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Krugman Calls Obama’s ‘Surrender’ a ‘Catastrophe on Multiple Levels’

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Posted on Aug 1, 2011
U.S. Navy / Gus Pasquarella

Here’s one way to feel worse about the debt ceiling deal announced by the president Sunday night: Read Paul Krugman’s column. The Nobel Prize-winning economist is about as harsh in his assessment of the deal as can be, saying it “will take America a long way down the road to banana-republic status.”

(Thanks to Matthew T. for sending this in.)

Paul Krugman in The New York Times:

A deal to raise the federal debt ceiling is in the works. If it goes through, many commentators will declare that disaster was avoided. But they will be wrong.

For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

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Anarcissie's avatar

By Anarcissie, August 7, 2011 at 5:53 pm Link to this comment

The S&P downgrade is a clown show.  And Mr. O is not an enigma.

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By Cliff Carson, August 7, 2011 at 1:14 pm Link to this comment

Michael Z

I agree with you with one exception:  I say H is the correct answer.  My reasoning:

All of the “usual suspects” co-conspired to form the charade of Governance against those who would destroy the Economy, when the fact seems to be that all of them wanted to profit from a badly needed correction.

They all play their roles perfectly meaning they are all guilty, and their plan to confuse the “marks” so that they would quarrel among themselves and never identify the fact the neither the Republican Party nor the Democrat Party serves the interest of the common people.  You may have noticed that the richest 1% are going through this correction with record profits, even getting the “marks” to bail them out of their supposed misery.

As to the Tea Party, the avatar for that nefarious bunch is “Koch Brothers” along with “Crossroads” , organizations both about a mile to the right of the old Conservative GOP.

These two organizations started by the Koch Brothers and Carl Rove believe in the “Let them eat cake” mentality.  They are despicable people.

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By michael z, August 7, 2011 at 10:38 am Link to this comment
(Unregistered commenter)

(CONTINUED….................)

President Obama appears to be another enigma.
His political rhetoric of “change” appeared to offer hope to the People.
Unfortunately, his actions have decried his rhetoric.
There are many examples, but the most remarkable was that he signed the extension of the Bush 2001 tax legislation on December 17, 2010.  He offered that although he was against this action, he was forced into doing this because the Republicans were holding “hostages”.  That did not appear to reflect the characteristic of a strong and rational President.
I suggest that we go back to 2008, as Senator Obama was running for the nomination to run for the Presidency.  Part of his campaign included that he would reverse the Bush tax cuts.
After he was elected, he said he would allow those tax cuts to “sunset”.
The House could have passed the legislation to extend the cuts for those with taxable incomes less than of $250,000 prior to the November 2010 elections.  It did not do so.  Why?  It would have been the correct action to take and would have been politically brilliant, which could have eliminated or mitigated the losses suffered by the Democrats, during that election.
The reason must have been substantial for the Democrats to have committed hara-kiri

Had President Obama not signed the December 17 legislation, allowing the 2001 tax legislation to continue for those with taxable incomes in excess of $250,000, the probability is pretty close to 100% that S&P would not have downgraded federal debt.

Oops!  Does that mean that H was not the correct answer? 
H is a good answer, but E is the best answer for the action taken by S&P.

mz
August 6, 2011

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By michael z, August 7, 2011 at 10:34 am Link to this comment
(Unregistered commenter)

Who is responsible for Standard & Poor’s downgrading of federal debt from AAA to AA+?

Candidates:
A.  The Tea Party
B.  The Republicans
C.  The Democrats
D.  President Bush
E.  President Obama
F.  Previous Presidents
G.  Congress
H.  All of the above

A simple question deserves a simple answer, which is, obviously, H.

The Tea Party is a logical outgrowth of the economic and political malaise we suffered through during the Bush Administration, with the Obama Administration providing the frosting of the impetus to the Tea Party’s explosion into the political arena.
The members of the Tea Party found themselves “mad as hell” and felt they had to do something.
The Democrats should have realized this and should have offered to discuss the grievances and frustrations with the Tea Party leadership.

The Republicans appear to have a number of axes to grind, none of which is beneficial to the People.
In fact, if the collective goals of the Republicans and the Tea Party (usurped by the Republicans, which was, politically, brilliant) were agreed to, it would have been National suicide, which should force one to conclude that they couldn’t have been serious, i.e., as with any negotiations, their inane demands were a subterfuge used to employ the old “bait and switch” concept.

The Democrats appear to represent a classic enigma.  They appear to be inept, but that could be an intentional cloak of confusion.  I could suggest that they appear to be weird, but that is, at best, an ambiguous characterization. 
Why didn’t the Democrats, when they possessed the House of Representatives, the Senate, and the Presidency, raise the debt limit?
Why, during the same period of ownership, did they not pass the “limited” extension of the Bush 2001 tax legislation, prior to the November 2010 elections? 
Why didn’t they pass the “single-payer” payment system regarding medical expenditures?
Something appears to be very “interesting”.

President Bush appears to have had two major goals for his Administration, reduction of tax rates and the invasion of Iraq (hint: PNAC).
Although it appears that the Bush Administration was the single worst in our Nation’s history, it was, perhaps, the most successful in accomplishing its goals. 
The annual federal deficits exploded during the Bush years.
The most fascinating and “telling” phenomenon was Alan Greenspan telling the Senate’s Committee on the Budget on January 25, 2001, that his number one concern was the problem we would face once the federal debt was extinguished due to the projected “burgeoning” federal surpluses!
http://www.federalreserve.gov/boarddocs/testimony/2001/20010125/default.htm
I refuse to believe that his “script” was authored by a comedic mind.
His “script” included the comment that rather than increase federal spending to forestall the elimination of the federal debt, Congress should legislate tax decreases.  This information should appear to be extremely interesting to all.

(CONTINUED…...........)

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By Litl Bludot, August 7, 2011 at 12:54 am Link to this comment

Anarcissie

Here’s the problem.  Parasites are not wise.  They just live off their hosts.  There
are those that are commensal, that is they are benign.  There are some that are
symbiotic, those that give as much or more than they take. 

And then, we come to the parasitoid parasites.  They are the ones that kill their
hosts.  Here we are talking about various deadly organisms, such as malaria, the
AIDS virus, and of course, the cause of unprecentented disease, suffering, death and
destruction, the premier parasitoid on the planet (causing its imminent demise)
the fascist corporate capitalist.  It’s current chief vector is the most highly evolved
parasitoid to date, the chief vector for fascist corporate parasitoids, power pimp
Obama.

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By Anarcissie, August 6, 2011 at 5:02 pm Link to this comment

The wise parasite does not destroy its host.

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By Cliff Carson, August 6, 2011 at 3:23 pm Link to this comment

Ardee

You certainly are correct.  My apologies.

Anarcissie, I must disagree…....

I just think that the Ruling Bunch are smart enough to avoid the disaster they brought to us common folk.

I believe it no accident that they have made Financial policies and managed our Money supply, in a manner that has drained wealth from our Nation as a whole, but you may confuse our elected leaders with those who run our Government.

Being a Conspiracy Theorist, I go back and again point a finger at an International Financial Cabal that every day, including today, and for over almost the the entire life of our Country, have had control of our Financial policies and Money supply.  Some of them are Americans, others are not.

This bunch has wreaked havoc across the world in Nations other than ours, although they have raided ours previously on occasion, always the mission being to guide the Worlds wealth to their control.


They have been extremely successful.

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By ardee, August 6, 2011 at 8:53 am Link to this comment

Cliff Carson, August 6 at 7:36 am Link to this comment

Ardee

I must disagree with your statement that the Ruling Class is bad at Business Management.

I must disagree with your assignation of that statement to me. Look again.

Anarcissie Business management is where you find it. From the standpoint of making huge profits I find the “ruling class” rather adept indeed. Managing to take advantage of lower wages, nonexistent benefits, less restrictions in areas of plant safety, environmental protections et al I find that they are indeed “adept” by moving their businesses off shore.

This sort of business behavior is the epitome of “good capitalist behaviors”. This being the natural path of unregulated capitalism, the expected norm in fact, is precisely why government MUST regulate in order to protect the economy, the environment, the working class, the nation.

We see almost our entire manufacturing base disappearing into third world nations, we see billions of dollars held overseas in order to avoid taxation, and the result is chaos indeed. If we had a government dedicated to serving this nation and its people solutions to such would manifest themselves rather quickly I believe.

I prefer to believe that these events signal the death throes of capitalism itself, as it is, at heart, a self destructive economic practice. But these throes will bring much chaos, much suffering and almost universal hardships to all but the top 1%. That is why I seek solutions rather than sit back expecting socialism to arise from the ashes.

I do not expect, in my own lifetime, to see even the hope of such occurring. But my responsibility to my nation, my descendants as well, seems clear to me. Thus I work to bring third party influence to bear in making the changes necessary to , if not avert, then at least lessen the coming impact.

I got no choice, really.

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By Anarcissie, August 6, 2011 at 7:55 am Link to this comment

Cliff—you’re talking about politics and marketing.  The American ruling class has not done well at managing the American economy.  There was no good reason from their point of view to destroy it the way they did; it was just easier to let it go to ruin than to exert intelligence and self-discipline to preserve it.

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By Cliff Carson, August 6, 2011 at 7:36 am Link to this comment

Ardee

I must disagree with your statement that the Ruling Class is bad at Business Management.

I think they get exactly what they plan to get and this is a measure of a good business plan.

The plan has been to move an increasing % of the Wealth to the Few ( themselves).  At this they have been a roaring success.
As a desired by product they have conned the people into blaming the victims.

How more successful can you be when this is what you planned for?

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By Anarcissie, August 6, 2011 at 7:07 am Link to this comment

ardee—There has been a broader mismanagement of the economy than mere deregulation.  The housing bubble was driven by credit inflation, the main mechanism of which were interest rates abnormally depressed by the Fed.  The credit inflation was necessary to keep the economy going in the face of many years of trade deficits, capital flight, imperial expansionism, and the disutility which results from moving wealth from the poor to the rich.  Our ruling class is good at politics, good at marketing, bad at business management.

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By ardee, August 5, 2011 at 9:27 pm Link to this comment

Some seem hell bent to blame the hen for the foxes deprivations. With over one million homes foreclosed upon, with another two million homes in the process of foreclosure, it seems a bit unrealistic to call them all speculators and greedy.

Not only does this seem wrong to me, it seems to be an attempt, however involuntary, to whitewash the responsible parties, the financial community and the banks who offered mortgages and then bet against them.

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By Rixar13, August 5, 2011 at 11:28 am Link to this comment

“Paul Krugman’s column. The Nobel Prize-winning economist is about as harsh in his assessment of the deal as can be, saying it “will take America a long way down the road to banana-republic status.”

Republicans and Tea-Baggies forced the Presidents hand… sigh

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By DaveZx3, August 4, 2011 at 5:52 am Link to this comment

I still have a ChFC designation, so hopefully, I remembered something. 

The creation of the CDO and CDS was made possible for the most part because of the intense greed surrounding the housing market.  This greed was evidenced in all quarters, not just financial institutions.

The ensuing housing bubble was caused by the ignorantly held notion that housing prices would continue to go up forever, and that owning a house or investing in some segment of the housing market was the free ticket into at least the middle class, if not untold riches.  It was similar to the attitude many had of the stock market in the late 90’s as I recall. 

Everybody scrambled to get on board, and Fannie and Freddie made it possible for those without jobs, or down payments, or good credit, etc, etc, to join the band wagon.  People were using home equity to finance outlandish dreams, while driving themselves deeper and deeper into debt, but expecintg continued home equity to create wealth out of thin air to pay it off. 

When the economy started to slide, due to a myriad of forces, globalization, NAFTA, Chinese ascension, middle east wars, deficits, outrageous debt (private and public) among others, the housing bubble was ripe for popping.   

If the economy could have kept growing, with full employment, theoretically, the housing bubble and all its derivatives could still be with us generating wealth for all.

In some respects, CDO’s are no more evil than Mutual Funds, as the packaging of financial instruments for the purpose of selling them to investors.  If the stock market crashes and mutual funds become worthless, can we blame the mutual fund for the crash?  Or was it some other factor which destroyed the basis of value of the mutual fund that is the cause? 

But in the end, greed on the part of EVERYONE, drives all systems into a bubble at some point, and when reality strikes, the bubble bursts.  Not really a mystery. 

Your problem is that for political purposes you want to attach greed only to your political adversaries.  But honest people will freely admit that the greed which caused the housing bubble was near universal, with risky financial instruments being only one part.

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Lafayette's avatar

By Lafayette, August 4, 2011 at 12:40 am Link to this comment

HISTORIC MYOPIA

RL: As it turns out, this is a very naive statement, but it is the accepted party line.

YOU are the naive one.

If one looks at the economic history of the US just before the Stock Market Crash of 1929 and the Great Depression of the 1930s the parallels with the Credit Mechanism Seizure of 2008 and the Great Recession of 2009 are patently obvious.

We refused to learn from the history of our previous errors.

Because of that refusal, we became hell bent collectively on making a FastBuck (like flipping condos in three months make a quick killing) and spending it with frenzied abandon fired by cheap-money. We are now paying the price of that thoughtlessness.

You, RL, are suffering from Historic Myopia. We are to blame for what happened. Stop pointing the finger at others - let’s all look in the damn mirror.

Who elected these Tea Party scoundrels? We, the sheeple. So we are responsible for the mess in DC. Let us assume the responsibility that is ours rather than reflecting it upon others, who knew greedily to profit from our own naiveness.

MY POINT

Want to reform America? Then lend yourself to that effort (by means of furthering a Progressive Agenda) rather than blathering-in-a-blog.

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By RayLan, August 3, 2011 at 6:30 pm Link to this comment

@DaveZx3
“As it turns out, this is a very naive statement, but it is the accepted party line. “
You’ve got it backwards - the party line is that it is the deficit that caused the economy to tank, which is not only false it is financially stupid.
There is nothing naive or simplistic about pointing to the toxic mortgage bonds that blew up the speculative bubble. It was hardly a ‘simple’ nor simplisctic process. Do you know what a CDO is? The you know what a CDS is?
You just have to have the most elementary knowledge of the finance and finance industry practices to understand that the economy busted because of the bubble. I work for a capital asset management company and you obviously don’t know what you are talking about.
Hold tight to your denial.

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By DaveZx3, August 3, 2011 at 11:30 am Link to this comment

By RayLan, August 3 at 4:17 am

“THE ECONOMY TANKED BECAUSE OF THE HOUSING BUBBLE - that was caused by unethical practices by big financial corporations like Goldman Sachs. If the government had not bailed out the banks, we would be in a serious depression comparable only to The Great Depression.”
——————————————

As it turns out, this is a very naive statement, but it is the accepted party line. 

People who understand how the Federal Reserve works know why the Fed had to funnel trillions back to the central banks by diverting the cash through the Federal Government first and calling it Qualitative Easing.  This is the excuse given to the people by the government to divert attention from the fed’s rewarding the banks for their work on behalf of the Fed, while chalking the cash transfer up to government debt, and having the citizens be on the hook for it.  It was simply redistribution of wealth from the taxpayers up to the uber wealthy to cover the mistakes made by the wealthy in pursuing Fed policy. 

If the fed wants to bail out its member banks, it does not have to create a government debt first.  The Fed is a private bank, with unconstitutional but otherwise absolute authority to print American dollars.  They do not allow audits, so no one actually knows how much cash they print and for what reasons.  Ron Paul has been trying to audit them for years. 

The cause of the housing bubble was primarily putting far too many people who had no ability to pay into mortgages, thus creating artificial demand for housing and inflated prices.  The fact that other financial giants bundled these bad loans as derivatives and sold them to unsuspecting investors was a double whammy, but not primary cause.  If the bad loans had not been made, no derivatives could have been bundled.

You are fair too naive, Raylan, taking your elected officials word as truth.  You might realize someday, that most of what they are telling you is just to cover their butts.

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By truedigger3, August 3, 2011 at 11:19 am Link to this comment

Re: By Lafayette, August 3 at 10:21 am ,

Lafayette,

I understand Social Security very well.  What you wrote is meaningless obfuscating bullshit whose only purpose is to confuse, mislead and not to inform.
You ask me to take a course in accounting 101.!!
Nobody needs a course in accounting to understand SS, buster. Here you are trying to scare people of trying to understand SS.
How about you taking a course in ethics and good citizenship ass hole TROLL.!!

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By Shenonymous, August 3, 2011 at 11:00 am Link to this comment

as long as they use the UI period to either learn a new trade or do
benevolent work.
”  If and only if there are apprenticeships or jobs
that are easily transitioned into by the limited skilled available, which
in reality are far and few between, so reality check instead of fact-
checkno solutions coming from that suggestion, and “benevolent
work” means work your ass off for free.  Ask your f’n politicians to
work for free why don’t you and save the American budget a treasury. 
I’m not using the word you in a personal sense but in the collective
sense.  But please do tell exactly what was the puerile conduct of the
Democrat side of the aisle?  Holding fast to their policy of expecting
revenue to share the pain?  I see.

It is quite likely time for National Renewal of its Political Class. That
will take at least two elections,...
”  Try at least two generations.

Sorry, if I sound very cranky today, it is because there were too many
one-sided compromises yielded to the avaricious Republicans and too
many troll assholes on Truthdig making me wonder if the two groups are
related.

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Lafayette's avatar

By Lafayette, August 3, 2011 at 10:21 am Link to this comment

COMEUPPANCE

You know damn well, that Social Security expenditures are coming out from SS FICA taxes and that Social Security until the year 2018 will be ADDING revenues to the Federal Budget.

Yes, so but so what? We extended UI allocation periods and with higher unemployment SS is also contributing to budget outlays. Nobody doubts that SS is performing as it should and does not merit any reductions.

The people (in and outside the US) who hold the debt don’t give a damn about each component of it. They are just concerned about the total debt and America’s ability to repay it.

MY POINTS

* I’m all for maintaining UI for people put out of a job by structural factors as long as they use the UI period to either learn a new trade or do benevolent work.
* America’s economy is amazingly flexible. Those un- and semi-skilled jobs that left for the Far East (and are NOT coming back) will be replaced by Service Industry jobs. Thus getting people off UI (net budget debit) and onto a payroll (net budget credit).
* It is up to the Executive to manage the budget - which he is unable to do given that the majority party in the HofR is playing stupid games in preparation for elections next year.

But as regards this childish Debt Ceiling charade, comeuppance is in the air. Politicians on both sides of the aisle are on the razor-edge for their puerile conduct - and the fact that the American public feels that they have been Bought By Business Interests.

It is quite likely time for National Renewal of its Political Class. That will take at least two elections, so the sooner we get started the sooner it is done.

tg3: You can take your charts and shove it.

Brilliant response! So well reasoned. 

Go take a course in Accounting 101 ...

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By RayLan, August 3, 2011 at 4:17 am Link to this comment

“Indeed, slashing spending while the economy is depressed won’t even help the budget situation much, and might well make it worse. On one side, interest rates on federal borrowing are currently very low, so spending cuts now will do little to reduce future interest costs”
I knew that - you don’t have to be an award-winning economist to figure it out. What scares me down to my socks is how profoundly stupid so many voting Americans are in buying all the deficit bull - that the economy is tanking because of government spending- FALSE. The economy tanked because of the housing bubble - I repeat THE ECONOMY TANKED BECAUSE OF THE HOUSING BUBBLE - that was caused by unethical practices by big financial corporations like Goldman Sachs. If the government had not bailed out the banks, we would be in a serious depression comparable only to The Great Depression.

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By truedigger3, August 3, 2011 at 1:04 am Link to this comment

Re: By Lafayette, August 3 at 12:38 am

Lafayette,

What a lying obfusacating TROLL you are.
You know damn well, that Social Security expenditures are coming out from SS FICA taxes and that Social Security until the year 2018 will be ADDING revenues to the Federal Budget.
You can take your charts and shove it.

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Lafayette's avatar

By Lafayette, August 3, 2011 at 12:38 am Link to this comment

A PICTURE IS WORTH A THOUSAND WORDS

tg3: But Social Security monthly payments are not budget expenditure.

Let’s look at both the Spending and Receipts breakdown of the National Budget:
* Here is the national budget Spending breakdown Pie Chart. And
* Here  is the budget’s Receipts Pie.

Now, what is the point you want to make about deficits? What’s the Green Portion on the first Pie Chart above? That is not Social Security expenditures?

Explain yourself in terms of Receipts and Spending as indicated in the Pie Charts.

POST SCRIPTUM

And what do we see sticking out like a sore thumb in the Spending Pie? That blue portion, which represents the DoD budget. Look at its size with respect to the rest of the pie.

Is that part, to your mind, the right proportion? Or would you rather, like me, label that portion “M-I-C Welfare”? We can see all too well from where the cuts must come.

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By Shenonymous, August 2, 2011 at 2:16 pm Link to this comment

Some are for progs some are not.  The world goes round and round
oo oo oo…ooo oo oo ooo!  Yeah, let’s hear it more for the 1%ers
and down with the 99%ers!  Yayyyy!  Hiss boom bah, down with the
liberals! up with the shithead conservatives.  Yayyyy! 

Okay, now what? Invest in Chinese herbal medication for constipation? 
You makada beeeg monie!

You better damn well believe I will vote for Obama holding my nose but
still vote to stop any Republican massacre of ordinary Americans.  I’d
druther have a different Democrat, or Independent like Bernie Sanders,
who would fill Republicans with absolute horror given his socialism,
hahaha, or even Howard Dean who is more progressive than
progressives, but ahs and weez knows that ain’t gonna happen.  We
poor bastard liberals are stuck with Obama. Look at it this way.  It’s only
four more years.  And all the crap that happened these four can be
overturned with the new Democratic Congress that will come prancing in
November 2012.  Just watch the carnage.  For those who love to watch a
bloodbath, get out your popcorn and beer.

I know I know, inflation does make it look like money disappears but you
still have the printed paper.  I do like DaveyZ’s vanishing ink solution.  It
is so creative,... or rather uncreative.

DaveZx3, August 2 at 11:38 am, I had to belly laugh at your second
sentence.  I don’t really care what is Christian or anti-Christian.  And
since I have no gods nor have one in my providence, I still save up,
for that rainy day (you know, when nature is hostile, which it always is to
human beings, and anything else that is living).  And mannnn I do work
hard, no one works harder except a miner in a coal mine 32 miles below
the surface of the earth.  Don’t believe that!  But I do work hard.  Now
what do you mean by spending?  Like would you make a self-made
millionaire spend a million, like when and on what?  Certainly not on
M&Ms; or even a Blackberry?  It ain’t that easy to spend a million.  Have
you tried it lately?  I think the dollars will get ahead of you and you will
accumulate it whether you want to or not.  I just don’ think it would work
as good as disappearing ink!

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By Cliff Carson, August 2, 2011 at 2:12 pm Link to this comment

Lafayette

So there is no misunderstanding, you are ignoring the fact that Congress stole $2.5 Trillion dollars from the Piggy Bank of the Social Security fund.

And in so doing you are defending Factcheck in their claiming that the Social security fund is bankrupt while failing to mention that it was Congress that stole the money and bankrupted the fund.

That Congress ( the criminals)had to borrow $95 Billion after cleaning out the fund, to pay the victims a pittance of .04% while the criminals kept the entire $2.5 Trillion stolen loot in their slush funds is not a pertinent fact? Could you not have observed that the $95 Billion was a minuscule payback of what Congress had stolen?

Do you think Factcheck doesn’t know this?  I’m sure you do.  And my money says Factceck knows it but chose not to reveal it. 

Further had you done your math as I did, you would have seen that a payback ( had you and they called it that)of $95 Billion annually is less than the banks would earn on yearly Interest at 6% on $2.5 Trillion ( $155 Billion)!  That means that at a payback of $95 Billion yearly the $2.5 Trillion principal would increase every year.  The criminals could keep their loot and borrow to pay back less than the Interest would earn, at that rate the fund would never be paid back.

It reminds me of a Mover and Shaker from my State who on being convicted of stealing more than a Million dollars from the public asked the Judge if he could pay the money back in order that he might get his good name back.  The Judge asked what his pay back plan would be and the 70 year old criminal offered a payback of $50 per month.

Lafayette, I’m losing confidence in your image.  Can’t you just admit that Factcheck made a horrendous blunder?  I call them liars by omission of a fact they knew.  And they call themselves Factcheck.  Shameful.

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By DaveZx3, August 2, 2011 at 2:07 pm Link to this comment

Capital would come straight from hell where it has always come from.  Just kidding.  I am not against capital.  Only the using of it as a tool to control the people. 

I’m not going to get cornered into debating any half-baked scheme such as taxing accumulations instead of incomes, because it was only a passing thought. 

Everyone has hair-brained ideas, but not all are stupid enough to post them, like I apparently am.

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By truedigger3, August 2, 2011 at 1:27 pm Link to this comment

Re: By Lafayette, August 2 at 8:28 am


Lafayette wrote about the Social Security monthly payment to retirees:

“Every budget expenditure “contributes to the debt”,

———————————————————-

Lafayette,

REALLY! NO KIDDING!!!!
But Social Security monthly payments are not budget expenditure. These payments are from the collected FICA taxes. Until 2018, the collected yearly FICA taxes exceed the yearly SS payment to retirees.
After 2018, the Social Security amnistration will start redeeming some of the Treasury Notes it has in its Trust Fund to cover the short fall between the collected FICA taxes and the payment to retirees.
You are proving beyond any shadow of doubt that you are a TROLL for Wall St. & Friends by insisting on such dumb obfuscation and bullshitting. Your level of knowledge is so good to make such statement in ignorance. You made such statement deliberately to mislead and bullshit your readers. SHAME ON YOU, LYING TROLL!!

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By truedigger3, August 2, 2011 at 1:12 pm Link to this comment

Re: By Lafayette, August 2 at 8:28 am


Lafayette wrote about the Social Security monthly payment to retirees:

“Every budget expenditure “contributes to the debt”,

—————————————————————-

Lafayette,

REALLY! NO KIDDING!!!!
But Social Security monthly payments are not budget expenditure. These payments are from the collected FICA taxes. Until 2018, the collected yearly FICA taxes exceed the yearly SS payment to retirees.
After 2018, the Social Security amnistration will start redeeming some of the Treasury Notes it has in its Trust Fund to cover the short fall between the collected FICA taxes and the payment to retirees.
You are proving beyond any shadow of doubt that you are a TROLL for Wall St. & Friends by insisting on such dumb obfuscation and bullshitting. Your level of knowledge is so good to make such statement in ignorance. You made such statement deliberately to mislead and bullshit your readers. SHAME ON YOU, LYING TROLL!!

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By Anarcissie, August 2, 2011 at 12:19 pm Link to this comment

So where would capital come from?

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By DaveZx3, August 2, 2011 at 11:38 am Link to this comment

Shenonymous,

You became speechless prematurely.  You didn’t give me the chance to add the kicker, which many would think even more absurd than “disappearing ink”. 

So my last post was just to establish the idea that accumulation, ie: having more than one needs and saving it, is not a virtue, even though it has been forever peddled as one.  It is in fact, anti-Christian, where it is taught, “take no thought for the morrow”, as I mentioned in the last post.  The assumption being that, if you claim God is your providence, why do you save up?  Don’t you trust Him to provide your “daily” bread?  Refer to the manna story.  Christ was anti-accumulation, and anti-rich.

But working hard should never be penalized, and the one who is willing to bust his butt and earn a million dollars should never be penalized for earning it by having a higher tax rate.  As long as he spends it, it is virtually the same as being taxed, as he reenters that cash into the marketplace to circulate and provide jobs and income to others. 

So if “Earning”  a lot of money can be seen as good, but “Accumulating”  it can be seen as bad, then the simple solution is to tax the hell out of accumulation and not earnings.  Abandon the income tax and establish an accumulation tax. 

Why is that fair?  Because the rich and the poor can be taxed the exact same outrageously high rate for accumulating wealth, maybe upwards of the 90% people talk about.  No discrimination.  If you’re poor and you save $10, you are taxed $9.  If you are rich and save $10,000, you are taxed $9,000. 

Renters and homeowners would get the same tax break by spending their rent or mortgage money every month.  Richie Rich and Averge Joe would get the same tax break on the gasoline they purchase, whether a corporate fleet or driving to work. 

Seeking tax breaks would not require fancy tax consultants to decipher complex tax codes, it would just mean going down to the store and spending like hell.  People would be buying stuff for other people just to avoid taxes.  Charity would flourish. 

The tiny 1% sales tax that governments could attach to every sales transaction would, due to the outrageous amount of spending going on, fund all legitimate programs, easily.  And the outrageous spending would turn our economy into an extremely inclusive one, where anyone who would legitimately and honestly provide a service of almost any kind, would be able to prosper. 

Unlike disappearing ink, taxing Accumulation rather than Income is do-able and fair.  It penalizes and minimizes the idea that you can become ultra powerful through accumulation.  The rich would pay dearly for their excessive accumulations. 

But to the talented guy who could earn $1 million or more, he could do whatever he wants with it, but spending it would be the patriotic thing to do, the fun thing to do, and the best tax avoidance thing to do.  Plus it would circulate that money to the utmost, creating jobs galore.

But, no need to hyperventilate, I am not here to bust into your piggy bank.  This is just another crackpot idea from someone with a complete inability to think like everyone else.  Of course this is not an original idea, just one that needs to be reconsidered.

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By Anarcissie, August 2, 2011 at 10:47 am Link to this comment

The idea of having money that declines in value has been suggested before.  In fact, we have a method for that now: it is called ‘inflation’.  It is popular with ruling-class types like Krugman because it taxes those who keep their savings in cash—the poor and the working class—while the rich escape to stocks and bonds and commodities.  From him that hath not shall be taken away even that which he hath, which will keep his nose to the corporate grindstone until he drops, a very nice state of affairs from the superior point of view, since it will leave the poor schmucks no time or energy for troublemaking politics.

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By berniem, August 2, 2011 at 10:06 am Link to this comment

Vote for Obama if you so wish(even while holding your nose)but remember, this little fiscal “crisis” aside, the current POTUS has much to answer for with his continuation of the criminal activities of the prior administration and the neo-liberal economic policies of Clinton, et al, as well as his refusal to seek justice by prosecuting those who have caused this disaster while complicit in the persecution of those who would question and oppose his obvious pro-fascist agenda! To answer your question, I intend to vote only for candidates unaffiliated with our reactionary duopoly who support a truly inclusive progressive position and, if things go as they now appear, lend my meager resources to the struggle against this authoritarian and increasingly totalitarian system!

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By screamingpalm, August 2, 2011 at 9:57 am Link to this comment

By Shenonymous, August 1 at 8:09 am
Those on these forums must beware of the Republican shills who would instill a defeatism in those who really care about the ordinary folks.

My pessimism comes not from Republican shills, but from liberals who continue to back mainstream Democrats. On the bright side, the last time progressives came together and gathered steam was after 8 years of Clinton. Unfortunately, the majority of liberals and progressives will get suckered back in by some nasty blame-game/lesser evils propaganda by the DLC. (And there I go being defeatist again!)

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By Shenonymous, August 2, 2011 at 8:30 am Link to this comment

1.
DaveZx3, August 2 at 8:05 am That is the absolute best idea I’ve
ever heard!  It is a wonderful idea, I am speechless.  Way…elll, nearly
speechless! hahaha

Disappearing ink on money!  Fabulous and your reasoning goes
along with it.  How can we invoke this…as a national Constitutional
Amendment and a world rule via the United Nations.  No permanently
printed money!  What an idea!  Your speculations I feel in the marrow
of my bones would be exactly as you outlined.  God I thank you. It made
my day and probably the rest of my life, unless of course someone
comes up with a better idea, then I’m fickle.


Then to address your other post at 7:30 am I did go the link you said
Cliff Carson provided (Cliff is always a most lucid contributor to Truthdig
who I always appreciate reading).  It is perceptive of you to pass the
article along.  The following are my thoughts, for whatever they are
worth…
Five years ago, Stephen Lendman advocated a more aggressive solution
to the American Federal Reserve system.  The power he indexes is not
as surprisingly unimaginable as he proposed.  Why would any ordinary
person understand the world of billions and billions of dollars when they
at most have anywhere from zero cents to a hundred dollars in their
pocket at any one time.  It is patronizing to suppose we serfs would
know or even have an inkling what the world of high finance is like.  But
everything has its congruencies.  There are small models to which more
people can relate than trying to wolf down the humungus banquet of
dollars in the global financial world.  So what if America dominates? 
What other country ought to?  What other country has a better “global”
view?  What is most important is how the system works to better
humankind rather than to exploit it.  Nefarious groups like the Mafia
in its many variations in all the countries involved will always be in
existence given the financially greedy and powerhungry nature of men. 

Trying to see what Lendman’s thesis is, I read the article Dirty Secrets of
the Temple carefully.  I do not pretend to know much about the world of
finance but I do know something about ethics and morals.  Being among
the human population of the world and more close, America, I have to
come to terms with such propositions about the world of finance as best
I can, and in my ignorance. 

While I think reading and trying to understand the dynamics found in
historical accounts is important, it has to always be reconciled that a
change in era is huge and the forces in play in one major segment of
history are not in play in another one. So when comparisons are made, I
see that generally these differences are conveniently forgotten in order
to make a personal observation.  I don’t think Lendman is any different
from others assessing the situation he is describing.  And certainly the
United States is completely unlike any other country in the world, in
many ways.

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By Shenonymous, August 2, 2011 at 8:28 am Link to this comment

2.
He mentions, rightly, “The lesson from history is always the same.
The price for reckless behavior is high, painful and inevitable.” and
then recognizes, “It’s true for countries as well as individuals, but
too often neither one sees it until it’s too late.”  The reality is that
while we see what human foibles are when reviewing history, we
do not learn from that.  We always stumble anew because there are
conditions that are always different than at any other time. They just
look alike but only superficially.  A real study of the forces at play
would show those differences, and then recognizing them, one has to
be articulate enough to show the population how and that they must
change the likeness of the past mistakes.

Most interesting to learn is that the FRS is not a government agency. 
This is the one first fact that should be made public over and over
again until it sinks into the collective head of the American population.

Lendman’s clearness of thought shows when he said, “Most people
know little or nothing about money and banking, likely never think
about it, and have no idea how what the Fed and bankers do affect
their lives. “  Knowing that, now what?  It is the endemic problem of
solving higher echelon finances.  It literally is above the heads of the
public.  If it is above, then either of two things have to happen.  Either
more the higher echelons have to be deescalated to a lower strata, or
the heads of the public have to be elevated.  Both probably would be
more propitious to a more popular involvement, which I think is part
of Lendman’s criticism.

Using the founding fathers as a touchstone for all kinds of argument,
is somewhat useless unless the ethics of the majority of those to whom
one is writing can clue into those sentiments.  As just a bit of history,
learning what Jefferson and Madison or even later Lincoln understood
and did, is really of more interest only to the political historian
philosopher.  What do their founding ideas have to do directly with what
is going on now.  What are the differences, what are the similarities, and
what are the implications of both differences and similarities?  It would
be good to print out Lendman’s essay (about 18 pages) and stick it to
one’s refrigerator for daily reference I guess.

Getting to Lendman’s solution:  However and why the FRS came into
existence are now moot points.  He asks rhetorically if people can be
mobilized to pursue recourse to a privately owned Federal Reserve
System?  He wants to abolish the FRS.  Doing that has about as much
chance as putting a laid egg back into a hen. While Lendman’s reasoning
that followed his solution are long and rational, it has low probability,
close to zero, to happening given the power already invested in the FRS. 
It would have to be a political action and we know how successful those
are in the political climate we have today.  Yes we are at a key watershed
moment, but such moments almost always pass without any action or
change.  Or if change happens it is a glacial speed.  And momentum
often just drifts away as generations change, along with perspectives.

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By Lafayette, August 2, 2011 at 8:28 am Link to this comment

BRAINLESSNESS

Cc: And the last time you used it, someone on Truthdig pointed out to you that Factcheck was incorrect.

Yeah, right, and the sun rises in the West.

CC: The question was whether Social Security had contributed anything to the deficit.

Every budget expenditure “contributes to the debt”, because the debt is created by a shortfall of revenues below expenditures. It is ideological brainlessness to think that unilaterally cutting expenditures is the sole way to reduce the debt.

How much foregone income did Uncle Sam sacrifice when Reckless Ronnie lowered Marginal Income Tax rates from 70 to 30% and reduced the Capital Gains taxes (though not by as large an amount).

It was this fact that has resulted in the present Debt Mess, particularly after a Lead-head Replicant threw a few trillion dollars away into the Sandbox to depose a dictator who had tried / failed to assassinate his father in Kuwait. (Forgot that bit? Read about it here.)

THE ROAD AHEAD

One must ask, in the annals of recent history, has any modern nation had such such despicable and irresponsible Congressional representation. The slate should be washed completely and we start anew.

Any outcome could not be worse than the shameful one witnessed yesterday. A country “kicked the can down the road” because a minority of dolts could not overcome ideology and compromise for the betterment of the nation.

We thought Greek politics were a joke? Euripedes: Those whom the Gods would destroy, they first make mad. The TeaBaggers are as mad-as-a-hatter.


We, the sheeple, either elected these morons or allowed them to get elected. There is no time like the present to start the campaign for un-election - targeted at each and every one of them deserving the political death they so justly have coming.

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By DaveZx3, August 2, 2011 at 8:05 am Link to this comment

Shenonymous, August 2 at 6:19 am

————-

If it is pertinent, my daughter, an independent graphic artist, was contracted by a local campaign office to do some artwork.  Even the money she received had to be filtered out to her suppliers and other vendors. 

I think that campaign costs do get filtered down in multiple ways.  Even the large ad agencies have employees, contractors and vendors they must pay. 

The spider web which is created through the flow of money is an interesting one to contemplate.  It is almost as though any large chunk of money entered into the system at any point, can have a qualitative easing effect.  And in this regard, I think a legitimate argument would be to enter it in at the poorest levels, and let it filter up, instead of vice versa.

But no doubt the poor would better their condition by figuring out a better way to be in the loop of money flow, rather than relying on someone to give it to them. 

Perhaps the ideal society would be one that no matter where money was located, the flow of it was it’s only value, and the accumulating of it was self-destructive. 

It would be like inventing money that the ink disappeared if it was not literally spent within a few weeks of receiving it.  This is a concept that would really invigorate the economy and deny the elite their power through riches, while allowing even the poor to set up simple services and have them prosper, because money flow would expand drastically. 

Disappearing money. Either spend it or it disappears.  Like anything in your checking account would disappear after it had been in there for so many weeks.  Or don’t go putting your money into a mutual fund, or buying savings bonds, or stock certificates.  It would all disappear after a few weeks.  Use it or lose it.

Interestingly, that is the concept of the “manna” which was God’s providence to the Israelites wandering in the desert.  Any of it they tried to save rotted away in one day.  Eat it or lose it.  That was that lesson.

I think the lesson was that accumulating is evil.  Like, “take no thought for the morrow” type thinking.   

There I go, thinking outside of the box again.

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By DaveZx3, August 2, 2011 at 7:30 am Link to this comment

By Tina Skywriter, August 1 at 6:21 pm

“If I were a Planner and wanted a country to do my bidding…...........”
—————————————————-

If I were a tyrant and wanted a country to do my bidding, I would cause them to go into extreme debt through the funding of everything from wars to welfare with the fake “fiat” money I just printed up in my little private enterprise called the Federal Reserve. 

I would lend them fake money forever, constantly requesting them to raise their debt limit.  I would have them totally divided through debates regarding who is to pay off the enormous debt. 

Division and debt equals extreme weakness, and through it I would control any country.  I would probably request they turn in all their weapons also, just in case they realized the scam I just pulled on them. 

There are two sides to every issue Tina Skywriter.

On another thought, I haven’t read all the posts, so I don’t know if Cliff Carson posted this website which he did on another thread, but I will post it again anyway, becaue it must have maximum exposure. 

http://www.globalresearch.ca/index.php?context=va&aid=2712

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By Shenonymous, August 2, 2011 at 6:19 am Link to this comment

The questions worth posing are: ?* Why are campaigns so costly?
(The last presidential campaign reportedly cost close to half a billion
dollars.) Why and how is this money cost-effective?

Listed as the primary question in this section, I’m curious who exactly
is getting the money spent?  Advertising agencies, news media, staff,
modes of transportation?  Someone is getting really rich in the money
spent on campaigns.  I mean it is if all totaled up probably close to a
billion.  I wonder if the same agencies are used by all candidates?

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By MaxShields, August 2, 2011 at 6:17 am Link to this comment

All of these issues are the unraveling of an empire. When defense spending snuck back into the deal you know that push has come to shove BIG TIME.

I must repeat this is a debtor nation. When the debt reaches - and it is moving in this direction - to 30% of GDP you are forever stuck. The only correction will be replacement of the current economic system lock stock and barrel. No doubt there will be remains.

This is not a bad thing. It is good if we are smart enough to rethink what we have and with a new vision of prosperity and community. Otherwise the tragedgy will doubtlessly be enormous for nearly everyone as this empire comes crashing down in a thunderous calamity of economic mayhem.

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By MaxShields, August 2, 2011 at 4:57 am Link to this comment

If we square deficit with debt will find the nation has been a debtor nation for decades. Over time the entire US economy has been based from its monetary system to its high demand for GDP growth through consumption to debt. This debt has interest on it and has been upward.

Yes during Clinton’s administration there was a surplus in terms of the deficit (the government took more money in than it spent) but the debt did not go away. Perhaps someone could tell me/us whether Clinton had this as a pledge or goal? I suspect the Dot.Com bubble, and for sure an increase (however slight) on the wealthy contributed to this surplus.

However, Clinton invigorated the housing bubble, neoliberal trade agreements that work only for corrupt foreign leaders and US Corporations while facilitating off-shoring of state-side jobs, neutered the Glass Steagall Act thus leading the way to the Wall Street bailouts.

On balance - damn poor if you ask me.

The other day I was reading how excited a group of energy conservationists were about the news that the President (Obama that is) was going to increase the regulation on auto fuel consumption. All I could think was so how does that square with the children we’re killing in Afganistan and Pakistan?

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By tedmurphy41, August 2, 2011 at 1:38 am Link to this comment

You had a surplus about ten years ago and now have a trillion dollar plus debt hanging around your necks!
Does anyone ask where this money went.
You will find that you run your households better than the (previous) Government ran the Country.
Look at the major expenditure over this ten year period and ask these financial wizards, as they like to be known, to explain to you where the money has disappeared to, as if into a black hole?
It should be relatively easy, once you have access to ALL the balance sheets, for even a school pupil to work out, cutting away all the “newspeak” normally used as logical reasoning in order to muddy the waters of investigation, to arrive at a consensus over these ‘losses’.

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By Lafayette, August 2, 2011 at 12:24 am Link to this comment

IN A QUANDARY

TS: If I were a Planner and wanted a country to do my bidding, I would remove all controls on political donations, fund a radical but seemingly harmless group and get some of them elected to Congress. I would spread false rumors about major leaders and take away all controls on firearms.

And if you were living in Europe:
* Public funding is encouraged because it is essential to the democratic process. State funding of political parties (and not to just get-out-the-vote), however, is also a prevalent form of promoting candidacies. Let’s remember, the less costly an election campaign, the less need there is for corporate donors.
* There are controls on small donations. Large corporate donations can pass regulatory scrutiny but they are not illegal. They are, however, not common and are usually balanced between the two major parties.
* Funding a radical and seemingly harmless group is common, but the groups have no real influence in parliaments. Most are on the extreme fringes either Left or Right and have little following. A handful is nonetheless elected to parliaments and the number depends upon highly local issues. For instance, the Right in Norway has taken an extreme position as regards immigration and has gained significantly parliamentary seats.
* You would find yourself in court for defamation if you used public media to spread “false rumors”. Freedom of Speech does not protect one from public defamation and a prosecution.
* Controls on firearms are Draconian. For which, death due to handguns is far less (per capita) than in the US. Nonetheless, nothing prevented a Crazy in Norway from buying/using a fully-automatic machine gun.

DYSFUNCTIONAL POLITICS

Democracy in America always had a populist tinge to its functioning. However, the dysfunction of the present systems is due to the abject extremeness of the Rabid Right. One can remain in opposition without bringing government to a halt, which provides an ephemeral political victory but, worse, may hurt the population as a whole.

To employ that tactic for political gain demonstrates endemic puerility. Such an attitude is a sign of political maturity. The Right has taken leave of their senses.

A THEORY

And there is a theory as to the origins of their madness. They understand full well that taxation in America has gone berserk and favored the rise of a Plutocrat Class - to which they are historically beholden. The TeaBaggers fell prey to that class because of campaign financing.

But Replicant representatives to Congress and even Presidential candidates find it Extremely Difficult to wean themselves away from campaign financing - which is costly.

Next year will prove fateful. Taxation MUST INCREASE, which is contrary to the wishes of the Plutocrat Class. But most Republicans know in their heart-of-hearts that it is inevitable in order to get a handle on the National Debt.

So, they find themselves in a quandary. 

MY POINT

The questions worth posing are:
* Why are campaigns so costly? (The last presidential campaign reportedly cost close to half a billion dollars.) Why and how is this money cost-effective?
* Do Americans really believe the defamatory BS that passes on the boob-tube as a “political message”?
* Are they unaware of the Infamous Income Unfairness of the economy and the resulting extremes in the Net Worth of individuals?

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By Litl Bludot, August 2, 2011 at 12:15 am Link to this comment

Queenie, I liked the tone of yours post better, but thanks.  A few of us are
crying in the wilderness, but it seems like there may be some more awareness
beginning to happen. 

What is disturbing to me, as I said in the post, that by not Identifying Obama as
the premeditated corporate fascist mole that he is, and that Krugman, by now
knows that he is, but instead allowing this facade to continue to fool the US
population, i.e that he’s just weak, or wants to compromise, “surrender” is the
word used by Krugman, then it can go on and on until we are completely and
utterly defeated by the fascists.

But If Krugman (and Scheer, and their ilk) can get the courage to identify
Obama as a premeditated liar and fake, then we can have a chance at voting for
an alternative.  Obama has to be seen for what he is, a completely amoral tool
of the corporate fascists who has planned to back the banksters, the corporate
fascists from the very beginning of his presidency.

There is just no doubt about it now (there never was, in my opinion, I voted for
Nader).  The evidence is too blatantly clear and obvious.  The lies and deceit too
numerous.  The pundits that pretend to believe that he is something other than
this, are complicit in the deception and the ongoing unraveling of our country,
and the plundering of the planet.  It is an intellectual deceit that is unforgivable
for supposed progressive, humane pundits to continue to support.

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By Tina Skywriter, August 1, 2011 at 6:21 pm Link to this comment
(Unregistered commenter)

If I were a Planner and wanted a country to do my bidding, I would remove all controls on political donations, fund a radical but seemingly harmless group and get some of them elected to Congress. I would spread false rumors about major leaders and take away all controls on firearms.

Then the Congress would get snarled in bad infighting and block necessary business like approving judicial nominations, so there would be enough judges to keep an eye on bad legislation, and managing debt limits. Then I would threaten seniors, disabled, business owners, etc., that their retirement benefits would stop and interest rates would go up if the Congress didn’t behave.

Then I would appoint a Congressional committee (read persuade current Congresspeople to appoint one) to write the bills with no overseer. Some judges would block this but would be so shorthanded they could not stop it. Then I’d wait and dissolve the legislature and appoint a leader already familiar to the populace to run the country without opposition.

Why hasn’t somebody else written this fictional story?

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By Maani, August 1, 2011 at 6:14 pm Link to this comment

The difference between Bill Clinton and Obama:

“In proposing a plan to cut the deficit, Clinton submitted a budget that would cut the deficit by $500 billion over five years by reducing $255 billion of spending and raising taxes on the wealthiest 1.2% of Americans. It also imposed a new energy tax on all Americans and subjected about a quarter of those receiving Social Security payments to higher taxes on their benefits. Republican Congressional leaders launched an aggressive opposition against the bill, claiming that the tax increase would only make matters worse. Republicans were united in this opposition, as it were, and every Republican in both houses of Congress voted against the proposal. In fact, it took Vice President Gore’s tie-breaking vote in the Senate to pass the bill. After extensive lobbying by the Clinton Administration, the House narrowly voted in favor of the bill by a vote of 218 to 216. The budget package expanded the Earned Income Tax Credit (EITC) as relief to low-income families. It reduced the amount they paid in federal income and Federal Insurance Contributions Act tax (FICA), providing $21 billion in relief for 15 million low-income families. Improved economic conditions and policies served to encourage investors in the bond market, leading to a decline in long-term interest rates. Clinton’s final four budgets were balanced budgets with surpluses, beginning with the 1998 budget, which was the first balanced budget since 1969. The surplus money was used to pay down the public debt by $452 billion, though the gross federal debt continued to increase. The economy continued to grow, and in February 2000 it broke the record for the longest uninterrupted economic expansion in U.S. history, which began during George H. W. Bush’s presidency.”

“After Republicans won control of Congress in 1994, Clinton vehemently fought their proposed tax cuts, believing that they favored the wealthy and would weaken economic growth. In August 1997, however, Clinton and Congressional Republicans were finally able to reach a compromise on a bill that reduced capital gain and estate taxes and gave taxpayers a credit of $500 per child and tax credits for college tuition and expenses. The bill also called for a new individual retirement account (IRA) called the Roth IRA to allow people to invest taxed income for retirement without having to pay taxes upon withdrawal. Additionally, the law raised the national minimum for cigarette taxes. The next year, Congress approved Clinton’s proposal to make college more affordable by expanding federal student financial aid through Pell Grants, and lowering interest rates on student loans.”

“Clinton also battled Congress nearly every session on the federal budget, in an attempt to secure spending on education, government entitlements, the environment, and AmeriCorps–the national service program that was passed by the Democratic Congress in the early days of the Clinton administration. The two sides, however, could not find a compromise and the budget battle came to a stalemate in 1995 over proposed cuts in Medicare, Medicaid, education, and the environment. After Clinton vetoed numerous Republican spending bills, Republicans in Congress twice refused to pass temporary spending authorizations, forcing the federal government to partially shut down because agencies had no budget on which to operate.  In April 1996, Clinton and Congress finally agreed on a budget that provided money for government agencies until the end of the fiscal year in October. The budget included some of the spending cuts that the Republicans supported (decreasing the cost of cultural, labor, and housing programs) but also preserved many programs that Clinton wanted, including educational and environmental ones.”

As one of those who did not drink the Obama Kool-Aid (I was a much-maligned Hillary supporter), I can only wonder which path Hillary would have been more likely to take.

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By Queenie, August 1, 2011 at 5:27 pm Link to this comment

Litl Bluedot:

You nailed it! Nothing more needs to be said. Great insight!

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By Cliff Carson, August 1, 2011 at 5:10 pm Link to this comment

Lafayette

You sent me to Factcheck with your link, an organization that when speaking of Social Security and Medicare made an incorrect statement.

As I recall, this is not the first time you have used Factcheck for this same illustration.  And the last time you used it, someone on Truthdig pointed out to you that Factcheck was incorrect.

The question was whether Social security had contributed anything to the deficit.  Factcheck said that it had, by $49 Billion in 2010 and $46 Billion in 2011.  While it is true that Congress borrowed this money to pay that shortfall in 2010 and 2011, what wasn’t said by Factcheck is that Congress had “borrowed” $2.5 Trillion from the collected Social Security funds and that $95 Billion is only 0.038% percent of the $2.5 Trillion “taken” by Congress from the Social Security money collected for the Social Security Fund.

So it is disingenuous to say that SS contributed to the deficit.  At a pay back of $95 Billion per year, it would take 26 years and four months to pay back that money - at no interest.  To put that into perspective, the interest on $2.5 Trillion at 6% would amount to $150 Billion per year.  So if only $95 Billion was borrowed to pay SS each year, and the interest on the $2.5 Trillion was paid to the SS fund each year, the money taken from the SS Fund would NEVER be paid back.  In fact the money in the fund would grow each year by the difference: $150 Billion - $95 Billion = $55 Billion each year added to the $2.5 Trillion owed to the SS retirees.

Congress wants to crush Social Security so that the public is not aware of the grand theft of American retirees money.  Lafayette, they are criminals pure and simple.  Surely you realize that.

This is the second time that I know of, that you have been apprised of that Factcheck error, I think it is a lie instead of an error, so I am asking you to be honest with the people on this thread.

Admit that your source is incorrect.

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By Leslie Fox, August 1, 2011 at 3:46 pm Link to this comment
(Unregistered commenter)

I’m watching Valery Jacobs, Obama’s mouthpiece, telling us that public funds with private sector funds (?) will create jobs (construction) and pull us out of this! Many call all of this debt crisis fanciful, or a distraction.  I call it the fascist response to a restless population.  Naomi Klein (Shock Doctrine), Milton Friedman, and Rob Emmanual were correct: Create a crisis so that the government and coporations (the so-called free market) can put yet another one over on the people, extracting more wealth from the average person, and furthering the stranglehold on the exploited (that’s us in case you didn’t know).

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By question, August 1, 2011 at 3:24 pm Link to this comment
(Unregistered commenter)

We’re already a banana republic, but soon we’ll really have to grow our own bananas.  Bush, landing on aircraft carriers wearing a uniform he doesn’t deserve, addressing the troops he’s sacrificing daily after declaring victory…then schlepping around the WH pinning medals on anyone who’ll stand still, saluting helicopter guards (inappropriately)...followed by Obama who schlepps, pins & salutes nearly as much only without the faux uniform. 

Conservative think tanks pointing out that poverty in the US isn’t really poverty ‘cuz we have refrigerators & coffee makers - government assistance programs are for the lazy & encourage people to remain so…we have to be willing to sacrifice more, like living in thatched huts around a common well as long as it’s not too close to a gated community of CEO’s.

Unemployment isn’t as bad as we think & if it is, it’s because of the unions. If your health is poor, it’s your own fault.  Smoking is an abomination unless it’s your kitchen faucet that catches fire from fracking chemicals - that’s free market capitalistic energy independence.

And Krugman, who has been so right so often, is dismissed with contempt by the “serious” insiders in the District of Chiquitaville.

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By Morri Creech, August 1, 2011 at 3:11 pm Link to this comment
(Unregistered commenter)

While I love Krugman’s writing generally, and his assessments seem soundly tethered to historical analysis, I have to ask: does it strike anyone else as oxymoronic or bizarre to yoke the terms “Nobel-Prize Winning” and “Economist,” particularly in the context of attempting to hallow or authenticate a person’s credentials? Can such a term be said to mean anything at all? I mean, what pair of honorary titles are currently in more general disrepute than “economist” and “Nobel-Prize Winner?”

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By Ron Ranft, August 1, 2011 at 2:21 pm Link to this comment
(Unregistered commenter)

Everything Krugman says is true. And he is not the only one. I recently received an email from a Progressive group who had an attorney research the Debt Limit Law. It clearly stated in that Law that the Secretary can pay all outstanding debts at the direction of the President. Other people have written at length about the 14th Amendment. Obysmal claims he doesn’t have to notify Congress if he attacks another country the Constitution to the contrary but he then turns around and claims uncertainty about using the 14th Amendment. Like his predecessor, George the Lessor, Emperor Obustus Obysmal seems intent on interpreting or misinterpreting the Constitution however suits his whims. Krugman makes the mistake, like so many others, that these outcomes are anything other than how he really wants them to turn out. He isn’t learning. Anyone who ever listened to Ralph Nader talk about Obama knows that he loves trickle down economics. He has constantly provided more and more incentives for the rich, including his recent attempts to get a chance to give the filthy rich and their corporations another 9% tax break on top of letting keep the Bush cut. Obysmal has made Ralph look like an Old Testament Prophet the way his predictions have turned out. Of course every time Obysmal rolls over and wets himself he and his true believers yell pragmatism, he was only strengthening it, bipartisanship, or compromise which really means, “we screwed you again People.”

Obysmal and his Goldman Sachs Friends in his Cabinet and on staff were the architects of the Austerity Program, which Obysmal touted at the G20, now sweeping Europe. It only stands to reason they would eventually introduce it here.

Obysmal is a 1960’s Wall Street Democrat or what used to be called a Republican. If the Rethugs hadn’t moved so far to the right, which Obysmal facilitates, they should love him every bit as much as they should have loved Clinton. He is one of them. If Americans weren’t so gullible that they can be taken in by HOPE and CHANGE, the would by now realize what Obysmal meant when he said YES, WE CAN! He wasn’t talking to the People who were going to vote for him, he was talking about the people who gave him the money to buy his way into the Presidency!

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By Lafayette, August 1, 2011 at 2:05 pm Link to this comment

BLATHER-IN-A-BLOG

MCRN: So while some will remain loyal to Brand Obama (Registered Trademark) no matter what, we can hope that many more will now start listening to those of us who had been right all along.

Specious argument and tendentious.  Thanks for your “credentials” …  but who cares?

The debate about Obama’s performance is a fair one, as it is for any elected official at any time during their tenure. After all, they should be working for us, not for themselves. But stating “I told you so” begs the question. 

So, where’s the debate? We’re supposed to believe you because you said so?

No, that’s not the game rule. Make an argument as to why he’s incompetent. Demonstrate why it is soooo disappointing that he cannot walk on water and fix the Recession double-quick.

Besides, smart guy, what is the alternative? Replicant-lite?  Wanna switch horses in midstream and drown next year in November?

Yep, I’d bet that would suit you just fine ...

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By MaxShields, August 1, 2011 at 1:49 pm Link to this comment

Keysianism is problematic. The debt created over decades.

Here’s the issue, Keysianism (and really even the Chicago school which is depicted as its relative opposite) all believe (Rep/Dem alike) that we need to grow our way out of the economic demise. That is faulty and shared by all the “doctor” economists with outlier exceptions. We are at the end of growth - as determined by GDP which has flat lined and has always been a pathological measure of a “heathy” economy.

The problem is much deeper, much more systemic. Both Krugman and Scheer are on the same page as the Republicans EXCEPT the Republicans believe that we need to cut to grow, while the Dems (including our Mr. Krugman, et al) believe we need to stimulate to grow. It is the very notion of growth which is the devil in the details…the rest of this is chit chat about a place we’ve never been before.

Dr. Krugman is a conventional Keynsian economist and the Chicago School represented by the likes of Milton Friedman converge when it comes to what makes the US economy tick - GROWTH. Realistically we are at an end of this train ride. It derailed in 2007/08. That’s gone. And old economic theories will not “recover” the economy most of us grew up with. The road to recovery is acknowledging that first. Then we can begin to build and economy “as if people mattered” and with an understanding of the natural constraints their human created economic systems must live with in. Krugman is not the way, though he is right about President Obama and the political machinations that corporatism brings to the table once it owns the political system.

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By phreedom, August 1, 2011 at 12:37 pm Link to this comment

Part 1

Paul Krugman is correct,

Supply side economics puts 100% of so called “responsibility” of any transaction,,, financial, social, psychologically or spiritual on the consumer. It only lowers the barriers for the corporate hordes to slaughter us. The beauty(and I do mean ugliness) of supply side economics is that it exploits the bad habit of dualistic thinking, or the splitting of inalienable wholes into halves or parts with enormously seductive and deceptive propaganda. Problem is, these halves or parts have inseparable moral and materialistic advantages and benefits to one another. The attempt to cause the perception that these imagined halves or parts can stand on their own has the intention to disavow the moral and materialistic advantages and benefits only available if certain realities of a sovereignty’s citizens, to have natrual barriers, and/or counter balancings in the form of, for instance, not allowing the separation of greed from poverty, so that certain essential realities are free to be perceived, by citizens(consumers),,, as intact, two sides of the same coin, one is the other,  and/or all is part of one indivisible share.

Supply side economics allows for the impossible logic, that though we are all fundamentally consumers, that somehow the go getters, the producers, the suppliers,, stand apart, are proudly ambitious, are admirably satisfied, are wise and all knowing, are righteously barrier-less, and who themselves get no satisfaction from their own consumption and only humbly bathe in the endless joy of producing, unencumbered,  mindless, useless & needless goods and services. Could it be that the mechanism which allows them to run rampant to produce whatever novelty they desire to make a profit selling, well, is unbridled wisdom?, an unadultered willfulness to produce the right thing, at the right time, in the right amounts, with the right quality, at the right price, with the right utility?, I think not, and most obviously this has not been the case.

It is as if we are not citizens while we are consumers, and the only road to citizenship is through a consumption responsible for the unprotected depletion of all natural resources and complete destruction of essential infrastructure. Resources and infrastructure served up by institutionalized greed out of any control. A “good citizen” is only really so if he/she is a consumer who has taken 100% blame(responsibility) for the consequences of any and all economic & political transactions, no matter how misguided and insincere they have been.

Rhuen Phreed
231 Park Drive, #40
Boston, MA

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By phreedom, August 1, 2011 at 12:36 pm Link to this comment

Part 2

Our Congress engages in the legislative exploitation of the vulnerabilities of consumers, from the perspective of a so called supply side economic theory of greed unbound,, Congress is not dealing with needs and concerns of citizens from the perspective of a well managed sovereignty. The welfare of this nation’s people is serendipitous at best, tactfully incomplete and legislatively predestined to be unfulfilled.

Here is another Zen story which depicts human nature in general, but also how we confuse our political leaders with people who represent our humanity under this particular flag. How we keep waiting around for different results to come out of the same old political selfishness, how we keep waiting for benefits to be derived from depraved economic strategy. 

There was this man who’s job it was to go out each evening to hunt for the tribes dinner food/meal. Well, one evening while this guy was out hunting for dinner for the tribe, he came to a clearing in the woods, when all of a sudden a large rabbit came darting out and ran head long into a tree stump killing itself. The hunter returned to this stump every evening, at the same time, for the next 4 years, and waited for dinner.

People, it will be just a matter of chance that Congress or the president will work for our best interests, so why wait around like we do?,  and trust these 2 political parties to do better, especially when it is our actual experience that any benefit we have experienced in the last 25 years is due only to our keen survival skills, and our ability to do for ourselves.

Now that is the kind of responsibility our leaders need to live up to, to take on, to own up to,,,, that we we have survived without them.

Can’t wait to see all the sneaky stuff we are being distracted from, with all the romance of debt ceilings, and/or how extreme they can appear, sort of thing. There are going to be some real goodies coming. Start preparing for more decline of our culture and society. They will run out of the big meeting declaring, as if it’s great and wanted news, “harah!!, harah!!, you are on your own”,, “harah!!, we the congress have preserved your freedoms and the constitution”.

We will say to ourselves, “as if we did not know that already, thanks for reminding us, yi-pee?”, “So we can expect the same old shit then??”

Rhuen Phreed
231 Park Drive, #40
Boston, Ma

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By Shenonymous, August 1, 2011 at 11:19 am Link to this comment

berniem, August 1 at 9:39 am – Why don’t you get started then? 

Yeah CenterofMass, I voted for him too and feel as you do.  Yes I
will have to hold my nose next time unless Bernie Sanders or Howard
Dean presents a challenge, then maybe a change of person is
possible but not party.  But both of those two, the only others who I
would vote for, are Obama supporters.  Sanders is getting more and
more disaffected though in his public statements.  There is a move-
ment afoot to draft him for the challenge.  Sanders would be criticized
by the Republicans because of his socialist orientation, but far as I know,
he always votes with the Democrats.  He is a rational socialist.  There are
lots of Democrats unhappy with the shenanigans that have gone on in
Washington this past year.  Yeah, we know it is not an easy job to be
president, with all the shit the republicans have shoveled at Obama, it is
no wonder he falls down, but it is times like these when one’s nerve and
tenacity is revealed.  This country demands strength of character and will
and commitment to the people not to the elitist few.  Cooperation and
compromise are behaviors that are needed in the face of obstinate
opposition but lines in the sand are where character and will are born.

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By Anarcissie, August 1, 2011 at 11:08 am Link to this comment

As I pointed out before, the Republicans, especially the Tea Party, now own a failing economy.  Mr. O can run against his own record.  Proggies can be counted on to return to the fold on Election Day.  It’s all very clever.

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By Morri Creech, August 1, 2011 at 10:49 am Link to this comment
(Unregistered commenter)

I’m as disappointed by President Obama’s lackluster leadership in this debt ceiling debacle as any progressive out there; and I suspect many progressives may wish to trounce me for saying what I’m about to say—not least those who compare him to Chamberlain. And perhaps in the nearish future, I’ll even be inclined to agree with them. But it seems to me that many other leaders in times of crisis have looked feckless and incapable in the short view. For all the initial spending programs of FDR’s administration, it took the massive spending required for the nation to gird itself for war before the economy began to revive significantly. And in Lincoln’s first term of office, it appeared he couldn’t nudge General McLellan from the safety of the Potomac, much less achieve an effective victory for the North. After the Army of Northern Virginia audaciously charged into Pennsylvania, his rhetorical response to the bloodbath at Gettysburg was regarded by many as a profound disappointment due to its seemingly oafish brevity, especially at a time in history when speakers were expected to hold forth for hours. I don’t wish to postulate that Obama is either a Chamberlain or a Roosevelt, or any other historically quasi-analogous figure for that matter; I’m not one for crystal balls. But I am one for history. And despite what seems a sub-par performance from our beleaguered executive, it is early yet for me to start casting predictions or making hasty comparisons. While I suspect things may get much, much worse before they get better for our economy or our future—assuming they ever do rebound—I intend to balance my angry judgments with a sense of the longer view. I will say this: despite many progressives’ desire for Obama to invoke the 14th Amendment, I have an appropriately modest degree of admiration (call it a “AA” rating if you wish) for the restraint he has shown. While it may seem noble in the short run for a Democrat in executive office to usurp the power of the purse to stave off economic calamity, an eagerness to do so could set an alarming precedent for a more cynical leader down the road to do so for more nefarious ends. I have no wish to see the executive branch overstep its bounds and shore up the weaknesses of the legislature, unless it proves an absolute last resort. The only thing I fear more than legislative malfeasance or incompetence is executive despotism. The fact that I should fear either, though, is testimony to the fragile state of our republic—assuming it still deserves that title.

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By Dave L., August 1, 2011 at 10:48 am Link to this comment

Krugman is a fool. He calls for more and more Govt. intervention when the holes in the system have not yet been plugged. The criminals on Wall St. have yet to be jailed, and the bad debts still have to be written off. GDP at this point is an illusion. Take out the Govt. spending and it would fall by 10%. That is the true state of this so called economic “recovery”. There is no way out of this without significant amounts of pain for the entire country. The “not-so-rich” have already taken their lumps. Time for Wall St. and the rest of the status quo to take theirs!

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By Druthers, August 1, 2011 at 10:41 am Link to this comment

This is Obama’s Gettysburg and he handed over his sword like Robert E. Lee.
When a new Bretton Woods - it is urgent!                                                                                                                                                                                                                                                                      like Robert E. Lee.

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By entropy2, August 1, 2011 at 9:48 am Link to this comment

For all those Starbucks progressives willing to “hold your nose” and vote Dem in ‘12…

Maybe you should order a hazmat suit.

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By CenterOfMass, August 1, 2011 at 9:43 am Link to this comment

@Blackspeare: “It ain’t over yet…That will be Obama’s moment whether he gets a second term or not.”

Theoretically, yes.  Realistically, no.  Look at it this way: Obama has abandoned every crucial progressive concept that he ever claimed to support.  More open government?  No too-big-to-fail banks?  Stop foreign wars?  Public option health care?  Taxes on the super-rich?

Been there, done that, didn’t-buy-the-T-shirt.

He shows a pattern of claiming support for progressive concepts, and then failing to follow through.  This, right now, this claim that he will fight for “increased revenues” and a “fair tax system”, is an empty promise that he will not deliver, just like the others.  He could have let the Bush tax cuts expire, and he did not.  He will do likewise in the future.

I voted for him, but I have since learned not to trust him.

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By berniem, August 1, 2011 at 9:39 am Link to this comment

Why wait until 2012 and a pre-determined “selection” that will result in the continued downward spiral this nation is in? I’m sure that with the more than willing assistance of the whack-os on the right the Progressive, as well as the Black Caucus, among other disaffected pols, can surely scare up enough support for the drawing of articles of impeachment ‘cause this guy has surely committed enough “high crimes and misdemeanors” to warrant such. Perhaps this may spur the Weimar democrats to start living up to their rhetoric and would send a message to the Blue Dogs that their brand of Fascism-lite will no longer be tolerated! It’s time to show some teeth to the forces of reaction in this country before we are all required to master the goosestep or disappear to the gulag! FREE BRADLEY MANNING AND TIM DeCHRISTOPHER!!!!!

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By Inherit The Wind, August 1, 2011 at 9:25 am Link to this comment

I can no longer in good faith defend President Neville Chamberlain. It’s Munich 1938 all over again “We have peace, er, financial stability in our time”

I throw the same charge at Barack Obama I threw at Ralph Nader in 2000:  When he had it IN HIS POWER to prevent this catastrophe, he didn’t take it.

Our only hopes are: 1) that a Republican senator planning to filibuster cannot be forced into cloture, that there aren’t 60 votes and 2) That Nancy Pelosi leads a revolt in the House and is joined by the extreme Bat-Shit-Crazy Teabaggers who think the bill doesn’t go nearly far enough.

Let the plan fail and THEN the President either must invoke the 14th Amendment or use unilateral targeted cuts to a) punish those who created this mess and b) remove any way for the wealthiest to appeal full-rate taxation…no appeals process paid for, not tax court…pay your fair share or go to jail.  That’s it!

When has Krugman been wrong on a single major issue?

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By lasmog, August 1, 2011 at 9:23 am Link to this comment

More of the same from Obama and the Democratic Party;  moderate rhetoric and conservative legislation.  Every time the Democrats step to the right, looking for the mythical center, the Republicans move the center further to the right. It seems our nation is headed for the same tragic destination regardless of which of these two parties is in control.  The only difference appears to be the speed at which they will take us there.

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By Shenonymous, August 1, 2011 at 9:23 am Link to this comment

tolstoy, August 1 at 8:14 a.m. – Ain’t it da trueff?  It is so logical…

mackTN, August 1 at 8:52 a.m.- Indeed where is the shared sacrifice. 
Oh I get it, the old people and the poor get to share all the sacrifice!

I don’t know about there being one party in Washington, there were
lots of Democrats and the two Independents who did not go along
with the bending majority.  The Democrats need to be reformed to
be stronger Deep Blues and choose stronger and more committed
candidates at the local level.

I’ve heard one bright boy say we need to create a contract that
candidates sign that promises to represent the welfare of the people
or they get booted out through a recall.  Course that means recall is a
right in the state where the infraction occurs.  Not all states have that
voters’ right.  The job of all true liberals is to educate the public, their
local public, and to organize so that can efficiently be done.  My
reasoning for redressing the Democrats is that it is acute and crucial
that Republicans be defeated in the next Congressional and Presidential
2012 election.  A third party will without a doubt vitiate that defeat.  It is
perfectly obvious that our “weak” president has been more than further
hamstrung by a Republican Congressional strength even though they
only controlled the House side of Congress.

Only a party with vast numbers is going to defeat the Republicans with
their money and voting machine, and violating voting processes (which
we know they will do as they are already at work on it!) in the next big
election.  It they who must be defeated and that is where the sharp focus
must be kept if you want to take your country back from the corporate
world.  I say go ahead start your third party efforts at the local level, for
success will be from the bottom up and any success will scare the
bejeezus out of the Dummacrats in Washington.  They will be voted out
of office too since their names will go on a list to defeat along with their
Republican brethren. Start forming your third party and by the time the
next mid-term election comes along it could be strong enough to elect
several candidates who will make a difference.  I, a lifetime liberal Deep
Blue Democrat, would consider joining you.  It will be a much more
egalitarian parliamentary type government.

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By Michael Cavlan RN, August 1, 2011 at 9:01 am Link to this comment

Ardee

True. Let us not forget those “stargazers” who screamed blue bloody murder at those of us who were telling the truth about Obama BEFORE the selection. To the point of booting us off of “progressive” blogs, list serves, groups, “peace marches” etc etc.

So while some will remain loyal to Brand Obama (Registered Trademark) no matter what, we can hope that many more will now start listening to those of us who had been right all along.

Come join us
firedoglake a blog that allows articles that are NOT apologist in nature. Time to go Hampsher.

New Progressive Alliance

October2011.org

Anonymous The Plan

Quit complaining. Start organizing

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By mackTN, August 1, 2011 at 8:52 am Link to this comment

Even the Congressional Black Caucus calls this so-called deal a satan sandwich. 
Why should the left be happy with this?  Because there wasn’t a default that didn’t
have to be in the first place? 

Create a crisis, then avert it and be a hero? 

What happened to shared sacrifice? tax revenues from the wealthy? 

This president is weak, weak, weak.  It’s time we called for a 2-party system
because there is clearly just one party operating in Washington.

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By cwbystache, August 1, 2011 at 8:47 am Link to this comment
(Unregistered commenter)

“down the road to banana-republic status”? Where’s he been? We’ve been there so long that I can’t remember when and where we first set foot on that path out of Oz!

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By MeHere, August 1, 2011 at 8:44 am Link to this comment

This nation has not shown any evidence of having a strong commitment a) to the
well-being of all of its citizens, b) the development of a healthy foreign policy, or
c) the solution of energy and environmental problems.  So let’s be honest and
acknowledge that those who were elected to office and are now discussing the
budget were not put in power in order to address those concerns.

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By Glad to be an Expat, August 1, 2011 at 8:17 am Link to this comment
(Unregistered commenter)

What a spectacle!  We Americans have once again sacrificed our dignity and self-respect, not to mention our place on the right side of history, and for what purpose? 

It could have been ennobling if a segment of our Congress had lined up to bargain on behalf of one of the great causes, such as ending the half dozen or so wars the US is indulging in, ending world poverty (don’t kid yourself, we Americans could do it), addressing global climate change or even adopting universal health care.

I would have gone to Washington in support of a grandstand play like we have just witnessed if it had been for a great enough cause; so would thousands of others.

Instead, we have sacrificed our dignity and our childrens’ futures just so a few reckless businessmen and bankers can keep their ill-gotten gains. 

How shameful!  What an embarrassment!  What will they write about us in future history books? 

Meanness, corruption, timidity, willful ignorance; in short, all of the worst of human weaknesses are prominently displayed in this generation of politicians (and by logical extension, their funders and voters). 

Instead of revolution, we have revolting politicians.  Instead of an American Spring, we have the American Dark Ages.  We know what the Dark Ages felt like:  about as sickening as you can get.

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By tolstoy, August 1, 2011 at 8:14 am Link to this comment

Another analogy is the gas is low, the car won’t start, so you drain the gas out of it completely. The country NEEDS spending and more deficit to get going. It needs a tough president and a Public Works Program to put 11 million to work, as in the 1930’s. Instead we have political posturing.

Check out an alternative:

http://www.americanselect.org/

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By Shenonymous, August 1, 2011 at 8:09 am Link to this comment

Keeping the door of optimism open, I hope you are right Lafayette,
for I hate to think Krugman is right, though at this point I do.  As a
liberal Democrat, I feel we the people are being betrayed and the
Republicans get all the cookies but one, the debt ceiling gets raised,
in three stages, which is still a Republican win.  Why?  Because the
Republican corporations get their financial asses saved by the US not
falling into default in their debts.

I don’t know about Banana Republics, as one man cannot ascend to
tyrant here, but a coalition of teabag and corporation oligarchy can,
which it is getting very close to being just that.

Just follow the Republican 10 Commandments and we can capitulate this
country to the Right-Wing Conservative Republican strategy to take it
over and enthrall the 99%ers.

One man, Obama, like Napoleon, cannot be the sole blame (do read War
and Peace). It takes a village!  But it is the misperception where power
resides and a misperception that one, as a group, the liberals, is
impotent.  Progressives must inform the public, the general public and
incite their will to power, in order to save their collective asses.

Those on these forums must beware of the Republican shills who would
instill a defeatism in those who really care about the ordinary folks.  They
must be squashed like the stinkbugs they really are.  And hold your nose
as you do it!

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By Anarcissie, August 1, 2011 at 8:05 am Link to this comment

mrfreeze—John Kenneth Galbraith suggested a long time ago that the United States was in many respects a Third-World country (‘banana republic’), dependent on exporting agricultural goods, overly concerned with military power and war, ruled by a rich elite who were driving it to ruin.  So in a sense we have already reached the status which Mr. Krugman is just waking up to.

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By Blackspeare, August 1, 2011 at 7:56 am Link to this comment

It ain’t over yet.  Though the present agreement is predicated solely upon spending cuts, there is still the “Bush Tax Cuts” that set to expire at the end of 2012 when Obama will still be president.  That will be Obama’s moment whether he gets a second term or not.  I suspect there may have been an implicit agreement to let the tax cuts expire——whether it’s across the board or not remains to be seen.

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By impeachTrojanhorseobama, August 1, 2011 at 7:39 am Link to this comment
(Unregistered commenter)

Impeach the Trojan horse traitor.

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By Mark, August 1, 2011 at 7:38 am Link to this comment
(Unregistered commenter)

The ‘Boys in the Club’ have been practicing for decades, establishing totalitarian regimes all over the world that enrich oligarchs and our Corp.‘s while impoverishing their peoples and exploiting their resources.
Now they’ve brought it home, to a nation so ignorant, apathetic and complacent, that most don’t even know we haven’t a democracy in America, nor know the meaning of fascism!
I suppose ya’ get the govt. you deserve, which was evident when they elected Bush…. twice (actually appointed once, then fraudulently elected again). ‘The Manchurian Candidate’, as was Clinton. Anyhow, this depression was planned years ago at Bilderberg.
Franklin was wary of our losing the Republic….... sorry Ben!
Until we’ve public financed elections, there’s no hope of regaining it.
The founders idea for avoiding ignorant zealots from controlling govt., was to only give the vote to the landed gentry, that might’ve worked then, but now, I’ve no idea how to escape this clusterf#$k.
Education’s the remedy, but I doubt many bigots are reading Truthdig.
It should be made mandatory, as should adults reading the Constitution, and maybe ‘1984’ and ‘Brave New World’.
“Political language is designed to make lies sound truthful and murder respectable, and to give the appearance of solidity to pure wind.”-Orwell
??

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By mrfreeze, August 1, 2011 at 7:35 am Link to this comment

Krugman (and many others) point out that the U.S. is destined, in the not-so-distant-future, to become a banana republic. Definition:

“Banana republic is a pejorative term that refers to a politically unstable country dependent upon limited primary productions (e.g. bananas), and ruled by a small, self-elected, wealthy, corrupt politico-economic plutocracy or oligarchy.”

I’m sincerely curious: suggesting we are headed in this direction seems plausible, but I’d like to hear others on this thread comment about where we’re headed. Are we becoming a banana republic or is this just Krugman overstating the case. Or, more fundamentally, are we a wealthy nation with a broken government? Or as some suggest, has the U.S. simply run out of steam?

IMO, we simply cannot continue to operate a country effectively (and humanely) by running endless wars, by giving corporations the legal status of individuals, by maintaining our current tax system or by dismantling our educational/social safety networks.

What do you all think?

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By CJ, August 1, 2011 at 7:06 am Link to this comment

I think Krugman understates the situation, if anything. It’s going to get a lot, lot
worse. But we knew the President would crumble, he always does. Krugman
doesn’t mention way back when Obama ruled out single-payer (though he
claimed to support such a plan) at the outset and then gave up the public
option in the already hopelessly watered-down version of the healthcare bill.

Obama’s a Republican, plain and simple. True, that doesn’t make him much
different from the average Democrat, but he talked a somewhat progressive
line, though nothing radical mind you. (He might have known Bill Ayers, but he
learned nothing from Bill Ayers, or from Jeremiah Wright.) He was always a
corporate guy about whom a few writers here (Hedges in particular) warned
before his election.

So I was writing Harry Reid yesterday morning to ask he not allow this latest
give-away (for all the good writing these people ever does), the whole time
knowing—like when I voted for Carter after Reagan had already been declared
the winner—Reid and his would give away the store. No need to watch the news
last night, the whole charade predictable all along—last-minute drama, etc.,
etc. Media even dragged in Wall Street, claiming standard market shenanigans
were the result of the “crisis.” They weren’t and I’m not sure Krugman’s right
concerning investors. That remains to be seen, but contrary to claims by some
economists, while most Americans are invested they are so only through 401(k)
mutual funds in stocks of which they’ve no idea and in which they don’t daily
trade on their own. And shares in any one company are miserly, of course. (For
them, let’s hope the markets perk up. It’s the best most can do, though many
don’t even have 401(k)s.)

Big-time traders might well react well to the news, stealing all of us a little
more blind. There’s reason the reactionaries do as they do and it’s not to appeal
to the tea party, reactionary creed aside. McConnell’s not one of these wimpy,
whiny freshman Congress persons who’ll be gone in a term or two. He’s a
political boss in league with business.

As are, apparently, co-Republicans Reid and Obama, neither of whom is too
young to know how far to the right our government has moved over the
past three decades.

Not only to the right but to out-and-out thuggery by now. Pols have become
muggers of the American people they’re always claiming to speak for en masse. 
CEOs have to be a little happy as well not to be regarded as the ONLY thugs in
the room. What a cozy little, and I DO mean little, family (mob-style) they make.

As we used to say, wrongly most of the time but not this time, “FASCISTS!”

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By prisnersdilema, August 1, 2011 at 7:01 am Link to this comment

Of course Obama will get the blame when the economy slides again, he’s the fool, and
should have seen this coming, the set up for the sucker punch the Rerhuglicans just
landed on his jaw.

He will be the one that gets the blame for this mess, both from his base and
From the right. Just in time for the new election cycle.

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By Litl Bludot, August 1, 2011 at 6:59 am Link to this comment

It’s beyond belief that Krugman (along with Scheer) don’t realize that it’s not
that Obama “surrender’s” to Repubican demands, it’s that he plans to.  He wants
to.  He’s surronded by corporate hacks, he appointed them.  His commisions
have the very people who propose cuts to medicare and privatizing social
security.  If Krugman doesn’t see this pattern, he should have his head
examined.  The question now is: Why can’t Krugman, Scheer, and fellow
progressive pundits say what Obama really is, because I don’t believe they don’t
know by now.

Obama is the coporate fascist’s mole posing as a liberal black man.  He is the
opposite of what he is branded to be by his handlers.  He is a power pimp for
the banksters, the military/industrial/prison complex..  All Bushes policies have
remained in place, and in fact expanded, from spying on us, keeping
government secret, distorting scientific information- so the polluters can
continue to poison the planet-expanding insane nuclear power, murdering and
slaughtering innocents in Iraq, Pakistan, Afganistan, Libya, Somalia, Yemen,
extending into Africe, Mexico, Central American and South America for
resource wars based on the rape and pillage of the planet by corporate fascists
Claiming the authority to kill anyone, anywhere.

As long as pundits like Krugman keep refusing to identify Obama and his fellow
corporate Democrats as willing partners in the destruction of what’s left our
freedoms, our ideas of justice and equality, not to mention the biosystems of
this planet,, the longer this country will be forced down the road of fascism.

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By Lafayette, August 1, 2011 at 6:49 am Link to this comment

CHEAP SHOTS

RD: Thus the blame for his election must go to the stargazers and utopians who rushed to vote for what was basically an empty symbol.


Bollocks to this notion. Who were Dubya and Billy-boy before they entered the Offal Office?

Those who have served in the position, due to their gained experience, are the best critiques of any incumbent. When where you last PotUS?

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By Lafayette, August 1, 2011 at 6:45 am Link to this comment

A balanced review of the Debt Limit Debate, here .

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By Mark Hiser, August 1, 2011 at 6:05 am Link to this comment
(Unregistered commenter)

Once again, it appears that the hostage takers had their way.  Common sense, and many experts, tell us that we need cuts AND new revenue.  But, we ended up with a bill that allows Obama to get through the elections, that emboldens the hostage takers on the extreme right thus increasing the divide in our government, that hurts the poor and middle class, that protects the wealthy and heads of corporations, and that ignores the everyday people of this country.  Another major disappointment with our government. 

When will we Americans have enough and engage Washington?  When will we remember that we have a role in government and can make a difference?  Washington is to blame—yhes.  But so are we for letting Washington govern for the few and against the many.

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By ardee, August 1, 2011 at 5:55 am Link to this comment

Why blame Barack Obama?

This is a man whose entire national stage was a partial term in the Senate. It has been said that the Presidency of the USA is the most difficult job in the world. Thus the blame for his election must go to the stargazers and utopians who rushed to vote for what was basically an empty symbol.

I suppose a case might be made that you all were duped by his high flown rhetoric, appeals to lofty principles and all that. But , when I think back to the numbers who voted for Shrubya, and twice no less, I fear that our democratic republic is in the hands of fools, all of us.

An educated and participatory electorate is an essential ingredient in the success of a working democracy. We, apparently, have neither. So discouraging, really.

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By David J. Cyr, August 1, 2011 at 5:37 am Link to this comment

Krugman considers it a “catastrophe” that Obama didn’t raise America’s war machine debt ceiling last December.

Anyone who opposes America’s serial wars of aggression being waged upon Muslim people, for the control of remnants of fossil-fuels, wouldn’t want the debt ceiling raised. If liberals actually opposed the wars they say they oppose (though they vote for them) they would want America’s credit card cut up and discarded.

If Americans were the Great People they see themselves to be, then they wouldn’t be borrowing money to keep invading and occupying other countries. They’d be disbanding the destruction at any cost imperial military that they can’t afford, and then budgeting their peace dividend enhanced tax dollars for spending only upon societally constructive policies. The most progressive nations are those that have suffered defeat, and lost their empires… and became more humane as a result.

America’s neoliberal liberals (aka “progressives”) are addicted to a war dependent economy that requires a constant (and unsustainable) growth… while we run out of resources to be consumed, and we lose our planet’s human habitable climate condition.

Yes, Paul Krugman, the END is near, but Obama hasn’t been surrendering to his corporate party Republican partners. The corporate party’s Democrats have never been more successful in doing what they do.

The Devolution of Liberalism:

http://chenangogreens.org/home/index.php?option=com_content&task=view&id=496&Itemid=1

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By truedigger3, August 1, 2011 at 4:46 am Link to this comment

Obama is in complete collusion and partnership with the Republicans in everything. He didn’t surrender or throw a political victory to the Repulicans, he is working with them according to a script. There is no difference whatsoever between the “new” Democratic party and the Republicans except in fringe cultural issues, but they are in complete agreement regarding the wars, fiscal policies and givng everything to Wall St. and the super-rich that they ask for.
All that “negotiations”, “shouting” pointing fingers and blaming between the Democrats and the Repulicans is make-believe theatrics and bullshitting for the naive population.
It happened before with the tax cuts for the super-rich, health care “reform”, financial “reform”. It is now a clear pattern.
The Republicans said the First thing they will do is to repeal what they called “Obama care”, but they didnt because they like it very much and it is what they REALLY wanted.
The next step is starting dimantelling Social Security and Medicare.

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By truedigger3, August 1, 2011 at 4:39 am Link to this comment

Obama is in complete collusion and partnership with the Republicans in everything. He didn’t surrender or throw a political victory to the Repulicans, he is working with them according to a script. There is no difference whatsoever between the “new” Democratic party and the Republicans except in fringe cultural issues, but they are in complete agreement regarding the wars, fiscal policies and givng everything to Wall St. and the super-rich that they ask for.
All that “negotiations”, “shouting” pointing fingers and blaming between the Democrats and the Repulicans is make-believe theatrics and bullshitting for the naive population.
It happened before with the tax cuts for the super-rich, health care “reform”, financial “reform”. It is now a clear pattern.
The Republicans said that the First thing they will do is to repeal what they called “Obama care”, but they didnt because they like it very much and it is what they REALLY wanted.
The next step is starting dimantelling Social Security and Medicare.

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By Lafayette, August 1, 2011 at 4:05 am Link to this comment

IT AINT NECESSARILY SO

I dare beg to differ with our esteemed Nobel Laureate with whom I share wholeheartedly his insistence on Stimulus Spending to get us out of the Deep Doodoo.

The outlook is not as bleak, however, as he paints it. How so?

Here’s our GDP progression over the past 40 years. Nice constant slope upwards, isn’t it?

Look at the inflection in 2007, when the economy supposedly went to hell in a hand-basket (by American standards).  In fact, it inflected then stagnated but it did not decline.

At present, with our GDP not at all in bad shape, businesses can fulfill present orders with the staff they have. So there is not the slightest necessity to invest in increasing production capacity (whether in goods or services). However, when Consumers decide to spend Discretionary Income rather than Save it, then there will be an up-tick in job creation.

It could happen, after all, as said above, the economy is buzzing along moderately well. Consider that the GDP in 2009 was already at 14.119 trillion, that is, $57 billion more than in 2007 when the economy started its decent into the Great Recession.

The question thus remains, what does it take to get back on the upslope that inflected in 2007 - that is, 4 years ago?  (Note that a typical recession in the US takes at least 3 to 4 years to mend.)  I suggest it is Consumer psychology.  That is, once mind-sets change and the Feel-Good-Factor returns, so will Consumers propensity to spend more. Then we shall see job creation, but not before.

Will that take another year? No, the Feel-Good-Factor is likely mending at present albeit slowly. Still, climbing back out of the Recession Hole will not be aided in the least by the lack of Stimulus Spending. Which is why the Replicants have become such an abject party obsessed with making Obama a One-Term PotUS - and the unemployed be damned. After all, what are the unemployed if not road-kill on the Highway of Life?

Whose Feel-Good-Factor must return? Those most menaced by unemployment – that is the grassroots at the bottom of the Social Pyramid. And they are legion. About 40% of all American households earn less than the median income of $44,600 per year. (See here.)

That’s where, particularly, once the Feel-Good-Factor returns and they no longer feel employment-menaced that the Great Consumer Awakening will occur.

MY POINT

But most of all, what the LaLaLand charade has highlighted (to my great pleasure) is the fact that Taxes Must Be Increased, like it or not.  This exigency opens the discussion of why and how.

Taxes in America are a bane upon we, the sheeple, because Income Disparity is amongst the worst of the Developed World. And increasing Marginal Income and Capital Gains taxes to pre-Reagan levels (above 70%) will have these advantages:
•  Address the malignancy of Income Disparity in America and boost the economy with Stimulus Spending.
•  Perhaps help lower the National Debt.
•  Offer the opportunity to pass Balanced Budget legislation that gives the PotUS elbow room for deciding national objectives.
•  Deincentivize corporate greed that follows blindly the QuickBuck.
•  Offer Progressives the opportunity to focus the election debate on “Their Agenda” (Presuming they are smart enough to build around which we can rally.)

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