Republican Lies About Spending and Deficits Exposed

Republican Lies About Spending and Deficits Exposed

We’re at the edge of the cliff of deficit disaster!  National security spending is being, or will soon be, slashed to the bone!  Obamacare will sink the ship of state!

Each of these claims has grabbed national attention in a big way, sucking up years’ worth of precious airtime. That’s a serious bummer, since each of them is a spending myth of the first order. Let’s pop them, one by one, and move on to the truly urgent business of a nation that is indeed on the edge.

Spending Myth 1:  Today’s deficits have taken us to a historically unprecedented, economically catastrophic place.

This myth has had the effect of binding the hands of elected officials and policymakers at every level of government.  It has also emboldened those who claim that we must cut government spending as quickly, as radically, as deeply as possible.

In fact, we’ve been here before.  In 2009, the federal budget deficit was a whopping 10.1% of the American economy and back in 1943, in the midst of World War II, it was three times that -- 30.3%. This fiscal year the deficit will total around 7.6%. Yes, that is big. But in the Congressional Budget Office’s grimmest projections, that figure will fall to 6.3% next year, and 5.8% in fiscal 2014. In 1983, under President Reagan, the deficit hit 6% of the economy, and by 1998, that had turned into a surplus. So, while projected deficits remain large, they’re neither historically unprecedented, nor insurmountable.

More important still, the size of the deficit is no sign that lawmakers should make immediate deep cuts in spending. In fact, history tells us that such reductions are guaranteed to harm, if not cripple, an economy still teetering at the edge of recession.

A number of leading economists are now busy explaining why the deficit this year actually ought to be a lot larger, not smaller; why there should be more government spending, including aid to state and local governments, which would create new jobs and prevent layoffs in areas like education and law enforcement. Such efforts, working in tandem with slow but positive job growth in the private sector, might indeed mean genuine recovery. Government budget cuts, on the other hand, offset private-sector gains with the huge and depressing effect of public-sector layoffs, and have damaging ripple effects on the rest of the economy as well.

When the economy is healthier, a host of promising options are at hand for lawmakers who want to narrow the gap between spending and tax revenue. For example, loopholes and deductions in the tax code that hand enormous subsidies to wealthy Americans and corporations will cost the Treasury around $1.3 trillion in lost revenue this year alone -- more, that is, than the entire budget deficit. Closing some of them would make great strides toward significant deficit reductions.

Alarmingly, the deficit-reduction fever that’s resulted from this first spending myth has led many Americans to throw their support behind de-investment in domestic priorities like education, research, and infrastructure -- cuts that threaten to undo generations of progress. This is in part the result of myth number two.

Spending Myth 2: Military and other national security spending have already taken their lumps and future budget-cutting efforts will have to take aim at domestic programs instead.

The very idea that military spending has already been deeply cut in service to deficit reduction is not only false, but in the realm of fantasy.

 There are a few other details at the link, including the ridiculous Republican urban myth that Obamacare will increase the deficit ( that is utterly false), that government health care (Medicare) is too expensive and we should privatize it Medicare is more cost effective than private insurance). Why do Republicans use these myths as a crutch; because they cannot win the battle on ideas based on facts. Conservative constantly engage in the sleaze of fake patriotism - hiding their freakish agenda behind the flag, and behind the Bible. They should be ashamed, but they seem to lack the moral conscience to feel shame.

Conservative Republicans are actively trying to stop job creation. Not exactly how a patriot should act.

Conservative Republican Journalist and Pervert James O'Keefe Fails To Find A Scandal, Union And Public Works Edition

Conservative Republican Media Starts Noise Campaign to Drown Out The Fact Obama Has Been a Conservative Spender

Conservative Republican Media Starts Noise Campaign to Drown Out The Fact Obama Has Been a Conservative Spender

White House Press Secretary Jay Carney told reporters not to buy into the "BS" of GOP-driven tax and spending claims and pointed to a Wall Street Journal MarketWatch column that noted that government spending is rising at its slowest pace since the 1950s. Far from heeding that advice, right-wing media figures relied on misleading economic talking points to attack Carney

...Right-Wing Media Respond By Saying The Debt Dramatically Increased Under Obama

Fox's Varney: "Obama Has Run Up The Debt A Great Deal More Than President Bush Did In His Full 8 Years." From the May 23 edition of Fox News' Your World with Neil Cavuto:

    STUART VARNEY (guest host): [I]f you are going to argue that the president is not a big spender, it's very difficult to argue against the hard, solid numbers. I've got figures which show very clearly that President Obama has run up the debt a great deal more than President Bush did in his full 8 years: 4.9 trillion for President Bush in 8 years. 5 trillion and more for President Obama in just three-and-a-half years.

( can Varney and Fox News do simple arithmetic? See charts above)

PolitiFact: "Obama Has Indeed Presided Over The Slowest Growth In Spending Of Any President Using Raw Dollars." From a PolitiFact post rating the MarketWatch finding that Obama has the lowest spending record of any president as "Mostly True":

    Obama has indeed presided over the slowest growth in spending of any president using raw dollars, and it was the second-slowest if you adjust for inflation. The math simultaneously backs up Nutting's calculations and demolishes Romney's contention. The only significant shortcoming of the graphic is that it fails to note that some of the restraint in spending was fueled by demands from congressional Republicans. On balance, we rate the claim Mostly True. [PolitiFact, 5/22/12]

The charts include statistics from the OMB ( Office of Management and Budget, the non-partisan Congressional Budget Office and Haver Analytic. Those numbers would look even better except that from 2000 to 2008 conservative Republicans put all their spending on the national credit card, leaving those bills for the next guys to pay. Behavior that was both irresponsible and immoral, but hey that is the way conservatism works.

There are several ways to run a free market economy. One way is the Romney way. Where people with lots of money, power and connections give average Americans the shaft and call it "success".Why Mitt Romney’s Time At Bain Capital Matters

Conservatives Are Wacky. America's Tax Rate and Revenue Stream Is Too Low

Federal Income Taxes on Middle-Income Families Remain Near Historic Lows

Federal taxes on middle-income Americans are near historic lows,[1] according to the latest available data.  That’s true both for federal income taxes and total federal taxes.[2]

    Income taxes:  A family of four in the exact middle of the income spectrum will pay only 5.6 percent of its 2011 income in federal income taxes, according to a new analysis by the Urban Institute-Brookings Institution Tax Policy Center. [3]  Average income tax rates for these typical families have been lower during the Bush and Obama Administrations than at any time since the 1950s, as Figure 1 shows.  (As discussed below, 2009 and 2010 were particularly low because of the temporary Making Work Pay Tax Credit.)

    Overall federal taxes:  Overall federal taxes — which include income as well as payroll and excise taxes — on middle-income households are near their lowest levels in decades, according to the latest data from the Congressional Budget Office (CBO).

Federal Income Taxes Have Declined Significantly in Recent Decades

Federal income taxes on middle-income families have declined significantly in recent decades.  In 2000, the year before the 2001 tax cut enacted by President Bush and Congress, the median-income family of four paid 8.0 percent of its income in individual income taxes, according to Tax Policy Center estimates — a smaller share than in any year since 1967 (except for 1998 and 1999).[4] 

The Bush tax cuts further reduced middle-income tax obligations.  This year (i.e., when people pay income tax on 2011 income) the Tax Policy Center estimates that the median-income family of four will pay 5.6 percent of its income in federal income taxes.

The 5.6 percent rate (as well as the other rates discussed here for both 2011 and other years) is the effective tax rate, or the percentage of its income that a family pays in taxes.  It is well below the 15 percent marginal tax rate — the rate paid on a filer’s next dollar of income — that a family of four in the exact middle of the income spectrum faces.  A family’s effective tax rate typically is significantly lower than its marginal tax rate, because the family takes the standard deduction (or, in some cases, itemized deductions), personal exemptions, and tax credits such as the child tax credit, and because a portion of the family’s taxable income is taxed at lower rates.  (For the median-income family, some of its income is not taxed, some is taxed at a 10 percent rate, and some is taxed at a 15 percent rate.)

Despite what the "lame stream media" says the US does not have a deficit problem, we have a revenue problem. We have millionaires who have every, and take every advantage of our infrastructure to make money, but are not paying their fair share of maintaining that infrastructure. Only in the USA have or values been so corrupted as to think the worse plague on society are the working poor. It is the tax welafre recipients at the top we should be concerned about.

Conservatives are complaining about President Obama's assertion that conservative judges are engaging in judicial activism. Over the years conservatives have not only complained they have threatened and attacked judges.

Conservative Puppet of the Week Sen Scott Brown(R-MA) - Has Strings Pulled by Anti-American Publisher Rupert Murdoch

Conservative Puppet of the Week Sen Scott Brown(R-MA) - Has Strings Pulled by Anti-American Publisher Rupert Murdoch

News Corp. subsidiary Fox News -- which actively aided the Massachusetts Republican during his 2010 campaign -- is playing host to Brown as he promotes his new book, published by News Corp. subsidiary HarperCollins.

Brown appeared on Fox's Hannity last night and Fox & Friends this morning to discuss the book, which Fox's Brian Kilmeade said "is going to be rockin' up the charts."

The Associated Press noted that "highlights" of Brown's book tour include "the Ronald Reagan Presidential Library in Simi Valley, Calif., and The Villages retirement community in Florida, where Sarah Palin promoted 'Going Rogue.'" Palin's Going Rogue was also published by News Corp. subsidiary HarperCollins.

According to the FEC, Brown's campaign committee proposed to "use the book to influence Senator Brown's election, such as by distributing books as 'thank you' gifts to campaign contributors and political supporters."

On February 17, the FEC issued an advisory opinion that concluded Brown's campaign committee's proposal to "use campaign funds to purchase copies of the book from the book's publisher at the fair market price, and to have the publisher donate to charity Senator Brown's royalties from sales of the book to the Committee, is permissible." However, the FEC "could not approve a response on whether Senator Brown may host fundraising events in cities where the publisher pays his travel costs to promote the book."

As Media Matters documented in 2010, Fox News repeatedly hosted Brown in the days leading up to his 2010 special election, and Fox News political analyst Dick Morris urged viewers to "go to DickMorris.com ... to help elect Brown," because if "we win this fight, then there will never be another victory for Obama."

Fox also repeatedly misrepresented remarks made by Brown's Democratic opponent -- Martha Coakley -- to portray her as incompetent.

Shortly after Brown won the 2010 special election, Fox News contributor Newt Gingrich acknowledged that Fox News helped make Brown's "insurgency possible."

Ever hear Sen brown offer up any real solutions for real problems. No, and that is because Brown basically recycles all the worthless sound bites of conservative great thinkers like George Bush. Brown thinks America has a debt problem when we have the lowest revenue in decades. We're over regulated, brown repeats like a little puppet, just like every conservative robot. Except we have much the same regulation we had during the Clinton boom years. Brown wants smaller government? That sound bite is meaningless code speak from conservatives. What they mean is they want government to let corporate crooks and polluters to get away with anything they want. That worked out real well on Wall Street, right?


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Why Does CBS and Mark Knoller Hate Facts

Why Does CBS and Mark Knoller Hate Facts - CBS's Mark Knoller Falsely Claims Debt Has Increased More Under Obama Than Bush

Mark Knoller is the White House correspondent for CBS Radio, and a first-class right-wing tool. Monday night, he posted an article titled, "National debt has increased more under Obama than under Bush," which sent wingnuts scurrying to their Twitter accounts. The problem is, the piece is BS. Here's Knoller's key graf:

    The Debt rose $4.899 trillion during the two terms of the Bush presidency. It has now gone up $4.939 trillion since President Obama took office.

Don't you just love the way he capitalizes "debt"?

What Knoller doesn't specify, naturally, is what the debt was when Bush began his presidency. And that's a glaring omission, because unless you don't know that, you can't accurately compare the records. So here it is.

In 2001, the national debt Bush inherited was around $5.7T, give or take. Some of that debt in 2001 has to be attributed to Clinton, just as some of the debt in 2009 when Obama took office has to be attributed to Bush. When W. left office in 2009, the debt was nearly $11T. That's an increase of 89 percent.

Under Obama, the debt has increased from about $11T to about $15T, about 40 percent.

And what's behind that increase? Historically low taxes and historically low revenues -- and the worst financial crash since the 1930s. There's been no "binge" in spending, as Knoller wants you to believe.

America hating conservatives like Michelle Malkin who think a misinformed public is good for democracy, has echoed Knoll's lie. C&L are correct. The Obama administration has not gone on some spending spree, they have been one of the most fiscally conservative administrations in modern history.

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America Please Forget All The Things Republicans Did to Trash The Country From 2000 to 2008

Forget all the horrible anti-American things conservative Republicans did to the USA from 2000 to 2008 and Vote conservative Republican again in 2012.

There's a mythology around politics, one that sees the ballot box and the floor of Congress as a battleground of ideas. In this star-spangled arena, progressives and conservatives square off in the competition to prove the worth of their opposing philosophies and the merit of their plans. Of course it's not all high-minded rhetoric and reasoned discourse, there are selfish motives and personal ambitions, angry outbursts and plain old mistakes, but in the end the best ideas win out in the great experiment that is America! Cue the brass section and wave the flag.

The truth is it was probably never that way. It doesn't take much prompting for people to produce examples of nastiness in campaigns back Jefferson and Adams, or to revisit instances of corruption from decades or centuries gone by. We all know that Mr. Smith is a fictional character.

However, just because it's possible to unearth grizzled examples of ugliness doesn't mean that the current season is not unique. Uniquely dangerous. And what makes it dangerous is the pretense that we're still in that fantasyland were ideas arm wrestle for history's approval. In fact, that time is long past. It's not even that what's now coming from the right consists of 100% emotional, fear-based appeals without a factual basis. In 2012, a campaign of suggestive fear-mongering seems almost quaint.

It's that the Republicans have staked out a position that requires that they lie, 24/7, 365. Not shade the facts their way. Not put their own spin on the situation. Lie. Big, sloppy, and constantly.

The lies go beyond instantly dismissible claims like President Obama being the "food stamp president" (why you have to go back one whole administration to discover that more people joined the food stamp ranks under Bush than Obama, but then the Republicans don't seem to remember Bush in any case).  The blatant lies extend through every aspect of the Republican platform, such as it is. The simple reason is that the Republicans have no ideas left, at least no ideas that have not been tested and proven to be failures again, and again, and again.

The economy didn't just crash under a Republican president, it crashed under Republican policies. It crashed with low taxes. It crashed with deregulated markets. It crashed with huge restrictions on union activity. It crashed with massive cuts in environmental regulations. It crashed with lowered trade barriers. It crashed with big fat Pentagon spending.

They got what they wanted. They got CEOs with no limits on their wealth. They got banks with no limits on their "creativity." They got trade agreements that guaranteed manufacturing could be moved to the dirtiest, cheapest, most desperate source available. They got massive cuts in capital gains taxes and equally large boosts in the wealth they could pass along in estates. They got everything they said would make us all wealthy. They got record oil and gas drilling. They got record giveaways of public land. They got everything they said would create jobs. They got the middle class to shoulder more, more, more of the burden so that those beautiful job creators would be free to work their magic.

They can't say the economy crashed because taxes went up, because they didn't. They can't say that the economy crashed because there was a raft of new regulation, because there wasn't. They can't blame it on "union thugs" or Saul Alinsky or the guy who writes Happy Holidays cards at Hallmark. They can't blame it on a president who was elected when the world was already in free fall. Only, of course they do. They say it because they have no choice.

For the same reason that they have to maintain that global warming is the creation of a conspiracy of scientists, and that evolution is a conspiracy of other scientists, and that gay marriage is a threat to "traditional" marriage. They have to lie about the threat of illegal immigrants. Lie about the state of the national debt. Lie about the effects of the President's health care plan. They have to lie, because lies are all they have left.

They certainly can't admit the truth about the economy. They can't admit that they did it. Own it. That their policies directly caused the worst economic failure in American history. Strike that. Make it "the greatest failure in American history since the last time that these same policies were tried." But then, they've been lying about that bit of history for years.

The truth is that the Republicans have nothing to offer. Not even anything that looks like a governing philosophy. Conservatism has moved out of the ranks of political theories and simply become a cult; one that requires that certain phrases be mouthed, that certain hatreds be nourished, and that purity be maintained regardless of cost. That schism with reality is increasingly large and increasingly obvious. They try to paper over that gap by dismissing little things like science, reason, history. Real science fails to support their contentions, so they have to write it off. Reason doesn't work for them, so any question must be met with red-faced indignity — every question a gotcha question. Real history is full of warts, quirks, and unfortunate truths that don't fit their ritualized beliefs. So they have to try to rewrite history, giving us rewrite Reagan who never raised a tax or increased a debt, rewrite FDR who created the issues he actually solved, rewrite Lincoln who championed the Confederate cause, rewrite founding fathers who never owned slaves, never supported government regulation of the economy, never wavered in their ardent love for a form of religiosity that didn't yet exist. Tricorner hats are the new tinfoil.

The real danger isn't that someone might listen to the Republicans—anyone who lies long enough and loud enough can always find an audience, especially when that someone has three quarters of the television media and ninety+ percent of radio. The danger is that we might forget that they're lying. Too often Democrats, including this president, have felt that the best way to handle Republican fantasies is to compromise with them. You can't compromise reality, no no matter how loud the lies.

Every conservative in America has their fingers crossed hoping that regular working class Americans are idiots with short memories who will return them  to power. So they can trash the nation once again. Conservatives have not learned their lesson. They're in denial about the horrible things they did, all the while wrapping up that horror in the flag and having the gull to call it patriotism. Either it is not patriotism or it is a sick twisted kind of love of country.

Conservative Lying Sleaze Bag of the Week - John Boehner for claiming that taxing millionaires will hurt small businesses

Conservative Lying Sleaze bag of the Week - John Boehner(R-OH) for claiming that taxing millionaires will hurt small businesses

Will increasing taxes on millionaires squelch job creation?

That’s the assertion behind Republican House Speaker John Boehner’s remarks on ABC’s This Week with Christiane Amanpour, criticizing President Barack Obama’s jobs bill.

The bill, which so far has been stymied in Congress, calls for a 5.6 percent surtax on incomes greater than $1 million to pay for tax cuts for workers, infrastructure spending, hiring incentives and cash for local governments to keep teachers and police from being laid off.

Republicans oppose the so-called millionaires' tax because they say it will discourage investment and expansion by business owners who are best positioned to create new jobs. But the idea is popular with the public, a point raised by Amanpour in her Nov. 6, 2011, interview with Boehner.

"Now, you obviously disagree with the idea of paying for this with extra taxes," Amanpour said. "Some 75 percent of Americans agree with an increase in tax on millionaires as a way to pay for these jobs provisions. Do you not feel that by opposing it you're basically out of step with the American people on this issue?"

"Well," Boehner responded, "over half of the people who would be taxed under this plan are, in fact, small businesspeople. And as a result, you're going to basically increase taxes on the very people that we're hoping will reinvest in our economy and create jobs. That's the real crux of the problem."

We see this argument raised regularly, so we decided to look further.

Who are the small businesspeople?

To determine the accuracy of Boehner’s statement, we first needed to define a small business owner.

To be clear, we’re not talking about large companies that pay corporate taxes. We’re talking about individuals who have some amount of business income that they are able to account for on their personal tax returns.

Still, defining a small business owner is no simple task.

"A person who gets paid to give a speech shows up along with the owner of a small manufacturing plant, the guy who runs a pizza place, a lawyer in solo practice, a small investment firm and so forth," said Roberton Williams, a senior fellow with the nonpartisan Tax Policy Center. "Some of them are what we think of as small businesses that might grow and hire more workers while others are not...Tax returns lack the information needed to sort out the different types of small businesses."

For one thing, they don’t distinguish if a business has any employees.

The Tax Policy Center did glean some valuable insights from tax return data, though, namely by calculating how many people in different income categories get various percentages of their income from businesses.

The information, contained in this chart, shows that among people with income over $1 million, about 60 percent of them get more than 10 percent of their income from businesses. But just 37 percent get more than a quarter of their income from those sources and only 29 percent get half or more.

"Are people who get relatively little income from business really small businessmen?" Williams asked.

These millionaires are more likely earning the bulk of their income through wages or capital gains, he said.

What’s a small business?

The Office of Tax Analysis at the U.S. Treasury Department recognized the vacuum in the debate over taxing small businesses without a clear definition of a small business.

In an August analysis, the authors acknowledge that defining a small business is a matter of setting some subjective parameters. The ones they set include a limit of $10 million in income or deductions to be counted as "small" and a minimum labor deduction of $10,000 to distinguish businesses that don’t have any employees.

Other tests they applied excluded businesses on the very low end of the scale, such as those with $4,600 or less net annual income.

Not surprisingly, by narrowing the definition, far fewer tax filers qualified as small businesses.

The authors found that:

• one-fifth of small businesses are employers, using their definition.

• slightly more than half of small businesses reported total income of less than $50,000, and half of those businesses reported a tax loss for the year.

• only 0.5 percent of small businesses reported a profit in excess of $1 million. For those businesses, investment and rental income comprised roughly half of their reported income.

The study paints a clearer picture of what many of us think of as a small business -- a bagel shop or dry cleaner -- that has several employees, earns a modest income for its owner and yields profits of much less than $1 million.

Other evidence

Boehner’s spokesman acknowledged the speaker could have worded his statement better. Then he referred us to a 2010 report by the Joint Committee on Taxation that examined Obama’s previous proposals to raise income taxes on high earners. The top two income brackets would have seen a bump from 33 percent and 35 percent to 36 and 39.6 percent, respectively if the proposals had been adopted.

That report said "50 percent of the approximately $1 trillion of aggregate net positive business income will be reported on returns that have a marginal rate of 36 or 39.6 percent."

But half the income being taxed at that rate is not the same as half the earners being taxed at that rate.

Furthermore, the report said, that $1 trillion income figure does not imply "that all of the income is from entities that might be considered ‘small.’ For example, in 2005, 12,862 S corporations and 6,658 partnerships had receipts of more than $50 million."

We know of few bagel shops and dry cleaners with revenues anywhere near $50 million.

Our ruling

Boehner said, "Over half of the people who would be taxed under this plan are, in fact, small businesspeople."

Boehner is wrong on two points -- the "half" and the "small businesspeople."

Of the business income reported on tax returns, half of it would have been taxed at the top two rates, the Joint Committee on Taxation found. But that doesn’t mean half of the earners are paying those rates.

And it’s incorrect to call small business owners and millionaires who would see a tax increase one and the same. The Joint Committee as well as the Tax Policy Center have given credible evidence that for top earners who report business income, it is often just a fraction of their total income. They are not the folks operating small manufacturing plants or neighborhood pizza parlors. In fact, only 0.5 percent of small businesses make that kind of money. More often, small businesses are small in every sense -- most have incomes of less than $50,000 and almost all have profits of less than $1 million -- and they wouldn’t be affected by the millionaires tax. We rate the statement False.

Jon B. continues to shame the state of Ohio with his sleazy lies and corrupt politics.

Economics of Austerity - Serious Conservatives and The Consequences

Economics of Austerity - Serious Conservatives and The Consequences

Martin Wolf is getting frantic, as well he should. The austerians have brought us to the brink of a vast disaster. A recession in Europe looks more likely than not; and the question for the United States is not whether a lost decade is possible, but whether there is any plausible way to avoid one.

Wolf directs us to a recent speech by Adam Posen (pdf), which opens with a passage that very much mirrors my own thoughts:

    Both the UK and the global economy are facing a familiar foe at present: policy defeatism. Throughout modern economic history, whether in Western Europe in the 1920s, in the US and elsewhere in the 1930s, or in Japan in the 1990s, every major financial crisis-driven downturn has been followed by premature abandonment—if not reversal—of the macroeconomic stimulus policies that are necessary to sustained recovery. Every time, this was due to unduly influential voices claiming some combination of the destructiveness of further policy stimulus, the ineffectiveness of further policy stimulus, or the political corruption from further policy stimulus. Every time those voices were wrong on each and every count. Those voices are being heard again today, much too loudly. It is the duty of economic policymakers including central bankers to rebut these false claims head on. It is even more important that we do the right thing for the economy rather than be slowed, confused, or intimidated by such false claims.

Indeed. Posen’s “unduly influential voices” are my Very Serious People. And it has been an awesome spectacle watching the VSPs search, obsessively, for reasons not to fight mass unemployment. Fiscal policy must tighten to appease the invisible bond vigilantes and please the confidence fairy. Interest rates must rise because, well, um, inflation, well, no, low rates cause moral hazard — yes, that must be it.

And we’re not (just) talking about ignorant politicians. This stuff has been coming from the European Central Bank, the Organization for Economic Cooperation and Development, the Bank for International Settlements.

I don’t fully understand it. But a large part of it, it seems obvious, is the intense desire to see economics as a morality play of sin and punishment, where the sinners are, of course, workers and governments, not the bankers. Pain is not an unfortunate consequence of policies, it’s what is supposed to happen.

How obsessive are these people? So obsessive that when the financial doom they predict fails to materialize, they consider this a bad thing: punishment must be administered, so what are the markets waiting for? Here’s Alan Greenspan a while back:

    Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences.

Gosh, it’s regrettable that the markets aren’t confirming my warnings! And today Ronald McKinnon laments, yes, laments the failure of the invisible bond vigilantes to show themselves — they’re supposed to be “disciplining the government”, so why aren’t they here?

Just to reiterate a point I’ve made before, none of this reflects actual economic theory. Throughout this crisis, people like Adam Posen and yours truly have been basing our arguments on standard textbook macroeconomics, whereas the Very Serious People have been making up stories on the fly to justify their calls for pain. As Wolf, who really seems to have eaten his Wheetabix, puts it,

    The waste is more than unnecessary; it is cruel. Sadists seem to revel in that cruelty. Sane people should reject it. It is wrong, intellectually and morally.

And this cruelty rules our world.

We have never cut spending and taxes to turn a corner during a recession. No country has ever cut spending to the bone to recover from a economic downturn. America cannot cut spending as a way to recovery. Don't worry if you disagree, the serious people, the cruel people, the people who do not have clue, are winning and the world is likely yo to fall back into another bad recession as a result.

Rewarding Stupidity. John Boehner (R-OH) and Eric Cantor (R-VA) Show Why They Are Unqualified to Hold Public Office

 Rewarding Stupidity. John Boehner (R-OH) and Eric Cantor (R-VA) Show Why They Are Unqualified to Hold Public Office

During a town hall meeting today, Doug Edwards, the former Director of Consumer Marketing for Google, asked President Obama to please raise his taxes. “I would like very much to have the country to continue to invest in things like Pell Grants, infrastructure, and job training programs that made it possible for me to get to where I am,” Edwards said, noting that he is unemployed by choice because he was “fortunate enough to work for a start-up down the street here that did quite well.” “It kills me to see Congress not supporting the expiration of the tax cuts that have been benefiting so many of us for so long,” he said.

The spokesmen for both House Speaker John Boehner (R-OH) and House Majority Leader Eric Cantor (R-VA) — Brendan Buck and Brad Dayspring, respectively — proceeded to mock the exchange on Twitter by densely insinuating that the man only wants taxes to go up because he is unemployed and wouldn’t have to pay them:

These two — either out of ignorance or because they’re being disingenuous — completely missed Edwards’ point and the point behind the “Buffett rule” that the administration has proposed. Many people, Edwards included, make their income through investments, which are taxed at a much lower rate than wages. The Bush tax cuts not only lowered income tax rates, but also the rate on capital gains, taking it all the way down to 15 percent.

When asked after the event if he supported raising the capital gains tax, Edwards replied that he did. This jives with what billionaire investor Warren Buffett has said:

    The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot…I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off.

Remember, it was the raging socialist President Ronald Reagan who totally equalized the treatment of investment income and wage income, rejecting the argument that investors needed to pay a lower tax rate. Edwards, meanwhile, is earning enough income from his stock options in Google to donate all of the proceeds from a book he wrote to charity, while supporting three children.

But the spokesmen for the two most powerful congressman in the House managed to miss the point entirely. When it was pointed out to Dayspring that Edwards was still likely making investment income, all he could respond with was “he is welcome to pay more.”

Some of you may have heard that we supposedly have a huge deficit problem - those would be the deficits that John Boehner (R-OH) and Eric Cantor (R-VA) voted for. Since conservatives used to like to compare government budgets to household budgets, lets do that. John Boehner (R-OH) and Eric Cantor (R-VA) both voted to spend all the families money plus max out all the credit cards and than borrowed money to spend on more stuff. Now they're apparently clueless about where the money is going to come from to pay for the financial wreckage they left for President Obama to clean up. Making the people who benefit most from a stable government and infrastructure is apparently unfair to these two clowns even though many wealthy Americans think they should be taxed at a higher rate - say rates similar to those under Reagan or Clinton. Americans wonder why government is broken, it is because we have utterly incompetent clowns like John Boehner (R-OH) and Eric Cantor (R-VA)  in Congress.

Mealy Mouthed Republican of the Week - Sen. Chuck Grassley (R-IA) Knows How to Save Social Security But Won't

Mealy Mouthed Republican of the Week - Sen. Chuck Grassley (R-IA) Knows How to Save Social Security But Won't

Constituents waved signs and gave boisterous applause when one Iowan after another stood up and urged Sen. Chuck Grassley (R-IA) to strengthen Social Security rather than cut the retirement program at a town hall in Carroll, Iowa on Monday.

One middle-aged woman, Rosie Partridge, pointedly asked Grassley, “Why can’t we raise the wage cap in order to ensure that Social Security can continue on as it is without talking about cutting it?” (The current payroll tax does not tax income above $106,800.) Partridge, a small business owner, went on to tell her senator that despite the fact her business “would pay more” in payroll taxes, “you know what? No complaints. We want to have Social Security!” Grassley, who helped lead his party’s efforts to privatize Social Security in 2005, backed down, saying, “You have to have everything on the table”:

PARTRIDGE: My husband and I have a business in Carroll County. [...] My question is, why can’t we raise the wage cap in order to ensure that Social Security can continue on as it is without talking about cutting it? [Applause] And if we, as a business, we would have some people that would be giving more to that, actually a family member that’s part ownership of the business. And the business would pay more, too. And you know what? No complaints. We want to have Social Security! [Applause]

GRASSLEY: I think when it comes to Social Security, if anybody’s going to bargain in good faith, you have to have everything on the table. But if your point of view is to solve the Social Security problem just by taking the cap off, that isn’t going to solve it, as the trustees looked at it and said five years.

Watch it: video at link.

In fact, lifting the payroll tax cap would keep Social Security solvent for the next 75 years. Last week, Sen. Bernie Sanders (I-VT) announced he would introduce legislation to this effect, because doing so would keep Social Security fully-funded without having to cut benefits.

Though it may be tempting to hear “everything [is] on the table” and believe that Grassley is open to Partridge’s proposal, this is a phrase he commonly employs in tough policy fights. Optimists may believe that Grassley genuinely considers all options; pessimists will point to the health care reform debate when he made similar musings, only to string Senate Democrats along for months before criticizing the bill for supposedly allowing government to “pull the plug on grandma.”

Later in the town hall, another older woman chastised Grassley and his fellow Republicans for including Social Security in the recent debt ceiling standoff. “We have not caused the debt,” the woman said. “You owe Social Security recipients just like you owe China and anybody else that has treasury bonds.”

Grassley worships at the alter of no increase in taxes even if hard working average Americans have figured out that sacrificing a few dollars now means income security for millions of Americans for the next 75 years. Like all weird cultish thinking Grassley doesn't have to make sense or justify what he believes, he just believes it and that should be enough.

Three Charts To Email To Your Right-Wing Brother-In-Law - America has a revenue problem, not a spending problem. It is exactly in bad times like these the government should spend.

How did Gretchen Morgenson, one of America’s best financial reporters, get the story of Fannie Mae’s role in the financial collapse so wrong? Fannie and Freddie have some mud on them, but it was private sector banks who went hog wild on sub-prime loans.

Republicans Have Become The Anti Jobs Party Just to Make Obama Look Bad

Republicans Have Become The Anti Jobs Party Just to Make Obama Look Bad

Got home yesterday and told my kid I'd had a busy day because the stock market dropped a lot. Her response: "Oh... is that bad?"

The downgrade certainly played into the massive sell-off, so yet again, S&P's fingerprints are all over a market crash. Could somebody please downgrade them?!

But the larger issues behind the crash are well-known at this point. At center-stage, we have weak growth prospects that continue to lag expectations -- everybody thinks things are about to get better, and when they don't, everybody has their economic hearts broken all over again.

The typical forecaster predicts improvement in the next quarter or so, then a week later, moves that improved scenario another few quarters ahead.

Note the magical thinking here. "Things will get better, I just know it." Yet, both here and in Europe, policy makers essentially fumble around, unwilling to identify and go after the real culprit: weak aggregate demand here and insolvency (or near-insolvency) there.

I'm not saying these are easy problems to diagnose or fix (well, the US demand problem is very clear -- Europe's is more complicated, because some countries (Italy) could likely resolve their debt burdens with strong liquidity injections, others (Greece), probably not).

But what was the biggest, most time- and media- and attention-consuming economic debate in this country in recent months? Was it which are the best jobs measures to get America back to work? Was it how many more rounds of easing should the Fed undertake?

No. It was whether to raise the debt ceiling or default.

Enough already.

Yes, there are many policy makers who either don't understand these dynamics or are purely politically motivated. Some are cynically and solely driven to make the president look bad, with no regard for collateral damage. Others are acting on the belief that smaller government, and thus cuts and further austerity will allow growth to flourish, despite daily evidence that this is backwards.

If you are Ben or Barack, in my honest opinion, you need to ignore them from here on in.

Bernanke and the Fed can help, but they face two other constraints. First, the monetary version of premature fiscal austerity is the phantom menace of inflation. But to the contrary, one way to help both households and governments reduce the real level of their debt burdens is to print money and buy more long-term bonds -- QE3, 4, etc. There's little threat of core inflation accelerating with so much spare capacity in the economy, so helping these sectors to lower the liabilities on their balance sheets will help.

But it might not help much. Constraint number two for the Fed is that interest rates are already low, both at the short and long end of the yield curve. And we know firms are highly profitable and sitting on trillions in cash reserves. So monetary policy faces a pushing-on-a-string problem.

The real action is with the president right now. I liked his comments yesterday -- they didn't go far enough on the jobs front in a way I'll suggest in a moment, but I liked the setup. He essentially said, "OK, I worked with the opposition -- who recklessly used default as a bargaining chip -- to do some deficit reduction. S&P didn't like it -- so what? They're not exactly a beacon of light these days. But I think I've bought myself some running room on jobs... so that's where I'm headed."

He then talked about renewing the payroll tax holiday, extending unemployment benefits, and infrastructure -- specifically roads and bridges.

The first two are already in the system -- they should be renewed but let's be clear: they don't provide new stimulus. It's keeping your foot on the accelerator, which is helpful, but not as helpful as pushing down further. The third -- infrastructure -- is great, but I'm worried "roads and bridges" don't get it. They're necessary, but a) they've become more capital intensive so you don't create enough jobs (I think this is true, but need more research to be sure), and b) they don't capture the imagination.

I like FAST! and recommend he runs with that, or some other idea that meets these criteria: it can be stood up quickly, it's labor intensive with a decent bang-for-buck re jobs, people get it and feel good abut it right off the bat (so, as much as I like the infrastructure bank idea, I'm not sure it works here).

"But wait!," you shout. We're out of bullets -- there's no more money for such things -- and Congress will refuse to add any of this to the deficit. How can you advise the president to block everything else out and call for measures Congress will refuse to consider?!

That's the kind of second guessing, negotiating-with-yourself that has us stuck in the mud. The president needs to decide what this economy needs, make sure it meets the above criteria, especially the one about the solution being easy to understand and feeling good, and fight for it nonstop from here until the unemployment rate starts to steadily decline.

If the merchants of negativity and obstruction block him, then he has to tell the American people precisely who is standing between them and their jobs, their opportunities, their living standards. Tell them that their own and their children's well-being is actively undermined by those who refuse to work with him to get America back to work.

It's that simple.

(This post originally appeared at Jared Bernstein's On The Economy blog.)

For those who have had time to keep up we know that Republicans are enjoying every drag they can put on economic progress. Their presidential candidates have their fingers crossed hoping there is no job recovery because it might help them become president. In the last thrity years conservatives have raised the debt ceiling over 20 times. Now they decide was a good time to hold the economy hostage to get their anti-jobs austerity plan into action. Conservatives are not concerned about jobs or America they are concerned with power and gathering up more money from special interests in between doing everything and anything to make the President look bad. They're like spiteful children who have to have everything their way or they won't play, or let anyone else play either. This all plays into their strategy to make sure govenrment does not work. Government is never all the things everyone wants it to be, ut are we really supposed to put our futures completely in the hands of Exxon or the Koch brothers - you know like they're going to look out for the average American's best interests. Our best hope is a more progressive Democratic Congress in 2012. Kick out the government hating, jobs hating conservative brats.

UnAmerican Fox News Told America The Debt Ceiling Did Not Matter

UnAmerican Fox News Told America The Debt Ceiling Did Not Matter

During the debt ceiling debate, Fox has relentlessly pushed economic policies and positions that experts have said would be harmful to the economy, including downplaying default concerns, openly advocating for default and a credit downgrade, and actively lobbying for a balanced budget amendment.

Fox Figures Consistently Dismissed Or Downplayed Concerns Over Government Default

Hannity: Democrats' "Doomsday Rhetoric Would Have You Believe" That If The Ceiling Deadline Passes, The "Economy Would Crumble." On the July 11 edition of his Fox News show, Sean Hannity said: "As the deficit reduction talks continue in Washington, Democrats have been ramping up their efforts to scare the American people into supporting this deal. Now, the left's doomsday rhetoric would have you believe that if Congress does not vote to raise the debt limit by August the 2nd, the American economy would crumble." [Fox News, Hannity, 7/11/11, via Media Matters]

Dobbs Calls Debt Ceiling Deadline A "False Date" And "Pure Fiction." On his July 11 Fox Business show, host Lou Dobbs called the August 2 deadline for raising the debt limit a "false date" and "pure fiction." Dobbs made his comments in response to J. Dennis Hastert, former Republican speaker of the House, who said that "the federal government can decide what it's going to pay, when, and where." [Fox Business, Lou Dobbs Tonight, 7/11/11, via Media Matters]

Carlson: "Some Republicans" Are Asking Whether Debt Ceiling Deadline Is A "Democratic Ploy." On the July 12 edition of Fox News' Fox & Friends, co-host Gretchen Carlson claimed that "some Republicans are saying that August 2 deadline, as I alluded to at the top of the show -- is that a Democratic ploy, or is that a hard and fast date now? Remember, back in April that was the first deadline date, and everyone kind of pooh-poohed it, and before you knew it, in the middle of that horrible earthquake tsunami in Japan, the Treasury secretary moved it." [Fox News, Fox & Friends, 7/12/11, via Media Matters]

Moore: "The Biggest Lie In This Whole Debate ... Has Been That The United States Is Going To Default On Its Debt." On the July 18 edition of Fox News' America's Newsroom, Fox News contributor Steve Moore claimed: "The biggest lie in this whole debate for the last six months has been that the United States is going to default on its debt, and I will tell you this point blank with 100 percent certainty: There will not be a default on U.S. securities, no matter what happens." [Fox News, America's Newsroom, 7/18/11, via Media Matters]

Doocy: Obama Is Trying To "Gin ... Up" Default Crisis As If "It's The End Of The World." On the July 19 edition of Fox News' Fox & Friends, co-host Steve Doocy responded to a Pew Research Center poll which claimed that 43 percent of independents say it's "not essential to meet deadline" by claiming, "It's that last number right there, the independents, that has got to horrify the White House, because they're trying to gin this up as if it's the end of the world." [Fox News, Fox & Friends, 7/19/11, via Media Matters]

Cavuto: "I Would Welcome A [Credit] Downgrade." On the July 27 edition of Fox News' Your World, host Neil Cavuto claimed: "I would welcome a [credit] downgrade. I really would. I think it would be the pain from which we have a gain." Fox News host John Stossel responded, "Maybe that would wake people up." [Fox News, Your World, 7/27/11, via Media Matters]

Morris: Offices That Would Close Without Increase In Debt Ceiling Are "Ones We Don't Much Care About." On the July 28 edition of Fox News' On the Record, Fox News contributor Dick Morris claimed that, if the debt ceiling is not raised, "some offices are going to close, but they are ones we don't much care about. I mean, who is going to go crazy because the National Labor Relations Board closes its doors, or the Federal Communications Commission or the Federal Trade Commission?" Morris later claimed that "the country is not going to fall apart" without agencies such as those. [Fox News, On the Record, 7/28/11, via Media Matters]
While Some On Fox Have Openly Advocated Against Raising The Debt Ceiling

Napolitano: "If I Were In The Congress, I Would Encourage Everybody To Vote Against Raising The Debt Ceiling." On the April 11 edition of his Fox Business show Freedom Watch, host Andrew Napolitano interviewed Rep. David Schweikert (R-AZ). During the interview, Napolitano spoke repeatedly about the debt limit and at one point said, "If I were in the Congress, I would encourage everybody to vote against raising the debt ceiling." From the show:

NAPOLITANO: You have a couple of crucial votes coming up, Congressman Schweikert ... I suggest to you, Congressman Schweikert, is one of the more crucial votes you'll have to make this year, and that's the vote on whether or not to raise the debt ceiling.

SCHWEIKERT: The debt ceiling.

NAPOLITANO: And here is where the Republicans alone -- they don't need the Democrats, they don't need Mrs. Pelosi and they don't need the Senate -- can stop the flow of red ink. Because if every Republican in the House, or a majority of the Republicans, simply says no, then the debt ceiling does not go up, and the president is forced to cover the debt service, defense, entitlements and discretionary spending just on what he collects every month. What are the chances of that happening?

SCHWEIKERT: Judge, I've got to tell you, you're speaking like I'm thinking, except there's a lot more in the details. What happens if we stand firm, and do we what's right on the debt ceiling vote, and the bond markets go nuts on us. Every point that interest rates go up on U.S. sovereign debt is close to another 100 billion dollars in debt service. And remember, the discussion is raising the debt ceiling functionally to pay the bills that the previous Congress have already spent the money on.

NAPOLITANO: Correct. Correct, correct.

SCHWEIKERT: And so where do you find the balance of convincing the world debt markets that we're taking our debt seriously, so we don't panic them, and at the same time we bend this curve in the spending? This is walking a tightrope, because if we screw up, boom, every bit of savings we've accomplished gets eaten up by higher interest rates, and if we don't do it enough, then the left keeps buying their next election by this crazy spending.

NAPOLITANO: Last question, Congressman Schweikert. And if I were in the Congress I would encourage everybody to vote against raising the debt ceiling. But you've analyzed this in a most respectful and intelligent way. What will the Republicans get from the president and the Democrats in return for voting to raise the debt ceiling that will permanently, permanently stop this red ink and this madness? [Fox Business, Freedom Watch, 4/11/11, via Media Matters]

Napolitano Has Repeatedly Spoken Against Raising The Debt Limit. Napolitano has frequently used his Fox Business show as well as guest host positions on the Fox News Channel to speak against raising the debt limit. As a guest host on the March 10 edition of Fox News' Glenn Beck, Napolitano urged Rep. Jason Chaffetz (R-UT) and Sen. Jeff Sessions (R-AL) to vote against the debt limit. During the January 4 edition of Freedom Watch, Napolitano said, "It's an easy one for me -- the debt ceiling should not be raised." [Fox News, Glenn Beck, 3/10/11, via Media Matters; Fox Business, Freedom Watch, 1/4/11, via Media Matters]

Bolling: "I Say Let Them Default." As a guest co-host on the April 13 edition of Fox & Friends, Fox Business host Eric Bolling told Stuart Varney, "I say let them default. ... What's going to happen?" Varney replied, "Armageddon is going to happen." From Fox & Friends:

VARNEY: There's a great danger in that. As you approach this deadline, if you're even talking about default, as even a possibility, a remote possibility, you really spook the world's money people. You really spook them.

BOLLING: I say let them default.

VARNEY: Really?

BOLLING: Let them go. What's going to happen?

VARNEY: You're a brave guy.

BOLLING: What's going to happen?

VARNEY: Armageddon's going to happen.

BOLLING: How is it going to be Armageddon? Let's talk about that for a second.

VARNEY: OK. If we fail to allow ourselves to borrow any more money --

[...]

BOLLING: That's got to stop. That will force it to stop. That will guarantee --

VARNEY: So you've got an immediate $150 billion cut every month.

BOLLING: That will guarantee in order for it to come out of default, you have to stop spending. [Fox News, Fox & Friends, 4/13/11, via Media Matters]

Hannity: "I Would Not Vote To Raise The Debt Ceiling." During a panel discussion on the April 12 broadcast of his Fox News' show, Sean Hannity said, "If I was in Congress, I would not vote to raise the debt ceiling." From Hannity:

HANNITY: If I was in Congress, I would not vote to raise the debt ceiling.

FOX NEWS CONTRIBUTOR, DOUG SCHOEN: Right.

HANNITY: Vote for a balanced budget amendment -

SCHOEN: I would with a plan to balance the budget absolutely.

[STAN] DZIEDZIC [FMR. OLYMPIC WRESTLER]: I think it is dangerous to go down that path.

HANNITY: Why?

DZIEDZIC: Well, you have to remember that -

HANNITY: Wouldn't force him to cut?

DZIEDZIC: If that was the end result, but you may - you may force a risk premium for uncertainty on the bonds -

HANNITY: Isn't China, isn't Europe lecturing us now on capitalism and how if we don't get control of our debt -- wouldn't they see that as a sign that America may actually get it? [Fox News, Hannity, 4/12/11, accessed via Nexis]

Palin: "Hells No, I Would Not Vote To Increase That Debt Ceiling." On the April 29 edition of Fox News' Special Report, Fox News contributor Sarah Palin responded to a question about whether she would vote to increase the debt ceiling by claiming: "Hells no, I would not vote to increase that debt ceiling. Otherwise it just shows the American public we're not serious yet, we're still going to incur more debt." [Fox News, Speical Report, 4/29/11, via Media Matters]

Bolling: "We Should" Let The Debt Ceiling Expire "And See What Happens." On the July 28 edition of Fox News' Fox & Friends, Bolling responded to White House press secretary Jay Carney's statement that people unconcerned with raising the debt ceiling should "buy and hold [and] see what happens" by claiming, "He was right, though. We should buy and hold and see what happens." Bolling later claimed, "That downgrade and default thing that they keep throwing out there and scaring, you know, the bejesus out of people, it won't matter." [Fox News, Fox & Friends, 7/28/11, via Media Matters]


But Economic Experts Have Agreed That Failing To Raise Debt Ceiling And Defaulting Would Have Disastrous Consequences

Zandi: "In A Post-Default World, Financial Markets Would Unravel And The U.S. And Global Economy Would Enter Another Severe Recession." In a July 15 Washington Post op-ed, Moody's economist Mark Zandi stated: "The Obama administration and Congress must raise the federal debt ceiling by Aug. 2. That's all there is to it." Zandi warned that failure to do so could create "another severe recession" in "U.S. and global econom[ies]." From The Washington Post...

Since Fox News is a mouthpiece for Anti-American far Right conservatives it serves their interests to see the country dive into an even deeper recession. That way they could blame the consequences on a Democratic president. Now that a debt ceiling bill has been passed that is all about spending cuts without raising revenue, it is Republcans who are resposnsible for the continued recession.

The Chicken-Little Debt Crisis - The U.S. Has a Revenue Problem Not the Fake Spending Crisis Cooked Up By Republicans

The Chicken-Little Debt Crisis - The U.S. Has a Revenue Problem Not the Fake Spending Crisis Cooked Up By Republicans

Whenever someone like me(Nobel economist Paul Krugman) or Bruce Bartlett points out how little Obama resembles the right’s portrait of a raging leftist, someone is sure to come back with the assertion that Obama has presided over a vast expansion of federal spending. Even people who really should know better, like John Taylor, do it.

So what’s the truth? I’ve written about this before, but here’s another take.

The fact is that federal spending rose from 19.6% of GDP in fiscal 2007 to 23.8% of GDP in fiscal 2010. So isn’t that a huge spending spree? Well, no.

First of all, the size of a ratio depends on the denominator as well as the numerator. GDP has fallen sharply relative to the economy’s potential; here’s the ratio of real GDP to the CBO’s estimate of potential GDP:

A 6 percent fall in GDP relative to trend, all by itself, would have raised the ratio of spending to GDP from 19.6 to 20.8, or about 30 percent of the actual rise.

That still leaves a rise in spending; but most of that is safety-net programs, which spend more in hard times because more people are in distress. The CBO breaks out “income security” (Table E-10 in Historical Budget Tables), which is unemployment insurance, food stamps, etc., and also gives us numbers on Medicaid; here’s what they look like as percentages of GDP:

That’s another 2 points of GDP, or about half the rise.

So we’re still left with a bit, around 1 point of GDP. That’s the stimulus, more or less. And there are two things you need to know about it. First, it’s temporary, and already fading out fast. Second, a large part of the stimulus “spending” was actually aid to state and local governments, intended not to expand spending but to avert a fall — that is, it was about maintaining government, not expanding it.

Now, pointing out the Obama spending binge is a myth generally produces rage: people know that it happened, because Rush Limbaugh and the Wall Street Journal say so. But that doesn’t make it true.

Safety net spending(chart with blue/red waves) because of the recession. The economy was shedding 700,000 jobs a month. It is only fair that people who had little to do with causing the recession, but were victims of it have some unemployment insurance benefits while they try to survive. Most of the spending that occured in 2009 was from polcies Republicans voted into law in 2008 - including TARP and the automakers bailout. Note in the graph at the very top that spending as a percent of GDP dropped back down to perfectly normal historical averages in 2010 and are predicted to remain at that level for years.

The Debt Ceiling Crisis And The Failure Of The Establishment( A crisis mind you invented by Republicans who raised the debt ceiling 7 times during the Bush administration when it was running up the largest deficit in US history)

The political assumptions here turned out to be badly wrong. The main problem is that the Republican Party does not actually care very much about the deficit. It cares about, in order: Low taxes for high-income earners; reducing social spending, especially for the poor; protecting the defense budget; and low deficits. The Obama administration and many Democrats actually do care about the deficit and are willing to sacrifice their priorities in order to achieve it, a desire that was on full display during the health care reform debate. Republicans care about deficit reduction only to the extent that it can be undertaken without impeding upon other, higher priorities. Primarily "deficit reduction" is a framing device for their opposition to social spending, as opposed to a genuine belief that revenue and outlays ought to bear some relationship to each other.

The Post has since published a series of increasingly terrified-sounding editorials pleading for a debt ceiling hike backing away from its bold hopes that the debt ceiling would produce a bipartisan compromise. In retrospect, they now see what should have been obvious: Increasing the political leverage of the Republican Party made a Grand Bargain less, not more, likely. Moreover, the deficit hawks who represent the center of Washington establishment thought badly underestimated the danger entailed by tying high stakes negotiations involving the Republican Party to a cataclysmic event. Happy visions of Bob Dole and Tip O'Neill danced in their heads, oblivious to the reality of what they were facing.

Republicans Are Telling a Dangerous Lie About Obama and Spending

Bush vs. Obama on Spending: It's No Contest - See chart above.

The No. 1 Republican talking point these days seems to be this: Profligate spending by President Barack Obama is the reason we face a debt-ceiling crisis.

Any rational, reasonably well informed citizen should know that is not true. But prominent GOPers still chant it like a mantra. God only knows how many otherwise sane Americans are starting to believe it.

That's why a chart in Monday's New York Times should be sent to every household in the US of A. It shows, in clear, indisputable numbers, that policy decisions by Republican president George W. Bush led to spending that dwarfs financial outlays under Obama. (See the chart at the end of this post.)

In fact, the cost of just the Bush tax cuts ($1.8 trillion) exceeds the costs of all spending under Obama ($1.4 trillion).

The final tally--$5.07 trillion of spending under Bush, $1.44 trillion under Obama. By the way, those figures for Obama are projections from 2009 to 2017. In other words, both presidents are being judged in eight-year time frames. And Bush "wins" the spending contest in a runaway.

If my math is correct, spending under Bush was more than three times greater than that under Obama. Yet we still get bilge like this from the blog of U.S. House Majority Leader Eric Cantor (R-VA): "President Obama Refuses To Acknowledge That His Out Of Control Spending Sparked A Debt Crisis."

In a piece titled "The Chart That Should Accompany All Discussions of the Debt Ceiling," James Fallows of The Atlantic explains why the Times' graphic handiwork is so important:

It's based on data from the Congressional Budget Office and the Center on Budget and Policy Priorities. Its significance is not partisan (who's "to blame" for the deficit) but intellectual. It demonstrates the utter incoherence of being very concerned about a structural federal deficit but ruling out of consideration the policy that was the largest single contributor to that deficit, namely the Bush-era tax cuts.

The chart is titled "Policy Changes Under Two Presidents," and Fallows says it is called that for a reason:

An additional significance of the chart: It identifies policy changes, the things over which Congress and Administration have some control, as opposed to largely external shocks--like the repercussions of the 9/11 attacks or the deep worldwide recession following the 2008 financial crisis. Those external events make a big difference in the deficit, and they are the major reason why deficits have increased faster in absolute terms during Obama's first two years than during the last two under Bush. (In a recession, tax revenues plunge, and government spending goes up--partly because of automatic programs like unemployment insurance, and partly in a deliberate attempt to keep the recession from getting worse.) If you want, you could even put the spending for wars in Iraq and Afghanistan in this category: Those were policy choices, but right or wrong they came in response to an external shock.

The point is that governments can respond to but not control external shocks. That's why we call them "shocks." Governments can control their policies. And the policy that did the most to magnify future deficits is the Bush-era tax cuts. You could argue that the stimulative effect of those cuts is worth it ("deficits don't matter" etc). But you cannot logically argue that we absolutely must reduce deficits, but that we absolutely must also preserve every penny of those tax cuts. Which I believe precisely describes the House Republican position.

In other words, the GOP of 2011 is utterly illogical. But large chunks of the America public still lap up Republican sound bites.

It is dangerous to the economy to make Americans think we're in a debt crisis when we're not. Americans stop spending because they lack confidence in the economy and that lack of spending makes the economy worse. Which is likely the reason Republicans are lying about spending because they want the economy they crashed to crash again under a Democratic president. Conservatives have always put their radical Anti-American agenda before what is best for the nation. So this is nothing new.