Insightfull sharing thank you... On 4/22/10, Azania Heritage <[email protected]> wrote: > This the type of neoliberalism uk & us wants our country to follow! > > ----Forwarded Message---- > From: [email protected] > To: [email protected] > Sent: Wed, 21 Apr 2010 16:35 EDT > Subject: The Big Fix (Hold on to your Wallets) > > The Big Fix (Hold on to your Wallets) > > By Robert L. Borosage > Co-Director of the Campaign for America's Future > Huffington Post > April 21, 2010 > > http://www.huffingtonpost.com/robert-l-borosage/the-big-fix-hold-on-to-yo_b_545986.html > > The drumbeat about deficits has reached deafening > levels. The president warns about "out of control" > spending. Fed Chair Ben Bernanke calls for bringing > deficits down. The opinion pages bristle with rants > about the U.S. turning into Greece, headed to default. > Next week, the first session of the president's > "National Commission on Fiscal Responsibility and > Reform" will convene. The next day, shamelessly, the > two co-chairs and the staff director (all committed > deficit hawks) will grace a forum sponsored by the > Peterson Foundation, established by Wall Street > billionaire Pete Peterson largely to gin up hysteria > about America's long term deficits. > > Premature Ejaculation > > This potion is being served long before its time. Sure, > deficits are big and the projections are scary. But the > economy is struggling to get out of a big hole. > Unemployment is still near 10%. Foreclosures are still > rising. Banks aren't lending; businesses aren't hiring. > Deficit spending is critical to what little growth > we've seen. > > The president and the Congress should be focused on > jobs, not deficits. Ironically, when pushed, most of > the purveyors of the hysteria agree. Bernanke admits we > shouldn't roll back the spending too soon, and is > keeping interest rates (for the banks) near zero. David > Walker, head of the Peterson Foundation, agrees > deficits might be larger in the short run to create > jobs and help get the economy going. But these cautions > can't be heard amid the clamor about deficits. > > The Elite's Big Fix > > Consider this another example of Naomi Klein's "shock > doctrine." Not wanting to let the crisis go to waste, > an elite consensus is congealing on how to bring the > deficits down. > > Call it the big fix. "Everything is on the table," > we're told. That's code for a trade-off. Republicans > accept tax increases; Democrats accept spending cuts. > > But the fix is in the details. On the revenue side, the > favored vehicle is a value added tax (VAT). The VAT is > essentially a hidden sales tax, levied at each stage of > a product's production. Conservatives, who, unlike Dick > Cheney, believe deficits matter, accept it because it > is regressive, taxing spending, not investment or > wealth. Liberals accept it because it is hidden, and > could generate a lot of revenue. > > The debate has already begun around the VAT. John > McCain, in his new guise as conservative partisan, > brought a resolution to the Senate denouncing the VAT > as a "massive tax increase that will cripple families > on fixed income." Eighty-five Senators voted for the > non-binding resolution, including all six members of > the President's Commission. The administration has > since denied that it has any designs on a VAT. But > these protestations are simply reflections on how > serious the move towards a VAT has become. > > On the spending side, cuts in Social Security, Medicare > and domestic spending are targeted. The Republican co- > chair of the President's Commission, former Senator > Alan Simpson is an infamous scourge of Social Security. > The Democratic co-chair Erskine Bowles favored the > Clinton effort to privatize it. The deal is > foreshadowed by the president's budget which calls for > a three year freeze on domestic discretionary spending, > and "pay-go" limits on entitlements, insisting that any > increase in entitlements be paid for. > > All this is wrapped in gauzy poll designed packaging. A > VAT will sold as a corporate tax reform. Entitlements, > we're told, must be brought under control as the > boomers age. Domestic spending is rife with waste, > fraud and abuse. > > Stuff and Nonsense > > There's only one problem with this consensus -- it is > both wrong-headed and dangerous. It ignores how we got > into this hole, is blind to the challenges the country > faces, and offends the values that made this country > great. Here's a little common sense: > > 1. Ignore False Prophets > > As Dean Baker has pointed out, the elite deficit agenda > is being peddled by the same folks that profited from > the bubble bust economy that drove us over the cliff. > Wall Street moguls Pete Peterson and Robert Rubin, > leaders of the effort, have preached against deficits > for years, arguing that they would eventually lead to > recession. They never uttered a word about the housing > bubble, the financial casino, the excesses and frauds > of Wall Street that actually blew up the economy. They > made a lot of money along the way. But their profits > don't make them sound prophets. > > 2. Get the Question Right First > > The question isn't how we raise taxes, cut spending and > balance the budget. The question is how we return to an > economy of full employment with a broad and prosperous > middle class. If we create a prosperous and growing > economy, wages will go up, revenues will go up, > spending on unemployment and misery will go down, and > budgets will come into greater balance. Growth is an > essential precondition to sound finances. We last had > debt of this size relative to the economy at the end of > World War II. We invested in the GI Bill and educated a > generation. We built the interstate highways. We > transferred war industries to private companies. We > launched the Marshall Plan, and created markets for > products in Europe. And we grew our way out of the debt > burdens over time, as we built the middle class society > that was America's pride. > > 3. Wrong diagnosis, wrong remedy > > To understand what remedy is, you've got to have a > clear view of what the problems are. The irony of the > elite consensus is that in every particular, it ignores > the problems we face, and calls for remedies that would > make things worse. > > Consider: > > We don't have an "entitlements problem." Social > Security is in surplus and, if the economy grows and > workers capture a fair share of the productivity they > help generate, Social Security will be in surplus as > far as the eye can see. > > We also don't have a "Medicare problem." We have a > broken health care system. The source of virtually the > entire long term projected deficits comes from soaring > health care costs. We're spending 50% more than other > industrial countries per capita and getting worse > results in terms of good health. The new health care > reform does offer some hope of reducing the rate of > cost increase. A single payer system -- extending > Medicare to all - would do far more. But the problem > isn't entitlements or greedy geezers, but a broken > health care system.. Cutting Medicare and Social > Security won't solve that problem. > > Consider: > > We now suffer Gilded Age inequality. The wealthiest 1% > of Americans not only pockets 21% percent of the > national income; they hold more than one-third of the > privately held wealth. Plus they've enjoyed the largest > tax cuts over the last decades. IRS figures show that > the wealthiest 400 Americans -- averaging over $263 > million in income in 2006 -- now pay taxes at a rate > (17%) lower than their chauffeurs. > > Yet the elite consensus is pushing a VAT that will > burden the working and middle class far more than the > wealthy. Instead we should be talking about increasing > top end tax rates, taxing unearned income at the same > rate as earned income (last done when Reagan was > president), and cracking down on tax avoidance schemes, > levying a speculation tax on short-term financial > speculation, reviving the estate tax. And of course, we > need to set a "price on carbon," a regressive tax no > doubt, but one that at least is focused on taxing > spending on what we need to reduce. > > Consider: > > On the spending side, we spend almost as much on the > military as the rest of the world combined. We spend > more to defend South Korea than the South Koreans do. > We police the world and maintain an empire over some > 750 bases. And, the military is by far the largest > cesspool of waste, fraud and abuse in government. The > Defense Department's books are in such disarray that > none of the services can be audited, much less pass an > audit. > > At the same time, we have a debilitating domestic > public investment deficit that is rapidly getting > worse. As the president has said, we need to build a > new foundation for our economy. And that requires > investing in education and training so our children get > the best education in the world; investing in research > and development so we remain on the cutting edge of > invention and science; building a 21st Century > infrastructure - from a smart electric grid, to fast > trains, cutting edge broadband, and renewable energy. > And we've got to rebuild a basic infrastructure - from > schools to sewers to bridges - that is aged and > literally falling apart. Sure, if the Congress is ready > to take on entrenched interests, we can cut a lot of > fat out of domestic spending (consider subsidies for > Big Oil, Big Agra, and Big Pharma for starters), but in > the end we should be spending more, not less on vital > domestic investments. > > So it makes no sense at all to focus on domestic > spending cuts, and leave the military off the table. > > Beware Bipartisan Blight > > Most Americans want the two parties to work together to > solve problems. But when the parties come together to > do something big, Americans should be particularly > vigilant. Too often, that reflects a strong elite > consensus, willing and able to purchase support on both > sides of the aisle. > > The elite consensus described above already has a lot > of momentum and money behind it. You'll see publicists > from AEI on the corporate right joining those from the > Center for American Progress, on the center-left. > Clinton's former Treasury Secretary Robert Rubin > joining Nixon's former Commerce Secretary Pete > Peterson. Editorial boards will echo established > authority. > > But trust your common sense. The reality is that they > have it wrong. If we follow their advice now, we're > likely to suffer a renewed recession. And their > prescriptions will make America more unequal and less > secure. We'll continue to squander resources across the > world, while failing to build a sound foundation for > the future at home. America's broad middle class, the > pride of our democracy, will continue its decline. And > our politics and our lives will get nastier and more > brutish. > ________________ > > This post is part of the two-week long Virtual Summit > on Fiscal and Economic Responsibility for People Who > Did Not Wreck the Economy,, hosted by Campaign for > America's Future. > > _____________________________________________ > > Portside aims to provide material of interest > to people on the left that will help them to > interpret the world and to change it. > > Submit via email: [email protected] > Submit via the Web: portside.org/submit > Frequently asked questions: portside.org/faq > Subscribe: portside.org/subscribe > Unsubscribe: portside.org/unsubscribe > Account assistance: portside.org/contact > Search the archives: portside.org/archive >
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