Budget Insanity

How can Republicans believe that they'll win votes for "courage" to stand up to the poor on behalf of all those victimized rich guys? Unlike the Beatles' song, they seem to think that money can buy them love.

If Fox and corporations can spin this, then we have wholly entered into a corporate-run nation, in which only the CEO's and billionaires count--perhaps GOP activists will gain perks like the apparatchiks in the Soviet CP, or the higher ups in Germany's NSDAP. The rest of us just better keep our heads low, and work hard for our diminishing crusts of bread.

Congressman Ryan, the GOP budget boss, proposes draconian cuts to services, eventual privatization of Medicare at the likely expense to future seniors, and then proposes cutting high-end tax rates by a whopping 10%, while closing middle class loopholes like the mortgage deduction.

So, let's be clear about what he's proposing: take from the poor and middle class, who are hurting from this recession. Take from them some of the services that are enabling them to survive, take from them the loopholes that make middle class tax rates affordable, take from the people who are being thrown out of work, losing their homes--or, know they are at risk for one or both. Take from them the assurance that in their old age, their health care will be there for them.

What does this great subtraction buy? The first thing is tax cuts for the rich and corporations (almost half of which avoid paying any taxes). What will that buy? More speculation, not more jobs. The rich are already sitting on trillions of dollars; they are not investing in job creation--except possibly in places like China or Brazil.

A large enough cut in government spending to reduce the size of government, could also buy a renewed recession--unless we're lucky enough to have a real recovery before it takes effect.

Which brings us to the budget impasse on the 2011 budget: Boehner and his cohorts demand huge cuts, but they also demand programmatic cuts, like defunding NPR and Planned Parenthood. The programmatic cuts won't cut the deficit, so their argument for them is disingenuous. But the huge cuts to states, to services, to health care, to programs could be a recessionary strong right fist to the economy, especially since the tax cuts to everyone have only enabled unemployment to be pushed back a little; the elite aren't investing their gains in jobs; they're just expecting their workers to work harder--without unions, of course.

So, Ryan and Boehner, and those behind them, want to shove us on the economic path built by the late Roman Empire, in which a few own virtually everything, and everyone else is a slave or a serf.

It weakened Rome, too.

Obama-Vision

Obama has called for cutting the deficit, freezing government salaries, and even, cutting corporate taxes (most large corporations don't pay any), joining a throng of right-wingers, and also the Conservatives who took power in the UK not so long ago. But look what's happening in the UK in the wake of huge cuts to the UK government budget.

"It's not enough just to slam on the spending brakes. Measures that cut spending but killed demand would actually make matters worse," said Sir Richard Lambert, outgoing director-general of the Confederation of British Industry. NYT 01/25/11. In the wake of the Conservative/Lib-Dem budget cuts, the UK suffered a decline in GDP in the fourth quarter, after several rising quarters.

The UK made cuts very much like the ones Rep. Ryan proposed in his Republican response to Obama's State of the Union address. How do you stimulate an economy by cutting the government's budget? Market fundamentalists claim government spending crowds out private spending, so if you cut the government, corporate energy will be "unleashed."

This doesn't make much sense right now. In a boom, excess government spending will crowd out private investment. We are not in a boom. While corporations are realizing fair profits--from overseas sales--and the banks are pocketing huge returns, few are hiring, even when there is increasing demand for their products or services; they are demanding more of their current employees, instead--overtime usually, mandatory unless a union is involved, and at regular, not overtime wages unless a union contract requires otherwise.

That's why we still have over 9.5% unemployment officially; it's estimated to be as high as 19% when discouraged workers and involuntary part-time workers are counted.

At least Obama proposed only a modest freeze to government, and insisted that it should invest in clean energy, etc. He could have made a strong case for the government as employer of last resort to invest in workers, and in addressing our sliding housing crisis, but he didn't: maybe not "centrist" enough.

One of his signature issues is education, which is logical, when talking about the future, but if the US is going to "win" the future, Race to the Top won't do it. Our children are not successfully competing with the rest of the world, but if we are to "win," they have to, not on standardized tests, but in skills and creative thinking: penalizing teachers won't accomplish that. Encouraging good teaching and supporting teachers would have a better chance--in colleges, too.

Obama's proposals, however, won't "win the future." The US must face its decline, withdraw from empire, and focus on its long-term deficits, not only of government, but of infrastructure, education, skills and trade.

That won't happen as long as the elite hold on to the status quo that enriched them. What the US needs is a democratic uprising like the one in Tunisia.