Archive for August, 2011
There is a reason why the headline above is true; the Republicans are simply that bad.
Now it’s true that Obama has been much more successful than the Bush Administration. But any presidential administration in history is successful when compared to George W. Bush, even Herbert Hoover.
Obama could’ve and should’ve done much more, especially when the Democrats had large majorities in both houses of congress.
Rick Perry is another Bush, only worse. So are all the other candidates.
Where are the real leaders? Why do we always have to vote for the lesser evil? Where are the modern day FDR, Abraham Lincoln, Teddy Roosevelt, Thomas Jefferson and George Washington’s?
Why are we stuck with the lesser evils?
President Barack Obama on Monday tapped one of the nation’s top labor economists, Alan Krueger, to become the next chairman of the Council of Economic Advisers, a selection that underscores the president’s “urgent mission” to jump-start the economy.
Why is the selection of Krueger important? For one, the president decided he wanted to get reelected. So he selected Krueger because he isn’t known to be a former high level employee of Goldman Sachs or Citibank. The Princeton University professor also has performed legitimate research in the labor market. He discovered, for example, that raising the minimum wage of workers in the restaurant industry increases employment in that industry, most likely because it increases the demand for restaurant products. That is something, of course, that FDR knew way back in 1933. And Obama surely knew it last year and the year before, and a dozen years ago. But back in 2008, Obama instead chose to hire Goldman Sachs hacks as his economic advisers. Now that his job security is in jeopardy with the coming election, now that the only difference between Bush and Obama has been exposed (it takes the Republicans a few days more to get what they want under Obama than under Bush, as they continue to redistribute income from the middle class to the rich with Obama’s blessings) the president has decided to put on some working class window dressing so as to appear that he’s working on behalf of working people, which he isn’t, and which he has never intended to do.
“Alan brings a wealth of experience to the job. He’s one of the nation’s leading economists,” Obama said in White House Rose Garden as he introduced the Princeton economics professor, who from 2009 to 2010 served as the Treasury Department’s assistant secretary for economic policy and chief economist. “I have nothing but confidence in Alan as he takes on this important role in my economic team.”
Obama said he expects that Krueger will offer advice that is not driven by partisan politics, especially now that president cannot get any legislation passed without conceding to all of the Republican demands. “We need folks in Washington to make decisions based on what’s best for the country, not what’s best for any political party or special interest,” he said. Like he really expects to do that.
The nomination sets the tone for the administration’s jobs-focused fall, as the White House prepares to announce a major new jobs initiative after Labor Day. There are few prominent labor economists, and the president’s decision to pick one underscores the administration’s aims.
Obama emphasized that reviving the economy is his priority. “Next week, I will be laying out a series of steps that Congress can take immediately to put more money in the pockets of working families, middle-class families,” he said.
The president also pledged the federal government’s continued dedication to providing assistance to those who suffered damage in Hurricane Irene. “It’s going to take time to recover from a storm of this magnitude,” he said, especially in New England, where the storm set off major flooding.
If confirmed, Krueger would be Obama’s third CEA chairman, following Christina Romer and Austan Goolsbee, who left the White House this summer to return to his professorship at the University of Chicago.
Krueger, 50, arrived at Princeton in 1987, after finishing his Ph.D. at Harvard. Jointly appointed in the economics department and the Woodrow Wilson School of Public and International Affairs, Krueger has examined job growth, the effects of increases in the minimum wage and the long-term unemployed.
He spent a year-and-a-half in his previous Obama administration post, working on stimulus measures including the Cash for Clunkers program, Build America Bonds and the Hire America Act. He also served as chief economist at the Labor Department during part of the Clinton administration.
Treasury Secretary Timothy Geithner praised the selection of Krueger, saying he is “one of the most distinguished” people to serve as assistant secretary for economic policy. “Given his expertise in labor economics, he is precisely the right choice to lead the CEA at this moment in history.”
Geithner weighed in on the pick, a Treasury source told POLITICO.
“We obviously said we were strongly supportive of Alan based on his excellent work as the assistant secretary for economic policy here,” said a source familiar with the conversations between the White House and Treasury.
Krueger’s nomination must be confirmed by the Senate, but he’s already cleared that process once in recent years — for the Treasury post — suggesting that the administration has confidence he’ll be able to easily do so again.
Perhaps the president has finally come to his senses, but since he can’t get anything passed through congress, he probably it won’t hurt his attempts to enrich Wall Street at the expense of working people. However, it’s likely the selection of Krueger will make no difference to working folks. His selection at the worst should do no harm, like the president did when he selected Timothy Geither and Lawrence Summers.
Posted in Uncategorized, tagged Associated Press, Debt, Deficit, Recession, Republicans, Ronald Reagan, tax rates, tax revenues on Jam8000000amSun, 28 Aug 2011 10:44:18 +000011 10, 2010| Leave a Comment »
FACT CHECK: Recession Is Culprit in High US Debt
By THE ASSOCIATED PRESS
Published: August 20, 2011 at 3:33 AM ET
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WASHINGTON (AP) — It’s the loud and clear consensus of Republicans in Congress and on the presidential campaign trail: Runaway government spending is the problem, not taxes.
But the math isn’t so simple.
The number at the heart of the battle cry of the Republicans and their tea party allies — that federal spending has risen to an alarming 25 percent of the economy — is skewed by recession dynamics.
In recessions, federal spending always goes up and tax revenues go down. And the economy contracts in recessions, shrinking the gross domestic product, which is the total output of goods and services and the broadest measure of the economy’s health.
Republicans are calling for sweeping spending cuts and want to hold the line on taxes, even as the U.S. struggles through one of its slowest recoveries since the Great Depression. The jobless rate has been stuck for months at more than 9 percent. With the economy slowing again, the odds of a new recession seem to be increasing.
While spending’s share of the GDP might be at a post-World War II high, tax revenues have fallen to 14.4 percent of the index, the lowest since 1950.
This disparity between what comes in and what goes out plays into the Republican argument about runaway spending.
But it also reflects the mathematical reality that during recessions, tax revenues go down sharply because people and companies make less money and so pay less in taxes. Federal spending goes up, even before stimulus programs, with an increasing demand for government help from food stamps and unemployment compensation and other safety-net programs.
At the same time, the negative economic growth associated with recessions lowers the GDP number on the bottom of the equation, further boosting the ratio of spending to GDP.
Since 1970, federal spending has averaged just over 21 percent of GDP while tax revenues have averaged over 19 percent.
The last time since World War II that federal spending exceeded 23 percent of GDP was in 1982 and 1983, when it rose to 23.1 percent and 23.5 percent, respectively, during what was then called the worst recession since the Great Depression. A Republican, Ronald Reagan, was president, and he was hardly anyone’s idea of a tax-and-spend liberal.
Federal spending is even higher now as a percentage of GDP, but not by much — just between 1 and 2 percentage points. That reflects the fact that the most recent recession was far deeper than the 1981-82 downturn, which lasted 16 months.
Much of the present large gap between tax revenues and federal spending comes not from political decisions but from what happens to a nation’s finances during any deep recession, economists suggest.
But you wouldn’t know it from some of the recent campaign rhetoric. The Republican candidates all want to shrink government’s role by slashing spending and taxes, and repealing or suspending regulations.
—Former Massachusetts Gov. Mitt Romney asserted that, because of the rise of the ratio of government spending to GDP on President Barack Obama’s watch, “We’re inches away from no longer having a free economy.”
—Former Pennsylvania Sen. Rick Santorum: “We’re now at almost 25 percent (of GDP) … the problem is spending, not taxes.”
—Reps. Ron Paul of Texas and Michele Bachmann of Minnesota insisted they would never vote to raise the U.S. debt limit and they decried the rise in federal spending. The recent bipartisan debt deal, which includes a big spending-cut component, won the support of many tea party-aligned lawmakers, however.
—Texas Gov. Rick Perry said that Federal Reserve Chairman Ben Bernanke would commit a “treasonous” act if he “prints more money” before next November’s elections. “We would treat him pretty ugly down in Texas,” Perry told an Iowa audience. Economists generally credit Bernanke with helping save the nation’s financial system by stimulating it with a flood of new money.
Economist Bruce Bartlett, who worked in the administrations of both Reagan and President George H.W. Bush, said some of the statements by Republicans make him cringe. “And what sometimes makes me cringe more is the silence from their competitors.”
Bartlett includes the solid opposition to any tax increases from the entire GOP field, citing the recent debate when not a single Republican participant would agree to accept even a mix of $1 in new taxes for every $10 in spending cuts.
“It’s the cowardice of people who know they’re wrong when they say these things that disturbs me more than the fact that some people say crazy things,” Bartlett said. He said the Republicans were clearly playing to the party’s conservative base for the primary elections “but when you repeat these things, they tend to get solidified.”
He added, “The same is true in both parties. It’s just that there’s no primary race on the Democratic side.”
The intense focus by Republicans and some conservative Democrats on cutting spending to reduce the national debt, now at nearly $14.5 trillion, helped put deficit reduction high on the priority list for both parties.
But polls continue to show that people are more concerned about the lack of jobs than they are the deficit. Nearly 15 million are jobless in the U.S.
Obama, now on vacation, plans a major speech on the economy after Congress returns in September, trying to emphasize jobs and help the poor and middle class, aides said. The plan is expected to contain a mix of tax cuts, construction projects and steps to help the long-term unemployed.
Even though the pace of recovery is painfully slow, any improvements in the jobs situation will help spur stronger economic growth, leading to more tax revenues and lower federal spending.
“If the economy starts to get better, then everything gets better,” said Democratic strategist Mark Mellman.
But it will be a slog.
As the recession that began in December 2007 intensified, federal spending increased from 20.7 percent of GDP in 2008 to 25.0 percent in 2009, according to figures compiled by the White House budget office. And while the recession was officially declared over in early summer 2009, overall federal spending was 23.8 percent of GDP last year and is projected to come in at 25.3 percent for 2011 amid fears of a new, or “double dip,” recession.
From Bloomberg News….
Billionaire Warren Buffett plans to hold a Sept. 30 fundraiser in New York City to benefit President Barack Obama’s re-election bid, according to two Democratic officials not authorized to speak publicly about the event.
The fundraiser, reported earlier by the New York Post, will also feature former Obama economic adviser Austan Goolsbee.
Obama, who is preparing for a post-Labor Day speech about his plans for stimulating the economy, spoke with Buffett Aug. 22 by phone from his vacation on Martha’s Vineyard as he works to gather ideas on how to boost job creation and spur growth.
The chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A) has been a longtime Obama supporter. He hosted an August 2007 fundraiser in Omaha, Nebraska, for Obama and has served as an informal economic adviser.
Obama has cited Buffett to counter critics of his policies, particularly on raising taxes for the nation’s wealthiest individuals and families. Buffett has called for higher taxes for wealthy Americans including himself.
During his bus tour last week through rural areas of Minnesota, Iowa and Illinois, Obama quoted from a New York Times opinion article in which Buffett wrote that the nation’s richest individuals have been “coddled long enough by a billionaire- friendly Congress.” Buffett argued for raising taxes for the “mega-rich” in the U.S.
Buffett has primarily supported Democratic candidates, including giving the maximum allowed by law during the 2008 campaign to both Obama and the Democratic National Committee.