America at Political Cross-Roads (Revised)

        It is rather obvious to anyone with any common sense that there are two reasons why we have a debt problem:  (1) We spend more than we could afford--or were willing to cover.  Instead of paying cash for our unnecessary expenditures, we put it on our credit card, borrowing money to give big tax breaks to the wealthiest Americans and borrowing more money to fight a war in Iraq which we needed not fight.  (2) We did not bring in enough revenues through taxes to pay off the credit cards, that is, to cover the payment of our debts.  So we have a debt problem because we have both a spending problem and a revenue problem.  And it doesn't matter how many times Republicans say it is only because we have a spending problem; it is not not true.

      Liberals on the far left have reason to be disappointed with the performance of President Obama during the first two and a half years of his presidency.  He was so absorbed in the nation's need--and call--for bipartisanship that he too often began negotiation at the likely position of compromise, resulting in his eventually compromising to the right of center.  He did not allow Congress to arrive at that center themselves, with some timely help from him when necessary to fine tune the agreement.

     On the debt-ceiling dilemma, the President told Democratic members of Congress not to draw a line in the sand, despite Republican having announced their line in the sand of no tax increases.  Even so, Democrats and Republicans likely had found a middle ground of sorts with three or four to one weighings of spending cuts to revenue increases.  There was a chance that more spending cuts could have been achieved had Republicans agreed to an additional $400 billion in cuts which had been suggested by the Senate's Gang of Six Committee.  The President asked the Speaker if those additional revenues were doable with House Republicans.  The Speaker did not respond.

     But freshmen tea party Republicans weren't even going to agree to even the original revenue increase $800 billion in revenue increases.  And when Republicans turned down the $800 billion increase in revenues, the Speaker blamed the rejection on the President's "moving the goal posts" and "demanding" $400 billion dollars of revenue.  Neither the reason for the rejection nor the claim of the President's "demanding" a revenue increase was true.

     If there are sufficient Republicans who are committed to the government defaulting in paying back the money Congress borrowed, then Congress cannot reach any agreement.  The House and Senate will never agree on something that can pass both chambers.  What happens then?

     The Constitution has the answer:  The obligation of the nation's debts to be paid cannot be "questioned."  But if Congress cannot agree to pay expenditures it approved, the President must save the nation from default before the condition become a catastrophic.  The 14th Amendment apparently gives somebody the responsibility--and the authority--to pay the bills.  Who is that if not the President of the United States?  And if it is the responsibility of the President, would it not be derelict in the performance of his duty for the President not to raise the debt ceiling? Would it be an impeachable offense?

      But for how long would Obama have the authority to raise the debt ceiling:  one week, one month, one year, until after the next elections, or is it a blank check to raise it at the president's discretion?   Obama must not allow political blackmail to succeed.  He must exercise the 14th Amendment authority if necessary, and let the Supreme Court explain for governments of the future why a president can or cannot do so.   A vote of disapproval by the Court would encourage political blackmail and is itself perhaps unimpeachable offense.

     The nation and the world now know what to expect should Republicans ever gain control of Congress and the presidency.  They know what is likely to happen should Democrats not control the presidency and both chambers of Congress that includes a filibuster proof majority in the Senate.  And they also know, now, why Republicans were so persistent in characterizing Obama as a Fascist:  It was to deflect attention to their own efforts in that direction.

     Unfortunately, the present political climate in Washington makes possible the unthinkable: government officials having the power to deliberately manipulate the political climate in ways that influence financial markets in ways that assure the success of their or their supporters investment bets.  Politicians can scare the markets into a decline, enabling them, those related to them or to whom they are indebted to make money as markets go down and as they turn around a go up.  It is understandable why some politicians don't want government big enough to regulate and oversee.

      Your will notice that Republicans never mention how poor and middle class Americans will be affected by tax cuts that are too large and tax revenues that are too low.  They never explain how spending cuts will increase the number of jobs.

The present political debates are not about whether we spend too much or tax too little.  It is about something much more:  It's about what kind of people we are or choose to become as Americans. 

     On second thought, the tea party Republicans are not as significant part of that future as they appear.  Their threats to not vote to raise the debt ceiling and severely damage the American and world economies unless they get their way clearly identifies them as a non-factor in future elections.  Remember, all of the spending cuts that will go into the final bill were negotiated with any tea party members of Congress, only regular Republicans.  Tax cuts without revenue increases is a conservative position, but tea party members don't care about a Republican victory; they are only care about their receiving the credit for whatever out come results, and making political blackmail work.

     The final Democratic position, in this debt-ceiling debate, is where a party which wants to be the big-tent party should be: slightly to the right of center--and Democrats and Republican would be meeting there even without a tea party.

     

Ronald C. Spooner

Email:  rcspoon@earthlink.net

Blog:    ronaldcspooner.blogspot.com

Thwarting Political Blackmail and Compassion Void

     It has been said that the test of a nation's character is the way it treats its poor. It has become obvious that Republicans don't care about the poor and powerless.  What that says about Americans in general will be communicated during the Nov. 2012 elections.  While Democrats have been talking about the effects of cuts that are too big and too untimely on the middle class and the working poor, Republicans have been talking, without shame, about how much money the wealthy--who helped cause massive unemployment with the money they had--now need supposedly to reduce unemployment.    

      I recently chanced upon Neil Cabuto's show on Fox News.  His disturbing argument was essentially that millionaire and billionaires should not pay more in taxes because poor people don't pay taxes.  Republicans care so little about the poor that they beat them up for things for which they are not responsible.   The poor did not pass the laws exempting them from paying income taxes.  Those laws were passed during a time when both Democrats and Republicans contained mostly compassionate members.

     Unfortunately, funding the government's obligations is the responsibility of this increasingly shameless congress which is increasingly less compassionate and sympathetic toward less fortunate Americans, and increasingly indifferent to mainstream Americans.  Until recently, the final bills were routinely compromises between House and Senate ideas that are subsequently approved by both houses and signed by the president.  But along with record tornadoes, floods, fires and heat have come tea party Republicans.

     Initially,  because paying the nation's bill is the responsibility of Congress, President Obama was not part of the negotiations to reach a compromise on debt reduction through spending cuts and revenue increases.  However, because Democrats were persistent in requiring that there be revenue increases as well as spending cuts in any compromise, Republicans objected to the way negotiations were going under the leadership of Vice President Biden and asleep that the President become directly involved in the negotiations.  They said Obama needed to demonstrate some leadership.  So the President joined the strategy sessions.   

      But Obama was also demanding that spending cuts be coupled with revenue increases, reportedly to the degree of 4 or 6 to 1 in favor of spending cuts.  But Speaker Boehner still couldn't sell the tea party Republicans on the idea of raising revenue as a means of effecting massive debt reduction, and thereby placing Obama at odds with his political base.   Republicans did not go along with a large deficit-reduction package of $4 trillion or more at a time when they claimed debt reduction was essential for economic recovery and job creation.

     Fed up with attempts to negotiate with Obama, now Boehner said he could not negotiate with the President, and will negotiate only with senate leaders.  (The fact was he could not convince his tea party comrades that he had effected a good deal for Republicans.

     At first glance, the best of the alternatives for President Obama and fellow Democrats seems to be approving some of the spending cuts on which both sides agree, along with having the debt limit being raised and extended pass into 2013.  Voters could decide during the presidential and congressional campaigns--and during the November, 2012 elections--what kind of government they want in the future and who as president and as members of congress can best lead them there.

     President Obama, however, is right in believing compromises that cannot be achieved, now, will only be more difficult to resolve three or six month later with the same people.  And if he caved in now, he would only be expected to cave in even more three months later.  Six months later, he likely would be expected to throw in the kitchen sink--and he probably would.

     Republicans cannot be allowed to blackmail the government into honoring its every wish--and won't unless the President allows it.  No party--nor any faction within a party--should be in a position to effect the directions of financial markets solely according to its wishes.  Allowing this would be an even greater threat to our American democracy and longterm economic health than defaulting.      

     By assuming presidential authority, apparently accorded him by the Constitution, to raise the debt limit when the Congress refuses to pay its debts in a manner and for motives that amount to political blackmail, President Obama can show that such antics will not work for this Congress, now, nor against any future president.    The president's authority to prevent default has been equated some to his authority to respond decisively to a military attack.  The president of the United States is the most powerful political figure in the US government.  Hopefully the Supreme Court confirms, now, and in the future, such presidential power related to the payment of the nation's debts.

     If Republicans feel that they are doing the right thing, then they should not mind their decisions and those of the President in this matter being at the center of campaign debates concerning the future of our democracy.   If they really believe they are right in this current stalemate, they should feel confident that raising the debt limit into 2013 would benefit themselves rather than President Obama during the 2012 campaign.  President Obama only has an advantag , as Republicans suggest. only he is the one who is right.

     Americans, most of the rest of the world and bond raters know that, if the United States defaults, it will not be because we cannot afford to pay our debts, either now or later, but rather because Republicans are choosing to demand unreasonable political concessions as conditions for paying.  Neither Americans, bond holders nor raters of bonds benefits from a United States they cast into depression.  We likely would continue to be able to sell our bonds, as bond holders wait until the results of the 2012 elections to make decisions about whether--and to what extent-- the United States and the party in power can be trusted.

Ronald C. Spooner

rcspoon@earthlink.net

ronaldcspooner.blogspot.com

        

Theory of Republicanomics

     Republicans have tried to make the case that taxing wealthy people, and corporations that are making hundreds of billions of dollars in profits, would be bad for the American economy.  They claim that corporations would not be able to hire workers because they would not have enough money left to do so.   

     However, their argument that lower taxes would stimulate job growth fails to acknowledge three facts: (1) Because of technology, there are fewer corporate job openings. (2) There are lower demands for good and services because of uncertain and unemployed consumers.  And (3) there is no evidence in the recent past that lower taxes on either wealthy people or wealthy corporations produced more jobs. 

     If lower taxes for corporations and wealthy people meant more jobs, one might reasonably assume that job growth would be maximized by reducing corporate taxes and taxes on wealthy people to zero.  And if that is the case, would not the functioning of the economy be maximized if nobody paid taxes?  Certainly people would have more money to spend.  That would create a greater demand for goods and services and, hence, a greater need for corporations to employ more workers to satisfy the demand, enabling businesses to more money.  Having no taxes would be Utopia for the American economy.  Wouldn't it?

     However, Republicans have yet to show that lower corporate taxes produce more jobs and not just more profits for stock holders.  Republicans claim with certainty that taxes cuts for businesses and wealthy individuals would increase the number of jobs, but have not explained why they would, nor have they explained occasions when they haven't.  Have we, for example, gotten the job increases Republicans promised when the Bush tax cuts were extended?  And what about the jobs promised through the other tax deals made during this year's Lam Duck session?  Were all of these promised job increases supposed to occur next year?These should be able to explain at levels average Americans understand--if they can be.

     Small businesses and corporations do not make profits by selling goods and services only to their workers.  They might be able to do that if they produced and served all of the needs of consumers they hire, but they don't.  An economy involves consumers who buy goods and services from different enterprises, which also receive goods and services from other enterprises, many of whom are their own consumers.  

     The economy is a complicated matrix of competing interactions, including political influences, distributions of wealth, and other self interests such as market manipulations which allow savvy investors to make money both as markets go up and as they come down.  These interactions are not easily predictable by such simple-minded suggestions as lower taxes enhance job creation and higher taxes inhibit them.  They only sound right because they are said so often and too often are not effectively refuted.  

     The American economy needs consumers to spend, but economists say consumers needs to save and invest more.  But when consumers save more, they lose their jobs for not spending enough.  Business profits decrease, and jobs seek cheaper labor overseas. A solution would be workers being paid enough so they can save, invest and spend.  But how can that be made to happen?  Republicans pretend to be certain about things about which even expert economists fail to agree.

     One reason low and no taxes are bad ideas is that we need governmental services: an adequate military, police and firefighters, safe food and water, safe medicine, and many others such as the need to educate our children with the essential knowledge and skills necessary to maximize the development of their academic potentials.  How much government is needed is an appropriate question.  But does government only become too big only when it addresses the needs of others but too small when it fails to address our own?    

     Can wealthy people be trusted to identify and provide for the needs of the poor and powerless?  The answer is debatable.  Poor and middle class people are part of "We the people."  They are the one's whose children (and often themselves) are defending this country.  Certainly Christianity and the Constitution provide protections for the powerless and less powerful.  Shouldn't they?

      Republicans should be required to explain why they feel that allowing the country to default in the payments of its bills is better for the American economy and job production than raising taxes on the wealthy.   If they can explain--and make me understand--I'll support default, too.  But their brand of economics is hard to understand for the same reason that Einstein's Theory of Relativity if hard:  Both operate outside the realm of common sense.  The difference is that Relativity is understood by people who are well-versed in the field of physics.  No person who is well-versed in the field of economics, whether conservative or liberal, understands the logic of Republicanomics.

     Just as there is a point where taxes are too low to sustain an economic system, there is a point where taxes are too high: paying taxes at the 100% level, for example.  Government, with the help of independent economic experts, must be the final arbiters of what constitutes the proper taxing levels, and maybe even what constitute optimum wealth distribution and opportunities for employment within a viable society. 

     But when Wall Street, Congress and the Supreme Court form a politico-economic team, democracy is at a risk level that Americans would not permit were the president not Barack Obama.  Time will tell whether the present team uses or abuses this once in a lifetime opportunity that Obama's unique leadership qualities provide.

Ronald  

Email: rcspoon@earthlink.net

Blog:  ronaldcspooner.blogspot.com