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The Sequester looms

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  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Reference: Seattle Times, February 16, 2013: Sense of urgency nonexistent as sequester looms

    "WASHINGTON — As deadlines go, the March 1 sequester lacks punch. Nobody’s taxes will go up; the U.S. Treasury won’t run out of cash. Government offices won’t immediately turn out the lights and lock the doors. No federal worker will be furloughed for at least 30 days. So federal lawmakers felt little need to cancel the Presidents Day break.

    "Instead of negotiating, party leaders were busy issuing ultimatums and casting blame. Before they left, Senate Democrats unveiled a bill to replace the sequester in part with new taxes on millionaires, which Republicans oppose. And House Speaker John Boehner, R-Ohio, vowed “the sequester will be in effect until there are cuts and reforms that put us on a path to balance the budget in the next 10 years,” an idea Democrats oppose."


    So yes, there is supposedly nothing magic about the March 1st deadline as many of the cuts will be phased in over the coming months and year. But the longer a resolution is put off, the cuts will be real...and cabinet secretaries are now outlining how their agencies will be impacted. If Congress cannot agree, the provisions of the Sequestration Transparency Act signed into law by President Obama in August 2012 to avoid a default on our debt will be implemented. That act effectively just kicked the can down the road, but we are at the end of that road again.

    Will it be kicked further down the road again...or will it be allowed to take effect?
  • Democrat
    Meridian, MS
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    As an answer to your question Schmidt, I sure feel like the President will not sign any bill, no matter of how temporary it is, that only "kicks the can...". And, as I'm sure you'll agree, the House will never pass the Democratic last-ditch effort at generating more revenue by taxing the millionaires more than now. I believe it (the sequester) HAS to take effect before this Congress will actually DO something about it, and not just band-aid the situation.
  • Independent
    Ft.myers, FL
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    I guess "politics" as usual!! I'm not surprised; it is just a bunch of little kids who play a game of chicken with our money. Pathetic!!
    How far has the US sunk? We were always the country which was an example for the world related to a good household book keeping and democratic idea's. Where is that all gone to? To Mars? or in Romney's bank account in the Caymans? We are already the laughing stock of the world related to our excellent gun control and now our inability to put our financial house in order, because we love our billionairs and tax free churches and let the poor just die or refuse to give unemployed cancer patients medical help etc. Nice example for the world!!! Anyway like "michaels" said just keep kicking the can down the road and get a healthy salary for doing so; wow, when can I get a job like that; I'm available!!!
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    As of today (Wednesday, February 27th) it certainly looks like the Sequester will take effect on March 1st. None of the "negotiators" have been meeting. Speaker Boehner refuses to meet with President Obama or Senator Reid. Instead he uses derogatory terms like "ass" to attack Senator Reid. While we can read all about the finger pointing, I had a good chuckle in reading the satirical and humorous Borowitz account of how things are going:

    New Yorker, Borowitz Report, February 26, 2013: Boehner Defends Decision to Remain on Ass

    "Minutes after telling the United States Senate to “get off their ass” to avoid the deep spending cuts that will take effect this Friday, House Speaker John Boehner called an impromptu press conference to announce his intention of remaining on his ass “for the foreseeable future.”

    “The United States Senate is showing contempt for the American people by refusing to get off their ass,” a defiant Mr. Boehner told reporters. “And the only fitting way for me to protest their reckless behavior is by remaining on my ass for as long as humanly possible.”

    “Take a good look, ladies and gentlemen of the press,” he said, before leaving the lectern in a huff. “This is the last you’ll see of old John Boehner off his ass.”


    Speaker Boehner did not say those things, but I can certainly visualize him doing so. Ha!
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Don't forget, after we get out of the sequester showdown, we have a government shutdown to stop at the end of March, and then another debt-ceiling fight in May.

    Perpetual political warfare over the budget. This is looking like Grant vs. Lee circa 1864-65.
  • Are you sure you want to delete this post?
        
    I am so sick of this game of blind-man's Bluff. Pushing us over the cliff about every month or two. It has to be the worst CHARADE I have ever seen in history. Then they REVERSE the whole image, like a drunken old time "Fun House" mirror, ---- where you look around, & everything is backwards. If the GOP says one thing, you can darn well bet that the OPPOSITE is TRUE. Just take anything they say, & then reverse it exactly upside down and backwards --- & you will begin to see the TRUTH. [Just like in "Alice in Wonderland" --or-- "Thru the Looking Glass."]
  • Independent
    New York
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    upto I looked at the check for $6895, I didn't believe ...that...my mom in-law was like really earning money parttime at there labtop.. there best friend has done this less than twelve months and just now repayed the mortgage on their apartment and purchased a great new volvo. we looked here, FAB33.COM
  • Democrat
    Meridian, MS
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    Oh Schmidt, you spoiled my day when you admitted that Boehner did NOT say those things. I was so ready to celebrate his ignorance, well I guess I still can celebrate it, but it won't be with quite the same enthusiasm.
  • Independent
    New Hampshire
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    One of the advantages of Congress taking last week off was that they were out of the News. Though they were not doing what they were elected to do, another plus is that they didn't make things worse. This week they are back in their usual form with both Republicans and Democrats working on alternative plans they admit will not be acceptable. I don't know what mose of you have experienced; but if I called a meeting with a client to show them plans that I like and they would hate, I wouldn't have to worry about calling abother meeting.

    I can not imagine looking at a person who has just asked me what I did today and saying, I just wrote a proceedure which will not work that will never be used.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Politics certainly have taken the front seat of this debate. President Obama is having to play that game because Republicans have drawn a line in the sand with regards to closing of tax loopholes. It's ironic because when you look at what initially spurned on the Tea Party, a big part of it was corporate welfare, especially Wall Street financial firms, getting away with "not paying their way" while the middle class workers had to bear a larger and larger percentage of the tax burden (including bail-outs)...in other words, they were upset with the inequality of the system.

    However, now you have Tea Party Republicans out there championing the virtues of low or no taxes for corporations and the rich no matter how much money they are making. They think that oil companies deserve all their tax breaks...they earned them the old fashioned way...with lobbyists. The same applies to a whole host of companies that paid essentially zero US taxes but are making billions. Tax breaks for corporate jets and yachts are defended by the Tea Party. They defend offshore tax breaks for Cayman Island hedge funds, and they attack Dodd-Frank as another "Big Government" regulation that hurts the job providers. It's just crazy upside down thinking, but that's what President Obama is up against. He cannot negotiate with that kind of thinking by Republicans in the House and Senate. Boehner has said he won't negotiate with Obama on anything. He cares more about his House Speakership title than the American people.

    What's left for Obama? His only option left is to take his case directly to the American people....again and again. Maybe in the end it won't do any good either, but if he can penetrate the minds of many middle class Americans by getting outside of Washington DC, then that's what he must do. It's politics, but it's good politics. Sitting down with Boehner will be a useless exercise until he can get the American people behind him.

    Maybe this is all about the 2014 election....to lay the seeds for Democrats taking back the House. However, I agree that's a dangerous game to play because the Republican noise machine thus far seems to be more effective than anything on the left can throw at the situation. And many Americans in the meantime will suffer if the Sequester holds for any length of time without any meaningful actions by Congress.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Effectively, the Tea Party wants higher taxes on lower income earners, and lower taxes on higher income earners; hence, the big hubbalo about the 47% paying no INCOME taxes. You'd think they'd never heard of FICA (a flat, 15% regressive tax on employment). When you get into it with them, they will argue that FICA is a dedicated tax that pays for Social Security and Medicare, so it's not a tax, per se. Democrats will make similar arguments in defense of Social Security and Medicare, which is why the AARP opposed the 2% employee side FICA holiday and fought for reinstatement.

    It's important to note that Tea Party people are not all of the same mind. I've talked to a lot who are on-board with MMT ideas, and Warren Mosler did make several appearances at Tea Party rallies, where the MMT FICA tax cut recieved thunderous applauses. It should be noted that Warren deliberately left out the MMT Job Guarantee idea from his Tea Party speeches, given how it most likely would have been recieved.

    Basically, MMT tax reform ideas are Georgist. However, it should be noted that Georgist tax reform is rooted in classical thought, and Henry George was not the first to propose a single progressive federal land tax to replace all other federal taxes.

    Income based taxes (the federal income, payroll, and corporate taxes) are notoriously hard to enforce. The system creates all kinds of jobs for lawyers and accountants, when we need more scientists, engineers, and teachers. Cheating is rampant. And when you tax at a consolidated level (corporate), more resources can be pooled to cheating, and individuals get experience and practice at it, which leads to them cheating on their taxes. So now you got businesses competing against one another over reducing their tax liabilities, and diverting more real resources to those ends, instead of competing over what we want them to compete for, CONSUMER DOLLARS. Meanwhile, the politcians have a multitude of strings they can pull on (threat of raising taxes) to recieve campaign contributions, private sector favors, etc.

    The whole thing is insane. Remember the point of the currency issuer levying taxes is to create demand for the currency and to control for inflation; it is not to raise REVENUE. That's an effect but not the point.

    Land prices are a huge driver of cost-side inflation. Speculation is rampant and, given the opaque nature of Big Finance, supply and demand fundamentals do not hold. We already tax land at the local and state levels. So all the work is already done for the federal government. You can't hide land; pay the tax or lose the land. The entire federal tax code can be retired and replaced with something way easier to enforce. Progressive federal land taxes would add a cost to speculative real-estate activities, which would substantially reduce the profitability of those activities, and thereby discourage them, while promoting productive use.


    Now, I would also argue that if you're gonna do tax reform, you have to do Wall Street reform. The tax code is a big part, but an even bigger driver of inequality is the merger of Wall Street and government, primarily in what we allow government insured financial institutions to do. Banking is necessarilly a public-private partnership, and the rules governing banking should serve public purpose. The industry should serve a public purpose. That certain activities are profitable for Wall Street is not an argument for extending government backstops to those activities. Taxes may cut down on inequality, but they do so after-the-fact. Fact is, certain activities on Wall Street should not be allowed, period.


    The true CONSERVATIVES are the PROGRESSIVES fighting for the restoration of the rule of law and the return of public purpose.
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    Somebody recently left an article on the Forum about the "lock box" for Social Security, & it said that it was a FRAUD, that there was no such thing, and that the Congress routinely loots that Social Security fund, for wars & other expenditures. (I had heard this very thing a long time ago, & always wondered if it was true). So now of course, our Social Security funds are bankrupt, along with most everything else, since the Republicans never met a war they didn't like. and they were willing to "rob" our retirement funds for the elderly to pay for those wars.

    They keep hoping we never find out, since we may demand REPAYMENT to those funds, & take it out of the Military Budget. Of course, the GOP does not mind if we starve the elderly people in the USA, just so we keep their (GOP) "cash cow" & "pet projects" afloat.

    I have noticed for decades now, in my hometown city, whenever the Republicans have control of some part of the govt, whether it be the DMV (dept of motor vehicles) or the FHA Housing Dept, or any other department, you can BET that they will "rob" that dept blind, & deprive it of all necessary money to fulfill the agenda for that department. It has happened so OFTEN, that the people just shrug their shoulders, & not pay any attention. They have just gotten USED to the idea, that the Republicans will ROB any GOVT agency they possibly can. They have no shame, or remorse, they just think it is their privilege to steal from everybody else. (Then they call US the "Takers"??) I have not heard of any of the thieves, once they have been caught, going to jail. Most of them are put on "paid leave" & then they still draw a salary from the taxpayers, while they loaf & take a vacation to the Bahamas. Probably to hide their stolen money in an offshore bank acct. Then the whole thing is swept under the rug, & they wait for the taxpayers to forget the whole thing, & then it is never paid back, & the thief is just relaxing in stolen splendor.

    Don't we have a Justice Dept anymore? Somebody who could get a "warrant" & find out WHAT is being stored in those offshore accts in the Cayman Islands and the nation of Switzerland? WHY does Romney have to "hide" all HIS money? And since it obviously is done to avoid paying taxes, why can't anyone go after him for Tax Evasion? That is a Felony. Not to mention the assets of Bush/Cheney/Halliburton. Why does the GOP seem to think they are all "above the law" -- especially since now they have "rigged" the Supreme Court with Koch Bros money. The Founding Fathers are right now rolling in their graves, trying to claw their way out, to grab a musket & come back here to seek Justice. They know Obama NEEDS THEIR HELP.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    The SSI "Trust Fund" is just an accounting device. It just records SSI surpluses. If that money was in fact "saved" and not exchanged for intergovernmental debt, then the government would just issue more public debt. Either way, if that tax piles up dollars in a savings account, some other agent has to deficit spend by that amount, or that amount of output doesn't get sold, leading to unemployment and less money collected by the FICA tax.

    Point is the currency issuing government can always fund Social Security payments. The real cost is not on the financial side, but on the real side of the economy, i.e. available goods and services that people can buy with SSI dollars.
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Another point to make, why does SSI and Medicaid parts A&C have to be entirely prefunded through a regressive punishing payroll tax?

    Do we pay for wars with a regressive payroll tax? Do we pile money in a sovereign wealth fund for war? Prefunding wars would probably be a bad idea on multiple levels, the least of which might be the regressiveness of the tax.

    Anyways, if SSI was "saving" the surplus money, they would have to be earning massive compound interest to keep up with inflation.
    Instead those funds are deposited in a general account, in exchange for intergovernmental debt, which is like government making a self-commitment to spending the money in the future on SSI, as needed. That intergovernmental "debt", then reduces the size of public debt issued, in accordance with institutional arrangements.

    The funds to pay our taxes and buy government securities come from government spending-Warren Mosler.

    The real cost of government is the real resources it consumes and the real cost/losses from its poor choices (i.e. allowing liar's loans, control fraud, bailing out criminals, not net-spending enough to get us to full employment, etc).