Posts Tagged ‘budget compromise tax cuts Medicaid Medicare Obama Boehner deficits’

Showdown on the Budget Just a Stop Gap Distraction

In Current Events, Economics on April 11, 2011 at 15:06

Photo from http://blog.reidreport.com/2011/04/congress-white-house-reach-budget-deal-avert-shut-down/

There’s shrinking opportunity in America, according to Joseph Stiglitz.

In an interview on Democracy Now, Stiglitz states,
“If people were gaining rewards for contributing to our society…then you can say…those who contribute more should get more…but what we saw in that crisis was that …people got mega bonuses while their companies were making mega losses.” http://www.youtube.com/watch?v=cZC1HVRz450

“We lower the tax rates on speculators” and workers pay the same rate.

Cutting back on health care for the poor and elderly but not doing anything about health care costs as the current budget compromise does means future rationing. This budget bill does nothing to address the costs it just makes health care cuts on the nations most vulnerable populations.

There is also nothing in the this compromise to address employment. We can reduce spending all we want, but that will not bring back the jobs we have lost. Quite the contrary.

According to Dean Baker, Co-director, Center for Economic and Policy Research, “Well, according the analysis from Moody’s and Goldman Sachs, the Republicans’ full target for reduced spending would cost around 700,000 jobs. There is a device rarely used in policy circles, called arithmetic, that tells us that cuts of two-thirds this size should cost around 500,000 jobs. I’m sure the half million people who will lose their jobs because of this deal are celebrating now.” http://www.politico.com/arena/archive/is-arizonas-fat-fee-fair.html The recession riddled state of Ohio will face job loses of over 51,000 due to this budget. http://www.the-daily-record.com/news/article/5014618

So, just at a time when the unemployment rate was making a slight downturn, Republicans force acquiescence out of Congressional Democrats that will cost us 500,000 jobs. There goes the recovery of 2011. If our economy is based on consumer spending and taxes from that spending and earning, then we are in for a double dip recession with these new job losses. State revenues from sales taxes will slump, income tax revenue will evaporate and there will be an influx of payouts to the newly unemployed. In the meantime, billionaires can hoard their cash and U.S. defense contractors can continue to get rich creating weapons we don’t need for wars that don’t defend us.

So while the millionaires and billionaires keep their tax cuts, the working classes have their jobs cuts. That is the Republican vision of America, and Obama and Congressional Democrats appear powerless to do anything or unwilling to take a stand for his constituents.

What will be lost in the next stopgap budget? As the Republicans move their demands closer and closer to the elimination of Medicaid and Medicare and further cuts in education funding, Pell grants and early childhood education programs, will the Democrats take a stand for us? Some will, like Tucson’s Raul Grijalva, many won’t.

There is another deadline in a week; this was only a stopgap for seven days. Then what? What else will the Republicans blackmail the American people with? What treasured program for Americans, like Planned Parenthood, with be threatened? What will bully Boehner do to get the President to heal? And what about the big battle over next years budget that is looming? Will the debt ceiling be raised, will corporations and billionaires be asked to pay their fair share, will necessary cuts be made to military spending and other corporate welfare programs, or will Congress and the White House take the historical tack of gutting Medicaid and Medicare to save perhaps Obama’s one remaining legacy, his health care plan?

You can bet it will be another “compromise” that won’t touch tax rates, especially for those that don’t need lower taxes, and more cuts to programs for the lower classes, programs we all pay for with our tax dollars.

Paul Krugman summarizes the position Obama has ended in, “Maybe that terrible deal, in which Republicans ended up getting more than their opening bid, was the best he could achieve — although it looks from here as if the president’s idea of how to bargain is to start by negotiating with himself, making pre-emptive concessions, then pursue a second round of negotiation with the G.O.P., leading to further concessions. I wish you better in the next round Mr. President.

Tex Shelters