Looks Like I Picked the Wrong Day to Quit Blogging
The U.S.’s credit rating has been downgraded, with S&P citing political infighting and poor debt handling. Most significantly, this would not have happened if the Republicans had not taken the U.S. economy hostage, taking us intentionally to the very brink in a manner that assured it would end like this.
Once again, let us not forget who brought us here. Ten years ago, we were in surplus territory. Despite claims by Tea Partiers and conservatives in general that this is all the fault of Obama and the Dems, it was the Bush tax cuts, the two massive wars, the general mismanagement and the Great Recession which brought us to this point. And as weak as Obama and the Dems have been, it has been the Republicans who have been the primary force which continues to take us in the wrong direction.
They will undoubtedly react by becoming even more recalcitrant and hostile. The idiots.
Not that the downgrade is fully reasonable. But it has happened, and conservatives brought us here.
If the American people react to this by electing any more Republicans into office, they are the worst idiots imaginable. Seriously.
And no, I am not returning to blogging full-time. I noted that I would return occasionally when the mood hit me–it simply happened that a story like this broke the day after I said I’d be stopping. Figures.
You’ve probably seen this, but in case you haven’t:
http://www.economist.com/blogs/babbage/2011/08/gps-fiasco
Don’t let me drag you back into blogging though, if you’re trying to stay away!
I think the downgrade is reasonable. Anyone or entity living that far beyond its means needs to be chastised. I think the real question is why did Obama sell-out his base–liberals, progressives, democrats? As the republicans have said, they got 98% of what they wanted. Everyone else got the shaft. Obama is either gutless or is a democrat impostor. I’d say the latter. Obama kept us in these senseless hopeless wars. Obama refused to push for revenue from the rich and the corporations. Obama gave all the money to the banks and is letting them sit on it when it should be working to fire-up the economy. Most outrageously he accepts the premise that Social Security and Medicare are the problems. I think our best hope is to start a left version of the tea party to pull the Democrats back–Kucinich. Sanders, Barbara Lee–lets build up the progressive caucus and see if we can pull this thing back from going off the cliff. Regular people have not gotten anything from Obama except nice words. No way would I vote for him again.
>As the republicans have said, they got 98% of what they wanted
they were successful in shifting the debate to only cover cuts and not any tax increases, but the cuts they got are thus far not significant.
I for one actually think taxes are about right in this country and that spending is way too high.
Not counting SS, we’re spending $5.4T this year at all levels, that’s $50,000 per household. Totally unsustainable.
The game the Republicans and conservatives in general are playing is attempting to hide the connection between their disastrous policies of the 2000s and the $10T national debt, and so far the American people haven’t shown any indication of them seeing through this.
>Obama is either gutless or is a democrat impostor
Obama has to win Virginia and other red states. This means he can’t be as liberal as Pelosi, no.
>Obama kept us in these senseless hopeless wars
No he hasn’t. Adults understand that it’s harder to get out of wars than get into them, and Obama has allowed these wars to wind down.
>Obama refused to push for revenue from the rich and the corporations
The Dems in Congress didn’t want to play that tune in 2010.
>Obama gave all the money to the banks
No he didn’t. That was TARP, passed before Obama was elected.
> is letting them sit on it when it should be working to fire-up the economy
the ugly truth is is that credit-worthy people have adequate access to capital still. Our economic problems stem from a credit hangover (households and corporations were borrowing $2T per year during the peak, now it’s ~$0), and the fact that hundreds of billions of dollars a year are leaving our domestic economy via the trade deficits with China, Mexico, and oil exporters.
>Most outrageously he accepts the premise that Social Security and Medicare are the problems.
I agree about Social Security — its $2.6T FICA surplus means it is not the problem here — but Medicare is in fact a problem in that the entire health care system is a problem.
The solution is going to require more medicare not less, but the American people are pretty stupid and don’t really understand that well the debate here. They voted out Feingold because he cut Medicare!
>lets build up the progressive caucus and see if we can pull this thing back from going off the cliff.
This country really isn’t that liberal:
http://www.washingtonmonthly.com/political-animal/2011_08/wanted_more_american_liberals031264.php
>Regular people have not gotten anything from Obama except nice words. No way would I vote for him again.
Sorry you didn’t get your pony in the past 2 years. Your petulant vote doesn’t count unless it’s in Virginia, Illinois, Colorado, Wisconsin, or Pennsylvania.
These are the states Obama has to win, especially Virginia. If he doesn’t win Virginia he has to win all of the rest of the red states he won in 2008.
>If the American people react to this by electing any more Republicans into office, they are the worst idiots imaginable
dunno, we’re not as bad as you Japanese . . .
I really don’t understand Japan at all. Everybody is so competent at the micro level but the system itself is completely untethered.
van Wolferen’s The Enigma of Japanese Power was a good book to explain this I guess.
Everybody’s trying to cheat the system, and governments are the easiest to cheat since they are the biggest and slowest moving pieces in the picture.
Japan’s fatal decade was the 1980s, and they’re still trying to pick up the pieces from that mistake.
The US’s was the 2000s, and we really have not yet begun to understand the damage we did to ourselves.
Then again, according to this:
http://www.metro.tokyo.jp/ENGLISH/PROFILE/overview09.htm
Japan is spending around $40,000 per household, about 70% of
the US’s spending.
That’s using Y80 to the dollar which really isn’t right. At Y100, Japanese spending is $30,000 per household, or 60% of the US.
Japan really sucks on the happiness scale though:
http://www.ritholtz.com/blog/2011/08/15-most-heavily-taxed-countries-in-the-world
Welcome back
Americans have a big problem. They keep voting for Banana-Republicans, and the country keeps becoming more and more like a Banana-Republic.
I don’t suppose that American’s will notice the correlation between tea-baggist extortionist politics coming to the fore and the down grading of our credit rating. Certainly the tea-baggist will say this is proof of too much whatever, spending, I’m not even sure what it is they want.
They vote for people who don’t believe in government, to manage their government, look what it gets them.
By the way, my new academic interest is, well, I have several of them, one is radicalization of politics – I’m thinking it’s a structural thing: but the most notable cases are Jacobins during the French revolution era, and of course Fascism through out Europe.
We are undergoing radicalization in our politics.
I think, this is probably a bi-product of many things, but primary system I think is one of them. Back when professional party politicians made backroom deals, like the one that put Harry Truman on the 1944 ticket with FDR – these guys back room guys were thinking about their future when they made their picks, so they wouldn’t have put a jackass on a ticket – someone like Palin. Primaries make it possible for Palin and Bachmann and other jackasses to be plausible if the vote gets split up enough, and if they can connect with enough voters… and lies don’t matter if the blow back doesn’t come until after Iowa and New Hampshire has already destroyed your opponents. Perhaps this is why the French have run-off elections… you can’t win an election unless you secure at least 50% of the vote. The crazies can always get 20 or 30%, and in a pluralistic, first past the post system, that means a crazy can win a primary if all the other candidates take 10%.
But the Radicalization studies will have to wait until I’m done studying about Mofo bills. Your post on the Magic Coin, which was brilliant got me thinking about money. And I recalled reading about the Nazis use of MOFO bills to begin their rearmament of Germany in the early 1930s.
When Hitler took over, the Country’s economy was of course a mess. Reliant on imports, they had no money left over to stimulate their economy. They created MOFO bills, similar to the magic coin trick you talked about. Essentially MOFO were nothing more than IOUs that German industry agreed to embrace, creating a sort of shadow currency.
Anyway, I found a well written book on the subject “Wages of Destruction”, and so I’m hungry to read up all about how the Nazis funded their armaments projects, also stimulating their country. The transition from pathetic economic weakling to intimidating the western powers in only five or six years is a story worth reading about. I understand similar events occurred in Japan at the same time. The original Japanese zero, supposedly, was pulled out from its hanger by a horse or some such thing. A few years later they were maintaining air superiority over the distant island of Oahu while Japanese bomber’s bombed battleship row.
So Mofo bills first, then radicalization of politics.
Steve Benen lays out the timeline extremely well:
Let’s take a stroll down memory lane, shall we?
1980: Ronald Reagan runs for president, promising a balanced budget
1981 – 1989: With support from congressional Republicans, Reagan runs enormous deficits, adds $2 trillion to the debt.
1993: Bill Clinton passes economic plan that lowers deficit, gets zero votes from congressional Republicans.
1998: U.S. deficit disappears for the first time in three decades. Debt clock is unplugged.
2000: George W. Bush runs for president, promising to maintain a balanced budget.
2001: CBO shows the United States is on track to pay off the entirety of its national debt within a decade.
2001 – 2009: With support from congressional Republicans, Bush runs enormous deficits, adds nearly $5 trillion to the debt.
2002: Dick Cheney declares, “Deficits don’t matter.” Congressional Republicans agree, approving tax cuts, two wars, and Medicare expansion without even trying to pay for them.
2009: Barack Obama inherits $1.3 trillion deficit from Bush; Republicans immediately condemn Obama’s fiscal irresponsibility.
2009: Congressional Democrats unveil several domestic policy initiatives — including health care reform, cap and trade, DREAM Act — which would lower the deficit. GOP opposes all of them, while continuing to push for deficit reduction.
September 2010: In Obama’s first fiscal year, the deficit shrinks by $122 billion. Republicans again condemn Obama’s fiscal irresponsibility.
October 2010: S&P endorses the nation’s AAA rating with a stable outlook, saying the United States looks to be in solid fiscal shape for the foreseeable future.
November 2010: Republicans win a U.S. House majority, citing the need for fiscal responsibility.
December 2010: Congressional Republicans demand extension of Bush tax cuts, relying entirely on deficit financing. GOP continues to accuse Obama of fiscal irresponsibility.
March 2011: Congressional Republicans declare intention to hold full faith and credit of the United States hostage — a move without precedent in American history — until massive debt-reduction plan is approved.
July 2011: Obama offers Republicans a $4 trillion debt-reduction deal. GOP refuses, pushes debt-ceiling standoff until the last possible day, rattling international markets.
August 2011: S&P downgrades U.S. debt, citing GOP refusal to consider new revenues. Republicans rejoice and blame Obama for fiscal irresponsibility.
There have been several instances since the mid 1990s in which I genuinely believed Republican politics couldn’t possibly get more blisteringly ridiculous. I was wrong; they just keep getting worse.
I know some will argue that Clinton benefitted from the Internet boom, but (1) it doesn’t mean his economic plan from 1993 wasn’t important, and (2) it just shifts more emphasis to Gore, whose legislation as a senator in the late 80’s/early 90’s was key to developing the Internet, and his stewardship and influence over technical policy in the 90’s helped foster its growth. Then Republicans trashed Gore for claiming that he “invented the Internet,” which he never said, while Vint Cerf and Robert Khan, two key founding fathers of the Internet, gave Gore great credit for “taking the initiative in creating the Internet,” which Gore did say, and was true, if not the clearest remark ever.
And, yes, Democrats let a lot of the crap happen when they possibly (though not always, and often at great political cost) could have stopped it, but frankly I find it far more significant that Republicans have gone balls-to-the-wall in wrecking the economy than I do that Democrats haven’t tried as hard as they should have to stop some of it.
Republicans brought us here, shooting the economy to hell over the past three decades. And now all they have to say are two things: one, we’ve been doing a swell job and it’s all the new guy’s fault, and two, to fix it all you have to do is dismantle everything the other guys hold dear but we hate, while letting us cancel out any good that would do by giving us more for the partisan crap we want.
Yes, but which way will the voters go in 2012?
Tea Party BS doesn’t seem to be getting any greater traction now but neither does the opposing message.
Part of the deal now is that we’re just running insane budget deficits:
http://research.stlouisfed.org/fred2/graph/?g=1sS
There’s a big hole in the economy now.
The trade deficits with China & Mexico is a big part of the problem, as is the oil money we have to pay to keep our economy going.
We’re moving to a winner & loser third-world economy. “Strong dollar” directly benefits some and hurts everyone else. A $7T/yr public sector benefits some and is a burden on everyone else.
This nation is far, far from having an accurate understanding of the fiscal situation we face.
Obama’s team shares the main blame for this, but it’s understandable to not want to repeat the Carter “malaise” speech.
We’ve been enjoying way too many free lunches since the mid-1990s. The bills are starting to come due.
“the two massive wars”
“Dick Cheney declares, ‘Deficits don’t matter.’ Congressional Republicans agree, approving… two wars”
Excuse me, but the Democrats supported the war in Afghanistan all throughout Bush’s reign. Wholeheartedly.
And although there was resistance from the more liberal members, the Establishment Democrats supported the war in Iraq, just as they’ve backed every stupid, unnecessary war in the last half-century or so. That has nothing to do with insufficiently pushing back against the Republicans. It has to do with towing the line.
steve, that is entirely disingenuous.
The Bush crew got us into Baghdad, not the Democrats. If Gore had been President I don’t think we’d have invaded Iraq at all.
As for Afghanistan, whether or not Gore would have deployed forces there we do not know how different that war would have been with a more intelligent and thoughtful leadership in charge of it.
War, like deficit-spending, is easy to get into but hard to get out of.
this guy has the general idea of what’s happening:
http://www.truth-out.org/tale-two-lootings/1312292014
corporate taxes are about half what they were in the 1960s:
http://research.stlouisfed.org/fred2/graph/?g=1t7
Personal income taxes are down ~50% from the 1960s:
http://research.stlouisfed.org/fred2/graph/?g=1t8
Thing is, like Japan, the US system has grown accustomed to these lower tax rates.
Imagine what your house would sell for if everyone’s national income tax was doubled, or even just doubling the consumption tax would be deflationary for Japan.
Modern economics doesn’t understand the first thing about real estate and how centrally important it is in every economy.
Did you know that on google searches, nearly all links to your blog come up as “Buy Ultram Online No Prescription”? That doesn’t seem right…
Steve:
Excuse me, but the Democrats supported the war in Afghanistan all throughout Bush’s reign. Wholeheartedly.
Democrats supported the war at the beginning, when it was in response to 9/11. So did I.
However, it seems that you equate this to supporting the way the war was managed over its entire span; if that is your contention, it is wholly unsupportable. Afghanistan was supportable for one reason, and one reason only: to get al Qaeda and bin Laden. We should have gone in, devastated the Taliban, rooted out al Qaeda, set up the best short-term government we could, and then high-tailed it outta there. The Taliban would probably have re-established themselves, but we would have accomplished what we went in for: not nation-building, but as a reaction to 9/11.
However, soon after Bush took us in, he started jonesing for Iraq big-time. He pulled troops from their duty and from that point on more or less abandoned Afghanistan in the serious sense of combat management. He focused on Iraq and Afghanistan went to the dogs.
Democrats most definitely did not support that, nor did they ignore it. Take my post from January 2004:
Afghanistan was harboring terrorists, but Bush turned away from that task when Iraq came into view–and now the Taliban have retaken a foothold in Afghanistan. As for Iraq, there were no WMD, and no terrorist ties. If anything, Bush has fumbled the ball and allowed terrorism to thrive while shooting America in the foot with the Iraq war. And yet still, here, Bush makes the patently false claim that Iraq was a threat to us due to both WMD and terrorism.
I am sure that if you do a quick Google search and limit the time range to late 2003 to several years after, you will find few Democrats “wholeheartedly” supporting Bush’s management of the war.
Umm, I really don’t think so. Many voted to give Bush the go-ahead, but remember the context at the time: Bush claimed that he needed the authority so he could pressure Hussein to open Iraq to inspectors, and at the time, fear was rampant and any perceived opposition to Bush’s wars was regarded as tantamount to treason. Bush maxed out that card and so today we see it as an easy thing to criticize the wars; back in 2003, however, it was a different story. For many Democrats, voting against the war was (a) useless, as Bush had enough votes and the momentum to do it anyway, and (b) political suicide, as their GOP challengers would blast them to hell and back should they be too vocal against the war effort. If you were a Democrat and not in a safe seat, opposing giving Bush war powers was not an easy choice to make at the time.
I don’t doubt that there were Democrats who went along with it wholeheartedly, but absolutely not a majority.
Now, don’t get me wrong–I despise what the Democrats did. I am not trying to say they were courageous or stood by their convictions. Most of them wussed out and became lapdogs to the GOP, no doubt.
But to equate this to “wholehearted support” simply is not true. As Troy pointed out, and as I pointed out before, had Gore been in the White House, there would have been no Iraq. If the Dems had full control, or even just Gore in office, it simply would not have happened. Had 9/11 happened on Gore’s watch, he would have gone in–but he would have stayed focused, and he would have likely brought us out within a few years at most. But the fact is that Gore probably would not have even gone into Afghanistan, as 9/11 probably would not even have happened on his watch.
As for Democrats supporting “every stupid, unnecessary war in the last half-century or so,” you have to remember that since Vietnam–which had Southern Democrat (read: modern-day Republicans) support–and before Bush 43, wars were quite limited–you simply cannot equate Bosnia to Vietnam or Iraq. The major opposition to Vietnam came overwhelmingly from Democrats.
The basic fact remains that Republicans wanted these wars, demagogued for these wars, mismanaged these wars, and drew these wars out. Democrats did not oppose them enough, even when they could have–but had Democrats been in control, the wars would not have happened.
>For many Democrats, voting against the war was (a) useless, as Bush had enough votes and the momentum to do it anyway, and (b) political suicide, as their GOP challengers would blast them to hell and back should they be too vocal against the war effort. If you were a Democrat and not in a safe seat, opposing giving Bush war powers was not an easy choice to make at the time.
This is a good point too.
The House Democratic bloc voted against the AUMF 82-126.
The Senate voted 48-1 (Republican) and 29-21 (Democrat). Filibustering a war going into the 2002 election would have been electoral poison and any no vote would have been a protest vote anyway since there were plenty of pro-war Dems.
One of the things clouding politics is the insistence at looking at Dems as a monolithic bloc. Charles was doing it from the left above, blaming Obama for failure to lead the Dems to the promised land when they had 60 votes in the Senate.
What he fails to understand is — like the population as a whole — few Dems in Congress have their heads on straight.
But the problem isn’t them, it’s us. Case in point would be Feingold losing reelection. If push came to shove I’d willingly give that guy emergency autocratic powers, yet the Wisconsin electorate replaced him with some rich asshole.