All the talk of QE3 and other lame stimuluses. QE3 will funnel yet more money to bank balance sheets and rich people taking their assets and plopping those to the Feds balance sheet. Normal folks do not benefit from those money flows. Heck interest rates are not even rising.
You want stimulus? 50% income tax cut on anyone making less than $200K for one year. Hopefully, some of this gets spent and some reduces people’s debt putting people in a stronger position.
not sure a tax cut is what we need. we have had too much of tax cuts.
i hate taxes too. but i’d rather see the money go directly to jobs or small business loans.
tax cuts favor those who already have money, in proportion to how much they have. and the times are such that the reasonable instinct of even the poor is to save, not spend, a tax cut.
but the psychology of getting a new job, not to mention the probable actual NEED to spend would almost certainly be a real stimulus… even if instead of “borrowing” the money, the government paid for it by taxing those who are currently sitting on a lot of it.
our financial geniuses are still fighting the last war.
It has nothing to do with liking or hating taxes, but everything to do with getting money out there as we are headed back to recession . QE3 will enrich bank balance sheets and buy binds from rich people. We know Obama cannot coordinate stimulus and the republicans will sign onto this
Is Mitty Mitt Romney a convert to Keynes? Or is he a closet stimulator? Inquiring minds (not Mark Helperin’s ) found a nugget of decidedly non austerian goodness in a recent Time interview… The money quote:
Romney: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.
Courtesy Equire’s priceless Charles Pierce. http://www.esquire.com/blogs/politics/mitt-romney-government-spending-9146518 Full length useless trainwreck knob job of an interview here: http://thepage.time.com/2012/05/23/the-complete-romney-interview-transcript/
It is the one thing I hated the most of being a vet was being thanked. Those of us who are here today, are here because of those who died. Lost some close friends and it still haunts me to this day how I was not one of them.
Most ostensible Supply Side/Public Deficit Hawks have been Keynesians all along. They just want any increase in public spending to go through private conduits. Which is why they supported Medicare Part D while insisting to the end on no price controls (e.g. Ban on reimports). It is why they simultaneously weep about $500 billion in Medicare savings under ACA while pushing voucher-type systems to cut overall program costs. The $500 billion in cuts comes out of the pockets of medical equipment manufacturers and via elimination of the average 14% premium subsidy over regular Medicare that was given to Medicare Advantage providers. It is why any close examination of the B-S proposed cuts to military spending show essentially zero cuts to core acquisition programs (Commission member David Cotes of Honnywell made sure of that) while many billions were saved by cost shifting health care costs to active duty and retired soldiers, sailors, and airmen.
Nothing has changed since Stockman let the cat out of the bag with “starve the beast” during the Reagan years followed off course by Norquistian “drowning government in the bathtub” orthodoxy. Or you can just look at the total absense of cost and audit controls when it came to Iraqi War contracts. At no point in the history of Reaganomics and followups have any serious proponent actually proposed controls on acquisition or maintenance contracts as long as those were funneled through private industry.
And it is not just at the federal level. Take just about any scheme favored by the right: charter schools, privatized toll roads, private prisons, privatizing public parks, few if any actual net out as cost savings to the federal, state, or local budgets (not long term) and more often than not actually result in a cost-plus position.
This is not pathology, it isn’t even denial (for most promoters), it is a conscious strategy to ensure that every economic flow possible go through channels controlled by capital for the sake of capital.
And back in the day this wasn’t even controversial. The foundations of modern capitalism were laid at a time when political structures were openly and proudly anti-democratic. For example England only became a democratic country in 1918, and only a real representative system in 1888 (while still maintaining property qualifications for voting). The Great Reform Act of 1832 that for the first time made Parliament a pale reflection of the whole country was at base a power sharing agreement between land-owning rent collectors (the traditional aristocracy) who previously monopolized Parliament and the relatively new manufacturing/industrial capitalists of previously unrepresented cities like Liverpool and Manchester. But the rest of the century was marked by continuing and successful attempts to monopolize most gains from productivity for capital at the expense of labor. And which also BTW included the taxation system whose net effect was to redistribute national wealth UPWARDS from ‘non-ratepayers’ (Randian parasites) to ‘ratepayers’ (Job Creatuhs) even as the latter continued to complain about how burdened they were. (Then as now capital got rich buying government debt subsequently paid off by extraction from labor).
And a fair reading of the Ryan Roapmap (the full version) shows a desire to have this arrangement explicitly recognized by eliminating ALL taxation on gains from capital.
The Right knows full well that government spending and especially war spending creates economic growth even as it adds to debt, they have no quarrel with Keynes there. They just insist that as much of that government driven growth as possible be directed to profit based organizations under their control while equally insisting that the subsequent debt service is not […]
Bait and Switch. ‘Rates’ vs ‘Tithes’, a modest history lesson.
A good deal of Economic and Political Right thinking can best be understood by examining it in terms Margaret Thatcher would understand rather than those put forth by Reaganites.
In Britain the line of demarcation between the ultimately deserving (Randian producers) and the undeserving (parasites, looters and moochers) was most simply defined by being or not a ‘Ratepayer’. A Ratepayer was subject to the Poor Rates assessed against real property and ostensibly devoted to Poor Relief. Making any non-owner of real property at least potentially a real parasite dependent on Outdoor or Indoor Relief (roughly Welfare vs Poorhouses). In the U.S. the typical proxy is ‘Federal Income Tax Payer’ as opposed to the free riders (sounding familiar?)
But in Britain there were parallel tax systems to the Rates, especially a series of Excise Taxes and the Tithes. Now in theory Tithes were a 10% assessment on productivity (goods and wages) to support the Established Church and so not a ‘tax’ at all. Even though it was enforced by government and exacted from people who didn’t belong to the Established Church (in England this would include Quakers, Protestant Dissenters, Catholics, and the tiny minority of Jews). Moreover not only was the entire flow sent to the Church of England (or Scotland or Ireland) there was no guarantee that it would even stay local to the parish. Instead it endowed what was tellingly known as a ‘Living’ and used to fund various offices and sinecures elsewhere, many of which were not even remotely religious (though they would include educational posts at Colleges). Indeed the holder of the Living would pay a fraction of its proceeds to fund a local Vicar (literally ‘placeholder’) who in turn might hire a number of Curates (literally givers of ‘Care’ meaning spiritual care in the form of masses, burials etc).
The end result was that labor of all sorts and sects paid 10% of their income to support generally non-local and mostly quasi-governmental offices all under the direct control of landowners and yet in the eyes of the latter were simple parasites on God-fearing Ratepayers. Because those parasites being landless didn’t pay rates.
In the U.S. the role of Tithes has been replaced by that part of rent actually passed through to government in the form of property tax (once again with landowners insisting only they are ‘really’ paying that tax), but the basic division remains the same: actual tax incidence disguised by nominals.
Thanks Bruce. I wish you would teach history to American children.
I want to make sure everyone understands that your “not a tax” tithe is nothing like my “not a tax” SS premium. But that’s beginning to look like a lost battle.
And I think i’d add that I don’t mind theft, or graft, so much by the upper classes as long as they leave enough for the poor to have a decent life. I am guessing that is also a lost battle.
The difference between my “not a tax” tithe and your “not a tax” FICA is as simple as the age old question ‘cui bono’. Per the numbers 99% of all Social Security income goes to pay benefits for the covered population. Whereas the percentage for 18th century tithes going to the actual parish being much lower. And in places like Ireland where only a tiny minority actually belonged to the (Anglican) Church of Ireland, with even many Protestants belonging to Dissenting Sects, the amount of money raised via tithes going to the workers who largely paid it being close to zero.
Thanks bruce this response is a lot more involved than I expected from my mostly sarcastic pointer to Pierce.
One little thing I would add to your list is the way even stuff the right hates (food stamps etc.) are now captured via e-payment systems owned by major banks. So even stuff they vote against ends up helping the banksters. I think Dickens would be impressed, if not actually surprised.
Government is wasted on ordinary people. It is a money-making proposition for those who can direct its activities to their benefit exactly as Bruce points out. That’s why Tea Party people want to go to Washington to get in on the ground floor for any new enterprises that spring up when the government is no longer performing social, educational and public health services.
Florida government is a good example of how this works. In place of public employees, private companies do the work of former state agencies under contracts with few if any quality control or effective public accounting mechanisms. Want to find out how the State of Florida is administering federal child support statutes? Well, first you’d have to track down what company got what contract and then try to get information from that company about its performance. Good luck with that. Then, suppose the company refuses to give you the information you want. Again, no law requires disclosure for contracted state functions so you’re not going to get very far.
Suppose you think that services being provided citizens are inadequate or unfairly administered. Think about drug testing for food stamps or TANF, for example. You have to sue the state alleging some violation of basic constitutional rights to prevent the state from abusing its citizens (Fourth Amendment search and seizure for drug testing, for example.) On the other hand, if your state just does a piss poor job of administering a federal program, you’re out of luck. It’s not a violation of the Constitution for a state to cut programs to the point where few citizens receive needed assistance or other benefits as long as federal basic program benefits are provided on a “first-come” basis and others wait-listed. In essence, the state is depriving its citizens of services other states’ citizens take for granted. But, it is certainly “business-friendly” if it contracts out services through private firms. NancyO
All the talk of QE3 and other lame stimuluses. QE3 will funnel yet more money to bank balance sheets and rich people taking their assets and plopping those to the Feds balance sheet. Normal folks do not benefit from those money flows. Heck interest rates are not even rising.
You want stimulus? 50% income tax cut on anyone making less than $200K for one year. Hopefully, some of this gets spent and some reduces people’s debt putting people in a stronger position.
Repect to all regular Bears who are veterans, and all veterans.
Mcwop
not sure a tax cut is what we need. we have had too much of tax cuts.
i hate taxes too. but i’d rather see the money go directly to jobs or small business loans.
tax cuts favor those who already have money, in proportion to how much they have. and the times are such that the reasonable instinct of even the poor is to save, not spend, a tax cut.
but the psychology of getting a new job, not to mention the probable actual NEED to spend would almost certainly be a real stimulus… even if instead of “borrowing” the money, the government paid for it by taxing those who are currently sitting on a lot of it.
our financial geniuses are still fighting the last war.
It has nothing to do with liking or hating taxes, but everything to do with getting money out there as we are headed back to recession . QE3 will enrich bank balance sheets and buy binds from rich people. We know Obama cannot coordinate stimulus and the republicans will sign onto this
Is Mitty Mitt Romney a convert to Keynes? Or is he a closet stimulator? Inquiring minds (not Mark Helperin’s ) found a nugget of decidedly non austerian goodness in a recent Time interview… The money quote:
Romney: Well because, if you take a trillion dollars for instance, out of the first year of the federal budget, that would shrink GDP over 5%. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.
Courtesy Equire’s priceless Charles Pierce. http://www.esquire.com/blogs/politics/mitt-romney-government-spending-9146518 Full length useless trainwreck knob job of an interview here: http://thepage.time.com/2012/05/23/the-complete-romney-interview-transcript/
rusty:
Thank those who did not come back.
It is the one thing I hated the most of being a vet was being thanked. Those of us who are here today, are here because of those who died. Lost some close friends and it still haunts me to this day how I was not one of them.
Your heart is in the right place.
Most ostensible Supply Side/Public Deficit Hawks have been Keynesians all along. They just want any increase in public spending to go through private conduits. Which is why they supported Medicare Part D while insisting to the end on no price controls (e.g. Ban on reimports). It is why they simultaneously weep about $500 billion in Medicare savings under ACA while pushing voucher-type systems to cut overall program costs. The $500 billion in cuts comes out of the pockets of medical equipment manufacturers and via elimination of the average 14% premium subsidy over regular Medicare that was given to Medicare Advantage providers. It is why any close examination of the B-S proposed cuts to military spending show essentially zero cuts to core acquisition programs (Commission member David Cotes of Honnywell made sure of that) while many billions were saved by cost shifting health care costs to active duty and retired soldiers, sailors, and airmen.
Nothing has changed since Stockman let the cat out of the bag with “starve the beast” during the Reagan years followed off course by Norquistian “drowning government in the bathtub” orthodoxy. Or you can just look at the total absense of cost and audit controls when it came to Iraqi War contracts. At no point in the history of Reaganomics and followups have any serious proponent actually proposed controls on acquisition or maintenance contracts as long as those were funneled through private industry.
And it is not just at the federal level. Take just about any scheme favored by the right: charter schools, privatized toll roads, private prisons, privatizing public parks, few if any actual net out as cost savings to the federal, state, or local budgets (not long term) and more often than not actually result in a cost-plus position.
This is not pathology, it isn’t even denial (for most promoters), it is a conscious strategy to ensure that every economic flow possible go through channels controlled by capital for the sake of capital.
And back in the day this wasn’t even controversial. The foundations of modern capitalism were laid at a time when political structures were openly and proudly anti-democratic. For example England only became a democratic country in 1918, and only a real representative system in 1888 (while still maintaining property qualifications for voting). The Great Reform Act of 1832 that for the first time made Parliament a pale reflection of the whole country was at base a power sharing agreement between land-owning rent collectors (the traditional aristocracy) who previously monopolized Parliament and the relatively new manufacturing/industrial capitalists of previously unrepresented cities like Liverpool and Manchester. But the rest of the century was marked by continuing and successful attempts to monopolize most gains from productivity for capital at the expense of labor. And which also BTW included the taxation system whose net effect was to redistribute national wealth UPWARDS from ‘non-ratepayers’ (Randian parasites) to ‘ratepayers’ (Job Creatuhs) even as the latter continued to complain about how burdened they were. (Then as now capital got rich buying government debt subsequently paid off by extraction from labor).
And a fair reading of the Ryan Roapmap (the full version) shows a desire to have this arrangement explicitly recognized by eliminating ALL taxation on gains from capital.
The Right knows full well that government spending and especially war spending creates economic growth even as it adds to debt, they have no quarrel with Keynes there. They just insist that as much of that government driven growth as possible be directed to profit based organizations under their control while equally insisting that the subsequent debt service is not […]
Believe it or not I had to edit this down to meet the 5000 character limit. If I get the energy later I will add in the deleted parts.
Bait and Switch. ‘Rates’ vs ‘Tithes’, a modest history lesson.
A good deal of Economic and Political Right thinking can best be understood by examining it in terms Margaret Thatcher would understand rather than those put forth by Reaganites.
In Britain the line of demarcation between the ultimately deserving (Randian producers) and the undeserving (parasites, looters and moochers) was most simply defined by being or not a ‘Ratepayer’. A Ratepayer was subject to the Poor Rates assessed against real property and ostensibly devoted to Poor Relief. Making any non-owner of real property at least potentially a real parasite dependent on Outdoor or Indoor Relief (roughly Welfare vs Poorhouses). In the U.S. the typical proxy is ‘Federal Income Tax Payer’ as opposed to the free riders (sounding familiar?)
But in Britain there were parallel tax systems to the Rates, especially a series of Excise Taxes and the Tithes. Now in theory Tithes were a 10% assessment on productivity (goods and wages) to support the Established Church and so not a ‘tax’ at all. Even though it was enforced by government and exacted from people who didn’t belong to the Established Church (in England this would include Quakers, Protestant Dissenters, Catholics, and the tiny minority of Jews). Moreover not only was the entire flow sent to the Church of England (or Scotland or Ireland) there was no guarantee that it would even stay local to the parish. Instead it endowed what was tellingly known as a ‘Living’ and used to fund various offices and sinecures elsewhere, many of which were not even remotely religious (though they would include educational posts at Colleges). Indeed the holder of the Living would pay a fraction of its proceeds to fund a local Vicar (literally ‘placeholder’) who in turn might hire a number of Curates (literally givers of ‘Care’ meaning spiritual care in the form of masses, burials etc).
The end result was that labor of all sorts and sects paid 10% of their income to support generally non-local and mostly quasi-governmental offices all under the direct control of landowners and yet in the eyes of the latter were simple parasites on God-fearing Ratepayers. Because those parasites being landless didn’t pay rates.
In the U.S. the role of Tithes has been replaced by that part of rent actually passed through to government in the form of property tax (once again with landowners insisting only they are ‘really’ paying that tax), but the basic division remains the same: actual tax incidence disguised by nominals.
Thanks Bruce. I wish you would teach history to American children.
I want to make sure everyone understands that your “not a tax” tithe is nothing like my “not a tax” SS premium. But that’s beginning to look like a lost battle.
And I think i’d add that I don’t mind theft, or graft, so much by the upper classes as long as they leave enough for the poor to have a decent life. I am guessing that is also a lost battle.
The difference between my “not a tax” tithe and your “not a tax” FICA is as simple as the age old question ‘cui bono’. Per the numbers 99% of all Social Security income goes to pay benefits for the covered population. Whereas the percentage for 18th century tithes going to the actual parish being much lower. And in places like Ireland where only a tiny minority actually belonged to the (Anglican) Church of Ireland, with even many Protestants belonging to Dissenting Sects, the amount of money raised via tithes going to the workers who largely paid it being close to zero.
Thanks bruce this response is a lot more involved than I expected from my mostly sarcastic pointer to Pierce.
One little thing I would add to your list is the way even stuff the right hates (food stamps etc.) are now captured via e-payment systems owned by major banks. So even stuff they vote against ends up helping the banksters. I think Dickens would be impressed, if not actually surprised.
Government is wasted on ordinary people. It is a money-making proposition for those who can direct its activities to their benefit exactly as Bruce points out. That’s why Tea Party people want to go to Washington to get in on the ground floor for any new enterprises that spring up when the government is no longer performing social, educational and public health services.
Florida government is a good example of how this works. In place of public employees, private companies do the work of former state agencies under contracts with few if any quality control or effective public accounting mechanisms. Want to find out how the State of Florida is administering federal child support statutes? Well, first you’d have to track down what company got what contract and then try to get information from that company about its performance. Good luck with that. Then, suppose the company refuses to give you the information you want. Again, no law requires disclosure for contracted state functions so you’re not going to get very far.
Suppose you think that services being provided citizens are inadequate or unfairly administered. Think about drug testing for food stamps or TANF, for example. You have to sue the state alleging some violation of basic constitutional rights to prevent the state from abusing its citizens (Fourth Amendment search and seizure for drug testing, for example.) On the other hand, if your state just does a piss poor job of administering a federal program, you’re out of luck. It’s not a violation of the Constitution for a state to cut programs to the point where few citizens receive needed assistance or other benefits as long as federal basic program benefits are provided on a “first-come” basis and others wait-listed. In essence, the state is depriving its citizens of services other states’ citizens take for granted. But, it is certainly “business-friendly” if it contracts out services through private firms. NancyO
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