Something needs to be done about our long-term structural deficit. And any feasible political solution is going to be extremely sub-optimal. I get that. I don’t expect a bipartisan commission to issue recommendations that I think are fair, or logical, or even supportable. In the end, I have to weigh the harm caused by their recommendations against the harm of doing nothing. But Eskine Bowles is making me sick, and the co-chairman’s mark-up is so counterproductive that it makes it hard to see any difference between the parties. I mean, seriously, they want to increase income inequality and shovel even more money to the ultrarich? The Democratic chairman signed on for this?
So, so you think you can tell
Heaven from Hell,
Blue skys from pain.
Can you tell a green field
From a cold steel rail?
A smile from a veil?
Do you think you can tell?
When I look at Erskine Bowles and Alan Simpson, I don’t think I can tell. And as much as it pains me to say it, Obama is responsible for this travesty. Yeah, I am damn glad he is president, and there’s no one out there right now that I’d want to replace him with. I admire many things about him, and I am comforted that we have someone who is measured, smart, and analytical in the White House for a change. And I know what kind of tiger he is riding. The president is there for, at most, eight years. He or she cannot change the fundamental character of this country or it’s political architecture on a dime. But my patience is getting tried by the ongoing war machine, by the national security state, and by crap like this proposal from the Deficit Commission. In spite of this, I am even more impatient with the opposition and their refusal to acknowledge the threat of climate change.
And did they get you to trade
Your heros for ghosts?
Hot ashes for trees?
Hot air for a cool breeze?
Cold comfort for change?
And did you exchange
A walk on part in the war
For a lead role in a cage?
The country is off is la-la land, and our leaders are failing us. They are over there somewhere in an alternative universe. I wish they were here.
Boo, I would be interested to hear the reasons why you consider the recommendations to be unsupportable.
I read Paul Krugman’s column today bashing the recommendations as raising taxes for the middle class to give to the wealthy. As usual, I agree with much of what he says, but I noticed that he left out what seems like a key point–that one aspect of the proposal is to tax capital gains as normal income. This strikes me as highly redistributive, and possible compensation for the lowered top rates. So I’m not buying PK’s analysis until he explicitly takes this aspect of the proposal into account.
Yeah, so the capital gains tax is set to go back to 20%, right? It’s currently at 15%. They want to drop the top income rate to 23%. So, that’s a 3% hike in the capital gains tax in exchange for a 16% drop in the top bracket.
They want to slash the discretionary budget. Look at this:
A Democrat is opening with this plan?
Where do the rich feel any pain in this plan?
Boo:
You do understand that Bowles is presently getting paid as a member of the Board of Directors at Morgan Stanely, right? As to the rest of it, do you see now why certain people badmouthed the Catfood Commission from the outset? And need I remind you who was the only Senator to show up at the opening of Pete Peterson’s Hamilton Project? And that begs a question of why any Democrat would dare listen to anything that Pete Peterson says.
For the option 1 (the zero plan) the top rate is 24%. For option two (Wyden-Gregg) the top rate is 35%. Option one is unacceptable for me. Option two has some promise for me. In both options capital gains are taxed as regular income.
Most of the cuts to discretionary income are draconian. There are some good defense budget cuts recommendations in there. Like closing 1/3 of our overseass military bases. There are also some bad ones.
Capital gains should be taxed as ordinary income. It doesn’t increase investment, it increases market volatility because the gain is captured when the asset is sold. Low capital gains taxes encourage market churning just to get transactions; there is no guarantee that any investments will be made in the operation or expansion of real (non-financial) businesses.
Frankly, I’m of the opinion that capital gains should be taxes MORE than real income. Because of exactly the reasons you ascribe. Hell I’d even want to put an exemption in there – capital gains achieved due to the payout of a dividend could be taxes as regular income. Capital gains achieved due to the sale of stock are taxed at a higher rate than income.
I might even be open to having dividend payouts taxed at a lower rate than income just to encourage more people to focus on long-term investments where they’re going to hold onto the stock to make money off of it, instead of using the stock market like a dog track.
Taxing capital gains as ordinary income and having a financial transaction tax could do the same thing. A financial transfer tax of $0.000001 on dollar value would do a lot to stop the churning.
As for debt vs. bond instruments, the best remedy is actual shareholder rights by shareholder instead of share. And some way of having boards independent of the CEOs operating a management.
Of course, the elephant in the room is an actual national corporations law (instead of 50 more or less coordinated ones) that requires some responsibilities for its grant of the privilege of limiting liability of the individuals in the corporation. The current law and precedent for “piercing the veil” of limited liability in order to hold individuals accountable is too easily dodged.
Our structural deficit results from these things: two wars that are not underwritten by a sound financial plan of taxation and future defense cuts and that now seem unending; the Bush tax cuts that gave away trillions of dollars to Republican clients; and severe recession that has produced large unemployment (and thus reduced individual income tax revenue); a dooD niboR tax code that can’t deal with fiscal reality; unchecked healthcare and higher education price gouging; the effects of compound interest on the national debt. When there are surpluses, compound interest works to the taxpayers favor as the interest on the national debt is rapidly reduced.
The quickest way to deal with the deficit is to reduce unemployment rapidly through massive infrastructure investments that pay back in future savings to businesses and consumers. Republicans resist this because: they want Obama to fail so that the next President is a Republican with a Republican Congress that can continue the George W. Bush revolution; they want to drive a stake through the heart of Keynesian fiscal policy (although it proves to be wise in demand-loss recessions); they still want to drown the federal government in a bathtub so that states can relegislate discrimination and Christian moral codes.
The Republicans have proven that they do not want the national debt reduced. They opposed that idea when Al Gore ran on it in 2000. Republican clients invest in the national debt as their most secure and conservative investment (goldbugs notwithstanding).
You said it all.
Have I told you how much I despise the Republicans, even thoses with a D after names?
Not recently. How kind of you to mention that.
Well, despite the pendulum shifts of power between the two parties over the course of our history, despite progressive cultural development & progressive legislation, the direction we’re all traveling in has been the same: power makes power, wealth makes wealth. Someone has to lose so that someone else wins.
What seems to change most is the ways available for wealth & power to grow, like an active virus that mutates with circumstance.
The desire for a fundamental change in the rules of this game does seem wasted, when the rules are so very simple & everyone basically complies.
In that case, where true change comes from is anyone’s guess. It probably will not come from the MVPs ..
Power makes wealth makes authority/legitimacy.
Authority/legitimacy makes power makes wealth.
Wealth makes power makes authority/legitimacy.
Dominance in either the economic, political, or cultural structures of society easily greases the path to dominance in the other structures.
There was once a cultural brake on this process in the US through an elite that Chris Hedges calls the “liberal class”. Religious institutions were concerned about morals and the poor. Universities were concerned about education as liberation instead of education as tradition — a liberal education instead of classical education instead of today’s vocational education. Unions were still organizing more workers and industries instead of being in a defending diminishing gains in labor standards and benefits; union members were as identified with unions as they were with their church, unlike the separation resulting from the culture war between rank-and-file union members and the political choices of their unions. And media saw its role as reforming politics, busting trusts, and promoting liberal American values.
That movement originated in the 19th century women’s movement against saloons, brothels, and spouse abuse; 19th century socialism and labor organizing; moves toward universal education; the influence of muckraking journalism and the reaction to the excesses of muckraking. That movement was always partial and not total, but in the 1980s (or before) all of that collapsed. Churches turned from social action to piety and moralizing. Universities became Clark Kerr’s model of multiversities lunching at the trough of defense contracts, corporate contracts, and political mandates to “encourage economic development”. Unions purged anyone suspected of being socialist or communist from their leadership and ranks, some became captives of organized crime (it had to do with the large amount of money in union pension funds). And the media became owned by multi-media, national market conglomerates that were horizontally and vertically integrated. That is what Hedges calls the “corruption of the liberal class”.
Politically that class included Teddy Roosevelt, who busted the early trusts. In included the imperialist Woodrow Wilson, who put peace on the national agenda for the first time. And Franklin Roosevelt, who presided over the success of the labor movement. And Harry Truman who presided over the governmental recognition that segregation needed to end. And JFK who called for a new generational elite to fill the liberal class. And Lyndon Johnson, who put the nail in the coffin of desegregation, but not of racism. And Jimmy Carter, who put human rights at the center of US policy.
And the new generation that JFK called forth either deserted liberal values or stayed true to those liberal values and were excluded from elite positions. Again, this narrative is partial, not universal.
And the institutions involved — churches, universities, unions, the media — were independent of political commitments. They were the institutions of large-scale civil society. And local, neighborhood civil society. Rebuilding that restraining power starts with rebuilding a collapsed civil society. Bowling Alone captures the human spiritual cost of that collapse.
Contrary to what some few folks on blogs seem to believe, politics is not everything.
Thank you for your book rec!
This is the ‘low ball’ from just the Commissioners. Stop calling it a report from the commission. The commission has to have a super-duper-majority to do anything, so whatever recommendation THEY ACTUALLY MAKE will be immensely watered down. The commissioners and President know this and are just lowering expectations for people.
There will be an exchange of higher taxation for smaller reductions in services, AKA a compromise. Obama is a systems man and his commissioners have done us a great service by opening the conversation by getting all the controversy out on the table so we can all be shocked, take a breath, and then get into negotiations that soften the edges.
I’d love to see a VIABLE plan where all we do is tax rich folks an extra 5% or something and be done. But I can’t make that math work out.
There is one simple way that the commission can and likely will do to make a lot of this seem less draconian: push back the year in which we are required to return to balance by a year or two (at 5 right now).
Chillax. This is a good thing that is happening, so let’s try to be a constructive part of this conversation instead of screaming ‘nonstarter! nonstarter!’ from the get go. It’s not like the commissioners don’t share or know about these long standing opinions.
I have my limits.
I’ve heard from commission members that ‘some kind of report’ will be coming in early December.
Then we’ll all go home for holidays and discuss it with out families. Then we’ll all say we hate it. The commissioners will agree and go ahead with their negotiations and produce something that 14 of 18 of them can agree on. Then we’ll all say we hate it and we’ll all be ‘right’. But we’ll all understand that ‘something’ must be done and that perhaps the commission isn’t the worst way to go about it, having seen Congressional debate on HCR.
Hopefully there will be some miracle by which some of what they come up with can make it through the predictable hurricane of disapproval.
Seems even harder the HCR, but Obama got that done(ish).
“I mean, seriously, they want to increase income inequality and shovel even more money to the ultrarich? The Democratic chairman signed on for this? […] our leaders are failing us. They are over there somewhere in an alternative universe. I wish they were here.”
When i said this you told me I was “living in an alternative universe of permanent outrage and relentless negativity fostered and fueled by the blogosphere.”
I’ve been seeing this go on for years now. And maybe I’m more sensitive to it than others because i work in human services and see the budgets get cut year after year, no matter who’s in charge. and yeah, maybe it IS permanent outrage: maybe i won’t be so outraged when things aren’t so outrageous.
I now understand where you are coming from. I was RIFed from a human service and economic development agency at the beginning of the Reagan administration because of budget cuts.
It’s tough being a canary.
yes it is.
but now you know why i’m this way. i see the impact. not just of the latest outrages, but the impact of previous outrages, impacts that are never fixed.
I am trying to stay optimistic about our country, but I must admit it is difficult right now.