By Lindsay Beyerstein, Media Consortium blogger

Sen. Jim DeMint (R-SC) is calling for a “big showdown” over the upcoming vote to raise the nation’s debt ceiling to $14.3 trillion from $13.9 trillion. The debt ceiling is simply the maximum amount the government can borrow.

Congress routinely raises the debt ceiling every year. It’s common sense: Since the government has already pledged to increase spending, Congress must authorize additional borrowing. (Remember that the government is now forced to borrow billions of extra dollars to pay for tax cuts for the wealthy, which Republicans insisted on.) If the ceiling isn’t raised, the United States will be forced to default on its debts, with catastrophic consequences.

Why would default be catastrophic? The principle is the same for countries and consumers alike: If you have a good track record of paying your bills, lenders will lend you money at lower interest rates. If you don’t pay your bills on time, or default on your obligations altogether, lenders will demand higher interest rates.

Congressional Republicans say they oppose raising the debt ceiling because they favor fiscal responsibility. This kind of rhetoric is the height of recklessness. The interest on our debts is a big part of government spending. Even idle talk about defaults could spook some creditors into raising interest rates on U.S. debt and cost taxpayers dearly.

Steve Benen of the Washington Monthly quotes Austan Goolsbee, chair of the White House’s Council of Economic Advisers, who says that congressional GOP members are flirting with the “the first default in history caused purely by insanity.”

Making work pay (for real)

An astonishing 80% of full-time minimum wage workers can’t afford the necessities of life, according to new research by labor economist Jeannette Wicks-Lim of the Political Economy Research Institute, featured on the Real News Network.

Wicks-Lim argues for a two-part solution to the crisis of working poverty in America: i) raising the federal minimum wage to $12.30/hr from $7.50/hr; ii) Increasing the earned income tax credit to 40% of income. She estimates that these two policy changes would raise the income of a minimum wage worker from $15,000 to about $36,000 at a manageable cost to employers and taxpayers.

Her proposal is a revamp of President Bill Clinton’s attempt to “reform” welfare by cutting social service benefits and shifting government spending to tax credits. Currently, the Earned Income Tax Credit is a subsidy for the working poor that is designed to “make work pay”–i.e., if workers aren’t making enough in wages to secure a decent standard of living, the government provides an income subsidy to reward them for working.

However, if a decent standard of living remains out of reach for 80% of full-time minimum wage workers, Wicks-Lim argues that the minimum wage is too low and the subsidies are too modest to achieve the stated goal of making work pay.

Colorado minimum wage inches up

Speaking of minimum wage issues, Scot Kersgaard of the Colorado Independent reports that the minimum wage in the state ticked up from $7.25 an hour to $7.36 on January 1. The modest increase represents the annual adjustment for inflation. Every bit counts, but Colorado families are falling further behind. According to a new report by the Denver-based Bell Policy Center, 8.3% of working families in Colorado live below the federal poverty line, which is $22,050 for a family of four. Fully one-fourth of Colorado families do not earn enough to meet their basic needs, which requires an income approximately twice the FPL, according to the report.

Colorado is one of only 10 states that automatically adjust their minimum wages for inflation.

Wage theft epidemic

Unscrupulous employers are stealing untold millions of dollars from hardworking Americans, Dick Meister reports in AlterNet:

The cheating bosses don’t take the money directly from their employees. No, nothing as obvious as that. The employers practice their thievery by underpaying workers, sometimes by paying them less than the legal minimum wage. Or they fail to pay employees extra for overtime work, or even force them to work for nothing before or after their regular work shifts or at other times. Some employers make illegal deductions from employee wages. And some withhold the final paycheck due employees who quit.

In New York City alone, an estimated $18 million worth of wages is stolen every week. Workers in the restaurant, construction, and retail sectors are at increased risk of wage theft. Wage thieves disproportionately target undocumented workers because they assume that these employees will be less likely to report the crime.

Debt collection from beyond the grave

The dead don’t tell tales, but they have been known to sign debt collection papers, Andy Kroll reports in Mother Jones. Martha Kunkle died in 1995, but her printed name and signature appear on paperwork filed by the debt collection agency Portfolio Recovery Associates as late as 2006 and 2007. The ruse was discovered and PRA, facing a fraud lawsuit, agreed in 2008 that the “Kunkle’s” documents couldn’t be used in court. That didn’t stop the agency from trying to use them again in 2009.

The attorney general of Missouri has announced that he will investigate whether any of Kunkle’s handiwork was used to support debt collection in his state. The attorney general of Minnesota is already investigating whether debt collectors have used fraudulent paperwork in court.

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"The economy clearly has gotten substantially worse from the initial predictions that were being made, not just by the White House, but by all of the private sector." - Austan Goolsbee

On Friday, the Bureau of Labor Statistics released the May Jobs report showing that US economy had shed another 345,000 non farm jobs with the heaviest losses coming in the manufacturing sector. Overall, the number of unemployed persons increased by 787,000 to 14.5 million in May, and the unemployment rate rose to 9.4 percent.  Since the start of the recession in December 2007, the number of unemployed persons has risen by 7.0 million, and the unemployment rate has grown by 4.5 percent-age points.

On the plus side, the May numbers were half the average monthly decline for the prior 6 months. Still it is important to note that the current jobless rate is already higher than the hypothetical rate that was used to calculate the health of banks and other financial institutions in so-called "stress tests" earlier this year and that most economists expect the US economy to continue to shed jobs. And the continuing erosion in the nation's labor markets may yet have a political calculus detrimental to Democrats and the Administration. So far, it hasn't.

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Politico is asserting that the President in particular and the White House in general is struggling in communicating with the American public.

It was brilliant communications skills that carried Obama to the presidency, with a national campaign built on the strength of his personal story and the clarity of his promise to transform politics. On the rare occasions when he was thrown on the defensive, he quickly turned problems into opportunities and regained control of his public image.

What's different now? The polished phrases and unflappable delivery haven't gone away. His prime-time news conference and speech to Congress drew the usual praise.

But the discipline and strategic focus of the campaign have yet to move into the White House. The story of the day often catches the president flat-footed or on the defensive -- and regularly undercut by fellow Democrats.

To Obama's dismay, he is learning that successful presidential communications is only in part -- often a fairly small part -- about personal eloquence. It requires harnessing his words to a consistent strategy of public education.

It is a fair assessment. The President was brilliant at Williamsburg in front of the House Democratic Caucus speaking on the need for the fiscal stimulus but he was sometimes flat-footed when speaking on the subject extemporaneously. And as Politico notes the President's "sluggish and unsteady response" to the backlash over AIG bonuses suggests the President has yet to fully embrace the role of Educator-in-Chief. The White House can frankly do better in this score and lucky for them they have an ace in the hole, Austan Goolsbee. So far, the White House has used him out the bullpen. They should put in him a starting role.

Vintage Austan

Austan on AIG

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From First Read:

Desperately seeking another spokesman: As voices from the left -- especially Nancy Pelosi's -- keep alive the chatter about a second stimulus, the White House is looking for another spokesman to talk about the economy. White House aides admit it's difficult to find a strong voice, other than the president's, that can inspire the same level of confidence in dealing with the economic crisis. Federal Reserve Chairman Ben Bernanke doesn't have the same perceived Yoda-like hold over Wall Street that his predecessor, Alan Greenspan, had in the '90s, although Bernanke's comments yesterday did provide some comfort to investors. Treasury Secretary Geithner was hailed as a potential savior when Obama appointed him, but stumbled early. But last night, Geithner was on "Charlie Rose." And now the White House is pushing out chief economic adviser Larry Summers and Christina Romer -- who appeared on TODAY this morning -- to play more public roles. They need one or more of these four key folks to catch fire among the muckety-mucks on Wall Street.

To throw out a name not a name not mentioned above, the Obama team includes at least one more economist with a good presence on television: Austan Goolsbee. During the campaign, Goolsbee was one of the Obama campaign's key surrogates, particularly during the period immediately following John McCain's assertion that the fundamentals of the economy were strong. Here's something of a highlight real of one such appearance by Goolsbee:

Per TPM DC, Goolsbee should soon be confirmed to the Council of Economic Advisers -- perhaps as soon as the end of this week -- so he could be out making television appearances, speaking authoritatively on the issue of the economy to the American people, in the not too distant future. And at least from this vantage, that wouldn't be such a bad idea.

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At 8:30AM this morning, the U.S. Department of Labor's Bureau of Labor Statistics (BLS) will, once again, attempt to deceive us in their efforts to maintain the quickly evaporating "national calm," when they announce that our nation's unemployment rate is, most likely, somewhere between 7.9% and 8.1%.

We'll also be told (actually, we're already being told) by the MSM that: "U.S. February Job Losses May Have Been Largest in Six Decades."

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