Category Archives: Economy

Watch “2016 State of the Union Address: Enhanced” on YouTube


On January 12, 2016, President Barack Obama delivered his eighth and final State of Union address. In my opinion, it was one of Obama’s best crafted speeches for the State of the Union. It has certainly been a long arduous road for our first black President, but I couldn’t be more proud of Mr. Obama’s accomplishments. His poise in the face of such racism and hatred is remarkable. This speech was reminiscent of candidate Obama in its style and tone. The President, once again, touched on themes of hope. He urged Americans not to listen to voices of division and ignorance that seek to pit Americans one against the other. It was appropriate that he concluded the speech with a quote from Dr. Martin Luther King. Cheers to you Mr. Obama! You continue to inspire many Americans and people around the world.

Ryan’s Hope

RyanBudgetPaul Ryan’s budget, according to Andy Borowitz, gets an endorsement from Ayn Rand and Marie Antionette from Hell. With this budget proposal, Paul Ryan is clearly saying, “let them eat cake”. The budget pits Medicare recipients against Medicaid recipients. It benefits the rich and the military industrial complex on the backs of the poor and middle class. Ultimately, it paints a future of austerity for America for years to come. The best way to discern whether or not a plan is concocted by the GOP is to observe what kind of division it creates. GOP stratagem is always to divide and conquer.

If Romney/Ryan had won the White House, the United States of America would have been well on its way to becoming a third world economy. By the way, that is the plan of the GOP, and their right-wing supporters are too ignorant to get it. Ryan’s budget confirms what I have been saying all along. The GOP only wants the wealthy elite to prosper, and the poor and vulnerable can simply struggle or die. There is something morally reprehensible about the GOP’s vision for America vis-à-vis the Ryan budget.

Ryan’s budget is a rerun of his prior budgets with tweaks here and there. It is noted that Ryan’s budget hypocritically appropriates from Mr. Obama. He has no original ideas of his own, apparently. The budget hits on the three majors for the GOP, 1) spending cuts; 2) lower taxes for the rich and 3) rejection of ObamaCare. With this budget, the GOP government haters continue their attempt to “starve the beast”.

Ryan’s attempt at balancing the budget is based on many assumptions but does not detail when his proposals go into effect which leaves us to guess when deficits actually get cut and by how much. His budget calls for discretionary spending levels that are lower than what Congressional Budget Office (CBO) assumes. Discretionary spending is defined as spending done by Congressional appropriation on a yearly basis. This basically means he wants to cut spending for things like education, veterans, EPA, etc. His budget reduces transportation spending and extends the lowering of discretionary spending caps set by the 2011 Budget Control Act to 2023. Basically, Ryan’s budget relies on deep cuts to discretionary spending with the exception of defense spending (defense spending is also part of discretionary spending).

Ryan’s budget, again, proposes Medicare reform by reintroducing the creation of a premium support plan by 2024 otherwise known as a Medicare voucher plan. The voucher plan offers seniors a fixed amount to buy private health insurance. Anyone 55 or over is supposedly not impacted, but future seniors would have a choice between traditional Medicare (fee-for-service) and the premium support (voucher) system. The voucher plan would also limit what the government pays. Notably, Ryan maintains the $716 billion savings that President Obama made to Medicare within his budget. How hypocritical. Slam the President for this Medicare savings during the campaign, and then add the savings into your own budget proposals not once, but twice.

What a surprise. Ryan proposes to do away with parts of ObamaCare by repealing subsidies for Americans who buy health insurance via the exchanges and also by repealing the expansion of Medicaid. Ryan’s budget simply put kills Medicare and Medicaid as we know it today. His budget proposes Medicaid block grants where states would assume a greater level of autonomy relating to how the program is set up, who is eligible or how much participants must pay. Ryan’s budget also proposes Food Stamp block grants impacting eligibility by imposing time limits and work requirements. Federal employees would also be required to contribute more money to their own pension plans.

As it pertains to revenues, Ryan’s budget collects the same amount of revenue as projected by CBO over the next 10 years. Ryan’s budget repeals ObamaCare tax revenues that pay for insurance subsidies, but it still relies on its revenue for his budget. How is this possible? Ryan indicates that tax reform will replace this revenue. The budget relies heavily on the hope that Congress will complete tax reform by 2014. Tax reform GOP style proposes two tax rates at 10% and 25%, repeal of the alternative minimum tax, lowering of the top corporate rate to 25% and changes the rules for international taxation. Fantasy!

Let’s sum it all up. The CBO will not analyze the Ryan budget since it is only a proposal, and it is not backed by any legislation for achieving its dubious goals. This budget is basically dead on arrival in the Senate. Of course, the White House has rejected Ryan’s budget and rightly defines the budget as a “wrong course for America”. Let’s hope that come the 2014 elections, this budget is placed securely about the neck and shoulders of the GOP.

It’s Not About the Deficit…

Deficit by 2019

What I have decided to do is just keep posting about how bogus the Republican party is in their propaganda campaign regarding the deficit. Republicans run up deficits, but they rail against the deficit when Democrats are in the power seat. Here are a few good pieces regarding the deficit, austerity, sequestration, blah, blah, blah…you get the point.

What’s driving the deficits from The Maddow Blog

How Premature Austerity Caused A Recession And The Market Crash Of 1937 from Business Insider

The Sequester Begins to Fester from Jared Bernstein’s blog On The Economy

Boehner on sequester: ‘I don’t know whether it’s going to hurt the economy’ from Politico

We’ve reduced the deficit and hurt the short-term economy from Wonkblog

On The Economy: Sequester, Revenues, and Timing

Lets Make a Deal

Jared Bernstein’s blog On The Economy breaks down how the Republicans could have had a much better deal on spending cuts a few months ago. A combination of timing and GOP sedition are bringing the country to the economic brink, yet again. Republicans refuse to govern with the first black President. How many more scenarios like this do we need to draw this conclusion?

The GOP Deficit Game

The GOP are lying about deficits and they’ve got a lot of their right-wingers duped. They didn’t care one bit about deficit spending for eight years during the George W. Bush administration. In fact, Republican administrations have a pattern of deficit spending. As you  can see from the graphic below, Republicans ran up deficits under Reagan and both Bush administrations, and at a higher rate than either Clinton or Obama. Wasn’t it Dick Cheney who said, “deficits don’t matter”?


The GOP claims that President Obama’s 2009 stimulus spending increased the deficit, but it was actually the recession, the free fall in the economy and the loss of tax revenue due to massive jobs lost that contributed to the deficit between 2008 and 2009. During 2010 and 2011, as the economy began to show signs of recovery the deficit began to shrink. But, Republicans don’t want you to know that.

Paul Krugman, Op-Ed Columnist for The New York Times, explains why deficit hawks should not be taken seriously. They cry austerity, but their real objective is to “starve the beast”. The GOP long-standing strategy is to cut taxes, run deficits that would require spending cuts to entitlement programs like Social Security and Medicare, which they hate. Bottom line is the Republicans have thrown up the smoke screen of the deficit. Republicans don’t hate the deficit, they love it. They will leverage it as a tool to gain political points in their quest to oppose President Obama on just about everything, and in an attempt to shrink, what they call, “big” government.

The 14th Amendment


House Minority Leader, Nancy Pelosi clearly advocated invoking the 14th Amendment last Sunday on the CBS’s, Face the Nation, and now there are reportedly several Democrat members of the Senate that would back President Obama if it came to that. Even though I still don’t think that President Obama will invoke the 14th Amendment, it’s good to know that Democrats are showing solidarity against right-wing extremism and GOP brinksmanship. Isn’t it funny, to Rep. Nancy Pelosi’s point, that Republicans never had any issues with raising the debt ceiling during the deficit-creating Bush years? Section 4 of the 14th Amendment states as follows:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any state shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

If the 14th Amendment were invoked by President Obama, Section 4 would definitely be challenged relative to its interpretation and application, but I think it very clearly indicates that valid public debt (any debt not deemed as illegal) “shall not be questioned.” With each balk by the GOP at raising the debt ceiling, they are challenging the very legality of the debt which Congress has already legislated. That is an oxymoron.

The Debt Ceiling Escape Hatch?

Debt Ceiling

Edward Kleinbard’s opinion piece in the New York Times entitled The Debt Ceiling’s Escape Hatch offers an interesting solution to the coming federal debt ceiling fight between the White House and Republicans in Congress. He proposes that President Obama issue “registered warrants” also known as scrip. The non-technical term would be an I.O.U. In fact, the state of California, successfully, issued I.O.U.’s as recently as 2009 when it faced its own budget crisis. Kleinbard writes,

“The scrip would not violate the debt ceiling because it wouldn’t constitute a new borrowing of money backed by the credit of the United States.”

Who can say whether or not this would be the best approach, but the alternatives are probably worse. If President Obama were to heed the House Minority Leader, Nancy Pelosi’s advice and invoke the 14th Amendment, Republicans in the House, no doubt, would move toward Articles of Impeachment. Given President Obama’s pragmatic political disposition, I just don’t see him doing that.

Read the full article at:

Edward D. Kleinbard, a former chief of staff at the Congressional Joint Committee on Taxation, is a law professor at the University of Southern California.

AIG Says “No”


AIG wisely said no to the offer by former CEO and AIG shareholder, Maurice R. “Hank” Greenberg to sue the federal government for damages at $25 billion. He claims that the AIG bailout deal in 2008 was a raw deal for AIG and unconstitutional. Are you kidding? AIG would not have survived had it not been for the American taxpayer. AIG’s is currently running a media campaign thanking the American people for that bailout, so I’m sure that the Insurer does not want to squander the credibility it has regained after repaying taxpayers in full plus a profit of $22.7 billion. We the People bailed out AIG to the tune of $182 billion because AIG was considered, as they say, “too big to fail”. In fact the federal government considered it would have been “catastrophic” if AIG had failed resulting in a devastating domino effect throughout the financial markets. Needless to say, the AIG Board decision not to join this lawsuit was a smart one.



‘Plan B’ Debacle and the Fiscal Cliff

BoehnerWhen I heard reports earlier this week that the White House’ latest negotiating offer to avert the fiscal cliff (curb) was to extend the Bush tax cuts to a higher income threshold (incomes up to $400,000) and to also propose spending cuts to Social Security by changing how benefits are calculated (using the chained CPI), I was disappointed, to say the least. Some Democrats, and I’m one of them, had to break with President Obama’s latest fiscal cliff proposal. Social Security has nothing to do with the deficit.

Then I began to think, this was probably a negotiating gesture by the White House that they figured Republicans would not accept anyway. Turns out, that’s the case. No one can ever say, credibly, that President Obama was not willing to make concessions during these negotiations. Then here comes Boehner, bam!, with bogus Plan B. Well, the President promised to veto Plan B, which is no viable plan at all, if it came to that. Boehner’s Plan B proposal extended the Bush Tax cuts on incomes up to $1 million.

Of course, Boehner’s Republicans did not accept the White House proposal (even with the Social Security spending cuts), but now Boehner’s inability to alternatively get his Republican caucus’ support for Plan B is solid evidence that he cannot responsibly negotiate the fiscal cliff. Boehner is a feckless leader, and probably the worst Speaker in the history of the United States. He appears to be a leader without any followers.

Republican House members were sent home this evening for the Christmas holiday after Boehner could not muster the votes to pass Plan B. What a well-deserved embarrassment for John Boehner. He had to call off the vote because, after all of Boehner’s rhetoric and posturing, he could not get the votes to pass it. As of this writing, Plan B is dead, so I guess the Social Security concession from Obama is no longer at issue either, I hope. It’s all for naught, and it looks like we may be going over the cliff after all. In fact, that may be the better deal for the American taxpayer, but it certainly will not help the economy, at least in the near term.

L. Jackson/12.20.2012

Roosevelt and Obama

See my latest post, Roosevelt and Obama, under Salient Points.

“Let history be our teacher. When Republicans are in power, it’s anything goes. Laissez-faire capitalism is the rule and the actions of the Republican plutocrats lead the country to the brink of economic ruin.”

This post is dedicated to my mother.

L. Jackson/10.27.2012