Thursday, July 17, 2014

July, 2014: Austerity Crazed GOPs Dump Another $287 Bn onto the Deficit

Just a Wee Bit of US Budget and Deficit History
The GOP would like to pass a law against even remembering this stuff...

The National Debt comes from the yearly Federal Budget deficits. Since there is already a deficit for this year, the $287 Bn unpaid House bill be will added to the National Debt.

So, let's start by getting something straight. The US Federal Budget deficit is best considered as a percentage of the US GDP. Of course, the whole calculation is riddled with carefully crafted "economic doodads" masquerading as some sort of "expertise" purposely intended to be quite beyond the meager comprehension of American tax payers, but -- since this is the way we officially calculate the monstrosity -- we may as well pay attention to what we are being told.

Now, the "getting something straight" part.

There have been exactly two Presidents in the last four decades who have over seen an actual reduction in the deficit during their terms: Bill Clinton and Barack Obama. Naturally, no one would even remotely suspect this with opinions based on the drivel of the US failed domestic media, so let's take a look at a few charts which tell what has actually gone on with the deficit since Obama was inaugurated in 2009. [The data shown is probably as accurate as someone without his own think tank can expect -- from the Congressional Budget Office, October, 2013. Read the entire article Deficits are Rapidly Shrinking - Crooks and Liars]

Remember, the decreases shown in the deficit as a percentage of the GDP are being generated by two important forces. The first is by a reduction in the amount of federal spending, and the second is because of an increase in federal revenues.

[Note: The 2014 deficit figures appear to be headed for the rate shown -- when this chart data were calculated, the 2014 figures were "forecast" figures.] The actual decrease in the amount of dollars spent by the government is really the central issue with this post. Sure, it might seem to make sense to reduce the annual federal deficit to zero -- that is, reduce our spending to match our income, but when President Clinton's budget looked like it might actually do that, the economists warned him away from going that far.

There are a few very influential Americans who make fabulous incomes from the interest they receive from the Treasury for financing the national debt.
Just as the federal deficit is based on two factors, so is the federal revenue. The issues creating federal revenue are first, tax rates, and second, [GDP] the size of the economy. [The red bar at the left shows the forecast revenue for 2009, but it was an estimate prepared before the awful gravity of the Bush W. collapse had been completely measured. The actual revenue during Obama's first year was about $300 Bn less than forecast.]
Federal spending -- the current "screaming point" of the GOP tea bags after their rhetoric about "jobs, jobs, jobs" cratered from Congressional ineptness -- is what it costs the government [in dollars] to pay for everything it buys each year. The reason we can say that the deficit is "shrinking rapidly," is only partially the result of actually spending less, but also partly the result of having higher revenues as the collapsed economy painfully heals.

The first [top] chart shows exactly what is meant by "measuring the deficit as a percentage of the GDP." Things looked pretty grave in 2009 after the US economy had contracted at -6% for a couple of years thanks to the Republican looters. However, that deficit percentage started down the next year and has continued to drop since then.

The next chart shows that the deficit itself -- this time in actual cash trends instead of as a percentage of the GDP -- also began to decrease steadily. The next chart shows that federal revenues began to increase steadily once the Bush crime family had been retired back to Texas and Wyoming, while the last chart shows that federal spending -- again, in actual dollars -- has stabilized and remained fairly constant even though the GDP has -- finally -- begun to once again increase.

That last chart shows federal expenditures roughly constant in the range of $3.5 Tn during the Obama Presidency. If any of MeanMesa's visitors is inclined to ask, "So what?," have a look at what these figures looked like toward the end of the W's catastrophic reign. [Data: US Department of  the Treasury, Office of National Debt, 2007]
Toward the end of the Bush W. term, the national debt was adding around 1/2 Tn dollars per year

 The GOP's Famous History
 of Good "Business Sense"
Borrowing trillions to create a nasty clutch of over fed "job creators"

Now, why are we beginning this post will all of these deficit and revenue charts?

They explain the scale of what the House Republicans are trying to do. $287 Bn may not actually seem like that much to Americans already exhausted by Washington D.C. billion dollar shenanigans, but spending just a few minutes with the CBO data [above charts] puts the cold-cash magnitude of this 10 year tea bag looting scheme into clearer perspective.

Right here, we can dedicate absolutely no more than a couple of paragraphs to the hideous screaming hypocrisy of these sold out GOP dead enders. We have to look no further than some of their stinkiest "deficit reduction" budget cutting ideas. 

For example, the 2012 "Ryan budget" proposal aimed at a $1.4 Tn reduction in federal spending, a feat to be accomplished by slashing programs for food stamps, emergency housing, heating assistance and Medicaid, just for starters. [Read more: ALTERNET and The HILL] The point here is simple. That $1.4 Tn "savings" would gut most of the already tattered "safety net" into oblivion, leaving the streets of the United States looking like a poorly functioning third world nightmare.

The approach taken by the tea bag controlled House has been similar to what we might expect from a "one trick pony." Everything that costs so much as a single dime of Federal tax money must be off set by cuts and "savings" extracted somewhere else from the budget.These now famous "off set" demands extend to everything from limiting the percentage of income for student loan repayment to rebuilding the New Jersey shore after hurricane Sandy.

The GOP's Promise
 of Prosperity Through Austerity
Ever see a bridge built with a tax cut?

But wait. What about the tea bag obsession with an "offset" for every dime of federal spending?

Where, exactly, is the "off set" for the $287 Bn in the business tax reduction bill? 

Well, there isn't one. Even more interesting, all the corporate media "mouth junk" experts haven't even mentioned the matter with so much as a single one of their usual, hand wringing, whimpering gasps.

The tea bags hill billies who can't so much as draw a breath of air without wailing about "the debt" have not only remained eerily silent, they were the back room cheer leaders powering this thing through the House of Representatives. Of course, it wasn't really their idea. They were "just following orders."

Let's see. Who will get the benefit of this latest scam? Oh, that's right -- the JOB CREATORS and the ...uh... CAPTAINS OF INDUSTRY who will be "investing in America" to get the smoldering remnants of the US economy resuscitated after the last time.

Give MeanMesa a break. Just like most folks visiting this blog, that nonsense didn't make sense the first time they trotted it out for us. Or the second. Or the third.

MeanMesa's Theory 
of the Theoretical "Normal" Business

Let's pretend for just a moment that you are a small business owner. No, you "don't listen to both sides" and then troll Stephanie Miller's show with a fist full of breathlessly delivered, frantic, canned right wing talking points. We'll pretend that you are REALLY a small business owner with an actual small business somewhere in the United States.

The "small business owner" label is important because it is precisely this group of people who are the central "engine" which can restore what's left of the American economy by creating jobs, making business investments and so on. For this post, this is even more relevant. The "small business owners" are the folks the Republicans intend to "help" with their $287 Bn dollars worth of tax cuts. 

[Of course there's a troubling "disconnect" between what we might consider a "small business" and what the owners of the GOP might consider a "small business." For example, the GOP thinks that Bechtel, the largest engineering and construction company in the US and the fourth largest in the world, is, in fact, classified as a "small business." Read more about Bechtel  here. Read more about the conveniently strange definition of "small business" used by the GOP Washington Monthly, 2010]

Setting all this aside, let's say that your particular "small business" is, actually, small -- that is, quite a lot smaller than these phony Wall Street gargantuans who just use the description to get fat GOP tax loop holes. Right away, MeanMesa should warn you. If your business is so small that it doesn't have lobbyists with check books, you'll not be seeing any of the $287 Bn worth of "business tax cuts."

Well, when you started your small business, you had a business plan. You investigated how much it would cost to provide your product or service, how much you could charge for it, how much your expenses for doing business would be and so forth. In fact, with respect to these expenses, you added up gas, rent, electric, insurance etc. but you certainly were sure to include taxes. You were going to have to pay taxes.

After all this went into the total, you looked at your plan to see if it would work. MeanMesa emphasizes taxes here because taxes are not a sudden unanticipated surprise to anyone thinking about a small business. If your "business plan" wouldn't work -- because of taxes or anything else, you "went back to the drawing board."

However, right now -- after these same Republicans totally wrecked the US economy with their eight year looting festival during the Bush W. autocracy -- they would like very much to cut your taxes right now. You know, cut your taxes as a "special House GOP Capitalism favor" to you, so your "small business" can grow, grow, grow and create lots of jobs after you patriotically reinvest the extra money you'll have from the savings you got from the tax cuts.

Now, the House tea bags don't like to careen into a potentially shady plan like this without plenty of accompanying drama for media cover. The GOP is basically a sham. Policy means nothing to them if it doesn't wind up either deregulating something or plunking wads of tax money into the pockets of the Party's owners.

So they added to their proposal this, for them, dramatic threat: "Unless we can give $287 Bn dollars worth of these tax cuts to businesses, they will go out of business because their taxes are so-o-o-o very high already. Why, these poor businesses never, ever, thought that they would ever be paying such horridly unfair taxes like these. We desperately need to fix this so the economy we wrecked in 2008 won't stay wrecked -- at least, won't stay wrecked for our friends."

And, of course, those "friends," just by an almost unbelievable, happy coincidence, are either the owners of the Republican Party or, sometimes, just really close friends to the owners of the Republican Party. In any event, let's just say that every one of these businesses about to be saved by the tax cuts, at the very least, has lobbyists.

The owners of the GOP have also spent plenty of dough insinuating the idea into their base of education challenged hill billies that taxes -- practically any taxes whatsoever -- will drive every American business somewhere else in practically no time at all. This is possible because those hill billies have also been led to believe that there is, somewhere in the world, a wonderful tax and regulation free paradise where American corporations can go to enjoy all the "liberty" and "free market" freedom they deserve once they escape the liberal tax oppression here.

Of course, there is. We call it Somalia.

There's "Predictability
and Then There's "Predictability"
The GOP's current "problem" keeps changing - 
jobs then debt then predictability then certainty.
No matter the name, it's always taxes and regulation.

The GOP voices have an unsettling thread of eerie unanimity running through them. There are plenty of GOP voices -- screaming and squelching in the halls of the Congress, blathering endless hatred and fear on right wing radio and sandwiching worn out ideology with grotesque self righteous arrogance on their daily television shows.

However, the really creepy part of it all is the mysterious synchroneity. On any specific day -- beginning early in the morning East Coast time -- a certain word or phrase will appear in what may at first appear to be some sort of reasonably sincere discourse about something. However, an hour later on a different right wing show perhaps in a different time zone and issuing forth from a different right wing mouth, precisely the same word or phrase will mysteriously appear again.

By noon time, that certain word or phrase has become a repetitive litany, chanted by the reactionary "faithful" across numerous networks, radio and television shows and as embarrassingly often as possible by wing nut Congressmen and Senators fortunate enough to find themselves facing a microphone. By dusk that certain word or phrase is frothing from the barber and the beer drinker -- usually between burps -- from Bangor, Maine to Tijuana.

Further, there has been an interesting "collection" of these unusual words repeated and repeated in exactly this fashion by the right wing "spokesmen." For example, in 2009, the GOP spoke relentlessly, hour after hour, day after day, saying "Jobs, Jobs, Jobs." After utterly failing to actually ever do anything about "Jobs, Jobs, Jobs," that particular talking point was retired in favor of "Debt, Debt, Debt."

Once again failing utterly to do a single thing about the "Debt, Debt, Debt" -- except, of course, to make it worse -- the latest example of these strangely repetitive talking points has become "Predictability, Predictability, Predictability." The right wing tax rate nonsense in the section above, is, in fact, precisely an issue derived from this specific talking point.

Often, the "Predictability, Predictability, Predictability" talking point is temporarily replaced with "Certainty, Certainty, Certainty." With respect to the onerous, burdensome, horrible, liberal, economic recovery wrecking tax policies of the Obama Administration, the right wing complaint then becomes "Business growth is being hampered by a lack of certainty" -- meaning, of course, tax laws and, quite possibly, also expensive environmental regulations.

One of the too often repeated "redeeming qualities" of this particular stinky little $287 Bn "business tax cut" bill is that it takes what had been -- only a few years back during the brutal onset of the Bush W. Economic Collapse -- a temporary tax cut made necessary because the economy had been tanked by the looting and makes it permanent.

In right wing lock step talk, that means that the House bill would "add certainty" by making the low tax rates frantically adopted amid the smoldering wreck of the 2009 economy "permanent." In case you're still wondering, that would be "permanent" regardless of the economy doing better than it was in 2009, and if the cuts couldn't be made "permanent," it would amount to making the "uncertainty" facing business plans even greater.

[Read the entire Huffington Post article Huffington Post]

Huffington Post

House Votes For Tax Breaks To Add $287 Billion More To Deficit

Michael McAuliff
Posted: 07/11/2014 

WASHINGTON -- The GOP-led House of Representatives embraced a former stimulus measure Friday, voting to make it and another related tax cut permanent, adding $287 billion to the deficit over the next 10 years.

The largest part of the cut, worth more than $263 billion, is making permanent so-called bonus depreciation, which allows businesses to write off the cost of capital investments and improvements much more quickly.

It was enacted twice during the administration of President George W. Bush, and the most recent version expired last year. The idea behind it is that if lawmakers give businesses a break during tough economic times, they will speed up major equipment purchases and stimulate economic activity.

Those who support making such a stimulus measure permanent argue that it would give businesses the certainty to be able to plan their investments.

The President has hinted that he will VETO the bill if it ever reaches his desk.

MeanMesa's compliments to the President.

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