State of the Union: What did President Obama Promise a Year Ago?

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sotu.jpgThis is a very useful look back at what President Obama stated he wanted to accomplish one year ago. Kudos to the HuffPost‘s Shahien Nasiripour and Sam Stein for writing it.
On the plus side, President Obama delivered on overhauling financial regulation, reforming federal aid for college students, bringing combat troops home from Iraq, cracking down on Iran and North Korea, repealing “Don’t Ask, Don’t Tell,” and increasing enforcement of equal-pay laws.
He failed on taxing financial institutions to pay the costs of TARP, failed to add 1.5 million jobs over the last year, failed to pass a comprehensive energy and climate bill, failed to improve home values and increase mortgage refinancings, and failed to hold regular meetings with Republican Congressional members. Oh yes, and he failed to reform immigration laws.
He is on the edge of pass/fail, according to the writers, on increased transparency on lobbying and campaign finance, extending Bush-era tax cuts for the middle class but not for the wealthy (isn’t this a fail?), and stimulating lending to and tax cuts for small businesses.
There are some incompletes as well — but best to read the whole thing below. From a release on their piece:

As President Barack Obama prepares to deliver his second formal State of the Union address Tuesday night, it is worth looking back at the ambitious policy promises he made a year ago. According to a Huffington Post analysis of last year’s speech, Obama made 18 broad pledges to the country, ranging from economic growth and financial reform to troop withdrawals in Afghanistan. On many of those pledges, analysts say, he delivered. But the main thrust of Obama’s speech turned on his vow to generate jobs and jolt the moribund economy back to life — and there, he came up short.
Obama is not the first president to fall short of his State of the Union promises, which are generally broad blueprints for the chief executive’s vision of governance. But the Obama administration’s accomplishments and failures of the past year illustrate the daunting challenges facing the country and, to some extent, the overwhelming expectations this White House set for itself.
In 2010, after the end of a bruising yearlong health care fight, Obama followed through on promises to pass a sweeping law overhauling financial regulations and repeal “don’t ask, don’t tell,” the military’s ban on openly gay service members. In addition, he largely stuck to the script he set with respect to his foreign-policy agenda.
He will likely be defined, however, by his failure to deliver on the public’s top concern — jobs. Despite promises of bold action, 2010 saw the U.S. economy regain just a small fraction of the jobs lost to the Great Recession, and recovery continues to sputter.
Below is a virtual report card from last year’s State of the Union address, which The Huffington Post pulled together from interviews with experts and reviews of government and independently-sourced data. Obama tallied 7.5 promises broadly kept, 7.5 failures and 3 “incompletes.” The individual results, in order of when the promises made during the speech, are as follows:
PROMISE: Tax on the biggest financial institutions to recoup the cost of the Troubled Asset Relief Program and incentivize them to shrink
GRADE: Fail
Obama proposed a levy on the nation’s biggest banks to repay taxpayers for the cost of TARP and to induce the firms to shrink so that their potential failure would pose less risk to the entire financial system. After the industry objected, the White House dropped the issue.
PROMISE: Add 1.5 million jobs in 2010
GRADE: Fail

In discussing how many jobs his economic stimulus plan created, Obama said “we’re on track to add another one-and-a-half million jobs to this total by the end of the year.” Instead, the economy added 1.1 million jobs. Nearly one in ten American workers is jobless. At 9.4 percent, the unemployment rate has been stuck above 9 percent for 20 consecutive months, the longest such streak since records began in 1948, according to the Labor Department. When Obama took office, the nation’s unemployment rate stood at 7.8 percent.
PROMISE: Stimulate lending to and cut taxes for small businesses
GRADE: Pass/Fail

Obama told Congress he would call for “a new jobs bill tonight.” What he delivered was a bill that took $30 billion in TARP funds and redirected it to community banks — in hopes that they’d lend to small business — and an abundance of tax breaks. He added that “it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America.” The small-business bill was enacted in September, but credit remains tight and hiring is tepid. The tax overhaul for corporations never happened.
Much more. . .

— Steve Clemons

Comments

55 comments on “State of the Union: What did President Obama Promise a Year Ago?

  1. JohnH says:

    Nadine is right-we are governed by six year-olds who believe you can fight wars on a credit card.
    But did we hear Nadine ever complain about Bush deficits?
    Did we ever hear Nadine complain about fighting wars without any identified way to pay for them?
    Did we ever hear Nadine complain about looting Social Security and massive borrowing from China?
    Of course not. But when the Obama continues to fight wars on a credit card, it’s Social Security’s fault!
    Besides being a shill for AIPAC, she’s obviously a shill for merchants of death.

    Reply

  2. rc says:

    “What are Americans getting for their money?”(JohnH) — a lot lower unemployment than would otherwise be the case. Without wars going on ‘over there’ there would likley be revolution at home.

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  3. nadine says:

    “No, Nadine, it was Conservatives like Dick Cheney who said that deficits don’t matter”
    Deficits are like credit card balances. Whether they “matter” depends on whether the balance is $500 or $500,000. Deficits over 10% of GDP are unsustainable. But I suppose if you are numerically illiterate it all looks the same to you.
    “But now, Conservatives have had an epiphany–it’s Social Security’s fault, even though American wage earners have paid enough payroll taxes to fund their own OASDI for the next 30 years. ”
    What does it matter how much they paid in taxes?! The Government has spent it all! There is not a penny left! No money, no funding. What is due to the retirees will all have to be found again from some other source.
    We are governed by six year-olds. And I know who votes for them.

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  4. JohnH says:

    No, Nadine, it was Conservatives like Dick Cheney who said that deficits don’t matter. And they proved it by starting several $Trillion worth of pointless wars without a thought about how to pay for them. In fact, they destroyed any possibility of paying for them with their massive tax cuts for the wealthy.
    But now, Conservatives have had an epiphany–it’s Social Security’s fault, even though American wage earners have paid enough payroll taxes to fund their own OASDI for the next 30 years.
    As you say, conservatives “don’t worry about stuff like that. They just know that somehow they can keep spending and spending. They won’t believe there is a problem under after the bond market has a stroke. But by then, we will be Greece and it will be too late.”

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  5. nadine says:

    “This is such a comment: “The current deficit is $1.5 Trillion, 2 1/2 times the Defense budget.
    But you FEEL Defense is responsible.
    If Nadine thinks the Defense Budget is $500 Billion, perhaps she’s interested in a Brooklyn Bridge I have to sell.” (erichwwk)
    No, I think it’s $600 Billion+. Which it is.
    $600 Billion x 2 1/2 = $1.5 Trillion = current Federal deficit
    Might a suggest a remedial class in arithmetic?

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  6. nadine says:

    “Social Security has never contributed a dime to the deficit, but that’s where Nadine and her ilk want to cut.” (JohnH)
    It’s true that Social Security has never contributed a dime to deficit. In fact, Social Security has done just the opposite. It has been lowering the deficit since the 1980s. That is because the surplus that was collected to shore up Social Security has been spent by the Federal Government.
    But don’t worry, Social Security just went from cash-flow positive to cash-flow negative this year, about six years ahead of schedule. So now it will contribute quite a bit more than a dime to the Federal deficit, as well as having no savings to fall back on, the surplus having been spent already.
    But we can all relax, because the surplus is ‘invested’ in worthless Treasuries with the full faith and credit of the US Govt behind them.
    And I’m sure they will pay out. Of course, the dollars they pay in may only be worth a nickel in today’s money….but liberals don’t worry about stuff like that. They just know that somehow they can keep spending and spending. They won’t believe there is a problem under after the bond market has a stroke. But by then, we will be Greece and it will be too late.
    It’s like being governed by six year-olds.

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  7. JohnH says:

    Bacevich gets it: “The Pentagon presently spends more in constant dollars than it did at any time during the Cold War

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  8. erichwwk says:

    It takes a pretty ignorant and outrageous comment by Nadine to yank my chain.
    This is such a comment: “The current deficit is $1.5 Trillion, 2 1/2 times the Defense budget.
    But you FEEL Defense is responsible.
    If Nadine thinks the Defense Budget is $500 Billion, perhaps she’s interested in a Brooklyn Bridge I have to sell.
    I have accepted that she is interested in spin, not truth. For those that are confused about DOD accounting, one place to start is Winslow Wheeler’s “UNDERSTAND, THEN CONTAIN AMERICA’S OUT-OF-CONTROL DEFENSE BUDGET”, Chapter 11 of “America’s Defense Meltdown-Thirteen non-partisan Pentagon insiders, retired military officers and defense specialists speak out”.
    http://www.amazon.com/Americas-Defense-Meltdown-President-ebook/dp/B001TKD4SA
    “The aim of an argument or discussion should not be victory, but progress.” — Joseph Joubert

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  9. JohnH says:

    Social Security has never contributed a dime to the deficit, but that’s where Nadine and her ilk want to cut. (Old people can go f*ck themselves.) “Discretionary spending,” which consists mostly of defense, homeland security and related programs, has had no fully sustaining revenue stream for decades. But “defense” spending must grow ever more bloated and out of control.
    The federal government loots the Social Security Trust Fund and borrows from China to help pay for discretionary spending, including “defense,” which how it has managed to pay its way.
    Lets face it, Nadine and her ilk hate Social Security, Medicare, human rights and democracy. She freaks every time an Arab country gets a whiff of democracy. She has never seen an Israeli atrocity she doesn’t like.
    Tragically for ordinary Americans, it is exactly this type of inhumane, militarist personality that seems to have taken over Washington.

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  10. non-hater says:

    “Not according to Obama’s budget”
    Wait, let me get this straight. You think a Wikipedia article is a better source of information about Obama’s budget than… Obama’s budget itself? Didn’t you learn the last time that when I provide a link it has the relevant information in it?
    You’ve proved that you are stupid. See table S-4.
    http://www.whitehouse.gov/sites/default/files/omb/budget/fy2011/assets/tables.pdf

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  11. black swan says:

    “The salmon won!” — I hear smoking salmon can be a health hazard and in some states it may even still be illegal (although I understand medical salmon can be sourced more easily in California these days). A simple consumption tax on smoking salmon would probably tap into the vast hidden economy to help pay for social services and reduce the employment participation rates through increased apathy and indifference.

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  12. nadine says:

    Not according to Obama’s budget
    http://en.wikipedia.org/wiki/2010_United_States_federal_budget
    $978 Billion
    and rising fast.
    BTW you were able to read that that Social Security is bigger than defense right? Entitlements many times bigger? can you read the projected numbers in the out years?
    You could eliminate Defense altogether and it wouldn’t make a dent. The current deficit is $1.5 Trillion, 2 1/2 times the Defense budget.
    But you FEEL Defense is responsible.
    Today’s liberals are still living in the 1960s. I had such a feeling of deja vu listening to Obama’s SOTU. All the rhetoric was recycled. Just pretend we aren’t heading towards a fiscal crisis. Call government spending “investment” and you can keep doing it.

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  13. non-hater says:

    “In the current Federal budget, Entitlements are $2.5 Trillion. Defense is $650 Billion.”
    Nope. From table S-4:
    Security discretionary – $895B (of which the DoD gets $713B – see table S-11)
    Non-security discretionary – $520B
    Mandatory programs – $2165B
    Interest – $251B
    “Entitlements are already nearly four times as much as all of Defense.”
    Nope. 3 times.
    “Social Security alone is almost $1 Trillion now.
    Nope. $730B.
    http://www.whitehouse.gov/sites/default/files/omb/budget/fy2011/assets/tables.pdf
    “But what are mere numbers, when feelings matter so much more, right, Nadine. You FEEL “entitlements” must be the real issue, so it’s so.”
    FTFY
    You really are just flat-out ignorant. How does that feel?

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  14. JohnH says:

    The usual Nadine BS. Social Security and Medicare have dedicated revenue streams that, in the case of OASDI has generated a surplus of worth $2.5 Trillion. That $2.5 Trillion has been looted to pay for “discretionary spending,” which has a chronic, HUGE deficit–its revenue streams covering only about half of expenditures. Not surprisingly, the “discretionary” deficit is roughly equivalent to “defense” expenditures.
    While Social Security has kept its revenue stream intact and generated a surplus intended to carry it for another 30 years, revenues for “discretionary” spending were gutted by Bush tax cuts for the wealthy and by a 150% increase in “defense” spending, directly causing the HUGE discretionary budget deficit.
    What looters like Nadine want to do is to cut Social Security benefits to the point where money earmarked for the elderly would instead go to “defense” contractors. Unhappy that Social Security surpluses are declining and can no longer be looted, Nadine and her ilk want to gut social security benefits so that they can restore the lootable surplus.

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  15. nadine says:

    In the current Federal budget, Entitlements are $2.5 Trillion. Defense is $650 Billion.
    Entitlements are already nearly four times as much as all of Defense. Entitlements are scheduled to soar in coming years. Social Security alone is almost $1 Trillion now, and the Baby Boom has barely begun to retire.
    But what are mere numbers, when feelings matter so much more, right, JohnH? You FEEL Defense must be the real issue, so it’s so.

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  16. JohnH says:

    Yes, Nadine. The country is serious financial trouble, and the reason is that Bush cuts taxes for the wealthy while starting to pointless wars without bothering to find a way to pay for them.
    It’s not Social Security that’s the problem, it’s unfunded “defense” spending. Believing that borrowing is an inexhaustible source of funding has become the conventional wisdom of Conservatives.
    Remember it was Cheney who said that “debt doesn’t matter.”

    Reply

  17. nadine says:

    “This is eye-opening. If the lack of concern expressed here about
    Social Security solvency is the conventional wisdom of the left, and
    the majority opinion of the Democrats, this country is in serious
    financial trouble.” (drew)
    The country is in serious financial trouble, and now you know why. Believing that other people’s money is an inexhaustible source of funding has become the conventional wisdom of the Democratic Party.

    Reply

  18. non-hater says:

    “1.37 Trillion is less than the estimated 2010 Federal Deficit.”
    And 400 people is a lot less than the top 1% of earners. Oh, and it’s the 2011 deficit we’re talking about. FY2010 ended on September 30, 2010, and the deficit for that year was $1.29T.
    “And isn’t the Forbes 400 an international list?”
    LOL. The answer to the question is right there in the link. Duh.

    Reply

  19. nadine says:

    “Not even 1%.”
    1.37 Trillion is less than the estimated 2010 Federal Deficit. Not to mention the projected deficits.
    And isn’t the Forbes 400 an international list?

    Reply

  20. nadine says:

    “But the reason for these shortfalls has almost nothing to do with the facts that the surpluses were used to buy treasuries – which the right calls “looting” for some reason. If the surpluses had been returned to the taxpayer, we would still have anticipated shortfalls.”
    But if the surpluses had been used to buy some asset with value, like for instance, gold bars, then Social Security would now own real assets that would greatly alleviate the anticipated shortfall. This is what collecting the surpluses in the first place was intended to do. Instead, the money was treated as part of the general revenues of the Federal Goverment. In other words, the surpluses were looted by the politicians.

    Reply

  21. Dan Kervick says:

    The problem isn’t the Treasuries (“IOUs”), which are neither here nor there. The problem is anticipated shortfalls. These have to be addressed in some way eventually.
    But the reason for these shortfalls has almost nothing to do with the facts that the surpluses were used to buy treasuries – which the right calls “looting” for some reason. If the surpluses had been returned to the taxpayer, we would still have anticipated shortfalls.

    Reply

  22. non-hater says:

    “Obama couldn’t fund the current Federal deficits if he confiscated the total properties of “the richest 1%” that the hard-left likes to go about,”
    Hmm…
    “The total worth of the Forbes 400 was up 8% to $1.37 trillion, well out-earning the 1% rise in the S&P 500 index over the same period of time.”
    http://www.walletpop.com/2010/09/22/forbes-400-the-richest-people-in-america/
    Not even 1%. Which reminds me…
    “The resulting federal budget deficit of nearly $1.5 trillion projected for this year will equal 9.8 percent of GDP, a share that is nearly 1 percentage point higher than the shortfall recorded last year and almost equal to the deficit posted in 2009, which at 10.0 percent of GDP was the highest in nearly 65 years.
    By CBO’s estimates, federal revenues in 2011 will be $123 billion (or 6 percent) more than the total revenues recorded two years ago, in 2009.
    The continued slow improvement in economic conditions is anticipated to boost revenues from individual income taxes, corporate taxes, and other sources by nearly $200 billion between those two years; however, revenues from social insurance taxes are projected to decline by more than $70 billion relative to their level two years ago, mostly as a result of a one-year reduction in payroll taxes included in the 2010 tax act.”
    http://www.npr.org/blogs/itsallpolitics/2011/01/26/133240383/u-s-2011-deficit-picture-bleak-worse-may-follow-cbo

    Reply

  23. non-hater says:

    “SS is only not “broke” if one believes that IOUs from Congress have value. IOUs from Congress have no value if they cannot be redeemed because the public won’t let Congress raise taxes to redeem them (i.e., tax citizens twice to pay for the same benefit).”
    Saying Social Security is “broke” puts the blame on the SS system. As you state, the SSTF has plenty of perfectly valid IOUs, all of which are US Treasury Department issued-securities.
    The problem is that the people who borrowed the SSTF surpluses intend to purposely default because they just don’t *feel* *like* *paying.* That’s not the fault of the Social Security system.

    Reply

  24. questions says:

    Different topic….
    Are we still wondering about political thinking and Loughner:
    “Loughner pulled up several Web sites about lethal injections and solitary confinement in prison, said the sources, who asked to be anonymous because the investigation is ongoing. He also viewed Internet sites about political assassins, according to an analysis of Loughner’s computer that was completed by investigators last week, the sources said. ”
    http://www.washingtonpost.com/wp-dyn/content/article/2011/01/26/AR2011012603159.html?hpid=topnews
    Sounds indeed like a pointedly political act of a type to be determined.

    Reply

  25. Dan Kervick says:

    “That in practice SS has been an intergenerational transfer payment is a function of demography, and to a lesser extent, a growing economy, only.”
    I haven’t the slightest idea what you’re talking about, drew. Social security payments to current retirees are always funded primarily by the payroll taxes on current workers. Younger people are taxed, and those tax revenues are transferred directly to older retirees in the form of benefits.
    The Trust Fund have been in existence since the beginning. Using the surpluses to place Treasury bonds in the Trust Fund just guarantees that when those surpluses go into general revenue, there is a corresponding obligation from general revenue to pay them out eventually as benefits.

    Reply

  26. DonS says:

    “That Congress stole the trust fund for general spending, and that some consider that ho-hum, is odd because if SS was always just an intergenerational transfer payment, and not a
    pension, why did they create the trust fund in the first place?”
    Wasn’t it Al Gore who was ridiculed for proposing the “lock box” idea which, as I understand it forbade using borrowed SS funds for spending versus paying off non-federal debt.
    Both parties seem culpable. But the remedies are within grasp except for politicizing it all. Like exactly how beneficial is it to be advocating repeal of social security, like many teabaggers want? When Americans need increased SS benefits to make up for rife lifestyle-eroding factors, how helpful is it to be in left (right) field, demanding sops? It’s all about political posturing unrelated t solving real world problems for real world people (and yes, it is an obligation the government undertook, and which has worked quite well)
    Here’s a link on everything about SS; at least it’s more than I want to immediately digest.
    http://www.justfacts.com/socialsecurity.asp

    Reply

  27. DonS says:

    The post-mortems are rolling in. This one, I think, captures the charade, and the sadness of giving a nice speech but one perhaps not reflecting the seriousness of the whirlpool headed for the drain — at least for all but the very rich.
    http://my.firedoglake.com/scarecrow/2011/01/25/obama-ignores-state-of-the-nation-makes-nice-speech/

    Reply

  28. DonS says:

    ” the education stuff is enough to make a poster puke. RttP is nonsense. Telling kids to go teach when states are laying off teachers left and right — this too is nonsense.” (questions)
    The WH rejoinder to this might well be, “no problem, just throw out the incompetent one’s to make room for the new bright eyed, bushy tailed wonders”. That would be real progressive, and also takes a slap at teacher’s unions, so it’s a win-win. And the burned out teachers who get shit canned? Well, Wal-Mart’s always hiring (actually count on turnover to keep wages low).
    Not that education doesn’t need help. But slinking towards vouchers, and yet more testing really doesn’t seem the way to go. Like privitizing the prison system; great deal for the corporations; lousy by every other measure.

    Reply

  29. drew says:

    SS is only not “broke” if one believes that IOUs from Congress
    have value. IOUs from Congress have no value if they cannot be
    redeemed because the public won’t let Congress raise taxes to
    redeem them (i.e., tax citizens twice to pay for the same benefit).
    I don’t know where Dan gets the idea that SS was always, and
    simply, an intergenerational transfer payment. Explicitly, FDR
    sold the idea as a pubic pension plan; that was the basis of the
    legislative win that created SS. They were smarter then,
    however, than people were with Obamacare: they sidestepped
    enumerated powers restrictions by including the word “tax” in
    the bill, and there is no constitutional barrier in regard to the
    government issuing any tax.
    That in practice SS has been an intergenerational transfer
    payment is a function of demography, and to a lesser extent, a
    growing economy, only. Demography is no longer on the side of
    SS. That Congress stole the trust fund for general spending, and
    that some consider that ho-hum, is odd because if SS was
    always just an intergenerational transfer payment, and not a
    pension, why did they create the trust fund in the first place?

    Reply

  30. Dan Kervick says:

    I had no idea that some people were actually going to say, “Social Security? No problems. Move along now, nothing to see here.”
    Well that’s not my view. We will need to readjust the Social Security program again, as we have several times before.
    My core point is that talk about “insolvency”, “broke”, “looted the trust fund” and “worthless IOUs” seriously misrepresents the nature of the system and the problem, and does so for political purposes – mainly the purpose of trying to destroy the system rather than shoring it up.

    Reply

  31. drew says:

    This is eye-opening. If the lack of concern expressed here about
    Social Security solvency is the conventional wisdom of the left, and
    the majority opinion of the Democrats, this country is in serious
    financial trouble. I didn’t think it was possible for people to be so
    stymied by arithmetic. I thought we were about to embark on a
    national contest over SS vs. Defense, or SS being means-tested, or
    SS eligibility being raised to age 70. I had no idea that some people
    were actually going to say, “Social Security? No problems. Move
    along now, nothing to see here.”

    Reply

  32. Dan Kervick says:

    I said:
    “The Social Security system has never made any secret of the fact that it is an intergenerational transfer program, taking money from current workers and giving it to future workers.”
    But I meant to say,
    “The Social Security system has never made any secret of the fact that it is an intergenerational transfer program, taking money from current workers and giving it to current retirees.”

    Reply

  33. questions says:

    Nice Dan, thanks.
    On the SotU, okay, the salmon thing is nonsense. Taxonomy is always going to have borderline cases where it’s unclear where to shelve, stack, place, box, locate things. So it’s jut not that irrational to have a couple or several departments or agencies dealing with the same thing — they might actually be dealing with different aspects of that thing. Even Obama’s example of the salt vs freshwater salmon vs. smoked salmon falls apart instantly. We might not want the ocean experts dealing with lake issues or food safety issues, when you get down to it. There are inland vs. border issues, treaties on the open sea that are different from lake law…. And we might want someone else to work on the fish-ladder issues — someone whose expertise includes hydroelectric dams rather than, say, e-coli counts in farmed salmon…. And do we need ocean experts to visit our local grocery stores to check the temperature of the freezers or to our restaurants to swab for nasties on the counters and cutlery?
    Maybe we could have the department of salmon, so that there’s one-stop shopping for all your salmon-related regulatory questions?!
    So I call bullshit on that whole mess.
    Sure bureaucracies, like bureaus and closets, should be reorganized once in a while. But let’s say you throw away your size 34 jeans thinking you’ll never breathe in them again, and then you have gastric bypass surgery or you start running and you have to spend money on a whole new wardrobe…. Maybe you should have saved the jeans.
    Next, the education stuff is enough to make a poster puke. RttP is nonsense. Telling kids to go teach when states are laying off teachers left and right — this too is nonsense. Talking about how poor our schools are in general is nonsense as well. Michael Lind has the data on Salon/WarRoom, go visit and read. We have a poverty problem, a generational lack of resource problem in some segments of the populace. Many public schools work well, and Hahvahd and MIT seem to find some students USA born and bred to admit. Some of those students might not find jobs outside of TFA, but that’s not because of problems in our nation’s public schools.
    The earmark thing is funny. Congress cannot live without internal bribing. Every congressional expert gets that. Hope it boxes the Republicans in, they deserve it for making this such a big fucking issue.
    Austerity is a bad idea. But the markets might well love it. Haven’t checked. Did see that Yves Smith, I think it is, is worried about AIG’s insolvency. Hmmmm. Austerity isn’t the problem. Income distribution issues seem to be the issue. But we can’t talk class in this country.
    Obama spoke as he probably had to, given the Republican electoral victory.
    Ryan is a mess. They need to do away with people whose only way to communicate intensity is to move brows and ears up and down, widen eyes and narrow them. Wrong face, wrong skill set, dull, wrong policies. Poor republicans, you built the Tea Party and now you have to live with them.
    Haven’t dared Bachmann yet. I hear it was dreadful, that she didn’t address the correct camera so she looks cockeyed, she used the gazillion IRS agents lie, and she got her way. Good luck y’all with rogue republicans!

    Reply

  34. Dan Kervick says:

    Nadine, here are some of the things you are saying that are misleading:
    “Well, I suppose that’s true. It can’t go broke since it doesn’t have any money. It can just stop paying out like any other busted Ponzi scheme.”
    It’s not a Ponzi scheme. A Ponzi scheme also operates as a pay-as-you-go system; but it is fraudulently presented to those paying in as an investment scheme. But Social Security is transparent. Anyone can find out exactly how it works by reading the literature the system sends out or going to a web site or by writing a letter and asking. The Social Security system has never made any secret of the fact that it is an intergenerational transfer program, taking money from current workers and giving it to future workers. It is also based on tax obligations. It is not based on voluntary payments extracted from the payer by making fraudulent representations. Nobody is being defrauded out of their payroll tax pay-ins.
    It is misleading to describe the systems projected benefits as “liabilities”. Liabilities are legal obligations for which the obligated party can be sued. But Congress can alter Social Securities benefits any time they want; they can also increase the payroll tax. And the Social Security commissioner is actually prohibited by law from paying out more in benefits than they have available in funds. Social Security is prohibited from borrowing from the general fund to make benefit payments. Addressing and fixing the gap between projected resources and planned benefits is a matter of prudence, and intergenerational equity perhaps, but not a matter of shoring up legal liabilities. Only the Treasuries represent liabilities; not the shortfall.
    Here’s how George W. Bush put in in 2005:
    ” “Bankruptcy” is a scary term that Democrats have used too, when it suited them, but it could easily give the wrong idea. Nobody is predicting that Social Security will go out of business the way a bankrupt business does. It would continue to pay benefits — just not as many.”
    This is still true. Except now its usually the right that uses the scary terms “bankruptcy” and “insolvency”.
    The ratio of retirees to workers will continue to grow, given the current retirement age and demographic trends. Whether future workers can comfortably support future benefits depends on how rapidly we grow. That is, any projected shortfall depends on a projection about the incomes of workers that will be supporting payroll taxes. If those incomes do not experience substantial real growth, then we will have to cut benefits in some way or increase payroll taxes.
    The Republican plan under Bush was to allow people to dedicate some of their payroll taxes to personal investment accounts. This had no bearing at all on the “solvency” issue. It would not do a single thing to help future taxpayers pay projected social security benefits.
    The alternative idea of investing the surplus in private assets is more interesting, but is, as you know, a plan the Bush administration rejected. For one thing, the government could end up losing money that way. For another, it makes the federal governments invested funds a huge market player, and the politics that can be played to manipulate the value of the investment options can then further undermine the integrity and stability of the markets.
    “Now please tell me, are you $1000 richer? If you say yes, then you think just like the Federal government. But if you say no, then you think like most people, who understand that an IOU you write to yourself, that you have to take money from your own bank account to pay to yourself, isn’t worth anything.”
    Nobody thinks the Treasuries make us richer. You’re banging your head against the obvious. They do, however, provide current workers with a little bit of added security in the way Odysseus achieved added security by tying himself to the mast. The future generation of taxpayers cannot default on those bonds without wrecking the full faith and credit of the US government.

    Reply

  35. nadine says:

    I see total numeric illiteracy is part and parcel of being a rabid anti-Zionist. Obama couldn’t fund the current Federal deficits if he confiscated the total properties of “the richest 1%” that the hard-left likes to go about, much less the approx. $40 Trillion of future liabilities.
    But then, being hard left means thinking that you will never run out of other people’s money.

    Reply

  36. non-hater says:

    “There just won’t be enough taxpayers to pay it without crushing the economy.”
    Oh, bullshit. The Social Security Trust Fund’s cashflow requirements from the General Fund will be about 2% of GDP. That money can easily be found, either in the defense budget, rich people’s pockets, or both. The money is there. The only people who say it isn’t are those whose taxes were cut using the borrowings from the SSTF.
    Everyone who has half a clue knows that it will be our health care non-system than bankrupts us.
    You do know that it’s possible to be a rabid Zionist without adopting every stupid idea the Republicans spout, don’t you?

    Reply

  37. nadine says:

    “Nadine, this suggests to me you don’t even understand the fundamentals of how the Social Security system works. It is a pay as you go system; it has always been a pay-as-you go system.” (Dan Kervick)
    Pay-as-you-go is how Social Security has been working (though it was sold to the public as the opposite, an investment system) but I’m afraid it’s you who don’t understand the fundamentals, Dan.
    Fewer and fewer workers support each retiree every year; pay-as-you-go is not sustainable. Social Security won’t be able to raise enough tax revenue to keep going once the Baby Boom retires. That’s why taxes were hiked in the last big fix in 1983 to purposely make the system cash-flow positive to build up a Surplus so the system wouldn’t collapse. But the politicians couldn’t keep their itchy fingers off the money. The Surplus wasn’t saved; instead it was treated like other tax revenue and spent, lowering the Federal deficit.
    When President Bush tried to reform Social Security in 2005, he tried to explain this: “Now, one of the myths about Social Security is there’s a pile of money sitting there accumulating, because you put money in, the government saves it for you, and then when you retire you get it out. That’s not the way the system works. Every dime that goes in from payroll taxes is spent. It’s spent on retirees, and if there’s excess, it’s spent on government programs. The only thing that Social Security has is a pile of IOUs from one part of government to the next. This is a pay-as-you-go system.” (George Bush)
    “Since Social Security is essentially a pay-as-you-go system, it doesn’t make much sense to describe it as “broke” or “insolvent”. It is literally almost impossible for the system to go into “default”.” (Dan Kervick)
    Well, I suppose that’s true. It can’t go broke since it doesn’t have any money. It can just stop paying out like any other busted Ponzi scheme.
    The Social Security system has made a bunch of fiscal promises to hundreds of millions of people; these promises represent its unfunded liabilities. They amount to trillions of dollars. In the real world, pension schemes are required to have actual assets to fund their future liabilities. But not Social Security.
    “I’m not sure what your idea is about what should have happened with the surpluses instead of buying Treasury bonds.” (Dan Kervick)
    My idea is that the surplus should have been invested in some actual interest-paying asset, which was the intention of the 1983 reforms. Then these assets could have helped fund Social Security’s future liabilities. Instead, the money went into the Federal Government General fund and was spent elsewhere, leaving worthless Treasuries behind.
    Why do I say worthless? Try this exercise, Dan. Take a blank sheet of paper, and on it write, “I solemnly pledge to pay Dan Kervick $1000 on January 1, 2012. Signed, Dan Kervick.” Put the piece of paper into your desk drawer to wait until you can redeem it next New Year’s Day.
    Now please tell me, are you $1000 richer? If you say yes, then you think just like the Federal government. But if you say no, then you think like most people, who understand that an IOU you write to yourself, that you have to take money from your own bank account to pay to yourself, isn’t worth anything.
    The Social Security “assets” are all IOUs that the Federal Government has written to itself. When it comes time to pay, they will have to raise the money from somewhere, or more likely, renege on the promises. There just won’t be enough taxpayers to pay it without crushing the economy.

    Reply

  38. rc says:

    — 1 million electric cars by 2015?
    — 80% clean energy (clean coal as well!) by 2035? (the oil is gone by then anyway or only affordable by Chinese and Indians).
    — 25% of kids not finishing high school?
    — Burnt-out boomers to become teachers and promote science more than sport (is this Creationist science or Darwin’s science?)
    — Rule of Law? (but nothing on Gitmo Bay)
    — Doctors for the sick? (but nothing about traveling to Cuba to get their cheap top-quality health care services).
    — 5 minutes on some little drilling company that helped with the mine salvage in Chile … but nothing on BP and the Gulf mess.
    — US infrastructure looks 3rd world then celebrates the ‘inefficient’ democratic process that stops him as a leader form doing what is needed in a timely fashion. (subtle message and blame shift there imo).
    — A bit of dribble about the wars and losing with pride (yes, a pride parade is in the offering it seems). $$$Zillions and a whole nation still focused on 100 old retired Al Qaeda operatives who could be nailed by their Saudi government if needs be.
    — And a bit “Hi!” to Tuneesia and not a peep about the Saudi Arabian family dictatorship that the Tunisian dictator fled to (just down the road from old Idi Armin (“Dada Oumee, AKA ‘Big Daddy’, AKA ‘Butcher of Africa’, AKA ‘Conqueror of the British Empire’, AKA ‘Lord of All the Beasts …”) Drive it seems.
    — A quip about yesterday and chasing the Sputnik, but nothing about Vietnam and crawling away from the evil visited on millions there. All face and no face-up.
    — Good Salmon joke!
    — The USSA might be a big boat, but big boats still sink just as fast as small ones if the leaks are not addressed (oh, and nothing about Wikileaks and democracy!).

    Reply

  39. Mark says:

    JohnH,
    Don’t be too hard on Nadine. She’s still upset that President Obama failed to praise Avigdor Lieberman and Yisrael Beiteinu as the greatest forces for peace, freedom, and offshore banking in the world today.
    Be gentle, JohnH. Nadine’s hurtin’ bad right now.

    Reply

  40. JohnH says:

    The Bushies looted the Social Security Trust Fund prosecute their pointless wars in Iraq and Afghanistan. Now Nadine wants America’s elderly to pay for their lunacy. After all, a Treasury Bond sold to China is a valid IOU. But a Treasury Bond sold to the Social Security Trust Fund, according to her, is an invalid IOU, because America’s elderly must be taken advantage of.
    Despicable, simply despicable.

    Reply

  41. Dan Kervick says:

    “We’re saying it should have been in Surplus for the last 60 years, so the money to pay for the Baby Boom’s retirement would be there. It’s not.”
    Nadine, this suggests to me you don’t even understand the fundamentals of how the Social Security system works. It is a pay as you go system; it has always been a pay-as-you go system. That’s how it was designed; that’s its structure; that’s its purpose. It is not an investment program or a savings plan. It doesn’t work by “saving” the money that present taxpayers pay in, and then “paying back” those same people with the money they have “invested.”
    The obligations that the country incurs to future beneficiaries are to be made good by the taxpayers of that future time. That’s it. That’s how it works. That’s how it is supposed to work. The only reason for using any annual surpluses to buy Treasury bonds is so that that obligation becomes somewhat less of a mere promise and something more like a formal liability. We place more of a strict formal obligation on those future generations by buying the bonds from the Treasury, because it will be harder for those taxpayers to default in the future on US government bond obligations than it would be for them to abolish the program. Either way, the future generation of taxpayers has to come up with 100% of the money, either with all 100% from future payroll taxes, or with some mix coming from payroll taxes and redemption of Treasury bonds. Those future taxpayers pay beneficiaries then the same way we are paying current beneficiaries now, with taxes.
    Since Social Security is essentially a pay-as-you-go system, it doesn’t make much sense to describe it as “broke” or “insolvent”. It is literally almost impossible for the system to go into “default”. It is possible, however, that promised benefits in any given year – like the recessionary year we are in now – will exceed the dedicated payroll tax revenues for that year. In that case, the taxpayers of that time will have to decide whether to increase taxes, borrow funds, or decrease benefits. It is good, of course, to try to plan ahead, and try to avoid making commitments that are higher than those that can comfortably be kept. And that’s why every decade or so there is some legislation adjusting the program.
    If a system such as Social Security generates any annual surpluses, there really are only three choices: either the surplus is returned to the taxpayers roughly at the time it is paid; or it is deposited directly into the general fund; or it goes indirectly into the general fund by buying a government bond that becomes a Social Security system asset. I’m not sure what your idea is about what should have happened with the surpluses instead of buying Treasury bonds. If we return those surpluses to the taxpayer, then those future taxpayers are still on the hook. They will be on the hook for higher payroll taxes, but lower taxes for paying off the bonds at maturity.
    Conservatives sometimes seem to have been born yesterday when they talk about Social Security. It’s like they just woke up, having never read a history book. “Hey,” they ask, “did you know the Social Security system is really a pay-as-you go system?! Did you know that its benefits are payed out mostly from present payroll taxes?! Did you know that the small percentage of benefits tied to Treasury bonds are debt obligations that we have to pay to ourselves?!” For some reason this comes as a shock to them, even though that’s the way Social Security was always supposed to work.

    Reply

  42. DonS says:

    Dan, I respect your diligence. My snark notwithstanding. Harry Reid may be a lot of things, but he spoke the truth on SS. Perhaps he drew a line in the sand , obvious to anyone with a brain, that needed drawing.
    I think we both wish for a more humane nation to emerge; with our fingers crossed.

    Reply

  43. rc says:

    January 25, 2011
    State of The Union: Objective Jobs or Reelection?
    Stephen Diamond: A real jobs strategy requires higher wages in China and the US
    http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=6143

    Reply

  44. nadine says:

    “Well, if you just mean that Treasury Bonds are a fancy kind of IOU, fine. But what else would it be full of?” (Dan Kervick)
    That would fine, Dan, if the government owned the Treasuries and somebody else had to pay their value upon maturity. Unfortunately, the government IS the somebody else.
    Let me give you the Federal government’s own explanation:
    “As stated above, money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.
    Far from being “worthless IOUs,” the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. [i.e. we promise we will pay, trust us] The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.
    Many options are being considered to restore long-range trust fund solvency. These options are being considered now, over 25 years in advance of the year the funds are likely to be exhausted. It is thus likely that legislation will be enacted to restore long-term solvency, making it unlikely that the trust funds’ securities will need to be redeemed on a large scale prior to maturity.”
    http://www.ssa.gov/oact/progdata/fundFAQ.html
    “Are conservatives saying that they want Social Security to be in surplus all the time, so that the trust fund can purchase more securities? ”
    We’re saying it should have been in Surplus for the last 60 years, so the money to pay for the Baby Boom’s retirement would be there. It’s not.

    Reply

  45. Dan Kervick says:

    Well DonS, when someone presents bad arguments in a public forum, I think the responsible thing to do is to try to address those arguments and show why they are bad. You can call that “taking the bait” if you want. I call it, “not letting bad ideas influence people because they have gone unchallenged.”

    Reply

  46. DonS says:

    Dan I can’t believe you even take nadine’s bait on Social Security. It could be 200% in the black and these haters would still want to repeal FDR.

    Reply

  47. Dan Kervick says:

    “SS has turned cash-flow negative …”
    Well, it’s essentially a pay-as-you go system. So it would appear the system needs more revenue to get it back in surplus; and that means we have to bring unemployment way down. It also means we need to raise the payroll tax cap. However, both parties just agreed to a temporary cut in the payroll tax.
    “and the so-called “Trust Fund” is full of IOUs.”
    Well, if you just mean that Treasury Bonds are a fancy kind of IOU, fine. But what else would it be full of?
    Are conservatives saying that they want Social Security to be in surplus all the time, so that the trust fund can purchase more securities? Why, if those securities are “worthless”? Or would they prefer that the tax pay-ins and the benefit payouts are kept as even as possible?

    Reply

  48. questions says:

    So many perils for an exercise like this….
    I know it’s a great idea to take stock of the year gone by, to fast and pray, to promise to do better next year for real this time, and to kick oneself for all of one’s shortcomings.
    Mid winter, before making Oscar picks or Superbowl bets seems like as good a time as any. It is a holy time, after all.
    But seriously, My HERO ™ didn’t get the mortgage market fixed. Well, I am disappointed. Except, of course, the courts are slowly unwinding MERS, putbacks, foreclosure documentation fraud and so on. Oh, yeah, the courts. Oops.
    And DAMN, he didn’t get Congress to get the government to hire 1.5 million people. Oh wait, there was never going to be direct money for that. And probably some people did NOT lose their jobs, so that’s something.
    And, RATS, he didn’t make Congress pass capntrade.
    And goshDARN he did NOTHING on immigration reform — except maybe to keep his own side of the non-bargain by deporting VAST quantities of undocumented human beings.
    ***
    And so I try to figure out what to think about the foolishness of the exercise that takes SotU hopes, turns them into unilaterally manageable tasks and then gives the prez a failing grade.
    Wintertime and a young poster’s fancy turns to thoughts of the whole stupid education testing regime that misunderstands what teaching and learning are. And then my thoughts go all metaphorical and think that this “test” is as pathetic a measure of a president’s year as the FCAT or TAKS or MCAS is as a measure of a typical 4th grader….
    If you don’t capture the essence of the system in your test, then what the hell are you measuring?
    Obama is not a dictator, he cannot operate unilaterally, he cannot GET THINGS DONE without a whole lot of cooperation.
    He set a vision, Congress took some bites, puked up a bunch more.
    Could we characterize our political system a little more accurately instead of fixating on the executive branch as if that were all there is?
    Of course, if you get all system-y and legislative-y and complex-y, you can’t get a nice HuffPo “Prez Sucks” headline, but maybe you can get a little accuracy instead.
    BO-ring.

    Reply

  49. davidt says:

    A few days ago Steve said calling him an “Israel-basher” was akin to calling him an “anti-semite.”. Here he repeats the argument from the HuffPost that Obama’s proposals in the last state of the union were somehow “promises.”. Is this Beck News, New America or something?
    Wigwag quibbles that the Start Treaty should be included which detracts from Steve’s narrative, so, stop that Wigwag and just accept that Obama failed in so many ways and let any countervailing facts be damned :). It doesn’t matter what the president might have accomplished. What matters is what he said that Steve and the piece’s authors call a “promise” which I had always understood to mean something ever so slighly different than a “proposal.” But I suppose that the last Congress was the most productive in most American’s lifetimes (my guesstimate in terms of population demographics but I could be a bit off) shouldn’t distract one from what it didn’t do.
    And of course, never mind that Steve is sympathetic to those “moderate Republicans” even though they were central players in enabling the blocking of some other legislative efforts (like cap and trade) to pass in the Senate. I know, picky picky picky.
    Just trying to keep you honest Steve.

    Reply

  50. Pahlavan says:

    Lebanon! Tunisia! Now Egypt? That is some savvy foreign policy work! I guess when the guardians are overly occupied with looting the cookie jar; this shouldn’t come as a surprise. Look out Abdullah Jr.!

    Reply

  51. nadine says:

    “What is the long-term picture for Social Security? Obama might very well declare Social Security officially safe and out of bounds. But if he is screwing with the payroll tax funding source and has no plan to set it right again, then the claims of protecting Social Security are bogus” (Dan Kervick)
    The claims are already bogus. SS has turned cash-flow negative and the so-called “Trust Fund” is full of IOUs. The money was put into the General Fund and spent elsewhere. Any CEO who tried this stunt with his pension funds would be in jail.
    Obama’s economic claims are one big fraud. He wanted a freeze last year? Oops, he never presented a Federal budget. Now he’ll ask for it again? Great, first raise discretionary federal spending by 25%, do nothing to control entitlement spending, on the contrary, pass massive new entitlements, THEN claim you are fiscally responsible because NOW you want a freeze.
    Obama doesn’t lack for chutzpah, I’ll say that much.

    Reply

  52. Dan Kervick says:

    Good catch, WigWag. That is certainly a signal accomplishment, and Obama did set out that goal in last year’s speech:
    “Now, even as we prosecute two wars, we’re also confronting perhaps the greatest danger to the American people — the threat of nuclear weapons. I’ve embraced the vision of John F. Kennedy and Ronald Reagan through a strategy that reverses the spread of these weapons and seeks a world without them. To reduce our stockpiles and launchers, while ensuring our deterrent, the United States and Russia are completing negotiations on the farthest-reaching arms control treaty in nearly two decades. And at April’s Nuclear Security Summit, we will bring 44 nations together here in Washington, D.C. behind a clear goal: securing all vulnerable nuclear materials around the world in four years, so that they never fall into the hands of terrorists.”
    “Now, these diplomatic efforts have also strengthened our hand in dealing with those nations that insist on violating international agreements in pursuit of nuclear weapons. That’s why North Korea now faces increased isolation, and stronger sanctions — sanctions that are being vigorously enforced. That’s why the international community is more united, and the Islamic Republic of Iran is more isolated. And as Iran’s leaders continue to ignore their obligations, there should be no doubt: They, too, will face growing consequences. That is a promise.”

    Reply

  53. WigWag says:

    I don’t know whether he mentioned it in last year’s State of the Union address, but shouldn’t getting the Senate to ratify the most recent START Treaty in the face of stiff opposition count as both a substantive and political success?

    Reply

  54. Dan Kervick says:

    Yes, this seems about right to me. A fail on the economy but a pass on a lot of the promises on the social agenda.
    Here are some of the questions that I think progressives should be asking themselves as they try to grade the speech tonight. (I don’t know what kinds of questions conservatives will be asking):
    1. Is this a plan that benefits ordinary Americans? It is entirely possible, of course, to do all sorts of things that benefit American corporations without benefiting a great number of Americans, since these corporations have a lot of overseas operations. These companies can get the tax cuts and deregulation benefits here, while the main economic beneficiaries are workers in other countries or top corporate executives and wealthy shareholders. What’s in it for the common man and woman?
    2. Where is the accounting? If Obama is putting forward a long-term deficit cutting plan, and also a call for long-term public investments, then what combinations of tax increases and spending cuts is Obama offering or envisioning to pay for the investments? And do they add up? Should they add up?
    3. Are the long-term educational investments Obama is set to call for really aimed at better *educating* Americans, or just providing them with improved technical skills that turn them into more useful serfs for industry? We need better skills, no doubt, but perhaps Americans are also failing to “compete” in the broader category of understanding the world – equally vital in a democracy.
    4. What is the long-term picture for Social Security? Obama might very well declare Social Security officially safe and out of bounds. But if he is screwing with the payroll tax funding source and has no plan to set it right again, then the claims of protecting Social Security are bogus. Social Security can be killed without a frontal assault. It can also be killed by gradually draining the blood out of it and steering people by phases into alternative private programs that are made temporarily attractive by government subsidies.
    5. On the jobs front, what is going to be happening *now*, in the immediate term? It is all very well to talk about long-term investment plans so that Americans in 2025 and 2030 have good jobs. We surely need such plans. But what is the plan for attacking 9.5% unemployment – now, today, *this year*? Is there one?
    6. The job of reforming the banking and financial sector is still not complete. Where are we going on the fundamental questions about how the engine of capitalism is to function?
    7. What is Obama’s approach to the problem of private household debt? So much of the talk is about public sector deficits. But the public sector deficits help fund the private sector surpluses we need to help people pay down their household debt and pay off their underwater mortgages, and return aggregate demand to a place where it can sustain growth in our domestic economy. How is Washington planning to accelerate the digging out process and boost the demand that will boost businesses desire to expand and hire?
    8. Is Obama giving us an austerity budget? The UK Tory pivot toward austerity has already had the debilitating effect many had predicted: decreased economic activity, slower growth. As Warren Mosler has written, a great concern is that “because we believe we can be the next Greece, we continue to work to turn ourselves into the next Japan.”
    9. Is the export-based model for future growth the best way to go for us? Because in the near term at least, it looks like a plan that might slowly increase employment, but at the cost of declining wages and a lower standard of living.
    10. In calling for a “Sputnik moment”, is Obama accurately identifying real foreign competitive challenges, or is he creating artificial public unity by exaggerating foreign threats, and blaming external enemies for economic conflicts of interest and exploitation at home, conflicts that he lacks the political will to address?
    11. Is Obama really thinking about the actual national economy and what is best for it? Or is he too busy thinking now about how to thread the needle politically and win re-election? In other words, is he leading; or is he just drifting with the tides of fickle public opinion?

    Reply

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