Deficit reduction - the utter meaninglessness of

Yes, surveys say that people are concerned about reducing the deficit, but a close examination shows that this concern is hugely overstated and very few of those who claim to be concerned about deficits really have much of a clue as to what they're talking about. Where the level of the deficit actually is and how much people express concern about it are not at all correlated. People get concerned about it when politicians make noise about it. Period.

Link to flyer on Cat Food Commission. Two important points made on the flyer: There's really no evidence that the Commission is actually concerned about the deficit and the Commission is really determined to see to it that progressive programs can't be carried out.

Personal taxes versus business taxes

Look, I understand that Bob Shieffer is getting on in years and is now a tired, weak fellow who can no longer think rapidly on his feet, but he got completely rolled by Senate Minority Leader Mitch McConnell here (Note that McConnell is still Minority Leader, the 2010 mid-term election did not result in the Republicans taking over the Senate).

McConnell kept speaking of small businesses and kept indirectly suggesting that small businesses would pay a bigger excise tax, i.e., a tax on things like:

• Environmental taxes.


• Communications and air transportation taxes.


• Fuel taxes.


• Tax on the first retail sale of heavy trucks, trailers, and tractors.


• Manufacturers taxes on the sale or use of a variety of different articles

In other words, taxes that have nothing to do with personal income. But the subject of Shieffer's interview was personal income taxes. Shieffer was talking about taxes on the income that people personally make, he was not talking about taxes on the money that a business makes.

Is there an overlap? Are there people who work in a small business who make over $250,000 a year? Yes, but it's a pretty small one. It refers to people like doctors who run small, specialized practices, investment people who don't employ a lot of other people, etc.

A mom-and-pop hardware store that pulls in over $250,000 a year is completely irrelevant to the Shieffer-McConnell discussion as most of that income goes right back into keeping up the inventory. The remainder that goes to the mom & dad team is usually in the $30,000 to $40,000, maybe the $50,000 range. It's only that latter amount that gets counted as personal income because a business takes in all of its money as business income. The owner pays him/herself by taking out a portion of that income and segregating it off as their personal salary. If the business does poorly, the owner doesn't get tot take anything out and hopefully, the owner has it in the business plan that there's enough cash on hand or investments that can be cashed out to keep going until business picks up.

Really?

A few months ago, I had a correspondence with a right-winger who earnestly informed me that Republicans were doing a grand job running individual states. Looking at how the governors of Wisconsin and Ohio are against high-speed rail, how the governor of New Jersey is opposed to a second rail tunnel from Manhattan and how Texas is now $25 billion in the hole, I'm not so sure he has a point about that.

Der Spiegel has a piece on the economic decline of America. Especially heartbreaking is the first picture, a large housing complex with only a few houses scattered here and there in it.

David Broder: Insane or Demented?

Nah, it's unfair to blame David Broder as though he were just a lone thinker and was not representative of "The Village" of Washington DC pundits. He should be seen as being a representative of what "The Village" thinks. First, let's look at the rather glaringly obvious solution that Broder so casually rejects:

The nation is suffering simultaneously from high and persistent unemployment, lagging investment, massive public and private debt, and a highly inefficient tax system.

The steps that have been ordered so far in Washington have done nothing more than put the brakes on the runaway decline. They have not spurred new growth.

I'm not so sure that the tax system has anything to do with anything, but if America solves the problem of "high and persistent unemployment," it's likely to be via the solving of the problem of "lagging investments." Debts, of course, will take care of themselves once the other two problems are taken care of.

So what's the problem with more stimulus? That second paragraph sure reads an awful lot to me like there simply wasn't enough of it. To the extent that stimulus was tried, it certainly did indeed work. So why doesn't Broder simply suggest that Republicans are the bad guys here and that Obama needs to step over them in order to fix the economy?  Because that would tramp all over the beloved conventional "wisdom" that all problems stem from a lack of bipartisanship. According to Broder and his "Villager" friends, he simply can't blame one side for any problem and the thought of stepping over an obstructionist political party would promptly cause him to retire to the fainting couch.

Hmm, what to do? What to do? A-ha! That's the answer! War wih Iran! The fact that the US is:

already involved in two wars, have been for close to an entire decade, and during that time have had the lowest economic growth since WWII.

is just one of those...well...annoying problems...that just...tsk...just gets in the way a lot.

What if the US were to start a war with Iran? As the "Baghdad has WMDs" skeptic back before the Iraq War began, Scott Ritter, pointed out back in 2006 that attacking Iran is an absolutely insane idea. It would resemble the Athenian attack on Syracuse in that it would probably result in the annihilation of our army in Iraq.  The Guardian examines Iran's military, anti-US role in Iraq. Relatively little has happened so far, but it's pretty clear that Iran could do a heck of a lot worse to US forces there. So no, Broder has not managed to "square the circle" or to find that edible bowl of porridge that's of course, always in the middle. To suggest attacking Iran demonstrates a mindless bloodlust that would reveal savagery, but is probably more indicative of a very sheltered and privileged life.

In either event, Broder is not the slightest bit concerned about the millions of casualties that would result. Nor, interestingly, does Broder show the slightest concern over his previous, very-strongly-expressed desire for a balanced budget. To suggest a war with Iran as a way to get the economy moving again is to show that Broder thinks Keynes was right. Of course, getting stimulus into the economy via military spending would be an effective strategy, but

If spending on war can provide jobs and lift the economy then so can spending on roads, weatherizing homes, or educating our kids.

Stimulus is stimulus, no matter how it's delivered. Is military spending a good stimulus? Not really. With US military contractors already busy, it's far from clear that opening up yet another front would improve the economy at all. There's also the problem that the US doesn't particularly want to re-start the draft, but counter-recruitment efforts are doing well and there's also no strong desire for regular citizens to sign up for a tour of duty in that area of the world. About the only strong incentive for young people to sign up for the military is the cruddy job market. If that ever improves, there's simply nothing in American culture that suggests an urge to run around the globe improving everybody elses' societies.

Worse set of prorities is hard to imagine

The Obama Administration seems to be convinced that deficit reduction is a worthwhile thing to do and that tax cuts are the only tool left in the bag that they're able to use. Of course, neither course of action is going to win any Republican cooperation. Republicans don't have any interest in cooperating or in governing, so a government shut-down is more or less guaranteed no matter what the administration does. It's just so sad to see our government give up on meaningful policy changes, especially when cooperation and making concessions has proven to be such an utter loser of a strategy.

Heck, Senate Minority Leader Mitch McConnell has admitted flat-out that:

"The single most important thing we want to achieve is for President Obama to be a one-term president."

Cat Food Commission admits irrelevance

So now, as it nears its final months, the Cat Food Commission admits that there's really no reason for it to exist in the first place. By suggesting they might put out separate reports and by, very predictably, suggesting that eliminating tax cuts are off the table, they're making clear what progressive critics have claimed all along. The commission is a complete joke in terms of actually accomplishing anything useful, but might possibly achieve its' less publicized goal of cutting spending on programs that the public likes, but that more elite institutions don't, i.e., Social Security.

Disband the damned commission and send everyone home!!! 

The utter impracticality of Tea Party ideas

Rock, meet hard place! Tea Partiers of South Carolina were convinced, convinced, I tell you!!! that earmarks were really, really, just awful and terrible and no good. That was before South Carolina's Republican leadership was confronted the possibility of getting a deepwater port for ships that would use a widened Panama Canal.

All of the sudden, the deeply-felt principles that "Spending is bad, earmarks are bad, taxes are bad" ran headlong into the fact that a deepwater port could bring lots and lots of money into South Carolina.  And gee, wow, amazingly enough, these principles were suddenly being treated as optional, as a "nice to have" sort of thing and not as a critical, mandatory element of a new economy.

The Tea Party folks are having a bit of trouble reconciling their philosophy with the real world.