"Bad for growth. like your hair!" -bo

TechCrunch:

The world’s most powerful man went to Twitter to promote his plan to avoid the so-called ‘fiscal cliff‘ of impending tax hikes. If his style is any indication, the prez tweeted from Camp David while sipping an Arnold Palmer. So, make like your commander-in-chief, put your feet up, and check out some of the best moments of tax policy in 140 characters or less...

A noteworthing high point in the responses, and this exchange will be catalogued by the Library of Congress:

@dontbeaprat: @BarackObama #My2k As a recent college grad w/o a full time job, these cuts wouldn't help me, would they?

@whitehouse: @dontbeaprat cuts w/out revenue = reductions in student loans; work/study & college tax credits expire. Bad for growth. like your hair! -bo

Meanwhile, Dean Baker:

Senator Lindsey Graham, a Republican often cited on budget issues, is apparently badly confused about the basics of the budget. A Post piece quoted Graham as saying:

"This offer doesn’t remotely deal with entitlement reform in a way to save Medicare, Medicaid and Social Security from imminent bankruptcy."

This statement is absurd on its face. Medicaid is paid out of general revenue, it makes no more sense to say that Medicaid faces bankruptcy than to say that the Commerce Department faces bankruptcy.

And Krugman:

The key is having a health insurance system that can say no — no, we won’t pay premium prices for drugs that are little if any better, we won’t pay for medical procedures that yield little or no benefit

But even as Republicans demand “entitlement reform”, they are dead set against anything like that. Bargaining over drug prices? Horrors! The Independent Payment Advisory Board? Death panels! They refuse to contemplate using approaches that have worked around the world; the only solution they will countenance is the solution that has never worked anywhere, namely, converting Medicare into an underfunded voucher system.

But, but... deficits!

 

"Back to 1965..."

Ezra Klein notes the "peculiar impasse" in the negotiations to veer away from the apocalypse Armageddon cataclysm annihilation very-scary-sounding-thingy fiscal cliff: Republicans would agree to revenue if Democrats would just agree too... uh...

They know they want “Medicare reform” — indeed, they frequently identify Medicare reform as the key to their support for a deal — but aside from premium support, they don’t quite know what they mean by it, and they’re afraid to find out. 

The solution they’ve come up with, such as it is, is to insist that the Obama administration needs to be the one to propose Medicare cuts. “We accepted this meeting with the expectation that the White House team will bring a specific plan for real spending cuts — because spending cuts that Washington Democrats will accept is what is missing from the balanced approach that the president says he wants,” Boehner spokesman Michael Steel said in regard to the most recent round of talks.

Democrats find this flatly ridiculous: Given that the Obama administration would happily raise taxes without cutting Medicare but that Republicans will only raise taxes if we cut Medicare, it falls on the Republicans to name their price. But behind their negotiating posture is a troubling policy reality: They don’t know what that price is.

Fear of political costs for unpopular, but necessary -- you believe -- policy isn't a political novelty (especially if you've convinced your entire base to take leave of the real world).  But I think this gives the Republicans too much credit in this particular self-created predicament.  This assumes they have specific ideas they believe make good policy and just don't want to own them alone.  It assumes they've thought this one through beyond an ideological hatred for Medicare and the safety net at large, success of the program(s) be damned.  Sherrod Brown said it best in 2003:

[Privatization] has really been the thrust. From President Bush to the gentleman from California (Mr. Thomas) to Speaker Gingrich a few years ago, to back in 1965, Republicans really wanted this system turned over to the insurance companies. Privatize Medicare and give it to the insurance industry. Go back to 1965, out of roughly 200 Republican Members of the House and Senate, only 23 voted for the creation of Medicare. Gerald Ford in 1965, a future President, voted against it. Congressman Dole, future Senator Dole, Republican Presidential candidate, voted against it. Senator Strom Thurmond voted against the creation of Medicare. Congressman Donald Rumsfeld in 1965, later Secretary of Defense and the architect of this plan, I put in quotation marks, of the rebuilding of Iraq, voted against the creation of Medicare.

Then in 1995, the first time Republicans had an opportunity to do something about Medicare, the Republicans under Speaker Gingrich tried to cut it by $270 billion in order to give a tax cut to the most privileged Americans, the same old story. Speaker Gingrich said in October 1995 that he hoped Medicare would wither on the vine.

Republicans don't find themselves without a specific demand because  Vouchercare isn't on the table, they are in this bind because Vouchercare was only popular with Republicans primarily as a gateway to privatization. 

I find it hard to believe the same party that successfully sold trickle-down economics for 3+ decades with little push back from Democrats, or managed to get the very tax cuts being debated now on the table then (as a job creator, no less) is suddenly too timid to bullshit the American populace into getting behind they're latest proposal.  No. They would praise the genius of toddler's finger painting if they thought the public would buy it. The reason Republicans can't make a specific demand now with the White House bluntly asking them to name their price is simple: they haven't considered it much.

Reform is the white wash, overblown fears of fiscal solvency the excuse, and privatization the thrust.  But the goal has always been an end to the social safety net.

Not something you admit to outside of the country club, even if it is the President asking.

 

Age of Austerity

Republican voters are more sour on the debt deal than Democrats, and Nate Silver says polls show House Republicans owning the debt ceiling deal, creating an opportunity for Obama:

Voters’ Pavlovian reaction may simply be that fiscal austerity equals pain, which could complicate Republican messaging in the long-run.

In the short-run — depending on what happens with the markets over the next several trading days as well as with tomorrow morning’s jobs report — the question becomes whether Mr. Obama attempts to exploit the crisis by calling for stimulative measures that were lacking in the deal he signed with Republicans.

And speaking of that job's report for July: Hiring increases, expectations don't.  Via NPR, Brookings' William Dickens isn't impressed:

The July report also revised figures for the two previous months. The economy added 53,000 in May, up from an earlier estimate of 25,000; and 46,000 in June, up from 18,000.

Even so, the economy expanded at a meager 0.8 percent annual rate in the first half of the year, the slowest pace since the recession officially ended in 2009. Those figures, combined with financial troubles in the eurozone in recent days, have ratcheted up talk of a double-dip recession and put markets on edge in the past week.

"If Europe gets its act together and we don't have any more brinkmanship in the political arena here, I can see us just limping through without a double-dip recession," Dickens said.

Surely we've seen the end of "brinkmanship" hostage taking.  Dickens argues that the Fed is out of options. Dean Baker says not so quick:

... the Fed could pursue a path that Bernanke himself had advocated for Japan when he was still a Princeton professor. It could target a higher rate of inflation, for example 4 percent. This would have the effect of reducing real interest rates. It would also lower the debt burden of homeowners, which could allow them to spend more money.

That could relieve some pressure on consumers, but the numbers today are still a little good news in a sea of bad.  Private sector growth is almost -- but not entirely -- negating public sector cut backs.  Until something different than what we're doing is done, we'll be applauding "not as bad as it could have been" right into the double dip and President Mittens!/Bachmann/Perry's first term.

"Back to 1965..."

Ezra Klein notes the "peculiar impasse" in the negotiations to veer away from the apocalypse Armageddon cataclysm annihilation very-scary-sounding-thingy fiscal cliff: Republicans would agree to revenue if Democrats would just agree too... uh...

They know they want “Medicare reform” — indeed, they frequently identify Medicare reform as the key to their support for a deal — but aside from premium support, they don’t quite know what they mean by it, and they’re afraid to find out. 

The solution they’ve come up with, such as it is, is to insist that the Obama administration needs to be the one to propose Medicare cuts. “We accepted this meeting with the expectation that the White House team will bring a specific plan for real spending cuts — because spending cuts that Washington Democrats will accept is what is missing from the balanced approach that the president says he wants,” Boehner spokesman Michael Steel said in regard to the most recent round of talks.

Democrats find this flatly ridiculous: Given that the Obama administration would happily raise taxes without cutting Medicare but that Republicans will only raise taxes if we cut Medicare, it falls on the Republicans to name their price. But behind their negotiating posture is a troubling policy reality: They don’t know what that price is.

Fear of political costs for unpopular, but necessary -- you believe -- policy isn't a political novelty (especially if you've convinced your entire base to take leave of the real world).  But I think this gives the Republicans too much credit in this particular self-created predicament.  This assumes they have specific ideas they believe make good policy and just don't want to own them alone.  It assumes they've thought this one through beyond an ideological hatred for Medicare and the safety net at large, success of the program(s) be damned.  Sherrod Brown said it best in 2003:

[Privatization] has really been the thrust. From President Bush to the gentleman from California (Mr. Thomas) to Speaker Gingrich a few years ago, to back in 1965, Republicans really wanted this system turned over to the insurance companies. Privatize Medicare and give it to the insurance industry. Go back to 1965, out of roughly 200 Republican Members of the House and Senate, only 23 voted for the creation of Medicare. Gerald Ford in 1965, a future President, voted against it. Congressman Dole, future Senator Dole, Republican Presidential candidate, voted against it. Senator Strom Thurmond voted against the creation of Medicare. Congressman Donald Rumsfeld in 1965, later Secretary of Defense and the architect of this plan, I put in quotation marks, of the rebuilding of Iraq, voted against the creation of Medicare.

Then in 1995, the first time Republicans had an opportunity to do something about Medicare, the Republicans under Speaker Gingrich tried to cut it by $270 billion in order to give a tax cut to the most privileged Americans, the same old story. Speaker Gingrich said in October 1995 that he hoped Medicare would wither on the vine.

Republicans don't find themselves without a specific demand because  Vouchercare isn't on the table, they are in this bind because Vouchercare was only popular with Republicans primarily as a gateway to privatization. 

I find it hard to believe the same party that successfully sold trickle-down economics for 3+ decades with little push back from Democrats, or managed to get the very tax cuts being debated now on the table then (as a job creator, no less) is suddenly too timid to bullshit the American populace into getting behind they're latest proposal.  No. They would praise the genius of toddler's finger painting if they thought the public would buy it. The reason Republicans can't make a specific demand now with the White House bluntly asking them to name their price is simple: they haven't considered it much.

Reform is the white wash, overblown fears of fiscal solvency the excuse, and privatization the thrust.  But the goal has always been an end to the social safety net.

Not something you admit to outside of the country club, even if it is the President asking.

 

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