Senate Dems on Obama Stimulus: Size Matters
By Susie Madrak Friday Jan 09, 2009 3:30pmI'd guess that the Democratic dismay must run pretty damned deep for them to oppose Obama on his stimulus plan. Good, because it isn't big enough:
WASHINGTON — President-elect Barack Obama’s economic recovery plan ran into crossfire from his own party in Congress on Thursday, suggesting that quick passage of spending programs and tax cuts could require more time and negotiation than Democrats once hoped.
Senate Democrats complained that major components of his plan were not bold enough and urged more focus on creating jobs and rebuilding the nation’s energy infrastructure rather than cutting taxes.
Sounds like someone's been reading Paul Krugman.
Just hours earlier, Mr. Obama called for speedy passage of the stimulus measure, warning that the recession “could linger for years” if Congress did not pass his plan within weeks.
Further complicating the picture, Democratic senators said Thursday that they would try to attach legislation to the package that would allow bankruptcy courts to modify home loans, a move Republicans have opposed.
This one's a no-brainer, one that will have broad popular support. Why would Obama want to back off from a fight with the Republicans on this one?
Parallel to its work on the stimulus plan, the Obama team has also been considering how to use the second $350 billion of the bailout program approved by Congress. A transition team official said Thursday night that the new approach would give government officials broader range to provide relief on consumer loans for homes, automobiles and education, while also doing more to address foreclosures and the problems of municipalities and small businesses.
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Cut federal taxes.
Let people's income raise (Obama, we need a raise!).
Let the states tax revenue go up.
Let the states take care of their infrastructure.
Yanking this thought out of thin air, but here's what came to mind. Maybe Obama fixed the goal lower than he wanted, knowing that others would demand more. That way they can't say he was asking too much to begin with. Better to ask for less and get more, than to ask for more and get less.
See? I told you it was yanked out of thin air.
I've come to see him as a coalition-builder, a la shrub, sr.
I don't think he's that subtle.
would be across-the-board debt forgiveness for all but government debt and corporate bonds.
So long as consumers are shackled by debt, no amount of fiscal stimulus is going to re-ignite economic growth.
More fundamental, however, is this question: What will a recovered economy look like?
No economist can truthfully say it will look like the economy 1946-2008.
For those of us who have been living within our means, though meager, it's a bash in the kisser to see our neighbors foolish behavior rewarded by a free car/boat/home. That is criminal. "Kids, look what a credit card got mom and dad! For free!"
On a credit card? Surely, you are out of touch with reality.
Ok, provide better examples.
Nobody has bought any of those items on a credit card.
loans then.
Maybe not but they did buy giant TVs and their kids have their own TVs. They bought furniture for that new home and things they really didn't need. I watched it happen in my neighborhood. Families would buy a home and within days the furniture truck arrived with all new stuff. These people just didn't see what was up ahead. The mortgages went up, the job was gone and so are the people as the house sits empty for over six months.
One of the commenters to Krugman's column today said something I thought brilliant: don't forgive credit card debt, just stop the usury. If Congress ensured rates were no more than 10-12%, people would pay off their debts and the banks would stabilize (if indeed they are unstable...but that's another thread).
Trying to discern who among us is 'worthy' of a break is a big waste of time and plays right into the cons divide-and-conquer meme.
But given that 2/3 of the U.S. economy is driven by consumer spending, the anchor of consumer debt spells doom.
that doesn't punish behavior of low income frugal people?
because for about 30 years the economic system of this country has rewarded bad behavior -- that is, borrow furiously to buy shit you don't need or even really want.
The solution needs to keep in place some self-responsibility incentives, or it will continue.
I just don't want to throw kids out onto the street.
forgiving student loans?
People have been saddled with huge loan paybacks for just trying to get an education to better themselves. That's not rewarding bad behavior, just ensuring these people don't go under for trying.
Getting a loan involves accepting a risk. What does it teach if we erase that risk for a select group?
Print me some money too.
it would teach the middle class and the working class that they can, too, get a 'get out of [debtor] jail free' card just as easily as the wall street barons that raped the economy
we erased risk for our financial overlords, why not those that struggle?
or howzabout this crazeee idea, hold the financial overlords responsible for the checks their asses can't cash, and then forgive student loans??
teach anything. I am concerned that we do not care for each other enough to want to help younger people (I'm 66) have a better life, free from a burden that might make the difference between a decent life or not.
Have you ever read the parable of the man who hired 3 workers? One in the morning, one at noon and one later in the day?
When it came time to pay them, he paid them all the same as agreed to.
I think it's important that young people have opportunities to have a decent life. Shelter and decent nourishment are a start.
I read someplace that the easy loans pushed the cost of education sky high.
..
...should automatically receive food stamps, or what ever the program is called now days.
We should all have that simple advantage of not being hungry and malnourished, as citizens of the USA.
i would suggest making tuition 100% tax deductible
the loss of revenue can be made up by taxing the rich at much higher levels
..
#1) Eliminate ALL the crafty underhanded ways the CC companies expand the debt: increasing the rates on overdue balance, tacking on numerous penalties, etc.
#2) Offer to each CC holder a debt-reduction plan, requiring them to shred ALL credit cards and replace them with a single debit card AND to make monthly payments to a single consolidated CC company.
but I ask: Why reward the fraudsters who literally threw credit cards at people? For a few years, my mailbox was stuffed with offers I was told I shouldn't refuse.
Republicans are always going to oppose any help for average to below average income Americans, especially if there's nothing in it for the rich and powerful. I don't know why Democrats don't point that out every chance they get.
consumer borrowing, more consumer spending, more Chinese… …goods.
Everything old is new and I feel young again.
---
Cut the obscenely bloated defense budget in half. Enact a single payer universal health care system.
Voila - a stimulus package I can believe in.
Here, Bill Moyers and the march for the dead.
but it isn't going to be enacted until there is a real revolution in this country.
Until then, all federal economic policy will be aimed at funneling money to the military-industrial complex Eisenhower warned about.
Paul Krugman: The Obama Gap
Read it all!
Link.
Until people believe their job is secure, nothing much is going to happen. I don't know anyone who believes their job is secure, if they even have one. Because the situation ahead looks so dire, everyone is holding on to every dollar they have and just not spending except for the bare necessities. We need financial security and once everyone feels that, they will start to part with some of that money they are holding.
According to Suze Orman, the credit card companies are about to wreck the people who owe them money. Higher interest rates and lower totals available for customers to charge. One more mouse trap about to snap shut.
"Size matters" in a time of general racial sensitivity and male Caucasian anxiety?
ok, obama, here we go:
step one: lose the rubinites you have advising you (summers, geithner)
step two: grab paul craig roberts, joseph stiglitz, paul krugman, and naomi klein (among others) for some good ole economic-ideology cleansing
step three: IMMEDIATELY suspend all corporate tax breaks and subsidies, and TAX out-sourcing
step four: raise, no DOUBLE the minimum wage
step five: institute universal health care
step six: sign the EFCA, and signal to the workers that you support labor, and flip wal mart the bird
step seven: raise the taxes on the highest earners
step seven: increase unemployment benefits
step seven: start a HUGE infrastructure program designed to repair/build roads, bridges, green infrastructure
step seven: green-up the economy
step eight: rework all trade policies, working in environmental and labor concerns
step eight: watch your back because the ruling class is going to come after your head.
Step 9: Raise the cap on Social Security
Step 10: Raise the benefits for Social Security benefits to what real inflation has grown.
sorry, not sure what happened:
ok, obama, here we go:
step one: lose the rubinites you have advising you (summers, geithner)
step two: grab paul craig roberts, joseph stiglitz, paul krugman, and naomi klein (among others) for some good ole economic-ideology cleansing
step three: IMMEDIATELY suspend all corporate tax breaks and subsidies, and TAX out-sourcing
step four: raise, no DOUBLE the minimum wage
step five: institute universal health care
step six: sign the EFCA, and signal to the workers that you support labor, and flip wal mart the bird
step seven: raise the taxes on the highest earners
step eight: increase unemployment benefits
step nine: start a HUGE infrastructure program designed to repair/build roads, bridges, green infrastructure
step ten: green-up the economy
step eleven: rework all trade policies, working in environmental and labor concerns
Step twelve: slash the pentagon budget
step thirteen: stop the failed drug war
step fourteen: legalize pot, and nationalize prisons
step fifteen: watch your back because the ruling class is going to come after your head.
Only one suggestion.
Imprison the "ruling class" via Patriot Act.
hee hee, i couldn't even get elected block captain here in south philly
and your suggest would be constitute a REAL patriot act!
So i have been an almost daily reader of C&L for a few years now but have never posted before.
Does anyone else notice that since Obama won that most of "liberal" blogs are no longer a useful source of critical news. I'm not saying that they are shills for Obama or anything but they seem to be moving in that direction pretty fast and he isn't even in office yet.
Don't get me wrong, I voted for him. Between Obama and McCain it was a easy choice(McCain is the political equivalent of a petulant child), but this is getting out of hand. It's almost as if liberal sites are starting to take it as a forgone conclusion that Obama's position on whatever is the right one. I have seen a stark change in coverage from most of the sites I visit. More and more they are guilty of the same type of coverage they used to rail against the MSM for.
Critical news means being critical of the government be it Rep OR Dems. It's really a shame as most of the blogosphere came into being during the Bush years. I expect it to be a while before a new sphere of sites come up that can be credible critics of a Dem administration.
Granted there are a few notable exceptions, Glenn Grennwald is still happy to hold all forms of hypocrisy to the fire.
my 2 cents on Obama's stimulus plan(which I expect to be throughly flamed for). IT WONT WORK. Granted it's less insane that the things done so far by the current masters of the monetary universe, but that still doesn't make it a good idea. If the problem is MASSIVE over spending and debt by the government and society in general, then how in the world can the answer be MORE spending and debt. It defies reason.
-vividvew
in noticing that which you have nicely written. I've seen it myself. Did you know Congress first acts for 2009 are the enactment of tax increases? Consumption taxes are going up exactly when they say they are going to lower taxes. Make sense? Nope. The government is supposed to represent the people. Not do everything in their power to toss the money to corporations and the ponzi scheme industry. To do that needed both parties and both parties agreed quickly.
in the grand shape of things I consider fractional reserve lending to be the mother of all ponzi schemes. Not that they don't matter, but what we call taxes and the like are the details and the rhetoric.
We fight about them because they are among the things allowed to be a part of the nation discourse while the root causes are not on the table for discussion.
You will find many in agreement. My point was, it's all nothing more than a song and dance act. All major political parties have had how many years to fix the economies around the world? Truth is, they have very little they can do about it, except steal your tax dollars and give it to the rich greedy bastards running the show. What else can they do? The government, an employee of the people, is going to employ the people? Right. And I've never heard of anybody of sound mind and judgement, that would borrow massive amounts of money, to get themselves out of debt. It's ludicrous. At the end of the day, whatever you spend those dollars on, has to return you something of value.
Agreed!! The cure for too much debt CANNOT be more debt. The very idea is insane. The idea is so basic that a 5 years old can understand it, but this is the underlying idea behind the stimulus plan.
I wont say that all the liberal sites are outright shilling for it(some are) but I am not aware of any of the heavy hitters(C&L, TPM, huffington, Kos, etc) looking at the basic premise of debt as a cure for debt from a critical point of view.
Hahahahaa...they are too busy doing the Rah Rah Cheerleading dance of "oh goody I got tickets to the ball"...posters there sound like they are 10 years old. Arianna even has them doing their own little oaths, like good little soldiers. Good grief, and these people made fun of the Republicans undying loyalty. I do not read that site any more. It's beyond juvenile.
the cure for debt can be more debt--it just all depends on what you do with a stimulus package (ie tax cuts for corporations: harmful/bad/more debt... increased food stamps: beneficial/good/increased revenue)
Samson. However, you and I both know how the infastructure package will work. Just like all other government spending. They don't call it "pork barrel" spending for nothing. Fiscal responsibility does not exist with government. If they are all gung ho for this, it most certainly isn't to help out the taxpayers.
the potential for corruption and bill-padding is huuuuuge when it comes to rebuilding the infrastructure.
but, there are other things (like universal healthcare, extending unemployment benefits, raising the minimum wage, etc.) that will produce huge returns on investment and be less likely to be burdened with corruption (notice i used the word 'less', hee hee). the notion that any spending on a stimulus package is akin to just taking on more debt, imo, is not looking at all the angles.
while right, does not mean that they will be enacted like that. Without a doubt, the real entity that is to be stimulated will be the corporations and the rich, not the common taxpayer. I know, I'm a cynic, but I believe government after they prove it, not before. Blind loyalty gave 8 years of Bush. Gag. Off topic, but want to see the change Obama is bringing? His number 2 man selection at the Pentagon is a military lobbyist. So far, he's looking like "do as I speech, not as I do"
i have railed about nearly all of obama's appointments and selections (vilsak, rahmy, summers, geithner, clinton, etc.)
Dear god. NO it can't.
I'm not saying that I am not in favor of food stamps, plus well fair and the like. I'm just saying that I wont try to make and economic argument for them. I am in favor of them on humanitarian grounds. I don't care which way the economic equation comes up on them. So while I may be in favor of some the of things included in the stimulus package, to think that they will have a positive ECONOMIC effect in the short term is at best hopeful and at worst delusional. To think that the long term cure for too much debt is more debt is just insane.
If this were true there would be no such thing as a bank bailout. If a bank had too much debt it would just lend more. The very idea of a bailout would not exist if this were true.
The latest numbers I hear are that they want to create 3M new jobs over 2 years. At the current(likely to increase) rate of unemployment filings(~500K a month) this will be a wash in 6 months. Taking this tact Obama will find himself coming up on the end of his first term having raised the debt at a faster pace than even Bush(unthinkable even a year ago) and the economy will still be worse off that when he walked in.
-vividvew
i don't need you to make an economic argument for them, i know they will produce a huge return on the investment.
so GOOD NEWS, you can be a humanitarian and know that you are being economically responsible too!
One year $ change in real GDP for a given $ reduction in federal tax revenue or increase
in spending:
tax Cuts
Non-refundable lump-sum tax rebate 1.02
Refundable lump-sum tax rebate 1.26
Temporary tax cuts
payroll tax holiday 1.29
Across the board tax cut 1.03
Accelerated depreciation 0.27
Permanent tax cuts
Extend alternative minimum tax patch 0.48
Make Bush income tax cuts permanent 0.29
Make dividend and capital gains tax cuts permanent 0.37
Cut in corporate tax rate 0.30
Spending Increases
Extending UI benefits 1.64
Temporary increase in food stamps 1.73
General aid to state governments 1.36
Increased infrastructure spending 1.59
(source: moody's)
And you are accusing me of not looking at all the angles.
Everyone one of the tax "cuts" you mentioned will cause an increase in the national debt. This in turn will have the effect of increasing long term interest rates(that's what govn't debt does). While this may not be called a tax it is money out of people's pockets just the same.
Even worse, it is money out of the pockets of people who need to borrow(read those at the bottom of the income chain). Those at the top of the income chain do not borrow they lend. We call it "investing".
The only cure for debt is what most individuals are now figure out. Less spending, more savings.
If we wanted to have a REAL, LASTING, LONGTERM, plan for our problems we would force the government to spend less not more.
Top of my list of ways to VERY quickly save LOTS of money.
Iraq war - DELETE
Korea - DELETE
Germany, Japan, DHS, CIA, DELETE.
I addition to costing us hard money these thing have lots of secondary but no less real costs.
I could go on but you get the point.
and before you discount moody's findings without any actual thought, consider their implications
BTW before you start taking Moody's word for things you should go look at the ratings they gave even just one year ago to a lot of the financial instruments that have now gone bust.
Rating agencies are not checks in the system. They are a part of it. Therefor their opinion will always be biased towards preserving the current economic order insofar as it is possible.
yet, there numbers on the stimulus package seem pretty spot-on
i also agree with your list of cost savings. military spending and the cost of our empire is drowning us all in debt.
but, other than that we are just going to have to disagree about everything else
interesting--though, admittedly not necessarily relevant to some of your concerns--read:
The Anti-Stimulus Crowd: The Fear of Success
by Dean Baker
At least some Republicans are starting to muster an anti-stimulus drive, claiming that President-elect Obama's package will not help the economy. Their drive is centered on what they claim is a careful rereading of the history of the New Deal. According to their account, President Roosevelt's policies actually lengthened the Great Depression.
In their story, we would have been better off if we just left the market to adjust by itself. New Deal programs that directly employed people, or in other ways supported living standards, created an uncertain investment climate. They claim that this uncertainty slowed the process of market adjustment that was necessary for returning to high levels of employment.
The Wagner Act, which created the legal framework for the union organizing drives of the era, stands out as being especially pernicious in their story. The Fair Labor Standards Act, which created the 40-hour workweek and established the first national minimum wage, also gets singled out for criticism. In this new reading of history, what most people consider the great successes of the New Deal simply worsened the Great Depression.
In reality, any careful reading showed that the New Deal policies substantially ameliorated the effects of the Great Depression for tens of millions of people. The major economic failing of the New Deal was that President Roosevelt was not prepared to push the policies as far as necessary to fully lift the economy out of the Great Depression.
Roosevelt was too worried about the whining of the anti-stimulus crowd that he confronted. He remained concerned about balancing the budget when the proper goal of fiscal policy should have been large deficits to stimulate the economy. Roosevelt's policies substantially reduced the unemployment rate from the 25 percent peak when he first took office, but they did not get the unemployment rate back into single digits.
It took the enormous public spending associated with World War II to fully lift the economy out of the depression. The lesson that economists take away from this experience is that we should be prepared to run very large deficits in order to give the economy a sufficient boost to generate self-sustaining growth.
However, from the standpoint of Republicans, the more ominous lesson of the New Deal policies is that it left the Democrats firmly in power for more than 20 years. The Republicans did not regain the White House until 1952, 20 years after President Roosevelt was first elected.
Imagine how terrifying the prospect of 20 years of Democratic presidencies must be for the current generation of Republican leaders. This would mean that they would not retake the White House until 2028, just 20 years before the Social Security trust fund is first projected to face a shortfall.
In 2028, Newt Gingrich will be 85 years old; Mitt Romney will be 81; Mike Huckabee will be 73 and Senator McCain will be 98. Even Sarah Palin will be a less than youthful 64. In short, if President-elect Obama is allowed to carry through with his stimulus package and the rest of his ambitious domestic agenda, most of current leadership of the Republican Party can expect to spend the rest of their political career in the political wilderness, far removed from the centers of power.
For this reason, the Republicans can be expected to adopt a strategy aimed at delaying and diluting the stimulus. We can expect their leaders to find every conceivable argument to slow down the spending that the economy desperately needs right now to prevent further job loss. While some of their concerns may be legitimate - we should all support efforts to restrain wasteful pork barrel spending and rein in corruption - these concerns should not be the basis for obstructing stimulus. The public should be careful to distinguish legitimate concerns from simple delaying tactics.
In short, we should realize that the main concern of some of those opposed to stimulus may not be that it will fail, but rather that it will succeed. Most of us don't have the same set of concerns.
the baker article, and my inclusion thereof, was NOT intended to suggest you agree with nor are like those baker calls out
just thought it was somewhat apropos to the convo
not a problem. I didn't think you were going there.
I actually do agree with *some* parts of the article but will give the Reps(and Baker) exactly zero credit for taking that tact. If it was Bush putting up the stimulus package most of them would be all for it. And like I said, while I don't think the stimulus package will help, it is decidedly less insane or as craven as Bush's response so far.
I'll leave you with one of my favorite quotes from my favorite founding father.
Thomas Jefferson: "If the American people ever allow the banking system to control their money, first by inflation, then by deflation; their children will one day wake up homeless on the continent their fathers conquered."
Fractional reserve lending is the root problem, w/o it a govn't would not even be able to amass so much debt. The rest is details and rhetoric. I'm not big on christian ideals en such but they had it right on usury thousands of years ago.
meant to say to do agree with *some* parts of Rep argument. Just wont give them any credit or taking that side.
understood
thanks for a good back and forth, i am off to do the friday night thing...
lots of good material to think about
not really here too much at C&L, but over at dailykos, holy shit, they have been obamatized
great progressive sites to visit, but come back--and post--to C&L:
alternet.org
commondreams.com
counterpunch.com
tompaine.com
truthout.org
leftbusinessobserver.com
among many others
(you might know and visit these sites already, if so, ignore this post)
and the sites you mention are terrific!
by no means an exhaustive list--just the daily read
and i am always open for other suggestions, other sites, other portals....
thanx
a couple of those sites would fall under my list of notable exceptions. tompaine.com and alternet.com. Some of the rest I will check out.
I like the emphasis on infrastructure projects in Obama's plan and I don't mind some tax cuts if they're aimed at the middle class but what's the rush? Obama sounds just like Bush and Paulson saying congress needs to pass his plan now or the sky will fall on us.
Citi agrees to let judges alter mortgages; Makes deal with key Senators, who hope other lenders will follow suit
close look at how government is going to stimulate the economy, I suggest this:
Here Piggy Piggy
http://www.scribd.com/doc/2429147/Pig-Book-20...
"... the Obama team has also been considering how to use the second $350 billion..."
i don't think duby plans to share any of that... not really...
Bush Prepares to Ask for Second Tranche of Bailout Funds
If Congress Fails to Approve Request, Administration May Use Veto Power
By David Cho and Lori Montgomery
Washington Post Staff Writers
Friday, January 9, 2009; 6:35 PM
In a move being coordinated with the Obama transition team, senior Bush administration officials are preparing to ask lawmakers for the second half of the $700 billion financial rescue package, despite intense opposition in Congress, sources familiar with the matter said.
[...]
but it seems obama thinks otherwise...
good grief...
maybe barney will help... but i can't read it now... not yet...
Frank Releases Proposal for Rescue Fund Restrictions
Bloomberg - 1 hour ago
By Alison Vekshin Jan. 9 (Bloomberg) -- House Financial Services Committee Chairman Barney Frank today proposed legislation setting terms for releasing the remaining $350 billion of financial-rescue funds, seeking as much as $100 billion to stem ...
I don't hear Michelle complaining.
Their opposition to his suggestion of tax breaks tied directly to people getting hired. They let Bush just give those away for free, and now they're trying to make it look like Obama's the one being irresponsible. F*ck 'em. Same complicit racist double-standard found in the GOP shills.
I think we need the stimulus plan, and it needs to be very large, but Congress needs to make sure that it continues providing benefits in the long term, not just a shot in the arm for the short term.
The infrastructure spending will help keep the economy growing in the long term, but it would also be helpful if Congress could find a way to encourage businesses to invest in infrastructure as well. Possibly they could do this by making sure there are fewer unnecessary regulations that dissuade businesses from making those investments. There seem to be many businesses that have money to invest, but not as many that are actively investing in any forward-thinking enterprise. Hopefully Congress can find ways to get that money flowing.
The tax cuts on businesses would certainly be helpful, especially on small businesses or businesses in sectors where there is potential for significant job creation. We need the businesses like that to be able to resume their traditional role as the engine of our economy. The government can certainly assist the process getting started, but businesses will actually provide the growth.
I think the aid to the state governments is also needed, because the programs that the state governments support are needed for sustained growth. For instance, the state governments support schools and public workforce training programs. It is important to make sure both of those programs survive to make sure we are able to provide workers for whichever sectors of the economy are providing the jobs.
I recently saw that the Friends of the U.S. Chamber of Commerce is working with Congress to make sure that they take these things into account when they are designing the stimulus package. They have a petition that I encourage everyone to sign to make sure Congress knows that we want the economy fixed - but we want it fixed for the long-term - http://www.friendsoftheuschamber.com/takeacti...
We are going to see real quick whether Obama will be what we hoped for or a big let down ( and a failure ) in which case I want my money back , a refund . If Obama is going to kiss Republican butt , compromise with them and seek a green light from them for every thing he does we are SOL folks . You don't compromise with or make deals with the devil unless you are willing to compromise your integrity and your principles . These "devils" want to see Obama fail so they can regain power , they don't give one damn about the country or the people , they've absolutely proven that and they hate Democracy. I sure hope our new President has some back bone and toughness and isn't afraid to hit them low if he has to , this is the real world .
Congresstional democrats are useing there balls only under a democrat president.
The worst part is I agree with them Obama seems way to willing to please the gop while shunning his own party. After so many year of GOP pushing everyone around they need to be shown they are not in control . Last thing GOPs need is to be pandered to which Obama seems willing to do.
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