You can disagree with him about every other sentence, but he speaks a lot of sense and a lot of stuff we need to think about. Before his death in 2010, historian Howard Zinn talked about the bank bailouts that got us out of 2008:
Howard Zinn: Bank bailout was trickle down economics run amok
August 14, 2011
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Economics, History, Politics | Tagged: Bank Bailouts, Economics, History, Howard Zinn, Politics, Trickle Down Economics | 
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Posted by Ed Darrell
Will any Republican stand up for America?
August 12, 2011Ezra Klein’s on-line column this morning worries me more — will any Republican stand up for America?
No, I don’t mean lip service, I don’t mean flag lapel pins. I mean, will any Republican stand up for the policies we need to steer through the shoals of economic woe we face in the next 60 months?
The most telling moment of Thursday’s GOP debate wasn’t when Michele Bachmann cooly stuck a knife between Tim Pawlenty’s ribs, or when Rick Santorum plaintively begged for more airtime, or when Mitt Romney easily slipped past questions about his record on health-care reform. It was when every single GOP candidate on the stage agreed that they would reject a budget deal that was $10 in spending cuts for every $1 in tax increases. Even Fox News’s Bret Baier couldn’t quite believe what he was seeing. He asked again just to make sure the assembled candidates had understood the question.
Primary debates are usually watched for what they say about the candidates, but they’re generally important for what they say about the party. This one was no different. With the notable exceptions of Ron Paul and Jon Huntsman, the candidates didn’t disagree over policy. They disagreed over fealty to policy.
Bachmann didn’t attack Pawlenty’s policy proposals. She attacked him for past statements suggesting he might believe in other policy proposals, like the individual mandate and cap-and-trade. Pawlenty’s assault on Romney took the same form. This debate wasn’t about what policies the candidates believed in. That was largely a given. This debate was about which of the candidates believed in those policies the most.
The best policy in this debate wasn’t the policy most likely to work, or the policy most likely to pass. It was the most orthodox policy. The policy least sullied by compromise. A world in which the GOP will not agree to deficit reduction with a 10:1 split between spending cuts and tax increases is a world where entitlement reform can’t happen. It’s a world where the “supercommittee” fails and the trigger is pulled, and thus a world in which $1 out of every $2 in cuts comes from the Pentagon. It’s not a world that fits what many in the GOP consider ideal policy. But it is a world in which none in the GOP need to traverse the treacherous politics of compromise.
Policies discussed weren’t mainline, capitalist economic policies, either. They’re so far out in left field they can’t even see the pitcher’s mound from where they are. Plus, they’re looking the wrong way.
Over and over again, [Michelle] Bachmann misstated basic facts. She said that Tim Pawlenty “implemented” cap-and-trade in Minnesota. He did no such thing. She said “we just heard from Standard Poor’s,” and “when they dropped our credit rating what they said was we don’t have an ability to repay our debt.” Simply not true.
S&P has never questioned our ability to repay our debt. That’s why we remain AA+. They have questioned whether political brinksmanship will stop us from paying our debt. The downgrade “was pretty much motivated by all of the debate about the raising of the debt ceiling,” said John Chambers, head of S&P’s sovereign ratings committee. That is to say, it was motivated by political brinksmanship from the likes of, well, Michele Bachmann.
It’s fitting that the candidate best able to resist compromise is the candidate who seems least able to correctly explain the policies at issue and the choices we face. It’s a lot easier to take a hard line if you don’t understand the consequences of your actions, and a lot simpler to belt out applause lines if you’re not slowed down by the messy complexities of the issues. But where Bachmann is leading, the other candidates are following. Mitt Romney knows perfectly well that a deal with $10 in spending cuts for every $1 in tax increases is a great deal for conservatives. What he probably doesn’t know is how he’s going to explain why he pretended otherwise when he was vying for the nomination.
Winners in the debate? Unclear. Losers? You, me, and every American.
Can any Republican explain where in the world they got these nightmare economic policies? Are they being made up on the spot?
53 Comments | 2012 Campaigns, 2012 Elections, Campaigns, Economics, Elections, History, Republican Party | Tagged: 2012, Campaign, Economics, Elections, History, Politics, Republican Party | Permalink
Posted by Ed Darrell
Republicans lose only two in Wisconsin
August 10, 2011Opening paragraph in this morning’s Post-Crescent in Appleton, Wisconsin:
By Steve Contorno, Gannett Wisconsin Media
Sen. Rob Cowles blocked one of six attempts by Democrats on Tuesday to oust a sitting Republican lawmaker from office, putting his party in a position to maintain control of Madison and continue its unchecked, aggressive agenda.
That’s about as polite as it is possible to be.
Democrats faced an uphill battle, but took two out of three seats from Republicans. It is not enough to flip the majority in the Senate.
Will it be enough of a scare to make Republicans talk sense? You’d think that, after watching the damage done to the stock market, almost as bad as the attack on the World Trade Center, Wisconsin voters would have been more circumspect.
But these six Republicans were well-entrenched. 33% is better than nothing. It means 33% of Wisconsinites appear to have awakened to the wolves at their doors.
How to wake up the rest?
Two Democrats face recall elections next week, revenge for the recall elections this week.
Will the assault on U.S. values, education and public institutions, continue?
_____________
This morning, according to AP, Wisconsin Democrats said they will push forward to recall Gov. Scott “Ahab” Walker, just as soon as he is eligible for recall.
16 Comments | Economics, Education, Elections, Leadership, Politics | Tagged: Economics, Education, Elections, Leadership, Politics, Wisconsin | Permalink
Posted by Ed Darrell
Barbara Ehrenreich wonders: What’s the real poverty rate in America?
August 10, 2011Barbara Ehrenreich, “How America turned poverty into a crime,” Salon.com, August 9, 2011:
At the time I wrote “Nickel and Dimed,” I wasn’t sure how many people it directly applied to — only that the official definition of poverty was way off the mark, since it defined an individual earning $7 an hour, as I did on average, as well out of poverty. But three months after the book was published, the Economic Policy Institute in Washington, D.C., issued a report entitled “Hardships in America: The Real Story of Working Families,” which found an astounding 29 percent of American families living in what could be more reasonably defined as poverty, meaning that they earned less than a barebones budget covering housing, child care, health care, food, transportation, and taxes — though not, it should be noted, any entertainment, meals out, cable TV, Internet service, vacations, or holiday gifts. 29 percent is a minority, but not a reassuringly small one, and other studies in the early 2000s came up with similar figures.
The big question, 10 years later, is whether things have improved or worsened for those in the bottom third of the income distribution, the people who clean hotel rooms, work in warehouses, wash dishes in restaurants, care for the very young and very old, and keep the shelves stocked in our stores. The short answer is that things have gotten much worse, especially since the economic downturn that began in 2008.
Liberty does not flow to those who lack the money to eat, or keep warm. We have strides to make to get to “liberty and justice for all.”
Libertarians, why do you oppose liberty for poor-but-working people?
7 Comments | Civil Rights, Economics, Equality, Liberty, Politics, Poverty | Tagged: Civil Rights, Economics, Equality, Liberty, Politics, Poverty | Permalink
Posted by Ed Darrell
98% of what Republicans wanted = credit rating downgrade
August 7, 2011House Speaker John Boehner famously said that he thought the Republicans got 98% of what they wanted in the debt ceiling agreement, crappy as it was. Then, late Friday, Standard & Poor’s announced they had downgraded the U.S. government’s previously unsullied credit rating. God forbid Republicans had gotten 100%, eh?
Ben Hoffman urges us to read the Standard and Poor’s report on why the rating company downgraded U.S. credit.
S&P Explicitly Blames Republicans For Credit Downgrade
by Ben Hoffman
Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act.
Obama should have let the Bush tax cuts expire last year, which would have dramatically reduced our deficit. The Republicans held the unemployed hostage and Obama negotiated a bad deal with the domestic terrorists.
Is there more in that report we should read before we get the torches, tar and feathers to meet with our Republican representatives in August town meetings? Would they get the message with polite questions?
183 Comments | Economics, Politics, Rampant stupidity, Republican Party, U.S. Congress | Tagged: Economics, Politics, Rampant stupidity, Republican Party, Standard & Poor's, U.S. Congress | Permalink
Posted by Ed Darrell
Plan to save the spotted owls
August 2, 2011A lawyer complains in the Wall Street Journal that the plan from the U.S. Fish and Wildlife Service (USFWS) intended to help the endangered spotted owl should be dismissed because, well, the spotted owl is still endangered, and after all, didn’t the spotted owl personally shut down the entire lumber industry in the Northwest?
Well, no, the owl didn’t shut down the mills.
But before we discuss, can we at least read the shorthand version of what USFWS has to say? Here’s the press release on the plan:
Plan Marks New Route for Recovering Northern Spotted Owl and Promoting Healthy Northwest Forests
Contact:
Janet Lebson
503-231-6179
janet_lebson@fws.gov
The U.S. Fish and Wildlife Service today released a final revised recovery plan for the threatened northern spotted owl, stepping up actions that so far have helped stem but not reverse the old-growth forest raptor’s decline. The revised plan identifies three main priorities for achieving spotted owl recovery: protecting the best of its remaining habitat, actively managing forests to improve forest health, and reducing competition from barred owls, a native of eastern North America that has progressively moved into the spotted owl’s range in Washington, Oregon, and northern California.
“For more than 20 years, northern spotted owl recovery has been a focal point of broader forest conservation efforts in the Pacific Northwest,” said Robyn Thorson, the U.S. Fish and Wildlife Service’s Pacific Northwest Regional Director. “This revised recovery plan is based on sound science and affirms that the best things we can do to help the spotted owl turn the corner are conserving its habitat, managing the barred owl, and restoring vitality to our forests.”
The U.S. Fish and Wildlife Service will use the recovery plan to work with land managers in the Pacific Northwest such as the U.S. Forest Service and Bureau of Land Management, as well as other federal and non-federal landowners, to advise them on habitat management activities that can benefit the spotted owl and contribute to improved forest health.
Because about 20 million acres of U.S. Forest Service lands and about 2 million acres of Bureau of Land Management lands are potentially affected by recovery plan recommendations, the three agencies worked together on key recommendations related to forest management. Both agencies provided formal letters of support for the plan’s recovery goals.
“This recovery plan is a welcome update to the state of the science surrounding the northern spotted owl,” said Cal Joyner, Deputy Regional Forester for the Pacific Northwest Region of the U.S. Forest Service. “The plan will help us implement a mix of actively managing and protecting habitat to best contribute to conservation and recovery.”
“The recovery plan provides space to develop ecological forestry principles and to actively manage our public forests to achieve the twin goals of improving ecological conditions and supplying timber,” said Ed Shepard, Oregon/Washington State Director for the Bureau of Land Management. “We look forward to continuing our close cooperation with the Fish and Wildlife Service as we put the science from the recovery plan to work in our planning, in evaluating proposed timber projects, and in improving forest health.”
Overarching recommendations in the revised plan include:
- Conservation of spotted owl sites and high-value spotted owl habitat across the landscape. This means the habitat protections provided under land use plans on federal land will continue to be a focus of recovery, but protection of other areas is likely needed to achieve full success (including some of the lands previously slated for potential timber harvest on federal lands, and possibly non-federal lands in certain parts of the owl’s range where federal lands are limited).
- Active management of forests to make forest ecosystems healthier and more resilient to the effects of climate change and catastrophic wildfire, disease, and insect outbreaks. This involves an “ecological forestry” approach in certain areas that will restore ecosystem functioning and resiliency. This may include carefully applied prescriptions such as fuels treatment to reduce the threat of severe fires, thinning, and restoration to enhance habitat and return the natural dynamics of a healthy forest landscape. The U.S. Fish and Wildlife Service recommends this approach in areas where it promotes ecosystem function and is in the best long-term interest of spotted owl recovery. The agency also strongly affirms adaptive management principles to continually evaluate and refine active forest management techniques.
- Management of the encroaching barred owl to reduce harm to spotted owls. Most of the recovery actions the U.S. Fish and Wildlife Service has carried out since finalizing the spotted owl’s 2008 recovery plan deal with the barred owl threat. A major part of this is developing a proposal for experimental removal of barred owls in certain areas to see what effect that would have on spotted owls, and then to evaluate whether or not broad scale removal should be considered. This portion of the 2008 plan was not significantly revised.
“While the new recovery plan has been refined and improved from the 2008 version, the U.S. Fish and Wildlife Service continues to implement the most important recommendations,” said Acting U.S. Fish and Wildlife Service Director Rowan Gould. “We have begun to address the barred owl threat, improved survey protocols, and developed incentives for private landowners to voluntarily participate in recovery actions. We look forward to expanding conservation partnerships to contribute to the spotted owl’s recovery.”
Since the northern spotted owl was listed as threatened under the Endangered Species Act (ESA) 21 years ago, the U.S. Fish and Wildlife Service and recovery partners are benefitting from far more information on what factors most affect its survival and productivity. This includes a broader body of scientific knowledge on the species itself and forest ecosystem dynamics — including variables such as climate change and the role of natural disturbances such as wildfire. Recovery partners also are taking advantage of new science and technology to develop more precise tools for analyzing how different strategies can contribute to recovery.
In addition, land managers have made significant strides in advancing active forest management techniques to promote the health and resilience of forest ecosystems. The recovery plan emphasizes the concept of adaptive management to apply new knowledge and science to those techniques on an ongoing basis. This is a more mainstream approach today than in 1994 when the Northwest Forest Plan was created to address the needs of several forest-dependent species, including the spotted owl, and the region’s timber industry.
The U.S. Fish and Wildlife Service developed a final recovery plan specific to the spotted owl for the first time in 2008. As the agency and recovery partners moved forward in implementing many recommendations in the 2008 plan, the U.S. Fish and Wildlife Service initiated a targeted scientific revision to some portions of that plan after facing legal challenges and critical reviews from leading scientific organizations in the conservation community.
The U.S. Fish and Wildlife Service tapped the knowledge and perspectives of public and private sector experts over the last two years in developing this revised plan, the draft of which was released in September 2010. The agency held more than 30 workshops and meetings with public and private partners throughout the spotted owl’s range to share information, evaluate options, and incorporate valuable input during the revised plan’s development. The U.S. Fish and Wildlife Service accepted public comments on the draft revised plan for a 90-day period and received more than 11,700 comments. In April 2011, the agency released an updated Appendix C, relating to a new habitat modeling tool, for an additional 30-day public comment period and received about 20 public comments.
The revised recovery plan does not include recommendations from the 2008 plan for a new habitat conservation network of “Managed Owl Conservation Areas.” Rather than creating a potentially confusing new land classification, the plan identifies the scientific rationale and parameters for habitat protection and will revise the spotted owl’s designated critical habitat to reflect the latest scientific information about areas essential for the owl’s recovery. Identifying this habitat through the critical habitat process — as the ESA intended — will be more efficient and provide land managers and the public with additional opportunities for review and comment.
For a recovery timeline, Frequently Asked Questions, related information, and the recovery plan itself, visit www.fws.gov/oregonfwo.
America’s fish, wildlife and plant resources belong to all of us, and ensuring the health of imperiled species is a shared responsibility. The Service is working to actively engage conservation partners and the public in the search for improved and innovative ways to conserve and recover imperiled species. To learn more about the Service’s Endangered Species program, go to http://www.fws.gov/endangered/.
The mission of the U.S. Fish and Wildlife Service is working with others to conserve, protect and enhance fish, wildlife, plants and their habitats for the continuing benefit of the American people. We are both a leader and trusted partner in fish and wildlife conservation, known for our scientific excellence, stewardship of lands and natural resources, dedicated professionals and commitment to public service. For more information on our work and the people who make it happen, visit www.fws.gov. Connect with our Facebook page at www.facebook.com/usfws, follow our tweets at www.twitter.com/usfwshq, watch our YouTube Channel at http://www.youtube.com/usfws and download photos from our Flickr page at http://www.flickr.com/photos/usfwshq.
-FWS-
Stay tuned for the response, and my response to the response.
_____________
Oooooh, bonus! Story in the Daily Astorian says saving the spotted owl habitat also ties up carbon, helping out with the fight against global warming.
Leave a Comment » | Economics, endangered species, Environmental protection, Forestry, Geography - Economic, Geography - Physical, History, Politics, Science, trees, Wildlife | Tagged: Conservation, Economics, Endangered Species Act, Environmental protection, Forestry, geography, History, Law, Politics, Science, Spotted Owl, US Fish and Wildlife Service, USFWS, Wildlife | Permalink
Posted by Ed Darrell
Olbermann on debt ceiling bill: “Four great hypocrisies”
August 2, 2011Keith Olbermann doesn’t like the debt ceiling compromise, and tells why:
One suspects he has not read all the specifics of the bill.
One may also fear he’s right anyway.
A requirement for passing a Constitutional amendment is clearly unenforceable — perhaps illegal (such pledges are considered corruption, generally prosecutable). Not that it matters.
Ronald Reagan said we shouldn’t negotiate with terrorists, but then did. Now we see why we shouldn’t.
The Tea Party took the U.S. economy hostage. They sliced up the hostage, and got quite a bit in ransom. This is not a good way to run politics. Shame on them.
2 Comments | Economics, Politics | Tagged: Debt Ceiling, Economics, Keith Olbermann, Politics | Permalink
Posted by Ed Darrell
President Obama on the deficit ceiling deal
August 1, 2011The White House published this video within the last hour or so:
302 views at posting
Here are the White House bullet points on the deal:
What the Debt Deal Does
- Removes economic uncertainty surrounding the debt limit at a critical time and prevents either party from using a failure to meet our obligations for political gain.
- Makes a significant down payment to reduce the deficit — finding savings in defense and domestic spending while protecting critical investments in education and job creation.
- Creates a bipartisan commission to find a balanced approach to continue this progress on deficit reduction.
- Establishes an incentive for both sides to compromise on historic deficit reduction while protecting Social Security, Medicare beneficiaries, and programs that help low-income families.
- Follows through on President Obama’s commitment to shared sacrifice by making sure that the middle class, seniors, and those who are most vulnerable do not shoulder the burden of reducing the deficit. As the process moves forward, the President will continue to insist that the wealthiest Americans share the burden.
- For a closer look at the mechanics of the debt agreement, take a look at this infographic.
More from Obama here.
2 Comments | Barack Obama, Economics, History, Politics, President Obama | Tagged: Barack Obama, Budget, Deficit Ceiling, Economics, History, Politics, President Obama | Permalink
Posted by Ed Darrell
Encore post: “Don’t play chicken with the debt ceiling!”
July 30, 2011If only they had listened last April when I first posted this!
A blast from the past:
BusinessWeek cover, April 18-24, 2011 - Don't play chicken with debt ceiling; chicken image by Jan Hamus/Alamy
Not every one of the Bloomberg Businessweek covers has been a hit, but a lot of them are — vastly more entertaining since Bloomberg took over the old workhorse magazine.
This one packs a political punch along with visual excitement.
And it’s right. Do any Republicans pay attention to the finance and business worlds anymore?
Articles inside are informative, too — see Peter Coy’s article, and did you see the article on the debt ceiling issue and the views of past Treasury secretaries?
Hey! Republicans! Stop playing chicken with the nation’s credit, will you?
Businessweek graphic from April 18-24, 2011 issue - click for larger view at Businessweek site; chicken image by Jan Hamus/Alamy
2 Comments | Business, Economics, News, Politics, Rampant stupidity, Republican Party | Tagged: Business, Economics, News, Politics, Rampant stupidity, Tea Party | Permalink
Posted by Ed Darrell
Wind power, more than just talk
July 30, 2011I missed Global Wind Day on June 15 — too much static from the ironically long-winded anti-winders.
Voice of America claims wind power offers great potential. Climate denialists, used to denying all facts especially if they are hopeful, will deny it any way they think they can.*
* These posts are for examples only, and should not be interpreted to mean that the blogs sampled are composed entirely of denials, or that the blog authors and editors are themselves pure denialists — certainly they will deny that. We will gladly post links to posts at those blogs that promote benefits of harnassing wind energy, if anyone can find them.
3 Comments | Climate change, climate_change, Economics, Energy, Environment, Environmental protection, Global warming, Globalization, Green Politics | Tagged: Climate change, Economics, Energy, Environmental protection, Global warming, Globalization, Green Politics, Wind Energy, Windmills | Permalink
Posted by Ed Darrell
History and economics of energy use and conservation – a more accurate version
July 30, 2011Our memorial to George Washington neared completion in the 1880s. For an obelisk more than 550 feet tall to honor the Father of Our Country, planners decided to top it with a “capstone” made of the what was, then the most precious metal known on Earth. The top is a pyramid, and the top of the pyramid is a one-pound block of this precious metal.
What was the most precious metal known to humans in 1880? Gold? Platinum? Tungsten, perhaps, not yet chosen to be filaments in the yet-to-be-perfected Edison “A” lightbulb?
Washington’s Monument is topped with aluminum.
Yeah, aluminum.
“But,” you begin to sputter in protest, “aluminum is almost ubiquitous in soils, and it’s cheap — we use it in soda cans because it’s cheaper than steel or glass, for FSM’s sake!”
Today, yes. In 1880, no. Aluminum requires massive amounts of energy to refine the stuff from ore. Aluminum is common in soils and rocks, but it couldn’t be refined out easily for use.
That problem’s solution was electricity, generated from coal or especially falling water. For a while, our nation’s biggest aluminum refining plants resided in the state of Washington, not because they were close to aluminum ore deposits, but because there was a lot of cheap electricity available from the Grand Coulee and other dams on the mighty Columbia River. It was cheaper to transport the ore long distances for refining than to transport the electricity.
This history reveals a lot about science, history, energy use, resource conservation and economics — areas in which most climate denialists appear to me to lack knowledge and productive experience.
Peter Sinclair more often explains why climate denialists get things wrong. In this video, the first of what could be a significant series, Sinclair explains how we got to where we are today in energy use and conservation — or energy overuse and lack of conservation, if the Tea Party and Rand Paul get their way. (Notice the ingots of aluminum shown in the historic film footage.)
This is history which has been largely covered up, partly because so much critical stuff happened in the 1960s, 1970s and 1980s, a time the internet doesn’t cover well.
5,842
Leave a Comment » | Climate change, climate_change, Conservation, Economics, Environment, Environmental protection, Global warming, Green Politics, History, Politics, Science, Technology | Tagged: Climate change, Conservation, Economics, Energy, Global warming, Green Politics, History, Politics, Science, Technology | Permalink
Posted by Ed Darrell
Lesson for Congress: Sometimes an eagle has to drift a while just to survive
July 28, 2011Maybe Ben Franklin got it wrong, and the bald eagle is the best candidate for our national bird.
Cousin Amanda, last year with the condors in California, spends this summer with the bears, salmon, whales and other spectacular wildlife in Alaska. (Internships are great, for the interns, no?)
Comes this photo of our national symbol, the bald eagle:
Eagle in the water near Hoonah, Alaska; photo by Amanda Holland (rights reserved)
Yeah, it’s a bit of a flyspeck on the horizon photo, but it’s still instructive. Probably looking for fish, this bird waded too far out into the estuary. Once it realized it was wet, and in the water, it tried to swim to shore. Eagle wings are made to soar, however, not swim. Swimming didn’t work. At this point, the bird could have continued to struggle to do the impossible, and probably drown; or it could just give up, and drown.
Or, it might sit tight and wait to see if another opportunity presents itself. After about an hour in the water, the bird drifted into shallow water where it could walk out.
Ms. Holland posted this photo on her Facebook site. A friend there observed, “The symbol of our nation floating aimlessly with the tide because it is too bogged down to do anything else… How much irony can exist in one single photograph?”
Sometimes we get in “too deep.” We may want to soar, but that’s not possible. But if we’re patient, if we don’t do stupid stuff, we might just drift into safer waters, and survive, and thrive.
Yeah, we know, Tea Partiers: You think the nation spends too much money. That’s a debate worth having.
But that’s not worth failing to raise the debt ceiling. Failing to raise the debt ceiling will cost the nation, by conservative estimates, a half-trillion dollars in increased interest rates, with no gain of any program or paying of any debt.
It’s time to drift with the flow of events. Raise the debt ceiling now, and survive without doing something stupid. We can discuss solutions later, rationally, once we prevent the waste of a half trillion dollars, eh? Time to stop fighting and stay alive, Congress.
We can learn a lot from the bald eagle. I think even Ben Franklin would agree.
What’s that, Ben? Our follies tax us more than taxes?
“Friends,” says he [Father Abraham], “and Neighbours, the Taxes are indeed very heavy, and if those laid on by the Government were the only Ones we had to pay, we might more easily discharge them; but we have many others, and much more grievous to some of us. We are taxed twice as much by our Idleness, three times as much by our Pride, and four times as much by our Folly; and from these Taxes the Commissioners cannot ease or deliver us by allowing an Abatement. However let us hearken to good Advice, and something may be done for us; God helps them that help themselves, as Poor Richard says, in his Almanack of 1733.
— Ben Franklin, The Way to Wealth, 1758
10 Comments | Ben Franklin, Economics, photography, Politics, Taxes | Tagged: A Good Story, Alaska, Amanda Holland, Benjamin Franklin, Debt Ceiling, Eagle, Economics, photography, Politics, Taxes | Permalink
Posted by Ed Darrell
How did we get into this deficit mess?
July 26, 2011From the New York Times:
From the New York Times, article by Teresa Tritch, "How the deficit got this big"
102 Comments | Barack Obama, Economics, Politics, President Obama | Tagged: Budget, Deficits, Economics, Politics, President Bush, President Obama | Permalink
Posted by Ed Darrell
Long time coming: Current insanity
July 22, 2011I get e-mail from a friend on the high desert plains of the Mountain West:
On the other hand, maybe if we hadn’t been so polite for so long, they wouldn’t have had reason to think they could get away with this sort of thing: holding the country hostage to their latest demands.
Fruitcake isn't all that's illogical, Robot Spock!
It’s been a long time coming, no doubt about it. You could say it started decades ago, with that famously loopy math: “Let’s balance the budget by cutting everyone’s taxes and spending more on the military! That’ll work!”
Was it ridiculous on its face? Of course it was ridiculous on its face. And here’s the scariest part: Things have gotten much worse since then! The fringe thinking that gave us the Age of Reagan couldn’t even get a hearing now from those who claim to worship him! Too “moderate.” Not “pure” enough.
They’ve got their own loopy math. Twenty-first-century loopy math. And their own economic theories, too — except that they’re not theories, they’re certainties. Matters of unshakeable faith. And since they’re certainties, why waste time listening to anyone else’s views on the subject? Expertise is overrated.
So they’ve got their own economics. They’ve got their own climate science, of course. They’ve got their own history. (Paul Revere, anyone? Slavery and the Civil War?) They’ve even got their own electoral history. (2008 was a glitch. Barack Obama isn’t really president.) What’s next? Their own geography? Their own gravity?
And we’ve let them get away with it.
20 Comments | Economics, Politics, Reason | Tagged: Current Angst, Economics, Politics, Reason, Zeitgeist | Permalink
Posted by Ed Darrell
Hard truths about the debt ceiling and uncertainty in the Treasury market
July 16, 2011Two organizations provide information to Congress in an unbiased manner, with great care for accuracy and completeness of information: The Congressional Research Service (CRS), an arm of the Library of Congress, and the General Accountability Office (GAO), formerly the General Accounting Office. Both agencies share the unique status of being organs of the Congress, and not the executive branch.
Consequently, we and Congress should give particular consideration to a report issued by GAO on February 22, 2011:
Debt Limit: Delays Create Debt Management Challenges and Increase Uncertainty in the Treasury Market
GAO-11-203 February 22, 2011
Highlights Page (PDF) Full Report (PDF, 52 pages) Accessible Text Recommendations (HTML)Summary
GAO has prepared this report to assist Congress in identifying and addressing debt management challenges. Since 1995, the statutory debt limit has been increased 12 times to its current level of $14.294 trillion. The Department of the Treasury (Treasury) recently notified Congress that the current debt limit could be reached as early as April 5, 2011, and the Congressional Budget Office (CBO) projects that under current law debt subject to the limit will exceed $25 trillion in 2021. This report (1) describes the actions that Treasury traditionally takes to manage debt near the limit, (2) analyzes the effects that approaching the debt limit has had on the market for Treasury securities, and (3) describes alternative mechanisms that would permit consideration of the link between policy decisions and the effect on debt when or before decisions are made. GAO analyzed Treasury and market data; interviewed Treasury officials, budget and legislative experts, and market participants; and reviewed practices in selected countries.
The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred. While debates surrounding the debt limit may raise awareness about the federal government’s current debt trajectory and may also provide Congress with an opportunity to debate the fiscal policy decisions driving that trajectory, the ability to have an immediate effect on debt levels is limited. This is because the debt reflects previously enacted tax and spending policies. Delays in raising the debt limit create debt and cash management challenges for the Treasury, and these challenges have been exacerbated in recent years by a large growth in debt. In the past, Treasury has often used extraordinary actions, such as suspending investments or temporarily disinvesting securities held in federal employee retirement funds, to remain under the statutory limit. However, the extraordinary actions available to the Treasury have not kept pace with the growth in borrowing needs. For example, unlike the past, the amount potentially provided by the extraordinary actions for 1 month in fiscal year 2010 was less than the monthly increase in debt subject to the limit for most months of the year. As a result, once debt reaches the limit, Congress will likely have less time than in prior years to debate raising the debt limit before there are disruptions to government programs and services. This trend is likely to continue given the long-term fiscal outlook. Failure to raise the debt limit in a timely manner could have serious negative consequences for the Treasury market and increase borrowing costs. Also, some of the actions that Treasury has taken to manage the amount of debt near the limit add uncertainty to the Treasury market. In the past, Treasury has postponed auctions and dramatically reduced the amount of bills outstanding, which compromised the regularity of auctions and the certainty of supply on which Treasury relies to achieve the lowest borrowing cost over time. GAO’s analysis suggests that borrowing costs modestly increased during debt limit debates in 2002, 2003, and most recently in 2010. In addition, managing debt near the debt limit diverts Treasury’s limited resources away from other cash and debt management issues at a time when Treasury already faces challenges in lengthening the average maturity of its debt portfolio. Observers and participants suggested improving the link between the spending and revenue decisions that drive debt and changes in the debt limit. Better alignment could be possible if decisions about the debt level occur in conjunction with spending and revenue decisions as opposed to the after-the-fact approach now used. This practice, which is similar to practices used in some other countries, might facilitate efforts to change the fiscal path by highlighting the implications of tax and spending decisions on changes in debt. To avoid potential disruptions to Treasury markets and help inform fiscal policy decisions in a timely way, Congress should consider ways to better link decisions about the debt limit with decisions about spending and revenue. Treasury provided technical comments on a draft of this report, which GAO incorporated as appropriate.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from “In process” to “Open,” “Closed – implemented,” or “Closed – not implemented” based on our follow up work.
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Matters for Congressional Consideration
Recommendation: The projections of a growing debt burden have raised concerns both in Congress and in the public. Well-designed budget processes and metrics can help as Congress and the President seek to address the federal government’s long-term fiscal challenge. The current design of the debt limit does not engender or facilitate debate over specific tax or spending proposals and their effect on debt. In addition, the uncertainty it creates can lead to disruptions in the Treasury market and in turn to higher borrowing costs. To avoid these potential disruptions to the Treasury market and to help inform the fiscal policy debate in a timely way, Congress may wish to consider ways to better link decisions about the debt limit with decisions about spending and revenue. Such a process would build on the approach used in 2008 and 2009 when Congress passed and the President signed three laws that were expected to increase borrowing with a corresponding increase in the debt limit. This report presents a number of approaches that could serve as a basis for better linking decisions about spending and revenue with decisions about the debt limit.
Status: In process
Comments: When we determine what steps the Congress has taken, we will provide updated information.
Use the links near the top of the report to get to the full report.
Pay particular attention to this, repeated from above:
The debt limit does not control or limit the ability of the federal government to run deficits or incur obligations. Rather, it is a limit on the ability to pay obligations already incurred. While debates surrounding the debt limit may raise awareness about the federal government’s current debt trajectory and may also provide Congress with an opportunity to debate the fiscal policy decisions driving that trajectory, the ability to have an immediate effect on debt levels is limited. This is because the debt reflects previously enacted tax and spending policies. Delays in raising the debt limit create debt and cash management challenges for the Treasury, and these challenges have been exacerbated in recent years by a large growth in debt.
Tip of the old scrub brush to Michael A. Ryder.
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Wall of shame: Bloggers and others who do not have a clue
14 Comments | Economics, Government, History, Politics, President Obama, Presidents, Primary Source Documents, U.S. Congress | Tagged: Debt Ceiling, Deficits, Economics, GAO, Government, History, Politics, Treasury Market, U.S. Congress | Permalink
Posted by Ed Darrell
Millard Fillmore's Bathtub 