Monday, January 21, 2008

Pablum, Nostrum & Ronald Reagan's Magic Beans

Ill: Wizard of Whimsy

Bush's Fantasies About Economic Fixes Lacking in Substance or Details ~ Surprise!
~ Hoisted on the petard of the Ronald Reagan Magic Bean Theory of Economics, America is stunned as things reach a predictable impasse ~
In big kimchee, Bush uncharacteristically reaches out to Democrats in Congress (the only people in America whose approval ratings are lower than his own), Neo-con lite Harry Reid takes the bait.
Ah, the sainted RR, whose name is yet whispered reverently among the true believers (& whom even Obama has taken to praising recently ~ why, your Demon can't for the life of her fathom, but she can guess ~ politix indeed makes strange bedfellows)!
A brief history of economics in America since Reagan
All hail Reagan, he who 1st sold America on an economic program which started a long, debilitating process of eviscerating traditional American bulwarks of the middle class such as unions, ever-deeper tax cuts for the hyper-rich, trickle-down theories which remain just that ~ theories ~ all the way to the present time, along the way forcing the Clintons into a "centrist" strategy & "triangulation"(& "impeaching" Bill for sexual peccadilloes we now know that Gingrich, Guiliani & other luminaries of the neo-con movement, straight & gay, can't seem to resist either. But, hooray, they drove the immoral Clinton out of office, but not before he balanced the budget & left a surplus, all of which is just a memory now.)
Campaigning on tax cuts for the wealthy, an ideology impervious to fact & real life (though incapable of noticing, conveniently enough), Neocons since Reagan managed to get elected in sufficient numbers to carry the day, all of the above resulting in our time in a series of manic, illusory bubbles by which the rich became super-rich, manifesting the Gordon Gekko Creed (greed is good, & greedier is gooder yet) even though there is no industrial base in America anymore, full-time employment with benefits has been replaced by permatemps, & the primary foundation of prosperity is really just the empty activity of churning money markets.
And for icing on the cake, all hail Ronnie again for alerting us to dangers of the duplicitous Cadillac-driving welfare queens buying filet mignon with their foodstamps, a preposterous (& imaginary) bugaboo that even the Clintons bought into to keep the peace. So now, uh-oh, there are no more government social services left, universal healthcare is still just a fantasy, extended unemployment is taking even the skilled middle class by surprise (see WaPo article below), the stock market panic is spreading to Europe & Asia, & George has racked up untold deficit spending on his War on Terra & the Entire Middle East.
Back in 2003, we were warned by voices abroad that the "extreme" Republican fantasies of tax cuts for the rich while starving the social safety net was, in a word, suicidal.
'''The lunatics are now in charge of the asylum.' So wrote the normally staid Financial Times, traditionally the voice of solid British business opinion, when surveying last week's [U.S.]tax bill.
"Indeed, the legislation is doubly absurd: the gimmicks used to make an $800-billion-plus tax cut carry an official price tag of only $320 billion are a joke, yet the cost without the gimmicks is so large that the nation can't possibly afford it while keeping its other promises.
"But then maybe that's the point. The Financial Times suggests that 'more extreme Republicans' actually want a fiscal train wreck: ''Proposing to slash federal spending, particularly on social programs, is a tricky electoral proposition, but a fiscal crisis offers the tantalizing prospect of forcing such cuts through the back door.''
"Good for The Financial Times. It seems that stating the obvious has now, finally, become respectable.
"It's no secret that right-wing ideologues want to abolish programs Americans take for granted. But not long ago, to suggest that the Bush administration's policies might actually be driven by those ideologues -- that the administration was deliberately setting the country up for a fiscal crisis in which popular social programs could be sharply cut -- was to be accused of spouting conspiracy theories.
"Yet by pushing through another huge tax cut in the face of record deficits, the administration clearly demonstrates either that it is completely feckless, or that it actually wants a fiscal crisis. (Or maybe both.)
"Here's one way to look at the situation: Although you wouldn't know it from the rhetoric, federal taxes are already historically low as a share of G.D.P. Once the new round of cuts takes effect, federal taxes will be lower than their average during the Eisenhower administration. How, then, can the government pay for Medicare and Medicaid -- which didn't exist in the 1950's -- and Social Security, which will become far more expensive as the population ages? (Defense spending has fallen compared with the economy, but not that much, and it's on the rise again.)
"The answer is that it can't. The government can borrow to make up the difference as long as investors remain in denial, unable to believe that the world's only superpower is turning into a banana republic. But at some point bond markets will balk -- they won't lend money to a government, even that of the United States, if that government's debt is growing faster than its revenues and there is no plausible story about how the budget will eventually come under control.
"At that point, either taxes will go up again, or programs that have become fundamental to the American way of life will be gutted. We can be sure that the right will do whatever it takes to preserve the Bush tax cuts -- right now the administration is even skimping on homeland security to save a few dollars here and there. But balancing the books without tax increases will require deep cuts where the money is: that is, in Medicaid, Medicare and Social Security.
"The pain of these benefit cuts will fall on the middle class and the poor, while the tax cuts overwhelmingly favor the rich. For example, the tax cut passed last week will raise the after-tax income of most people by less than 1 percent -- not nearly enough to compensate them for the loss of benefits. But people with incomes over $1 million per year will, on average, see their after-tax income rise 4.4 percent.
"The Financial Times suggests this is deliberate (and I agree): 'For them,'' it says of those extreme Republicans, 'undermining the multilateral international order is not enough; long-held views on income distribution also require radical revision.'
"How can this be happening? Most people, even most liberals, are complacent. They don't realize how dire the fiscal outlook really is, and they don't read what the ideologues write. They imagine that the Bush administration, like the Reagan administration, will modify our system only at the edges, that it won't destroy the social safety net built up over the past 70 years."
What's a boy to do, besides standing by as Americans plead for foreign cash infusions & auction themselves off at fire sale prices to the highest bidder? Make it somebody else's (preferably the Democrats') problem! (See above).
The New York Times reported Friday that, after ignoring the signs for so long (much as he ignored the information that a crazy buncha militant Islamists were planning an attack on American soil), he had hastily pulled out a proposal "for roughly $145 billion in tax relief for individuals and businesses that he said would 'provide a shot in the arm' for the economy, while Congressional Democrats, in a rare show of Washington bipartisanship, pledged to work with him to enact a plan quickly.
"Mr. Bush laid out his ideas for an economic rescue package only in broad strokes, saying the plan must be 'built on broad-based tax relief' and 'big enough to make a difference in an economy as large and dynamic as ours.' He did not use the word recession, but acknowledged that 'there is a risk of a downturn.'

"His comments, in the Roosevelt Room of the White House, reflected a heightened sense of urgency within the administration and on Capitol Hill about the need to stimulate spending in an economy shaken by higher gas prices and instability in the housing and credit markets.
"Though the details must still be negotiated, both the White House and Congressional Democrats are leaning heavily toward a combination similar to the one the administration turned to in 2001 as a recession-fighting tool. It would include a one-time tax rebate for individuals and an immediate expansion in the deductions that businesses take for investment in equipment. If Congress acts quickly, checks could be in the hands of American taxpayers as early as spring.

"Still, there will be sticking points. In laying the foundation for a plan rooted in tax policy, Mr. Bush held fast to a central theme of his presidency, that cutting taxes, rather than increasing spending, was the route to prosperity. Democrats, by contrast, supported an extension of unemployment benefits, coupled with tax breaks aimed at the middle class. Some reacted warily, even as they praised Mr. Bush..."
Your Demon Sez: The Neocon Insane Mantra of Tax Cuts/ Rebates Alone Won't Cut It
Here's why, according to Charles Schumer, speaking on Fox. "The White House, for now, envisions providing one-time rebate checks to people who pay federal income taxes. That would leave out millions of the working poor, who do not make enough to pay income taxes but do pay Social Security and Medicare payroll taxes.
"Families of four earning less than $24,900 a year would not get a rebate under the White House approach, said Chad Stone, chief economist at the Center on Budget and Policy Priorities, a research group that focuses on how government programs affect the poor and middle class.
"He has estimated that about 22 million households file income tax returns but do not pay that tax because their earnings are so low. An additional 22 million households do not file a return, he said. This group includes many older people on fixed incomes, he said.
"Treasury Secretary Henry Paulson has said Bush 'is focused on broad-based tax relief for those who are paying taxes." Paulson said that worked in 2001 and 2003.
"The centerpiece of an economic aid plan should be a tax cut for the middle class, and the overall proposal could include relief for business and spending incentives for the unemployed, Schumer said.
"'I'm not going to draw any lines in the sand,' said Schumer. But he said any plan that does not carefully balance help for people making less than $50,000 with relief for those making $200,000 or more 'doesn't make much sense from either a fairness or economic point of view.'
"President Bush and Democrats in Congress have expressed an interest in working together to pass a plan quickly that could help the struggling economy. Schumer agreed on the need for fast action.
"'Partisan fights and dithering could only make whatever recession we're going to have worse,' Schumer said. 'There's a real spirit of compromise in Washington right now, a spirit of let's get together, put away the bipartisan differences, because the economy is in poor shape.'
"Schumer said that in a balanced plan,'the centerpiece would be a tax cut for the middle class and working families, and the bookends might be some business tax cuts as well as some spending stimuli for, say, people who are unemployed.'"
As Donna Summer once famously put it before the lights of the Disco were shuttered for a long, dark night: "Last chance for romance tonight."
Your Demon leads the way by announcing to the RR Republicans that if you think you're going to fuck us again, you've got another think coming. We want a real display of love & commitment that also says you won't run out when the chips are down (as they are, RIGHT now!) Time to pay for all the fun you've been having at our expense, & no, we don't really care that your foolishness has bankrupted you in the meantime. Don't forget who pays (more than) half the bills in this common enterprise. If you make nice & render a real apology & you're prepared to demonstrate you really mean it, maybe we'll think about it. Here's news for you Gordon Gekko types ~ you can't get as rich as you wanna be without taking care of us.
Republicans, don't make a bad situation worse by continuing to hammer on the Ronald Reagan magic bean theory, which is not improving with age. You've driven the country into bankruptcy & pulled the collective rug from under our feet. This is your LAST CHANCE to prove you're still on board with the broader well -being of the country economically, & sane. After all, what did those barons of commerce do with the hefty tax bonanza disproportionately allotted to them in 2003? If they actually created jobs doing something productive & tangible, they did it overseas. If they actually owed taxes as a result of the expansion, they moved their headquarters overseas to more favorable cardboard shack tax shelters seaside, or to Abu Dubai (Halliburton).
America, in the next Presidential election, choose a grown up, not another puppet of moneyed interests who can spout the rhetoric but can't see beyond it long enough to comprehend the damage he's foisted upon us collectively, nor the fact that we always have been the land of hard work & opportunity, not the land of the money-takes-it-elsewhere-so-we- don't have to pay our fair share.
Further reading:
Stocks Plunge Worldwide on Fear of US Recession:
Highly Skilled & Out of Work:
Very entertaining 1999 report on Bush's personal finances: [After driving his own oil businesses into bankrupcty, he could report] "No debts" & being a "multimillionaire":

Labels: , ,


Blogger Paul said...

I'm shocked!

12:17 PM  
Blogger Demon Princess said...

Hey Paul!

Shocked, are ya? Stay tuned. The festivities are just beginning. This economic mess is no place for tender ears! Warn yer children, man the lifeboats!

How's everything in SD? You librels defeat that Blackwater expanding war on terra compound yet?

2:43 PM  

Post a Comment

<< Home