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Paul Krugman, January 6, 2009:

This really does look like a plan that falls well short of what advocates of strong stimulus were hoping for — and it seems as if that was done in order to win Republican votes. Yet even if the plan gets the hoped-for 80 votes in the Senate, which seems doubtful, responsibility for the plan’s perceived failure, if it’s spun that way, will be placed on Democrats.

I see the following scenario: a weak stimulus plan, perhaps even weaker than what we’re talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says “See, government spending doesn’t work.”

Keep in mind that when Krugman wrote that, Bush was still President and the Senate had yet to reduce the scope of Pres. Obama's stimulus plan -- and had yet to divert more of its stimulative spending into unproductive tax cuts.

Flash forward to today, and the only thing that Krugman was wrong about was that the unemployment rate peaked at over 10 percent. This is something that the Obama administration seems to be recognizing, at least tacitly; over the weekend, they pushed for another $50 billion in spending.

Of course, it's going to take a lot of heavy lifting to get that $50 billion, thanks in large part to the dynamic Krugman pointed out (McConnell saying "See, government spending doesn't work"). And the White House won't just have to battle Republicans or Blue Dogs, either: Steny Hoyer on Sunday said that he wanted the money to come from unspent stimulus funds, which is a truly absurd idea if the goal here is to provide additional stimulus.

The truly maddening thing about all this foolish focus on short-term fiscal restraint is that nobody who is now urging austerity protested Bush's budget-busting tax cuts at the start of the last decade. As Krugman wrote on February 1, 2009:

Dean Baker is having some fun with the Washington Post, which keeps looking for superlatives to describe the “staggering”, “breathtaking” expense of the stimulus plan. And Dean is quite right to point out that reasonable estimates of the shortfall in private demand are on the order of three times the $800 billion package. (Jan Hatzius at Goldman, using different methods, arrives at more or less the same number.)

One other comparison worth making, however, is with the Bush tax cuts, which will end up having cost about $2 trillion over the course of a decade — without anything like the economic rationale for the stimulus. Did the Post find this cost staggering? Inquiring minds want to know.

There's no doubt that the administration was dealt a bad deck in January 2009, but they haven't made it any easier on themselves. It's true that Obama's top economic advisers are now pushing for more stimulus and it's true that even Obama-appointed Ben Bernanke is channeling Paul Krugman, but President Obama himself has not done enough to push back on the absurd notion that the time to reduce spending is right now.

Instead of talking about things like domestic spending freezes and deficit reduction commissions that could slash Social Security, the President should spend more time making the case that the best way to get the budget in balance is to grow the economy -- thereby increasing revenue.

On January 9, 2009, President Obama said that if Paul Krugman had a good idea on getting the economy going, the administration would listen. Now would be a good time to start.

Originally posted to Daily Kos on Mon Jun 14, 2010 at 08:56 AM PDT.

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Comment Preferences

  •  Tax the rich. Ending the Bush tax cuts is a joke, (25+ / 0-)

    it's nearly meaningless. Cap gains should be based upon means and income testing, and taxed progressively.

    Reaganomics never ended. 'Wealth Creation' for the rich is still more important than a sustainable middle class

    by shpilk on Mon Jun 14, 2010 at 08:58:33 AM PDT

  •  More job creation, less tax cuts (19+ / 0-)

    Hell, RAISE taxes and use the money to pay CCC type workers to fix the mess in the Gulf. We don't need 2011 to be like 1937. There's some history we don't need to see again.

    Republican ideas are like sacks of manure but without the sacks.

    by ontheleftcoast on Mon Jun 14, 2010 at 08:59:36 AM PDT

    •  Why is there never a cry for fiscal restraint (15+ / 0-)

      When the pentagon needs more cash for the wars?

      •  Because war plays to the fight-survival instinct (0+ / 0-)

        and fiscal discipline plays to the "parcel the food to survive the winter" instinct, and nature has programmed us to consider the former to be a far more urgent matter than the latter.

        Whereas stimulating jobs and deficit concerns fall within the same level of urgency in people's mentality.

        Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

        by Robobagpiper on Mon Jun 14, 2010 at 09:59:10 AM PDT

        [ Parent ]

    •  Unemployment hasn't peaked yet. (9+ / 0-)

      We need the original trillion in stimulus, plus we need to re-appropriate all the money that was wasted on things like massive tax breaks for suburban homebuilders, plus we need to finally pass mortgage cramdown bankruptcy reform, plus we need to spend the stimulus money on real jobs and infrastructure rather than just stuffing the money into the bankers' pockets and hoping they invest it in something productive.

      Unfortunately, none of this is going to happen.  Welcome to neo-hooverism.  Thank god the other party is even worse, I guess.

    •  Actually tax cuts for workers would be (4+ / 0-)
      Recommended by:
      ssgbryan, TracieLynn, mcartri, greenearth

      greatly stimlative much more in fact than any government spending program could hope to be. Replacing all the federal payroll withholding taxes with other truly progressive federal taxes would give everyone that earns a paycheck a consistant 25% increase in take home pay. Income that would circulate through the entire economy which would add billions of dollars to the active economy. If your interested on how that works read my diary;

      Bring back the progressive federal income tax

      Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

      by RMForbes on Mon Jun 14, 2010 at 09:31:33 AM PDT

      [ Parent ]

      •  It's an interesting idea (4+ / 0-)

        and it would be hard to get people to say no to a wage increase. Trouble is I really don't see a good alternative to taxing wages. If you tax all purchases instead the problem is the poor get shafted immediately and have to wait for a refund check. Someone who is barely making enough to afford food and rent will be fronting the government an interest free loan for months at a time. They can hardly afford to eat.

        Republican ideas are like sacks of manure but without the sacks.

        by ontheleftcoast on Mon Jun 14, 2010 at 09:40:18 AM PDT

        [ Parent ]

        •  I can think of several but the most progressive (0+ / 0-)

          would be an increase in the FTT to a half point and a new 5% federal consumption tax with the cost of the tax included in the price of every product and service. The sales generated by any business no mater who the buyer is or where they come from would include this 5% federal tax. The business not the buyer would directly remit the tax to the federal treasury. This is an ad valorem tax to replace the payroll withholding taxes that already inflate the price of every product or service by 15%.

          Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

          by RMForbes on Mon Jun 14, 2010 at 12:15:50 PM PDT

          [ Parent ]

          •  That still hits the poor disproportionately (0+ / 0-)

            That's the problem with pretty much all "flat tax" schemes. The poor take it in the gut and maybe get a refund somewhere down the road. Lousy system. And I'm not buying that payroll taxes add 15% to the cost of goods. Given that much of the stuff bought is manufactured over seas.

            Republican ideas are like sacks of manure but without the sacks.

            by ontheleftcoast on Mon Jun 14, 2010 at 02:50:09 PM PDT

            [ Parent ]

            •  Prey tell, how (0+ / 0-)

              Replacing an extremely regressive tax that inflates the cost of everything by 15% and replacing it with an increase in the FTT of a half point with an ad valorem tax on all sales no matter to who or where the sale is made, how can that be concidered even remotely regressive? A big corporation with $1 billion in sales remits $5 million of those sales to the federal treasury. The local store has sales of $100K for the same period. The local store remits just $5000. The cost of federal payroll taxes are already three times more than the replacement tax for the local store, but the big corporations will be paying far more with this tax than they currently pay. Bigger savings for small businesses and higher taxes for large corporations, that sounds progressive to me.

              Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

              by RMForbes on Mon Jun 14, 2010 at 03:17:54 PM PDT

              [ Parent ]

              •  So how does reselling work? (0+ / 0-)

                Company A build widget but doesn't maintain a store to sell those widgets to the consumer. Company B buys widget and resells it to consumer. Where is the ad velorem tax paid? Does Company A and Company B both pay the FTT on the good?

                Republican ideas are like sacks of manure but without the sacks.

                by ontheleftcoast on Mon Jun 14, 2010 at 03:40:01 PM PDT

                [ Parent ]

                •  It doesn't matter who buys the product or service (0+ / 0-)

                  or where it's sold. The cost of the tax is included in the price and remitted to the treasury.

                  Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

                  by RMForbes on Mon Jun 14, 2010 at 04:00:08 PM PDT

                  [ Parent ]

                  •  So you do end up hurting the small stores (0+ / 0-)

                    They can't afford to manufacture and sell their product. They have to buy their products from another source and the price goes up. Then they sell it with an effective double tax. The larger places like Wal*Mart could easily game the system buy directly owning the production and selling with one less tax increase.

                    Republican ideas are like sacks of manure but without the sacks.

                    by ontheleftcoast on Mon Jun 14, 2010 at 04:05:17 PM PDT

                    [ Parent ]

                    •  No it doesn't do that at all (0+ / 0-)

                      It's just another cost that gets worked into the price. Just like the cost of labor or the cost of utilities but instead it's a easy to calculate consistant cost. It's not an added value tax that is calcualted all the way up through production and paid by the buyer at the register. No matter what the price the item or service is sold for, the cost of the tax is always already included. The business only needs to know how much they sold and then calculate the tax owed.

                      Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

                      by RMForbes on Mon Jun 14, 2010 at 04:27:52 PM PDT

                      [ Parent ]

                      •  Sorry, now you're making even less sense then (0+ / 0-)

                        before.

                        Take a cotton shirt.

                        Farmer A grows cotton sells it to cloth manufacturer B.
                        Cloth manufacturer B makes cloth sells it to shirt maker C.
                        Shirt maker C makes shirt sells it to retail store D.
                        Retail store D sells shirt to consumer.

                        Seems that A, B, C, and D will all pay the taxes.

                        Now look at this

                        Farmer A grows cotton sells it to HyperMegaMart E who produces the cloth and makes a shirt from it.
                        HyperMegaMart E sells shirt to consumer.

                        You saying that if the cost of goods and labor are the same that the shirt from retail store D would be the same as HyperMegaMart E?

                        Republican ideas are like sacks of manure but without the sacks.

                        by ontheleftcoast on Mon Jun 14, 2010 at 04:36:47 PM PDT

                        [ Parent ]

                        •  Yes they all include the cost of the tax (0+ / 0-)

                          in the price they charge. The cost is included. The cost of the tax is always the same rate but these costs are not cumlative. It doesn't matter how many levels of manufacturing and distribution a product goes through the seller alway includes the same 5% rate to cover the cost of the tax just like they must do to cover the cost of wharehousing or shipping. The only difference is shipping may add only 1% or upwards of 90% to the cost of an item this tax is always a constant rate. Much easier to work into the final price calculation.

                          Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

                          by RMForbes on Mon Jun 14, 2010 at 05:07:00 PM PDT

                          [ Parent ]

            •  Even goods manufactured off shore (0+ / 0-)

              need to cleared through customs, transported, wharehoused, distributed to retail stores, priced and sold. Each level contributes to both the direct cost of the employers contribution (7.25%) and the indirect costs incured through compliance to the payroll withholding taxes. These costs may add up to as much as 30% for some smaller businesses and much closer to the 8% range for large corporations that can centralize compliance to reduce the effect upon individual departments or locations. But 15% is a conservate average.

              Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

              by RMForbes on Mon Jun 14, 2010 at 03:58:07 PM PDT

              [ Parent ]

      •  Yes, decrease the taxes I would (1+ / 0-)
        Recommended by:
        bear83

        pay on a job I don't have.

        I think your logic is missing something...

        Rick
        -9.63 -6.92
        Fox News - We Distort, You Deride

        by rick on Mon Jun 14, 2010 at 10:04:04 AM PDT

        [ Parent ]

        •  Yes your missing the fact that a dollar (0+ / 0-)

          that is circulating in the economy generates ten dollars in economic activity. Adding billions of dollars into local economies across the country will generate more demand for all products and services which creates jobs. Money not flowing in the economy is the real problem. Money being held static by businesses or the wealthy does not circulate in the economy and mutiply economic activity. Money caught up in the internal trading on the Wall Street casino is not circulating in the economy at large. The trillions of dollars sequestered in off-shore tax shelters is completely removed from the economy and totally sucks jobs along with it. You want a job change the federal tax structure to keep capital flowing in the economy to create more demand and the jobs that demand will create.

          Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

          by RMForbes on Mon Jun 14, 2010 at 12:01:39 PM PDT

          [ Parent ]

  •  Krugman was right (31+ / 0-)
    and it may sink some Dems chances this year.  The failure to make the stmulus big enough may sink the blue dogs who helped prevent the stimulus from being big enough.  Karma.  

    We had one chance, and we did not do what was needed.  

    Pooties and Woozles unite; you have nothing to lose but your leashes!

    by TomP on Mon Jun 14, 2010 at 08:59:53 AM PDT

    •  P.S. Great post, Jed. (5+ / 0-)

      Pooties and Woozles unite; you have nothing to lose but your leashes!

      by TomP on Mon Jun 14, 2010 at 09:00:18 AM PDT

      [ Parent ]

    •  Obama should have pushed to (11+ / 0-)

      increases taxes the first day he took office. Democrats should been pushing to do the same when they took over the House in 06.

      Trickle down economics doesn't work, it's at the core of all of the problems we've got.

      Reaganomics never ended. 'Wealth Creation' for the rich is still more important than a sustainable middle class

      by shpilk on Mon Jun 14, 2010 at 09:02:19 AM PDT

      [ Parent ]

      •  Increasing taxes a bad idea (1+ / 0-)
        Recommended by:
        FiredUpInCA

        in a recession.

        The idea when up against the zero-interest-rate bound is deficit spending.

        In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

        by blue aardvark on Mon Jun 14, 2010 at 09:03:19 AM PDT

        [ Parent ]

        •  Yeah (3+ / 0-)
          Recommended by:
          ssgbryan, greenearth, bear83

          Reagan raised taxes during the 1982 recession and...
          Oops, that actually didn't cause problems. It raised taxes during a recession, the worst prior to this one since the Depression and it didn't hurt. Don't you hate it when Reagan did something right?

          Republican ideas are like sacks of manure but without the sacks.

          by ontheleftcoast on Mon Jun 14, 2010 at 09:06:37 AM PDT

          [ Parent ]

          •  The critical difference (0+ / 0-)

            is that we are against the zero interest rate bound.

            Monetary policy (the Fed) is crippled. Fiscal policy is our only tool. We desperately, desperately need massive fiscal stimulus, and that means deficit spending. Which tax increases aren't.

            In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

            by blue aardvark on Mon Jun 14, 2010 at 09:23:57 AM PDT

            [ Parent ]

            •  We need spending from the government on (4+ / 0-)

              things that put people to work to get capital moving thru the system. We can deficit spend, sure. But there is no reason to not tax the high earners. They won't suddenly stop earning money or spending it. They will change their habits somewhat, true. But were are we going to borrow the money to pay for the spending? China? Europe? Simply print it? We're tapped out except for the billionaires. Maybe a straight-up wealth tax, a one-time assessment for the good of the country. See how many "patriots" would go for that idea.

              Republican ideas are like sacks of manure but without the sacks.

              by ontheleftcoast on Mon Jun 14, 2010 at 09:32:03 AM PDT

              [ Parent ]

              •  See how many billionaires (2+ / 0-)
                Recommended by:
                Betty Pinson, APA Guy

                Move their money, and themselves, out of the country.

                One of the things conservatives have been facilitating for decades, little noticed by most, is the free movement of capital between nations. Seriously threaten the billionaires, and they will be gone, and so will their billions.

                In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

                by blue aardvark on Mon Jun 14, 2010 at 09:37:58 AM PDT

                [ Parent ]

                •  Where are they going to go? (4+ / 0-)

                  Seriously. I can't believe you went Galt on that one. I expected better from you in a debate.

                  Republican ideas are like sacks of manure but without the sacks.

                  by ontheleftcoast on Mon Jun 14, 2010 at 09:43:11 AM PDT

                  [ Parent ]

                  •  Tax havens (0+ / 0-)

                    Become a legal resident of Luxembourg. Or Nassau.

                    Physically, you can still live in NYC. Legally, you don't. And your money is invested elsewhere - or invested in the United States, but through enough shell companies that no one can prove you own anything here.

                    When you can hire a dozen full-time tax lawyers and still come out ahead - you will.

                    In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

                    by blue aardvark on Mon Jun 14, 2010 at 10:02:01 AM PDT

                    [ Parent ]

                •  That's much of what has happened to CA... (1+ / 0-)
                  Recommended by:
                  blue aardvark

                  The affluent have grown weary of the taxes there and moved elsewhere. I know...I handled their telecom business accounts (T1, etc.) for years and did the account and services moves myself.

                  It really is a catch-22...

                  •  And? In CA you can choose from 49 other states. (3+ / 0-)
                    Recommended by:
                    3goldens, cybrestrike, Betty Pinson

                    If we're talking about an increase in federal taxes, where are you going to move to that's LIKE the United States, but won't tax you as much?

                    Regards,
                    Corporate Dog

                    -----
                    We didn't elect Obama to be an expedient president. We elected him to be a great one. -- Eugene Robinson

                    by Corporate Dog on Mon Jun 14, 2010 at 09:49:15 AM PDT

                    [ Parent ]

                  •  So reform has to come from the federal level (1+ / 0-)
                    Recommended by:
                    Orange County Liberal

                    Instead of state and local governments giving massive tax breaks to businesses to steal an ever-shrinking jobs base from other states, some form of national business and manufacturing policy is needed to stabilize the system.

                    "Private health insurers always manage to stay one step ahead of the sheriff." Sen. Sherrod Brown

                    by Betty Pinson on Mon Jun 14, 2010 at 09:49:58 AM PDT

                    [ Parent ]

                    •  But here's the thing... (0+ / 0-)

                      If deficits don't matter and deficit spending is the way out, what is the reason to increase taxes? Why not just increase spending?

                      •  Deficits DO matter... (4+ / 0-)

                        ... but right now, with the current state of our economy, spending matters much, much more.

                        Eventually, if we ever climb our way out of this downturn, we'll then want to try to climb our way out of the deficit, and it helps if we can limit how deep we have to go.

                        Regards,
                        Corporate Dog

                        -----
                        We didn't elect Obama to be an expedient president. We elected him to be a great one. -- Eugene Robinson

                        by Corporate Dog on Mon Jun 14, 2010 at 10:03:31 AM PDT

                        [ Parent ]

                      •  Certainly not my opinion (1+ / 0-)
                        Recommended by:
                        Virginia mom

                        Increasing taxes on the highest income earners helps channel funds into US stimulus spending and mitigate higher deficits. Long term deficit spending is not good, but short term deficits that are targeted to high quality economic stimulus and job creation are necessary.  Part of the reason we have federal deficits is high unemployment - lower tax revenues from unemployed workers.

                        Finding ways to make the business sector begin investing in economic stimulus is a win/win.  It decreases unemployment while increasing tax revenues, not to mention profits for the businesses.  Incentives don't necessarily have to be all higher taxes, but better tax incentives.  If businesses want low taxes, they need to earn them by creating US jobs.

                        "Private health insurers always manage to stay one step ahead of the sheriff." Sen. Sherrod Brown

                        by Betty Pinson on Mon Jun 14, 2010 at 10:08:29 AM PDT

                        [ Parent ]

                •  But sitting on their billions (1+ / 0-)
                  Recommended by:
                  Robobagpiper

                  doesn't get them anywhere in the long run.  At some point, they have to stop gambling on Wall Street and begin investing in the US economy.  Where else are they going to invest their money?

                  As Robert Reich points out, US corporations and investors are sitting on huge piles of cash. If the US economy is to recover, they have to begin investing in job creation and production in order to get consumers spending again. And those jobs have to be in the US, not overseas.

                  Where are the tax incentives to get businesses investing in US production and job creation? Where are the reforms that will reduce the incentives for non-productive casino investing on Wall Street?  Federal spending can help stimulate the economy, but its past time for the business sector to start doing their part.

                  "Private health insurers always manage to stay one step ahead of the sheriff." Sen. Sherrod Brown

                  by Betty Pinson on Mon Jun 14, 2010 at 09:46:53 AM PDT

                  [ Parent ]

          •  Brain...hurts*** (0+ / 0-)

            Let tyrants fear.-Queen Elizabeth I

            by Virginia mom on Mon Jun 14, 2010 at 11:09:39 AM PDT

            [ Parent ]

        •  The surplus money isn't being (11+ / 0-)

          used for job creation, so there's no suppression of employment that would come from raising taxes on capital gains and other "money for nothing" schemes. No matter what Ronald Reagan would say.

          Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

          by Jim P on Mon Jun 14, 2010 at 09:10:55 AM PDT

          [ Parent ]

          •  Do you know what the money is being used for? (0+ / 0-)

            Tax cuts do stimulate the economy. That's how Reagan achieved the illusion of success in the 80's.

            In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

            by blue aardvark on Mon Jun 14, 2010 at 09:26:05 AM PDT

            [ Parent ]

            •  Reagan's tax cuts were followed (3+ / 0-)
              Recommended by:
              3goldens, Virginia mom, Betty Pinson

              by the economy going down. When he raised them, the economy improved. That's just the historical record.

              The current monies saved by the leech-class on tax cuts are not being reinvested in the US economy, no matter what the theory says will happen.

              It's self-evident if you look at what has actually happened since the Bush cuts went into effect.

              Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

              by Jim P on Mon Jun 14, 2010 at 09:42:21 AM PDT

              [ Parent ]

              •  No...that's not accurate... (1+ / 0-)
                Recommended by:
                Orange County Liberal

                He lowered taxes in 1982. The upper-income rates proceeded as follows:

                1983 50%
                1984 50%  
                1985 50%  
                1986 50%  
                1987 38.5%
                1988 28%  
                1989 28%  
                1990 28%  

                Now, Clinton raised upper-income tax rates to 39.6%, but he also increased the taxable-income exemption by 280%.

                •  Why not start with '81 & '82 just like (1+ / 0-)
                  Recommended by:
                  3goldens

                  Ronald Reagan did? And in fact, for most citizens, their taxes went up. I'll take Krugman's word.

                  But Ronald Reagan does hold a special place in the annals of tax policy, and not just as the patron saint of tax cuts. ....he followed his huge 1981 tax cut with two large tax increases. In fact, no peacetime president has raised taxes so much on so many people.

                  ...The first Reagan tax increase came in 1982. By then it was clear that the budget projections used to justify the 1981 tax cut were wildly optimistic. In response, Mr. Reagan agreed to a sharp rollback of corporate tax cuts, and a smaller rollback of individual income tax cuts. Over all, the 1982 tax increase undid about a third of the 1981 cut; as a share of G.D.P., the increase was substantially larger than Mr. Clinton's 1993 tax increase.

                  ...Mr. Reagan's second tax increase was also motivated by a sense of responsibility; or at least that's the way it seemed at the time. I'm referring to the Social Security Reform Act of 1983, which followed the recommendations of a commission led by Alan Greenspan. Its key provision was an increase in the payroll tax that pays for Social Security and Medicare hospital insurance.

                  For many middle- and low-income families, this tax increase more than undid any gains from Mr. Reagan's income tax cuts. In 1980, according to Congressional Budget Office estimates, middle-income families with children paid 8.2 percent of their income in income taxes, and 9.5 percent in payroll taxes. By 1988 the income tax share was down to 6.6 percent; but the payroll tax share was up to 11.8 percent, and the combined burden was up, not down.

                  Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

                  by Jim P on Mon Jun 14, 2010 at 10:10:54 AM PDT

                  [ Parent ]

                  •  Now wait a sec...you just wrote: (0+ / 0-)

                    When he raised them, the economy improved. That's just the historical record.

                    Now, apropos Krugman's argument, you're saying the aforementioned tax increases were bad for the economic recovery post-1982?

                    Which is it...were the tax increases (combined with the federal tax cuts) good or bad for the recovery of that time span?

                    •  No, the tax increases were good, (0+ / 0-)

                      for the economy, except they came from my ass, and every other working stiff's. So they were bad for ordinary people's budget, though they helped the overall economic picture.

                      In short, ordinary people subsidized the share the rich used to pay.

                      His original tax decreases were bad, which is why he raised them on the rich as well as the workers after the 1981, 1982 failures.

                      You'll also note that his decreases on rich people's taxes in his later years played a part in the recession which got Clinton elected in '92.

                      Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

                      by Jim P on Mon Jun 14, 2010 at 10:30:01 AM PDT

                      [ Parent ]

                      •  Hmm...I'm not so sure... (0+ / 0-)

                        Remember, Bush Sr. raised them back to 31% beginning in 1991 - while at the same time only marginally increasing the taxable-income limits.

                        Recession ensued subsequent to that point - and even though Clinton raised taxes, his near-tripling of the taxable-income limits (limits that continued to rise each year until Clinton left office) left a hell of a lot more money in affluent pockets than people are willing to admit.

                        •  However you figure it (0+ / 0-)

                          all I know is that I pay a hell of lot more in taxes, when I'm working, than do financial speculators, big corporations, and the chief people running said corporations. Even after my tax refund.

                          So that has to be made equitable, imo. I'm pretty sure taking more from the aforesaid isn't going to hurt our economy, and will definitely help our deficit, and might well make it easier to engage in some intense job creation.

                          The coddle-the-wealthy approach of Voodoo Economics seems to have failed spectacularly.

                          Until we break the corporate virtual monopoly on what we hear and see, we keep losing, don't matter what we do.

                          by Jim P on Mon Jun 14, 2010 at 11:05:54 AM PDT

                          [ Parent ]

    •  Strange new world of Krugman (3+ / 0-)

      Yet another demonstration of the fact that sometime in 2000 we entered a strange world in which Paul Krugman is always right. If we are going to live in such a world, I really, really wish that he had a sunnier and more optimistic disposition.

      DeLong

      Skepticism of all the elite institutions, not trust, is what required for successful leadership in this era. Digby

      by coral on Mon Jun 14, 2010 at 09:19:14 AM PDT

      [ Parent ]

    •  Krugman seems to forget (4+ / 0-)
      Recommended by:
      citizen k, SoCalSal, moonpal, FiredUpInCA

      that Congress, in addition to President Obama, had to approve the stimulus package.  Since the Stimulus package was going to increase the deficit reconcilliation was NOT an option so Obama had to get 60 votes in the Senate at a time when Al Franken's seat was still being decided in MN.

      $800 Billion was the most he could get given the makeup of the Senate at that time.

      If that seems like a low figure, please note that in '93 President Clinton tried to get only an $18 Billion stimulas and FAILED to get even that modest proposal through the Senate.

      11/4 Changed Everything - Now, Henceforward, and Forever.

      by Sam I Am on Mon Jun 14, 2010 at 09:29:34 AM PDT

      [ Parent ]

    •  "Listen to Krugman"... Just More Empty Rhetoric (1+ / 0-)
      Recommended by:
      3goldens

      Corporate owned White House & Congress...Two-corrupted to the core political parties...What's a progressive to do?

      •  bitch and moan? just a guess (0+ / 0-)

        based on what I read here.

        •  Speaking of B & M (0+ / 0-)

          You might want to read Matt Tabbis's recent article in "Rolling Stone", "Wall Steet's War". You can read some facts regarding how the White House & Democratic leadership is in Corporate America's pocket. Study the Senate votes on Bernie Sander's amendment to open The Fed up to public review, Kaufman-Brown's & Merkley-Levin's amendments to the Financial Reform Bill. You can choose to keep your progressive eyes shut tightly & fingers inserted in the ears. You will not have to endure any "Bitchin' & Moanin'".

    •  "Krugman was right." (3+ / 0-)
      Recommended by:
      3goldens, TomP, Betty Pinson

      That's gonna sit well with the President's ardent partisans who were ripping him for most of the last year and a half.

      The real enemy of the good is not the perfect, but the mediocre.

      by Orange County Liberal on Mon Jun 14, 2010 at 10:09:45 AM PDT

      [ Parent ]

  •  The more I read Krugman... (17+ / 0-)

    the more I feel like we've wasted the last year and half by simply postponing Depression 2.0 the same way the Japanese did in the 1990's. They then, and we now, have prevented the worst of the pain, but the cost has been stagnation.

    We simply need more stimulus to revitalize the People's economy.

    Groucho Marx sings the new GOP motto: I'm Against It!

    by Jimdotz on Mon Jun 14, 2010 at 09:00:59 AM PDT

  •  And the GOP was wrong (12+ / 0-)

    It must be a day of the week ending in "y"

    The best way to save the planet is to keep laughing!

    by LaughingPlanet on Mon Jun 14, 2010 at 09:01:03 AM PDT

  •  Hoyer always seems to be the wet blanket when it (3+ / 0-)
    Recommended by:
    Ky DEM, jck, Betty Pinson

    comes to Congress doing things that would have a large, positive impact.  On top of that, he seems to enjoy undermining Pelosi and Obama on a regular basis.  Why Maryland's 5th CD can't find someone more progressive or less ass-hatish to take his place, I don't know.

    Don't be so afraid of dying that you forget to live. "Sometimes you gotta roll the hard six." - Adama

    by LionelEHutz on Mon Jun 14, 2010 at 09:01:13 AM PDT

    •  True (0+ / 0-)

      He's Rahm's point man in the House and he's very close to corporate lobbyists.  There's quite a revolving door for his staff and corporate lobbying firms.

      "Private health insurers always manage to stay one step ahead of the sheriff." Sen. Sherrod Brown

      by Betty Pinson on Mon Jun 14, 2010 at 10:14:52 AM PDT

      [ Parent ]

  •  Here's the lesson from history for you, Mitch (14+ / 0-)

    REAGANOMICS FAILED

    And Obama is missing a bet if he doesn't proclaim that message from the roof tops.

    REAGANOMICS FAILED

    Deregulation? I think BP and Goldman Sachs put that argument to rest. Sometimes we need a strong central government vigorously enforcing regulations.

    Tax cuts for the rich? Yeah, that's really produced job growth for the middle class.

    REAGANOMICS FAILED

    In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

    by blue aardvark on Mon Jun 14, 2010 at 09:02:24 AM PDT

    •  There Is No American Will to Repeal Reagan (4+ / 0-)
      Recommended by:
      shpilk, ssgbryan, mcartri, dendron gnostic

      Fail or no, the most the Democrats will ever roll back is some of Bush's policies.

      Carve the man on Mt. Rushmore, by mid century he'll be more important than anyone up there now.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Mon Jun 14, 2010 at 09:03:43 AM PDT

      [ Parent ]

    •  Tax cuts for the rich jacked up the economy (4+ / 0-)
      Recommended by:
      rick, opinionated, psyched, Ken in MN

      on a bunch of false bubbles which Clinton rode, but most of the economic benefits were wasted. Millions of people had jobs sitting around playing games, and not doing anything constructive, it jacked the prices up on houses and gave another bubble to drive Bush for a few years.

      Money injected into speculation without regulation does not create long term wealth, it just creates more extreme income disparity and market disruption.

      Obama shows no sign of rejecting VooDoo economics. Most of the Democrats embrace it, along with all of the Republicans.

      Reaganomics never ended. 'Wealth Creation' for the rich is still more important than a sustainable middle class

      by shpilk on Mon Jun 14, 2010 at 09:06:19 AM PDT

      [ Parent ]

  •  70% of Americans have no faith in Obama's re: U/E (5+ / 0-)

    http://pr-usa.net/...

    "68.8% have little-to-no confidence that government's economic policies will get the economy back on track, compared to 31.3% who do. Similarly, 73.8% have little-to-no confidence that government policies will help lower unemployment (v. 26.2% who do).

    Another issue on the home front is the Gulf oil spill, and Americans tend to score the Obama administration low on handling it. 29.3% gave it a "C," 25.4% gave a "D," and 23.4% assigned an "F."

    Uneasiness about domestic issues may be affecting how Americans would vote for president. If the election were today, 36.8% of adults would vote for a generic republican candidate versus 34.7% who would vote for Obama. 37.8% of registered voters would vote for a republican (v. 35.1% for Obama)."

  •  This is craziness. Let them fail, all of them. (1+ / 0-)
    Recommended by:
    Virginia mom

    Businesses with customers and good products don't disappear.   The bad ones disappear, and people who know how to make money and create jobs pick up the pieces after the bubbles pop and run things the right way.  

    Rewarding failure is counterproductive, especially when you have to borrow money you don't have from the Chinese in order to do it.

    Madness, I say.  

    Strength of character does not consist solely in having powerful feelings, but in maintaining one's balance in spite of them. - Clausewitz

    by SpamNunn on Mon Jun 14, 2010 at 09:08:49 AM PDT

  •  Republicans back spending cuts (4+ / 0-)
    Recommended by:
    TracieLynn, Ken in MN, TomP, Virginia mom

    because they know that will kill the recovery, which they will then blame on the Democrats.

    "A lie is not the other side of a story; it's just a lie."

    by happy camper on Mon Jun 14, 2010 at 09:11:36 AM PDT

  •  Obama is the worst negotiator in history (16+ / 0-)

    He makes MacGruber look like a genius.

    Obama asks his advisors how much is needed. They say: "$100 billion." So, Obama asks Harry reid and pelosi how much he can get and they say: "about 25$ billion if you're lucky." So, Obama asks for $50 bil expecting it to be cut.

    Well...why not start out asking for $200 billion and then negotiate down? No good negotiator compromises his bottom ine publicly and ahead of the negotiation. That's just idiotic.

    This is what he should have donw ith the origoinal stimulus. It needed to be $1 trillion? Ok. Then ask Congress for $1.5 trillion! Then "comrpromise" it down to between $900 billion and $1 trillion.

    •  He's addicted to delusions of... (7+ / 0-)

      ..."Bipartisanship" with an opposition that has no vested interest in doing anything other than helping Obama, and by extension, the nation, fail...

      •  No. He's just dumb. (2+ / 0-)
        Recommended by:
        ssgbryan, icebergslim

        Bipartisanship is not the problem. Its Obama's complete lack of understanding how to negotiate something. He's utterly clueless. Or, perhaps more disturbingly, he regards it unseeemly to do it.

        I cannot imagine Lyndon Johnson caving in and looking so weak.

        •  dont think he is dumb (7+ / 0-)

          think he is in the bubble too long already.  He does things in half measures ( ie half assed).

          The Stimulus was the right thing to do, but it was half assed, see the same thing for HCR, see the same thing for mortage relief, see the same thing for upcoming Financial reform, see the same for Oil response, etc et c...  

          His administration doesnt act boldly.  It isnt the time for half measures, but DC doesnt get it.

          (regarding the bank mess) They want to cure the patient but not deal with the disease.

          by dark daze on Mon Jun 14, 2010 at 09:23:20 AM PDT

          [ Parent ]

          •  When did the bubble form around him? (1+ / 0-)
            Recommended by:
            CWalter

            Because that stimulus package was passed within 60 days of him taking office.

            •  It is called SECRET SERVICE. (1+ / 0-)
              Recommended by:
              dark daze

              He has been under their protection since May of 2007, the longest of any candidate.  18 months before assuming the presidency.  He truly don't know what is going on out here and his so-called friends are not being honest with him.

            •  he was in the senate (1+ / 0-)
              Recommended by:
              Orange County Liberal

              he was in the senate long enough to be infected with it.

              (regarding the bank mess) They want to cure the patient but not deal with the disease.

              by dark daze on Mon Jun 14, 2010 at 10:01:29 AM PDT

              [ Parent ]

              •  Well, I ran into him at the airport (1+ / 0-)
                Recommended by:
                CWalter

                all alone hailing a cab when he was in the Senate.  In any case, I've always felt that he was fairly removed just as a person.

                Anyway, even if he doesn't "feel" anyone else's pain, as a politician he should be a bit more tuned into what creates pain - and, particularly, what pain will ultimately affect his political standing.

                He was terribly worried about the Republican Leadership and not worried enough about the plain old people on Main Street who were trying to figure out their new financial reality.  They believed that he was working for them; and now a lot of those folks don't have that same kind of faith in him.  I think it is a lot better to keep your fans happy than to try to cater to a bunch of people who want nothing but bad for you, but that's just me.

                •  I agree (0+ / 0-)

                  and for the bubble, its not just physical, it intellectual.  I dont think he REALLY listens to people when he is out speaking with them. This is true to almost every politician I have ever met. They always seem, dismissive, rushed, fake, responsive with little more than talking points, pulled five way by their handlers, etc, etc.

                  (regarding the bank mess) They want to cure the patient but not deal with the disease.

                  by dark daze on Mon Jun 14, 2010 at 10:48:24 AM PDT

                  [ Parent ]

        •  Obama is, and Will Remain, in Corporate Pockets. (2+ / 0-)
          Recommended by:
          rick, Orange County Liberal

          Obama isn't dumb, neither was George W. Democrats don't lack spine & do not cave. This isn't snark! Corporate owned Democrats love it when progressives fall for the myth that Democrats are weak & Obama really prefers Main St. over Wall Street. We are simply an oligarchy now, pretending that we're still a functioning democracy. We are not.

        •  he's a lot, a lot, much smarter than you (1+ / 0-)
          Recommended by:
          FiredUpInCA

          Anyone who reads your clueless theories about negotiation can confirm.

    •  He is letting CONGRESS move his agenda. (3+ / 0-)

      Then you know what that is about.  He want to be congress friend, when those sold out politicians only care about their next election.  If he does not start going AFTER CONGRESS he will continue to get half assed legislation done.  People are tired of this.

      •  War on Congress (1+ / 0-)
        Recommended by:
        SoCalSal

        Going to war on Congress or trying to go above or around them did not end well for Jimmy Carter and it made healthcare reform a non-starter in the Clinton administration. I think that is why he encourages them to do their constitutional duty of getting up and going to work.

        •  HE is a community organizer, (1+ / 0-)
          Recommended by:
          TracieLynn

          it is about the PEOPLE putting pressure on Congress FOR HIM.  He actually have Democratic Senators who will NOT vote for extending COBRA subsidies for the unemployed.  That is not right.  He needs to go after them.  He needs to show the American Public he will FIGHT FOR THEM, even if it is from his bull horn.  No excuses here.  And this is a huge GRIPE from people about him and why he is clueless and really believe that the people's anger at him is manufactured by the press.  Don't believe it, watch yesterday's Meet the Press and Roger Simon said this was told to him directly from his interview with Obama.  That tells me that he blames everyone else, but him or his failings?  No way.  If Barack Obama was allowed to walk around the Gulf, the people would have plenty to say about the way this government has handled that oil catastrophe in the Gulf, as they watch their pristine beaches become oil slicks, while the WH is arguing and sending letters to BP to "do better...."

      •  ice, congress IS the lawmaking body! (1+ / 0-)
        Recommended by:
        FiredUpInCA

        Presidents don't make laws, congress does. Every president must work with congress. Historically, bills drawn up by the White House get the most pushback from congress. That's what happened to Clinton's health reform proposal, remember?

        Granted, Obama was disappointed/surprised/dismayed when he didn't get any votes from Republicans, but he still has to work with congress to get any laws passed.

        I'm continually amazed that President Obama gets all the blame for the results that only congress can make.

        A president can propose, cajole, negotiate. But force? I don't think so.

        Slavery is the legal fiction that a person is property. Corporate personhood is the legal fiction that property is a person. -Jan Edwards

        by SoCalSal on Mon Jun 14, 2010 at 09:54:58 AM PDT

        [ Parent ]

        •  Yes, they are... (2+ / 0-)
          Recommended by:
          CWalter, Orange County Liberal

          but when you sit on the sidelines and look like you are NOT FIGHTING, that does not sit well out here.  We are starting to see it.  His once coalition is fractured and broken in many places.  Bill Clinton whipped up on congress and the public believed him in the end.  Now we can continue to say, oh well, "he could not do anything because of congress", and it may be true, but politics and the WH is also about OPTICS and looking like you are FIGHTING for something.  Making the public understand.  Most of the public don't understand all the functions of government, but they get congress, votes and the president.  And while this is congress fault, what is wrong with Barack Obama using his bullhorn to the public and saying, "CONGRESS WON'T HELP THE UNEMPLOYED.  THEY ARE BLOCKING YOUR HEALTH CARE INSURANCE".  You don't think the public will get that one?

        •  None would have dared cross him (3+ / 0-)

          publicly at the time the stimulus was passed.  He was too loved and too popular.  He negotiated away any advantage that he had by deferring to Congress and, in particular, the Republcans. I think they thought that they were going to be putting votes in the bank for something else down the line, but that was a huge mistake.  In DC, you take what you can get when you can get it - you don't count on loyalty lasting and you can't count on favors being repaid down the line.

          Anyhow, with Summers and Geithner advising him, he was doomed to fail on this front.  Between the stimulus and pushing banking regulation down the list of priorities, they made sure Wall Street's risks were minimized; and they ultimately exposed Obama to much greater risk.  They might have drank their own kool-aid and really believed what they were saying at the time about unemployment not going about 8% or whatever they were saying then, but the reality was that there was no reason in the world why the stimulus couldn't have been bigger and more aggressive even if 8% was going to be the worst of the numbers.  They left him no wiggle room for miscalculations on the low side; and his political advisors led him to believe that he could easily go back to the well if there was a problem.  Major political malpractice, imo.

      •  Except that he's willing to strongarm . . . (1+ / 0-)
        Recommended by:
        CWalter

        . . . Congress when it suits him to do so. The White House has no problem manipulating Congress when it wants to, and from what I've gathered, they do a pretty good job of it.

        Which means if they don't, it's because they're playing politics, not governing.

        The real enemy of the good is not the perfect, but the mediocre.

        by Orange County Liberal on Mon Jun 14, 2010 at 10:19:34 AM PDT

        [ Parent ]

      •  why did you name yourself after a pimp? n/t (0+ / 0-)
    •  Progressives are like drunk sports fans (1+ / 0-)
      Recommended by:
      FiredUpInCA

      That was an easy basket, all he had to do was drive the lane.

      Reading complaints here about Obama's negotiating style is like listening to an astrology club explain why physicists are stupid.

    •  You do not know a single thing about negotiation (1+ / 0-)
      Recommended by:
      FiredUpInCA

      I have seen this same theory advanced many times, but it's not even close to reality. Not in the same neighborhood.

      Here. You can test it. Go to your local car dealer and offer to trade your old car in for $500,000. Then settle for $250,000. It's so simple.

      Post a diary with a photo of your new car and the pile of extra money.

  •  The Dems controlled everything in '09! (6+ / 0-)

    President Obama could not have asked for more advantageous conditions in which to do whatever he wanted last year.

    That's the maddening thing.

    •  Except for the part where (7+ / 0-)

      the Senate conservadems vote with the Republicans on anything important.

      "A lie is not the other side of a story; it's just a lie."

      by happy camper on Mon Jun 14, 2010 at 09:16:24 AM PDT

      [ Parent ]

      •  Except for the part (4+ / 0-)

        where Obama holds the pen, and the power in the Democratic Party.

        See, this is where a Rahm Emanuel who uses his asshole status for good rather then as CEO of Dems for corporate hire would have been good. Don't back this we primary you. Don't back this we make sure you aren't funded for your reelection campaign. Don't back this and we make sure that this pet project never gets voted on. And if it does, it doesn't get a signature to become a reality. Don't back this we make sure that the press gets to meet your favorite lobbyist and a list of all your 'meetings'.

        Sure, some of it downright unethical. But pull the bastards in line. Make them realize that it is all about making sure the final product gets voted on, and if this will really kill them with their districts you can see about letting them out of the final bill.

        But we had a Democratic leadership who weren't willing to play hardball except with progressives about war funding, and a White House busy making corporate deals, trying to look bipartisan, and cementing the unitary executive.

        Here's the thing a SMART executive who was really interested in helping the economy would propose a stimulus that is three times as large as Krugman and crew is proposing. It would include one tax cut and one only - eliminate federal taxes on unemployment. Send that to the table. Let the Republicans add a tax cut for small business. Let them claim the  middle class tax cuts you planned on having anyway. Hold the line on cuts for payroll taxes, capital gains, incomes over 250,000, and anything for large companies. Heavily blanket the media about all compromises and the big Republican wins. Let them cut it back by half. The extra half can hold the special interest sweeteners.

        Instead we got a too small stimulus filled with tax cuts as the opening proposal because the White House clearly doesn't understand either negotiation or the PR value of compromising in public to the opposing view not understanding that Ship Bipartisan sailed about 20 years ago. Either that or it was a corporate tool who really didn't want to stimulate the economy of Main Street because the MOTU like high unemployment and the chance to cut social spending that should be going to them.

    •  Democrats Did NOT Control in 2009 (2+ / 0-)

      The American Corporate Party has controlled both their wings for most of American history. What changes with each election is which party K-Street makes the bribes out to. The corrupted, fixed, so called two-party system functions only for the transfer of the declining wealth of the middle-class to the rich. Sad, but oh so true.

  •  Mars mission parable (3+ / 0-)

    You are trying to get a bill through congress to support a Mars mission by NASA.  It is a tough sell because the rocket will need 2 million gallons of gasoline to get to Mars.  Supporters say it is worth buying all that gas, for the scientific benefits, exploration, etc.  Opponents say let's use the gas here on earth to support the drug war, truck fleet, disadvantaged children, or whatever.  There are three possible courses of action:

    1. Allocate the 2 million gallons of gas to NASA so it can go to Mars.
    1. Scuttle the Mars mission and use the 2 million gallons of gas for something else.  It's not like those uses don't have their own attraction.
    1. Do a political compromise and allocate 1 million gallons to the mission instead of 2 million, so the rocket runs out of gas halfway to Mars.

    #3 is obviously the dumbest.  Unfortunately, it also seems to be the way the Obama admin does almost everything.

  •  Paul and the Pres. were both wrong (0+ / 0-)

    to concentrate stimulus spending on "shovel ready" infrastructure spending (which failed completely in Japan during the '90s), tax cuts and politically correct "green" jobs.

    Instead of focusing on stimulating consumer spending (e.g., Cash-4-Clunkers) which constitutes 70% of demand in our economy, they took the easy way out and effectively blew hundreds of billions on programs that don't stimulate anything.

    PK thought unemployment would peak at 9%; instead, we will be lucky to see 9% in the  next year thanks to the ineffective stimulus that was enacted.

    •  5% went to infrastructure.. (1+ / 0-)
      Recommended by:
      Churchill

      Only 5%.. so, I have no idea where you get the notion they "concentrated stimulus spending on "shovel ready" infrastructure spending".

      "Those are my principles, and if you don't like them... well, I have others." - G. Marx

      by Skeptical Bastard on Mon Jun 14, 2010 at 09:17:04 AM PDT

      [ Parent ]

      •  Apparently, you missed my point (0+ / 0-)

        In his first weekly presidential radio and video address, Obama said his American Recovery and Reinvestment Plan would protect workers from losing health-care coverage; modernize public schools, roads and sewer systems; lower energy costs and taxes; and make college more affordable.

        Obama wants to double renewable energy capacity within three years, creating enough additional capacity to power 6 million homes, and he plans to leverage $100 billion to finance private-sector clean-energy initiatives.

        His plan also calls for an expansion of the child tax credit, which would provide a new tax cut to the families of more than 6 million children and increase the existing credit for the families of more than 10 million children.

        http://www.washingtonpost.com/...

        Obama's "stimulus" plan contained virtually no money to stimulate consumer demand, which constitutes 70% of total demand in our economy, because programs like Cash-4-Clunkers were politically incorrect.  I remember PK saying that stimulating consumer demand would be "wrong" because consumers needed to rebuild their balance sheets by saving instead of spending on consumption.

        So here we are over a year later with anemic consumer demand, unemployment near double digits and no end in sight.  Therefore, Obama proposes more of the same.

  •  50 Billion for raises to state workers (0+ / 0-)

    while the workers actually producing something get nothing.. or maybe get extended unemployment benefits.

    People are tired of seeing greedy state unions and teachers bitch about not getting raises.. and then getting them at taxpayer's expense.. while the rest of us get jack.

    No.. state governments need to tighten their belts.. lay off workers just like any business.  We cannot keep bailing out states that cannot manage their budgets.

    "Those are my principles, and if you don't like them... well, I have others." - G. Marx

    by Skeptical Bastard on Mon Jun 14, 2010 at 09:14:29 AM PDT

  •  So, I guess this is why Krugman won the Nobel.... (11+ / 0-)

    too bad Obama didn't make him a high mucky-muck on his economic team.  We probably all wrote letters to the White House urging him to learn from what FDR did to bring us out of the Great Depression - massive stimulus and public works programs, and to hell with the Republicans.

    "Those who make peaceful revolution impossible will make violent revolution inevitable." - JFK

    by moose67 on Mon Jun 14, 2010 at 09:15:53 AM PDT

  •  Not listening to Paul Krugman isn't the problem (2+ / 0-)
    Recommended by:
    jck, Betty Pinson

    Listening to Republican lies and the media whores that repeat them, is.

  •  Krugman? What does he know? (12+ / 0-)

    I am sure Mr. Krugman has his bad days but over the last 5-6 years I feel like he is the only voice in the traditional media that has a clue when it comes to economics. I don't know crap about economics but his foresight has been a lot better than the hindsight of the people in power.

    He seems to be the only voice that looks at the history of past policy. I also like the fact that he doesn't pretend to be a 'regular' guy. He is an intellectual and a liberal and he actually seems to care about the country as a whole.

    "You know, just because the thing I saw wasn't there doesn't mean there wasn't something there that I didn't see." Ann Althouse, Conservative Thoughtmeister

    by Bill Section 147 on Mon Jun 14, 2010 at 09:17:19 AM PDT

  •  It's time we all realize that government (1+ / 0-)
    Recommended by:
    happy camper

    spending is neither the savior or the distroyer of the economy. Simplifying the federal tax structure would have much more sustained long term stimulus value to the economy than any stimulus package, no matter how large, that congress could pass.

    My ideas were posted last friday on this diary.

    Bring back the progressive federal income tax

    Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

    by RMForbes on Mon Jun 14, 2010 at 09:19:57 AM PDT

  •  The line forms here... (3+ / 0-)
    ... for those of you who wish to apologize for ever calling me a 'doom & gloomer' when it came to the stimulus.

    Because all I've EVER argued was Krugman's position that it wasn't enough.

    Regards,
    Corporate Dog

    -----
    We didn't elect Obama to be an expedient president. We elected him to be a great one. -- Eugene Robinson

    by Corporate Dog on Mon Jun 14, 2010 at 09:21:25 AM PDT

  •  Congress--Major Fail (2+ / 0-)
    Recommended by:
    MikePhoenix, Betty Pinson

    The focus should be on doing whatever necessary to get people back to work--in meaningful, productive jobs.

    The Repugs are bereft of any ideas but tax cuts.  The last decade of 0% job growth pretty much discredits that approach.

    Transferring more government funds to private companies without explicit mandates to add jobs is just more corporate welfare.

    Putting a ceiling on the "stimulus" (the means) rather than funding a full bore effort to create jobs (the outcome) is a recipe for failure.

    Simply put...the President should espouse a significant target number of jobs--12 million if not greater and challenge the congress to come up with a meaningful program to do it in stages.  (E.g. 4 million by YE, 8 million by 1Q 2011,etc.).

    If we choose to continue down the same path both parties will be damaged by the fallout.  Who knows what could occur in the subsequent public perception of a power/leadership vacuum.

    The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected.

    by Agent Orange on Mon Jun 14, 2010 at 09:22:14 AM PDT

  •  Some of it could come from unspent (1+ / 0-)
    Recommended by:
    Betty Pinson

    stimulus funds like the broadband program. The federal agencies charged with implementing the $7B plus broadband program-Commerce and Ag departments-have spent almost none of the $7B to date and their plans for spending the money in the future have been so twisted by industry interests that the spending is not likely to produce much of a stimulus (when it is spent after the recession has ended) or do much to improve our nation's broadband infrastructure.

  •  Stimulus for the sake of what? (0+ / 0-)

    Growing the economy and creating a greater need for resources?

    If the government wants to build mass transit and high speed rail, then spend some money.  Government spending for the sake of economic growth is wrong headed.

    And Krugman is hardly ever right.

  •  I wrote about this yesterday, (9+ / 0-)

    And the usual suspects argued the stimulus package was working.  Really?  The first package touted saving firemen, policemen and teachers jobs.  But here we are again needing another 50B for the same ask.  Sure there is left over stimulus money, the problem is not 50B or the President will not ask.  The President should ask for the 50B but things have changed.  His political capital was not what it was in January of 2009, he will get pounded that the stimulus package did not work and he won't get 50B.  That is going to the same well twice, and most of the time that horse don't drink.

    If this President was smart, he would pull a Bill Clinton and start arguing his positions AGAINST CONGRESS.  Enough of this, "he can't do anything because of congress", this should be argued directly to the American Public along with the removal of the Cobra Subsidies.  He needs to do this.  He is Commander in Chief, he needs to use his bullhorn and BLAST CONGRESS, instead of trying to be their best friend.  He is not in the Senata, anymore.

  •  Time to chop that ridiculous defense budget. (8+ / 0-)

    Eisenhower was also right and nobody listened to him either.

  •  There is so much momentum now ... (3+ / 0-)

    ... to slow spending and tighten the economy. While many of us understand the need to put more public dollars into the system, I don't think the votes are there.

    Witness the screws they just put on unemployed workers ... in a related note, a tea-bagger business acquaintance I saw Saturday was absolutely giddy about the news and showed me some right-wing site that's framing it as a personal defeat for the president.

    This man, who portrays himself as a morally upright paragon of civic virtue, lost his job a little over a year ago when GM closed his auto plant. He took some of the separation money he received and started a small business that's doing barely OK.

    Help those less fortunate? Not a chance.

    Oh, and this boldly conservative christian dreams of sleeping with younger women, makes suggestive comments about them and would like to make his step-daughter one of his conquests.

    This is who they are and this time, with the help of the Blue Dogs, they will likely prevail.

    •  The momentum is entirely within (4+ / 0-)

      certain very loud (and either clueless, self-interested or cowardly) minority segments of the financial, political and media worlds, and not within the public at large, which is not clamoring for fiscal austerity at all. I.e. a small segment of a small segment of the entire population. This momentum, as it were, is largely made-up.

      Anyone who says that the deficit is one of our most pressing near-term problems that requires cost-cutting is either an idiot or a liar.

      "Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" --Alexander Hamilton

      by kovie on Mon Jun 14, 2010 at 09:46:42 AM PDT

      [ Parent ]

  •  This is a pointless exercise (4+ / 0-)

    "See I told you so."  Of course Paul Krugman was right.  Liberals are almost always right.  The problem is you have to convince the mushy middle and conservative Democrats that we're right.  And when you can't, and you still need their votes, you try to get as much support as possible for left-leaning policies.

    •  Well, not entirely pointless (2+ / 0-)
      Recommended by:
      ssgbryan, Orange County Liberal

      It's useful to point out the numbers for future reference and back up the concept that more government spending during a severe recession is necessary.

      However, to make it about two individuals-- Krugman vs. Obama-- distracts from the numbers and turns it into adolescent echos from the halls of high school.

      •  Except the point is to reference who is right (1+ / 0-)
        Recommended by:
        Orange County Liberal

        and wrong for a different reason. Do you keep going to someone consistently wrong or to someone consistently right? That's the value of assessing who is right here about the need for stimulus because the president is surrounded by people talking about deficit reduction rather than making sure the economy isn't going into the toilet.

  •  Paul Krugman is always right (3+ / 0-)

    Brad DeLong's rules for living:

    (1) Paul Krugman is always right.
    (2) If you think Paul Krugman is wrong, see #1.

    (Or words to that effect...)

    I have to admit -- as rules go, you can't go TOO wrong with these! I mean .. when was the last time he was wrong? The man seems to have a clarity of vision that is astounding, and no political concerns about expressing it.

    I really think he was even (mostly) right about Obama. During the primaries, his concern (one of them) was that Obama would not fight for progressive principles, that he was more interested in bipartisanship, something Krugman did not think was the really urgent thing. In effect, I put my hands over my ears and said "I can't hear you", but ... well, I think he's right.

    (Although I'm not convinced Hillary, who also has centrist-leaning tendencies, would have done better.)

    Republicans: ten-time gold medalists in synchronized stupidity

    by cedubose on Mon Jun 14, 2010 at 09:36:49 AM PDT

  •  Great post, Jed (0+ / 0-)

    In my eyes the deficit reduction commission doesn´t seem like a problem though.

    It´s important to take the longterm structural deficit seriously and underline that it is just in times like these with high unemployment that budget deficits are acceptable.

    This season's hottest new trend: Republicans nominating candidates so far to the right, they're practically falling off the map.

    by Mariken on Mon Jun 14, 2010 at 09:38:23 AM PDT

  •  The original stimulus could have been bigger (3+ / 0-)

    but it also could have been smarter.

    What I see daily in stimulus programs like building retrofits is that no thought was given to creating sustainable private sector replacement once the funds ran out.  For example, in Chicago there has been a significant retrofit program for public housing and state buildings, and these jobs went to the usual suspects (i.e., politically-connected companies).  This could have been the foundation for developing innovative private sector programs and investment models for retrofitting homes and commericial buildings, so that when the block grant money ran out, there was still demand for those skills.

    Instead, it was the same old same old--money = jobs = votes.  And now we're about to fall off a cliff.

    •  I saw a whole bunch of road repairing (4+ / 0-)

      in Chicago.  Not much else.

      I didn't see anything for mass transit or high speed rail.

      And why is the government paying to fix roads anyway?  Why don't the folks that drive cars pay to fix the roads?

      I drive like everyone else but I don't like our automobile dependent culture.

      •  Because folks want cheap gasoline (0+ / 0-)

        "Why don't the folks that drive cars pay to fix the roads?"

        The answer is simple:  Americans believe they are entitled to cheap gasoline and free roads.  From 2000 elections have been about "free candy" rather than about problem solving or paying as we go.  Until the supply siding demon is exorcised we will continue down the "Highway to Hell."

        Road repair/construction should be self funding through fuel taxes, but it is not.  Folks scream about the current small Federal gasoline tax.

        As far as maintenance goes...the worst wear and tear on roads comes from heavy equipment like garbage trucks and tractor/trailer rigs--all diesel equipment.

  •  I disagree (0+ / 0-)

    No. He's just dumb.

    Bipartisanship is not the problem. Its Obama's complete lack of understanding how to negotiate something. He's utterly clueless. Or, perhaps more disturbingly, he regards it unseeemly to do it.

    I cannot imagine Lyndon Johnson caving in and looking so weak.

    I don't think the guy we have in the White House is dumb by any stretch of the imagination.

    If Clinton is a genius for getting a $16 billion stimulus through, then I think we have to give credit where credit is due for getting an $825 billion stimulus through in the midst of the worst economy since the Great Depression, a near collapse of Wall Street and two wars.

    Comparing Lyndon Johnson's time to Obama's is comparing apples and spaceships.

    The truth is Lyndon Johnson routinely caved in on Medicare with the AMA and others to get the thing passed. But the most important ace in hole he had was his ability to lie about the true cost of Medicare.

    Johnson did not have the CBO to deal with at all. Obama has to prove he can pay for all of his programs.

  •  Yeah but he wasn't a close personal friend (3+ / 0-)

    of Howard Zinn or marched with Abbie Hoffman, which means that his Nobel Prize in Economics counts for nothing and he's just another poutraged blogger!

    "Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" --Alexander Hamilton

    by kovie on Mon Jun 14, 2010 at 09:40:33 AM PDT

  •  Primary his ass in 2012 (2+ / 0-)

    But who would do that?  Kennedy really beat up Carter in '80, but he didn't win and neither did Carter.

    I definitely think Obama needs to understand that a LOT of people on the left are severely disappointed and feel betrayed.  I don't think he gets that at all.  Not only will they sit out in 2010 unless things change, but they'll sit out in 2012 as well.

    What a missed opportunity to squash the GOP for an entire generation.

  •  Federalize Medicaid (1+ / 0-)
    Recommended by:
    Betty Pinson

    has always been one of my ideas to ease the state budget crisis.  But I understand that doing so would require altering the Hyde Amendment, which won't happen.

  •  a day late and a dollar short, again (0+ / 0-)

    Obama dined with David Brooks, Bill Kristol, Charles Krauthammer & George Will; but not with Kos

    by Churchill on Mon Jun 14, 2010 at 10:20:16 AM PDT

  •  You legislative wizards never want to consider (0+ / 0-)

    What would have happened if, as McConnell wished, the stimulus bill had not been watered down enough to get those three critical Republican cross over voters.

  •  60 Bil for Iraq/Afgh, no debate, 50 Bil -teachers (1+ / 0-)
    Recommended by:
    just some lurker guy

    there is a huge debate, outcry, from the GOP.  They want to cut education and they finally have their chance.  

    Obama dined with David Brooks, Bill Kristol, Charles Krauthammer & George Will; but not with Kos

    by Churchill on Mon Jun 14, 2010 at 10:39:26 AM PDT

  •  firing 300,000 teachers/gov wrkrs,hiring soldiers (0+ / 0-)

    that the way to have priorities.  The Iraq and Afghanistan war is STILL a huge financial drain on this country, but they keep getting more money. How many times do the general have to prove that they don't have a clue before someone cuts their budget?

    Obama dined with David Brooks, Bill Kristol, Charles Krauthammer & George Will; but not with Kos

    by Churchill on Mon Jun 14, 2010 at 10:42:17 AM PDT

  •  1. "No one could have known..." (2+ / 0-)
    1.  "He's just one man--he's not God/Superman/Ironman"
    1.  "Last time I checked, President Obama did not control the Congress/Senate/Lieberman/Nelson/Blanche Lincoln (oops, er...)"
    1.  "Maybe you all ought to focus some of your venom/spittle/hatred/bile/anger on the Senate/House/Begala/Carville/Hartmann/Greenwald, instead of attacking a great, great man and leader [who is simultaneously powerless to influence Congress] who is doing the absolute best he can, damnit!"
    1.  "Did I mention how it's Blanche Lincoln and Joe Lieberman's faults?  He doesn't control them!  (oops, er, he doesn't control Lieberman, anyway"
    1.  "But, if he pushes for more spending, then the Republicans will portray him as a tax-and-spend socialist...oh, wait, might've heard that somewhere already..."
    1.  "The public likes deficit hawking, and hates increased spending on things like stimulus, and also loves war/defense spending.  So, since that is what the public wants, President Obama is being a populist, really."
    1.  "Bully pulpit?  What bully pulpit?  Show me one example of a President using his power and position and access to the media to raise popular support for a policy or program.  Name one, I dare ya!"
    1.  "Haters!  You're just as bad as the right-wingers, except worse, because you should know better!"
    1.  "You're playing right into their hands.  President Palin it is.  Nice work, oh yeah!  Hope you're fucking happy!"

    Did I cover them all?

  •  Exactly right (3+ / 0-)

    President Obama himself has not done enough to push back on the absurd notion that the time to reduce spending is right now.

    How we got here, the Powell Manifesto: http://old.mediatransparency.org/story.php?storyID=21

    by Paleo on Mon Jun 14, 2010 at 10:46:23 AM PDT

  •  GADZOOKS (0+ / 0-)

    Seems as if the only way to push this nation further
    left is to have a huge catastrophe...one of these days
    (maybe it is already here) that even a catastrophe
    isn't gonna do it.  

  •  yup, he nailed it (1+ / 0-)
    Recommended by:
    dclawyer06

    and was so thoroughly vilified by, well, we all know who generally, around here. apologies which will not be forthcoming are in order. hehe. shit.

  •  Pay attention to ecology and jobs will follow (0+ / 0-)

    A very simple solution for the President.  He has a massive oil spill on his hands.  Create a job force paid by BP to clean it up.

    "There's no green there, they killed their mother" -- Avatar

    by noofsh on Mon Jun 14, 2010 at 11:10:10 AM PDT

  •  President Obama and the Dems should've raised tax (0+ / 0-)

    Should have Increased Taxes on the Wealthy - the minute the Bailed-Out Banksters announced their Bonuses.

    The Dems really missed a very important populist voter opportunity when they failed to do that.

    Celebrating PA Dems Voting for the Best Candidates in Sestak and Trivedi

    by PAbluestater on Mon Jun 14, 2010 at 02:20:14 PM PDT

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