President Obama must be going bubble crazy. No one was being held hostage. To say someone was being held hostage is just plain nuts.
The president speaks of this as a one time situation. The next big budget crisis will be over raising the debt ceiling. The government will shutdown if the debt ceiling is not raised. What will President Obama negotiate away? Perhaps medicare! Perhaps Social Security! Perhaps unemployment insurance! Perhaps whatever is left of the stimulus package! Who knows? If you do then please tell me.
Before US needs to raise the debt ceiling, republicans will start working on the 2012 budget. Since the budget starts in the House of Representatives, President Obama's proposed budget will be Dead Before Arrival. Health care will be cut into small pieces including much smaller funding for medicare and medicaid. Next to go will be departments such as the Labor Department and the Department of Commerce. The Department of Energy will have all non-nuclear bomb funding cut from their budget. The NSF will not get a budget, hell who needs science. The NIH will be eviscerated as will the EPA. The Department of Interior will be told to sell public lands if they want to keep employees. The IRS will be a walking dead man when the republicans get done with the budget. Yup, that is the future.
Now to get to some facts on the economy. Businesses invest when there are profits to be made from sales. Yeah sales for inexpensive Chinese goods are going strong this Christmas. But, who is going buy anything after Christmas? The demand for goods just will not be there. A few tax cuts for the middle class will not make a damn bit of difference. Business will continue to lay people off and the demand for goods will continue to shrink.
State, County, City, and local budgets are being cut left and right. Yeah there was some slight gain in employment in the private sector, but that gain was more than offset by new people entering the job market. Next year as more public sector budget cuts continue to increase, more and more people will be laid off. I expect unemployment levels to hit 15% next year. Just wait and see. Who will be the hostages then?
Next there are the banks. The banks are apparently making a whole lot of money. From what? What are the banks investing in to turn a profit? Oh, the banks are making profits from the mortgage funds for which they got bail out money. Sadly, the bank profits are not real. The profits do not come from loans to actually build products. The profits come from accounting fraud. Well, not necessarily legal fraud, but fraud in the sense that the money they are making is not real money. And from this bankers are receiving huge bonuses. Like wow.
Next there is the whole treasury bond issue. China buys US bonds so that the US will buy Chinese goods. If China stops buying bonds, their economy will fall apart. That will not stop. The oil producing nations do the same thing. Basically, they are buying their own products, only instead of receiving their products they send the products to us.
And then we get to Europe. The Euro is in deep shit. The Germans and the French want to starve everybody else and in return the starving nations are demonstrating. So the French demonstrate too, after all who wants to be fucked.
Taxes ain't the problem.
Well paying jobs is the issue. Tax cuts do not create such jobs. President Obama needs to understand what is happening. In the 1920s the fruits of tremendous productivity increases in agriculture and manufacturing resulted in a few becoming fabulously wealthy. New ways of distributing the wealth needed to be found. Social Security, the 40 hour work week, strong labor unions, and WW II, all redistributed the wealth. After the war the top marginal tax rates were above 90% to pay down the debt.
However, education through the GI bill was still funded. Due to high tax rates and the pent up demand following the war, companies made large investments.
We are now entering a post-industrial era. By this I mean that manufacturing and computers have become so efficient that fewer people are needed to manufacture goods, just as what happened in the 1920s we are faced with a huge unemployment problem. Just as in the 1920s trade is a part of the problem, and just as in the 1920s killing trade will cause more harm than benefit.
Until we recognize that we are entering a new post-industrial age and start adjusting to the new facts of life, unemployment will continue to rise. The solution includes refocusing on education, focusing on raising the standard of living in the rest of the world (part of the success of the 1950s was the Marshall Plan), providing a higher standard of living in the US, and doing the green energy thing. Of course more R&D needs to be funded and we need better trade deals.
Democrats try to govern. Republicans try to kill government. They do not care if their budget is filibustered in the Senate, government is killed whether it is or not. The republican budget needs to be explained as a means of destroying the United States. Republicans will surely deny this, but this is exactly what republican budgets will do.
So what do we do? The answer is first we support people like Bernie Sanders and Alan Grayson. Next, we write and write and write until someone listens. We pump up the ratings for shows like Countdown, etc. We support the Huffington Post and we submit articles to the Post.
Somehow these points need to be made loudly and clearly. That is our job.