt ceiling continues to drag on and Congress is still attempting to cut spending down to nothing but defense, tax breaks for the wealthy and their own salaries. While politicians continue to rail against taxes and spending and the media hypes the “gang of six”, it seems that we’re quietly moving past an interesting historical marker. Ten years ago, former President George W. Bush signed the first round of tax cuts and the Treasury Department began to borrow billions in order to pay for them.
Think Progress reports that on August 1, 2001, the AP ran a story on the Treasury announcing its intent to borrow $51 billion to cover the tax rebate checks handed out by the Bush Administration. In addition, the article highlighted the Democratic argument against the Bush tax cuts: “Democrats argued that President Bush’s $1.35 trillion…
Austerity For Everyone, Except The Defense Industry
Aaron Cynic writes at Diatribe Media:
While Congress and the President fight it out over the debt ceiling and all of America quietly shudders over whether our economy will completely default on itself, at least one industry still hums along without a care in the world.
Amidst a fiscal crisis of apparently apocalyptic proportions, where the GOP demands dollar for dollar spending cuts from the budget in order to raise our debt limit, the Pentagon asked Congress for $264 million to cover part of a $771 million overrun on the F-35 program. The Hill reports Republican Senator John McCain let the news slip via Twitter, saying “Congress notified that first F-35 jets have cost overruns of $771M. Outrageous! Pentagon asking for $264M down payment now. Disgraceful.”
Leaders of the program Lockheed Martin spat back on Twitter, contending “The F-35 team is focused on reducing costs of the jets and is showing significant improvement in…
Durban South Africa, Friday Night at The Movies: We Can’t Escape The Tensions Around Us
Soweto. Photo: Michael Toft Schmidt (CC)
It’s Friday night, and the motorways are packed with cars heading for the mall. Here in Durban, the Gateway Mall is the destination of choice. It’s huge, the biggest of its kind in the Southern Hemisphere. It’s stuffed with stuff, much of it upscale, calling itself a “theater of shopping.” (It is actually built over what was once a dump.) The parking lots are packed with late model cars, many of them high end.
I have to confess, I was invited there to see America’s latest high culture import, the 3D version of the movie Transformers 3, based on a toy and cartoon, in a modern movie complex with 18 theaters and rows and rows of packed gates where you line up for endless popcorn and soft drinks.
Business was booming; the theater was full. Most of the crowd seemed to be whites and Indians but there…
Do You Smell The Chum?
Well, this past Tuesday certainly was freaky. In case you hadn’t noticed it, a massive disturbance rippled through the Force with enough power to knock the shoes off of anyone paying attention. It’s unclear to me precisely what it all adds up to, but I suspect that the universe just passed through a Paradox Inflection. Just possibly the forces of Right Wing Corporatist Perversion have actually begun to turn on themselves. Here’s just three examples of what I mean:
1. Rupert Murdoch retreats on his big to monopolize Britain’s largest satellite service BSkyB. In the wake of the recent phone hacking scandal where person’s in the employee of Murdoch’s flagship publication News of the World was forced to close up shop for illegally eavesdropping on the survivors of terrorist attacks and bribing police officials. Many initial reports saw that as a savvy move to divert attention from Murdoch’s attempt to acquire…
Video: President Obama Says It’s ‘Time To Be A Dick’ (Parody)
With news of President Obama’s frustration with the debt talks, here is a parody from Funny or Die of what Obama may really want to say. As he said about the debt talks:
“I have reached the point where I say enough,” and added “I’ve reached my limit. This may bring my presidency down, but I will not yield on this,” according to the Republican aide. After leaving the debt talks, Obama said this confirms the totality of what the American people already believe” about Washington politicians who are “too focused on positioning and political posturing.” (RawStory)
Senator Orrin Hatch To Poor: Do More For The Rich
Aaron Cynic writes at Diatribe Media:
According to Senator Orrin Hatch (R-Utah), the poor and middle class aren’t doing enough to share the economic burden in America. In a speech on the Senate floor, the 77 year old Republican, whose net worth is estimated from $2 to $5 million and takes in a $174,000 per year salary from the Senate, said that the poor “need to share some of the responsibility” of the deficit, and that he preferred the Republican approach of “shared prosperity.”
Hatch went on to say that “51 percent of wage earners, of all households, do not pay income taxes.” He attempted to clarify a few sentences later, saying that payroll taxes were the same thing as social security taxes.
Senator Hatch appears deeply out of touch with exactly what “poor” people endure and where most of the federal budget goes. The richest Americans Hatch felt the need to so quickly defend…
