DUH! you may well say to such an obvious statement - but it's NOT obvious to the Very Serious People running the world. The Pain Caucus School of Economics & Socio-political Sadism answer to what currently ails us is to insist on more austerity - the beatings austerity will continue until morale improves the economy recovers. The facts are against them, history is against them - and yet they refuse to admit that maybe it's time to try something different. (The links in this comment will give you a sampling of just how bad it's getting out there, as will the link to this informed speculation by Dr. K. et. al.)
Austerity is a con game, nothing more than the Shock Doctrine of Disaster Capitalism prettied up and mainstreamed into conventional wisdom. The goal is the same as it ever was: the rich getting richer the old-fashioned way, sucking the wealth out of the rest of society, and pocketing the gains. They call for smaller government and lower taxes in good times and bad because that's what works for them; it's their answer for everything. THIS is their goal, not solving problems for the rest of society. They don't believe in society.
It's anti-democratic - the idea is to make government too small to be anything but their lapdog, answerable only to them. It's all about
profitizing the public sector for private gain, while transferring the burden of keeping civilization running to the backs of the poor as
the rich pay less and less. And while they do this,
the Democratic Party has become their enabler, in the spirit of 'compromise'.
Enough. The other day I posted some suggestions for a program of anti-austerity, and was encouraged to expand it into a full-blown diary. You'll find it below the Orange Omnilepticon if you're interested. The Austerions and their human dupes have a media machine running 24/7 to catapult their propaganda. It's about time we got some talking points of our own out there. Occupy Wall Street has opened up some space, but that window will close if we don't use it. There's plenty of evidence the powers that be do NOT want to talk about the elephant in the room, and how he's become a deranged homicidal lunatic.
I'm going to throw some talking points out here. For too long we've let the conservatives frame the issues, limit debate to their terms, and slam the Overton Window shut any time fresh air (and thoughts) threaten to intrude on the debate. Worse, too often Democrats who should know better embrace that same language to 'prove' how serious they are about finding common ground. Exhibit A here - what Digby said. (And don't even think about the crimes of the media.)
Thus Democrats of the DNC variety keep moving farther to the right all the time, and are among the most ferocious of hippie punchers. When was the last time you heard a mainstream Republican denounce their rabid rightwing, though? It's like a bizarre version of pecking order politics/social dominance. GOP thugs beat up on Democrats (who apologize) and then Democrats trash their own base to prove.... what exactly? It's like a horror movie where alien mind parasites are taking over, and the people trying to warn everyone are laughed at as crazy.
Well, finding common ground with a thug who wants to take you for everything you have and has no respect for you at all is simple: just give him total surrender. Sounds really delightful, doesn't it?
I'm going to suggest some ideas to turn that dynamic around. It's time to stop playing defense, calling every move that falls short of going into the abyss a victory. It's time to abandon the Republicans to their insanity and reclaim our heritage and our country. It's time to put some things back on the table that have been missing from the discussion for too long. The GOP agenda is the real deal when it comes to crazy. Instead of trying to accommodate it, we should be working like mad to hit it with some anti-crazy. We'll never get the Overton Window back to anyplace we want to be if we don't start pushing it hard in the other direction. Try some of this.
1) Boost the minimum wage - more money in the hands of people at that level is money that's going to go right back out into the economy and get things moving again.
More important, it shifts the debate about why people aren't doing better. The GOP framing is that big government takes too much and gives it to undeserving people. That's why taxes must always be cut and government shrunk. They say it in good times, they say it in bad. It's not a means, it's an end for them all by itself.
It's time to remind people that they're not doing well because they are not getting paid enough. In the last 30+ years, all the gains in productivity that have grown the economy have gone almost entirely to the top .1%. Workers were told they had to take pay cuts, give up benefits, give up unions, work harder - and then the profits were skimmed off and they got bupkis. Or worse, their jobs still went overseas despite everything they gave up.
Republicans like to tell the Big Lie that over half the country doesn't pay taxes. If that's true (which it isn't), why should cutting taxes even more help anyone - except the rich? You've heard the line that people should get to keep more of their own money rather than give it to the government? How come you never hear that argument when corporations post record profits from their workers' sweat, blood and talents? Where did that money come from after all? Why don't they get to keep more of it? Oh wait - that would be socialism!
Instead of trickling money down from above, let's start from the bottom up. 99% of the population with a few dollars more in their hands are going to do a lot more to get the economy going than .1% running out of places to pile their money higher. The knee-jerk conservative reaction that paying people more money kills jobs is not borne out by history. (And it's an argument they never apply to CEOs - although it might actually be true in that case!) Once we start with the minimum wage, we can start working up from there. It's not that most Americans are not getting to keep enough money, it's that they're not getting paid enough to begin with any more.
Cutting taxes on people who aren't getting paid enough to begin with A) doesn't help them all that much, B) the cuts have gone far too much to the top end, and C) they weaken the government that could otherwise do more for them and everyone else. But this is all good as far as the Austerians are concerned. They WANT to weaken government and reduce 'dependence' on it while strengthening the gains for those at the top.
2) Lower the age for Social Security; don't raise it! 65 should be the maximum. 63 would be better. (Can we dream about 60?) Letting people retire sooner would help open the job market NOW, and as above it's money that will go right back out into the economy.
You keep hearing the argument that people are living too long nowadays, that they're healthier, that Social Security was never meant to work under those conditions. Bullshit. There are so many things wrong with that kind of argument, it's hard to know where to start. Let's make a few points.
The idea that people should work as long as they are healthy, no matter their age or desires has some nasty assumptions lurking beneath the surface. It treats people as of value to society only as long as they can work OR have lots of money. It considers those who can't disposable. It treats people as livestock - to be tolerated only as long as they are productive. Put it another way, if someone makes it to age 65 in good health, why should they be punished for their good fortune? Not to mention the dirty little not so secret problem that they're not exactly prime prospects for hiring even if they ARE healthy. Age discrimination is still huge in this country - and it's even worse when employers can pick and choose at a time of high unemployment.
Social Security is NOT an entitlement - it's an earned benefit - social insurance. And it's money that keeps going round and round.
Retired people don't disappear from the face of the earth; they spend that money. It goes right back out into the economy. They have time to volunteer if they wish, or even start a business of their own. They can enjoy their families, explore their own potential. They're the beneficiaries of all those who paid before them; they're the benefactors of all those who come after them. Cuts to Social Security are nothing but another form of wealth transfer into the pockets of the rich (Gotta pay for those tax cuts!).
And if they're not healthy, if they couldn't find work even if they were able - then Social Security is even more important. (If the rich don't believe in it, they're free to write the government a refund check when they retire.) Let's put it another way: is it really a sign of the triumph of capitalism and the power of free markets when the best senior citizens can hope for is to be able to keep working up until the day they die?
3) Eliminate the cap on taxation for Social Security - that would fix the 'problem' of funding it. Tax more types of income to support it. (Capital gains, anyone?) Let's see how we can go about raising benefits instead of cutting them back. Nobody (except conservatives) thinks Social Security payments are too generous - and 401k's are a joke compared to what people used to be able to count on from defined pension plans until the big money boys decided to snarf up those funds for their venture capital games... (Bonus Option: At this link, you can find New York State Comptroller Thomas P. DiNapoli talking about New York State's defined pension system for NY state employees - the kind of thing corporations used to routinely provide for their employees back in the good old days. Note especially what DiNapoli has to say about costs and benefits - and 401k's.)
Social Security is funded by money withheld by payroll taxes. You work, you pay into the system - on wages up to $110,100. Earn more than that, it's not taxed for Social Security above that limit. If all your income is from Capital Gains (Yes, I'm looking at you Mitt!), none of it is taxed for Social Security, unless it's somehow considered part of your wages as in an employee stock option.
As it is, Social Security is taking in enough money to keep paying out for several decades yet even if we do nothing. After that, payments might be reduced to 75% if we do nothing - but they'll keep coming. 'Fixing' Social Security is trivial - but cutting it now or profitizing it is NOT the answer. Just raise or eliminate the damn cap and be done with it. That alone would do it. (And putting people back to work, paying them more, wouldn't hurt either.)
Bottom line: unless you're making more than $110,100 a year, you wouldn't even notice the lifting of the Social Security cap.
There are so many lies, so much confusion about the financial underpinnings of Social Security, again picking which ones to try to debunk is a real challenge. The important thing to remember is that all of the people screaming there's a crisis, that the system is going broke, that it's a Ponzi scheme are either deluded, trying to sell you something, or worse.
Conservatives have always hated the idea of the government taking people's money during their working years (A tax!!!!) to fund a secure retirement (Government hand-outs to dependent layabouts!!!). They've been predicting it's demise since day one. Never mind that A) experience has shown most people simply can not/do not adequately plan for retirement over the long haul, B) Social Security is MUCH more secure than gambling in the stock market, and C) few people have this option.
It angers them because it works. Because it's money that doesn't go through their hands so they can get a cut (aka commissions, management fees, etc. etc.) Because it's a government program. Because they can't loot it the way they've stolen defined benefit plans from working people (Hey - I'm still looking at you, Mitt!) and sold them junk 401k plans and employee stock options that tanked with the markets.
At semi-random, here's some antidotes to the zombie lies: take your pick - The Economic Policy Institute. Kevin Drum. Jane Byant Quinn. MoveOn.org Ezra Klein.
4) Double or even triple the capital gains tax. Too much of our economy is now based on moving piles of money around, and it's distorting our politics. Further, it destabilizes our economy and creates few if any jobs.
The whole idea of keeping the tax on capital gains (AKA using money to make more money, rather than actually working) at low rates is justified on the basis that it encourages investment in companies that will create jobs and grow the economy - that it somehow has a greater benefit to society than ordinary ways of earning income. You know, things like working at a job flipping burgers, manufacturing something for profit, developing a skill for which you get paid, etc. etc. Somehow, the kinds of things Wall Street does are so extra valuable, they deserve this special low low low tax rate, well just because.
The idea is that capital is special because it can fund entrepreneurs with innovative ideas, help companies expand, etc. etc. when only the lack of money is holding them back, keeping the economy moving. And in an ideal world, that's true. We DO need ways for people to put surplus funds to work, and be rewarded for taking risks when they succeed. But, since we don't live in an ideal world, it needs to be said there comes a point when capital becomes an end in itself, and gaming the system becomes the norm. It leads to very bad behavior. (h/t to bobswern)
Which is why we don't have the kind of manufacturing base we used to, why Very Serious People were so ready to let the auto industry die, why the financial sector has metastasized. So long as the government is ready to bail out the banksters with OUR money, so long as the rate of return for playing games with money is so much greater than old-fashioned brick-and-mortar enterprises, that is where the money will continue to go. And the more it dominates the economy and our political system, the more that tail is going to wag the dog. Which is not too reassuring when you realize it can collapse in milliseconds....
Meteor Blades had a front page write up of just how well the smart guys are doing, and how pathetic attempts to rein them in have become.
We use tax policy to change behavior all the time. That's why alcohol and tobacco have 'sin' taxes - because society has decided those who want to indulge can be asked to contribute something to cover the costs the rest of society has to bear for those indulgences. We give tax credits for certain activities - charitable giving for example, because as a society we gain more by encouraging those activities. We also have tax policies that make no sense for society - but work very well for those with the money and power to get them written into law.
The history of capital gains tax has a lot to tell us. Rates now are the lowest they've been in decades. If low rates are supposed to spark the economy, they haven't been working all that well. Well, not for the 99% of us. If you want to see just who benefits, this shows you just how low capital gains tax rates are increasing inequality. And that's NOT good. Bottom line: the capital gains tax rate is way too low - the purported benefits are nowhere near the costs. And on a related subject....
5) Millionaire's tax, of course. The top brackets are way too low. Money does not scale; the percentage of total income needed to assure housing, food, education, medical care, etc. is a lot lower for a billionaire than it is for someone making 5 figures.
A billionaire can take a 50% hit to his/her earnings and assets and still stumble along - because they still have way more than enough to provide the necessities of life. The ordinary person who lives paycheck to paycheck has no such cushion - one missed payday can be a disaster. And yet we live in an economy where the rich can take insane risks playing games with money and politics, and the rest of us have to live with the consequences. Then we get lectured on how important they are, and how we must pay for their follies.
Once upon a time we had MUCH higher tax rates on the top brackets and yet there was still industry, there were still jobs, and we still had people of wealth who weren't afraid to invest and reap the rewards. Progressive tax rates - and Federal income taxes used to be very progressive - helped keep the country running and investing in its future. We built the interstate highway system, sent people to the moon, outlasted the Soviet Empire... and then everything got turned upside down.
We've spent thirty plus years chasing the theory that taking money away from the government (cutting back investments in the country as a whole) would somehow grow the economy. (The idea seems to have been that all government spending is wasted - except for Defense, prisons, oil and gas subsidies, etc. etc.) Letting people keep more of their money (instead of putting it into their country) would still somehow magically make everything better.
So where are we now? We have critical infrastructure needs, we could use massive investments in sane energy policies, our educational system is in distress, our health care system is becoming toxic, we've had two plus wars without the money to pay for them - and we have a government that's become crippled for lack of revenue at all levels.
Republicans run up huge deficits all the time - the last president to balance the budget was Bill Clinton. Note: He had a booming economy AND higher tax rates. Bush CUT taxes and the economy stalled, then crashed big time thanks to deregulation and less government. But that's still the GOP magic elixir to 'solve' our problems.
The only time Republicans pretend to care about deficits is as an excuse to cut Democratic programs that help ordinary people. We NEED deficit spending right now to get the economy going again; the private sector is just spinning its wheels. But if Republicans really care about doing something about the deficit - just let the Bush tax cuts for the rich expire, and stop putting wars on credit cards.
Richard Eskow has an impassioned take-down of the 'centrist' fetish over the deficit, and the blatant hypocrisy on display. Not least of the offenders is someone who should know better: Bill Clinton.
Sure, tax cuts let people keep more of their money - but the rich get to keep a LOT more, because they're making a lot more. Seems all that growth in the economy didn't get shared out evenly. What didn't come from increasing productivity came from skimming off the portion that used to go to middle class, and cutting the help that used to go to the poor. Double whammy, in other words.
The Rich have suckered us into turning the government and the economy into a giant wealth transfer machine (details here) - filling their pockets even as ours get lighter. Robert Reich describes the antidote here. Dave Johnson also weighs in with some good arguments.
Just how terrible would a 90% tax rate be? Johnson gives an example as one of his arguments.
"...You may have heard about those 25 hedge fund managers who brought in an average of $1 billion each last year – an amount that would have paid for 658,000 teachers -- while the rest of the country suffered through a terrible economy. If we had a top tax rate of 90% they would “only” take home $100 million or so each – in a single year. And we could have 658,000 more teachers. So it’s a win-win.
Taxes are how we all pitch in to enjoy the benefits and protections of modern society. Those benefits and protections are what enable people to become wealthy, and we ask that they give some back so others can prosper as well."
Or if you want to see an example of why Too Much Money in one place is just if not more dangerous than Big Government,
what Digby says. High tax rates on the top aren't just good fiscal policy - they're self-defense for the 99% rest of us! Everyone would be horrified at the thought of a lunatic with his hands on a nuclear weapon; so why don't people freak out at the prospect of
lunatics with the destructive power of billions of dollars to wreak havoc? It is a puzzlement.
6) Let anyone buy into Medicare - and add in eye and dental benefits. Yes, Medicare keeps getting more expensive - but at a rate lower than the rest of the healthcare system. It's one quick way to slow rising medical costs. AND, it'd be a lot simpler than the kludges inherent in ACA.
The rest of the civilized world looks at American hysteria over the idea of providing decent health care to its citizens, and figures we must be crazy. Are they wrong?
Forget all of the nonsense and outright lies being told about the Affordable Care Act, AKA Obamacare. It was never the best goal to shoot for, just one that seemed attainable to the centrist-obsessed Very Serious People who figured adopting a conservative think tank plan offered up and already in use in Massachusetts by a Republican (Hi there again, Mitt!), one that preserved the insurance industry's profit-based grip on the health care system, stood a chance of getting support from both sides of the aisle. And so millions of Americans (almost everyone) might get some shot at decent health care.
HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!
Look - the Republicans will not rest until they've done everything in their power to wipe out anything that smacks of a social safety net. The rich don't need it, and they don't think anyone else deserves it either. When Alan Grayson said their plan for healthcare was Don't get sick, but if you do, die quickly, he wasn't kidding. (Just like their plan for Social Security reform is to make everyone work as long as they can, then die quickly.) The libertarian version of this is Live Free AND Die!
Look, while the Republicans use every dirty trick in the book to derail, dismantle and destroy Obamacare, there's a very simple way to do an end-run around them. Let anyone buy into Medicare at a reasonable rate to cover the costs of expansion. Subsidize those who can't - because it's still cheaper than leaving them to get medical care by the Emergency Room route if nothing else. Strengthen the program by improving/adding care for dental and eye care, and any other places where it falls short.
Medicare is not the most efficient system in the world - but it's still cheaper than the increasingly unaffordable for-profit healthcare system. This would sidestep all the court challenges, the cries to Opt Out, the refusal to set up state health care exchanges. It already has a huge base of 'customers' - demonizing it would be a lot harder for the GOP. (Even tea baggers were screaming at the government to "keep their hands off Medicare.) Expanding the system would lead to those famous economies of scale and elimination of redundancies that are always touted when corporations merge.
Just do it.
7) Cram Down. Give judges the power in foreclosure hearings to modify mortgage terms. Banks are letting thousands of homes rot and throwing people out on the streets rather than take a haircut on mortgages for homes now way underwater. It makes no sense - and it's killing communities.
It's something you don't hear about that much in discussions about housing - and the banks are happy to keep it that way, thank you. Cram down is a tool that would be very helpful in sorting out the widespread fraud in mortgages and criminal sloppiness by the banks. But, it's been repeatedly taken off the table.
If there is one huge failure of the current administration, it has been the failure to deliver real relief to homeowners struggling with mortgages that are just unreasonable. The housing bubble collapse left us with homes across the country burdened with mortgages that make no sense. Foreclosure hearings have been a joke, what with banks with bad paperwork, clogged courts, numerous errors, and just plain horror.
Atrios has been on this case for years. Just google Atrios and Cramdown for links to the sordid story. Try here, here, here for a sampling. If Obama is facing tough odds going into 2012, the failure to put the interests of people over banks is one big reason why. It's not like it wasn't being urged repeatedly.
Update 3: Little tale from the Huffington Post, about one more family running into problems with a bank over a mortgage.
The trouble started when the Rousseaus refinanced their mortgage, finding out much later that their interest rate actually increased after they did so, the lawsuit states. On top of that, the lawsuit claims that the couple was convinced to roll their credit card debt into the loan, ostensibly prolonging and increasing that debt as well, according to Chris Gardas, the attorney representing the Rousseau family.
At the time, the deal "tasted like honey" to Rousseau, who believed she and her husband had made a solid financial decision, Gardas told The Huffington Post.
Then in May 2009, Wells Fargo allegedly denied it had received the Rousseaus payment for that month. Later, the bank would change its story, blaming the mix-up on putting a stop on the couple's check, CBS Los Angeles reports.
What ensued were repeated and inaccurate requests for payment from Wells Fargo, along with excessive fees and a denied loan modification, according to the lawsuit. That climaxed in a lockout that appears to have led Norman Rousseau to his death, according to the lawsuit. The eviction has now been delayed two weeks, according to the family's attorney.
emphasis added Lather, rinse, repeat.
8) Defang Citizens United. Require full disclosure in real time of the people funding those 'information' ads. Public funding of elections would be nice. How about requiring campaign contributions above a certain amount go into a pool available to ALL of the candidates for a given office? We can't totally eliminate the power of money in politics, but we can try to ameliorate it.
If you're a regular visitor to Daily Kos, you've been hearing about Citizens United for months now. There's no need to belabor just how bad the principle that $ = Speech is for democracy. By this November we will have been buried in attack ads, propaganda campaigns, astroturf groups coming out of everywhere, and everything else money can buy.
And you know what? Damned little will be done about it. Politicians are too locked into a system of super expensive campaigns 24/7/365 to willingly give up the money. It's going to take old fashioned real grass roots efforts: door knocking, precinct walking, primary-winning, LTE writing and everything else. We're going to have to demonstrate we can elect people despite the power of money - and make people who take it anyway pay a price.
Politicians should take a cue from NASCAR. If they're going to suck down Big Money, they should damn well wear the logos of their owners so at least we know who they really represent. Next time you meet with an elected official, ask if they have anything on a web site or some other publicly accessible detailing of how much they've received in political contributions, and from whom. If they offer up excuses, just look them in the eye and tell them you're not going to give their your money or your vote until you know what their going price is.
We need fresh air and sunlight.
9) Extended voting - early voting at designated polling places, voting over weekends, etc. Increase turn out. When politicians know they have to seek more than the votes of a limited base, they're less likely to become captives to special interests. It's an investment in democracy; vote suppression is just another form of austerity.
This goes hand in hand with Point 8 above. We make voting too damn hard - and Republicans are deliberately making it harder everywhere they can by targeting specific groups of voters. Again, if you're a regular visitor to Daily Kos, you see diary after diary about this. Voting is fundamental - turn out is key. (And not just on election day; primaries are where real battles can be won or lost.)
If voter fraud is so rampant, how about demanding the billions we've poured into Homeland Security be used to make it easy for voters to prove who they are, and where they are entitled to vote? You know damn well the resources they can bring to bear over imagined threats. Why not use some of that investment in paranoia to enable people to exercise their franchise without having to jump through hoops?
Making extended, early voting possible at limited sites would make this easy to implement. Hell - we could do it just by adding some infrastructure to the huge network of government-based installations we already have in place. They're called Post Offices. The rest of the year, use that investment to make them contact points for citizens trying to access their representatives and government services; we could do even more. Hey - there's this thing called the Internet I keep hearing about. Think the Post Office could use it to make it easier for people to deal with their Federal, state, and even local governments? Of course, that might mean taking the U.S.P.S off a starvation diet....
10) Invest in America - not Wall Street. We need to make education affordable for everyone, and boost public schooling instead of profitizing education. We need to invest in roads, bridges, communications, energy, transport, etc. Infrastructure in other words, for sustainability AND coping with climate change. We need to stop exporting jobs and create them here. The bill may be daunting - but it's a lot lower than the cost of ignoring these needs.
Look, it's a question of world views here. Conservatives regard all government, except the parts that protect THEIR property as a parasitic growth. They don't believe in the public good, or the public for that matter. They've created a narrative that all government spending is a waste, that it is inherently inefficient, that getting rid of it would make the world a better place. Or if it is to exist at all, it is only as their property. They have a media machine constantly putting this narrative out.
It's destroying our country. It's impoverishing the vast majority of us. It's a betrayal of everything the Founding Fathers hoped for, and everything we've ever fought for. It's killing our democracy - but then conservatives have always dismissed democracy as mob rule. Given all the challenges we face, restoring faith in government, and making it work for everyone is a matter of survival. The twisted thinking that has given us more and more inequality is bad for everyone, rich or poor. Decades of research have documented this.
We no longer teach the basics of government in schools - how many still offer classes in Civics? What used to be the common understanding of how government should work has been replaced by the toxic bellowing of clowns like Rush and Hannity. For an antidote, this website has a lot of basic arguments that lay it all out in simple terms. It's like a breath of fresh air, or a drink of cool water in the desert.
Given the track record of the Austerians to date, given the repeated failure of conservative thought to ever deliver on its claims, isn't it past time we stopped listening to them or trying to accommodate them? That the ten points above may seem crazy in terms of 'common wisdom' and the views of Very Serious People is perhaps the strongest argument for them. We spend too much time and effort in compromises that keep dragging us closer to the abyss; it's time to turn our backs on them and start moving in the opposite direction. We've been going down this road long enough to see it's the wrong way. It's time to try a new direction.
Update: A couple of relevant items since I put this together. Dr. K looks at recent figures on economic growth, and has an interesting real world example of what happens when countries slash their government spending to boost their economies, while others spend spend spend... Austerity says the slashers will see growth while the spenders are punished for their profligacy. Or you could look at the graph and draw your own conclusions.
The inimitable Digby picks up on some more Krugthulu back and forth with Austerians, and a rather depressing tweet from the White House.
10:37 AM PT: Update 2 Again from Digby. Read it and weep. http://digbysblog.blogspot.com/...