Who’s Taxing Whom?

Fair warning: what follows is a bit of a rant and contains nothing particularly new.  But the fiscal follies of our overlords are unhinging me, and as misery loves company, I hope to share my derangement.
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I’ve been a little obsessed with light bulbs lately, as regular readers know.  I  continue to be dumbfounded at the depth, passion, and naked-mole-rat-stupidity of the GOP drive to ensure Americans waste money on illumination.  Following a thought from one commenter, I’m bracing for the claim that bans on whaling are really an unconscionable assault on the liberty of the people to light their homes with oil lanterns.

But as I thought about the implications of the Republican House caucus’ relentless drive to undermine America’s energy security, I started to fixate on a penetrating glimpse of the obvious:  the entire GOP approach to the federal government’s fiscal policy is a vast tax hike on most Americans.

That the GOPsters approach to policy will raise the cost of living in America is, I think obvious by this point:  when you privatize public goods, by and large those goods cost more for the individual user to access.  (There is a lot of detail obscured by that blanket statement, and certainly some instances where it might be otherwise, but the health care system (about which more below) is a familiar example of the basic problem, and there are many more.)

Republicans would say, I think, that cost isn’t the issue.  Government shouldn’t pay for much that it does now and that individuals can make better choices about priorities and so on.  They’d add that government musn’t pay for that which it can’t; that, to use a cliche repeated over and over again, that the government must behave like any household would, and not spend money it doesn’t have.

That last is nonsense, of course.  I’m actually working on a next book that tells a grand story of fraud and deceit at the birth of the idea of government debt—and that tale turns on the ways that governments aren’t like households or small businesses.

For now, though, the point is that if you take the Republicans false metaphor at face value, then you see that despite the brave promises of “no new taxes,” the practical, household consequences of their actions add up to a huge stealth tax increase that differentially falls on to working people, the middle class, and the poor.

And yes, as noted above, I know I’m restating the obvious, but bear with me.  Let’s  take my lighting fixation for a spin.  Recall that the energy efficiency standards that so offend the current Republican caucus* are predicted to save each American household $50 a year.

Now back to that bill-paying session over the kitchen table Republicans are so wont to imagine.  More »

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Obama is not going to slash Medicare or Social Security, so CTFD already

He’s got this.

Check out this interview Obama did with Jean Enersen in Seattle.

[via The Obama Diary]

[cross-posted]

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Boehner Blinked.

Well, what do we have here:

House Speaker John Boehner is abandoning discussions with the White House on a large-scale debt deal slated to achieve $4 trillion in deficit reduction. The bone of contention is Boehner’s insistence on no tax increases in the deal. Instead, Boehner said the talks should focus on reaching a smaller debt-reduction deal.

“Despite good-faith efforts to find common ground, the White House will not pursue a bigger debt reduction agreement without tax hikes,” Boehner said in the statement.

The Administration knew what Boehner’s pressure point was. How? Because Grover Norquist hasn’t shut the hell up about it for a month now. The sacred tax pledge! You must obey the sacred tax pledge! All the howling from the left may turn out to have been a good thing.***

Meanwhile, the Tea Party is about to lose its collective mind (to the extent it has one, which is unlikely).

The hits: They just keep on comin’.

I reckon this is your evening flame war thread.

Cheers!

***I know I know, he’s worse than Bush.

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Rand Paul is being a dick about the debt ceiling.

He’s going to filibuster because of course he is.

Rand Paul, who is turning out to be one dumb motherfucker, is planning to throw a temper tantrum filibuster in order to force a debate on raising the debt ceiling.  Yup.

He also claims that the Teabilly Caucus’s vote to raise the debt ceiling is contingent upon passing a Balanced Budget Amendment to the Constitution.

Yup.  A Balance Budget Amendment.  The same one that Ezra Klein called “the worst idea in Washington”—that Balanced Budget Amendment:

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Is America Too Big To Fail? Eric Cantor Doesn’t Think So.

Investing in Failure

A reader pointed out this interesting bit of news, with the question “Why hasn’t this gone viral?” The answer? I don’t know:

Putting his money where his mouth is? Eric Cantor, the Republican Whip in the House of Representatives, bought up to $15,000 in shares of ProShares Trust Ultrashort 20+ Year Treasury ETF last December, according to his 2009 financial disclosure statement. The exchange-traded fund takes a short position in long-dated government bonds. In effect, it is a bet against U.S. government bonds—and perhaps on inflation in the future.

Given that it seems the Republicans are hell-bent on destroying the economy in order to stick it to Democrats, I fail to see how this isn’t a big deal.

Perhaps I am not reading this correctly and it isn’t a conflict of interest, but it certainly seems like it is: These folks have a stake in the failure of the U.S. economy, but IOKIYAR.

I’d ask where the jobs are, but why bother.

(H/T starshine!)

[via Think Progress]

[cross-posted at ABLC]

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I’ve got this thing and it’s fucking golden, and, uh, uh, I’m just not giving it up for fuckin’ nothing. I’m not gonna do it.

It makes perfect sense to have some limit on how high government debt can get. You can’t have a situation where some poorly thought out program or budgeting accident runs up the national debt like a tween with no texting plan on her phone. After all, Congress can always raise the limit when the need comes up. Whoever put that in place no doubt took it as a given that any leaders who screwed around with the debt limit would have their fingerprints all over a financial calamity and get slaughtered in the next election.

And yet here we are. Mitch McConnell now says that we cut Medicare or the economy gets it.

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Krugman > Drezner. As if you need me to tell you that.

Krugthulu snorts at opinionmakers who demanded Bush bills that exploded the deficit, held up Ireland as an economic model and now act like like the budget crisis is some passive-tense disaster that just sort of happened because ordinary people are stupid. Dan Drezner calls that silly because polls supported cutting taxes and invading Iraq. Drum points out that polls always supported those things but, until Bush, nobody actually did them because informed people understood that they were bad policy.

I would add two things.

(1) Popular opinion is not exactly an inexorable force to which politicians swing like algae on a harbor rock. If you have enough money and enough media outlets you can make people care about any damn thing you want.

Do people remember 2003 anymore? The only people thinking hard about Iraq right after 9/11 either worked in the White House or knew personally someone who did. Once Bush and his neocon advisers decided to go to Iraq it took a full-court press by FOX, the internet right, talk radio, nonstop screaming hysteria from the bully pulpit and a healthy dose of processed bullshit fed to pet reporters like Judith “fucking right” Miller. It also took an incredible amount of naked lying. The decayed corpse of Hermann Goering pretty much nailed it.

If you care enough and have enough resources public opinion just doesn’t mean anything. It might be relevant for third rail issues like Medicare and Social Security (that is to say, they have support that no amount of screaming on FOX can budge) and yet Republicans keep taking a tire iron to those anyway. That is nigh inexplicable unless you dismiss the idea that public opinion has even a small influence on the GOP agenda.

(2) If anything the recession is an even more obvious point in Krugman’s favor. The most obviously stupid move in the whole affair came when a bipartisan team of wise men decided late in the Clinton Administration to deregulate the banking industry. In a sense bankers are like algae on a harbor rock: at least collectively they don’t have any complex or hidden motives. They want to get rich and they will follow whatever incentive system government creates (whether it means to or not) to get wealthy as fast as possible. Those bizarre investment decisions of the early aughts make perfect sense if you consider that the people who made them made a fortune and kept it. So their firms caught fire and blew up. Who cares? Those “stupid” bankers are still stupid rich. Unless the rules change and/or a lot of people go to jail, you can bet any money that they will make the same decisions again.

Harder to understand is why a small band of respected leaders such as Phil Gramm, Bob Rubin and Alan Greenspan set out on what amounted to a holy jihad against accountability and transparency in banking. “The public” did not demand banking reform because “the public” had no idea what banking reform is. Alan Greenspan, on the other hand, must have had some idea where his jihad was leading. Uncle Alan represented Charles Keating in 1984.

I will repeat Krugman’s conclusion because the point cannot be made enough.

[T]he larger answer, I’d argue, is that by making up stories about our current predicament that absolve the people who put us here there, we cut off any chance to learn from the crisis. We need to place the blame where it belongs, to chasten our policy elites. Otherwise, they’ll do even more damage in the years ahead.

Alternatively: LEARN, GODDAMNIT. LEARN.

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Give The Man One White Chip*

Via the NYT we learn what constitutes “big” to a Republican congressman.  (No, children…don’t go there.)

(Hell.  This is the internet.  Go there if the spirit moves you.)

By now, just about everyone with a pulse and an interest in politics knows that the budget debate produced much more kabuki than actual cuts.  Rather the reverse in fact:

According to a Congressional Budget Office comparison, the bill would produce only $350 million in tangible savings this year, in part because cuts in domestic programs were offset by an increase of about $5 billion for Pentagon programs.

When projected emergency contingency spending overseas is figured in by the budget office, estimated outlays for this year will actually increase by more than $3 billion.

There are longer term effects that restrain spending.  Albert Einstein is said to have said that the only true miracle in the universe is compound  interest.  That’s apocryphal, of course, but it is true that cuts in baseline expenditures in discretionary spending will propagate through the years to come:

The agreement does put the brakes on what had been a steady growth in spending by federal agencies. Future savings would be greater as the cuts took hold — a point Republican aides emphasized by noting that the plan is estimated to cut spending by $312 billion over the next decade.

Sounds like a lot of money.  At least, so says those members of the GOP, who quail before the wrath of the pitchfork brigade that they’ve turned into their base.  Hence nonsense like this:

“Big stuff,” said Representative Tom Price, a Georgia Republican and leading conservative.

Yeah, I know.  A billion here and a billion there and pretty soon you’re talking real money.

 

Except that $312 billion, for all that it could buy is …

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David Stockman is Shrill

Via TPM:

“It doesn’t address in any serious or courageous way the issue of the near and medium-term deficit,” David Stockman told [Brian Beutler] in a Thursday phone interview. “I think the biggest problem is revenues. It is simply unrealistic to say that raising revenue isn’t part of the solution. It’s a measure of how far off the deep end Republicans have gone with this religious catechism about taxes.”

Stockman is still on the wrong side of critical issues—the architect of the Reagan deficits loves him some entitlement pain…

...but, as Beutler reports, he

...breaks faith over taxes and the GOP’s unwillingness to slash defense spending. And he laughs off the notion that the plan will do anything about unemployment, let alone dramatically reduce it, which Ryan and his plan claim it will. “This isn’t 1980. It’s not morning again in America. it’s late afternoon, or possibly even sunset.”

Oh noes! Someone dares to suggest that America may be exceptional only in the self-inflicted wounds that mark its decline.

As soon as I recover from my attack of neurasthenia, I’ll be sure to bestow some appropriately framed certificate of Moore-ishness upon this miscreant’s head.

Image: Alejo Fernández, The Scourging of Christ, before 1543

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Children With Matches, Playing in the Powder Magazine.

...That would be your present-day Republican party.

The just concluded budget skirmish was a mere amuse bouche to the gluttons-for-(other people’s)- punishment that is your modern GOP.   The New York Times reports today on what looks to be the mother of all budget battles to come over the vote to raise the debt limit.

I’m waiting for the chorus of the swaddled commentariat to tell us just how principled are Republican moves like these:

...they will again demand fundamental changes in policy on health care, the environment, abortion rights and more, as the price of their support for raising the debt ceiling

If they don’t get what they want, and actually block the Treasury from raising more obligations, then this is how the Grey Lady (no longer) of 43rd St. rather demurely describes the consequences:

Once the limit is reached, the Treasury Department would not be able to borrow as it does routinely to finance federal operations and roll over existing debt; ultimately it would be unable to pay off maturing debt, putting the United States government — the global standard-setter for creditworthiness — into default.

The repercussions in that event would be as much economic as political, rippling from the bond market into the lives of ordinary citizens through higher interest rates and financial uncertainty of the sort that the economy is only now overcoming, more than three years after the onset of the last recession.

That is:  with still achingly high unemployment; wage stagnation; food and energy cost hikes; the rise (again) of the financial sector’s share of corporate profits nation wide; the increasingly worn safety net and all that, the GOP is threatening to make life worse on just about every economic and social axis imaginable.

The irony is that it may be our last, best hope that the monied class will be able to tame the beast they’ve unleashed.  Here’s Jamie Damon, head of JP Morgan Chase and someone often seen as one of the non-monstrous Wall St. types:

“If anyone wants to push that button, which I think would be catastrophic and unpredictable, I think they’re crazy,” Mr. Dimon said recently at the United States Chamber of Commerce.

But the problem is that this is what he—and the rest of us—have to contend with:

Representative Mick Mulvaney… dismissed warnings about default as “just posturing,” and said Democrats should bear the responsibility for passing any measure to increase the borrowing limit.

“It’s their debt,” he said. “Make them do it. That’s my attitude.”

Except, of course, this “Democrats did it” nonsense is simply false.   Here’s the key part of the Times piece, an all too rare fact-based description of where our current debt comes from:

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They’re Not Even That Consistent

I like the general theme of Sullivan’s bit about the meaninglessness of labels with respect to modern Republicans. However, this is simply wrong.

Income tax rates are now lower than they were under Ronald Reagan and far lower than they were under Eisenhower. And yet it has become a Norquistian non-negotiable that no taxes can be raised at all on anyone[...]

Republicans will gladly increase taxes on poor people. Republicans will annul tax credits that favor the poor even faster.

You cannot predict Republican behavior with any single principle. Full stop. For one example, take Newt Gingrich (please). Or look at the Affordable Care Act. Orrin Hatch cosponsored essentially the same bill in the 90’s and defended it until the week when Obama embraced it as a compromise plan. Now he says it is worse than Hitler. Mitt Romney implemented the plan in Massachussetts, and it’s working great! Just don’t ask Mitt to defend his greatest achievement. He won’t. As another example, take any issue that Mitt Romney ever spoke about more than once.

True, virtually everything they fight for will make the rich more secure or subdue the not-rich, but not always, and certainly not if it means that they agree with something that a Democrat proposed first.

And there, my friends, is the main difference between Republicans today and the people Sullivan used to know and love. Once upon a time the GOP would gladly cross the aisle and work with Democrats to screw the poor. Now even that exalted goal must take a backseat to petty displays of spite by loud, stupid bigots like Richard Shelby, John Kyl and Jim DeMint. What was once a genteel agreement to slowly throttle the working class has devolved into a naked gibbering scramble for the bundle of fasces, and that just won’t do.

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Reality Has A Well-Known Liberal Bias, Wisconsin Edition

I know that probably everything below is obvious to this audience and/or already presented better by someone else here, but anyway:  following up John’s post on the deliberate deception behind the “contribute more” demand of public service workers in Wisconsin, here’s some inconvenient data.

The shorter:  public service workers are not overpaid.  Not even a little bit.*

Let me turn it over to an MIT colleague (one vastly more accomplished than I), Thomas Kochan,

Kochan is a Wisconsin native and a University of Wisconsin graduate.  He’s recently been involved in some creative and effective labor negotiations in Massachusetts.  In his day job, he studies industrial relations and labor policy at MIT in both the Engineering Systems Division and the Sloan School of Management (i.e. not habitats exactly  overpopulated with DFH’s).

Here’s what he had to say to his home state:

It has to start by getting the facts right. Wisconsin’s public service employees are not overpaid relative to their private sector counterparts. Rutgers University professor Jeffrey Keefe has done the analysis. (See his complete study on our Employment Policy Research Network website: www.employmentpolicy.org.) Controlling for education and other standard human capital variables he found that Wisconsin’s public sector workers earn 8.2 percent less than their private sector counterparts in wages and salaries. Taking fringe benefits into account shrinks the difference to 4.2 percent. Thus, public sector workers have lower wages and higher fringe benefits (yes, pensions and health care benefits are the two standouts). But overall, they are not overpaid compared to the private sector. No easy scapegoat here.

That is:  Wisconsin state workers are living exactly the way their fellow citizens  should want them to:  they are deferring present consumption for  income security in retirement.  This is what every financial counselor begs their clients to do.  It is what as a society we want to happen—better by far that our citizens anticipate and prepare for life after work than to hit the bricks with a grin and a sawbuck in their pockets.

And  Wisconsin civil service is exercising such prudence at a cost to the taxpayer lower than that of private sector workers.  You can argue whether or not that 4% figure is a sufficient price to pay for the (at least partly) notional job security public employees possess, but the basic point is clear:  Wisconsin state workers are hardly bilking the tax payer to enjoy lives of sloth and opulence.

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But Serious People Know This Doesn’t Count

The New York Times report about Dennis Montgomery, who allegedly defrauded the Pentagon and CIA out of $20 million over almost a decade, and whose software caused multiple false alarms while doing nothing to fight terrorism, contains this interesting fact:

Hints of fraud by Mr. Montgomery, previously raised by Bloomberg Markets and Playboy, provide a cautionary tale about the pitfalls of government contracting. A Pentagon study in January found that it had paid $285 billion in three years to more than 120 contractors accused of fraud or wrongdoing.

That’s $285 billion of spend on contractors who have committed real fraud, versus $1 billion of imaginary fraud. Perhaps some serious DC player will explain why the “math demands” we cut entitlements, yet we’re not even discussing shaving a few hundred billion dollars of waste from the Pentagon budget. And maybe when they’re done telling us why those dollars don’t count, they can also explain why we can’t just let the Bush tax cuts expire, which would cut the deficit to 3% of GDP in one fell swoop.

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More on fiscal austerity and Iraq

So Digby noticed the Iraq/fiscal austerity parallels 7 months ago (h/t Elia). At any rate, it is quite striking. Here’s Orrin Hatch (h/t AK):

Hatch (Utah), the ranking Republican on the Senate Finance Committee, accused Obama of surrendering on the budget like Chamberlain surrendered Czechoslovakia to Germany.

“The United States is demanding a Churchill on the issue of deficits and debt, but the administration has delivered us a Chamberlain,” Hatch said on the floor Monday, in a clear reference to Chamberlain’s foreign policy of “appeasement.”

I want to be clear, budgetary problems are complicated, just as Iraq is. I do not support running huge budget deficits forever, just as I did not support Saddam Hussein. However, I do not support spending cuts in the middle of the worst recession in 70 years, just as I did not support an ill-planned unilateral invasion of Iraq. And whenever someone starts talking about Chamberlain and Churchill in the context of some situation that bears no resemblance to the appeasement of Nazi Germany, I reach for my revolver.

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Just Go To The Emergency Room

I agree with Lawrence Tribe that the legal challenges to the PPACA are “a political objection in legal garb” but the Republican refusal to engage in any kind of serious dialogue on health care outside a courtroom means that it’s up to us to ask them questions on what they have in mind.

When I read the conservative proposals for tort reform or high deductible, low value health insurance plans, I keep running into this inconvenient truth, and I’m wondering whether anyone dares to approach GOP elected leaders and ask about it:

In 1986, Congress enacted the Emergency Medical Treatment & Labor Act (EMTALA) to ensure public access to emergency services regardless of ability to pay. Section 1867 of the Social Security Act imposes specific obligations on Medicare-participating hospitals that offer emergency services to provide a medical screening examination (MSE) when a request is made for examination or treatment for an emergency medical condition (EMC), including active labor, regardless of an individual’s ability to pay. Hospitals are then required to provide stabilizing treatment for patients with EMCs. If a hospital is unable to stabilize a patient within its capability, or if the patient requests, an appropriate transfer should be implemented.

We don’t even have to bring this law up, actually. Republicans raise it all the time, whenever they’re asked about what they plan to do with the tens of millions of uninsured and under-insured that will remain uninsured or under-insured under the conservative approach to health care:

McCONNELL: Well, they don’t go without health care. It’s not the most efficient way to provide it. As we know, the doctors in the hospitals are sworn to provide health care. We all agree it is not the most efficient way to provide health care to find somebody only in the emergency room and then pass those costs on to those who are paying for insurance. So it is important, I think, to reduce the number of uninsured. The question is, what is the best way to do that?

Well, now, not exactly, Mitch.

McConnell lied, because McConnell knows better. It isn’t an oath that guarantees universal access to the emergency rooms of those hospitals that accept Medicare (so virtually all hospitals). It’s a federal law. A federal law that passed with wide bipartisan support under the sainted Ronald Reagan. Republicans have been dodging the implications of that law ever since, but, incredibly, in some soft-bigotry-of-low- expectations kind of way, they have been able to get away with both relying on it in the abstract and ignoring it as a practical matter.

In fact, at the time of EMTALA’s passage, despite what McConnell would have us believe, only 22 states had laws that guaranteed that no emergency patient was denied emergency care because of inability to pay; 28 states had no such law. The emergency room treatment guarantee has become such a part of the background of the health care system in this country that we keep forgetting to ask Republicans to explain how they can support and rely on this guarantee, while proposing no way to pay for it. I guess they’re in favor of “cost-shifting”, because that’s how we’re paying for it now.

Here’s what it was like before, under the state’s rights approach:

The Emergency Act was passed in 1986 amid growing concern over the availability of emergency health care services to the poor and uninsured. The statute was designed principally to address the problem of “patient dumping,” whereby hospital emergency rooms deny uninsured patients the same treatment provided paying patients, either by refusing care outright or by transferring uninsured patients to other facilities.

The EMTALA is really unusual because it mandates that private, public or non-profit entities provide goods and services (health care) to anyone who walks in the door, with no prior payment or promise to pay.

We subsidize some essential life-sustaining services in this country. Examples are food stamps, housing subsidies and heating assistance. But I can’t enter a supermarket and announce I’m there to receive my federally guaranteed emergency food ration. I can’t show up at a motel and ask for my federally guaranteed emergency shelter. I can’t contact a private power provider and assert my emergency HEAP rights.

I have to pay for those goods or services prior to receiving them. I can use a voucher, like with food stamps, or I can use cash, or I can promise to pay with credit or insurance, but I don’t get the good or service prior to payment or promise to pay.

Further, I have to qualify for a federal/state voucher for food or housing or heating assistance. Those services are not universal. The level of assistance varies from state to state, and I can’t take my guarantee across state lines. None of those restrictions apply with emergency medical care. If I’m traveling through any state and I have what I perceive to be a medical emergency (or an actual medical emergency) any emergency room must assess, treat and stabilize, whether the hospital is public, non-profit or private, regardless of income, even if I’m not a citizen of this country, let alone residing in a certain state or county, just because I’m alive. We did that at the federal level.

And Republicans know it. They endorse it. They rely on it.

Here’s former President Bush:

“The immediate goal is to make sure there are more people on private insurance plans. I mean, people have access to health care in America,” he said. “After all, you just go to an emergency room.”

Easy! Just go to an emergency room! Well, that’s settled then. Let’s get on with the tax cuts.

Since 1986 we’ve been relying on an emergency stop gap because we flat-out refuse to grapple with health care. We’ve relied on it so long, incredibly, it has become part of the conservative argument against health care reform.

It’s the single reason why conservatives can simultaneously oppose any health care reform while claiming to be humanitarians, or just minimally decent human beings. They’re monsters without EMTALA, and they could not continue to pass the buck on health care without it.

Read it again:

to ensure public access to emergency services regardless of ability to pay

It mandates rock-bottom safety-net health care delivery at the federal level and it’s universal. We passed the law in 1986, with broad bipartisan support under Ronald Reagan, but we forgot to make any provisions for complete payment on uncompensated care, so we use the completely non-transparent payment mechanism called “cost-shifting”. We hide the cost.

Republicans oppose Medicaid expansion and they oppose federal subsidies for middle class health insurance, while at the same time relying on this law as a safety net, which is what it is.

Is anyone going to ask them about that?

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