JimC—You got it! I predicted it also. When I heard that they had “all three branches”, I thought, well, know they will have no excuse not to make good on some of their promises—then, I thought of what you did…

The “no 60 vote majority” propaganda, started before all the rep. and senators were even elected! They will ALWAYS find an excuse! It is because, they are really conservatives, and, want to kiss big business’ ass, but they need an exucse, so that we will still believe that they “feel our pain”. The DLC is crowing again, and, all liberals can just go to hell…they arent even going to have Dean at the inaugeration…

I agree with all you say. Just think of it—Larry Summers and more tax cuts…“change’s” ass..

G. Anderson—Please re-read my post! I said that credit was ok for “extras’, but that people are paying for necessities with it. I think we need to use , and make available, more “credit”—not at all!

I have never understood how excessive borrowing, especially to pay for necessities, created a “need’ for more “credit”..

But, people used up all the equity in their houses, as the duopoly scaled back social progams, to pay for the basics of life. (some bought up McMansions , and, we should not help them at all—it is not hard to decide—just look at the median for a house—dont help anyone who tries to live beyond that) That is how we are where we are today..goodbye middle class..

G . Anderson , excellent post , Tdbach , I too am sick and tired of Obama kissing these republicans ass’s . I would love to see the majority simply shove the neccessary policies down their god damned throats . I known good and well all 41 republican senators wouldn’t stay in lock step for long , especially if the democrats made them filibuster , actually stand and block votes day after day for all to see . I believe a lot of this 60 vote blather is simply a way for the DLC ( republican lite ) democrats to get cover . Corporate money has made it’s way deep into the democratic party also , they ( corporations ) saw this coming and have been gaining a foothold in the democratic party for a while . I am quite concerned that Obama is giving credibility to republican economic theory   , we don’t need tax cuts , we need to make the government solvent again . As I have said before , where are the liberals in his administration ? All I keep hearing is this kum bi yah bullshit , he seems to be worried sick about making the republicans happy , screw them . I was concerned from the start about his being steeped in University of Chicago economic theory , it’s a bastion of conservative neanderthals and a lot of his appointments haven’t made me feel any better . This Gopta , or what ever his name is didn’t help , he’s a corporate shill and a right wing hack , I keep thinking ” what the hell is he doing ” ? Now , he seems to be determined to try to fix this horrid mess with more of what got us into it , tax cuts , tax cuts , tax cuts and don’t make the rich pay any more , the republican cure all , we don’t need more tax cuts , we need to get the budget back in order . Stop these stupid , counter productive wars , get tax policy turned around , pass single payer healthcare and last but not least ” put the bastards that got us into this mess in jail ” . We also need to severely penilize corporations who move off shore and refuse to allow them to do business here if they don’t meet fair labor practice where ever they are . Let the corrupt bastards try to sell their goods to the people they want to pay .50 cents a day to , see how that works out for them .

I agree with JimC (and uglyfemale and Marie Cocco) - a highly progressive tax policy WORKS for everyone, even the wealthy. Tax cuts that aim to flatten the tax burden across the economic strata work only for the upper crust and ultimately even hurt even them (see their portfolios shrink).

But I don’t believe that Obama is including tax cuts in his stimulus package because he believe in their efficacy in stablizing the economy. I think the only reason he’s doing it is to get Republican support for his bill - or for anything else he wants to do. Without the repubs on board, he’s dead in the water. But I also think he underestimates his mandate.

Actually, Delphi credit is not fine. It’s a major reason why people can’t afford to pay their own way and why they have to turn to government for assistance.

After many years of government regulation, people can by products for example toasters, with the reasonable expectation that their products will work and they won’t burn their house down in the night.

However credit card contracts can run to several pages, of dificult legal terms, that even trained experts have a dificult time undestanding. Added to this is the fact that card companies have the right to change or revoke their contract at any time.

So, getting a credit card is a little like playing Russian roulette with a bank. It’s dificult for the average person to know what they are getting into, until way too late. The average credit card debt is runnning close to $20,000 dollars at this point, money that seems to have unending liabilities.

At this point I would like to quote from Elizabeth Warren from her article from the Pensylvania Law Review, Titled ” Making Credit Safer”.

“Physical products, from toasters and lawnmowers, to infant car seats and
toys, to meat and drugs, are routinely inspected and regulated for safety. Credit
products, like mortgage loans and credit cards, on the other hand, are left
largely unregulated, even though they can also be unsafe. Because financial
products are analyzed through a contract paradigm rather than a products
paradigm, consumers have been left with unsafe credit products. These dangerous
products can lead to financial distress, bankruptcy, and foreclosure,
and, as evidenced by the recent subprime crisis, they can have devastating effects
on communities and on the economy. In this Article, we use the physical
products analogy to build a case, supported by both theory and data, for comprehensive
safety regulation of consumer credit. We then examine the present
state of consumer credit regulation, explaining why the current regulatory regime
has systematically failed to provide meaningful safety regulations. We
propose a fundamental restructuring of this regime, urging the creation of a
new federal regulator that will have both the authority and the incentives to police
the safety of consumer credit products.”
†

We have done and overdone the tax cut boogie..Stop it! Its pandering!

xyopher—WHY is it “up to us”? He is getting paid—I am not, and, you are not!

The Govt Budget Office sites the Bush “tax cuts” as the single largest source of our deifict, but, now Obama wants to do MORE! Dance with the one that brung,ya, i guess!

I would suggest that people check the stats (in the arcicle) on median income. If you make $154,000, you are in the 95th Quintile! If you cant make it on that—sell something!

G.Anderson—‘credit” is just fine for “extras”. But, most peopel (or many) are using credit to pay for basic subsistence living, as the govt (over the course of about 40 years) has cut every social program to the bone. People should not have to pay 29.99% to buy health care or food…

Although I am looking forward to getting a tax cut, I believe that, Tax cuts aren’t going to help that much because of the way money is being spent.

A very small percentage of the population pay cash for everything, the rest rely on credit.

So putting a few dollars in peoples pockets will not resolve the current punitive nature of the financial system.

Part of the reason why the economy is strangling itself is because of credit reforms passed under Bush. Congress was warned by financial experts that if there was a downturn, those Bush enacted reforms would make a down turn much worse, and much longer. Yes, I know Democrats also supported the bill, Joe Biden was one of them.

Currently people are paying astronomical interest rates on credit cards, and they are burdened with endless punitive credit card fees, and are unable to ever get free of their debts no matter how bad things are for them, because of Bankrupcy reform. If their card cancels them because it deems them unworthy, it can tack on many thousands of dollars on their bill, and there is little they can do to protect themselves from the armies of modern day carpet baggers that will then come after them.

Student loans are also another big bank scam that makes debt slaves out of people. The banks and their collection agencies make billions on people by putting them in life long debt, and the money goes down the black hole of the banking industry.

All these scams take money out of the market place, and prevent people from supporting themselves and their families, so they can never get ahead.

The idea behind credit, is a sound one. To allow people to buy things over time that they can’t afford to pay cash for. But, the perversion of this by large banks, credit card companies and lawyers, has placed this system in jeopardy.

So why are we propping up the culprits of our debt mess? So they can create more debt to sell to China? 

Until people can get out of debt, and are given protection as consumers again, then no amount of cash will help, it’s just more fuel for the fire.

That money will only go to pay off debt, and that debt can’t be paid off, because the banks have it rigged to be that way.

The bottom line is, our debts cannot be paid off under our current system of credit.  And as long as that’s the way it is, the the economy will keep heading down.

I agree with ” Uglyfemale ” and if I may add a bit to her comment ; Put the tax rates on the very wealthy ( the top 1 or 2 percent ) back at 60% or so on everything over around 200.000 or so . Historically the economy has boomed when the richest few percent have had a very high tax rate . Don’t believe it , just check the tax rates on the wealthy during the best years for the middle class in this country . They then tend to plow their money back into business’s to avoid paying it . When taxes are low on the super rich they get into mischief , using their windfall to buy politicians and favorable legislation to attempt to quench and perpetuate their insatiable greed . Put the inheritance tax back to it’s highest level , TR understood what happens when wealth is allowed to be passed on for gererations , a literal aristocracy is formed , the bane of a democracy and destroyer of the middle class . Cut the defense budget in half , we have solid allies and friendly countries on our borders , we don’t need to spend more on the military than the rest of the world combined . Even cut in half we would still spend more than the next six to ten largest countries combined . The founding fathers realized that a large standing army in peacetime was a bad idea , it drains resources and tends to make military solutions attractive . Not to mention gets us into messes like the ones we’re presently in . It eventually also leads to tyranny . Use public money only for elections , forbid private money to politicians , period . Make paid lobbying illegal , if some enity does lobby , there should be a transcript and a witness who would be netural and representing the public interest , complete transparency . Link salaries of politicians to a multiple of the average salary of the middle class . I understand that some would argue that such transparency rules would have a chilling effect , well , may be , but everybody would be on a level playing field , and if strictly enforced would encourage those in elected office to make decisions leaning toward the public good rather than special interests . Those who argue that taxes are bad fail to realize that historically one sure marker that a country is in decline is a very low tax base . High taxes are a problem when there is a ruling class taxing the lower class’s and hoarding the wealth rather than using it for the common public good . Taxing the wealthy keeps the money circulating which is neccessary for a thriving middle class . Those who are innovators and start business’s have always thrived in such circumstances . When there is a large vibrant middle class there is demand for goods and services thus business prospers also , supplying goods , services and jobs .

The biggest issue here is that no amount of tweaking fiscal policy (taxing, spending, etc.), can overcome poor monetary policy.

Tax cuts means less money for the government to spend.  Hopefully that money will be spent wisely and with more accountability.  And like any smart companies trying to survive in these tough economic times, the gov’t should also consider job cuts.  I’m pretty certain the gov’t has grown in size significantly during the Bush administration and like all big companies there is probably a lot of dead weight.  I say it’s time to trim the fat.

Marie Cocco: “The lesson of the Bush era is that relying on tax cuts as the centerpiece—often the only piece—of economic policy is just plain bad policy.”

Tax policy is central.  Production no longer creates demand because the poor and middle class are broke.

The wealthy do very little spending because they already have everything, including 90% of the Nations wealth.  Adding additional taxes on the wealthy and reducing taxes on the working poor and middle class is precisely what is needed.  People can then afford basic necessities such as food, clothing, shelter, transportation and health care.

Cocco must be too wealthy to get it.

Heard BHO’s speech this morning on the economy.  Great in oration, but little in specifics though he did make reference to failures of the regulatory community in this economic debacle.  Failures mean that people were at fault, but who will be accountable and will they be punished or will it all go by the wayside for the umpteenth time.  I suspect it will be the latter.  In the US, there is little real punishment for white-collar crime.  In a true capitalistic society as created by the Bush administration the philosophy is “caveat emptor” where the wolves survive and the sheep are poor and plentiful.

Several pundits have mentioned Milton Keynes and his analysis of the Great Depression. If I understand Keynes’ position correctly he did not think that “high taxes” were the problem then. He singled out:
1. The reparations demanded from the “Central Powers” after WW 1 which prevented Germany to become once again the “Engine” of West European economic and financial recovery.
2. Much too low wages in the industrialized nations.
If he was correct, then the long-term responsibility of our recovery from “Pratfall 2008” lies with employers and not with the Federal Government. Employers must learn to increase wages substantially and at the same time produce more efficiently to prevent significant price increases. I did not hear our “Saviour” Obama say anything about wage increments in return for the 100 billion dollar injection into business.
With regards to the reparations after WW1, several actions can be taken now. States can forgive “debts” on a 1 to 1 basis. Our huge military outlays must be drastically curbed. This last step is unlikely to be taken by our future warlord Obama who wants to expand the war and occupation of Afghanistan and wants to expand the size of our army. Good luck folks! The current depression is not only going to deepen,it is going to last a long time.

During one of his numerous press conferences (I have completely lost track of this avalanche of hot air) Obama stated that he was going to recover some of his huge deficits from “entitlements”. What the hell does he mean by that? Social Security which, judging from earlier embarrassing misstatements he seems to distrust? Or medicare? Good luck fellow. I sure hope that AARP will then do to you what it did to President Bush namely make you bite the dust.

Both George I and Clinton raised taxes - Wall Street rallied, the economy followed suit.  Could it be that ‘taxes’ have little if anything to do with the health of the economy?

(Republicans know that voters react favorably to the ‘sound’ of tax cuts so that’s the ‘sound’ repeated ad nauseum. Maybe Obama is just following their lead?)

Ms. Cocco questions if people making two-hundred grand a year really need a tax cut.  Twenty-one percent of those making one-hundred grand/year live from paycheck to paycheck.  We’ve been on a spending binge, which, as Jeff29 points out has resulted in people spending more money than they’re bringing in.  That’s really the problem that has come home to roost.

For some reason, many people fail to understand this one simple point:  Tax cuts are not the problem.  Spending more money than you bring in is the problem.

Regardless of how much you hate Reagan or how much you hate Bush, you cannot logically deny the fact that tax cuts and rebates help to stimulate the economy in the short-term.  The problem comes in the long-term when spending is not adjusted to match.

For all of you Obama fans, prepare to be disappointed.  There is no way that he can keep all of the promises that he made to all of the different political and special interest groups.  Now, of course, he will do his best to smooth talk his way out of it, the media will continue their collusion, and many will be pacified.  I truly hope those who supported him try to keep his feet to the fire on all of his promises.  Keep in mind, however, if you do this, he will be a one term president.

Oh come on now, of course doing the same thing that got us into this mess will get us out…the market will read Obama’s good intentions or something.

Those tax cuts will mostly be spent on debt servicing, making for zero effect on the economy.  Buying that new t-shirt might be less important than making a dent in an ungodly credit card balance.

And the money to pay for those tax cuts will add to the collective debt that’s already mountainous…at a time when our consumer spending fueled GDP is likely to contract.

MUST keep President Obama on track of what he campaigned on…Taxing Bush’s Financial Royalist Base (i.e., the ACTUAL Elites). It is up to us keep Mr. Obama and his promise of Change going full steam ahead!!!