Barack Obama did a bunch of big things in his first term—passed health care reform and ended the war in Iraq, most notably. If he wants to do something big domestically in his second term (especially since he seems to have lost any inclination to do anything about climate change), one natural area to try would be tax reform. It might actually be possible to arrive at something both Democrats and Republicans could live with, if we put aside Republicans' desire to make sure he never accomplishes anything, ever (which will continue into his second term). Republicans already have their own tax plan, which lays out some goodies they'll give people (especially wealthy people, you'll be shocked to learn) while conveniently avoiding any specificity on how the goodies will be paid for.
Some analyses have been done on the Republicans' plan, and they don't look too good:
Over at Talking Points Memo, Sahil Kapur reports that Senate Majority Leader Harry Reid has pulled the “sabotage” card on his House counterpart, Eric Cantor:
“You have heard, as I’ve heard, that there’s a battle going on between Cantor and [House Speaker John] Boehner as to whether or not there should be a [highway] bill,” Reid told reporters. “Cantor, of course — I’m told by others that he wants to not do a bill to make the economy worse, because he feels that’s better for them. I hope that’s not true.”
BRUSSELS—Depending on whose narrative you believe, the deepening economic crisis in Greece proves (a) that the dysfunctional and dissolute Greeks just couldn’t get their act together and keep the reform commitments that they made in exchange for debt relief from the European authorities; or (b) it only proves that austerity breeds more austerity.
Cut public spending and wages, and raise taxes in a recession, and you just dig yourself a deeper hole. Since only about 20 percent of the Greek economy is exports and less than 40 percent of export costs are wages, slashing wages just doesn’t produce much of a bounce, especially when the rest of Europe’s economy is contracting too.
Yesterday I asked whether Texas voters would punish those incumbents who approved billions in state education cuts. I didn't even mention the billions of dollars in cuts to health and human services—or that despite these cuts, critical structural revenue problems remain in the state, which means this coming session will be worse. I just wondered whether incumbents would suffer for the session's austere approach.
Last year, during the biennial legislative session, Texas House Republicans approved a budget with a crippling $10 billion in cuts to public schools over the next two years—this despite warnings from educators that the results would be catastrophic. Several state senators fought to make the cuts only harmful rather than damning. In the end, Texas public schools lost $5.4 billion in the two-year budget, an unprecedented cut that's left districts and classrooms struggling to provide basic services.
For a moment last fall, it looked as if the last-minute debt-ceiling deal was all for nothing. Democrats had caved to Republicans’ demands to cut spending in order to keep the government funded. But Standard and Poor’s decided that the brinkmanship displayed by John Boehner and Republicans reflected poorly on the country’s ability to pay its bills, and decided to lower the U.S.’s credit rating anyway from AAA to AA+. Luckily, that decision was taken more as a reflection of the rating agency than a proper assessment of the country’s credit-worthiness. The U.S. continues to sell Treasury bonds at record low interest rates, a sign that investor confidence hasn’t been shaken.
Congress is deadlocked on a host of issues that will need to be solved before the end of the year lest the country plunge off a fiscal cliff at the start of 2013. If no action is taken, all of the Bush tax cuts will expire, the payroll tax will return to higher rates, and the full-sequester spending cuts will go into effect, with the debt ceiling hitting its limit shortly thereafter. Estimates from the Congressional Budget Office released early this week paint a horror story for the start of 2013, with the economy contracting by 1.3 percent.
In our last episode, dear viewers, we watched as Israel's main opposition party, Kadima, sold out its centrist voters and joined Benjamin Netanyahu's government—thereby providing the prime minister a reprieve of over a year before he must face the voters. This allows Bibi more time to raise regressive taxes, evade negotiations with the Palestinians, and deride diplomatic efforts to solve the Iranian nuclear issue.
When it was discovered that the General Services Administration spent nearly a million dollars on a lavish conference in Las Vegas, the outrage thundered through Washington like a roiling tsunami. Congressional hearings were quickly organized, the scandal led the news every night for days, and you couldn't turn on a television or radio without hearing more horrifying details. The public trust was betrayed! Our tax dollars were wasted! Government was out of control! Yeah, maybe. But in the end, the whole thing was about $823,000, or .00004 percent of the federal budget for 2011. You want to talk real government waste? Get a load of the F-35 joint strike fighter...
In the latest issue of the magazine, I have a piece examining a strange and growing trend in some conservative circles—pushing states to adopt alternative currencies to the federal dollar. The basic concern is one you've probably heard from Ron Paul: The Federal Reserve can't be trusted, the national debt is out of control, so the U.S. dollar, backed only by faith in the government, may become worthless. (The story outlines some of the more obvious economic problems with this theory.)
To deal with the concern, problem-solving state lawmakers have started introducing bills to create a second currency, one of gold and silver. Sounds like a fringe concept right?
As much as the Internet might try to fool you, the 2012 political season is about more than just Etch A Sketches and sweater vests. We’re up crap creek in a leaky canoe when it comes to the economy, and as the country heads into the general election, the debt and budget will be at the fore of public debate.
With competing budget proposals flying in from all sides, much of the political talk these days centers on the endless delays and extensions that Congress has thrown in the path of approving a long-term federal budget. Which might lead one to wonder: Would it matter if we never passed a budget plan ever again?
What exactly is the federal budget?
The federal budget is one big ’ol nasty bill thousands of pages long that determines the fiscal future of the country over the course of a year by allocating money to various programs like Medicare and Medicaid as well as to things like defense spending.
When was the last time we had a budget bill that was approved?
April of 2009. But technically it was just an “omnibus spending bill,” and President Barack Obama was none too thrilled to be signing it, citing the excessive number of earmark projects. The following year, Democrats chose not to put forth a budget bill because they deemed it politically imprudent during the hotly contested midterm elections. Same thing happened the next year. You get the point.
Mitt Romney's old ski lodge, aglow with the warm light of taxpayer subsidy.
Like a good liberal, I feel a tiny pang of guilt when I do my taxes every year and see how much the government is subsidizing my choice to buy a home. Not that I'm going to turn it down as long as it's in place, but the mortgage interest deduction is not easy to justify. Even if there are reasons to believe that homeownership is a good thing, that doesn't necessarily mean that the government should pay you thousands of dollars to do it, particularly when you were probably going to do it anyway.
One of the more frustrating aspects of this year's Republican primary was the utter lack of specificity in candidates' proposals. It turns out this was a strategic decision. In an interview with the Weekly Standard last month, Romney said:
