Dear Tea Party: Didn't We Warn You Not to Mess With the Markets?

By Chris Mooney | August 8, 2011 8:18 pm

The Dow closed at 10,809 today. On July 21, it was closer to 12,700. That’s nearly a 2,000 point drop.

I know much of this has to do with Europe. But let’s face it: Much of it has to do with the debt ceiling brinksmanship and its fallout, including the recent U.S. credit downgrade, by an institution that may not deserve its influence but nonetheless seems to have much of it–S&P.

I hate to say that rational people have been, uh, vindicated by this–but as usual, they have. It was insane and pointless to have the debt ceiling fight, and the economic consequences to people’s wealth and well being now probably measure in the trillions.

Hopefully this loss is only temporary and the market will come to its senses–because really, not very much has changed. But it just goes to show that economic stability is very hard to attain, and all too easy to lose. Rational people know this, too.

Not that I expect any introspection–after all, Tea Partiers will just say this is President Obama’s fault. One of our commenters even blamed him today for the 2008 financial collapse, which happened before Obama was even elected–although, rather impressively, this person actually backed down upon being corrected.

That’s rare these days.

And so the polarization continues, despite the cost and the damage to every last one of us.

CATEGORIZED UNDER: Economy, Psychology of Ideology

Comments (101)

  1. I think that rationality is not an option for TeaBaggers. They will fight to the death to prevent taxes from being collected on the wealthy, calling any such move “redistribution of the wealth.”
    And that’s socialism, morans.

    I really don’t know what to can be done by the sane. There is so much money being poured into our election process that the rational among us can’t compete.

  2. My take is that all that lost wealth is mostly phantom wealth anyway. I don’t see how our economy will ever return to its former state, unless the costs of labor here reach parity with China, India, Mexico etc. We might re-build trade barriers, but there are enough emerging markets elsewhere that I think business will do just fine without us.

    This piece at the Atlantic has some good ideas for fixing our politics.

  3. Somite

    S&P detailed what it would take to regain AAA status. They cite how Canada, the UK, Germany and France went through the global recession just like the US but they enacted reforms and a plan to deal with their debt. Our tea party and the GOP will not allow us to make meaningful change. Here is the link to the S&P podcast where they detail their views:

    Straight from the horse’s mouth. Hear @standardpoors explain why they downgraded the US credit rating to AA+: http://itun.es/igC8jB

  4. ColinC

    Um… so motivated reasoning… huh? Thanks for the demonstration folks.

  5. bad Jim

    The markets weren’t so much responding to the downgrading of U.S. debt as they were to the absence of any prospect of economic recovery. The cavalry isn’t coming to rescue us, because the Very Serious People here and abroad have decided that debt is a worse problem than idle factories and unemployed workers.

    When Treasuries are downgraded from AAA to AA, you’d reasonably expect that their price would drop (or, equivalently, that their interest rate would rise). The reverse happened. Everybody decided to take their money out of private enterprise and put in the safest available place: Treasuries.

  6. Gaythia

    Again, I quote Robert Reich:

    http://robertreich.org/

    “Imagine your house is burning. You call the fire department but your call isn’t answered because every fire fighter in town is debating whether there will be enough water to fight fires over the next ten years, even though water is plentiful right now. (Yes, there’s a long-term problem.) One faction won’t even allow the fire trucks out of the garage unless everyone agrees to cut water use. An agency that rates fire departments has just issued a downgrade, causing everyone to hoard water.

    While all this squabbling continues, your house burns to the ground and the fire has now spread to your neighbors’ homes. But because everyone is preoccupied with the wrong question (the long-term water supply) and the wrong solution (saving water now), there’s no response. In the end, the town comes up with a plan for the water supply over the next decade, but it’s irrelevant because the whole town has been turned to ashes.”

  7. Dan

    First off I don’t typically come to Discover to get political commentary (and Mr. Mooney here just proved to me why). The title itself screams, “I am an uninformed American who doesn’t have time to get the real news direct from the source so I get my serious political opinions from John Stewart and Howard Stern.”

    As an independent I feel like my opinion is less swayed by the ridiculous rhetoric being spewed by both mainstream parties. Our credit rating was not downgraded because we took so long to raise the debt limit. That was merely a club being used by both sides to take advantage of the urgency of the situation to push forward their agendas (as sad commentary on current politics). We were downgraded because even after all the debates we couldn’t agree on enough spending cuts to make the S&P confident we could pull out of our debt death spiral.

    Contrary to the beliefs of this author, that main party holding back any discussions on sufficient cuts where the Democrats. The tea party members seemed to be the only ones making any sense during the whole debate (for anyone who actually took the time to listen to what all sides where actually saying–http://www.youtube.com/watch?v=-fsG4jLBmrs).

    Government spending is out of control. Bush was bad and Obama has been worse. Anyone who says otherwise is refusing to look at the facts. Look at the numbers. Dave Ramsey, a financial adviser advocating a debt free life, gave a great analogy. You can read it here: http://www.daveramsey.com/article/federal-budget-vs-household-budget-how-do-they-compare

    We need to get spending under control. Raising taxes is great when the need is there. But raising taxes to pay for waste is insulting.

  8. Dan

    @Somite: It is very single minded to try and place the blame solely on the GOP and tea party-ers. The amount of fear mongering and rhetoric coming out of the mouth of Nancy Pelosi over the past few weeks has been embarrassing to anyone watching objectively. Sadly, it would seem that anyone who has been in Washington more than ten years or so in too entrenched in the politics to see reason. Winning the presidential election in 2012 trumps all sanity. Both sides are feverishly trying make the other side look like extremists and in the meantime they get nothing done. Its sad.

    We as a people need to get smart and vote these fools out of Washington. Stop voting along party lines and take an honest and educated look at your representatives. My guess is that if you are honest you would find that they haven’t been representing you for a long time. They don’t have time. They are too busy lining their own pockets and trying to move their own political career (and party) forward.

  9. The problem with economics and weapons testing is similar: how are you going to know what’s going to happen unless you light the fuse, step back, and see?

    The thing is, the weapons experts can tell you what’s likely to happen if you light the fuse on a stick of dynamite. So you’d be considered an idiot if you still lit the fuse and didn’t toss it a considerable distance because you weren’t sure if the experts were right. So what are you if you don’t listen to the experts and play debt ceiling brinksmanship?

  10. Grimoire

    Whoa, fell into the echo chamber here. Sorry, but the US has not deserved a AAA rating for 20 years.

    Actually it has to do with 50+ years of nonsense by every Party and every branch of government from the White House & Congress on down to your local city council, and their buyout by corporations and special interests. There are no angels and demons here- only greedy, high functioning madmen and madwomen who know how to rape the machine for all it is worth. We have a system that filters out everyone but sociopaths from making it even to the primary elections, and citizens who pick their precious little ideology and rah rah rah right over the cliff.

    But, yeah, keep up with the “Waaah! It’s all *their* fault!” piffle. You political ideologues have built as big of a demon haunted world as any religious fanatic.

    about how the reality-based community is moving to the left.

    Moving?!! Which merely means the “reality-based” community is failing to apply skepticism to their own distortion bubbles- a very common thing in my experience. Their bubble is just as thick as the Tea Party’s.

    Seriously, “reality based community” is just as stupid sounding as “moral majority”.

  11. Grimoire

    As an independent I feel like my opinion is less swayed by the ridiculous rhetoric being spewed by both mainstream parties.

    We’re fewer and far between, Dan. Just about everyone, including the alleged “reality based” people, are gazing so deep into their ideological navels, and constructing fantasy worlds of bogeymen and demons, the world of My Little Pony scores closer to reality on the fantasy spectrum.

  12. bad Jim

    Dan, we spent something in the neighborhood of a trillion dollars invading Iraq. We have to pay for that idiotic exercise. When Bush cut taxes we stopped paying in full for the expenses we were already incurring, and since then we’ve added two wars. That bill has to be paid. There is no alternative to restoring a reasonable level of taxation.

    At the moment the most pressing problem isn’t the debt. Real interest rates are essentially zero; there’s never been a better time to borrow in my lifetime. If we had a sane polity we’d be borrowing as much as we could reasonably invest in infrastructure repair and upgrades. The worst part of our shortfall in revenue is the millions of people out of work. Reducing government spending won’t help that one bit; it can only make it worse.

  13. Johnny

    If the drop in the Dow was caused by the US Government downgrade, then why are US Treasury bonds soaring?

    The answer is because it has nothing to do with the US Government downgrade. It is completely caused by the events in Europe, both the riots and the general disintegration of their currency union.

    In truth we all know what S&P wants to see; less spending and more revenue. Our politicians will choose a pinch of each, and a good deal of money printing to wash it down. If anything, S&P would want more Tea Party influence on our economy, not less.

    In the EU, they don’t have that option. Germany sits on the currency presses while the rest of the continent burns.

    We’re witnessing the inevitable collapse of a currency union with neither the federal power nor the military power to back it up. Euro’s have as much legitimacy as monopoly money.

    Its going to trigger the pre-planned and widely predicted continental financial emergency. National democratic assemblies europe wide will be forced to relinquish their sovereignty for a financial bailout.

    Finally, Obama will take the blame for this. Anyone who doesn’t see that is blinded by hero-worship. The Tea Party has the right idea.

    Cutting spending is pointless if you’re going to raise taxes. Soon the politicians will find new ways of spending those new taxes, and we’ll be right back where we started, plus a bit more debt of course.

  14. Somite

    @7 I am curious. Why do you think cuts are more appropriate than raising revenue? A more rational approach would be to do as much as both as necessary, and fix rising health care costs. Rational measures that have been opposed by the GOP and tea party.

    “Republicans in Congress continue to resist any measure that would raise revenues” – S&P statement complete text http://bit.ly/oOHWuB

    S&P was explicit. Other countries retained their AAA status becaused they enacted rational plans that involved raising taxes and cuts. The GOP and tea party refused to do what is rational.

    The more accurate statement of the Bush and Obama presidencies in terms of the economy is:

    “The economy was greatly damaged by Bush and the GOP and all efforts of repair by the Obama administration have been irrationally opposed by the GOP and tea party.”

    The only solution I see is to fire the GOP and only elect the most progressive candidates. Otherwise I don’t see much hope for a long term recovery.

  15. doctordrewl

    This is garbage journalism. Despite what the status quo would like you to believe, the teaparty is not some centrally organized group with a mascot. It is a loose coalition.. contaminated with many career politicians, who got on the bandwagon. You have to understand that there are real grassroots Teaparty advocates like Rand Paul, mixed in with Fox News annointed Teaparty-types like Michelle Bachmann, who have very little in common when you look at there actual voting records. Still the liberal media, and therefore most of the idiots I know, cannot decipher the magnitude of this difference…. and it allows them to fall into the trap, where they think the Teaparty is some grand Republican plot.

    In reality, the real Teaparty representative Senator Rand Paul offered many concessions in the debt ceiling debate, including raising the debt limit, if the Democrats would agree to balanced budget within ~8 years. What did the Democrats offer? No cuts… The real teaparty wanted 8 trillion in cuts… the fake Teaparty wanted 6 trillion in cuts… S&P wanted to see 4 trillion, and the Obama-Reid-Boeher coalition came up with less than $3 trillion… and that got our credit rating zapped.

    So please… know it all liberals… remember that the real teaparty, made up of your friends and neighbors has been infiltrated by Republican Operatives, many former mainline neocons, who gained fame, not because they deserve it, but because they are used by the mainstream media to brand their opposition… in this case as teabagger morons. Mainline conservatives have just as much to answer for, as they are quick to embrace anybody Fox News drops in front of them… anyone waving the flag and constitution around, many, just minutes before they desecrate them with their votes.

  16. Somite

    @8 How can you say the EU has monopoly money when many european nations retained their AAA status?

    And in general. What is your evidence that “government needs to be smaller” categorically. Doesn’t the government needs to be as large as it needs to be to complete it’s functions adequately?

  17. ╦heBigo╦

    I am sorry to disappoint your hope Mooney :(. But this loss will be long term. We still has the “the college bubble” to hurt us really soon. Then everything we have done from 2008 onwards will bite us again on the biggest bubble of them all the bail out bubble. That one is going to wreck everyone, especially China. =P

  18. Nullius in Verba

    “Why do you think cuts are more appropriate than raising revenue?”

    Because considered as a nation, you’re not raising revenue, you’re redirecting revenue from the profitable bits to the credit card spending, and because there isn’t enough there anyway. It was never more than a political fig leaf, to cover Obama with his base.

    You’re spending way more than you’re earning, you’re deep in debt, you’re contracted for an even more eye-watering future debt, and after a big fight you still haven’t agreed to cut spending. You’ve agreed to “discuss” it. If you don’t take spending cuts seriously, you’ll be downgraded again in another few months.

  19. bad Jim

    Nullius in Verba, didn’t you notice that the stock markets have been falling rather dramatically?

    The stock markets, for those who don’t understand such things, are a way for anyone to buy a piece of our system of free enterprise, a share of a company that sells things and in return for your investment offers a return in the form of a share of the profit, which is called a dividend, because it’s divided among the owners of the enterprise, or else in a rise in the value of the ownership of a share.

    This is the sort of thing that everyone has suddenly decided that they don’t want to own right now. It’s going all around the world. It’s not just American companies; no one wants a share of Japanese or European free enterprise either.

    An alternative asset, which offers at present essentially no income but which is universally considered safe, is a promise by the government of the United States to give you your money back. This, despite S&P’s downgrade, is what everyone wants today.

    An emphasis on cutting spending now is exactly analogous to bleeding the sick to get rid of the bad humors. We already know not only that it doesn’t work but that it’s based on a ridiculous theory.

  20. 1985

    7. Dan Says:
    August 8th, 2011 at 11:41 pm

    We need to get spending under control. Raising taxes is great when the need is there. But raising taxes to pay for waste is insulting.

    That’s correct, money shouldn’t be spent on waste. So have you ever seen a conservative pointing out that spending a trillion dollar a year to maintain military presence all over the world is completely unnecessary or that having a medical care system the only goal of which is profit and which costs obscene amounts of money as a result is insane? No. In fact, they are absolutely opposed to any change in the latter and defense spending is a sacred cow.

    Which is an irrelevant discussion anyway because the underlying roots of the crisis (we have hit the limits to growth and growth is forever over) are so far away from the ability of either side to comprehend that as I have said before, the distance between the positions of ultraconservatives and the liberals is negligible compared to the distance between each of them and reality.

  21. 78247

    You people seem to be forgetting that these tax increases would come in the form of revoking tax cuts for the wealthy ($250k+ annual) and eliminating tax loopholes that allow major corporations to lawyer their way out of taxes. This, combined with sensible reform over spending over the defense (i.e. Offense) budget would eliminate the deficit. But no, let’s not have the insanely rich contribute as much as the people they rob, let’s cut horrible things like Medicare and Social Security without looking at the amount we pay for healthcare and how funds were raided to pay for a WAR.

  22. Paul

    Entitlement spending has to be slashed; the coming deficits as the baby boom retires are enormous. Military spending must be cut too. That this is not happening is not the fault of the Tea Party.

    There are a great many people this will discomfit, including (apropos this blog) people in science. Discretionary spending, where science funding lies, is going to be massacred. No wonder the pigs at the ever-shrinking trough are unhappy.

  23. ╦heBigo╦

    @ bad Jim – “”Reducing government spending won’t help that one bit; it can only make it worse.””

    And that is the kind of Keynesian economics mentality ad lie that the whole world bought into. Govt spending makes things worse. http://www.youtube.com/watch?v=Ij4H9M55c64 You do not got yourself out of debt by spending more. And all Govt spending has unintended consequences.

  24. Incredulous

    I am constantly amazed at people who can see that our expenditure of energy resources cannot infinitely expand but think that our economy can. A huge portion of our economy is based on energy. You point out how dire global warming looks on a graph but when they show basically the same information plotted on a graph of the economy you snigger and make childish “tea bagger” jokes.

    How can you claim to be for “sustainability” when you want unsustainable expansion of government spending? I guess you just see money like some see oil. Just drill more out of the “Rich”. Well, please note, that definition of “Rich” keeps getting lower and lower and lower. It used to be “Millionaires”, now it is 25% of that. You want a “Big SUV” government when all we can afford is a “Camry” and really should be looking at a “Prius.”

  25. SLP

    Thank you Chris. I take exception to your defining it as ‘backing down’. Rather I found that I was in error and admitted it :). Perhaps it’s just semantics. I wish it were not such a bad thing any more.

    As someone who really really wants to retain what I’ve earned I don’t like what happened to the stock market. I like it even less when my ‘representatives’ want to take more from me. I believe there is a direct correlation between the two and the latter caused the former.

    As a Tea Partier I have a problem with entitlement cuts oddly enough. But it’s for the same reason that I don’t like what happened to the markets. If I purchase a ticket to a concert you can be sure I expect to get my monies worth. If I have to pay to an entitlement I’d better get back what I put in. Or don’t begin the entitlement to start with.

    Maybe the base problem is you serve your source. If you perceive that you succeed by hard work and self reliance then that’s whats most important to you. You then treat a growing government as a threat to your way of life and livelihood because the bigger the government gets the less you can keep to help your own. If you perceive that success only comes from government growth and intervention that that’s whats most important to you. And you treat people who really believe in taking care of yourself as being a threat to you because the more people keep the less the government has to spread around. And when you have such diametrically opposed positions there is no room for common ground. And when there is no common ground a person who does not share my opinions become my enemy. Class warfare indeed.

    I hope I’m wrong. I fear I’m right. Right now for me personally hope is winning. But not for long.

  26. Cathy

    I’d be more inclined to believe the old trickle down lie if the purchase of luxury goods in the US hadn’t risen in the last ten years. The market for $800 shoes and $9,000 coats is up up up, even as we face the prospect of a double dip recession. The wealthy don’t invest all their tax cuts in places that make jobs (like the manufacturing sector), they waste it on haute couture and yachts.

  27. 1985

    23. Incredulous Says:
    August 9th, 2011 at 9:28 am
    I am constantly amazed at people who can see that our expenditure of energy resources cannot infinitely expand but think that our economy can. A huge portion of our economy is based on energy. You point out how dire global warming looks on a graph but when they show basically the same information plotted on a graph of the economy you snigger and make childish “tea bagger” jokes.
    How can you claim to be for “sustainability” when you want unsustainable expansion of government spending? I guess you just see money like some see oil. Just drill more out of the “Rich”. Well, please note, that definition of “Rich” keeps getting lower and lower and lower. It used to be “Millionaires”, now it is 25% of that. You want a “Big SUV” government when all we can afford is a “Camry” and really should be looking at a “Prius.”

    There are different frames of reference within which certain things are valid and others are not, but their absolute validity depends on the validity of the frame itself.

    We can talk about economics and social expenditures while ignoring the reality of the limits to growth (this is what we usually do). Within that framework, certain things are true and other are not; the “cut taxes, deregulate and screw the poor” approach, for example, is probably a very misguided strategy. However, the larger reality is that the economy is a small subsystem of the larger planetary environment we live in, which in turn is a small subsystem of the Universe, and as a result what happens in the economy depends on what happens in the physical environment the economy is embedded in. When you look at things from the perspective, the answers change completely, in this example making everyone involved in the debate about economic policy totally wrong. But it does not change the fact that you can be also wrong when you ignore that reality and base your reasoning on the assumption that it does not exist. There are different levels of stupid.

  28. TTT

    @Dan: We were downgraded because even after all the debates we couldn’t agree on enough spending cuts to make the S&P confident we could pull out of our debt death spiral.

    That’s completely false. As was already pointed out, S&P very explicitly said the downgrade came about because of the teabaggers’ fundamentalist extremist religious dogma that no taxes may ever, ever, ever, ever be raised on anybody.

    It was the teabaggers who decided to turn a boring and meaningless procedural event–the umpteenth raising of the debt ceiling in the last decade–into a manufactured “crisis” referendum on the entire national debt.

    They were warned in advance that the worse their manufactured crisis got, and the closer to the deadline negotiations went, the greater the likelihood of a downgrade. And that is exactly what happened. The result: Interest rates on all new loans will be markedly higher, thus a shadow tax on everybody who might need a house, car, or education in the forseeable future. Of course, the richest 0.5% of the population will be unaffected by this.

    There has never been a case of greater damage being inflicted on a country more quickly or more completely unnecessarily and preventably than was the case with the teabagger economic suicide bombing. Basically the whole country just got curbstomped like a 100-pound woman at a Rand Paul putsch, I mean, rally.

  29. Mike H

    Blaming the Tea Part or S&P for the rating downgrade is like blaming the doctor when he tells his 3 pack a day patient that he has lung cancer.

  30. Matty J

    SLP you said “You then treat a growing government as a threat to your way of life and livelihood because the bigger the government gets the less you can keep to help your own”

    But I think what is missed is that many liberals find this ‘bigger’ government helping more Americans (our own). So maybe it isn’t so much serving your source, but a misunderstanding on both sides of what that source means to the person or group.

  31. Incredulous

    21. 78247

    “But no, let’s not have the insanely rich contribute as much as the people they rob, let’s cut horrible things like Medicare and Social Security without looking at the amount we pay for healthcare and how funds were raided to pay for a WAR.”

    Well, whether you are for or against raiding funds for a WAR, is moot. It was done and we have to live with it.

    Do you realize exactly how far down into small business an income of $250,000 really reaches? You do realize these people don’t have government pensions and are funding their own retirement with this instead of the before taxes breaks that employees make? Do you realize they are paying their own insurances our of this? Have you ever put this into the perspective of the high cost of living areas up in the NE and in big cities where a million dollar apartment may be lucky to have a closet? Have you put that into the perspective of a family farm where it may be supporting several households and several generations?

  32. TTT

    It is 100% the TP’s fault, because they were the ones who manufactured the crisis in the first place. There was no urgent problems with our spending levels, and debt ceiling votes are meaningless procedural matters that happen umpteen times with no actual reflection on day-to-day business.

    The TP picked this fight to wage a frivolous war of choice, ignoring all the warnings that such strange and ideologically blinded behavior could cause a downgrade even if there was no default.

    Now we’ve got the downgrade, which raises interest rates on all new loans, which is in effect a tax increase for anybody who will need a house, car, or education. The richest 0.5% will not be harmed–funny how things work out.

    What’s really galling is that this frivolous exercise in economic suicide-bombing is being *defended* as having been actually worthwhile–that it was actually the proper hill for our country to die on–by the same people who routinely accuse climate scientists of exaggerating AGW risks in order to provoke risky overreactions that will undermine economies and reduce wealth.

  33. Somite

    @26 The tax increases don’t work like that. They would be tiered and you would only pay more on the amount that goes over a tier. For example, if you make >250k you would only be taxed higher on the portion that goes above 250k and so on. And this would be for individuals, not businesses.

    And ok, let’s make it 500k or 1 million. Whatever amount we can agree on. The problem is that the GOP and the tea party only deal in absolutes, like the sith.

    What really is galling is that all the obstructionism is not leading to any solutions because the GOP and TP refuse to change the status quo in any way. No health care reform means no solution for the debt. That right there tells you that the GOP and TP doesn’t care for people and is only working for its oligarch masters.

  34. Grimoire

    An emphasis on cutting spending now is exactly analogous to bleeding the sick to get rid of the bad humors.

    o.O

    Oh, it must be Opposite Day in the “reality based” community.

    Because on a normal day, increasing spending and debt now is like treating an accident victim by stabbing them in the gut.

  35. TTT

    @Incredulous: Have you ever put this into the perspective of the high cost of living areas up in the NE and in big cities where a million dollar apartment may be lucky to have a closet?

    They’re only million-dollar apartments if you BUY them, and if you can buy something for that much you have no cost-of-living issues in any city. Which is precisely why most city-dwellers lease the same apartments for ~$30k/yr. The people with those leases by and large would NOT be harmed by ending Bush’s class-warfarist redistribution of wealth to the wealthy.

  36. Incredulous

    #30 TTT

    “Which is precisely why most city-dwellers lease the same apartments for ~$30k/yr”

    That just creates new victims and leaves the “rich” landlords to milk.

    #28 Somite

    ” That right there tells you that the GOP and TP doesn’t care for people and is only working for its oligarch masters.”

    Yes, that is right. Everyone should instead be working for their governmental overlords in a perfect world.

  37. Grimoire

    For example, if you make >250k you would only be taxed higher on the portion that goes above 250k and so on.

    And the government sucks up X more dollars from the economy, and then spends X+delta. Again. When will you people get it through your skulls that many simply don’t trust the government to do the right thing anymore? And they have decade after decade (heck, they have millennia of history) of empirical evidence to support that distrust.

    Where’s the “realty based” thinking in wanting to hand ever more of the GDP to the corrupt jerks in the government?

    What really is galling is that all the obstructionism is not leading to any solutions because the GOP and TP refuse to change the status quo in any way.

    Yup. Opposite Day.

    The problem is that the GOP and the tea party only deal in absolutes, like the sith.

    Bah ha ha ha! Sith? Seriously? Oh, well. At least you didn’t into Godwin territory.

    That right there tells you that the GOP and TP doesn’t care for people and is only working for its oligarch masters.

    Ooooo! Quick! Call Buffy. Yup. The typical demon haunted world of the ideologue. Maybe you should infiltrate Tea Party rallies with garlic and wooden stakes.

  38. TTT

    @Incredulous: That just creates new victims and leaves the “rich” landlords to milk.

    Which completely erases your attempt to plead poverty on behalf of those in “high cost-of-living areas in the NE and big cities”. You tried to claim that ending Bush’s class warfare tax redistribution scheme would hurt aaaallllll those people, because they aaaaaallll must be “rich” to own those apartments–and by a matter of basic fact that is not true.

    Sympathy for the landlords is a far weaker argument, as you implicitly admitted by having not used it from the outset–it is, in fact, a perfect glimpse of the GOP preference for the top 1%. Big city landlords got along just fine with tax rates under every president and in every decade before Bush and they won’t suffer for the return to fiscal sanity.

  39. ╦heBigo╦

    The myth that keeps getting peddles around especially by the progressives/statist is the “reform” myth. The false ideal that some generous govt program like social security can be “reformed” and that it will then become sustainable. What often happens is that the reform is accompanied y many more programs, often with programs that are unrelated to the main program itself. For example hidden inside the Health care reconciliation act of 2010 a 2310 page bureaucracy http://www.gpo.gov/fdsys/pkg/BILLS-111hr4872rh/pdf/BILLS-111hr4872rh.pdf which amended the Affordable health care act gives the federal govt control of the student loan sector. Which makes college/university a massive bubble waiting to pop under the same easy lending practices to no income/low income/no savings individuals of fannie mae and freddie mac prior to 2008.

    “Reform” is the scariest word to ever be uttered by president Obama. The man truly believes he knows what’s best for all citizens and that he has the intellect to reform everything i his ow image. Now he is talking about tax-reform.

    No matter how much you reform some govt program, it’s basic premise will always be there and therefore unsustainable. What is needed is mass repeals of laws and abolishing entire programs.

    Obama likes to talk about how the rich “should pay their fair share”, but the fact of the matter is that the rich DO pay much more then their share of taxes. Their the ones whom are constantly at work. They don’t have vacations as they have o constantly monitor their business and sleep with their cell phones o at all times. Wanna talk about fair share? look at the middle class. 40-60% of middle class Americans not paying their taxes? evading taxes and having it pile up ever further? ow many of those same Americans want to shift their personal responsibility to the rich. That is the very definition of class warfare. And this president peddles such disastrous ideals.

  40. Incredulous

    #36 TTT

    “You tried to claim that ending Bush’s class warfare tax redistribution scheme would hurt aaaallllll those people, because they aaaaaallll must be “rich” to own those apartments–and by a matter of basic fact that is not true.”

    Um, just out of curiosity, where did I say that? I stated a simple fact that a $1 million dollar apartment is not a large apartment in a city. Whatever fantasy extrapolation you made is kind of hard for me to defend when I didn’t say say it. I am not having sympathy for the landlords. Those are your construct. I specifically was talking about home ownership costs.

    I have never stated a support of Bush or his policies. I simply stated that a $250,000 income in many places is far from being “rich”.

    Please don’t make up things that I didn’t say and then attack me for them.

  41. SLP

    MattyJ your right as far as liberal thought goes I suppose. I really don’t know because I don’t – can’t – understand that mindset. But ‘The road to hell is paved with good intentions’. And that’s the problem, the intentions are – hopefully – good. On the other hand the very first time I heard someone say ‘think of the children’ or something to that effect was at a party where this guy was monumentally drunk and everytime he finished puking he’d say Lord, Lord, save the children.

    Life is a four letter word with all that means. It isn’t fair. It is hard. Everybody has problems. The government isn’t there to make everyone have the same. It isn’t there to make life easy. Didn’t you hate it in elementary school when you had a special treat and the teacher said if you didn’t bring enough for everybody then you can’t have it? Is it any different today? Are we still in third grade?

    If throwing money at the problem was the answer there would be no problems today. Untold trillions of dollars of wealth have been transferred within our society. The only thing to show for it is even more massive poverty and need. It doesn’t work so try something new. You value something based upon what it cost you. Schools in the inner city only work when the teachers, parents, and students buy into it, have expectations of excellence, and then work toward that goal. Why don’t we try setting expectations of excellence. We are the United States of America. We can do better.

  42. Messier Tidy Upper

    “Dear” Tea party?!? (That’s a fairly polite and restrained way of putting it.)

    Well their idiocy has certainly been proving costly I guess .. :-(

    Hmm .. On the positive side if you’re inclined to supporting the Democrat party we can, I ‘spose cheer them on safely in knowledge that they’re likely to make the 2012 Republican candidate an unelectable extremist rtaher than perghapos a moderate who can get votes from the sane majority. The majority *is* sane isn’t it? isn’t it? (This Australian observer who somewhat follows US politics froma distant hopes & thinks.)

    My assessment, For Whatever Little Its Worth is that recent events/ months will prove to be the Tea Party’s zenith and that they will swiftly implode and vanish into obscurity from here. Do those closer to the action and more knowledgeable about it over in the States agree or disagree?

  43. Somite

    I think the biggest divide in this conversation is that the conservatives believe government as an entity just “spends money” in a way akin to spinning wheels with no useful work generated. There are phrases in this thread like:

    “If throwing money at the problem was the answer there would be no problems today. ”

    “The false ideal that some generous govt program like social security can be “reformed” and that it will then become sustainable. ”

    “And the government sucks up X more dollars from the economy, and then spends X+delta.”

    This point of view is unsustainable when you look at government programs like NIH, NSF, EPA that have basically built this nation with tax dollars. But let’s look at this quantitatively. Those that are effectively arguing that the government is broken and can not be fixed and just spends money:

    Do you have any quantitative data to support this notion?

    These are the numbers associated with the causes of the debt:

    http://www.theatlantic.com/politics/archive/2011/07/the-chart-that-should-accompany-all-discussions-of-the-debt-ceiling/242484/

    Look at these charts and tell me where is the “big government” “government spending” that can be identified and reduce?

  44. Incredulous

    #41 Messier Tidy Upper

    “My assessment, For Whatever Little Its Worth is that recent events/ months will prove to be the Tea Party’s zenith and that they will swiftly implode and vanish into obscurity from here.”

    That depends. The Tea Party movement was unfortunately co-opted by the Republicans when the original intent was for it not to be a party at all and certainly not intended to promote the far right extremists. It really did start out with non-denominational goals. Unfortunately, our system apparently doesn’t allow someone to be fiscally conservative and socially liberal.

    I really believe that the two controlling party leaderships are determined to not allow us any way to do anything counter to their agendas until we force them out with parties that really represent what the public wants done. We had some promise when Ralph Nader and the Green Party. They started out but they were squelched just like they are doing to the Tea Party presently. The Libertarians make a token showing but it is kind of hard for it to really work out to make a big party and government from people that don’t want it to exist. Kind of like a rallying cry of “Anarchists Unite!!”

    Whichever way it works out, we can at least say it won’t be boring.

  45. Incredulous

    #43 Somite

    “Look at these charts and tell me where is the “big government” “government spending” that can be identified and reduce?”

    I understand your view and honestly don’t disagree with all of them, but what are the options? The changes will be painful whether they are now or in the future. We are having trouble with just the expenditures that we are already committed to and now they are adding even more roles for government such as healthcare reform. We cannot continually expand the budget just by borrowing more money and infinitely expanding the tax base.

    As an analogy, at least with our increase of energy usage, we can hope for new technology to create new energy sources. With the governmental spending, we have no such hope.

    *You should point to some different charts because those are just comparing changes between the Bush and Obama budgets and not the point you are really making regarding the entire budget.

  46. Somite

    @45 But why do you think those assertions are true. The government could in principle enact a plan that saves health care money. Where is the evidence that the government can only result in ineffective spending? Specially in the face of so much effective and profitable spending.

    I think that everyone in this thread should challenge your assumptions with facts. A good starting point would be a study that looks at how much government expenses are due to inefficiencies. I haven’t seen hard evidence or a number for this.

  47. Chris Winter

    To me it seems abundantly clear.

    The Republican House doesn’t want to raise taxes on the rich. They don’t want to cut military spending. They don’t much care that health care is still a mess (because, I guess, they think they won that battle.) They refuse to consider closing tax loopholes or ending oil-industry subsidies. Instead, they’re all about reducing investments in clean energy, eliminating funds for NPR & PBS, curtailing the influence of the EPA, and ending a passel of piddling programs that amount to almost nothing in comparison to our deficit.

    Also they continue to insist on drilling for all the domestic oil there is, including Alberta tar sands. Now there’s a short term non-solution with significant long-term downside. Meanwhile the ASCE says this country faces a $2.2 trillion backlog in infrastructure maintenance. What has the GOP proposed to do about that? Nothing that I’m aware of, despite the millions of jobs it would create long-term.

    Of course the Democrats are not blameless in the current crisis. State Department is leaning toward approving the Keystone XL pipeline, even though the existing segment has had a dozen spills this year. Ken Salazar’s Interior Department backs drilling in the Chukchki Sea off Alaska’s North Slope, and in February the GAO informed us that Interior failed to collect substantial sums in oil royalties due it.

    The Democrats are not blameless. But right now it’s the Republicans, courting their Tea-Party-inspired base and playing their usual scorched-earth politics, that deserve most of the blame.

  48. Incredulous

    #46 Somite

    “A good starting point would be a study that looks at how much government expenses are due to inefficiencies.”

    Well, both sides bring those out when it fits their goals and hides them otherwise. I was going to give you a chart to replace yours in #43 but I couldn’t find one other than on some of the kook sites that I wouldn’t trust.

    On the health care, I can’t honestly say that it will be much more expensive than what we have now since we are paying for the uninsured and under insured indirectly anyway. The point is that we keep adding additional roles to government (whether rightly or wrongly is a different problem) and the money to pay for those roles has to come from somewhere. Part of that huge increase from Bush was for the war and domestic things like establishing the TSA. There was admittedly some waste as well (No bid contracts for example.) Arguing over whether they were right or not is pointless. It has already been done.

    Yes, we have much effective spending which I would expand to include NASA, WIC, and many other programs. They have a lot of impact for the money spent. But every time we question any of the others that may or may not be effective, they end up being a sacred cow for someone. Farm subsidies, lease prices for lumber, minerals and oil drilling through BLM. Everyone agrees that we need to reduce things, but nobody is willing to give up anything.

  49. Incredulous

    #47 Chris Winter

    “Also they continue to insist on drilling for all the domestic oil there is, including Alberta tar sands. ”

    Did I miss Alberta seceding from Canada and joining the US? :)

  50. ╦heBigo╦

    @Somite – Those charts and it’s programs listed are almost all big govt programs that lead to debt. TARP for example or The Troubled Assett Relief Program http://mises.org/daily/3770 . http://mises.org/daily/5123/Government-Spending-Is-Bad-Economics. And this video http://www.youtube.com/watch?v=Ij4H9M55c64 ( I am not in a mood to type in all the reasons why).

  51. Somite

    But the point is; is the program effective and was the debt necessary. And if the debt is an issue why not reverse the reversible ones like the Bush tax cuts and enact regulation so that another TARP is not needed. Coincidentally both are opposed by the GOP.

    In the end the debt doesn’t affect me as much as the economy at large. What I would like to see is a solid commitment by the fed as an investment in mortgages and jobs.

  52. Incredulous

    #51 Somite

    “In the end the debt doesn’t affect me as much as the economy at large. ”

    Well, at least until you start thinking about being able to someday retire. I don’t know how it will work out in the long run. It depends on if people move money out of treasury paper and into the market.

    “And if the debt is an issue why not reverse the reversible ones like the Bush tax cuts and enact regulation so that another TARP is not needed”

    Because as soon as something gets created, it becomes untouchable. Like Bush’s tax cuts. I am going to lump them together but there are some fine differences. At least in part, these tax cuts were not tax cuts. They were removal of old tax increases that were supposed to be of a fixed time length. What he did was to not extend them rather than to repeal them.

    Both sides use code words that are meant to incite people rather than using language that is understandable to the public in general. It is all about the spin and smear rather than the substance. Logic and reason have nothing to do with the way they do things. It’s like the old joke, how can you tell a politician is lying?

  53. Johnny

    Again I ask.

    If the stock-market-drop is from the credit downgrade, why are US Gov Bonds soaring?

    Why are people lining up to give money to a government they think won’t pay them back?

    Anyone who can’t answer those question, and blindly blames the Tea Party, is showing their economic ignorance.

  54. Somite

    It is the difference between short and long term investments. The stock market is shorter term, high risk. Bonds are longer term, lower risk. It all means that people are less willing to take short term risk.

  55. Johnny

    @54 Somite

    Chris Mooney wants us to believe that the Tea Party caused the downgrade, which caused the credit crisis.

    Its illogical. If the government is considered less likely to pay its debts, people should be selling bonds, not buying them. The stock market should be going up, not down.

    Assume its Europe, with London’s streets and half the continents finances burning that is causing the global stock route. The stock market should drop, but the US government bonds should rise, which is exactly what is happening.

  56. Dennis D

    Clearly many people have no idea what went on by their attack on the Tea Party. S&P repeated many times they expected at least 4 trillion in cuts which means they did NOT want a rubber stamped increase in the debt ceiling as so many claim was done in the past. Without the Tea Party there would have been NO CUTS and downgrade would have probably been AA not AA+. You folks need an education.

  57. Incredulous

    #54 Somite:

    “Bonds are longer term, lower risk.”

    Well, they were lower risk as long as they had a good rating. That rating goes, so does the safety. To make them more attractive, they will give them a higher return and then we can start into a cycle of inflation. Hopefully, they will keep it under control. I don’t want to be a millionaire again. Last time I was, I was making a trip to Mexico and exchanged some dollars for pesos. I got about 2.2 million pesos for a few hundred dollars ($250-$300 if I remember correctly). A lot of it was in 100,000 peso bills. They stabilized it by whacking zeros off the end. Not too good for investments.

  58. Somite

    @56

    “Without the Tea Party there would have been NO CUTS and downgrade would have probably been AA not AA+. You folks need an education.”

    The republican and tea party intransigence is explicitly stated in the S&P rationale:

    “Republicans in Congress continue to resist any measure that would raise revenues” – S&P statement complete text http://bit.ly/oOHWuB

    It is right there in their statement. No need for an education. Just reading.

    @57 Bonds are a 10+ years investments. Way past this hullaballoo and probably the US will regain its AAA investment. People (myself included) may believe voters will come to their senses and stop voting for the GOP and its disastrous policies.

  59. Incredulous

    #53 Johnny

    “Anyone who can’t answer those question, and blindly blames the Tea Party, is showing their economic ignorance.”

    Why? You mean that 56 members of the Tea Party Caucus have so much control and their vote counts more than the 379 other members in the House of Representatives that the House was unable to function?

    They other thing I can’t get my mind around is that if the Bush tax cuts were such a bad thing, when the Democrats had control of the House, Senate, and Presidency, why didn’t they just get rid of them? When they were passing the bail outs, why didn’t they just increase the debt ceiling then, knowing that the Trillions of dollars it needed would maybe have a bit of impact on the budget?

    The whole thing is just theatre for our entertainment and building votes for the next election.

  60. Johnny

    Perhaps the people claiming the downgrade was based on Republicans alone should bother to read the entire article.

    Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.

    Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

    Reading the entire document, it seems that S&P is blaming both Republicans and Democrats, and specifically calls out the Democratic demand of “no entitlement cuts”. This demand is exactly as problematic for S&P as the Republicans refusal for more taxes.

    To cherry pick a single half sentence, and claim that it means “Tea Party”, is about the most idiotic attempt at political chicanery I’ve ever seen.

  61. Somite

    @59 Because we know the GOP would have filibustered everything like they constantly threatened to.

  62. Johnny

    @59 Increadulous

    You mean that 56 members of the Tea Party Caucus have so much control and their vote counts more than the 379 other members in the House of Representatives that the House was unable to function?

    379 Reps – 56 Tea Party Reps = 323 Non-Tea Party Representatives

    323 > 56

    So the answer is no, mathematically. 56 Tea Party members should be outvoted by the other 379.

    I guess this means you’ll have to admit that many Republicans and even Democrats also voted no.

    —–

    They other thing I can’t get my mind around is that if the Bush tax cuts were such a bad thing, when the Democrats had control of the House, Senate, and Presidency, why didn’t they just get rid of them?

    The answer is because the “middle class tax cuts” were popular and successful. Democrats knew full well that if they tried to portray the cuts as only for the rich, the CBO would call them out on it.

  63. Johnny

    @61

    Because we know the GOP would have filibustered everything like they constantly threatened to.

    There is no filibustering in the House, just the Senate. Poly Sci 101.

  64. Somite

    You still need the senate.

    “The 111th Congress again broke the record for the number of filibusters in a session, passing one-hundred cloture votes in the first eleven months.[30] In March 2010, freshman senator Al Franken attacked the majority of the filibusters—some on matters which later passed with little controversy—as a “perversion of the filibuster”.”

  65. Nullius in Verba

    “Its illogical. If the government is considered less likely to pay its debts, people should be selling bonds, not buying them.”

    The government is considered more likely to pay its debts, because it wants it’s AAA back, and there’s still a strong possibility that it will do so by looting the economy with tax rises. S&P have set their ultimatum – balance the budget and get your rating back; fail, and your rating will drop even further. Can you imagine the politics if they spend their time bickering and dodging and weaving as they had planned to block the coming cuts? In the run up to an election?

    Obama didn’t want to balance the budget – he wanted to borrow and spend more. The Tea Party forced cuts onto the agenda, but the deal worked out didn’t actually promise a balanced budget, only to present it for debate. I’m sure that before S&P’s move, the Obama plan had been to do everything he could to resist that – and that was what triggered the downgrade. Some sort of minimal compromise fudge would have been worked out, I’m sure, but it would fall far short of what could be done if the politicians took the debt seriously, and America’s creditors would not be happy. Had they still had a AAA rating in the bag, the Democrats evidently saw no costs to more borrowing, and considerable partisan gains, so why wouldn’t they?

    Downgrading, and threatening more, has cut that ground from under their feet. They have no choice now but to take the negotiations on cuts seriously. That, of course, makes it far more likely that they’ll pay their debts, and at the same time means they’ll be spending less and taxing more, so business is going to take a hit. (Which of course is bad, but better than building up an even bigger and more painful problem for the future.) Prospects for stocks have gone down, those for bonds have gone up.

    It’s perfectly logical.

  66. Johnny

    @64 Somite

    You still need the senate.

    Please name the “Tea Party Senator” you expect would have filibustered. Please name any “Tea Party Senator” for that matter. Or you can admit you didn’t realize there was no filibuster in the House.

  67. Incredulous

    #61 Johnny

    Of course I know, but somehow with inflammatory statements like this post, we are supposed to think that those 56 people are to blame for all the world’s problems instead of just recognizing the Democrats didn’t have the votes to do as they pleased without opposition.

    “The answer is because the “middle class tax cuts” were popular and successful. ”

    Ahh, yes, how soon they forget that just a short time ago these people were middle class and now they are rich. Hey, the way things are going, I guess I don’t have to give up hope of being rich myself….

    #63 Somite

    Now you want to get rid of the filibuster? Somehow I think that idea will change next time the Republicans have control of the Senate and the Democrats want to use it to stop from getting run over. Leave the filibuster alone. It is fine right where it is. It works for whoever is in the minority, not just Republicans. Somehow I find it funny to hear Al Franken complaining about a filibuster considering his debate style.

  68. Somite

    I’ve always referred to the GOP including the tea party. And are you suggesting the GOP would have been unable to obstruct the policies the democrats would have attempted to enact?

    Let me be clear I think the democrats are perfectly happy with the GOP getting away with what they want. This is why I think the only way to get out of this mire is to vote for more progressive candidates – including scientists and engineers as opposed to lawyers and businessmen.

  69. Johnny

    @ Nullius #56

    The government is considered more likely to pay its debts, because it wants it’s AAA back, and there’s still a strong possibility that it will do so by looting the economy with tax rises.

    It’s perfectly logical.

    Are you saying that the credit downgrade makes people more likely to buy bonds?

    Isn’t it far more plausible that events in Europe have people fleeing high risk stocks and Eurobonds in favor of trustworthy US Government bonds instead?

    What the government wants and what it can actually get are two very different things. Tax increases are possible, but not likely. Budget cuts are possible, but not likely.

    Its more likely the debt will be paid in newly printed dollars, than with those from tax increases or from budget cutting. Its the most politically palatable and therefore most likely option.

  70. Incredulous

    67. Somite

    “This is why I think the only way to get out of this mire is to vote for more progressive candidates – including scientists and engineers as opposed to lawyers and businessmen.”

    Unlikely unless you start conscripting congress. Scientists and engineers for the most part have no desire to be in congress. Lawyers and businessmen on the other hand love the power. But unless the demographics of the country changes substantially, we will be staying with the more middle of the road in national elections.

  71. Nullius in Verba

    #68,

    “Are you saying that the credit downgrade makes people more likely to buy bonds?”

    Not quite. I’m saying the political fall out from the downgrade and the threat of more makes people more likely to buy bonds.
    But yes, Europe’s similar problems (just a little further down the same road you’re walking along) probably help somewhat.

    Printing money won’t work – S&P exclude that sort of thing; inflation assumptions are included in their model. (You plan to pay your debts in monopoly money? That’s going to help your rating?) Doing so would trigger a further downgrade for certain.

    As S&P say:
    “The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.”

    #58,

    “It is right there in their statement. No need for an education. Just reading.”

    So it is.

    “We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.”

    Carefully non-partisan.

  72. Somite

    No one has said cuts and reforms are not necessary to cut spending. What everyone is saying why are taxes off the table as well. What the S&P is objecting to is the irrational approach to dealing with the debt, or not at all.

  73. Incredulous

    #72 Somite

    “What everyone is saying why are taxes off the table as well.”

    I don’t see a lot of people walking around saying, “I don’t pay enough taxes.”

    The Democratic party has spent years demonizing “The Rich” until now “The Rich” are what was considered not long ago middle class. They have just about sucked as much as they can from them.

    Yes, you will quickly point at the fabulously rich and say, “Hey, wait, they still have some!” But guess what? They are not going to give up being rich. So far, it has been cheap enough to buy a few Congressmen and Presidents to get people to leave them alone. If they really get bothered, they will find some cheaper government in another country. It has already started with the corporations. Who will be left to fund all this once we run them off?

  74. BobKC

    Some other pertinent excerpts from the report;

    “Standard & Poor’s takes no position on the mix of spending and revenue
    measures that Congress and the Administration might conclude is appropriate
    for putting the U.S.’s finances on a sustainable footing.”

    and

    “In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

    As Somite said – It is right there in their statement. No need for an education[or motivated reasoning]. Just reading.

  75. Johnny

    The new progressive definition of “The Rich” is the 53% of Americans who actually pay federal taxes.

    The Non-Rich are the 47% of Americans who pay no federal taxes. The Tea Party is a revolt by the tax payers against the tax eaters, the other 47% who consume the majority of entitlements while contributing next to nothing in taxes.

    We all believe in the original 1776 Tea Party slogan, “No Taxation without Representation”. Its the foundation of our government. We understand the danger of a political situation where those who vote on taxes are exempt from paying them, and from accountability to those that do.

    Should this not work in reverse? Is it not just as dangerous to have political situation where one party’s ideology is entitlements for some, taxes for others ? The 2011 slogan should be, “No Representation without Taxation.

    In other words, take away the vote from those citizens who do not contribute federal taxes. Taxes should be voted on by those who actually pay them, not by those who only stand to gain a free ride from them.

  76. Nullius in Verba

    “What everyone is saying why are taxes off the table as well.”

    I think fundamentally it’s because they don’t see why other people should be made to pay for the government’s profligacy. The problem is too much spending, on things the government shouldn’t be spending on. (From the Tea Party’s point of view.) Libertarians are small government people – the state should do the absolute minimum necessary, and taxes should be as low as possible, so that ordinary people can produce and prosper to the maximum.

    That’s not an argument that’s going to appeal to Democrats, though, so there is another. Taxes don’t create wealth; they simply move it from one place to another (with bureaucratic frictional losses) – generally from a person who earned it to a person who didn’t. So you’re not actually solving the problem, you’re only moving it around. People will still lose just the same, because you’re still spending beyond your means, but rather than losing government services they’ll lose jobs and wages. Many will be forced to borrow privately to survive, on worse terms than if the government did it, and with no choice in the matter. You punish enterprise and reward sloth, so big earners either move elsewhere or retire to live on their savings, and smaller earners give up working and go on welfare. Fundamentally, you can only spend the wealth you create, so you either have to spend less or create more. As taxes don’t create wealth – they destroy it – they’re counterproductive when the economy is considered as a whole.

    I rather doubt Democrats will agree with that one, either – but of course this debate has been at the heart of political disagreement between left and right since Marx and Smith. I doubt very much we’re going to resolve it here and now.

  77. Johnny

    I doubt very much we’re going to resolve it here and now.

    Well we’ve done a great job solving climate change here, why not take care of economics while we’re at it?

  78. Somite

    Wow. The myth of wealth in a vacuum is alive and well. All you have to understand is that any wealth is accumulated thanks to the systems and programs put into place by governments. There wouldn’t be a financial system without a country to sustain it using taxes. Your tax burden should be exactly proportional to your wealth.

    Democracies are not based on the wealth of individuals nor anyone’s merit. The point of democracies is that veryone regardless of wealth has a voice. There is nothing special about wealth some are lucky, some have merit but everyone has the same voice and government is everyone’s voice working towards a common goal.

    Understand. A functioning government is what allowed you to have, keep and enjoy your wealth.

  79. Nullius in Verba

    “All you have to understand is that any wealth is accumulated thanks to the systems and programs put into place by governments. There wouldn’t be a financial system without a country to sustain it using taxes.”

    Yeah. That’s the problem. That’s exactly what the small-government people say: the role of government is to provide the minimum framework of defence, law enforcement, and shared infrastructure for people to protect liberty, do business and create wealth – and no more. None of them want to cut the bits needed to operate businesses efficiently; it’s all the other rubbish and waste and obstruction they want to cut.

  80. Somite

    Please quantify how much goes into rubbish.

  81. Incredulous

    #78 Somite:

    “All you have to understand is that any wealth is accumulated thanks to the systems and programs put into place by governments.”

    Where did you get that impression? All we have we owe to the government? What about the work that I do? If I take on an extra job, I have to thank the government for more money? Do I also thank them for the maximum withholding on certain types of income regardless of income level? I just want to be sure to be appropriately grateful.

    “There wouldn’t be a financial system without a country to sustain it using taxes.”

    People would be unable to exchange goods and services? Why not? We did it before we had governments.

    “Your tax burden should be exactly proportional to your wealth.”

    Like you were promoting in #33?:

    “They would be tiered and you would only pay more on the amount that goes over a tier. For example, if you make >250k you would only be taxed higher on the portion that goes above 250k and so on”

    How is a tiered system exactly proportional?

  82. Brian Too

    I personally believe that both the political left and the right are capable, given competence within their ranks, of producing sound governance and just societies. When I look back in history I see administrations on both sides that were, given historical hindsight, likely better than any available alternative. The best were special and memorable.

    Ultimately, action to correct problems, even incomplete action, is better than stalemate. Incomplete actions can always (usually?) be bulked up later.

    In my opinion the political right has correctly identified a serious long-term problem. Where they have gone off the rails is in elevating this to the status of a current emergency. The current emergency is in fact weak economic growth, weak job creation, and weak spending and investment.

    In fact if the economy were stronger then revenues would rise and the debt/deficit would look a whole lot less scary than it does now. It wouldn’t be fixed but it would be better.

    The political right then compounds their error by their ‘no tax increases’ mantra. This is an elitist position that aligns them with the wealthy and powerful (a generalization, but an accurate generalization).

    The right works very hard to cover this up by pretending that all the wealthy in society are ‘job creators’. Well, the lack of accountability in this phrasing is simply breathtaking! Where are the measures? What is the proof? For a party that likes to think of itself as business oriented and realistic, they give away the financial store and never spend a minute to figure out how many jobs their tax cuts have produced. Every wealthy person gets the benefit and they don’t have to produce even one job. I mean, they might, but how will we ever know?

    Here’s a real business oriented position. Submit a plan to create jobs and make a commitment to do so. If it evaluates OK, you get a tax break for one year. At that point your performance is measured and if found satisfactory, your tax break is extended by another year. Repeat and monitor continuously. It’s called budgeting and it has been around forever.

    I’m not saying that this is the exact way, or the only way to do this. It is the principle of making a financial move (tax breaks) in order to get something in return (jobs). Measure and make sure you are getting what you are paying for.

    But that would require a real plan and commitment to create jobs. I doubt that’s what the primary motive force behind the right’s position on taxes is. A secondary goal, yes I grant that. But primarily, the wealthy simply wish to accumulate wealth, and they make their wants known. It’s hard to fault them for that. The question is, does society owe them that priority above so many others?

  83. Incredulous

    #82 Brian Too

    ” Where they have gone off the rails is in elevating this to the status of a current emergency. The current emergency is in fact weak economic growth, weak job creation, and weak spending and investment.”

    It is more like fixing a hole in the roof. If it is not raining, there is no reason to fix it. As soon as it starts raining, we must fix it even if we don’t like the idea.

    If the economy is blowing along all great, it covers the flaws. We have money to throw at people who have not been successful in the system for whatever reason through programs rather than really helping them succeed. We have money to incarcerate the ones who break the law instead of of actually seeing to them properly so they can succeed in legitimate ways. (Yes, there are true criminals and sociopaths but they are a small part of the prison populations.) We have money to reimburse the medical profession when some can’t pay. We help pay the way for students that can’t afford school. We fund research to those projects that can’t find other funding. We provide money to businesses to increase jobs. We provide aid abroad.

    The problem is when there is not a surplus of funds for the government to help these beneficial programs (or they become permanent fixtures in our economy) Now we have contention when the other necessary demands come up. We have several critical things to pay for: Iraq, Afghanistan, Drugs, Terrorism, etc. We have natural disasters to help with recovery aid here and abroad.

    The fact is, even through we have a large amount of resources, they are not infinite. Something has to give. It is hard to say no to some of these things, but to have the resources to run the necessary services and develop a surplus so we can continue to be around to provide the extras. It will require prioritization. We will have to say no to some things.

  84. TTT

    All we have we owe to the government? What about the work that I do?

    It would be impossible without the government roads you drive on, the government-supplied safe water you drink, the government school you almost certainly went to (and if not you, then others you depend on for your business), and the government food inspectors who keep you alive.

    Conservatives seem quite fond of the notion that “freedom is not free” so long as it is bought with someone else’s death. When their own money is on the line, though, they’d rather it be free.

    The problem is too much spending, on things the government shouldn’t be spending on. (From the Tea Party’s point of view.) Libertarians are small government people

    The TP is not libertarian. It believes, as movement conservatism believes, in expensive intrusive interventionist big government–one run according to their own priorities, spending on matters they approve of (frivolous wars, domestic surveillance, locking nonviolent college kids up for pot) and intruding in the lives of people they dislike (gays most especially, but really anyone who enjoys non-married / non-procreative sex, plus the whole abortion thing).

    You punish enterprise and reward sloth, so big earners either move elsewhere or retire to live on their savings

    Balderdash. There was no hardship for American lawyers, hedge fund managers, or car dealership owners under Clinton-era tax rates. They didn’t flee the country over a sane tax policy–far from it, they stayed here and got rich. There are enough people in that top 1% who really *cannot* leave while maintaining anything like their current standard of living–certainly anyone who makes their money in the real estate, legal, pharmaceutical, or contracting enterprises–that the attempted saber-rattling about these people “going Galt” and moving to Costa Rica isn’t worth the itty bitty ones and zeros composing it.

    I also would point out that it’s altogether too generous to describe the top 1% as “top earners,” what with how much of this country’s wealth is inherited. They also don’t seem to be creating much, as no matter how insanely, unaffordably, reverse-Robin-Hoodishly low their taxes go they haven’t made the unemployment problems any better.

  85. Messier Tidy Upper

    @44. Incredulous : Thanks. :-)

  86. Incredulous

    #84 TTT

    “It would be impossible without the government roads you drive on, the government-supplied safe water you drink, the government school you almost certainly went to (and if not you, then others you depend on for your business), and the government food inspectors who keep you alive.”

    How come when we talk about an over expansion of government services, you (Liberals, not you personally) bring up the basic services that even the Libertarians would agree with? The government does these basic things very well. Arguably better than anywhere else in the world. And a lot more. That doesn’t mean that all the services that they provide are that basic and necessary.

    “The TP is not libertarian. It believes, as movement conservatism believes, in expensive intrusive interventionist big government”

    My first reaction to this is to disagree because that was not how it started, but with how they have been co-opted by the ultra-Republicans, I really can’t argue against that point. I wish it were not true though. Does that count? *sigh*

    “There are enough people in that top 1% who really *cannot* leave while maintaining anything like their current standard of living…”

    They don’t have to physically move. All they have to do is move their money to offshore banking. What are we going to do, invade Switzerland and the Caiman Islands? They are still trying to hunt down the money from Nazi Germany over 60 years later.

    “…as no matter how insanely, unaffordably, reverse-Robin-Hoodishly low their taxes go they haven’t made the unemployment problems any better.”

    Any suggestion on how to fix this when they buy more congress seats than we can vote for? The Democrats are just as bad about selling us out as the Republicans. A good portion of these ultra rich *are* Democrats (Kennedy’s anyone?)

  87. Somite

    The only solution I see is voting for more progressive candidates at primaries and the democratic at the elections. History shows the GOP is just disastrous in terms of the economy and loss of life.

  88. Incredulous

    #87 Somite

    “History shows the GOP is just disastrous in terms of the economy and loss of life”

    Yes, and they eat babies too! It hasn’t been just the Republicans authorizing these things. The Democrats vote for them too. They just conveniently forget it afterwards. (Remember the hunt for WMD in Iraq? The Democrats voted for it too.)

    “The only solution I see is voting for more progressive candidates at primaries and the democratic at the elections.:

    How can you imagine that they will do so much when during the period that they controlled the House, Senate, and Presidency, they did not usher in this new utopia of things you wanted them to do and it was business as usual for the most part?

    Furthermore, lets assume that they had. The more “progressive” governments in Europe such as Spain, Italy, France (the most recent examples in the news– there are more) are fighting the same problems with their economies. Don’t you suppose that there are more factors in effect than just liberal vs. conservative when it is affecting liberal and conservative governments alike?

  89. Hugo Schmidt

    May I please ask you lot to get real? Does the collapse of the DOW have anything to do with a US debt that is so gargantuan that the entire gold supply of planet earth would not go halfway to covering it?

    I am thinking of Bernie Madoff. When some sleazeball runs off with$18 billion of other peoples money, everyone howls – but when someone like Obama and his goonshow run off with trillions of the money of everyone in the world and also of the unborn unto the seventh generation, it’s supposed to be okay?

  90. Somite

    @88 The democrats may be ineffective and allow the GOP policies to be enacted and obstruct true constructructive policy. However, the origin of the disastrous policies is the GOP. Only further moving of the country to the left can restore us.

    It is true that some european countries are still going to the depression (arguably that our deregulation caused). But the credit rating of these other countries is not being downgraded. We are the ones moving in the wrong direction.

  91. Incredulous

    #90 Somite

    “But the credit rating of these other countries is not being downgraded. ”

    “PARIS — President Nicolas Sarkozy cut short his vacation Wednesday and promised to cut France’s huge debts in response to rising concerns that the country’s triple A debt rating could be cut.”

    http://www.forbes.com/feeds/ap/2011/08/10/general-financials-eu-europe-financial-crisis_8616620.html

  92. Somite

    That’s one of many and there hasn’t been a downgrade. Pretty much every country that raised taxes or came up with a reasonable plan to deal with the recession, like Germany and the UK, kept their AAA status.

  93. Incredulous

    #92 Somite:

    “Pretty much every country that raised taxes or came up with a reasonable plan …”

    Which brings us back to the original point: You can’t just raise taxes, borrow money, and increase government infinitely. It is just reaching a point where we can’t afford to keep doing it. This post blames the Tea Party for this problem. Besides being able to out vote the rest of Congress, were they also somehow able to sneak over to Europe and vote on policy over there too?

  94. Somite

    @93 The point of this post is that the tea party and the GOP prevented any reasonable plan. Instead of trying to reach the best solution the tea party and the GOP legislate out of ideology.

  95. Incredulous

    #94 Somite

    That assumes that this plan is not reasonable and the best solution. Funny how democracy works. You don’t always get what you want.

  96. Chris Winter

    Incredulous wrote: “Did I miss Alberta seceding from Canada and joining the US?”

    OK, fair point. That was clumsily phrased; what I meant was that they are encouraging Canada to go after the tar sands — both directly (probably) and by supporting the pipeline to bring them to the U.S.

    I’m sure the Harper government doesn’t need much encouragement.

  97. Chris Winter

    Hugo Schmidt wrote (#89): “I am thinking of Bernie Madoff. When some sleazeball runs off with$18 billion of other peoples money, everyone howls — but when someone like Obama and his goonshow run off with trillions of the money of everyone in the world and also of the unborn unto the seventh generation, it’s supposed to be okay?”

    President Obama has run off? With trillions of dollars?

    Where did he run off to? I’m guessing you’ll say Kenya. But then it’s likely to be a place no one would suspect — like the Hashemite Kingdom of Jordan. I hear King Abdullah is going to put in a Star Trek theme park. Obama would fit right in; he could take over Tim Reid’s role as Tuvok. ;-)

    (I sure hope your comment isn’t a Poe.)

  98. Hugo Schmidt

    Chris,

    Where, exactly, did the money for the wretched “stimulus” come from? And by what conceivable standard do a collection of cronies earn the right to take such monies from others and dispose of them as they see fit? Yes, yes, yes – they were doing it “for the public good”. That tune is getting old. There is no, absolutely no essential moral difference between government pulling this and private individuals doing this. The only difference is that government can always do it far, far worse – and the Obama crew is doing it on a scale unprecedented in human history (incidentally, for any Republican loyalists hanging around who think that a McCain/Palin administration would have avoided this, please stop fooling yourselves.)

    I have also just noticed this:

    And so the polarization continues, despite the cost and the damage to every last one of us.

    Whenever I read anyone decrying ‘polarization’ or – gasp! – ‘extremism’, I always feel profoundly irritated and disturbed.

  99. Chris Winter

    Certain people toss around the claim that “trillions of dollars” have been or are going to be lost in some fashion. It will happen because the federal government expands entitlement programs or creates a new bureaucracy, because it imposes new regulations on business, thereby “killing millions of jobs” or driving them overseas, or because it raises taxes — an allegedly harmful and possibly unconstitutional “redistribution of wealth.”

    Such claims are what I find to have gotten old.

    I accept the arguments of economists like Paul Krugman that the stimulus was warranted and that it did some good; that its main fault was that it was not big enough. And I note that southern governors like Haley Barbour and Rick Perry welcomed their share even while criticizing the stimulus.

  100. Hugo Schmidt

    Chris,

    How much was the stimulus package? How much has the US budget increased? How much has the debt level increased? And from where did that money come?

    You are dodging my previous points because you cannot answer them.

    I accept the arguments of economists like Paul Krugman that the stimulus was warranted and that it did some good; that its main fault was that it was not big enoug

    I’m sure you do – the faithful tend to listen to the priest. I’ll leave aside that this sort of thing has never, ever worked in history, that it runs roughshod over the most basic economics 101. I will bang on about the moral lesson:

    If I decided to knock over a jewelers, my expenditures – in the form of new clothes, maybe a new car, and maybe a chunk of that given to charity – will certainly act as a ‘local stimulus’. Now, does that make the initial act of robbery okay? And what is the difference between that at the wretched stimulus nonsense, except scale?

  101. Hugo Schmidt

    Chris,

    You don’t address my points because you can’t. Now, I am going to skip over the point that this sort of stimulus nonsense has never, ever worked. I am going to keep banging on about the moral point here. If I knock over a jewelry store, what I do with the money – buying new clothes, getting a nice car, giving a chunk to some charities – will certainly act as a stimulus to local businesses. Now: does that make theft and larceny okay? And if not, what difference is there between that and the stunt that the Washington goonshow has pulled? Except for scale, and the fact that none of them has the guts for the risk that doing robbery in person would have.

    Back before Bill Maher fell into the party-political tediousness that seems to make idiots of so many American pundits, he asked: “Isn’t this the same thing that Bush did? Taking huge amounts of taxpayer money and giving them to failed businesses?” Oh, yes, yes indeed.

    By the by? If you are wondering how much money that stimulus nonsense was, it is more than the GDPs of the world’s poorest hundred and twelve countries combined. Now by what right or standard – what conceivable right or standard could there be for someone to dispose of that sort of economic power?

    And do you care to imagine what is going to happen to those hundred plus poorest nations when this bubble bursts? The global economy is interconnected – when the whole mess falls apart in the United States, lots and lots of the poorest people in the world are going to die of starvation. Criminal irresponsibility bordering on insanity is the only description of this stuff.

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About Chris Mooney

Chris is a science and political journalist and commentator and the author of three books, including the New York Times bestselling The Republican War on Science--dubbed "a landmark in contemporary political reporting" by Salon.com and a "well-researched, closely argued and amply referenced indictment of the right wing's assault on science and scientists" by Scientific American--Storm World, and Unscientific America: How Scientific Illiteracy Threatens Our Future, co-authored by Sheril Kirshenbaum. They also write "The Intersection" blog together for Discover blogs. For a longer bio and contact information, see here.

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