Posts tagged government
Posts tagged government
“If the SEC won’t take action, it would be irresponsible for the Financial Stability Oversight Council not to, … The lack of transparency in prices in money- market funds is startling; we would never permit this in any other publicly traded financial instrument … I normally find myself among the loudest defenders of the principle of regulatory independence. But in this case, the national interest — prevention of systemic risk — trumps all other considerations. In this case, the SEC’s mandate to protect the public interest is paramount. If it won’t pursue that mandate, the FSOC should.”
“Normalization of relations between Iran and the United States would deprive Khamenei and the deeply invested cohort of radical ideologues around him of a powerful justification for their arbitrary rule, … Continued enmity with the United States has time and again proved to be a convenient excuse for silencing the reformist opposition (as in the case of the 2009 Iranian presidential election, which has simply become known as “the sedition”) and managing the increasingly fragmented conservative establishment.”
Sequester: How Low Can Spending Go? – Jonathan Cohn
“Within a week or two, political rhetoric may matter a lot less than longer lines at airport security, smaller unemployment checks, and other reminders that less government spending also means fewer government services, … “
Cohn says that it’s not about whether the sequestration cuts are going to happen, it’s for how long they’re going to stay in effect. Obama is talking about what the effects of the sequestration will be while Republicans are saying it is merely exaggeration. Jonathan continues to say that government spending is at its highest in a decade due to (1) health care and (2) spending from the Recovery Act. Medicare reimbursements would be cut by sequestration, but these cuts are mainly targeting discretionary spending, which is at its lowest level to date. The economy will also be hit at a time of slow recovery, when spending is crucially needed.
Do not think conservatives like the idea of a sequester impacting our nation. However, they’d rather take it instead of the Democratic budget plan, which includes a mix of spending cuts and tax increases. Democrats also don’t like the Republican plan, which includes significant spending cuts on social programs. Polling indicates that the general public sides with Obama when it comes to choosing which budgetary path to take. In the end, as Cohn says, debates and blaming fingers will only go so far before someone realizes their check got smaller.
As Cohn pointed out, discretionary spending is at its lowest. What this country needs is investment in infrastructure, for one, and better regulatory oversight over those that control our money. On top of that, we need to remind those sitting in their comfy chairs in Congress that being a legislator isn’t meant to be a game. They hold the country in their hands. Ultimately, if the economy gets hit because they were too busy yelling at someone over political differences, it will not matter who they are. They will be blamed. It was their responsibility to avert something that could’ve easily been handled over compromise. Alas, we are in an age of polarity.
If the sequester hits…
“Broadly speaking, the data now indicate that as people get richer, they report getting happier too … [However t]he U.S. is nearly three times as rich today as it was in 1973 … According to nearly every survey, though, Americans are not at all happier than we were back then.”
Economists have been working together with psychologists to study when people are usually happy during the course of a certain day of the week, hour by hour. This also depends on your geography as well. The purpose of which is so that economists like Angus Deaton of Princeton University find out a way to quantify happiness and apply to the areas of GDP and unemployment. One may ask how it’s possible to include happiness in an economic analysis for a country? Studies have been launched before that tried surveying people on how happy they were. There were rational results: for example, Coloradans are happier than Nevadans, considering that Nevada took the brunt of the housing bubble imploding. However, there were also irrational results: the Philippines, a country poor in the relative sense, reports high levels of happiness.
These studies are not recent travails into the topic of quantifying happiness economically. Economist Richard Easterlin published a paper in 1974 that introduced the theory of the Easterlin paradox. In other words, people counter intuitively become less happy the more rich they get. Modern studies have seen a shift away from the paradox, however. Upon the movement of the world governments to run their own happiness surveys, it turns out that France is miserable, England is modestly happy despite being in a recession, and the United States, most intriguingly, is generally happy. The complex part is that there are individual factors to take in in order to understand why people are happy where they are. Poorer nations have fewer choices, so they would be naturally less pleased, but there isn’t conclusive evidence saying that everyone gets happier because they’re just receiving more money.
Happiness is a more microeconomic value. Davidson explains the case of Yvrose Jean Baptiste, who lost all of her capital following the Haitian earthquake in 2010. Visiting Yvrose after receiving $4000 in donations, Anderson “didn’t need any official statistic” to see that she was better off than she was before. The rationale here is that more money does equal more happiness, but relative to the general wealth of the country the person inhabits. Agrarian societies will report a higher level of happiness from a small increase in capital, but that’s due to a low GDP compared to urban industrial societies, where it takes a more modestly increased amount of money to raise happiness. In either case, money still gives more happiness.
There’s one catch to take away from all of this. Even though the GDP of America has gone up over the years, we have not been any happier than we were in 1973. Reasons for this could be because the majority of our citizens have not been included in this increase of wealth. The government may also be spending tax dollars on things that wouldn’t make people better off. This could shed some light on just what it could take to increase our happiness as a people. Let’s build policies that would make people better off all around, and not what favors a select few.
“The Republican Party isn’t reinventing itself so much as reverting to its previous form. There’s little evidence of a rethinking of core Republican policy ideas … That’s the problem with the Republican establishment reasserting control. They’re still the establishment.”
Klein starts by saying that there is something interesting happening to the Republican Party but it is yet to be seen just what direction this is taking the GOP. From the general looks of things, there seems to be an inner party civil war with the establishment Republicans, and the Tea Party. The establishment is winning by eliminating some of the more radical Republicans who’ve represented the party, and geared up to change face, especially the presidential contenders for 2016.
Former Republican Minnesota Congressman Win Weber credits this shift in the Republican Party to the “waves” of the Tea Party “receding”. However, this merely means that the Republican Party is going back to its ways pre-Tea Party, and doesn’t mean that anything is changing fundamentally. Evidence includes a recent speech by Eric Cantor, who brought up policies that he himself has described as being “on the shelf for a while”, and not introducing any new ideas at all. Klein says that the most important idea that came up involved with giving school districts with impoverished students more money – and it sounds like a liberal idea.
The Republican Party still has its sights set on the deficit, no matter the different policies politicians like Cantor are bringing back into the limelight. It is yet to be seen if the GOP are going to actually propose any new legislation. When Democrats decided it was time to reform the party, the Democratic Leadership Council in 1988 sought to quell inner bickering, and set an agenda. It may be time for Republicans to do the same.
“The truth is that no one can accurately predict the predilections and voting patterns of our future citizens. Instead, we should focus on supporting lasting immigration reform because it is the right thing to do and the status quo is far worse. The future of our national security, economy, and our children depend on it.”
Cardenas is “pleased” the discussion about immigration reform has come up and that a group of senators were able to get together and tackle the issue. However, not many conservatives are getting behind the bipartisan plan, due to skepticism that has roots in a failed attempt at immigration reform by Reagan in 1986. Cardenas isn’t saying questioning the government so assertively is a bad thing. In fact, it is encouraged in order to make sure policies are being correctly implemented. But there are some things conservatives should know before they go out on a limb to fight “amnesty”.
First thing to know, according to Cardenas, is that Democrats “control the Senate and the White House”. Second, is that “we already have ipso facto amnesty” due to Obama’s executive order halting the deportation of children of illegal immigrants. The choices that conservatives have to make are between accepting the current “executive fiat”, or accepting a bipartisan approach to “improve the status quo”. And if you want to still say that we can have a better path to immigration, instead of just complaining, “we are all ears for a … fix within … realities of the moment.”
According to Cardenas, the far left of the political spectrum have “poured more resources” to go against any immigration reform, despite the demographic shift and shrinking population. Those whose concerns are chiefly what the political consequences of immigration reform will be should remind themselves of how it was thought it was necessary to accept Hawaii and Alaska into the Union at the same time, due to fears of a dynamic shift in political balance. The main objective for addressing immigration reform now is to positively upgrade the status quo.
Paul Krugman on the Republican message of “takers”.
“Paul Ryan, for example, has lately made a transparently dishonest attempt to claim that when he spoke about “takers” living off the efforts of the “makers” — at one point he assigned 60 percent of Americans to the taker category — he wasn’t talking about people receiving Social Security and Medicare. (He was.) Which brings me back to Mr. Jindal, who declared in his speech that “we are a populist party.” No, you aren’t. You’re a party that holds a large proportion of Americans in contempt. And the public may have figured that out.”
Where Republicans would earlier use the term “class warfare” against Democrats, this time, it didn’t work. Their response is to change things around, but their goals are still the same: to serve the rich. A recent statement by Bobby Jindal exemplifies this. He said that Republicans can no longer “be the party that simply protects the well-off”. However, there’s no policy proposal to back this statement. Instead, the Louisiana governor is pushing the elimination of the income tax, and increasing sales taxes, making the burden fall more on the bottom 60%.
We are hitting another point where Republicans are looking for a sharper sound bite to make themselves look better, but their planned ideas are still as on the right as ever. Krugman asks why this is happening now, especially when the Reps just lost a presidential election. He honestly says he doesn’t have an answer, but “it’s important to understand” that conservatives seem to live in their own world, being spoon fed answers from Fox News, and being taught that any information that goes against their views is wrong without a doubt.
It is no doubt that, as exemplified by the infamous 47% comment by Romney, that conservatives will always point fingers, never targeting a pragmatic solution. And the answer to all of the world’s problems is to just cut more taxes on the rich. Paul Ryan, trying to backtrack on statements made against “takers”, said he was excluding those on Social Security and Medicare. It’s easy to target outsiders when your audience is of the same political party as you and you keep them sheltered from reality. Jindal said Republicans are a “populist party”. Case and point.
Paul Krugman on the mistake of current budget deficit worries.
“The medium-term budget outlook isn’t great, but it’s not terrible either — and the long-term outlook gets much more attention than it should… The deficit scolds dominating policy debate will, of course, fiercely resist any attempt to downgrade their favorite issue. They love living in an atmosphere of fiscal crisis: It lets them stroke their chins and sound serious, and it also provides an excuse for slashing social programs, which often seems to be their real objective.”
These days, you will hear everywhere that our budget deficit is our biggest problem, yet no one cares to explain why. To be honest, it isn’t our biggest problem, and it more or less solved. Our medium-term budget isn’t bad, and the long-term one is getting more attention than it deserves. Deficits are supposed to be there for when an economy is down so as to manage demand. It’s normal we have a large deficit considering the state of our economy.
Will fiscal outlook be better? Consider the $1.5 trillion agreed-on spending cuts from 2011 and the $600 billion agreed-on increased revenue earlier this year. Our debt-to-GDP ratio will only be moderately higher by 2022. The Center of Budget and Policy and President Obama both call for another $1.4 trillion over a decade to stabilize debt in the future. Even without this, things aren’t so bad. There are things to consider as they’ll become more problematic in the future, such as Social Security. But how can we decide how to address issues that won’t take effect until another 30 years into the future?
Concerning Social Security, there was a chance to solve any future debt issues before Baby Boomers retired. However, with the budget surplus Clinton left, Bush thought it was a better idea to have two wars and a bunch of tax cuts, eliminating a chance at a said solution. Raising the eligibility age for Medicare and adjusting the CPI are all that’s being talked about, but those are not real reforms. Most likely, within 20-30 years, Social Security will exhaust its coffers. The action being taken to solve this problem, right now is to try cutting more from the program… which is exactly as counterintuitive as shooting yourself in the foot in the middle of the war.
An argument is that cutting some benefits now would set up a smoother transition for other ageing populations entering the program in the future. However, these cuts can end up permanent, so maybe it is better to have those sitting in office in the future handle the problem? Basically, enough with the fervor of solving budget problems that are well off into the future. We have much more pressing problems demanding our attention right now. The ones calling for action on the deficit now use the situation to their advantage in order to get the cuts in social spending that they want.
Simply put, there are many more important things to take care of. Like climate change, or unemployment.
Dana Milbank on the use of children in the gun control debate.
“Is it really necessary for both sides to put them on the front lines in this political fight? There’s an argument to be made that the horrific nature of the carnage justifies reminding the public that children are vulnerable, but partisans on each side will only dig in deeper if they perceive that the other side is using kids as props.”
The NRA recently released an attack ad against the President shortly after he revealed his gun control legislation proposal in a press conference. In the attack ad, Obama’s kids were unjustly targeted in a mean-spirited way. Obama was called an “elitist hypocrite” for making bodyguards walk around his kids all the time, yet at the same time, he opposes having armed guards in every school. The White House response to the NRA was that the ad was “repugnant and cowardly”, but you don’t need the White House to tell you that.
Meanwhile, Obama had kids littered around his press conference when he was announcing his gun control proposals, reading their letters in which they personally requested the President to take action against gun violence. Milbank asks, “Why is it necessary to use kids as political tools?” He mentions that Republican Senator from Florida Marco Rubio thought that it was a shot at Republicans, asserting that it was a ploy to make conservatives and pro-gun advocates to look like bad people.
The NRA is still wrong in this, and it would be foolish not to be angrier at them than the President, which I’ll explain shortly. The President’s kids need bodyguard: they’re the First Children. If anything were to happen to them, like a kidnapping for instance, there would be a national crisis. The NRA ad was created to create public resentment with Obama, even when their ideas are the ones being rejected by gun advocates. However, it goes with saying that even if the President’s press conference wasn’t offensive, it is still uncomfortable to see children around a gun legislation discussion. In that press conference, Obama had said that opponents of gun control are constantly looking for an “A grade from the NRA”, and later talked about how once little girl who died in Newtown, Grace, continues to inspire him to push forward with curbing gun violence. Milbank says, “Just let the adults handle this without the kids.”
The NRA is definitely making themselves sound worse and worse due to them continuously ignoring public sentiment. This seems fitting since they buy out politicians through their direct lobbying and their ideas aren’t supported. Their hypocrisy is evidenced by them creating a shooting game app recently after an entire tirade of blaming video games for being the cause of shooting sprees. The President probably shouldn’t have played the “children game” either during his press conference. However, the fact of the matter was that they were involved. We are all involved when it comes to gun violence and they are victims as well. They should have their voices heard and protected just like the rest of us. Parents may be included in all of this talk about using kids as political game as well, since it is through their permission and guidance that they are allowed to take part and be taken along for the debate.
The Sandy Hook massacre was the event which triggered this huge push for gun control legislation. Where the NRA is using kids to push more guns into society, the President is showing that they do not want to see more violence in this country.
Antonio Villaraigosa on immigration reform.
“When the head of a household becomes a citizen, family income rises almost 14 percent on average. For the 11 million undocumented immigrants in the U.S. that would generate over $1.5 trillion in the next decade. And for the federal government that would mean $4.5 billion in new tax revenue over the next three years alone.”
A million undocumented immigrants marched down to LA City Hall in March 2006. After stepping out and seeing the scene, newly elected mayor Villaraigosa spoke and said that no human being is illegal, and he was right. This is relevant to our current time, as we need an immigration policy that stops alienating other people. It is time for Congress to stop wasting time and work on the reforms that matter to so many people who can make a difference for this economy. If undocumented immigrants were allowed to become heads of households, their income goes up, which generates a projected $4.5 billion in revenue over three years. Immigrants themselves started Fortune 500 companies, with a $4.2 trillion combined profit. Villaraigosa continues to suggest six main points to be addressed for immigration reform.
At the “core of the reform” should be an easier way to gain permanent residency and citizenship. Citizenship should be a process, of course, but not the way it is now where many are turned away or kept waiting. A third point is to focus on keeping families together, as this has the propensity to promote stronger values and put more money into the economy with the establishment of more small businesses. Good work skills should be rewarded with an easier visa and those studying in the United States in difficult fields should have an easier time staying here. Those who continue to be undocumented and are illegally employed put both themselves and their employers at risk; set up a verification system which allows it to be easier whether an employer is employing someone documented. Last but not least, we need smarter border control. A huge lump of federal law enforcement money goes to border control, but we have little to no migration from the border. It’s time to reallocate funds elsewhere and update our border control.
Thankfully, Obama has said that immigration will be one of the most important policy focuses of his second term. Let’s see what he’s got in store for the 11 million undocumented immigrants residing in this country who want nothing more than to just work here and live here to lead happier lives and create successful future lives for their children.
Edward Kleinbard on Obama’s Plan B for the debt ceiling.
“The scrip would not violate the debt ceiling because it wouldn’t constitute a new borrowing of money backed by the credit of the United States. It would merely be a formal acknowledgment of a pre-existing monetary claim against the United States that the Treasury was not currently able to pay. The president could therefore establish a scrip program by executive order without piling a constitutional crisis on top of a fiscal one.”
The federal debt ceiling debate is near. Republicans are demanding more spending cuts in order to agree to a debt ceiling raise of a total borrowing limit of $16.4 trillion. If we default, the country’s credit rating suffers and we risk a depression. Obama took the stand of not budging, as he said he wouldn’t debate with a Congress that is responsible for the debt it racked up passing the bills that mandated spending. In order to have any power behind his words, Obama needs an alternative plan, and there is no good plan. So far we’ve discussed the idea of our government doing something so silly the financial markets will go crazy, or the President pulls the executive order and Republicans try to impeach him for the next two years.
Some have said to ignore the debt ceiling and allow the Treasury to borrow more, but Congress has the power to issue that directive. The platinum coin idea is just that epic story of psychedelic Alice in Wonderland. Kleinbard suggests that there is a plausible idea that the President can get behind, and that is to issue “scrips”, or in other words, credit, to benefit holders. It wouldn’t violate the debt ceiling because the government doesn’t keep borrowing, and a later scrip program would be able to get that money to holders without creating a constitutional conundrum. This wouldn’t be confused with Treasury debt because it wouldn’t have interest attached, and it would have no maturity date. When the time comes, the scrips would be cash-redeemable. Institutions would be able to buy these scrips as well. In order for this to work out, the Anti-Assignment Act would have to be waived, since claim transfers can’t move from the US to another “private actor” already.
California has used this strategy before in 2009. It sent 450,000 registered warrants valued in total at $2.6 billion to claim holders who in turn would be able to sell these warrants to banks. The California legislature then worked out a budget and the scrips were redeemed for cash. The state afterwards paid its debt and didn’t lose its credit rating. Thus, a scrip program wouldn’t be unconstitutional, not to be confused with Treasury bonds, and would be able to be sold for cash while there isn’t new debt to be issued. While this may not be the best solution out there, it would be a way for our country to work out a deal without going into default or holding the country hostage.
Amy Davidson on the platinum coin.
“The coin is clever and intellectually interesting. That does not make it a good idea. The debt ceiling is a bad idea without being clever at all. A saner approach might be to ask how Congress expects to pass laws that mandate spending while keeping taxes low, and still have a debt-ceiling statute that makes doing so impossible.”
Right now there is a proposition being considered to mint one platinum coin in the US that could allegedly solve all of our fiscal problems. Some may ask how we’ve come to this – having to mint one coin. The end of February is when our Treasury runs out of money and it is time for our representatives to decide whether we should raise the debt ceiling, else risk default and financial calamity. Republicans are taking advantage of this opportunity to make the President authorize cuts in the social safety net, or they’ll drag the country down. The one solution that came up in economic circles is to mint a trillion dollar platinum coin, as per a statute that allows the Federal Reserve to do this. If the coin is created, the debt ceiling will not have to be raised, as the coin will be deposited as an asset in the Treasury, and no one will have to cut Medicare or other social benefit programs.
Despite how far-fetched this idea sounds, officials are seriously thinking about. Press Secretary Jay Carney is saying that the coin is being considered, and economists say that it won’t hurt the economy. People’s worries are answered when it is being said that this coin would allow the Fed to borrow money and pay bills, and current interest rates show that inflation won’t be uncontrollable. Paul Krugman, for example, is saying that even though this idea sounds silly, it sounds better than allowing the country to go into default. Others say that simply having a platinum coin will satisfy fiscally conservative Republicans.
The downside to minting a coin that will be worth more than anything I’ll ever see in my life is that the financial markets will not understand what the government is trying to do and they’ll hurt our economy for it. After all, it is all run through speculation. Republicans already believe that as long as Obama is President, every action taken by the Fed and Treasury is a conspiracy, so how can we be so sure they’ll embrace this idea? The fact is that the debt ceiling has to be raised in order to allow the government to keep operating, but there has to be some serious answers to the question of our spending. Maybe it will be possible to lower the debt ceiling at a certain time after all of our fiscal debates are over, because as long as our government keeps manufacturing their own problems, this country will be stuck in the same hole it’s dug itself.