Monday, October 22, 2012

Obama Deserves Your Vote

Despite all the political noise to the contrary, Obama is doing quite well with the economy. It is recovering just as well as other recoveries from depressions of equal severity. Remember, nothing in his policies caused the bad economy. Others whine that saying that is just blaming the other guy. But what sort of responsibility does it show when your policies produce the worst economic downturn since the 30’s and you completely ignored it? I just hate to think of what could happen if they get another chance.

Please take a look at what has really been accomplished despite fierce, unreasoned opposition. The right to equal pay for equal work was strengthened. The auto industry was saved from collapse (at a handy 3000% profit for certain venture capitalists including Ann and Mitt). The explosion of health care costs has begun to see a limit. Students have less predatory student loans. The Iraq war is over. The war in Afghanistan will soon be over. Seventy percent of the Simpson-Bowle spending cuts have been made. Homosexual military people no longer have to remain closeted and fear reprisals. Children who only know this country as home can continue to serve, learn, and contribute without fear of being deported. Insurance companies must accept patients with pre-existing conditions and they can’t deny coverage for contraception should any woman wish to have it.

Then compare that to what is being offered on the other side. Medicare is to be defunded. Most, if not all, of the benefits of the health care reform will go away. Tax breaks are promised to those who need them least at the expense of those who need them most. The goals of the budget cannot be achieved mathematically. The man at the top of the ticket seems to change his position every time he talks to a different group of people. In private, he says things that are simply appalling while glossing over them in public. The economic supply-side theory of economics has proven to be a failure. If you don’t like this depression, you really aren’t going to like the Romney one.

When you look at the case against Obama, it’s clear that it is driven by unreasonable antipathy and, often, patent delusion. Obama actually is a natural-born American citizen. He isn’t Muslim (but it isn’t against the law if he were). The ACA is insurance regulation based on Republican ideas. It isn’t socialized medicine nor is it death panels. Why are the people who say these kinds of things even listened to by anyone?

My complaint with Obama is that he has been not given the chance to do more. There is a budget that needs to be balanced with real arithmetic. There are tools available to improve the economy in ways that benefit everyone from the middle, not just trickle-down from the top.

Saturday, October 20, 2012

U.S. Debt Dissolved

Contrary to Republican rhetoric, the credit market makes this an excellent time to borrow and stimulate.

U.S. debt has shrunk to a six-year low relative to the size of the economy as homeowners, cities and companies cut borrowing, undermining rating companies’ downgrading of the nation’s credit rating.
Total indebtedness including that of federal and state governments and consumers has fallen to 3.29 times gross domestic product, the least since 2006, from a peak of 3.59 four years ago, according to data compiled by Bloomberg. Private- sector borrowing is down by $4 trillion to $40.2 trillion.
Reduced borrowing means there is less competition for the U.S. Treasury Department as it sells debt to fund spending programs to help the nation recover from the worst financial crisis since the Great Depression. Credit-rating firms are discounting the improvement even as debt, equity and currency markets suggest the U.S. is more creditworthy than before Standard & Poor’s stripped the nation of its AAA grade in 2011.

Auto Bailout Good for Romney's Coffers

Romney called the auto bailout a government gift to auto unions.  In fact it was a gift to the vulture capitalists of whom he was one.  Three thousand (yes, thousand) percent is a darn good ROI.

Romney and the SEAL

It's an ever-present temptation for a politician to dress up his personal history, but it almost always backfires. It ends up making the candidate look too much like the emotional opportunist he is.  When you talk about your emotional response, it pays to make sure that you actually have one.

Too Many Mitts

Salt Lake Tribune endorses Obama.  Sometimes it takes those who are closest to a candidate's deepest supporters to appreciate his fickleness.

Friday, October 12, 2012

Deficit Recovery

The party that was operated on the dictum that "deficits don't matter" now is very much in a lather about our national debt. Let's look at the history.

At the end of the Clinton admin, the budget had a surplus.  We were taking in more that we were spending.  We still had an outstanding debt but it wasn't getting any worse.  Then the bubble burst.  In an effort to stimulate the economy, Bush lowered taxes.  There was little appreciable stimulus but the deficit began to grow. In addition, we started paying for two wars.  This increased the deficit even more. 

Then the economy tanked.  In 2010 we had the lowest revenue as % GDP since 1950.

We should be asking, "What is the appropriate target revenue per GDP that government should have?"  This benchmark should be low enough that there is space to temporarily increase it in case of emergencies.  But there is no need to make it so low that government is crippled.  From 1983 to 1999, the federal revenue per GDP range from 16.94% to 19.38%o averaging 17.61%.  During that time, the GDP growth ranged from 3.3 % to 11.21%, averaging 6.28%.  In 2011, revenue per GDP was at 13.24%.  If we are serious about reducing the deficit we need to get our revenue back up to the something near 17%.  That means simply more tax revenue.  Really getting ahead on the deficit requires that we also fix our depressed economy.

On the revenue front, the first hit to the budget was the Bush tax cuts.  They should be the first to go in the process of getting our house in order.  The next target should be a belated tax increase to pay for the recent war efforts.  That should buy us some necessary breathing room in which to strategically restructure government to ensure better economic growth.

Supply-siders hold that more money in the hands of investors allows them to make investments that increase jobs and economic growth.  There has yet to be a convincing demonstration of this theory.  Demand-siders hold that more money in the hands of lower income consumers generate consumer spending that generates demand that then generates economic growth.  They also hold that strategic government investment can stimulate growth by provide economic infrastructure that opens new economic doors.  This has, in fact, been demonstrated in our history.  Major government investments in power production, irrigation projects, education, and transportation links have indeed fueled growth.  So my allegiance is with the demand-siders.

Another thing to look at is the source of our economic problems.  The biggest key factor is the collapse of the housing bubble.  A lot of wealth has just evaporated.  Consumers who were using inflated equity to buy goods and services now find themselves owing much more for their house that it will ever be worth again in their lifetime.  We need to reform the financial system to prevent a repeat of this.  Another cycle like this would be an apocalyptic disaster.  Reform would cost little but would end the worry about a repeat.

We need to rev up the economic engine.  Money to buy home-grown goods and services needs to flow into our markets.  This is where we need to be creative.  It may take government spending to do this, but we don't want to create an unsustainable situation.  This means that we have to be smart about benchmarking the success or otherwise of the stimulus spending.  We don't have money to gamble with.  Every program needs to have a method of scoring its success.

Friday, October 05, 2012

Mitt Romney's Real Agenda

Here is what to expect from a Romney presidency based on what the Republican House has already been doing.
From abortion rights and gun laws to tax giveaways and energy policy, it's far worse. Measures that have already sailed through the Republican House would roll back clean-air protections, gut both Medicare and Medicaid, lavish trillions in tax cuts on billionaires while raising taxes on the poor, and slash everything from college aid to veteran benefits. In fact, the tenets of Ryan Republicanism are so extreme that they even offend the pioneers of trickle-down economics. "Ryan takes out the ax and goes after programs for the poor – which is the last thing you ought to cut," says David Stockman, who served as Ronald Reagan's budget director. "It's ideology run amok."
The Republicans have put ideology before jobs.  They didn't even let Obama's jobs bill come up for a vote.  They have actually killed jobs by imposing the fiscal cliff in order to get a raise in the debt ceiling.  They passed a bill that would deny a lifesaving abortions to a dying women.  Rape victims would have to give birth to their rapist's baby.  Fuel economy standards would be reversed.  Higher mercury emissions would be allowed.  The ANWR would be drilled.  The Bush-era tax cuts would be extended and enhanced for the rich.  The estate tax would be eliminated.  We would either have much higher deficits or tax breaks enjoyed by the less affluent, like the mortgage interest deduction, would go away.  One million students would lose college tuition grants.  Food stamps would be cut for 1.8 million people.  Student lunches for 280,000 children would be cut out.  Health care for 300,000 poor children would be cut.  Obamacare would be repealed and health care costs for everyone will continue soar.

If this is the country you want, vote for Romney.  If you would rather not have that, vote for the other guy.

The Spending Has Already Been Cut

The Simpson-Bowle spending cuts have mostly been done, 70% complete. The spending cuts of deficit reduction are already in place.  It's now time to increase the revenue.

The Evolution of Human Nature

The resourceful, independent individual is not the natural model.  In the type of tribal societies in which human nature was formed, the people favored by evolution were the ones who cooperated.  Those who tried to game the system for their personal advantage, lost their reputation and potentially their lives.  Nor were they favored as good mating material.  It was the advent of "civilization" that allowed these social predators to prosper.

Evaluating the Carbon Tax

Here's a reasonable discussion on the carbon tax.  There are right ways and wrong ways to do it.  Australia chose a wrong way and it's a real headache.  It shouldn't be considered an long-term revenue source because if it works as planned, the revenue will eventually dry up.

Eagle Without Wings

A courageous Boy Scout has been refused his Eagle rank because of his sexual orientation.  In its defense, BSA say it has a strict "no gays allowed" policy.  This is really pathetic.

This is a new low for scouting. Isn't there some folks who care enough about this organization to take the reins of power and bring it into the 21st century?  Is it appropriate for charity money to go to such a blatantly discriminatory organization?

Thursday, October 04, 2012

Romney: 27 Myths in 38 Minutes

It's hard to keep up when the lies are flying this fast.  Here's the list.  Click the link for what the truth actually is.
1) “[G]et us energy independent, North American energy independent. That creates about 4 million jobs”.
2) “I don’t have a $5 trillion tax cut. I don’t have a tax cut of a scale that you’re talking about.”
3) “My view is that we ought to provide tax relief to people in the middle class. But I’m not going to reduce the share of taxes paid by high-income people.”
4) “My — my number-one principal is, there will be no tax cut that adds to the deficit. I want to underline that: no tax cut that adds to the deficit.”
5) “I will not under any circumstances raise taxes on middle-income families. I will lower taxes on middle-income families. Now, you cite a study. There are six other studies that looked at the study you describe and say it’s completely wrong.”
6) “I saw a study that came out today that said you’re going to raise taxes by $3,000 to $4,000 on middle-income families.”
7) “And the reason is because small business pays that individual rate; 54 percent of America’s workers work in businesses that are taxed not at the corporate tax rate, but at the individual tax rate….97 percent of the businesses are not — not taxed at the 35 percent tax rate, they’re taxed at a lower rate. But those businesses that are in the last 3 percent of businesses happen to employ half — half of all the people who work in small business.”
8) “Mr. President, all of the increase in natural gas and oil has happened on private land, not on government land. On government land, your administration has cut the number of permits and licenses in half.”
9) “The president’s put it in place as much public debt — almost as much debt held by the public as all prior presidents combined.”
10) “That’s why the National Federation of Independent Businesses said your plan will kill 700,000 jobs. I don’t want to kill jobs in this environment.”
11) “What we do have right now is a setting where I’d like to bring money from overseas back to this country.”
12) “I would like to take the Medicaid dollars that go to states and say to a state, you’re going to get what you got last year, plus inflation, plus 1 percent, and then you’re going to manage your care for your poor in the way you think best.”
13) “I want to take that $716 billion you’ve cut and put it back into Medicare…. But the idea of cutting $716 billion from Medicare to be able to balance the additional cost of Obamacare is, in my opinion, a mistake.
14) “What I support is no change for current retirees and near-retirees to Medicare.”
15) “Number two is for people coming along that are young, what I do to make sure that we can keep Medicare in place for them is to allow them either to choose the current Medicare program or a private plan. Their choice. They get to choose — and they’ll have at least two plans that will be entirely at no cost to them.”
16) “And, by the way the idea came not even from Paul Ryan or — or Senator Wyden, who’s the co-author of the bill with — with Paul Ryan in the Senate, but also it came from Bill — Bill Clinton’s chief of staff.”
17) “Well, I would repeal and replace it. We’re not going to get rid of all regulation. You have to have regulation. And there are some parts of Dodd-Frank that make all the sense in the world.” 
18) “But I wouldn’t designate five banks as too big to fail and give them a blank check. That’s one of the unintended consequences of Dodd-Frank… We need to get rid of that provision because it’s killing regional and small banks. They’re getting hurt.”
19) “And, unfortunately, when — when — when you look at Obamacare, the Congressional Budget Office has said it will cost $2,500 a year more than traditional insurance. So it’s adding to cost.”
20) “[I]t puts in place an unelected board that’s going to tell people ultimately what kind of treatments they can have. I don’t like that idea.”
21) “Right now, the CBO says up to 20 million people will lose their insurance as Obamacare goes into effect next year. And likewise, a study by McKinsey and Company of American businesses said 30 percent of them are anticipating dropping people from coverage.”
22) “I like the way we did it [health care] in Massachusetts…What were some differences? We didn’t raise taxes.”
23) “It’s why Republicans said, do not do this, and the Republicans had — had the plan. They put a plan out. They put out a plan, a bipartisan plan. It was swept aside.”
24) “Preexisting conditions are covered under my plan.”
25) “In one year, you provided $90 billion in breaks to the green energy world. Now, I like green energy as well, but that’s about 50 years’ worth of what oil and gas receives.”
26) “I think about half of [the green firms Obama invested in], of the ones have been invested in have gone out of business. A number of them happened to be owned by people who were contributors to your campaigns.”
27) “If the president’s reelected you’ll see dramatic cuts to our military.”    
Romney has admitted already that number 26 was wrong.  The true number is 3 out of 26, nowhere even close to half.

Romney has learned that the folks on the right will believe most anything that suits their preconceptions, so this stuff just excites them.  Those who have yet to make up their minds aren't paying close attention anyway.  So it's a prevaricator's paradise out there.

Wednesday, October 03, 2012

How to To Box In Mitt Romney On Taxes

It's a no-win situation for Romney. If he puts middle class deductions like the mortgage interest on the chopping block, he loses. If he doesn't, his plan isn't credible and he loses.

Multiplier Effects

In a number of stimulus studies the CBO's multiplier effects are noted.
The CBO calculated multipliers to estimate the effect on output of various kinds of stimulative programs, and then applied them to the amount of money spent in the stimulus on each type of program. For example, payments to state and local governments for infrastructure were estimated to have a multiplier of between 1 and 2.5, whereas the multiplier for transfer payments (unemployment benefits, food stamps, etc.) to individuals was between 0.8 and 2.1.
As the business cycle slowly moves up, more stimulus would be a good thing.