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The Economy Is Bad Enough

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Posted on Jun 27, 2011
woodleywonderworks (CC-BY)

By Eugene Robinson

There is no good reason for negotiations on the budget and the debt ceiling to be deadlocked, because the solution is obvious: First, do no harm.

The Hippocratic injunction should be something befuddled economists and warring politicians can agree on. With the nation struggling to recover from a devastating recession, unemployment stuck at crisis levels, financial markets spooked by the possibility of European defaults and consumers disinclined to consume, it makes no earthly sense to suck money out of the economy.

Democrats are right that this is a terrible moment for spending cuts. Republicans are right that this is an awful moment for tax increases. The only reasonable thing to do is kick the can down the road—but in a purposeful, intelligent way.

As a practical matter, this means Republicans must swallow an increase in the debt ceiling and Democrats must accept painful spending curbs that kick in when the economy is off its sickbed. It means conservatives have to be patient in bringing expenditures down and progressives have to be patient in returning tax rates—even for the wealthy—to what many of us consider appropriate levels.

All this is clear—even as much else about the economy and its prognosis becomes increasingly murky.

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Indeed, it is reasonable to ask whether the “dismal science” of economics even works anymore as a reliable tool for analysis and prediction. While some economists remain staunch, unwavering disciples of John Maynard Keynes or Milton Friedman, others have begun couching their words. It’s almost as if the laws governing the universe of money have changed.

Two years ago at a seminar, I heard a distinguished economic forecaster confidently explain how the recovery would proceed. While some usually reliable indicators were anomalous and contradictory, he said, the one thing he knew from the historical record was that sharp, deep recessions are followed by steep, roaring recoveries. By the second quarter of 2010, he said, growth would be as high as 4 percent and unemployment would be tumbling. Happy days would be here again.

I won’t embarrass the man by naming him, since he wasn’t much further off base than many of his peers. No economic orthodoxy has come through the past few years unscathed.

At least former Federal Reserve Chairman Alan Greenspan—once a firm, unquestioning believer in deregulation—had the honesty to admit that the 2008 financial meltdown exposed a “flaw” in his ideology and left him “in a state of shocked disbelief.” That’s where the whole economics profession should be.

But even if economists don’t know where the nation and the world are heading, there’s plenty of data to tell us where we are right now. Unemployment was at 9.1 percent in May, up from 9 percent in April. Housing starts were up slightly after having declined sharply the previous month. Retail sales were down a fraction after being up a fraction. Taking a longer view, the economy has clearly improved over the past year—but the improvement is slow, wobbly and fragile.

Given this state of affairs, it’s hard to imagine how taking money out of consumers’ hands—either through cuts in government spending or tax increases—could possibly make things better. It’s easy to see how such measures could make things worse.

Likewise, it’s hard to believe that running trillion-dollar deficits every year is sound policy. Economists who confidently tell us it’s no problem that the national debt is approaching 100 percent of GDP sound as if they’re whistling past the graveyard. I believe it would be a long, long time before the financial markets began to see the United States as a great big Greece, but at some point that day would come.

And how could Congress turn a long-range crisis into an immediate disaster? By stubbornly refusing to raise the debt ceiling, which would be the economic equivalent of a toddler’s temper tantrum.

It’s clear what needs to be done. President Obama and congressional leaders should agree on a series of firm deficit caps that would reduce the debt over time. This must be accompanied by a reasonable increase in the debt ceiling.

Then we will spend years engaged in a difficult but necessary fight over what kind of government we want and how much we’re willing to pay for it. At present, we’re operating a heavily armed, heavily indebted health insurance company—a giant, profligate Aetna or Prudential, with nuclear weapons. That’s not going to win the 21st century.

Eugene Robinson’s e-mail address is eugenerobinson(at)washpost.com.
   
© 2011, Washington Post Writers Group


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By TAO Walker, July 2, 2011 at 1:02 pm Link to this comment

While some here pursue their petty peeves, “THX 1133” offers a timely reminder
of the debilitating (ultimately paralyzing) effects of the rule of fear on those
subject to it.  S/he also calls attention to the CONfusion so many languish in
over the real nature of Human freedom.

These days the latter is often equated with mere license….the “self”-referential
prerogatives of “individual autonomy.”  It is still claimed in some quarters as an
“inalienable right,” attached to Humans by divine decree, and to be guaranteed
by institutions of “governance” taking their “authority” ultimately from some
disembodied (but paradoxically anal-retentive) tormenting (but inexplicably
“loving”) entity.

Many ‘moderns’ would dispense altogether with the god ‘grant’ notion,
substituting for it the humanist pretense of CONsent, that has the
manufactured wants of ‘the crown of creation’ serve as sufficient justification
unto itself for whatever means are necessary to satisfying those by-now-
obviously degenerative desires….at-least as these means are practiced upon all
the non-human components of creation.  Thus we’re seeing lately another well-
publicized rush to prosecute some inCONvenient “individual” like the Libyan
head-of-state for “crimes against humanity,” even as his would-be punishers
ruthlessly ravage helpless people by remote-CONtrol….while the daily
devastation wrought upon The Living Whole of Nature, by the industrial-
strength idiocy of the subspecies homo domesticus, is not even on ‘the radar,’
never-mind the docket.

Human freedom apart from the Living Ground of the Organic Responsibility
going with our given place in the Living Arrangement of Mother Earth, as a
component in Her immune system, is nothing but a “self”-serving and empty
CONceit, at-best.  It CONsists of all the kinds of cheap-imitation-plastic-
substitutes on-offer these days in the marketplace (of ” better ideas” and other
industrial waste products).  In actuality, however, that freedom itself becomes
when abused (as it is being, epidemically, today) the very greased-skids-road
down which the severely organically dysfunctional inmates and administrators
of the “global” gulag race to their own extinction….laughing (manically) all the
way, at us surviving Free Wild Peoples, of ALL Kinds.

Meantime, the chronic rule of fear has again metastasized into another of its
terminal-stage reigns of terror….and the delusion deepens that “It’s the
eCONomy, stupid!” and that there is some solution to be found, some
deliverance to be devised, merely by “doing the math.” 

HokaHey!

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By Paul Fernhout, June 30, 2011 at 4:13 pm Link to this comment
(Unregistered commenter)

As I say on my site:

In brief, there have always been five interwoven economies, and the balance of them changes with technological changes and cultural changes:
* A subsistence economy (“There’s some lovely berries over here.”);
* A gift economy (“The meat from this deer I hunted is going to spoil; I’ll share it with the tribe, and others will share their hunting results some other time as they have in the past.”);
* A planned economy (“Let’s put the longhouse here. I’ll cut the trees, you level the ground, you over there will put up the walls, and you over there will cook us some food while we are busy with these other tasks.”);
* An exchange economy (“You scratch my back, I’ll scratch yours. I’ll trade you some of my extra berries for some of your extra deer meat.”);
* A theft (or conquest) economy (“What’s yours is mine because I’m stronger, cleverer, sneakier, or can afford better lawyers.”).

Paid human labor has less and less value due to several causes including:
* robotics, AI, and other automation,
* better design,
* the accumulation of physical infrastructure,
* relatively cheaper energy (which can often substitute for human labor), and/or
* the emergence of voluntary social networks.

So, we can expect the balance between those five interwoven economies to change as our technology and society changes, perhaps with:
* A subsistence economy through 3D printing, gardening robots, local PV solar panels, and other local clean energy technologies (like cold fusion or something else);
* A gift economy through the internet, like sharing digital files to use with our 3D printers or gardening robots, or coordinating the movement of free goods like through Freecycle;
* A planned economy on a variety of scales, including through taxes, subsidies and regulation affecting market dynamics;
* An exchange economy marketplace softened by a basic income; and
* Minimizing the impulse to theft (or conquest) and related violence through the previous four changes.

The particular balance a society adopts is going to reflect the unique blend of history, culture, infrastructure, environment, relationships, mythologies, religions, and politics of that society.

Understanding this big picture is all part of rethinking socieoconomic institutions for the 21st century based on new (yet old) paradigms.

Mainstream economists have created a beautiful body of mathematical thought based on several key assumptions that has resulted in elegant equations worth admiring for their own sake. There is just one big problem with mainstream economics. Many of the assumptions are questionable. So, the mainstream equations in reality can produce divide-by-zero errors, such as when the value of human labor goes towards zero, or the cost of energy or information goes towards zero, or as supply of goods and services exceeds demand on a long-term basis and profit goes towards zero and the system freezes up.

Mainstream economists try to ignore these long term trends and divide-by-zero problems by assuming infinite demand. But infinite demand is just not in accord with healthy human psychology or the social dynamics in a healthy self-reflective society that cares about its future. See Maslow’s Hierarchy of Needs. Or think about the emerging “Reduce, Reuse, Recycle” ethic. Or see any of the world’s major religions — including humanism — about moving beyond materialistic values. So, mainstream economists’ assumptions about demand always outpacing productivity increases are questionable. There remains some truth in them within limits, but not enough to prop up their entire mathematical house of cards in a hurricane of widespread social and technological change including robotics, 3D printing, nanotechnology, better design, AI, cheap communications, dirt-cheap solar panels (predicted), cold fusion (maybe), and voluntary social networks.

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By Inherit The Wind, June 29, 2011 at 8:01 pm Link to this comment

So much for that, I’m bored with this thread. I’m letting things proceed of their own accord; I’m relaxing and not troubling with these details. I’m pretty much indifferent.
****

Thanks for the grins, JD!

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By johndrachel, June 29, 2011 at 7:19 pm Link to this comment

Enough of the polite and politic pleasantries.

There is nothing scientific about the argument being presented by the deficit hawks on either side of the aisle. There is no grand economic theory or sophisticated analysis here. It is a simplistic ideologically marriage between imperious elitism and unmitigated greed. Please see “Ax and Spend” ... http://jdrachel.com/2011/06/30/ax-and-spend/

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By JDmysticDJ, June 29, 2011 at 5:53 pm Link to this comment

RE: Inherit The Wind, June 29 at 9:05 am Link to this comment

“Tao Walker’s absurd “solution”.  Cast an I Ching… (the Book of Changes) whoopee. That’s really gonna help….”

*******************************************************************

Yeah, that’s too hopey changey for me too.


In defense of Tao Walker and the I Ching, I’ll offer the following from the I Ching:

“Everything proceeds as if of its own accord, and this can all too easily tempt us to relax and let things take their course without troubling over details. Such indifference is the root of all evil.”

(The above quotation from the I Ching is Existential Philosophy, but don’t tell Tao.)

Well… I was under the impression that the lust for money was the root of all evil, but maybe evil is a many rooted tree.

The “I Ching” also referred to as the “Tao Te Ching” “Book of Changes” and a bunch of other things is as worthy, or unworthy, of investigation as the “Book of Proverbs” in the Bible.

“Tao” translates as “the way, or path.” Which might shed some light on the mysterious “Tiyoshpaye.”

Let the rich eat the poor; it’s the “Tiyospaye Way.” (I’m not certain about that, I thought I’d just throw it in as food for thought.)

So much for that, I’m bored with this thread. I’m letting things proceed of their own accord; I’m relaxing and not troubling with these details. I’m pretty much indifferent.

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By SoTexGuy, June 29, 2011 at 11:52 am Link to this comment

I don’t have my neck hairs standing up over this edition of Robinson.. as I frequently do! Yet I feel the need to comment on this one thought he shared with us..

“President Obama and congressional leaders should agree on a series of firm deficit caps that would reduce the debt over time”

I did well in the second grade (and beyond though maybe it doesn’t show)  so I must point out that statement is nonsensical! Either you have deficit spending or not.. simply reducing or capping deficit spending will never reduce or eliminate debt.. only perhaps slow the growth of debt.

That’s what I think, anyway.

Adios!

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By Lew Ciefer, June 29, 2011 at 11:31 am Link to this comment

“Democrats are right that this is a terrible moment for spending cuts. Republicans are right that this is an awful moment for tax increases. The only reasonable thing to do is kick the can down the road—but in a purposeful, intelligent way.”

More ‘keep it simple stupid’ adult male bovine excrement from one the Ministry of Truth’s many shills.

As anyone knows when you haven’t the finances—the U.S. is broke news—you don’t keep spending money you don’t have. The trap door with ‘taxes’ is that it’s always about taxing the working man—income taxes.

The corporate-owned State propaganda apparatus is geared to play one side’s envy of the phantom ‘rich’ and the other side’s hatred of ‘vote-buying social programming schemes’ against each other. The result is, always and without fail, the lower and middle classes supporting a ‘cut off your nose to spite your face’ policy that assures the status quo remains firmly ensconced above the fray accumulating an increasingly disproportionate share of national/world wealth while the benighted sit like 2 year-olds wondering why their diapers are warm and squishy.

Two areas where spending cuts can be facilitated are foreign aid and corporate subsidies. Cut all foreign aid and corporate subsidies, immediately. That act alone will significantly reduce debt without negatively affecting the Left’s voter buying social programs and reduce the need—if any—to raise taxes on workers’ incomes. These cost cutting schemes are never offered as part of the so-called ‘debate’ because they would diminish the Power Elite’s wealth creating machinery and do not serve as fear factors to working Americans—only to failed States, Wall Street, corporate board members, and the incompetent social workers pretending to be Statesmen in the U.S. government who make their fortunes trading on insider information.

If after cutting all foreign aid and corporate subsidies it is found that a ‘tax’ increase is needed, the incompetent social workers pretending to be Statesmen in the U.S. government should go after capital gains and all those tax avoidance schemes—trusts, foundations, etc.—legislated to provide all those ‘rich’ people who are dying to pay more taxes methods to AVOID paying more taxes. If they feel they want to tax income they should raise income tax on all incomes above $10,000,000.00 at 90%. The super-wealthy make their fortunes from capital gains, tax-payer subsidized profits, and tax deferment and avoidance schemes much of which are hidden from public view wrapped in golden parachutes. The super-wealthy have all that money working for them, accumulating wealth, while the working man works for money.

The irony is that in spite of all the evidence that centralized, monopolistic economies do not produce prosperity but rather increase poverty and misery for all except those of the Power Elite, the incompetent, poltroonish, social workers pretending to be Statesmen and their masters, the Power Elite, continue to ‘fix’ the failing centralized, monopolistic economy by increasing centralization and monopolization.

You can’t make a village idiot smart by injecting her with Stupid.


“For the time will come when they will not endure sound doctrine; but wanting to have their ears tickled, they will accumulate for themselves teachers in accordance to their own desires, and will turn away their ears from the truth and will turn aside to myths.” -Timothy

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By Inherit The Wind, June 29, 2011 at 9:05 am Link to this comment

Tao Walker is intriguing; he resorts to extraordinarily extravagant idiosyncratic rhetoric to simply say, “The white man’s civilization sucks.” Ain’t it the truth!
****************
True dat, but what civilization doesn’t suck? The “Yellow” and “Brown” man’s civilization is polluting the earth just as fast…Look at Asia, particularly China and India. Japan doesn’t pollute as much, but only if you don’t consider spewing deadly radioactive debris into the air “pollution” .

Tao Walker’s absurd “solution”.  Cast an I Ching… (the Book of Changes) whoopee. That’s really gonna help….

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By djnoll, June 29, 2011 at 8:31 am Link to this comment

I understand economics, having taken several courses in the subject and tutored others.  I understand how to balance what comes in with what goes out.  But I also understand that in this nation where 80% of the wealth rests in the hands of 1% of individuals and corporations who pay little or no taxes, you have a problem.  Eugene Robinson has written one of the worst pieces ever in this column, designed to keep people from panicking and it would appear to appease politicians and the wealthy.

In balancing our budget, reining in debt, and reducing the deficit both sides have failed the American people.  As several people here have pointed out, along with 45 of the wealthiest people in America, the rich need to pay their fair share of the tax bill.  Raising taxes to 39%, or even more,on the corporations and wealthy is necessary. This is indisputable, contrary to GOP ideology.  Eliminating wasteful spending in the form of programs that are special interest and do not good for the general welfare is also necessary, but that does NOT include programs that keep money in the pockets of the unemployed and elderly, food in the mouths of our children, roofs over the heads of our families, and jobs here in America, not overseas.

Solutions are easy, and found in our history:  government jobs for the unemployed in three areas - a new power grid aimed at alternative resources; infrastructure rebuilding, including a national rail system and repairs to highways; and a national environmental reclamation of land, water, and air to improve our farmland and to produce food here at home.  These three programs could put almost all of our unemployed back to work, and train them for new careers.  It should be at a living wage and they would then pay taxes to help the whining wealthy meet our tax obligations.

Debts must be met and not raising the debt ceiling is tantamount to political malfeasance.  Not coming up with solutions that will work, have worked historically (which because most of our citizens no longer are old enough to know or remember it is ignored), and will work now to recover from the Bush/GOP economic disaster is negligent and ignorant. 

Economics is simple:  supply equals demand in equilibrium.  In other words, money in (taxes) equals money out (government spending)to create a balanced, healthy economy.  If there is not enough money coming in (the top earners pay next to nothing)to pay the bills, then cuts need to be made in those bills.  HOWEVER, cutting money flowing out that will help 99% of Americans to spend is not going to work.  This flow must continue in order to create a demand for private goods and services, because when you cut that money off, then everything dies and the only resource is government spending.  This is something that our President and the Democrats cannot seem to hold the line on, and the GOP does not care about at all.  When you have such a situation, you have a huge problem.

If the American people are going to be held hostage to GOP stupidity and Democratic cowardice, there will be a heavy price to pay for the rest of America, and it will not be in at the ballot box in 2012.  It will be on our streets and it will not be pretty.  Crime rates are up as people try to survive, health care expenditures are through the roof, children are going hungry, and people are jobless and homeless or so overworked that they are dropping like flies.  This is unsustainable in a healthy society, and people can only be pushed so far.  I would be very careful if I were the people in our state capitals and in DC if they continue these policies of attack on the American people.  Violence will be its only outcome, and then only God can help us.

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By Paco, June 29, 2011 at 8:11 am Link to this comment
(Unregistered commenter)

“Republicans are right that this is an awful moment for tax increases”.

This is indeed the propaganda we hear from Republicans, but to say they are right is to not think the issue through.  This is indeed an awful moment to tax the poor, the middle class and probably even the wealthy.  However, it is always a great time to increase taxes on the uber-wealthy.

There is a level of wealth that is unhealthy to our country and in fact any country, particularly one that pretends to be a democracy.  With wealth comes power and too much power in the hands of a small number of people is antithetical to having a democratic government. 

More importantly, concentrated wealth is detrimental to an economy because a healthy economy is dependent on the flow of money.  Sensible taxing policy, such as we had in the 1960’s and 1970’s would go a long way to rectifying our problem of concentrated wealth.  Mexico is a good example of a country that has failed to rectify this problem.

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By JDmysticDJ, June 29, 2011 at 4:19 am Link to this comment

Eugene is only afraid that our politicians might bankrupt us. I’m afraid that our politicians and Eugene will bankrupt us.

With all due respect I’ll offer that Inherit The Wind and Lafayette have clearly defined the problem and offered the correct solution, but it’s not rocket science, just basic math.

Many practitioners of the “dreary science” seek to make it less dreary by dressing it up in mumbo jumbo jargon, voodoo -“fundamentally flawed”- philosophy, self serving continuously errant projections, and by dressing themselves up in the finest attire while they spout their convoluted intentionally mystifying gibberish at congressional hearings, from podiums, and in the many varieties of hallowed halls.

Tao Walker is intriguing; he resorts to extraordinarily extravagant idiosyncratic rhetoric to simply say, “The white man’s civilization sucks.” Ain’t it the truth!

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By THX 1133 is not in the movie..., June 28, 2011 at 6:43 pm Link to this comment

TAO Walker, June 28 at 9:05 am
We do not actually live and breathe together in any
virtual world-o’-hurt CON-
TRAPtion called an eCONomy, Sisters and Brothers.  It
is the severe organic
dysfunction of homo domesticus, rather, within the
actual Whole Living
Arrangement of our Mother Earth, that is giving them
all so much grief these
days.

So, ALL TOGETHER NOW!:  It’s not the stupid (and
stupefying) eCONomy, after-
all!

HokaHey!
==========================
Posting on sites like this is a way for us to feel
like we’re actually accomplishing something; as
opposed to facing the reality of our CONdition.
But then fear of the path, unknown to us, is a
powerful bogyman and we forget that fear is a thief
which steals our very lives/freedom. But then freedom
is another state we don’t really understand either.
Cheers.

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By Hulk2008, June 28, 2011 at 3:15 pm Link to this comment

I am still waiting for that famous Reagan “trickle” to start….. especially if it could please be directed “down” this decade. 

Also still waiting for that avalanche of jobs that extending the Bush tax cuts promised.

My experience is: 
Give a poor dude a buck and he spends at least a dollar; give that buck to a fat cat and 80 cents stays in his pocket…. 20 cents goes to buy politicians who will get him another 2 bucks.

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By Rich Simpson, June 28, 2011 at 2:03 pm Link to this comment
(Unregistered commenter)

Our country seems determined to self-destruct at all levels. The President, Congress, and Supremes are all actively working against our national interests and general welfare. And many of the citizens most adversely affected are cheering and voting for the self-destruction.

I’m reminded of WW-I, when supposedly civilized countries undertook a spasm of incredible self-destruction in Europe, that eventually involved the whole world and took 40 years to play out.

The specifics differ between then and now, but it shows what folly nations are capable of.

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By Lafayette, June 28, 2011 at 1:54 pm Link to this comment

STUPID IS AS STUPID DOES

ER: Democrats are right that this is a terrible moment for spending cuts. Republicans are right that this is an awful moment for tax increases.

This is where Dems and Repubs separate company. The Repubs are dead wrong and the Dems are dead right.

Increasing taxes on the rich above an annual income of $250K per year will hurt no one. At the stratospheric levels of income, the rich just park the money with Asset Managers. This is exactly what should not be happening, because that money goes mostly into bonds, some into stocks and a lot into the money-market.

Regardless of which of the above three destinations is employed, the money does nothing whatsoever to help recover the economy. It just sits there earning capital returns which, themselves, are reinvested and not spent on consumption.

Redistributing enhanced tax revenue in stimulus spending can spark a faster economic recovery because it boosts consumption of goods/services. Which John Maynard Keynes recognized three-quarters of a century ago. Boosting consumption also boosts tax revenues - by means of sales taxes and job creation that generates income taxes.

It seems Congress still hasn’t learned the lessons that Keynesian Stimulus Spending is exactly what the doctor ordered.

MY POINT

When you give the keys of the kingdom to dogmatic boneheads in the HofR, what you get is gridlock - in a selfish bid to win an electoral victory next year.

And the well-being of the people be damned ... yes, harm will be done.

We voted the the boneheads into power so now we are paying the consequence of an economy that will not recover fast enough because consumption is lagging.

Stupid is as stupid does.

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By Awi, June 28, 2011 at 11:44 am Link to this comment

Kids are taking food home from school so they have something to eat at night.  Trust your eyes and forget the pundits.

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By tropicgirl, June 28, 2011 at 10:17 am Link to this comment

The economists know exactly where things are going. Those linked into the bank criminals are the architects of it. Come on.

If Gene doesn’t think that raising the debt ceiling is doing harm, then, well, how to you talk to a person like that?

Does he understand the scheme yet? Crooked banks enslave countries into debt they can never repay, that they didn’t incur, and that they are not responsible for. Yet, in return, these offshore criminals want state property, entire islands and infrastructure, and people in poverty.

What is wrong with you people that you don’t think the rest of us get this? Really?

As I said, nothing to talk about here.

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By TDoff, June 28, 2011 at 10:07 am Link to this comment

de profundis clamavi speaks truth. As does TAO.

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By mackTN, June 28, 2011 at 10:05 am Link to this comment

This is a bunch of BS!!!  We’re talking about doing away with favored tax cuts
for the upper 2% of this country, the people/corporations the rest of us are
financing by having services eliminated, pensions & unions decimated, etc.  If
this is such a bad time for eliminating tax cuts for the wealthy, then why did
the president and his topknotch economists table it until now?

I HAVE A FEELING THAT AGAIN THE PRESIDENT AND HIS DESPERATE
DEMOCRATS WILL CAVE…AND THE REPUBLICANS KNOW IT.  THIS ISN’T THE
CHANGE I CAN BELIEVE IN, HOW ABOUT YOU?

Eugene Robinson is not an economist and listening to one doesn’t make you
qualified to issue a pronouncement.  I’d like to know who paid you to say this?

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By Morpheus, June 28, 2011 at 9:54 am Link to this comment

I’m not worried about collapse anymore. We have a way out now. It doesn’t matter what happens. America will be bigger and better. I’m taking bets on it. Any takers.

FIGHT THE CAUSE - NOT THE SYMPTOM
Read “Common Sense 3.1” at ( http://www.revolution2.osixs.org )

We don’t have to live like this anymore, unless you pefer it.
“Spread the News”

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By bpawk, June 28, 2011 at 9:33 am Link to this comment

By not taxing all people, Americans are in for a rough ride in the future - the Scandinavian countries, Canada for example who are heavy taxers - the population will fare better because even though we pay higher taxes, we bake this into the system and get it back through health care, safety and respect around the world for being prudent. In a few years in America, you will see there will be the rich and then lower middle class - the middle class itself will be a thing of the past. But you guys let it happen - you kept your eye distracted and off the ball via celeb worship and consumerism making it easy for the rich to manipulate you.

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By de profundis clamavi, June 28, 2011 at 9:20 am Link to this comment

“Democrats are right that this is a terrible moment for spending cuts. Republicans are right that this is an awful moment for tax increases. The only reasonable thing to do is kick the can down the road—but in a purposeful, intelligent way.”

Really, Eugene, your columns show us week after week why the “conventional wisdom” that governs this country keeps us from going anywhere at all.

If you had enough intelligence and integrity, you might be capable of recognizing that both halves of your statement are dead wrong.

First, this is a great time to cut spending, as long as the right spending that’s being cut. And what spending is that? How about some of the $700 billion of “defense” spending, which has doubled in real terms since 2000 and tripled in real terms since 1997. Think back to 1997. Were you losing sleep then, fearing that our defenseless country could be invaded and conquered at any moment? If we cut our spending back to the 1997 level, do you think Al Qaeda or China or Russia or Iran or North Korea would promptly invade and conquer us? That spending cut alone is worth about $400 billion a year. That alone would eliminate the entire budget problem.

And what about the other half of your idiotic conventional mumblings - the part about this being a terrible time for a tax hike. Eugene, wake up. It all depends WHOSE taxes we are talking about. Now that 0.1% of Americans receive 8% of the income and own as much wealth as the poorest 150 million, it is abundantly clear that there is nobody left to tax except the very rich, because they are the only Americans left who have any money anymore. But their tax rates keep going down, and our pathetic weakling of a President has no guts to do anything to stop it.

Why not tax the rich to close the deficit? Tell me that, Eugene. Is it because you think they “create wealth”? Looks to me like they hog the wealth, not create it. Because they “create jobs”? I guess they employ a few cleaners, nannies and chauffers but as far as middle class jobs are concerned, the only jobs our ruling class are willing to create nowadays are in places like China or Singapore. 

Since the Forbes 400 own and control the entire Republican party and the “moderate” establishment of the Democratic party as well, it may be politically impossible to tax the rich but that does not mean that we should not say that they SHOULD be taxed. Just because the system makes justice and yes, prudence, impossible doesn’t mean we should not advocate justice and prudence.

Kick the can down the road? That is prudent? No, Eugene, that is the course of action that makes the ultimate collapse of this country more inevitable every day. When our economy, social order and and system of government all collapse, as they must and should collapse because the system is incapable of reforming itself from within, I look forward to witnessing your destruction along with the rest of the slavering sycophants of the rich who are willing participants in that corrupt system.

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By TAO Walker, June 28, 2011 at 9:05 am Link to this comment

Eugene Robinson and many commenting on this piece all present together yet
another catalog of ills plaguing, particularly, theamericanpeople.  That they
keep-on trying to ‘locate’ “the problem” entirely within the CONfines of the
make-believe CONstruct that is the ‘dominance’-paradigmatic political-
eCONomy, however, might be a clue to the causes of their on-going frustration
over their own chronic inability to find any actually efficacious “solution” to it.

If, as most people will admit (however grudgingly) when it is brought to their
attention, their difficulties are much deeper and more pervasive than just the
systemic breakdown of a mere ideologically-driven institutional set-up, then it
should follow that trying obsessively, even-so, to address those epidemic and
fundamental deficiencies only by CONtinuing to tinker fecklessly with the
inherently-DEAD-END-anyhow (because of its “zero-sum” faux ethos)
“command-and-CONtrol” apparatus, will at-best be a joint exercise in futility. 
The much greater likelihood, however, as demonstrated daily in our rapidly
deteriorating (at-least in its capacity even to tolerate, never-mind support the
almost exclusively “self”-referential behavior of 7,000,000,000+ domesticated
Humans) actual Living World, is that more of the same-old-same-old abstract
“intellectual” clap-trap, coupled with all the idiotic industrial-strength CONduct
dis-informed and driven by it, only makes things worse.

Hexagram 48, The Well, in The Book of Changes, warns succinctly about
(among others) the “dangers” of failing to “dig” all The Way to the “truth” of
things….to “get down to the real roots” of our essential Human Nature, for
instance.  It suggests in no uncertain terms that those who’re willing or able
only to scratch-the-surface will come-up dry….quite probably, if those often
superficially “self”-satisfying but always inevitably ineffectual habits are
persisted-in, perishing finally of thirst, both metaphorical and real.

We do not actually live and breathe together in any virtual world-o’-hurt CON-
TRAPtion called an eCONomy, Sisters and Brothers.  It is the severe organic
dysfunction of homo domesticus, rather, within the actual Whole Living
Arrangement of our Mother Earth, that is giving them all so much grief these
days. 

So, ALL TOGETHER NOW!:  It’s not the stupid (and stupefying) eCONomy, after-
all! 

HokaHey!

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By TDoff, June 28, 2011 at 9:01 am Link to this comment

‘Economics’ is a religion. It should be taught in a cathedral, or a remodeled gas station in the deep south, by someone like the perverted pedophile-supporting Pope or Preacher Billy Bob Bernanke or Minister Tiny Timmy Geithner. It is based on faith, the faith that all is guided by a mystic force, a universal something/someone whose disciples here on earth will guide us to the ‘true meanings and intents’ of the Econ God. It’s ‘Good Books’ are numerous and contradictory, as are it’s priests and preachers. Just as are Jews and Catholics, Protestants and Muslims, Holy Rollers and Episcopalians. And they all fight mightily for their particular visions/fantasies to reign supreme.

Unfortunately, the tithings that the Econ religion demands are bankrupting the once-richest nation on earth, as well as several others.

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By Inherit The Wind, June 28, 2011 at 8:31 am Link to this comment

Sharonsj:

I said the same thing about the effect on the states, too.  It affected a good friend, who had to give up a job in NJ to go home to her home state and take care of an enfeebled relative as the cuts changed everything.

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By sharonsj, June 28, 2011 at 6:51 am Link to this comment

Inherit the Wind, after Bush cut taxes for the rich in 2001, I said to myself, “This is really going to screw the states.”  That’s because people don’t make the connection between federal and state budgets.

Meanwhile, we are in a depression but the Republicans have one goal: to retake both houses and the presidency.  Then they can go ahead with their radical conservative/religious right agenda.  They don’t give a crap about jobs for the lower classes.  They only care about abortion, gays, and getting the taxpayers to fund religious education.

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By aacme88, June 28, 2011 at 6:03 am Link to this comment

“Republicans are right that this is an awful moment for tax increases.”
No they’re not. This is an excellent time for tax increases on the rich. The rich have never enjoyed such riches, or such low taxes, as now.
If you are looking for a solution, you look for causes, and you look for available tools.
The Reps don’t want to add to the deficit, in theory at least. In fact they don’t like Democrats adding to the deficit. But, ok, no more deficits. But the economy requires stimulation. Pretty obvious. It’s just lying there in a catatonic state, right through another round of Republican stimulation, also called tax breaks for the rich. Not surprisingly. The rich can buy only so many Bentleys. I’m sure Bentley is doing fine now, thank you, but Bentley is not a leading indicator.
The president can sternly instruct, hell even advise employers to hire more people, but if they don’t have any business, they won’t. Hiring comes when businesses can’t cover the orders they have with the people they have. I shouldn’t have to be instructing elected officials about that.
So the answer is stimulation, building back some of the 30 year backlog of infrastructure that has been deteriorating since the Reagan administration declared the War on Sanity. Alternative energy R&D, and grants for solar electric on houses, are another avenue of stimulation that would actually work, and speed up the day we claim energy independence.
And it could all be revenue neutral, the Repubs will love it, by raising taxes on the rich a teensy bit, and promising them a plaque on the Capital Building honoring their stepping up to the plate when it was needed. They’ll be so proud!

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By Dr Bones, June 28, 2011 at 5:39 am Link to this comment
(Unregistered commenter)

Consumers became indebted to the government to bail out the criminals on Wall Street.  That dried up consumer demand.  The criminals invested their money off shore in tax havens. Resulting in more job losses.  The President wants to pass Bush’s trade deals that would send even more jobs overseas so that CEOs of corporation that either don’t pay US taxes or pay very little, can profit and hide more money in tax havens.  The Government now spends one out of every two dollars on the military and they in turn blow up other nation’s economy and cause mass humanitarian crises that we send money to appease, somewhat.

For the past forty years, we have trickle down economics that sends all the money to the top few percent, who then invest off shore in slave labor.  Then our politicians pretend they don’t work for the top few percent but, all polling shows they don’t care what the vast majority of Americans want.  To win an Presidential election, you need to appease the wealth while hoodwinking and bamboozling the voters.

And then politicians start saying insane statements, like war is peace, deep well drilling, coal mining, and nuclear power are safe.

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By lynette, June 28, 2011 at 4:57 am Link to this comment
(Unregistered commenter)

With all due respect, you’ve bought into the claptrap that’s destroying us. Yes, you would be “sucking money out of the economy” if you instituted a tax on middle and lower income working people. What little they have is spent just to survive. The same is not true of the ultra rich.

The entire discussion is insane. Debt? That’s hardly the problem. We need jobs. Putting people back to work would go a long way to resolving the debt crisis you news people have become so obsessed with.

Why are you and your kind not loudly advocating for cutting our military adventuring? for auditing the Pentagon for fraud, waste, and abuse? No, you’ve taken your marching orders from Pete Peterson and his ilk, sure that if the (right wing) big people say it, it must be true: the only grown up way to resolve our (not) biggest problem is cutting social security. And if not MORE tax cuts for the ultra rich, then we must not raise their taxes. And that’s how we talk about letting the disastrous Bush tax cuts expire: It’s a tax increase! Impossible in this lunatic asylum we call America.

Why won’t you ever review how we got here? Why won’t you point out that we’re reliving the Gilded Age? Why won’t you show the correlation between union membership and middle class success ~ or failure? You do none of these things. Rather, you spend your time whipping people into a frenzy over things that might happen 30 years down the road.

Of course we need to raise the debt ceiling. To pretend otherwise is a travesty. And then we need to get people back to work, whatever that takes. And we need to regulate the conscienceless criminal thugs who brought us to this point.

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Billy Pilgrim's avatar

By Billy Pilgrim, June 28, 2011 at 4:40 am Link to this comment

Not to worry. President Bachmann will come to the
rescue and honor the legacy of our Founding Fathers,
among them, John QUINCY Adams.

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By Inherit The Wind, June 28, 2011 at 3:46 am Link to this comment

Gene:
If you laid all the economists in the world end to end they still wouldn’t reach a conclusion.

You saw an economist who missed critical factors.  Many missed the credit crisis, yet, I said to my wife back in 2001, after Bush cut taxes, mainly for the rich, that this was going to hammer the credit market and make borrowing much tougher. When Cheney said “Reagan proved deficits don’t matter.”  I said to her “Uh-oh, now we are in for it!”...then the sub-prime market collapsed and the wisest said it was just the beginning.

So there were, and are better prophets than those economists with axes to grind and a political leash on a metaphoric dog collar.

Yet, it’s not so hard to figure out.  Take money out of the hands of people with lots of it who aren’t spending in America (if at all) and put it in the hands of people who don’t have any and will spend every dime because they must.

When the wealthiest Americans pay a 15% (on average) tax rate and middle Americans can pay up to 35-37% in just FEDERAL taxes, something’s clearly wrong.

And let’s STOP spending money on Iraq and Afghanistan and spend it on our roads and bridges which are crumbling.  I spend the main part of my commute here in NJ dodging pot holes.  But I’m not talking about my personal discomfort but rather that this is an indication of fundamental neglect, neglect that goes back to the day Ronald Reagan took office.

We need to repeal paying incentives to oil companies and hypocrites like Michelle Bachmann.  We need to repeal incentives to ship manufacturing overseas, and, if there are going to be incentives, have them to build factories in the US.

We need to loudly label Mitch McConnell for the corrupt liar he is when he claims keeping low taxes for the wealthy and incentives to oil companies creates jobs.  It should be blatantly obvious that THESE brought about high unemployment, and cost us jobs.

What has failed has been economists’ moral courage to call Republican (and, by cowardly adoption, Democratic) policies insane, inane, and clearly failures.

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prisnersdilema's avatar

By prisnersdilema, June 27, 2011 at 11:26 pm Link to this comment

Just think…our government spent three trillion dollars, for this…..

That money went to Wall Street, then they blocked financial reform, so they could
continue to do the very things that caused the mess. Then the politicians gave the
Insurance industry a big payday, so they could send jobs overseas as well.

So here we are again back to square one, only three trillion dollars poorer.

Now the elections are coming up again, and the plutocracy is fixing to buy some
politicians again.

And Golly gee, those very same politicians seem puzzled that the economy is still going
sideways.

For the last two years E.R. Has been saying that everyday in every-way things are
getting better and better.  Only if your brainwashed.

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THX 1133 is not in the movie...'s avatar

By THX 1133 is not in the movie..., June 27, 2011 at 10:51 pm Link to this comment

Well, when one has children making all of the
decisions; one has to expect childish behavior and
results.
The reality is that we are being governed/ruled by the
very people we elected. What does that say about our
decision making process?
It would seem that until we take full, personal
responsibility for the people we elect; this is a never
ending story…

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