Andy Stern takes on America's second deficit
Ezra Klein, WashingtonPost -- 12/2/2010
Stern, the former president of the Service Employees International Union, is a member of the Simpson-Bowles Commission. He's not the only participant to bring out his own plan (pdf) -- [...] but his plan is more clearly distinguished from the others. This is, in part, because where they reduce one deficit, he reduces two.
Stern's proposal cuts and raises about $4 trillion by 2020, which is comparable to the Simpson-Bowles proposal, and sufficient to get us back to the black.
"But we need to appreciate that we have two deficits," Stern says. "A fiscal deficit, and an investment deficit. A family under stress would think hard before they didn’t invest in their kid’s education. A company under stress would think hard about not investing in new equipment that it needed. I wanted to show you can invest as well as cut."
Interesting concept ... we have an Investment Deficit, in addition to a Fiscal one.
Andy Stern, goes on to explain what he means, and how we can address BOTH problems, while making the Economy inherently stronger, at the same time.
Stern's critique of the fiscal commission is that its mandate has been too narrow: You can cut and tax your way to a balanced budget, but more is needed for a dynamic economy. His plan calls for the creation of "a permanent fund beginning in 2015, with an initial investment of $75 billion dollars, increasing by 3% annually. A range of long term investments (e.g. infrastructure, smart grid, education, and broadband) will be recommended each year by an outside panel of experts appointed by the President and Congress."
[...]
So if we want long-term investments, we need a dedicated fund with a dedicated funding source. Stern proposes a few possibilities: a Financial Transaction Tax, for instance, that would add a 0.25 percent-0.5 percent charge onto stock transactions if the stock is held for less than a year (that way, it mainly falls on professional investors making speculative trades, not ordinary investors managing their retirement savings). Another option is a surcharge on income over $1,000,000.
Here is Andy Stern's official report to the Commission; chalk one up for Progressives, for a few moments, anyway ... until at least the GOP steals the Deficit "high road" once again, as per usual:
The 21st Century Plan for America’s Leadership (pdf)
Submitted by Andy Stern, former president of the SEIU and Simpson-Bowles Commission member -- Dec 2, 2010
Fiscal responsibility is not a mere accounting exercise. Our country has to address another significant deficit in addition to its fiscal one -- an investment deficit.
If we do not make short and long term fiscally responsible investments in national priorities (e.g.infrastructure, broadband, education) to create dynamic economic, wage, and job growth, then American workers will fall behind, and our businesses will be less competitive in this new global economy.
[...]
Of course this is not the first time the Deficit Commission has heard from the advocates of working people. But given how much attention the Financial Transaction Tax proposal HASN'T gotten since then -- The Commissioners obviously weren't listening then either.
SEIU President Mary Kay Henry's Address to Obama's Fiscal Commission
Job One For America: Putting Americans Back On The Job
SEIU.org -- June 30, 2010
SEIU President Mary Kay Henry testified Wednesday, June 30, 2010 before President Obama's bi-partisan National Commission on Fiscal Responsibility and Reform as it looks for ways to improve the nation's fiscal outlook reduce the nation's deficit.
[...]
"Third, some on this commission have said that everything should be on the table, including cuts in entitlement programs such as Social Security. Given the fact that half of working Americans have no retirement benefits through their work, and that pension funds were devastated by the financial crisis, any conversation about Social Security must begin with the question of whether Social Security provides an adequate level of benefits, not cuts to those benefits. [...]
"What should be on the table is adequacy and fairness. Once we get the economy growing again, we will need to raise additional revenue and find the right balance to a sound fiscal policy. This means that all spending must be on the table, including our defense budget.
"America has become a much more unequal society. Between 1979 and 2007, average after tax income for the top 1 percent rose by 281 percent after adjusting for inflation -- an increase in income of almost $1 million per household -- compared to increases of a little over $10,000 for households in the bottom fifth of the income distribution. We cannot continue to make policy that only benefits the top 1 percent. In raising additional revenue we should be sure that those who benefited pay their fair share. Enacting a Financial Transaction Tax and other tax increases on the very wealthy could generate several hundred billion a year in revenues.
Several hundred Billion Dollars a year in extra revenues, could fill a lot of national deficits --be they Fiscal or Infrastructural, in nature. America's loss, I guess.
Les Leopold, frames this whole "taxing Wall Street" discussion -- with the Outrage it deserves. Isn't it amazing how quickly we forget. As a nation. As a party.
The Wall Street Tax Debate That Never Was
Les Leopold, Author, "The Looting of America" -- Huffingtonpost -- Dec 17, 2010
What is entirely missing from the debate and from the bill is any recognition that a large portion of the super-rich gained their wealth from the financial sector. And that money is highly suspect:
Wall Street elites "earned" much of it by creating bubbles and toxic assets that had little or no real economic value to begin with--and that ultimately crashed our economy. [...]
Have we forgotten how angry we were only a year or so ago when we realized that our tax dollars were going to bail out financial industry high rollers? Remember how galling it was to see $13 billion in tax dollars go to Goldman Sachs to cover its bad bets (at full value) with AIG? And how appalling it was that afterwards when that money went right back into their enormous bonus pool?
[...]
There was a moment, albeit a short one, when it seemed that at least progressives in Congress would focus on the two taxes that would be game changers:
- A tax on hedge funds. All hedge fund income should be taxed at the top income tax rate of 35 percent and not at the 15 percent capital gains rate. (That would generate from the richest 25 hedge fund gurus alone twice what we'll gain by the opportunistic freeze on federal employee wages.)
- A Financial Transaction Tax. Place a small tax on each and every financial transaction. This would not affect the trades of 99.9 percent of all Americans. But it would put a major crimp in the games that the big boys play. Let the quants use their brain power to cure cancer rather than to craft complex computerized trading systems that leave society with less than nothing. A small transaction tax could generate over a $100 billion a year from Wall Street--and in the process, bring those ridiculous bonuses and profits back in line with the real economy.
But here we are in December 2010, having a debate about "tax reform" that hasn't even touched on these two tax ideas. Help me out here. How is this possible?
So that means 0.1 percent of Americans (1/10 of 1%), got their way on the Financial Transaction Tax. Again.
I hope all their Churning and Flash Trading that they are STILL endangering the Stock Markets with, is worth what other 99.9 percent of us, will have to pay to make up their shortfall.
Why is it that the Un-Rich are always the ones, who are expected to put OUR Benefits on the "shared-sacrifice" chopping block "table"; while the Ultra-Rich are expected to just "take the money and run"?
Somehow "shared" doesn't seem to be the right word for it, does it?