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Republican leaders Senator Mitch McConnell (R) and John Boehner speak after a bipartisan meeting with President Barack Obama at the White House in Washington June 10, 2010. REUTERS/Kevin Lamarque (UNITED STATES - Tags: POLITICS)
These guys seem to want the economy to fail.
The battle over the long-term debt has obscured the stimulus elements contained in President Obama's proposal that Treasury Secretary Tim Geithner aired over the weekend. House Speaker John Boehner's phony proposal didn't even mention such measures.

The hysteria over the fake fiscal cliff has helped create a false narrative for what U.S. budget policy should be in the coming year. What's actually needed is a plan for sustainable growth, one that allows us to relieve the acute problems our economy is suffering so that we can get to work on dealing with the chronic ones that predate the Great Recession but were greatly exacerbated by it. Chronic problems such as wage stagnation. Unlike what the Republicans and too many Democrats argue, the nation does not have a short-term deficit problem.

At a time when more than 27 million Americans are out-of-work and hunting for a job or working part-time but need a full-time job (or wanting to work but so discouraged they have given up looking and thus are no longer counted as part of the labor force), the focus on cutting spending to rescue us from the deficit is as wrong-headed as it gets. In fact, going the austerity route right now will increase the deficit by killing jobs, lowering demand and slowing a sluggish economy. Fewer jobs means lower tax revenues, after all. And higher unemployment increases the need for government spending.

What is needed is a national industrial plan of the sort every developed and many developing nations have had for decades, massive infrastructure repairs and upgrades emphasizing clean energy, a rethinking of trade agreements, laws protecting workers' right to organize and a sharply retooled progressive tax system. Such proposals ought to be on the lips of progressive politicians every day even though Republicans (and the cohort of Democrats who enable Republicans) put up roadblocks to far lesser proposals. Getting progressive policies on the economy enacted someday requires talking about progressive policies today though there is no way they can clear the stubborn no-gotiators in Congress in the immediate future.

Just how stubborn they can be is seen in their resistance to President Obama's modest and reasonable spending proposals to keep the economy from taking a downturn over the coming year. Those are:

Extending the Social Security payroll tax break for one year: For the 2011 and 2012 calendar years, Congress cut the payroll tax from 4.2 percent to 6.2 percent. Like other tax cuts, this one expires at the end of the month. The average reduction for the 122 million families affected by the payroll tax was slightly less than $1,000 a year.

If the cuts end, it will mean an American earning $50,000 annually will pay about $80 more a month in 2013. Jan Hatzius, chief economist, at Goldman Sachs, projects that letting the tax cut expire would chop $125 billion out of the economy and 0.6 percent out of gross domestic product for the year.

Extending the cut through 2013 would cost $115 billion. Mark Zandi, chief economist at Moody's Analytics, estimates the extension would give the economy a $100 billion boost.

Extending the federally funded emergency unemployment insurance benefits for one year: As previously noted, as a consequence of the budget deal in February, federally funded emergency unemployment benefits are set to expire Dec. 29. If they do, 2.1 million Americans will immediately lose this lifeline and by April another 900,000 will have lost theirs, according to the National Employment Law Project. Ever since 1958, these temporary emergency benefits have remained available as long as the national unemployment rate is more than 7.2 percent. It is currently 7.9 percent and not expected to fall below 7.2 percent before mid-2013, if then.

Extending benefits would cost $30 billion to $40 billion in 2013. Mark Zandi estimates that if the cost is $40 billion, it would boost the economy by $58 billion for the year. Unemployment benefits are widely seen as having the best bang for the buck as stimulating because recipients spend the money right away. Not only do they get help to survive on their modest average of $300 in benefits each month, but also their spending in 2013 would keep some 300,000 to 400,000 other workers on the job, according to the Congressional Budget Office and NELP, respectively.

Adding a multiyear stimulus in the form of a bank for long-term infrastructure projects. For 2013, $50 billion to this effort. While that's really a pittance, such a bank has been a Democratic goal for a decade and actually getting it off the ground would be a major step in the right direction to provide long-term financing for projects that must now be paid for on a cash basis.

Continuing the accelerated depreciation for business. This would cost about $65 billion in 2013. This encourages business to buy capital goods sooner than later.

Continuing refinancing underwater mortgages with an upgraded plan. The mortgages of nearly 11 million homeowners are still underwater, more than a fifth of the nation's total. Efforts to help them refinance got off to a very bad start, but they've improved. The housing market has finally shown signs of life in the past few months, but it is far from restored to its pre-bubble health. That factor continues to be a major drag on the economy. Cost of the refinancing plan: unspecified.

As you can see, there's nothing radical or momentous here, mostly just a continuation of existing spending that has made a difference for tens of millions of Americans during the worst economic downturn in 80 years.

You would think these modest efforts would be eagerly supported on both sides of the congressional aisle and the deficit would take a back seat in all these discussions. Or rather, you would think that if you hadn't witnessed the know-nothings at work over the past four years.

Originally posted to Meteor Blades on Tue Dec 04, 2012 at 10:53 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  thier entire playbook is entitled OBSTRUCTION. (15+ / 0-)

    What other chancs do they have in 2014 than than to work hard for another recession?

    'Well-behaved women seldom make history” Laurel Thatcher Ulrich

    by dear occupant on Tue Dec 04, 2012 at 11:10:11 AM PST

    •  That may come back upon them. (3+ / 0-)
      Recommended by:
      dear occupant, ColoTim, a2nite

      Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

      by TomP on Tue Dec 04, 2012 at 11:41:57 AM PST

      [ Parent ]

    •  Since They're Opposed to Government Regulation (4+ / 0-)

      and promotion of the general welfare, obstruction is almost as good as holding the majority for them.

      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 Tue Dec 04, 2012 at 11:54:15 AM PST

      [ Parent ]

    •  it's not about obstruction, it's about profits! (5+ / 0-)

      Austerity's Big Winners Prove To Be Wall Street And The Wealthy

      But the austerity game also has winners. Cutting or eliminating government programs that benefit the less advantaged has long been an ideological goal of conservatives. Doing so also generates a tidy windfall for the corporate class, as government services are privatized and savings from austerity pay for tax cuts for the wealthiest citizens. ...

      As many economists predicted, however, the austerity policies implemented after the financial crisis have proved to be a losing proposition for the global economy. The strong economic growth that austerity advocates predicted has not materialized, with the United States showing only anemic improvements, and European countries sliding back into devastating recessions.

      At the same time, corporate profits in the financial industry remain above even the levels reached at the height of the housing bubble, according to Commerce Department data. And elites on both sides of the Atlantic have secured generous tax breaks, made possible in part by cuts to social services.

      they are just doing what they are paid to do.

      i'm part of the 99% - america's largest minority

      by joe shikspack on Tue Dec 04, 2012 at 02:07:32 PM PST

      [ Parent ]

      •  Exactly right. Maintaining the status quo (3+ / 0-)
        Recommended by:
        joe shikspack, LilithGardener, zaka1

        today is extremely profitable, unlike back in the day 30-40-50 years ago when profits were just very good.

        FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

        by Roger Fox on Tue Dec 04, 2012 at 07:00:52 PM PST

        [ Parent ]

        •  It has been extremely (4+ / 0-)

          profitable for the few, but the many are struggling.  30-40-50 years ago CEOs weren't making millions they were making more like $60,000.00 to just over $100,000.00 and we had middle managers (which started disappearing in the late 1980's) so there were more jobs, better oversight of a product and/or customer service and a more stablized ecomony which fed both the population and businesses in the area, it seemed to be a supply route for all involved.  

          I know I'm getting older, but just 30-40 years ago the population seemed happier and more satisfied with less.  It seems the more cutting that is done the worse the ecomony gets, the less people can afford, and further behind the majority of the people get.

          The area I grew up in was booming, we had professionals, retailers, laborers, and small businesses.  It was a steel mill town, yes, but much grew from the stability of businesses and better wage equality.  Today I see the changes in my area that make me want to cry.  Places that were humming as late as the early 1990's are being boarded up more and more.  The population is still here, but the business is leaving and that makes for a bad combination both ecomonically and psychologically for the population left behind.  The only production I see is medical and we all know that medical can't financially hold an area together when the system itself is too expensive and people are afraid of it because of the cost.

          The corporations are at their most profitable and yet everyone I know is having trouble with the major corporations like AT&T or their cable providers or their medical providers because either the product or customer service is poor or too expensive.  And there is almost no one who is a supervisor with long term experience with a company that can resolve problems with products or billing.  That usually was middle managers jobs and corporations have cut employees down to the bare bones.  

          Profits are fine, but profits for purely wealth accumalation are out of control in this country and I think that is what has gotten us into so much trouble the last thirty years.  

          "During times of universal deceit, telling the truth becomes a revolution­ary act. " George Orwell

          by zaka1 on Tue Dec 04, 2012 at 08:54:04 PM PST

          [ Parent ]

  •  Give to the rich, take from the poor... (9+ / 0-)

    that's all they stand for, in good times or bad.

    If we had listened to them four years ago, we'd all be living in a Mad Max / Great Depression II hellscape right now. The only up side of that would be that we might be able to put Mitch McConnell in the Thunderdome >;-)

    Just doing my part to piss off right wing nuts, one smart ass comment at a time.

    by tekno2600 on Tue Dec 04, 2012 at 11:21:00 AM PST

  •  A classic example of "loving" something to death. (2+ / 0-)
    Recommended by:
    D in Northern Virginia, TomP

    202-224-3121 to Congress in D.C. USE it! You can tell how big a person is by what it takes to discourage them. "We're not perfect, but they're nuts."--Barney Frank 01/02/2012

    by cany on Tue Dec 04, 2012 at 11:21:49 AM PST

  •  Excellent post, MB. (9+ / 0-)

    This is so true:

    At a time when more than 27 million Americans are out-of-work and hunting for a job, working part-time but needing a full-time job or wanting to work but so discouraged they have given up looking are no longer counted as part of the labor force, the focus on cutting spending to rescue us from the deficit is as wrong-headed as it gets. In fact, going the austerity route right now will increase the deficit by killing jobs, lowering demand and slowing a sluggish economy. Fewer jobs means lower tax revenues, after all. And higher unemployment increases the need for government spending.
    I'm glad Obma proposed some stimulus elements.  The R polices will head us back into recessionb when we're not fully out yet.

    Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

    by TomP on Tue Dec 04, 2012 at 11:41:35 AM PST

  •  Because Their Constituents Are Not Americans (8+ / 0-)

    The rich and their enterprises are global.

    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 Tue Dec 04, 2012 at 11:52:48 AM PST

  •  Jobs! Jobs! Jobs! (7+ / 0-)

    What better evidence is needed to prioritize jobs than that Americans apparently can't afford to contribute to Social Security and Medicare!

    Great diary.

    Marginalize these Republicans and build public or public-private infrastructure projects with enough jobs for every unemployed American.

    Budgeting is not rocket science and this protracted deficit reduction circle jerk is nauseating when so many American lives are suffering because of the lack of easy, affordable governmental action.

    Let all Bush tax cuts expire and , bring on the Sequestration cuts to defense.

    by kck on Tue Dec 04, 2012 at 11:58:28 AM PST

  •  Its amazing (4+ / 0-)

    that the fools in the Repub. party will make countless votes on the repeal of Obarmacare and do nothing on the points of this post.  Sooner or later their  idealogical purity will kill them off...hopefully it won't be too late for the rest of us.

    Give peace a chance get up and dance... Alvin Lee/Ten Years After

    by Blue Collar on Tue Dec 04, 2012 at 12:12:20 PM PST

  •  Republicans have been undermining (3+ / 0-)
    Recommended by:
    Eric Nelson, AnotherProgressive, akmk

    the US economy since Obama was sworn into office - made it their sworn duty to do so.  When do we call this economic terrorism or sedition or something along those lines, and when are they held accountable for this anti-American behavior?  Good god these people piss me off.  They throw their hissy fits to detract the ignorant among us and we all get dragged down into the muck with them.

    "They love the founding fathers so much they will destroy everything they created and remake it in Rush Limbaughs image." MinistryofTruth, 9/29/11

    by AnnieR on Tue Dec 04, 2012 at 12:45:44 PM PST

  •  Six and a half million of our young (7+ / 0-)

    ..are neither working or in school. To say nothing of experienced, smart people whose resumes get circular-filed if their birth-dates are in the 50's or 60's.

    It's a national tragedy, a waste of human potential, and a shameful thing to allow to happen to the nation.  

    It's not as if there's isn't any work that desperately needs doing. The system is broken.

    The dire straits facing America are not due poor people having too much money

    by Anthony Page aka SecondComing on Tue Dec 04, 2012 at 01:55:45 PM PST

    •  it's another of capitalism's embarrassing moments (5+ / 0-)

      capitalist economists and jingoist americans like to blather on about how the capitalist system is the most efficient way of distributing goods and services to the people that need them.  yet, periodically the system crashes and there are millions of people who have no economic signal that tells them to perform work and at the same time, there is work that desperately needs to be done which oftentimes eclipses the dormant capacity of the labor pool.

      i'm part of the 99% - america's largest minority

      by joe shikspack on Tue Dec 04, 2012 at 02:13:33 PM PST

      [ Parent ]

  •  Sad but true. (5+ / 0-)

    I listened to a "moderate" on early MSNBC yesterday and he was talking about how the Dem's and Pres want to go over the fiscal cliff so Pres can then "swoop in and be the HERO by proposing tax cuts to middle class" ..... once again the concern is with the Pres doing something that may reflect positively on him or the Dem's, not on what is good for the country.
    I often wonder what will be said in 30-50 years about this time period when politicians not only drove the country into the ditch but refused to let it come out of the ditch unless there was a political benefit  ..... the entire country at the mercy of a bunch of politicians, playing with millions of peoples lives and futures for their own amusement/benefit.  How is this different than most 3rd world countries that are controlled by a small number of  elite, wealthy, power-hungry mad men?

    "Life is a tragedy for those who feel, a comedy for those who think" - Jean de la Bruyere

    by Tinuviel on Tue Dec 04, 2012 at 03:06:17 PM PST

  •  Perfect title to this post and says what I finally (3+ / 0-)
    Recommended by:
    LilithGardener, Shippo1776, J Orygun

    ..figured out (sort of) through the process of elimination.
    The GOP has pulled the pin and is holding hostage the entire economy - 'If we go down you all go down too.'

    Republicans would prefer that the economy contract than let Obama spend a few bucks on stimulus
    I've been wondering what would a republican consider their best political move
     • GOP agrees to some negotiation, like voting "present" for 250k below tax cuts  and nothing else) or
     •  continuing to obstruct through 2012 into 2013 and beyond, taking the blame

    My opinion only: The GOP will trade on peoples desire to stop the punishment and hope of less economic suffering - for votes:

    It seems McConnell knows that either way they will take the blame so has decided that for 2014 there best poiitical/partisan move is exactly the same as it has been for 4 years. Work in every way they can to obstruct and sabotage every and anything  in hopes of tanking the economy.

    That's it. The GOP hope once again that by causing enough suffering that people, even if they hate the republicans for it, even if people know that republicans do not have their interests at heart want the torture that the republicans are putting on this country to stop.

    And the republicans have made it clear. They will do anything including economic torture to gain power.

    The GOP is counting on people that are out of work and suffering to give in not out of weakness imo, but because these out of work people will figure the only way to stop the devastation planned and carried out for the past 4 years by the republicans, is to let republicans trade their latest hostage for electoral wins in 2014

    GOP convincing people that maybe if they let the GOP have their way they''ll be nicer when they are in power (?)

    This is depraved behavior and it will not work.
    Now if we could get Merkley's filbuster reform as a start but more importantly SCRAP the super majority requirement for all but Article 5 constitutional stuvff like treaties, POTUS impeachment etc.

    And hold strong Dems. Don't give an inch. In fact next round of negotiations raise the tax from Clinton 39.6% three points to 42.6% - repeat when necessary. Also UI extensions, executive control on debt ceiling (or elimination altogether) and all of the posted ideas too.

  •  Watching the nat'l media, we forget... (0+ / 0-)

    It's very easy to lapse into believing the Beltway Budget Brouhaha is just a pissing match between Boehner and Obama over the tax rates the top 2% will pay going forward, if all one does is watch the national media.  The punditocracy makes it all too easy to forget that what's being debated, in fact, is a whole budget.  One that we're going to have to live with next year, as well as ten years into the future.

    I'm not liking our prospects in the short term, ta tell ya the truth.

  •  In very simple terms, I mean as basic as can be... (6+ / 0-)

    tell me one thing, if you can...

    Here we go. If a tax increase for the top 2% would be a job killer, then how come 10 years of a tax break for the top 2% has not been a job creator?

    Why aren't we all quitting our jobs regularly and taking all the better jobs being created because the top 2% have been languishing in low taxes for the past decade????


    Okay, one more thing...
    Tell me, how can Boehner and McConnell and Cantor and Ryan keep presenting the same deceptive, logically impossible, ridiculously formulated mistruth to the same audience and not be laughed out of office?

    Where are the jobs? They've had the tax cuts for 10 years!!!

    It is obviously a lie that the low taxes on the 2% create jobs!
    So stop saying it!

    skipping over damaged area

    by Says Who on Tue Dec 04, 2012 at 08:20:00 PM PST

    •  It's only obvious (1+ / 0-)
      Recommended by:

      if you use logic and reasoning. If you are among the 49% of Republicans who think that ACORN stole the election for Obama, you are a lost cause.

      "Victory means exit strategy, and it's important for the president to explain to us what the exit strategy is." - George W Bush

      by jfern on Tue Dec 04, 2012 at 10:09:00 PM PST

      [ Parent ]

    •  And Why Is Starving Social Security Good? (1+ / 0-)
      Recommended by:
      Says Who

      Get that 2% back ASAP!  Contributing to any acceleration of the alleged insolvency of Social Security is a terrible idea.

      Sorry, there are parts of this 'fiscal cliff' issue I happen to agree with and keeping Social Security well fed while slowly starving the Pentagon happen to be a couple of them.  I would totally agree with the starvation of the pentagon being 100% offset by the feeding of infrastructure, but that's not part of the deal yet.

  •  A new policy on negotiating (2+ / 0-)
    Recommended by:
    akmk, weinerschnauzer

    Now that it's out of the bag that Rupert Murdoch and Roger Ailes had a scheme going to run Gen. Petraeus for president, Obama should just say (publicly) to Boehner, McConnell, and Cantor, "Why should I waste time talking to you? Better to talk to Murdoch instead, since he's the one calling the shots for you." And then refuse to give them the time of day.

  •  I'm willing to make lots of cuts… (3+ / 0-)
    Recommended by:
    akmk, Meteor Blades, JohnnySacks

    I want to cut the War in Afghanistan.

    I want to cut the War on Terror, lest we drone strike every Muslim into hating us.

    I want to cut the War on Drugs, decriminalize all recreational herbs and pharmaceuticals, tax the same, and spend money on treatment.

    I want to cut out the Prison Industrial Complex for, but some studies, up to 70% of the 2.6 million Americans behind bars are needlessly in jail.

    I want to use the savings from the above cuts to cut our deficit and debt.

    Teh stoopidTM, it hurts. Buy smart, union-printed, USA-made, signs, stickers, swag for everyone: Get your We are the 99% Yard Sign.

    by DemSign on Tue Dec 04, 2012 at 09:43:12 PM PST

    •  Put Some Savings Into Infrastructure (0+ / 0-)

      Not necessarily all because someone's got to pay for the Bush years eventually, but some of that war, GI Joe action adventure toy, and prison swag should go to renewable energy to get us past the industrial age of burning coal to boil water, reasonable improvements to our mass transit and high speed rail systems, and maintenance of what's falling apart now.  Keep the house modernized while paying the mortgage if you will...

  •  That way they can blame Obama for the economy (0+ / 0-)

    contracting.  Didn't they try that play already?

    What Obama has going in his favor is a clear vision for American and what he wants to accomplish for the people who live here.

    No amount of brinksmanship and game-playing can beat clear vision that is accompanied by integrity.

    Sorry GOP, it's over for you.

  •  republicans have brainwashed enough people (0+ / 0-)

    to believe that spending is causing the contraction, and spending cuts will cause a boom. so they are just acting their role.

  •  How about we extend half of the payroll tax (0+ / 0-)

    holiday for a year, and end it altogether next year.

    Holidays need to end at some point.

    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 Wed Dec 05, 2012 at 03:44:16 AM PST

  •  They still want Obama (0+ / 0-)

    to fail, and they still don't care if they harm the economy while trying to make sure that happens. After all, there's an election in a couple of years, and their electoral prospects are all that matter.

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

    by happy camper on Wed Dec 05, 2012 at 06:09:53 AM PST

  •  Fiscal Cliff Dwellers (0+ / 0-)

    Sons of Declivity
    Daughters of Revolution
    by Grant Wood, 1932

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