Archive for the ‘Wall St. reform’ Tag
Strange are the times we live in. Never has this nation been in more desperate need of cooperation, but never before has this nation been so completely and totally divided (at least not in my lifetime). The November 2nd midterm elections are upon us, and they are sure to profoundly shape the immediate future of the United States, both politically and economically.
So what can we expect to see if the Republicans manage a coup?
Well, it won’t be good, that’s for sure. The simple answer is a return to the very same policies they had under the Bush administration. And that’s not conjecture. That’s exactly what they’ve stated. They want to return us to the same policies that got us into this mess in the first place.
But let’s talk specifics. We’ll start with taxes. Republicans are absolutely adamant about extending the Bush tax cuts for EVERYBODY, while the Obama administration and the Democrats want to extend tax breaks to those families making less than $250,000 per year, and individuals making less than $200,000 per year.
There are a couple of ways to look at it. Republicans say that tax cuts are the only way to revive a struggling economy. And that by extending tax breaks to the wealthiest Americans, it helps to spur job creation. Democrats say that it’s necessary to extend tax cuts for the middle class; that we need to put the money in the hands of people who need it most, who are most likely to spend it and put it back into the economy, which will help the economy grow.
There is no evidence to suggest that giving tax breaks, kickbacks, handouts, or whatever you want to call them, to the wealthy will do anything to spur economic growth. Quite the opposite. People who don’t need the money are more likely to put it into their pockets and hang on to it. There is no incentive for them to do anything with that money. There is no incentive for wealthy business owners to expand their businesses just for the sake of expanding their businesses. Tax breaks make the rich richer, and that’s about it.
Now, I’ll buy the argument that targeted tax breaks for small businesses will help spur job creation and economic development. For example, a tax break for those small businesses that hire a new employee, or some sort of temporary payroll tax holiday. Tax cuts in certain areas might make sense, and they might help growth. But that’s not what the Republicans are proposing. They want across the board tax cuts without any proof that it will help.
In fact, Republicans have offered no specifics on what they would do should they retake Congress. Lots of vague references, but nothing concrete. As if voters aren’t smart enough to know when they’re being snowed under.
The truth is that if the Republicans get their way, things will get worse. A whole lot worse. Repubs have vilified “out of control government spending,” telling us how we need to reduce the deficit and not grow the national debt. And they’re just the ones to do it, doggone it! The facts, however, tell us otherwise. The Republican plan to extend ALL of the Bush tax breaks, will ADD $4 trillion to the national debt over the next 10 years, and increase the budget deficit by $700 billion.
Oh, and by the way, lest we forget, it was a Republican administration, in concert with a Republican controlled House and a Republican controlled Senate that oversaw the explosion of the debt and deficit, that turned a budget surplus in to record budget deficits, and that saw government spending reach new heights. But let’s not let a little thing like the facts stand in our way.
This is not to say that Democrats have firm control of their policy message. Their unwillingness to directly challenge the Republican minority on their tax oath by putting off debate until after the midterm election is an astonishing display of cowardice, as they should use this opportunity to highlight the differences between themselves and their opponents. Dems are in the right, and have public opinion polling strongly in their favor, yet still refuse to publicly take up the fight.
Republicans recently released their “Pledge to America,” in which they said government had to cut expenditures; where they promised to cut federal spending next year by $100 billion. Again, they insist on cutting taxes for the richest two percent of Americans, yet have no plan to increase government revenues to address the debt and deficit. They also failed to point to a single program or area of the federal budget that they would target for such cuts.
An analysis by Bloomberg News found that cutting spending by the proposed 21% would take $400 million out of police department budgets; $6 billion from health research programs, including cancer research; $15 billion from education, including $5 billion from the Pell Grant programs that provide a financial lifeline to students who otherwise would not have access to a college education. Our already decimated education system would be put in a veritable death grip. Fire departments would also see huge cuts.
Military spending, however, according to the Republican “Pledge,” is off the table. No need to discuss it further, despite Defense Secretary Robert Gates’ insistence on the need to trim $100 billion from the Pentagon budget over the next five years. Republicans have scoffed, since trimming the defense budget would surely mean that their defense contractor friends would see some of their government contracts disappear. And after all, examining military operational efficiencies is strictly taboo to the Republican base.
Entitlement programs, such as Medicare, Medicaid, and Social Security, account for 60% of the federal budget, but they refused to detail what, if anything, they would cut from those programs. Despite that, Republicans insist that they can close the budget gap by cutting those mysterious costs and cutting taxes at the same time. In short, it’s MAGIC! It’ll happen because they say it will, but their math just doesn’t add up.
Speaking of entitlements: What was once unmentionable, even for Republicans, is now their preferred M.O. Privatizing (or “personalizing,” as Nevada Senate candidate Sharron Angle puts it) Social Security is now squarely back on the table. The idea is to hand over all of our inputs into the Social Security system to Wall St. and let them invest it in the stock market. Oh, and there will be no additional accountability to Wall St. execs, allowing them to gamble some folks’ retirement lifelines like they did in the years leading up to the “Great Recession.” How many of our seniors would have had their entire life savings completely wiped out two years ago if George W. Bush had been successful in 2005?
Republicans vow to wipe out capital gains taxes (which currently stands at 15%). That would mean that some hedge fund managers and Wall St. execs would pay no taxes at all, despite the billions of dollars in profits they take. Even billionaire Warren Buffet says it’s wrong for him to be paying a lower tax rate than his secretary. Democrats, on the other hand, want to raise the capital gains rate to 20%, still lower than it was under Bill Clinton’s administration. Also consider the fact that hedge fund managers don’t actually produce anything tangible, so they don’t anything concrete to our economy. Giving them even more tax breaks won’t provide more jobs for more workers. And when hedge fund managers bet against the American economy, as many did leading up to the “Great Recession,” it even further damages our national well-being.
And those tepid Wall St. reforms put in place by Congress and signed into law by President Obama? Kiss those goodbye. Since the Glass-Steagall act was repealed in 1999, big banks have been free to invest their depositors’ money in any way they choose. Traditional banks have now become major investment houses instead of the safe, secure institutions we’ve counted on them to be. The complex and controversial derivatives market was completely unchecked. But thanks to the Democratic Congress and the Obama administration, big banks can no longer frivolously throw money at any project in search of astronomical profits for their executives with no accountability, and there is at least SOME transparency now in the derivatives market.
The Republican plan calls for less regulation on industry, particularly on Wall St. This flies in the face of conventional wisdom, since it was a dire lack of regulation that led to the near collapse of our financial system in the first place.
The Obama administration was also behind the biggest overhaul of the federal student loan program in history, to the benefit of every student who will need loans just to attend college. Instead of providing billions of dollars in kickbacks to banks to administer the loan programs, the government will now take on that responsibility, freeing up billions of dollars in funds that will now go directly to students in need rather than bank executives who have found new and creative ways to game the system and take money away from students and schools.
Under Republican rule, those student loan reforms will go away.
And let’s not get started on health care reform. The damage that would be done to the future of health care in this country would be simply devastating. Suffice it to say that Republican cries of “government health care” are disingenuous at best. While they bemoan “putting health care decisions in the hands of government bureaucrats,” what they actually want to do is return health care decisions to the insurance company bureaucrats that, due to their profit driven motives, have skyrocketed health care costs and made access to care a pipe dream for tens of millions of Americans, while simultaneously forcing employers to eliminate health care benefits or cut their workforce just to be able to keep their heads above water.
And for those who insist that the government is too incompetent to administer the program, under Republican governance, that theory becomes a self-fulfilling prophecy. They want government programs to fail in order to prove how feeble government is, so they deliberately fail to provide the necessary resources that would ensure success. Just ask any senior dependent on Medicare how willing they would be to see that program go away.
Republicans have made no secret of their desire to return to the failed policies of the Bush II era that have brought about near disaster for the United States in the first place. They’ve promised a change; a change back to exactly the way things were between 2000 and 2008, except in many cases they’ll shift even more radically to the right of the political spectrum.
Despite claims to the contrary, “Trickle Down Economics” is a complete myth. Even the Oracle himself, Alan Greenspan, flatly denied Republican claims that cutting taxes actually increases federal tax receipts, that tax cuts pay for themselves. But if Republicans take over Congress, these are exactly the policies we’ll get. And we’ll long for the good ‘ole days of 2009 and 2010, when there was actually a glimmer of hope on the horizon.
A Republican victory on November 2nd is a victory for big business and special interests, and a major blow to average Americans, particularly middle class Americans. So do yourselves a favor and get out and vote and make sure we don’t cede our government to the corporate interests that run the Republican Party.
Regarding those “small business” claims by Republicans……you know, the ones where they say that by allowing the Bush tax cuts to lapse on the richest 2% of Americans, it will adversely affect small businesses? Well, the piece Keith Olbermann did on the Republicans’ definition of “small business” is truly “must see” TV. Here’s a hint: Price Waterhouse Coopers, the accounting giant, is a small business, according to Republicans. So is Koch Industries, the largest privately held oil company in the U. S., and Bechtel Corp., one of the largest engineering firms in the world.
Check it out below: