Another Occupy-Like Moment Arriving?

[IMPress Polly]

(OR: WHY I'M PRO-SEQUESTER)

This link contains an interview with President Obama's former senior adviser David Axelrod (http://www.nbcnews.com/id/26315908/#51500389) wherein he tries (a few times) to explain why progressives have to swallow significant cuts to Social Security, Medicare, and Medicaid -- the three main entitlement programs -- as the president's new budget proposal suggests. As you can see, Rachel's not buying what he's selling. Neither am I. I furthermore agree with Rachel's assessment that, as she succinctly puts it, "if really what [President Obama] believes in is Social Security benefit cuts, he's gonna feel the ground beneath his feet give way". Or, in other words, his social base of support will rebel, perhaps within the Democratic Party framework or perhaps outside the Democratic Party framework like they did in 2011 when the president was negotiating a similar agreement that included similar cuts to the ones he's proposing in this new budget. Fortunately, those negotiations with the Republicans failed and we got the sequester deal instead. Since then there have emerged two main camps of thought within the American left on the subject, which I will respectively call the Paul Krugman camp on the one hand and the Howard Dean camp on the other. Paul Krugman is a famous economist and writer for the New York Times who has made the case that the sequester should simply be cancelled so that we can go back to the pre-2011 state of affairs budget-wise and avoid hurting the poor and stalling our economic recovery from the recent Great Recession. That political line is supported by the Congressional Progressive Caucus and I understand why. But it has no chance of winning out in the current Washington atmosphere. Howard Dean is a former governor of my native Vermont and the previous chair of the Democratic National Committee. It was his presidential bid against George W. Bush during the 2004 election cycle that seemed to shift the political center of gravity in the Democratic Party a little bit back to the left again, whereas the directionality had been moving rightward previous to that. Anyway, he, in contrast to Krugman, has embraced the sequester cuts as the best viable option we (progressives) have in the current situation. He points out that fully half of the budget cuts therein are military spending cuts that we'll never squeeze out of the Republican Party in any other deal or framework and that the sequester, while hurting the poor to a degree unfortunately, at least doesn't include any cuts to the likes of Social Security and Medicare, whereas any "grand bargain" with the Republicans to replace the sequester cuts would. I'm in the Dean camp. The Krugman camp is naive and not even that progressive in their desire to primarily spare the military a significant budget reduction. American progressives should concern themselves not only with the plight of Americans, but of humanity. That which prevents the U.S. military from having to close any foreign bases and thus allows this country to retain the largest possible empire is NOT in the larger interests of humanity! And on behalf of that broader humanity that's so often subject to American imperialism, I get pretty offended when I see the president touring the country with military personnel standing in the background, using them as his big argument against continuing the sequester cuts. Fully the majority of the sequester cuts come out of the military, the prison system (forcing the system to release many non-violent offenders, like undocumented migrants for example), and border patrols...yet somehow so much of the American left is willing to oppose the whole package in favor of an alternative that has no political chance at all.

Well anyhow, that's why I think the sequester is the best deal we're gonna get. It's certainly better than what the president is proposing in his new budget, which offends the ENTIRE left, including both of the aforementioned progressive camps. Groups ranging from the AFL-CIO (the largest labor federation in the United States) to the National Organization for Women and lots in-between have out opposed to any cuts to the main entitlement programs. Progressive Massachusetts Senator Elizabeth Warren and my Senator Bernie Sanders have come out opposed to them as well. Progressive groups are already threatening to primary any member of Congress who votes in favor of the president's new budget proposal. I think this could be the beginning of another 2011-like rebellion on the part of the president's base of support. It's a situation to watch closely.

EDIT:

As an added comment, note that when President Bush did the same thing after he won re-election -- when he started taking the support of his social base for granted -- they rebelled. They organized the Minutemen in protest of his announcement of plans to pursue immigration reform namely. And after the Bush-aligned party establishment camp saw defeat in the 2008 election cycle, they formed the Tea Party movement, which mobilized their ranks to successfully retake control of the Congress in 2010. I feel that this is a rule that applies on both sides of the political aisle. When you take your base for granted, they might just revolt in protest and thereby shift the center of gravity in your party in a more ideologically clean direction.

In that connection, here was Rachel's lead-up to the linked interview above. It highlights the very example I just did: the case of George W. Bush from 2005. (http://www.nbcnews.com/id/26315908/#51500288)

[Common]

I fully understand your post and I agree with your description of the two schools of thought, krugman, Dean.
The left needs to go to the center and so does the right. The left right extremes are what polarize our country and it hurts EVERYONE, top to bottom. The far left have their wish list the far right has theirs and theres a 100 foot wall between the two that neither can climb. LETS STOP THE MADNESS :)
You left out one demographic and maybe the most important one that opposes Obamas budget and thats senior citizens. Polls indicate a full 68% totally oppose Obamas chained CPI and another poll indicates him losing 64% of independent voter support for the rest of his agenda.

[Chris]

"This link contains an interview with President Obama's former senior adviser David Axelrod "

That link goes to Maddow's blog.


Not sure what's to discuss about the sequester, it's already law as agreed upon during the fiscal cliff crisis. Besides, it does not cut spending at all, it only reduces the rate of increased spending in the future, and that only by 1-2%.

[Chris]

Samuelson on Obama’s lazy budget (http://www.washingtonpost.com/opinions/robert-samuelson-obamas-lazy-budget/2013/04/11/9956e56a-a2c5-11e2-9c03-6952ff305f35_story.html):


There is something profoundly timid about President Obama’s proposed $3.8 trillion budget for 2014. Stripped of boasts about “investments” for the future and a responsible “balance” between deficit reduction and economic growth, the budget is a status-quo document. It lets existing trends and policies run their course, meaning that Obama would allow higher spending on the elderly to overwhelm most other government programs. This is not “liberal” or “conservative” so much as politically expedient and lazy.

...<snip>...

So Obama has taken a pass. He has chosen the lazy way out. He’s evading basic choices while claiming he’s bold and brave. A more charitable interpretation is that he’s focusing his political talents on more promising causes (gun control, immigration). Either way, government is slowly growing larger while — in many basic functions — it’s being strangled. This paradox, it seems, will be Obama’s questionable legacy.

[Greenridgeman]

Samuelson on Obama’s lazy budget (http://www.washingtonpost.com/opinions/robert-samuelson-obamas-lazy-budget/2013/04/11/9956e56a-a2c5-11e2-9c03-6952ff305f35_story.html):



Obama told us he was prone to laziness before American Idol Nation elected him.

It is one of the few true things I have ever known him to say.

Thank God his laziness and arrogance caused him to dither away the two years his party had both Houses of Congress.

[Peter1469]

The first link worked for me. The second one did not.

But as Chris said, the sequester doesn't actually cut spending; it cuts growth. Government agencies planned a 5 year budget and now that budget is ~2% smaller, but it is still larger than last year.

Over time (maybe 10 yrs) I would cut DoD by 30-40%. Let other nations do something for a change. I would also cut most other agencies and eliminate some altogether.

[IMPress Polly]

I tested both links again just now and they both worked for me. *shrugs*


Peter wrote:
But as Chris said, the sequester doesn't actually cut spending; it cuts growth. Government agencies planned a 5 year budget and now that budget is ~2% smaller, but it is still larger than last year.

OF COURSE the government's budget grows annually! It has to just to keep up with inflation! Now I understand what your aim is here: whereas the two parties are talking about deficit reduction, you're talking about debt reduction. Debt reduction is NOT a good idea at this time, and especially not in as far as it comes on the backs of poor and working people. To start cutting down on the actual debt would require something like $9 trillion worth of inflation-adjusted reductions in government spending rates. That's like four times what the sequester will cut out of the economy and even the sequester will be sufficient to likely stall the reduction in our unemployment rate for the year. Imagine what a cut of $9 trillion over a comparable period or shorter would do! We're talking a recession worse than the recent Great Recession!

[Chris]

I tested both links again just now and they both worked for me. *shrugs*



OF COURSE the government's budget grows annually! It has to just to keep up with inflation! Now I understand what your aim is here: whereas the two parties are talking about deficit reduction, you're talking about debt reduction. Debt reduction is NOT a good idea at this time, and especially not in as far as it comes on the backs of poor and working people. To start cutting down on the actual debt would require something like $9 trillion worth of inflation-adjusted reductions in government spending rates. That's like four times what the sequester will cut out of the economy and even the sequester will be sufficient to likely stall the reduction in our unemployment rate for the year. Imagine what a cut of $9 trillion over a comparable period or shorter would do! We're talking a recession worse than the recent Great Recession!


OF COURSE the government's budget grows annually! It has to just to keep up with inflation!

Why "OF COURSE"? Why does it have to keep up with inflation?


Debt reduction is NOT a good idea at this time

Why?

Examine your assumptions.

[IMPress Polly]

Chris:

Re-read post #7. I already answered your questions. (Refresher hint: catastrophic recession.)

[Chris]

Chris:

Re-read post #7. I already answered your questions. (Refresher hint: catastrophic recession.)

"catastrophic recession" is based on your assumptions. What I'm asking for is the basis for your assumptions.

[zelmo1234]

Chris:

Re-read post #7. I already answered your questions. (Refresher hint: catastrophic recession.)

The truth is that if we did not keep up this rate of governemnt spending we would in fact slip back into recession while the ecnomy worked its way to the true bottom it was never allowed to hit!

It would not be catastrophic, but would in fact hurt some areas of the country very dependent on this spending.

HOWEVER to continue this rate of spending will in fact usher in a financial collapse of the system, soemwhre in the 20 to 22 trillion dollar debt range, whice will in fact be the next depression! This is the Reset button in which many on the left are hoping for a true socialism and on the right hoping for a retrun to personel responsibility.

And it will likely come with a conflict for the countries soul! the spending is the biggest threat to national security.

So lets look at the Big 3 entitlments. Socail Security, Medicare and Medicaid, and I guess you could add Abamacare as the 4th.

The easy one is the one not yet started and the onle that is a total disaster. obamacare should be repealed and free market solutions should be inacted ASAP and given 5 years to see what the true uninsuraced rate wiould be.

Social Security Is a paromise of poverty and could be a promise of prosperity and the vechical used to infact pay off the debt if it was not for the liberals needing dependency to insure their power base!

Medicare and medicaid, will in fact eat the entire budget if left unchecked, So a new system needs to be found!

So cuts are coming, we only need to decide if they will be gradual or complete! the choice is up to us!

[Peter1469]

I tested both links again just now and they both worked for me. *shrugs*



OF COURSE the government's budget grows annually! It has to just to keep up with inflation! Now I understand what your aim is here: whereas the two parties are talking about deficit reduction, you're talking about debt reduction. Debt reduction is NOT a good idea at this time, and especially not in as far as it comes on the backs of poor and working people. To start cutting down on the actual debt would require something like $9 trillion worth of inflation-adjusted reductions in government spending rates. That's like four times what the sequester will cut out of the economy and even the sequester will be sufficient to likely stall the reduction in our unemployment rate for the year. Imagine what a cut of $9 trillion over a comparable period or shorter would do! We're talking a recession worse than the recent Great Recession!


I don't think that we will even pay back the debt. I don't think that it is possible. But I also don't want to keep adding to it- certainly at such high levels.

During the last decade we have increased government spending per year much faster that ever before (other than the major wars). We can't except to keep expanding it forever.

And cutting government can make way for an economic boom that will help the poor people much more than endless government programs.

[Peter1469]

A recession, if the government doesn't meddle too much, is good in that it destroys poor performing ventures and makes way for better more sustainable investment / ventures. We you try to use the government to keep the poor performers around, you end up with what we have seen- little to no growth. And weak institutions that can fail at any time.

[IMPress Polly]

Peter wrote:
During the last decade we have increased government spending per year much faster that ever before (other than the major wars). We can't except to keep expanding it forever.

The key is have real assets at the bottom of all the debt, not just wind. It's for that reason that we need things like infrastructure projects and our own sustainable, independent energy supply. And we need to crack down on financial speculation. It would be nice if a certain political party allowed us to still do these things...


A recession, if the government doesn't meddle too much, is good in that it destroys poor performing ventures and makes way for better more sustainable investment / ventures.

"A recession...is good..."

Right there is the kind of mentality that very few people will agree with. Recessions have very real human consequences. They destroy a lot more than just capitalists who behave badly. (And quite frankly, capitalists who behave badly benefited from the last one. They were the only ones who did too.)

[Peter1469]

The key is have real assets at the bottom of all the debt, not just wind. It's for that reason that we need things like infrastructure projects and our own sustainable, independent energy supply. And we need to crack down on financial speculation. It would be nice if a certain political party allowed us to still do these things...



"A recession...is good..."

Right there is the kind of mentality that very few people will agree with. Recessions have very real human consequences. They destroy a lot more than just capitalists who behave badly. (And quite frankly, capitalists who behave badly benefited from the last one. They were the only ones who did too.)

That is because the government didn't allow the market to work- instead it took tax dollars (or rather the promise of future tax dollars) and bailed out those failing institutions. And those massive banking institutions were not creatures of capitalism, or the free market. More like creatures of corporatism.

I am not so sure how much in our ~$17T debt is of real value. A lot of it is malinvestment.

I am for infrastructure spending, so long as it is needed and honest, and not just a way to pay off friends and campaign contributors. Also I am for energy independence. I link to this book a lot:

http://www.energyvictory.net/energy_victory_tour.htm

[Greenridgeman]

The key is have real assets at the bottom of all the debt, not just wind. It's for that reason that we need things like infrastructure projects and our own sustainable, independent energy supply. And we need to crack down on financial speculation. It would be nice if a certain political party allowed us to still do these things...



"A recession...is good..."

Right there is the kind of mentality that very few people will agree with. Recessions have very real human consequences. They destroy a lot more than just capitalists who behave badly. (And quite frankly, capitalists who behave badly benefited from the last one. They were the only ones who did too.)

"It's for that reason that we need things like infrastructure projects and our own sustainable, independent energy supply. And we need to crack down on financial speculation"


Same song and dance Obama waltzed in with, meanwhile infrastructure crumbles, blue state elitists refuse to look at wind farms Corpus Christi, Texas style, while feds refuse to use our own energy until we do develop alternatives, and the biggest financial speculator on the planet is Ben Bernanke and his money machine.

[KC]

Loss in markets is healthy. Without it there is no reason to consider the consequences of our actions. The absence of that risk is the cause of the current recession. Wall St and huge financial operations knew they had friends in Washington to cover them if their actions didn't work out for the better, so their was no incentive for prudence. Had the government simply let them fail there would have been more suffering, but the entire banking system would be fundamentally changed for the better.

[simpsonofpg]

Obama doesn't want votes, a dictator doesn't need them. I am a senior and Alexrod is a Chicago trained puke.

[lynn]

For 2012 federal Dept held by the public consists of - Treasury Bills, Treasury Notes, and Treasury Bonds for a total amount of 11,269,586 (trillion) with 2.1% interest in the amount of 245 billion. 2.8 trillion in Treasury Bonds are all the years of surpluses that occurred from social security and disability trust funds, the Medicare Part A and B funds and many other trust funds.

We are experiencing deficits for Medicare and the disability fund but that is because of the recession that is lasting much longer then expected. Total tax revenue is not enough to cover these programs. One would think that the government could redeem those Bonds to make up the difference but in order to do that it requires cash to redeem those bonds.

The only way to cash in those bonds is to raise taxes, reduce government spending or both. That is why Obama is pushing these new cuts to seniors benefits. Why he is expanding Medicaid is the real question everyone should be asking right now. It doesn't make any sense when our economy cannot afford healthcare for the poor or the elderly right now.

Our government should have been honest with its citizens by stating that they could not make good on those IOU's without making us all pay again on those funds that has already been paid for by the previous generations of tax payers. They should have made it law that any surpluses be immediately applied to reduce the deficit for that year. As it is now those IOU treasury notes are included in the public dept.

[IMPress Polly]

KC wrote:
Loss in markets is healthy.

So how about millions of job losses on the part of innocent people? Are those healthy too?


Loss in markets is healthy. Without it there is no reason to consider the consequences of our actions. The absence of that risk is the cause of the current recession.

That argument doesn't even make sense. It's obvious that the Great Recession, as we aptly call it, was caused by the same thing all recessions are: by, as Marx put such things, "a feverish attempt to make money without the intervention of the process of production." In other words, wild financial speculation not backed by more than wind. This is the natural behavior of the financial sector of the economy in as far as they are for-profit institutions. It is accordingly that economic crises are routine under the capitalist system. What this last recession, with its unusual severity, proves, if anything, is that these crises are made worse when there is a lack of central regulation of the financial institutions. (I'm above all talking about the repeal of the Glass-Steagall Act of course.) Now we should have been able to turn to our history books for a review of the comparatively more laissez-faire 19th century (when the average recession was a depression) or the Great Depression to have seen that already, but our lawmakers are woefully quick to forget about these things, particularly when they're heavily invested on Wall Street themselves. Relative stability in the financial markets can only be assured by substantial regulation of their natural excesses. And the possibility that the financial markets will not win out legislatively and get these regulations destroyed (as they already largely have) can in turn only be assured by their nationalization. This is the case that I make for the nationalization of America's banking institutions.

[zelmo1234]

So Miss Polly?

The policy of the government that forced banks to make loans to people that were highly unlikely to be able to pay them back, in order to have access to federal banking funds (which banks use all the time for short term transfers) Had nothing to do with it!

Why do you think that they were so quick to bail the banks out! Which was totally unconstitutional in my opnion!

The policies of the equity in housing act are still in place today and one of the reasons that it is so hard to get a loan!

The policies of the governemnt like in the Great Depression have lessoned the pain, but prolonged it as well! And if we keep printing money it will prolong and deepen the pain of the current economic crisis. What do your history book tell you about nations that try and print there way out of dept?

We still have the pending collapse of Fannie and Freddie who are broke but hidden fromt he public by a democratic party that refuses to allow an audit of these institutions!

Had we not bailed out the banks, the blame would ahve gone onto congress and policies very much supported by the democratic party and progressive republicans. They even as later as 2007 looked the publiic in the eye and those them that the sub prime mortgage market was in great shape and nothing to worry about! eben called those looking to reform it racist!

But because of the bailout they were able to shif the story to the banks, and not congress and bad policy!

[Peter1469]

We should go back to the days where we had a two tiered finance structure. Banks that were regulated and had to play it safe with investor money- and in return would be protected by the government if things went wrong.

And financial institutions that were less regulated, had more risk, but much more potential profit. With no expectation of government bailout.