By lambert strether. Originally published at Corrente.
Izvestia: “Tentative Accord Reached to Raise Taxes on Wealthy”. Pravda: “Obama, Republicans reach deal on fiscal cliff; Senate vote expected tonight”. Man, I’m experiencing this tremendous body hit, a huge relief from tension. Not. And maybe I’m too cynical…
… but when you compare the Eisenhower top rate (91%) with the piddling 39.6% in this “tentative accord,” it all seems less exciting.
Especially when you know that the next move is cuts. Ezra Klein lays out the next rounds of kabuki*:
It would be going too far to say White House officials are thrilled with this package. But it looks pretty good to them. As they see it, it sets up a three-part deficit reduction process. Part one came in 2011, when they agreed to the Budget Control Act, which included more than a trillion dollars in discretionary spending cuts. Part two will be this deal, which is $600 billion — and maybe a bit more — in revenue. And part three is still to come, but any entitlement cuts that Republicans want will have to be matched by revenues generated through tax reform. If Republicans want $700 billion in further spending cuts and the White House insists on $700 billion in tax reform, they’ll end up with more revenue than in Obama’s final offer to House Speaker John Boehner.
But again, again, again, entitlement cuts and tax increases (especially on the rich) are not commensurate:
A “sacrifice” where some give up luxuries and others give up necessities is in no way “shared.” A marginal sacrifice for the rich is not commensurate to core sacrifices for the rest of us. But the tropes of official Washington carefully brush this reality away.
In case you were wondering, I’ve been in Pittsburgh visiting relatives and doing things that I’ll fill you in on later. I’ve been staying with a favorite aunt who doesn’t have time for the Internet and whose neighbors have put passwords on all their modems since the last time I was here.
Anyway, the anecdotal evidence suggests that the urgency of the fiscal cliff is not resonating here. People are bored with it. It’s not like Iraq where the Bushies scared everyone into thinking Saddam Hussein had WMDs that he could drop on us in 40 minutes. No, it’s like they really want mute the next TV pundit who is hyperventilating about his taxes going up in January. …
Of course, if working people’s taxes go up in January and benefits get cut, they’re going to be pissed. But no one here is fooled into believing that legislators are twisting themselves into knots on their behalf. …
So, there you go, TV pundits. You have created a crisis that instantly triggers bathroom breaks.
So, anyhow…. What I’ve been wondering about, though, is why now? Surely Obama would have gotten “a better deal” if he waited ’til the new Congress? It could be, of course, that Obama’s just a lousy negotiator (another Narrative of Democratic Weakness). However, if your goal is to help the Republican Party, then one thing you might do is arrange for the previous crop of Republicans to get blamed, so next year’s crop can point to them and say “It was the other guys!” I don’t think this is an especially good theory, but it’s the only one I’ve been able to come up with. Readers?
NOTE * Or “mini-cliffs” as the National Journal puts it.
NOTE Adding, the tax deal also — and I know this will surprise you — f*cks the working class and the poor:
But Obama is wrong [lying. Again. Oh noes!!]: Taxes will rise on the middle class even if this deal passes, because it doesn’t include an extension of the payroll tax holiday. That means that the paychecks for more than 160 million Americans will be 2 percent smaller starting in January, as the payroll tax will jump from 4.2 percent to 6.2 percent. And a huge number of those hit will be middle class or working poor (Two-thirds of those in the bottom 20 percent would be affected by a payroll tax hike.).
Oh well. So much for aggregate demand.
Again, again, again, one reason why Democrats suck so very badly is that they defend programs when they should be defending households. All that matters to poor schlubs like us is the money in the coffee can in the middle of the kitchen table. If the Democrats take a bill out of that can by cutting Medicare, so we have to pay more for medicine, or they take a bill out by shrinking our take-home pay, it doesn’t matter. Money is fungible! The only thing that matters is how much money there is in the coffee can.
And if the Democrats wanted to defend households, they’d have a program that looked like this:
1. NOT ONE PENNY OF CUTS to any social insurance programs
2. Any cost savings to be returned to beneficiaries as increased services
3. Reduce the Social Security eligibility age to 60, so young people just forming households can get jobs
4. Age-neutral benefits, so the shameful and immoral system where benefits get progressively worse the younger you are is abolished. How can we be doing this to our own kids?
NOTE I need to thank a member of the NC commentariat for “The Fecal Cliff.” But I forget who. So, whoever you are, take a bow!
Another insight from a media-based “talking head” spewing the party line.
Get a clue: There is no difference between the red team and the blue team.
We are one happy mass.
Us vs. Them is so Pink….
You read the post, right?
…”reason”??…bushbama is about to lose his blue dog whipping boys…AND those replacing the majority of, may NOT be willing to permanently discredit dems (themselves) by devolving “Social Security”…
insomuch as teaparty fascists are destroying repubLIEcons, so will devolving “Social Security” mean the END of democratic integrity…
Awww, those Tea Potter Repugnicants hold their breath until they topple over their own, self-climbed cliff . . . only to land on the crawl-down ledge 18 inches below the lip. Sorriest spectacle since, well, _July 2012_ and not to be topped until the next lot of gobspittles forswears their oath of office in a few days time.
The political class in this country worms down to a new depth in the ordure by the year in this generation. If only we could ignore them, but no, one never knows when they’ll hold a gun to the head of the citizenry next. Yes, they’re shooting blanks, but if the pop the hammer against your personal budgetary temple your just as smoked . . . .
Why now for Obama? To avoid “the fecal cliff” and the impact of sequestration, with its $1.2 trillion of cuts to defense and non-defense spending that has been estimated to cause the loss of over 2 million jobs. The deal was originally supposed to have cuts that would dispose of sequestration but now just delays it for a couple months while an agreement is reached over spending cuts, according to my understanding. This deal at least ensures that the middle class doesn’t see their taxes go up, if you ignore the expiration of the payroll tax relief, and the wealthy pay more taxes, as Obama campaigned almost exclusively on. But it allows for further drama in a couple months when the debt ceiling can be held hostage, “forcing” Obama to make draconian cuts to entitlement programs. Defense spending will be spared, as both parties have defense installations of some type in their home states they want to protect, and buy into the “national security” meme, as seen by the passage of the renewal of FISA (one of the few pieces of legislation, other than naming post offices, passed by Congress this past session).
It can still be foiled though if the bill isn’t passed by the House. However, I suspect Pelosi will round up enough Democrat support to make up for the recalcitrant Tea Party “no” votes and get a bipartisan majority. Unlike Boehner, Pelosi has firm control of her party.
The vote on this in the House will come right after another vote like they do regularly to reaffirm the “new” motto of In Gawd We Trust…..just warming them up, mind you……bend over, someone else is driving….grin…. how do these people sleep at night w/o Big Pharma?
I like the Fecal Cliff name. It evokes the proper propaganda sentiment.
By allowing the sequestration and debt ceiling bullshit to continue in two months, Obama has most likely sold out his Presidency completely.
On the other hand, if he coins the $100 trillion platinum coin and laughs at the debt ceiling, then maybe this will all work out OK. I’m not optimistic.
Well, if you accept the premises. But when it looked like a deal wasn’t going to be struck, there was a sudden rash of stories about all the palliative measures that could be taken to mitigate the impact for weeks and months.
The whole thing is kabuki, top to bottom. “Why now?” really means I’m not getting the actor’s motivation. It seems like a flaw in the script (which, of course, is not shown to us, in order to heighten the suspense, sell more tickets, etc.)
I expect you’re right that Obama and Pelosi will whip up the required Democratic votes to get this stinker passed.
And remember to keep your eyes on the ball. The real big hitter tax for the uber rich is the interest income/carried interest, not the earned income tax. This was the tax that allowed Romney to pay just 14% taxes on $33M income:
Great News, Rich Americans! Congress Just Raised Taxes On Workers While Saving Investors Billions http://www.businessinsider.com/dividend-taxes-2013-1
So apparently, the dividend tax was going to go back to 39.6% but got negotiated to 20% (up from 15%). Most rich have higher unearned income than earned income. “Shareholder value” you know, even if it’s the kind of value that leaves the real company and employees nothing more than a big smoking hole in the ground.
Also the estate tax. As of today the tax rate for megabillion dollar estates is 55%. The deal cuts it to 40%.
That’s what the Republicans care about.
Regarding the “shareholder value” nonsense, it’s usually bad for long-term shareholders too. It’s really just another excuse for the CEO’s to loot the company.
Yes, it took me a while to figure it out, but every time our CEO said “shareholder value”, he meant “my stock options”.
But he finally got caught screwing (literally) an employee and got “retired”. Everybody at work snickered until I pointed out that his golden handshake getting fired was way better than any of us would get.
After endless number of cases where Obama gave up the store, we still rehash his motivation, ability and sincerity. It’s a waste of time. Simpson/Bowels proves that Obama opposes the safety net. His numerous giving ins to the Republicans shows both that his negotiation skill are zero and his affinity of Republican high. His campaign story was a lie we all saw through. Enough.
Bingo! The same bankers like blankfein (goldman sucks) and his buddie jamie demon that have been paying off obama since he was a junior senator and did so again this year are really getting their money’s worth. Corporations too that want to end social security so it’s easier to end their under funded pension plans. This year those plans are under funded by over $600 Billion. Really ticks me off SS is self funded and doesn’t add a dime to the budget so there could be no other reason other then helping out the people who paid him off including GE. The corporations already got a break on their pensions this year but they want to do away with them entirely!
The Great American Retirement Scam: Why The Wealthiest CEO’s In America Want To Take Away Your Social Security
GE Latest to Cut Pension Contribution on New Law
JPMorgan CEO Pushes Fiscal Cliff Compromise As The Bank Lobbies For Tax Breaks
other links on SS, pensions underfunded and goldman lobbying embedded here
JPMorgan Employees Join Goldman Sachs Among Top Obama Donors
By Jonathan D. Salant – Mar 20, 2012
Barack’s Wall Street Problem is Now America’s
Let’s start with the numbers. Why is a first term Senator pulling down almost $300,000 a year from Goldman Sachs, Lehman Brothers, Bear Stearns, Fannie Mae, Freddie Mac, AIG, Countrywide Financial, and Washington Mutual? He has not even completed his fourth year in the Senate and received a total of $1,093,329.00 from these eight companies and their employees. (all data from OpenSecrets.org).
Re Ge pension bit –
” … the 60% reduction was made possible by a provision in the Temporary Surface Transportation Extension Act of 2012.”
The what? Hmmm, never even heard about this one – too bad, that sounds like it would have been really worth bitchin’ about ….
Am I the only one here that the TSTEA slipped by?
“…Simpson/Bowels proves that Obama opposes the safety net…”
Bowles = Bowels is an inspired tie-in with Fecal Cliff.
Maybe someone can think of a parody name conversion in the same vein for Simpson.
Can’t think of a tie-in for Simpson’s name, but I couldn’t help thinking of Simpson’s “300 million teats” comment — and that brought up images of all us 99 percenters at the South end of that Simpson cow ……. under the Fecal Cliff.
Whoever it was that started the Fecal Cliff phrase, I thank you!!
“After endless number of cases where Obama gave up the store, we still rehash his motivation, ability and sincerity. It’s a waste of time. ”
The problem is that there is a group of Obama worshippers who believe, despite great masses of evidence to the contrary, that he is both (1) on the side of the 99%, and (2) competent.
Now, perhaps he’s on the side of the 99%, and perhaps he’s competent, but it’s pretty obvious to anyone living in reality that he isn’t *both*.
I don’t really care whether he’s incompetent, evil, or both. We get the same results whichever way it is.
Face it. If BHO was all white instead of half white, nobody would have ever heard of him. He wouldn’t have made a career out of blowing smoke for Chicago real estate moguls who made him their community disorganizer. He wouldn’t have been given a national stage at the ’04 Democratic convention. His sympathies are purely narcissistic. His mantra is ‘promise em anything, give em Arpege.’ He has used race like jujitsu and dopey liberals just fell for it. When are people going to realize that, in National politics at least, race has become irrelevant?
lose ends, via google search:
‘Fiscal cliff’ deal would extend child tax credit, earned income tax credit, college tax credit for 5 years – @Reuters. BreakingNews.com - 16 hours ago
Fiscal-Cliff Deal ‘In Sight,’ Said to Include 1-Year Doc Fix
& ive heard on the news the milk cliff was avoided earlier, but cant find anything on extending the the mortgage debt forgiveness relief act..
At one point in my life I read Federal laws for work. I just might have to read this piece of sausage for fun…..the devil, as they say, is in the details.
Thanks for that sausage making update.
found this: Add-On to Budget Deal Would Stop Milk Prices From Doubling – Bloomberg: A budget deal between Vice President Joe Biden and Senate Republican leaders would extend most U.S. farm support programs for a year and end fears, at least until autumn, that the retail price of milk could double.
but if congress fails to renew the Mortgage Forgiveness Debt Relief Act, mortgage debt forgiven in short sales will be treated as income and be taxable in 2013…
here’s the whole bill. 157 pages.
Speaking of the ‘milk cliff,” I searched for details of the Ag bill that passed the $enate last night, but found little. As of a few weeks ago, Monsanto was expecting regulatory relief by way of that bill. They and the others in the genetic food industry now demand their birthright: They want the kind of stress free, minimal oversight regulations that other freedom loving American corporations, such as the frackers for example, now enjoy:
“The Farmer Assurance Provision” is the title of a rider, Section 733, inserted into the House’s 2013 agriculture appropriations bill. Somehow, as a farmer, I don’t feel the least bit assured.
The only assurance it provides is that Monsanto and the rest of the agriculture biotech industry will have carte blanche to force the government to allow the planting of their biotech seeds.
In addition, the House Agriculture Committee’s 2012 farm bill draft includes three riders – Sections 1011, 10013 and 10014. These amendments would essentially destroy any oversight of new genetically engineered (GE) crops by the U.S. Department of Agriculture. If these riders had been in place during the review of GE alfalfa, Monsanto could have requested — no, they could have compelled — the secretary of agriculture to allow continued planting of GE alfalfa even though a federal court had ruled commercialization was illegal pending completion of an environmental impact study.
Essentially, the riders would prevent the federal courts from restricting, in any way, the planting of a GE crop, regardless of environmental, health or economic concerns. USDA’s mandated review process would be, like court-ordered restrictions, meaningless. A request to USDA to allow planting of a GE crop awaiting approval would have to be granted.
Wow, who’s next to get in on a deal like this, the drug companies?
Not only would the riders eviscerate the power of USDA and the authority of the courts, but they would also permanently dismiss any input from other agencies, such as the Food and Drug Administration, Fish and Wildlife Service or Environmental Protection Agency.
Does Congress really believe it has the right to remove the court’s power of congressional oversight?
Looks like the “milk cliff” could be the stairway to heaven for Monsanto.
Talk about a fecal cliff – methinks driving our food supply into the hungry maw of Big Ag is bound to produce some pretty toxic s**t …
Methinks these GMO weapons of mass destruction, along with CC, will be the death of us – more efficient in the task than even the banks …
Ya, Mad Corn Disease on the way.
Not to mention High Fractose Porn Strips …not only fattening but full of STDs (super tough dic-saccharides…)
The American empire is OVER. There is no painless way to a MUCH lower standard of living.
Please obfuscate…can’t stand the clarity!
If the plight of workers in the developing world were rising as that of workers in the developed world is falling, your argument might have some hint of truth to it.
However, that is not what is happening. What is happening is this: As the plight of workers in the developed world falls, that of workers in the developing world is falling to an even greater extent, and much faster. For a hard-hitting statement of this, there’s this interview with Charles Bowden:
Charles Bowden on “Murder City: Ciudad Juárez and the Global Economy’s New Killing Fields”
Yeah, but there’s an important point here. When people are upset enough, they overthrow their governments.
In the US people keep being *not quite* upset enough. In the developing world they’re a lot closer to that point.
Mexico is a special case, being tied to the US, and shouldn’t be used as an example.
Revolution is a thing of the past. Look at Egypt. It should be called, Groundhog day, now.
I’ll believe that when there are no more billionaires. Until that happens, there’s plenty of room for the US standard of living to increase.
I don’t think things are going to get better until the revolution, and I don’t think people will be ready for revolution — even peaceful revolution — for another decade or two.
I could be wrong, though.
To be very clear about this, the reason I think things won’t get better before a revolution is that our governmental system fails to represent the people. If we had a working election system, perhaps a party-proportional representation system with a parliamentary system, and of course hand-counted paper ballots, we’d probably get out of this within less than a decade.
Fecal Cliff indeed! I would love to see a simple chart of what great benefits we got from compromising with the Republicans vs. what we would have if we had simply go over the damn cliff. I’ll bet it nets out negative for most people.
I bet you’re right. Anybody got a link to a chart like that?
It’s not a cliff, it’s a brick wall. The only variable is how fast you’re going when you hit it.
Here’s another theory on why Obama struck a half-baked deal now: he doesn’t think the House will go along and that would make it abundantly clear to folks where the obstruction is taking place. But the sad reality is that the folks in Pittsburg who SHOULD be outraged are taking a bathroom break.
My friends and I had a good belly laugh at the New Year’s party after our boy in the White House delivered on our investment once again. Now he can play out the script of being “forced” to cut those damn welfare programs like social security when the debt limit comes to a head in a couple of months.
The increase in tax rates for people making over a half mill is a particularly nice ploy to make the commie libs feel good. Nobody in my circle is stupid enough to pay taxes on salaries that large. Take my business for example:
Thanks to our boy Clinton’s NAFTA scam, we can manufacture our disposable plastic items for doctors and hospitals in our maquiladora factory in Mexico for an average cost of under .50 per item. It took millions of dollars spread around judiciously to Congresswhores to get them approved and required by Medicare, but hey, at $50.00 average sale per item we could afford it.
Taxes would have put a severe monkey on the back of my 170′ yacht being built in Holland, but fortunately I planned to register it in Gran Cayman. Simple matter to form a corporation headquartered in a post office box that provides management services to our US corporation. Nice neighborhood—Mitt has a post office box just down the hall. As a matter of fact, those management services are so expensive that the US corporation struggles to show a profit. Obama pushed through a token tax increase in the USA? Who cares!
That’s a great summation of how neoliberalism works.
But if you really want to see the underbelly of neoliberalism, you have to look at the living and working conditions of the workers who make those “disposable plastic items for doctors and hospitals in our maquiladora factory in Mexico (or any other part of the developing world as far as that is concerned) for an average cost of under .50 per item.”
The person who served as a model for this story and produces disposable catheters and the like in his maquiladora is afraid to visit his factory for fear of being kidnapped for ransom or simply assassinated. So at least there is one bit of good news already in 2013!
Ha, ha – maybe he’s afraid they would use him as a demo model for his own product – over and over and …
They could start with a 30 Fr …..
Crazy Horse offers some insight and all he gets is invective? Talk about shooting the messenger. Still, 170 ft IS a bit excessive. I propose a law that says rich fux must pay a 90% tax on every foot of yacht that exceeds 100 ft. That should cut ’em down to size!
How Much More Will Your Payroll Tax Be in 2013? – WSJ: To see how much more you will pay next year, input your annual pretax salary into the calculator below and click “calculate.”
Lambert, please consider adding #5 to your list: Reduce the age of Medicare eligibility to 60 this year, to 55 in 2015, to 50 in 2017, and so forth.
That way, we will eventually have decent healthcare coverage for the whole population, instead of Obamacare for the medical-industrial complex.
And as more and more Americans join the Medicare rolls, we can work to improve Medicare itself.
Medicare for all will not solve that problem unless you deal with the medical suppliers. The only thing you’re doing ( which medicare does now) is subsidize the current system.
It will solve the problem of people dying from lack of health care.
I realize that’s not at the top of everybody’s list, but it’s worth pointing out….
Allow Medicare to negotiate prices, and expand
Medicare to cover the whole population, and pretty soon the medical suppliers *have* to take Medicare’s prices whether they like it, or not.
Yup! Which is precisely why it is not done ….
Krugman (&Libs) play Charlie Brown to Obama’s Lucy football. Always thinking maybe next time O will stand firm.
—“So why the bad taste in progressives’ mouths? It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.
If Obama stands his ground in that confrontation, this deal won’t look bad in retrospect. If he doesn’t, yesterday will be seen as the day he began throwing away his presidency and the hopes of everyone who supported him.—“
Krugman also says “if I were a Republican I would also be betting that [Obama will] cave”. And Robert Reich spins the same theme, calling Obama “the world’s worst poker player”.
Still? After four years of unbroken betrayal, the premature capitulator continues to enjoy reliable cover from the milk-fed liberal veal pen. Paraphrase: “He’s not really a war criminal working for the criminal kleptocracy; he’s not actively colluding with John Boehner behind the curtain. He can’t help it, he’s just a well-meaning nice guy who happens to be an incurably naive invertebrate eunuch. We just need to work harder to make him do it.”
It’s time to conclude that Krugman and Reich and their veal pen cronies, along with Obama, are willingly in league with killers and thieves. They are part of the murderous protection racket.
Honestly, the same cognitive error again? Assuming people did what they wanted to do? Assuming that people are thinking clearly? (Please look up some psych research; most of the time people are not thinking at all, and there’s a long list of common cognitive biases.)
Never assume malice when incompetence is an adequate explanation.
Incompetence is *certainly* an adequate explanation for Krugman’s optimism. Most people have optimism bias.
Incompetence *may* be an adequate explanation for Obama’s catastrophically bad Presidency, too. It doesn’t make it any better than malice in that case, though; incompetent leaders are, if anything, worse than malicious ones.
Frankly i am long past caring why they do it – the fact that they do and have demonstrated time and again that they will continue on this course is enough for me to have decided long ago that they must be deposed from power.
i can think of only 2 reasons that it might be useful to speculate on why – 1) if there is indeed criminal behavior, it does need to be punished, in any case, or there is no point in law at all and 2) as i have mentioned, at least for me – it is at least a temporary way to ward off insanity by enlisting the detachment “intellectual” speculation provides …
Incompetence is the best all around cover that malice ever had.
Well, if somebody is going to be “throwing away” O’s Presidency, it’s too bad we didn’t get there first, as in 4 years ago …
I don’t accept narratives of Democratic weakness. I think they as a party, and Obama in particular, are doing exactly what they want to do.
* * *
My favorite metaphor is that the Republicans come right up to you and kick you in the stones. The Democrats, by contrast, sidle up to you, put their arm around your shoulder, and slip the knife in your ribs so deftly you don’t even feel it ’til after they’re gone.
I agree with your major premise, but reckon you’ve missed an essential part of the dynamic.
The republicans are craftier, more devious, more cunning. They play the game better, even though their base is dumber, and more easilly manipulated.
The evil geniuses of the right, who REALLY ARE playing 11 dimensional chess, and mostly winning, have turned what should have been a catastrophic defeat into a minor setback.
There was a discussion a few weeks back about “nicette”, the niavety of niceness, the false assumption that your opponent is negotiating in good faith. The democrats have fallen into this mistake yet again, stupidly, although you can almost forgive them, being as they’re suffering from nicette as to the charecter of Obama, who they still think is centre-left, when he’s clearly cetre-right, at least economically.
I’m down in the DC area and I can report there’s a whiff in the air that’s not entirely pleasant.
Thankfully the Redskins are going to the playoffs and have a franchise QB for the first time since probably Joe Theisman — so at least we’re able to ignore the smell for now.
If somebody slides down the fiscal cliff, do they need toilet paper or a full-scale shower and change of clothes? whap.
Oh man. I’m so glad I don’t have a TV. I’d be on Pacifex (TM) all the time. A daily 20 mg dose of Pacifex neutralizes the political psychosis wave and allows the patient to resume rational discourse about issues of import to the nation and local community. Some medical researchers believe it is impossible to engage in rational discussion using economic terminology. In these cases, Pacifex (TM) can contribute to amiable compromise, although somebody inevitably gets hammered somewhere and it’s usually the person who can’t afford to bribe the politicians. In that case you need alcohol and tranquilizers.
“If somebody slides down the fiscal cliff, do they need toilet paper or a full-scale shower and change of clothes? whap.”
I have a question regarding this that may seem wildly off topic but which I think goes to the heart of how we, as a culture, deal with reality.
The question is this: If someone rubbed their dirty hands with dry tissue paper and then declared that their hands were clean would you believe them?
So we’re getting the payroll tax increase right now, and then a big pile of spending cuts in a couple of months? Hello second recession. I guess we’re all Europeans now.
The thing is, if we do get another recession this year, because of the Fiscal Cliff deal, the Dems will not be able to blame it on the Reps. (OC, the Reps will blame the Dems, as always. ;)) Well played by the Starve the Beast team.
interesting framing – “payroll tax increase” instead of “not extending the payroll tax holiday” ….
FTW, commenter “lefttown” over @ FDL:
Obama: “cruel, evil and dishonest”
—“I didn’t expect him to “cave in.” I expected him to do exactly what he wanted to do, which is what happened.
Do you think Obama is essentially a good-hearted guy who cares about poor and working Americans, but gosh darn it, he just didn’t have the spine and finally “caved?” If so, you’re thinking the way Democrats want you think: they’d prefer you consider Obama to be weak rather than what he really is: cruel, evil, and dishonest.—“
Even if he’s cruel, evil, and dishonest, this is bad strategy. The billionaires will happily get rid of Obama once he’s done their bidding.
Furthermore, as I’ve pointed out before, the plutocrats are incredibly short-sighted. Emperor Augustus bragged about how many people *he* had on welfare — that’s the way to rule. These plutocrats don’t know how to deter revolution. Augustus did know how.
Perhaps they trust greatly in their psychological and technological leverage to keep a solid handle on things, as in Palestine.
I don’t think they’ll get “rid” of him. If you’re a plutocrat, you don’t make a habit of double-crossing your most loyal officers if you want your next deployment to be so strong and loyal and your officers emeritus to not use their residual power to make trouble. Honor among thieves, don’t you know.
They’ll “get rid” of him by turning him into a dead duck when it suits them.
In Palestine, the leverage Likud has is based on the racism and bigotry of the Jewish population, which is reinforced by (1) importing as many right-wing Jews as the government can find, and (2) being nasty enough to left-wing Jews that many of them emigrate to Europe or the US.
And despite this their colonial project is very much in jeopardy; they’re becoming apartheid South Africa, and eventually it’ll collapse. Might take a few more decades.
Now, that formula — racism and bigotry — worked for right-wingers in the US for a very long time, but it’s not actually sufficient to retain control in the US any more. First of all, there’s less racism; second, people are more mixed genetically, so it’s *harder* to be racist; third, the right-wingers have started openly engaging in class war — attacking the non-rich “white Anglo men” — rather than pretending that it’s race war. So this method of control has an even shorter lifespan than it does in Israel.
hunkerdown: The behavior you describe — loyalty — is not one possessed by the current kleptocrats.
That’s *exactly the problem*.
Read _Theory of the Leisure Class_ for why they do not possess the trait of loyalty.
To follow up, I expect the current psychopathic kleptocrats to be replaced by a feudalistic warlord who *does* possess the trait of loyalty.
This seems to be the usual way it works throughout history — French Revolution & all that.
Funniest title ever.
Do feel free to propagate — as a counter to the Peterson-funded “cliff” propaganda. That is the purpose!
I understand the tax rate on the wealthy, but I’d have to see the transaction that any monies are actually getting paid to the IRS.
Lambert Strether said:
I would like to add that even though federal revenues as a percentage of GNP have remained fairly constant for many decades, there has been a long-running trend to shift the cost of running the federal government off of corporations and onto workers in the form of withholding taxes. Here’s a graph that illustrates the point:
I think that graph was a little too clear.
Thank all that is right with this world for my 83 year old neighbor lady’s bootleg milk. Comes in a glass jar with cream on top. Three bucks a gallon vs. ten bucks (and no cream) at the store.
…..only outlaws have milk.
And thank Naked cappers for mentioning the payroll tax holiday. Amazing how few msm articles on this whole affair don’t mention it at all.
T”hank all that is right with this world for my 83 year old neighbor lady’s bootleg milk. Comes in a glass jar with cream on top. Three bucks a gallon vs. ten bucks (and no cream) at the store.”
I must be missing something, or that is some mighty special milk. Where the heck does it cost $10.00/gal? The Death Valley roadside SquishieMart??
At my local grocery store. Even more at my local health food grocer. Special it is in our society… it’s called organic (sans the cream). You might be thinking of the blood and chemical filled white stuff they call most milk… which is a bit less for now.
Shucks – you’re getting cheated – there’s some out there that is blood, chemical, pus AND hormone filled – lots of additives … Better living through chemistry …
I am Kos and I have a dream, in three parts: in the first part I see Obama holding out his hand to a small girl, who lips open and eyes fixed, seems to be humming some fine and prolonged melody. Next to her, on a pallet, a young boy immobolized in the sleep of death, still clutches in his hand a long wicker strand; near his deathbed, his grief-stricken father and mother are silently weeping. In the corner, a sickly hunchbacked girl child keeps humbly to the side.
In the second part, Obama turns towards the pallet and looks at the dead boy, who, miraculously restored to life, begins braiding the light and flexible wicker strand like a practiced basket weaver. The wonderstruck family expresses its joyous stupefaction with ecstatic gestures.
The final part of my dream contains the same decor and characters, and glorifies Obama. After being touched by the O man, the sickly hunchbacked girl child has become a tall, radiant and beautiful woman.
I am Kos, and I have a dream.
A warm welcome upon your return, from a member of your public.
“It’s a mad world, but I’m not all there myself.” – Chesire Cat (to Alice)
These negotiations, and really most tax and entitlement talk since the Reagan revolution, remind me of the scene in Goodfellas, with De Niro strangling Morris with a telephone cord, screaming “Gimme my money!”.
But if you strangle the middle class to death, you can’t get any more money out of them. My fear is that, like the scorpion with the frog, it’s just their nature, and we’re both going to drown.
Re: ” “The Fecal Cliff.” But I forget who. So, whoever you are, take a bow!”
Was this a pun intended?
Were you about to write “take a bowel”?
What a howl.
Oil and gas companies, which are raking in record profits, certainly don’t need $4 billion a year in subsidies, and even the oil company CEOs admit they don’t need it!
Why are cuts to Social Security and Medicare even being discussed while literally billions in corporate welfare are constantly spilling out of the Treasury?
White House petition to end corporate welfare here: http://wh.gov/Qa6f
And putting my name to a campaign site is going to change exactly what?
Hmm – i am curious – why did the Reps go along with ending the FICA tax holiday? For that matter why did the Dems? I admit i was much surprised at that – if the point of the holiday was really to “starve the beast”, as i firmly believe it was, why end it? Doesn’t that undermine the argument that we “can’t afford” these programs if they are “funding themselves”? And won’t that increase popular resistance to cutting bennies? And no, i don’t think it as simple as they “just want to screw us” – there is something more going on here …
Inquiring minds want to know …..
The *only* priorities for Republicans were
(1) low tax rates on capital gains for billionaires
(2) low estate tax rates for billionaires
(3) military pork going to military contractor billionaires
Viewed in this light, the deal actually looks bad for Republicans. Except that it’s not — because they have another hostage-taking round coming up, and they can get the tax cuts then.
#4 – privatizing SS and Medicare – a goal the Dems share with them. The Reps have always been about “cutting taxes” and would ordinarily call this restoring FICA tax rates to pre “holiday” levels a “tax raise!”, which in any other scenario they would oppose, and continuing this tax holiday had the added benefit of further undermining the popular conception of these programs as “self funded” …
Besides which it makes no sense to me for them to “agree” to restore FICA now only to “argue” for cutting it again in 2-3 months …
However i suppose this may well be part of the “revenue enhancement” the Reps are “agreeing” to, as you say – agreeing to – which means the Dems are the drivers of the restoration … which points toward the Dems, in turn, restoring the tax as “compensation”, in that perverse sort of way, in terms of “revenue enhancement”, for “agreeing” to raising the income level subject to increased income tax – which does, indeed, I must admit, quite immediately and directly, go back to “the poorer pay more so the richer pay less” …
This also suggests to me, now that i think more about it, that the Dems now think they can get away with gutting the safety net without having to go through the “starve the beast” routine first – OR, they will tell folks, “OK, we will restore the ‘holiday’ but in return we will have to cut the bennies”. This makes some sense to me, for, having seen the loud persistent oppo to the cuts they had fully intended to make, they realized they would have to “sweeten the pot” to get folks to accept it, and what better way to do that than “restore” the holiday – hmmm, so the lower tax goes from “starving the beast” to “sweetening the pot” – At that point the Reps wouldn’t have to “argue” for it, but only “agree” to it ….
This is all, by turns, so bloody sad and depressing and infuriating that these programs are nothing more than bargaining chips to them ….
Sorry for chewing out loud – but this “critical thinking” about the process is the only thing that keeps me “detached” enough to not blow my brains out … self defense, if you will …
Aquifer:Hmm – i am curious – why did the Reps go along with ending the FICA tax holiday? For that matter why did the Dems? I admit i was much surprised at that – if the point of the holiday was really to “starve the beast”, as i firmly believe it was, why end it?
They went along because SS overtaxation is the Republican “starve the beast” plan, not the tax holiday. See Hudson’s post here today. The Greenscam 1983 tax shift “starved the beast” (ordinary people) directly, by taking money out of their hands for no reason but to give it immediately to the rich. The Reps have always been about “cutting taxes”
is not correct – they’re about cutting taxes on the rich, raising them on the poor, Robin Hood in reverse, which is what happened in 1983.
That was the 30 year plan to gut the safety net, by destroying FDR’s plan for SS and SS taxation. In MMT terms, the FDR plan was/is very sound-financy, very deficit-hawkish. It is the stingiest “financing” plan for SS. I’m departing from MMT a bit in supporting it. But it could have worked forever, would have worked for the last 30 years to make ordinary people significantly better off, which is why Greenscam had to wreck it.
Also, your positions are inconsistent with each other. You have supported raising the interest rate on the bonds in the Trust Fund. But you oppose the tax holiday. But they are exactly the same thing! The tax holiday is “financed” by plonking new bonds into the Fund. Same thing as having higher interest payments into the Fund – the “new bonds” could be considered as a kooky kind of interest on the old ones.
I do think Wray was wrong to be curt with you at NEP a while ago. All your considerations and questions are good and deserve explications and answers – and are incorporated into MMT. E.g. in Wray’s papers – I’m particularly thinking of ones where he talks about cookie jars.
First – let me thank you kindly for bothering to respond to my ravings …
As it is pretty clear by now that I am a finance dunce as far as the ins and outs are concerned – i can only really deal with it in terms of public perception – which, if indeed, as per MMT, money, is in fact, no object, IS the thing that will make or break the program politically in the long, or perhaps now, sadly, the short, run …
The SS overtaxation, so i understand, leaves the fund with a pretty large “surplus” in the sense that no one can credibly argue that it is “going broke” . It was with that in mind that I argued that cutting its “funding” (and please remember here that i am talking about public perception …) is the perfect entree to cutting its bennies. I have no head for figures (including my own …), so if the original “funding” formula would work just as well to “fund” it – that is quite fine.
Forgive my density, once again, but I do confess i do not understand how raising the FICA tax in ’83 worked to “gut” the program …. I can see how it would serve as cover for producing an excess that wasn’t needed, and could be “skimmed”, under the public radar, for other purposes, but gutting it?
As for raising the interest rate on the bonds (heh, heh, i just typed “bombs” before fixing it …) again, in my duncery, i assumed that the FICA tax monies bought T-bills which the gov’t paid interest on which accrued over time and that the gov’t could increase the amount of interest it paid on those particular bills, while reducing the tax itself – If i have it bass ackwards, i would not be at all surprised, but why couldn’t it be done that way? ISTM, in my simpleton way, that such a mechanism would preserve the “best” of both “worlds” (of “fact” and of perception) – the gov’t ability to “print” money as “interest” and the public’s “skin in the game” that produces the fierce defense of the programs as something they “earned” …
i have observed over the years, in many different contexts, that if there is a conflict between “fact” and perception of “fact” that perception wins almost every time – This may, indeed, be quite lamentable, but suggests, IMHO, that 1) we would be wise to labor to make perception as close to “fact” as possible, but 2) that if we must make a choice between the two – pragmatism may dictate we form policy around perception – as, ISTM, FDR did – as “facts”, ironically, may be more malleable than perception …
First thing is to understand that pay-as-you-go is simplicity itself, and can CLEARLY work forever. FDR pay-as-you go just means Uncle Sam Robin Hood taketh dollars from the workers and giveth the same dollars to the retired workers. No net taxation. No net spending.
Slightly stimulatory because workers have to worry less about retiring, so save less. And retirees are past their prime saving years and just spend the SS money back into the economy. This, the existence of SS, was one reason that Keynes, unlike many “Keynesians” said that the Great Depression would NOT return after the war.
Pay-as-you go just reflects what MUST happen in the real economy of goods and services. You can only really provide a good or service for an oldster, or anyone else, in the present. (OK, you could stockpile wheelchairs, but that’s pretty silly) It always must be provide-real-good-or-service-as-you-go.
Pay-as-you-go is basically neutral, macroeconomically, financially (modulo what I said above). It just works as if everyone provided for their parents, the older generation, as the older generation had provided for them, and makes the money changing hands not mean very much. Seen that way, it has been going on forever. Since cavemen and before. Demographers (e.g. Joel Cohen) crack up when they hear the BS demographic scary fairy tales, but who listens to demographers about demographics?
Pay as you go would have meant lower taxes for the last 30 years, but maybe higher taxes now. But on a richer, more equitable, more fully employed country & populace, that could pay these taxes with ease, as they would immediately receive the “tax proceeds”, and which would have to perform in any case the real taxation of providing for the elderly, who since they had been a baby boom, had been able to better build up the real wealth, the capital that would provide for them together with the labor of the smaller succeeding generation.
End of pay-as-you-go paean.
Forgive my density, once again, but I do confess i do not understand how raising the FICA tax in ’83 worked to “gut” the program …. I can see how it would serve as cover for producing an excess that wasn’t needed, and could be “skimmed”, under the public radar, for other purposes, but gutting it?
Well, it was a major part of convincing a generation that SS would not be there for them. Even though they had been paying too much for it – which worked to gut ordinary people’s savings and checking accounts, which worked to disemploy people, the worst thing of all. And to not create a destructive surplus, there had to be government deficit spending in other areas to “pay for” the SS surpluses, to create the money that the workers would need to pay taxes with. Guess who those deficits went to?
And at some point, high taxation and constantly attacked, decreasing payout might not be a good deal. Particularly for people at the top end. And the marginal utility at the low end of the immediate cash taken away from the poor woker might be very large too. Divida et impera. Got a lot of richer & poorer people to fret about, fear and dislike SS, compared to its universal pre-1980 appeal.
As you say, perception is important. Framing things in the way that started in 1983 made people think that SS and the government could go broke, which is a perfectly insane idea. The government can’t “go broke” the way an individual can, because the government is always in debt, it’s always broke (if it were an ordinary worker, not a capitalist) already! What we call (base) money, currency, dollars is nothing but government debt. If the government ain’t in debt, then the people don’t have no (base) money. But because the government is so good at redeeming its debt – by accepting it for taxes – people like to have the government owe them.
“I do think Wray was wrong to be curt with you at NEP a while ago.”
“All your considerations and questions are good and deserve explications and answers – and are incorporated into MMT. E.g. in Wray’s papers – I’m particularly thinking of ones where he talks about cookie jars.”
Well alright. They beat the public and talk down to them all at the same time.
Having actually looked into the bill in detail, it reduces the estate tax rate for multibillionaires from 55% to 40%.
Big win for Republicans. And they get to extract more tax cuts for billionaires in 2 months.
Furthermore, because of Eric Cantor’s scheming, they’re going to force the House Democrats to provide the votes to pass this benefits-for-billionaire-Republicans bill. The Republican leadership is not stupid. Crazy, but not stupid.
A core tenet of conservatism is a highly visible, pervasive social pecking order governing public and private life. (Which is why they support a return to the man as “head of household”, and why patriarchs and would-be patriarchs love the GOP.)
You people are way too cynical about this deal. This is another killer Tuesday holiday happening here! I want my president to be working on his to kill list. That’s why he had to “cave”. Get the priorities in order people!!!
I don’t think he IS a cave man – Neanderthals, so i understand, had considerably more integrity …
The Democratic and Republican parties are complementary evils. Don’t be distracted by the kabuki. They are working together to loot us.
You ask why they do not do this or that now. Looting everything at once might engender true opposition among the people. So they just keep hammering away looting a chunk here and a chunk there. Each effort, even if unsuccessful in the short run, fatigues us and creates a sense of inevitability. And no defeat of theirs is ever final. There is always the last budget bill or the next budget bill, another debt ceiling, or a “debt” commission to raise all these issues again and again and again. And each time they are the looting goes on.
The two parties, our whole political class, are not stupid or incompetent. They are not good people making mistakes. Nor are they psychopaths making bad decisions. Each of these rationales in some way contains the idea that they are not wholly and completely responsible for their acts. While each of these explanations holds a certain attraction, none of them are true. The truth is a lot simpler. They are criminals acting as criminals. It doesn’t matter what they think. It doesn’t matter what they believe.
Who cares if they equate their good with the general good, and believe the more they take for themselves, the more the general good is served? Would we accept this argument from a car thief, a burglar, or a bank robber? No. So why should we accept it from our political class?
We need to be as serious and hard assed about this as they are. Everytime you see Obama, Boehner, Reid, McConnell, or Blankfein and Dimon, everytime you see any of our political classes remember that they murder more Americans in a year than a dozen bin Ladens did in a lifetime. They steal more in a year than a million Dillingers. They create more destruction than a hundred natural disasters. More pain and suffering than a major epidemic. They are the banality of evil made manifest. We must stop being distracted by that banality and look at them up close and in the face in all their evil and ugliness.
They mean with every atom of their being to loot us to the last drop and beyond if they can. To resist them, we must be as clear eyed and steadfast as they are to destroy us. We must put aside comforting but false stereotypes. We should keep ever present in our mind the evil that they are and the evil that they do. We can not afford to let that image slip an instant from our view, because when we do, they win. They succeed in making their evil appear less, or even no evil at all, and so easier to sell and continue.
You have written a very clear exposition of our situation. I am honored to be in the company of someone brave enough to say the truth.
So it would seem to me that you would encourage each and every opportunity to vote them out of office …that far from being “too soon” to take political action, we should be far more concerned about waiting too long …
And yet they *are* stupid and they *are* psychopathic.
Why? Because they could be far richer and more powerful if they ruled like Emperor Augustus. Or like FDR, who could have been President-for-Life if he’d wanted to, thanks to his immense popularity.
But they are unable to think long-term, for some reason.
“They are the banality of evil made manifest. ”
Now, *that* is correct. For evil is generally banal by being stupid, and by being interested solely in the short-term and not in the long-term.
If they are stupid, how is it that they have managed to steal almost all of the nation’s wealth? As for psychopathic, this implies that they are mentally ill as opposed to morally bankrupt.
My central idea is that you can use the metrics of the normal world to judge them, but you can not use the standards of the normal world to understand them. For them, normalcy is just a pose to confuse the rubes and keep any real opposition to them from forming. Otherwise and fundamentally, they are not normal, and we commit a fallacy when we describe them as stupid for not pursuing courses, which if they were normal, we would expect them to pursue. And conversely, psychopathic for engaging in activities, which if they were normal, they would not engage in.
I can not repeat this enough. They equate their good, their system of privilege, prestige, power, and wealth, with however you want to qualify it: the general good, the public good, social purpose, the will of God, Darwin, the survival of the fittest, divine right, or natural law. Their good, meaning them, must come first, regardless of the costs to the rest of us.
People have often wondered why Stalin pursued policies which left the Soviet Union open to invasion or why Hitler pursued policies in Poland and the Ukraine which doomed that invasion. It is a historical parlor game to speculate if Hitler had done this or Stalin had done that World War II might never have occurred at all or taken a very different course. What such speculation ignores is that neither could or would have chosen to moderate their policies. Their choices, as bizarre, destructive, and self-defeating as they might seem to the normal world, were not tactical mistakes or peripheral variables easily modified. They were core.
Hannah Arendt did a masterful job in describing the totalitarian fictions of Hitlerism and Stalinism. These fictions were the stories that these leaders told themselves and their followers. They defined the mission of their ideologies and did so in terms that could never be falsified by the normal world or reality. They were culminations of historical or genetic processes that would only be accomplished in some undefined future. To moderate them would have been to deny them, which in turn would have been to deny the basis of these leaders’ power.
Our rich, political classes, and elites tell themselves similar stories. These stories justify their whole system. They are the basis of their power. They are more important than reality. They are exempt from the critiques of the normal world. They explain why these groups pursue policies which are so destructive of us and which, we think from our grounding in the normal world, must also be ultimately destructive of them.
Stupid is relatively. Sure, they’re clever at stealing, but that doesn’t mean they know how to make themselves comfortable long-term.
And yes, they are mentally ill. There’s ample evidence for it. They’re the sort of mentally ill who need to be involuntarily committed as a danger to others.
I don’t think I disagree with you, really. Have you read _Theory of the Leisure Class_?
Lambert, I resent the title. You should be ashamed of using such a title which will only serve to dismiss any serious attention your writing should gain.
If it propagates and discredits the Goebellsian “fiscal cliff” I’ll be happy. So the reputational risk is worth it.
Lambert, the “fiscal cliff” deal was awful but please please do not use horrid images to try to make a case but really to repel readers.
Let the rich keep their money, as long as they don’t cut my SS and Medicare. MMT win/win.
Is it only YOUR SS and Medicare that concerns you?
The reason there is so little money in the coffee can is credit. More credit = more unfair competition between workers and machines.
As for Social and other benefits: the choice is being offered: ‘you can drive a car or get Social Security’. How do you think the public is choosing?
By electing to retire as I approached age 62, a woman in my department half my age still has a job three years later.
And it would be nice if the age for eligibility for Medicare would be adjusted downward to equal the age of eligibility for Social Security. A retiree at 62 would typically lose employer-sponsored medical insurance, leaving a severe funding gap, currently 3 years.
The pressure from the neo-liberal coalition is to push the retirement age to the actuarial limit, ie the end of life. The pressure from the human humane side should be relentless in the opposite direction, ever-younger eligibility.
It looks like the fiscal-cliff bill that passed the Senate today will extend the “doc fix” one more year (see link below). But to offset these costs, hospitals and other large healthcare providers will be paid for “evaluation and management” visits in their outpatient departments at the same lowly rate as for those visits when performed in doctors’ offices. This will reduce Medicare costs by roughly $10.5 billion a year and will hopefully put an end to the incestuous relationship that the American Medical Association (AMA) has with the American Hospital Association (AHA). Pitting the AMA against the AHA is one sure way to reduce healthcare costs, IMO. And if robbing Peter (i.e. the hospital) to pay Paul (i.e. the doctor) will significantly lower the overhead or administrative costs in hospitals, I’m all in favor of it!
Hmmm – yes, well methinks, to be perfectly honest, that pitting one healthcare group against another is not likely to bode well for those who are supposed to benefit from the services of both …. Should you or yours wind up in a hospital where staff was cut because funding was cut, you might change your mind …
As they say, when elephants fight, the grass gets trampled …
Aquifer, what makes you think that hospitals are using most of their Medicare dollars to pay for direct-patient caregivers, i.e. nurses and doctors, that are well staffed, well trained, and well equipped to do their job? No, they are using most of these dollars to pay for a fat and bloated management structure and a whole bunch of bureaucratic busybodies that are way overpaid for doing more or less Mickey Mouse work and for doing work that’s essentially free of stress and strain.
And what makes you think that those same admins, who control budget allocations would cut themselves before cutting useful staff if their budgets were cut?
Have you worked in a hospital?
Had enuff of that pos Obama yet, folks??
This is all sooooo Shock Doctrine!!!
Why does NO ONE on the left critiqueing this shitacular spectacle EVER bring up the possibility of having another, or better yet several more tax brackets for the REAL wealthy: people earning well over 400k a year? The silence is deafening. Regardless of the revenue it would raise fairness demands it and renewed progressive taxation on the top end of the income spectrum would have a huge impact on reducing inequality in America.
Capital gains? Same thing. Silence. People on the far left speak in dismissive whispers of perhaps raising capital gains to from 15% to 20%. But why should money earned by doing nothing but sitting on your ass ever be taxed at a lower rate than wages earned by the sweat of your brow? Even Reagan agreed to raise the capital gains tax from 20% to 28% after he first cut it from 33% . I think capital gains should be permanantly fixed at 1% more than the highest federal income tax rate with an exemption for retirees and the disabled living on a fixed income who depend on earned interest to maintain a modest existance.
The two party duopoly plus our consolidated corporate media have constricted the bounds of debate beyond what most totalitatian regimes would even attempt.
In the spirit of “fecal cliff” I offer another phrase in case someone want it. Legisfecal extretion process.
And for our news outlets: MS BM (MainStream BigMedia).
And I notice several posts ago that Bill Black(?) reversed the names of the co-chairs of the Obama Catfood Commission.
He called it the Bowles-Simpson Commission. Hoping we would see that the initials spell BS?
I remain with Aquifer on the so-called Payroll Tax Holiday. It was designed to defund Social Security in stages. Obama hoped to make it permanent, just like he wants to make the Bush Tax Cuts basically permanent. I was not worse off when it was “higher” according to the so-called Rescue Plan of 1983 and I am not better off because it was “lower” for a year.
I still hope to see a post someday about why so many liberals and progressive ever supported Obama to begin with.
Why did Matt Stoller ever support Obama to begin with? Matt Stoller is a very smart person. What sort of powerful brain magic did Obama and his army of brain-handlers work upon the minds of so many?
pardon my spelling, that should be Legisfecal exCretion process up above there.
As for raising the interest rate on the bonds … i assumed that the FICA tax monies bought T-bills which the gov’t paid interest on … and that the gov’t could increase the amount of interest it paid on those particular bills, while reducing the tax itself … ISTM … that such a mechanism would preserve the “best” of both “worlds” (of “fact” and of perception) – the gov’t ability to “print” money as “interest” and the public’s “skin in the game” that produces the fierce defense of the programs as something they “earned”
Yes, you have it OK enough, except that the government doesn’t buy T-bills with FICA taxes, it just pretends it does. If you write a $10 check to someone, and then he buys something from you worth $10 with the same check, then you might as well just tear it up. The next check you write has nothing to do with the old one. The T-bills are just postdated government checks, that the government controls the amount / interest on, and pretends it “buys” with the incoming FICA dollars. But among other reasons, if you set the price of what you are “buying”, calling it buying is not very sensible – and the IRS would go after the Treasury Department for such hijinks and false labelling – if the IRS were not part of it!
But the tax holiday works out to be exactly the same thing as the Eisner / Aquifer interest rate shenanigans. The government plonking money into the Trust Fund. For a first approach, don’t distinguish between currency and bonds at all, just think of both of them as dollar bills, FR money. For A government check or a dollar bill is a (mature) bond, a bond is just a (bankroll of) postdated dollar bill(s).
i have observed over the years, in many different contexts, that if there is a conflict between “fact” and perception of “fact” that perception wins almost every time – This may, indeed, be quite lamentable, but suggests, IMHO, that 1) we would be wise to labor to make perception as close to “fact” as possible, but 2) that if we must make a choice between the two – pragmatism may dictate we form policy around perception – as, ISTM, FDR did – as “facts”, ironically, may be more malleable than perception.
Perhaps, and I really do understand where you are coming from. But the only permanent cure for a problem, as Hegel & James Brown tell us, is education. To make the perceptions be of reality, not fantasy, be logical, not confused. The problem is that ordinary people (albeit somewhat vaguely) understood “MMT”, finance, economics better 70 years ago. And so did the majority of economists, who have devoted themselves to pseudomathematical, overcomplicated astrology. The MMTers are just synthesists and simplifiers performing a Herculean labor of cleaning up the Augean stable of economics, which in both academia and the ordinary world has become unbelievably, utterly bass-ackwards wrong.
“../Aquifer interest rate shenanigans”?
Sorry you consider them shenanigans – frankly, for all this talk about the need for simplicity, it seems my scenario is, after all, straightforward, reasonable, doable and quite understandable … i find your last explanation rather obfuscating.
As for perception – methinks you are forgetting that very strong “I paid for it, I earned it, don’t mess with it!” dynamic that is enervated the more tenuous, vague and indirect the connection between “paying for it” and “earning it”. As i have said before, until MMT can provide another meme that is as powerful with the public as the current one created and cemented by the tax, the one understood by FDR – methinks it foolish indeed to push its abolition … i find it interesting that even you are, apparently, not arguing for that …
i understand whacking it is necessary to be consistent with MMT theory – but i am a pragmatist, as apparently was FDR, and would prefer to save the program over the theory. He understood that the payment of the tax was/is indeed a powerful motivator for the defense of the program, whether it meshed with the “realities” of monetary theory or not, and i agree …
Frankly ISTM the public has gone along with this “prepaying” idea for several decades, and though you may argue they have been bamboozled, ironically, if the intent was to weaken the program, as you say, the effect of that “prepayment” has been, in the public’s mind, at least, which is where, in the end, it really counts, to help insulate it against the charge that it is “going broke”. That charge only had conceivable credibility under the lower worker/retiree ratio – which the “prepayment” arrangement theoretically neuters. So though TPTB may have done it to steal – the fact is in the minds of the “simpleton” public, their “prepayment” has, in fact pretty much taken care of that “problem”.
I appreciate the discussion – but frankly, perhaps because of my density re finance, I still don’t agree with whackin’ the payroll tax – I think that, more than any other maneuver, would delegitimate the program in the public eye …
I’m confused about the Payroll Tax Holiday. When it first came out, it was roundly criticized as a stealth means of weakening SS by cutting it’s funding.
Now getting rid of it is seen as a blow to the Middle Class? I’m missing something here, perhaps simply that this is not the time for negative stimulus?
As to speculating on why OBetrayer does this or that, it’s getting silly. It’s been made clear countless times that the Democrats and Republicans are in this together. The so called negotiations, the crazy goblins on one side and the ratcheting moves to the right on the other, it’s barely even hidden any more other than by a sort of hastily put together darkly humorous skit.
Methinks the main reason for speculating on motivation in a particular instance is because, as you say, it seems confusing – and in confusion folks tend to shrug, say “Eh”, and walk away as TPTB do the deed and scamper away, leaving folks not knowing what hit them until too late …
But you are right, ISTM, with regard to the big picture – whatever their motivation, they are making a mess and need to be replaced, pronto ….
Link exchange is nothing else however it is just placing the other person’s blog link on your page at suitable place and other person will also do same in support of you.