Estimates for December job growth converged at around 150,000 net jobs, and according to today’s report from the Bureau of Labor Statistics, the economy created almost exactly that: 155,000 new jobs, with a steady unemployment rate of 7.8 percent. The revisions show an economy that’s a little stronger than it looks; October was revised to 138,000 jobs from 137,000, and November was revised from 146,000 to 161,000.
The fiscal deal that raised taxes on the top one percent was a victory only for what it did not do. It did not cut Social Security, Medicare, Medicaid, or other public spending. Unfortunately, it merely put off the next round of jousting over fiscal issues to a time when Republicans will have more leverage.
Income taxes have gone up for the first time in 20 years, but as the Huffington Postreports, only 1 percent of taxpayers are affected:
Forget the 1 percent, the fiscal cliff deal is all about the .7 percent. That’s the slice of Americans who will be affected by Congress’ new definition of “wealthy,” according to a new analysis from the Tax Policy Center, a nonprofit tax research group.
The centerpiece of the deal passed by Congress on Tuesday includes higher income taxes on individuals who make at least $400,000 and couples who make more than $450,000. The tax rate for those groups jumps to 39.6 percent from the current 35 percent.
Yesterday, I complained that political media presents debt reduction as a no-brainer—something we must do, for the sake of our solvency—and not as a choice that may or may not be warranted in the current environment (hint: it’s not). There’s no mystery as to why that’s the case; the major mainstream news outlets are heavily influenced by elite opinion, and elite opinion is dominated by the views of successful businesspeople.
If the debate around the fiscal cliff and, particularly, the still-impending sequester demonstrates anything, it’s that Richard Nixon’s one plunge into economic theory—“We’re all Keynesians now,” the former president once said—still holds. Everyone acknowledges that laying off hundreds of thousands of government employees, including 800,000 civilian Defense Department workers, and stopping payment to government contractors will, by definition, destroy jobs, at least until the payments resume. It’s still Republican orthodoxy, to be sure, to deny that government spending actually creates jobs, but even they acknowledge that the cessation of government spending destroys them. Which illustrates that the problem with contemporary Republicanism isn’t confined to their indifference to empiricism but also their indifference to logic. Reasoning—either deductive or inductive—is either beyond them, beneath them or above them.
When President Lincoln suspended habeas corpus in 1862 (a couple of times, actually), he conceded the possible unconstitutionality of what he had done but concluded that since the move was necessary in a time when half the country was at war with the other half, he would take his chances with Congress, the courts, and history. The country’s current chief executive finds Lincoln comparisons disconcerting, but this is a case where he might pay attention, because his legal grounds for unilaterally raising the ceiling on the national debt in a time of congressionally inflicted crisis are no weaker than Lincoln’s and probably stronger.
Now that the future revenue path is pretty clear for the next decade, I took another look at President Obama's 2013 budget, which projects spending and revenue through 2022 on the assumption—a correct one, it turns out—that taxes will only rise on the affluent.
This passage from Politico’s write-up of the fiscal cliff deal, on the supposed inadequacy of the agreement, stuck out to me for it’s sheer wrongness: “The pact also does little to reduce trillion-dollar-plus deficits, shore up entitlement programs, overhaul the tax code or stimulate the U.S. economy — the casualty of a polarized political culture that scorns compromise.”
Beyond yesterday’s narrow escape from the dreaded fiscal cliff are … more cliffs. President Obama and Congress averted one fiscal calamity of tax-hikes-for-all only to face even steeper cliffs—the sequester, the debt ceiling, the Social Security shortfall, ad infinitum. It is a fiscal Wizard of Oz, an extended odyssey with perils on every side.
“It’s not all I would have liked,” says Republican Senator Lindsey Graham of South Carolina, speaking of the deal on the fiscal cliff, “so on to the debt ceiling.”
The battle over the fiscal cliff was only a prelude to the coming battle over raising the debt ceiling—a battle that will likely continue through early March, when the Treasury runs out of tricks to avoid a default on the nation’s debt.
The White House’s and Democrats’ single biggest failure in the cliff negotiations was not getting Republicans’ agreement to raise the debt ceiling.
The last time the debt ceiling had to be raised, in 2011, Republicans demanded major cuts in programs for the poor as well as Medicare and Social Security.
We are now halfway into our own lost decade. Five years ago this month, the economy started to collapse in the largest downturn since the Great Depression. Though the recession has officially been over since 2009, we’ve had a slow and uneven recovery. Unemployment, which dropped from 8.3 percent in January to 7.7 percent in November, remains far too high.
The side of John Boehner we understand most is the one that offers that distant sense of comfort—the one who'll pander to the conservative movement during these fiscal cliff talks but understands a compromise must come through at the end. This is the John Boehner we dub the "dealmaker," the leader who must "stand up” to the Tea Party—and Majority Leader Eric Cantor, the rival who would do him in. His “dealmaker” persona stems from the assumption he isn’t a true believer or an aggressively ideological Republican, which is correct.
Carla walked into my office with despair in her eyes. I was surprised. Carla has been doing well in her four months out of prison; she got off drugs, regained custody of her kids, and even enrolled in a local community college.
Without much prodding she admitted to me that she had retuned to prostitution: “I am putting myself at risk for HIV to get my kids a f---ing happy meal.”
Despite looking high and low for a job, Carla explained, she was still unemployed. Most entry-level jobs felt out of reach with her drug record, but what’s worse, even the state wasn’t willing to throw her a temporary life preserver.