[Another weekend political rant. Go no further if you came here for surgery.]Like John McCain, I'm not especially knowledgeable about the economy. Unlike him, evidently, I can think in a straight line. Nothing could be more obvious: George Bush has ruined the economy in ways so disastrous that the necessary fixes are, very possibly, politically undoable. But John McCain has already pledged to keep the faith (which is exactly what it is.) He's promised "no tax hikes." Since he'll be the next president, as the Democrats self-immolate and the electorate inevitably votes once again on fear of terrorism -- despite the fact that Bush's war, which McCain loves more than his traveling team of lobbyists, has made us less safe -- we're screwed.
In the comments on a previous post, we had a bit of a back and forth about the concept that lowering taxes increases government revenues; let's think about it some more. Following the logic to its extreme, eliminating all taxes should make revenue infinite. Can we agree that's not possible? Likewise, I'll concede that taxing at 100% would end all commerce and life as we know it. So it must be that for a given set of circumstances there's a "sweet spot." And it's also obvious that Bush hasn't found it any more than he found WMD in Iraq. (Help me out here: wasn't there a guy in recent memory who raised taxes, balanced the budget, and saw the economy roar forward?)
The current budget deficit is more than 400 billion. The forward costs of the war are estimated to be two to three TRILLION (by Joe Stiglitz -- whom I knew in college -- who won a Nobel Prize in economics, and whose methods and predictions have yet to be refuted, or even, far as I can tell, criticized.) We have sold our future to the Chinese and the Saudis, who own most of our debt, with payment due from our kids and our kids' kids. The value of the dollar is at an all-time low, oil at an all-time high. (George Bush, when running in 2000, decried the fact that under Clinton the price of oil had climbed to thirty bucks a barrel; said it was a shocking failure. It's approaching quadruple that now.) From another website: "The federal debt has increased 54 percent since President Bush took office, from approximately $5.6 trillion at the end of 2000 to an estimated $8.6 trillion at the end of 2006. By 2011, the President’s budget would increase the public debt to $11.8 trillion. (U.S. Department of the Treasury, Bureau of Public Debt)" Calling Bush's economic policy a failure is like comparing the tsunami of 2004 to a flooded basement. Housing. Banks. Jobs. Oil. "No tax hikes." McCain thinks he can scratch behind his earmarks and find the money to solve the problem. Straight talk, indeed.*
That the myth of tax cuts persists can only be explained by the efforts of those who are beyond danger -- i.e. rich enough -- to convince those who are fodder to buy into it. Or to look away. To inveigle people into focusing on abortion and gay marriage, and fear of terrorists, rather than on that which is actually destroying us. It's political prestidigitation: look at my left hand while I reach into your kids' pockets with my right. (And when I have all I need, screw you.) It works like a 600 hp, dual overhead cam, supercharged V-10. With cup holders.
Because religiously insane people flew into buildings and might do so again, we are willingly looking the other way at policies that most inarguably have made us less safe. Because of George Bush's idiotic response to the threat, we are more in debt, more dependent on the providers of oil who are the very basis for that threat, more unable to respond militarily if the need arose, are witnessing rising terrorism worldwide and the reconstitution of al Queda in the very place from which they directed the attack. But when scare comes to shitless, we vote for more of the same. Raise taxes to pay for the war and the troops coming home, and to reduce deficits and solidify the dollar? Heh. People would scream and run to emergency rooms (where, it seems, they'll be greeted with sympathy.) (If you go to that link, you must also go to this one -- the one that's mine.)
Democrats will be no less happy about indexing Social Security and Medicare than Republicans will be about raising taxes. But both will have to happen, and not very much in the future. Liberals won't like looking into safer nuclear power, and conservatives will deny there are problems with depending on and burning carbon. But they're both wrong. Democrats at least talk about the danger to our economy and our planet; Republicans see danger only when they look into caves (or into non-white faces.) Invading countries that have little or nothing to do with terrorism won't stop terrorism. Republicans don't want to hear that. To protect ourselves from attacks, we need both high-tech and low-tech intelligence gathering. Some Democrats would rather not hear that. (Although for most, myself included, it's only about doing it legally, with a little oversight, which ought not be all that big a hurdle, once George and his Dick are gone.)
So what's my point? This: we really are in existential trouble, but it has much less to do with guys in caves (other than the fact that they suckered us into slitting our own wrists) than it does with problems of our own making: economic, strategic, energetic, Constitutional. Because people don't want to hear it, and because politicians (with, I'd like to hope, some exceptions) are too cynical and weak to say it (they know that after thirty-five years of being fed bumper-sticker phrases, most people have stopped thinking), the chances of fixing it are slipping away. It's only if the electorate were to grow up, smarten up, and demand it that there's any hope at all. But the old guard of both parties, who have too much invested (quite literally) in the old ways are seeing to it that that hope is smothered in its crib, while the masses acquiesce: enablers, deniers, diggers of holes for their heads.
On the left, too many heads are in the clouds; on the right, in the sand. I'd rather be the former, because at least they are seeing the problems from up there. The modus operandi of the right is to believe that which is no longer -- nor ever was -- believable. Faith-based problem avoidance. If there's hope, I'm not seeing it any more.
*One of the more amazing things about our current state of mind is the ho-hum that people evince over deficits. Fifty years or so ago, Senator Everett Dirksen is famously said to have said "A billion here, a billion there.... pretty soon you're talking about real money." Today, nobody blinks at the idea of twelve billion a month spent on the war, deficits of hundreds of billions, or debt in the trillions. I guess we're overloaded; no doubt it's intentional. So it's useful once in a while to consider what a trillion dollars really is. Not that even such analogies really make it grokable, but here's a few: here, here, and here. Bush has been right about everything else, so when he says the economy is fine, I believe him. And so, evidently, does John McCain.
34 comments:
What the Republicans do well is to stick to their message, control it and kill off anything that doesn't follow it 100%. It's how they persuade people to vote against their self-itnerests.
The Dems don't have a mission or vision statement on their website.
That's a powerful message, too. They've not been effective in rallying people with disparate interests, although I think that obama is the most powerful candidate in changing this and bringing a sens of mission and unity to voters.
However, I'm not despairing that Obama and Clinton will kill each other off and allow McCain to step forward and steal the goods again.
That's because more and more people everyday are being hit hard by multiple fundamental losses: ability to pay for essentials such as safe and reliable transportation, safe housing, nutritious food, school and work supplies and equipment and small luxuries for recreation. (and of course, health care)
As we return to a Dickensien two state society, the outrage will increase as the pain increases.
The people are beginning to awake from their torpor and are questioning the distorted "news" put forth by the corporate giant-cdiscovering media. More are finding investigative blogs and are beginning to read, question and reevaluate their stances.
I think that voters will not allow the country to go down the drink without a whimper. Whether there is enough bite in the bark remains to be seen. But bait and taunt the dog one too many times....
Great post, as always, Dr. Schwab. So much food for thought and so much fodder for action! Thank you.
Many of my posts at my blog are inspired by your writing. You are one fabulous teacher.
Regarding "...as the Democrats self-immolate...", I prefer to think of it as heat-treating the eventual candidate -- who will shorely need a hardened shield come October.
"Paging Doctor Scalpel."
"Doctor Scalpel . . . Code yellow at surgeonsblog.blogspot.com . . . Code yellow at surgeonsblog.blogspot.com"
"Paging Doctor Scalpel . . .code yellow . . . someone has spilled some common sense at surgeonsblog.blogspot.com"
"Paging Doctor Scalpel to fix the common sense that has been spilled at surgeonsblog.blogspot.com"
Was that mean?
I was supposed to be cute 'n funny -- please don't take offense anyone. Dr. Schwab, your knowledge of economics is just fine.
Papa Bush said: "Read my lips: No New Taxes."
That was his clarion call.
Rode it right into office.
Right up until he said "Read the paper" and, lo and behold, there were "New Taxes" because somebody had to pay for the last supply sider president's follies.
If elected, (a really big if) McCain will either knuckle under and tax people who actually have money or he'll take the economy down with him into oblivion.
None of the Dems is particularly interested in leaving that legacy or even in biting that particular bullet.
The day after the next election has been won, by whoever wins it, and the dust has settled, the vilification of the current president will begin.
Baby Bush will go down as the last of the "Supply Side, Trickle Down presidents.
He'll be lucky not to escape with a prison sentence for disregarding the oath of office and passing all of those unconstitutional laws-cum-edicts.
And Carl Rove will be in the next cell.
as a voter living in a red county/blue state, I am frequently asked how I can vote for tax and spend Democrats.
My reply is that it makes more sense than voting for don't tax, just spend Republicans.
I can balance a checkbook, why can't the Administration?
Great post, and echoes what I have been saying for years. But buried in there is something that also makes sense to me.
I am not opposed to studying safe nuclear energy as an option to coal and gas power plants. The nuclear plants that we rely on are using 40 year old technology, and I think it is important to study the advances that have been made. The problem has always been for me the issue of spent-fuel storage. Yucca Mountain is not acceptable to many people, but I understand that new plants are far more efficient and less fuel is wasted.
I think that opposition to any sort of nuclear power is an example of where the left is making a big mistake, because it is a process that reduces global warming emissions and reduces our dependence on carbon-based fuels.
Sid,
Here's a link that may help you.
http://www.imf.org/external/pubs/ft/wp/2008/wp0807.pdf
Does our tax rate need to go up or down? The sweet spot is hard to find, but the higher the rate, the greater the non-compliance with tax laws, (think q day dosing verses QID dosing as an example).
The lower the rate the greater the compliance with tax laws and the more revenue generated.
The day that the Chinese stop buying our treasuries to finance our debt, is the day that budgets balance.
The day the Chinese cash in is the day we are in deep shit.
You can't sell debt without a buyer.
as for the sweet spot, I think you are talking about the Laffer curve. Wikipedia it.
I know about the Laffer curve. It makes a certain amount of sense, but neither Reagan, under whom in first came into play, nor Bush who went beyond even that, has found anything like the proper balance.
I remember my brother (an economist, he's sort of a game theory type) said that there's some sort of problem with the theory behind the Laffer curve.
I just don't remember what that was.
Heck of a way to add nothing to the discourse, eh?
Well said. Seems we were in a financial mess after Bush Sr., money/debt/I am a poor church mouse, but the USA fat cats always find a way to shift this decimal, plunk that zero, and eureka! We are in the black again. Sometimes I think if the USA isn't in a mess, we get bored. What would all the new MBAs DO?? What would all our macho military men do??
I'm glad I'm not the only liberal who is realistic about how this election is actually going to play out:
"Terrorists will kill your children and the other guy can't stop them."
Bingo - Republican victory, end of story, hello President McCain.
I'm beginning to enjoy your weekend rants Dr. Sid.
The so called "death tax" and the taxes that need to be put back in place are not generally affecting the middle class but the very wealthy.
Yet the alternative minimum tax, which no-one seems to want to change because it continues to bring in a lot of revenue, continues to hit the middle class hard.
Sadly, when the average middle class voter hears the word taxes they automatically assume it means them, if the voters would take a little time to actually look at the issue they might realize how they've been pillaged by the current administration.
Sorry, must have slept through my pager.
Looking at the empirical evidence, rather than relying upon nebulous left wing unmeasurable/irrelevant talking points (like number of terrorists created, world respect rating, or the like) would suggest that we are in fact safer as a result of "Bush's" war.
What next, Sid, homeopathy?
you never disappoint, scalpel.
To enlarge: I'd consider "empirical" the national intelligence reports that state al Queda is stronger than at any time since 9/11. That our military is depleted and, by the words of its top generals and admirals, less able to fight another war. That attacks have increased around the world. That our deficits will paralyze us. I'm guessing there have been political polls to your liking that you've considered empirical. There are many around the world that indicate our moral standing, our respect, willingness to cooperate with us have gone down, while attitudes that it's OK to kill Americans are up. I find that of concern, especially since it's empirically true that the rare intelligence successes we've had have depended on help from others. All of those things derive directly from the war. To the extent that we are safer, it's had nothing to do with the war; ie, airport security, etc. Some things are indeed better, those things that any president would have done. The war by no empirical measure has made us safer; and by many, less so. I think it may be you that has "water memory."
"...attacks have increased around the world."
I won't get into a point by point discussion of your response unless specifically requested, but this statement bothers me.
Are we responsible for the safety of the world? I think not. Given the newfound strength of foreign currencies, they can drop a dime (or a yen, or a Euro) to protect themselves.
There have been no successful homeland terrorist attacks since 9/11, and many more have been thwarted. Many terrorists are dead, and many more are in custody. Thank you, President Bush, for protecting America.
likewise, there have been no attacks on American soil since I started blogging. post hoc ergo propter hoc.
" Sid Schwab said...
likewise, there have been no attacks on American soil since I started blogging. post hoc ergo propter hoc."
An interesting argument from someone saying that attacks elsewhere are Bush's fault. Is it your contention that the fact that there have been no attacks in the US is coincidental to Bush's actions? I am sure you apply better logic to your medical pursuits.
BC
BC: "...from someone saying that attacks elsewhere are Bush's fault."
Nowhere did I say that. What I said was that there's no way in which the war in Iraq has made us (and by implication, the world) safer. Increased attacks may or may not be Bush's fault: I didn't address it. But I'm sure you will recall the many times Bush has said that around the world freedom is "on the march" and terrorism is "on the run." Neither statement is true.
Also, if you read the previous comments, you know I said that the things that Bush has done that have made us safer are 1) things any president would have done and 2) have nothing to do with the war. To claim Bush has kept us safe is not to disprove what I said; nor would it be true to say that since your house is not on fire, the person who set the nearby forest to burning has kept you safe. I think your sense of logic needs a tune-up. I happen to think that the policies of George Bush has made us far less safe, and there is much evidence for that. The fact that there hasn't been an attack is not a logical disproof of that. Bush's economy is tanking. I'm not yet living on the street. The second fact doesn't disprove the first. I could go on. You won't buy it. The second fact doesn't change the first.
I think you're still buying what the politicians are selling. The stereotypes you inflict on Republicans and Democrats alike aren't productive or true in my experience, they're media labels that make the talking heads on TV more comfortable with their talking points.
The truth is debt only goes up, government ineffecieny only goes up, and corruption, well, it only goes up. You only get smaller bureaucracy if you're willing to kill some bureaucracts (Which, lest I sound mad, I am not). There's only one long term solution, and Jefferson saw it in his day. 'The Tree of Liberty must...'
This too shall pass. The only good government is a young government, inexperienced in manipulating the vicissitudes of power to pull the public about by their noses. Republican, Democract, Whig, Federalist, heck, Communist, Socialist, and Monarchist too, these are just terms that lay a thin veneer of respectability over the same old accumulation of wealth, power, and influence.
When too much gathers in the hands of too few, we'll get that good government back in the form of whatever bit of polish is popular at the moment.
...but maybe I'm just a cynic? If what I were saying was true you'd expect debt to outstrip inflation as an increasing trend over the history of the nation, wealth to accumulate in ever smaller clans, the excercise of political power to infringe increasingly on the rights of the majority. Is that actually happening?
I leave the reader to his own conclusions. ;)
"I happen to think that the policies of George Bush has made us far less safe, and there is much evidence for that."
Then it shouldn't be too much trouble for you to produce some for us. The state of the economy is hardly a defense of your hypothesis, by the way. I'd like something a bit more filling than that, if you don't mind. I'm a meat and potatoes kind of guy.
Where's the beef?
if my comment from 1:14 pm didn't do it for you -- not to mention reading the papers every day -- then there's nothing more I can say; it's silly really, to continue this sort of "argument." So I won't. It's not that you won. It's that you are refractory to any input. So let's just agree not only to disagree, but also that nothing I can say will affect your point of view. I produce fact, you respond either with denial or non-sequitur. It's actually beginning to piss me off, and, as you know, I'm a lily-livered, yellow-streaked pacifist, reality-seduced and, by your standards, America-hating. So rather than sinking any further, let's call the whole thing off. George Bush is a brilliant guy, oil is cool, the war is the best thing that ever happened, the economy is smokin' hot, Obama is a Muslim, the world both loves us and trembles at our name, our children will be rich, and far better off than we ever were. It's a wonderful world.
C'mon man, we've had a civil discussion despite our differences. I haven't called you any names or disparaged your character in any way whatsoever. You have my utmost respect.
Can reasonable people not disagree but still discuss these sorts of issues as adults, or must we build artificial walls between us and simply hide behind rhetoric?
I've had plenty of internet political discussions of the type you suggest we've sunk to, but I'd hoped we could rise above that sort of nonsense.
No, seriously: I keep giving you what I consider facts, and you keep insisting I haven't. So I'm as much pissed at me as you. I'm unable to convince you of some things I consider self-evident. It's not whether adding several trillion to the money we owe people who wish us harm is bad; it's what we do about it. But you don't see it as bad. It's not whether paying $110/bbl to those who hate is us bad; it's what we do about it. But you don't see it as bad. It's not whether running 400 billion annual deficit is bad; it's what we can do about it. But you don't see it as bad. And it's not whether the war is harming us by depleting our military, losing the propaganda war, distracting us from the real threats; it's how to deal with it. But you think the war is a great thing. So we simply have no realistic hope of getting anywhere. I see nearly everything Bush has done as making our country and our world more dangerous, and our democracy more imperiled. You see a great leader. So let's just shake hands and walk away. I'm not going to change your mind, nor you mine. It's not "reasonable people disagreeing and having a discussion." It's polemics that adds no value. My rants included.
Come now Gentlemen, let's not resort to acrimony and heat in our disputes.
Yes Dr Schwab, America has "jumped the shark"; and you're quite right Mr Scalpel that it is not all GWB's fault.
Maybe if we lived in the era of the duel we might be able to sort this out in some definitive manner...
So it must be that for a given set of circumstances there's a "sweet spot."
Problem is that I can't afford anyone's sweet spot. I will never see it as my job to fork over nearly half my pay to fund every entitlement that strikes the fancy of our weak-minded politicians. While I have to watch my own checkbook like a rabid dog, I see governmental abuse with my money every day. I'm beyond cynical.
What next, Sid, homeopathy?
Hey, hey, HEY!!
the war has absolutely been a waste of $$, but look what happened to government revenues after the bush tax cuts...they skyrocketed. same with reagan's and kennedy's. the deficit is the result of out of control spending (including the war). the tax cuts themselves were brilliant, and should be extended. and just a reminder that the top 5% pay 60% of all income taxes...so "soak the rich" messages from the left are a little off target. love the blog.
matt: see how they skyrocket this quarter. And it's about income matching spending. The tax cuts Bush got have sent the imbalance skyrocketing. That's the bottom line. It's unsustainable, unwise, intolerable.
read this and tell me again how tax policy favors the rich? this is NOT a zero sum game. ....anyway, thought there was some great numbers in this article that shows tax policy is actually as lopsided as ever in terms of the % contribution from the top. Yes the income disparity is not utopian, but what is the favored policy to get rid of this?....the rich already pay all the taxes - ok, almost.
http://www.realclearmarkets.com/articles/2008/04/the_rich_and_their_taxes.html
sorry, not sure how to put in a link.....
http://www.realclearmarkets.com/articles/2008/04
/the_rich_and_their_taxes.html
Well, first of all I was primarily addressing the myth that tax cuts increase revenue. Second, it's not exactly big news that if a person gets richer he/she will pay more taxes than if she/he had not made more money. Third, the question is what to do about deficits. Cutting earmarks, as McCain says is the big deal, will eliminate a few billion. Whoopee. As I said, it will have to be -- unless people want to continue to keep their heads in the sand -- a combination of things that will be tough: cutting spending (which means re-defining medicare and social security, politically questionable; or reducing military spending, which would work if we'd stop invading countries that don't need invading) and raising taxes. It would seem there's more "room" to do that to the very wealthy, although I personally don't have a problem with the idea that everyone needs to pay the piper more, to save our country. It's a matter of how to distribute the burden. Ought more be levied on the guy in the Maserati than the guy with the smoking beater who can't afford a mechanic?
P.S.: here's how to make a link. (I tried to spell out the code, but it made a link!!)
well.........I happen to believe, maybe foolishly, but hey, I'm 24, possibly naive, but that's my right goddammit!- that the Democratic Party will save its own ass at the 11th hour, and still remain intact enough to take on John McCain in the fall.
Dr. Schwab: if you come across someone who still thinks Barack Obama is a closet Muslim....RUN, don't walk, back to the OR and continue with your dictations. I mean that. Otherwise your brain will start oozing out of your ears....trying to explain the truth. Those who would believe that......ain't nothin' gonna change their minds.....
I won't believe that doctors think that way. I just won't. I can't. Call me an idiot but I refuse.
with the way things are going, I'm a very frustrated "idiot".
The Integral
I got smoke comin outta my ears cuz of this shit.........
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