Just a few comments on President Obama’s press conference tonight, it will be quick because I’ve got a lot to study. I’ve got the whole thing posted at the end of this article but I wanted to highlight this clip where he addresses issues surrounding his proposed budget. Its short, and if you’re concerned at all about the 3.6 trillion budget the administration recently proposed its a good one to watch.
I’m probably going to do a larger post about the budget at a later date but I think he does a great job of hitting some of the common concerns head on. One thing he talks about is that, like with the stimulus plan and the bank bailout, we have to remember that it’s not a choice between increasing the deficit and not increasing the deficit! The deficit will increase over the next several years. Its a matter of choosing the path that will increase it the least. And we also have to remember that a slow-growing, or shrinking, economy reduces government inflows and increases our deficit significantly. The idea is to boost spending in ways that will stimulate the economy such that it offsets the costs of that spending.
So I don’t think we can just say, “why don’t we spend less to decrease the deficit?” Cutting valuable spending will likely Continue reading
Well I’ve had several questions lately about a statement I made in my post CA Obstructionism and Political Games in which I was pretty dismissive of tax cuts in the stimulus bill. All the questions came via email of course (this is what the commenting system is for guys! You can comment anonymously if you want!). Anyway, while I’m planning on writing a much larger treatise on tax policy at some later date, I thought I’d address why I think tax cuts provide for relatively little stimulus. I’m going to try to keep it as non-technical and conversational as possible. And I should note before I begin that the principles I’ll present in this post are not universally agreed upon in the field of economics, but they are reflective of the economic philosophies that seem most reasonable to me given my educational experiences, and the views that are most widely held among economists today. So with that, lets just jump right in, this is the trouble with tax cuts as far as I can tell… Continue reading
Screenshot from real life political computer game: "Take Back Illinois"
Well the Monday night deadline for CA politicians to agree on a budget came and went so Schwarzenegger was forced to send out 10,000 layoff notices to state employees. The reason for the stall? They were one vote short in the state senate. California has a very unusual arrangement that requires a two-thirds majority in both houses of congress for a budget to be passed. And after months and months of negotiations and concessions to republicans (the bill now consists of millions more in spending cuts than tax hikes) they were only able to entice 2 of the necessary 3 GOP senators to support the bill.
So when everyone woke up the next day and 10,000 more Californians were facing unemployment, did any of the senators who had voted against the bill, have second thoughts? Did they acknowledge in anyway that thousands of CA families would now be suffering (and not to mention on the unemployment and/or welfare roles of the state) because of their posturing? Nope. In fact they gave a big raspberry to bi-partisanship and ousted the senate minority leader who helped negotiate the compromise bill. The reason for these legislators’ ire? The bill still contains tax hikes. Literally, many of them will not vote for the legislation if it contains any tax hikes at all.
Unfortunately, CA is facing a 42 billion dollar deficit that absolutely cannot be fixed by spending cuts alone. Governor Schwarzenegger recognizes this:
“If you think that you can do this budget without any increase in revenues then you have a big math problem because you can’t erase a $42 billion deficit without revenue increases,” Schwarzenegger said. “I hate taxes, but you when you are faced with that kind of reality, that’s what you have to do. We can only solve this problem with additional revenues and with spending cuts.”
We slashed 11 billion from the budget last year and the current budget has 15.2 billion in further spending reductions in the works. I don’t think we can cut our way to solvency without unconscionably… Continue reading
One last stimulus post and then I promise I’ll take a break. I have been utterly amazed at the creative reading skills of stimulus opponents over the last few weeks. As they say a lie can travel halfway around the world before the truth has finished putting its shoes on. And the four outrageous claims discussed here have been passed around virtually unchallenged for a while now.
ACORN Nuttiness
The idea that there was money for ACORN in the stimulus was first invented by Fox news in the run up to the stimulus debate and its since been parroted by republican legislators including John Boehner and David Vitter. In reality, of course, ACORN is not mentioned at all in the bill but what worries republicans is that 4.2 billion is set aside for local governments and (gasp) non-profit organizations to help them buy up foreclosed homes, fix them up, and sell them or rent them out. So the logic goes 1.There is money in the bill for non-profits to buy up homes, 2. ACORN is a non-profit organization that does things vaguely housing related 3. The democrats are trying to sneak money to their buddies at ACORN!!!!!
Lest you think I’m exaggerating here is a quote from Louisiana Republican David Vitter on the subject: ”$4.2 billion dollars would be available to organizations like ACRON for so-called neighborhood revitalization. That’s just political payoff, quite frankly, not in spite of their voter registration fraud activity, really because of it, in my opinion, in terms of support from some of the liberals in Congress.” … Wow. That’s quite a conspiracy theory he’s put together there. Never mind the fact that “ACORN Housing” is an entirely different organization than the ACORN that committed voter fraud, never mind that ACORN housing has never purchased a foreclosed home in its history and has no plans to do so, and never mind that… Continue reading
To continue the themes of my post earlier today, if you want to read the stimulus bill for yourself, the Senate compromise version can be found here: Senate Stimulus Bill. If you right click on the link you can choose to download it to your computer for easier reading. Its 778 pages. But its 778 pages of double spaced, 16 point text that only takes up the middle third of the page. So it reads much more quickly than one would expect. Its brought to you via Readthestimulus.org. And you can go there to find previous versions of the bill. The new house and senate compromise version should be available soon.
Once again, if you can find some kind of pet project hidden in it then by all means notify news agencies because you’ll have some pretty exclusive information. For all the talk of the “bloated, pork-filled stimulus” I haven’t been able to find anything yet.
UPDATE: See the way that the spending in the final bill breaks down through this intuitive little tool: CNN Stimulus Spending Chart
I thought these seven minutes were some of the most important of Obama’s speech and they can serve here as a springboard for discussing two important topics. The first is the issue of partisanship. I have been thoroughly impressed with Obama’s calm demeanor and mature perspective in regards to bipartisanship. He has reached out across the aisle in an unprecedented way and he has been repeatedly slapped in the face by congressional republicans. Yet he doesn’t turn on them, he doesn’t denounce them and give up, he talks about how his efforts are a long-term investment. And he says he’s going to continue reaching across the aisle because its going to take a long-term investment to change the culture of washington. That demonstrates humility and maturity that we have long expected of our neighbors and friends but which we, for some reason, have not expected of our politicians for a long time.
He could easily use recent events to score political points against republicans, blaming the lack of bipartisanship on them, especially in light of all the political points they’ve been scoring on him lately. But I like to think that he has more confidence in the American people. He knows we can look at an issue rationally and won’t be deceived by strategist commentaries and media blowhards. He trusts that we can judge a situation based on facts and long-term results and not on quotes and smears. In short, he’s taking the high road, the same high road he stuck to during his campaign and that goes a long way in my book.
The second issue he talks about is pork. I think its hilarious how conservative pundits have been able to redefine the word pork so that they can label this stimulus bill as such. Or it would be hilarious if… Continue reading
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Quotes
"We do not need to judge nearly so much as we think we do. This is the age of snap judgments. … [We need] the courage to say, ‘I don’t know. I am waiting further evidence. I must hear both sides of the question.’ It is this suspended judgment that is the supreme form of charity. Someone has said that you cannot slice cheese so fine that it doesn’t have two sides."
-Dallin H. Oaks
"It is better to debate a question without settling it, than to settle a question without debating it...The aim of argument, or of discussion, should not be victory, but progress."
-Joseph Joubert
"The more you know, the more you realise how much you don’t know — the less you know, the more you think you know."
-David Freeman
"The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently."
- Friedrich Nietzsche
