Hah! Another fear mongering liberal hater. Hope and change?! Not so good so far….but go ahead and spew yer hate somemore. People are wising up. Stats have it that an empty box can beat nobama in 2012. Stop being so bitter, you’re going to hurt yourself. Have a happy INDEPENDENCE day and enjoy what little freedom you have left.about an hour ago · Like
Meager ??? Were crushing the economy with goverment bailouts and entitlements alone are more than all tax revenues combined, entitlement at 2.3 trillion … Tax revenues at 2.2 trillion which is a all time record.. Our spending 500,000 times as much the entire GDP of Somalia.about an hour ago · Like · 1 personSo “pragmatic” means following the corporate media until we turn into N. Korea?
Aw, you kids are cute. You Google 3 articles with “Libertarian” in the titles and you think you’re informed. Yes, I’m a Liberal (ironically, a Libertarian Progressive)- not because I hate anything, but because I can read, and I can do math.
1. Entitlements are solvent for quite some time – and would be even more safe is not for GOP raids on the Trust Funds. Take this from the Center on Budget and Policy Priorites (re: 2010 Trustee’s Report):
2010 will mark the first year since 1983 in which the program’s total expenses (for benefits and administrative costs) exceed its tax income (from payroll taxes and income taxes that higher-income beneficiaries pay on a portion of their Social Security benefits). That temporary imbalance — which the actuaries peg at $41 billion in 2010 — results from the severe economic downturn and will shrink dramatically in 2011 and disappear in 2012, although a so-called cash deficit will return permanently in 2015 as the retirement of the baby boom accelerates. Throughout that period, however, the trust funds will continue to grow larger, primarily because of the interest income the trust funds will receive on the Treasury bonds they hold. Even in 2010, for example, the trustees estimate that the trust funds’ interest income of $118 billion will more than offset the cash deficit of $41 billion.
Oddly enough, the SS shortfall would be offset completely by the expiring of the Bush tax cuts for the wealthy. Gosh, for a bunch of dudes crying about “corporate this” and “corporate that” you sure do like to give them money and power.
2. TARP, the “Wall Street bailout”, the “Detroit Bailout”, and the Stimulus were all consensus strategies by a host of economists from all ideological backgrounds. Without these programs, we’d have lost EVERY major bank on our shores. Without the movement of capital from these banks – indeed, if we had even lost Citi and Goldman Sachs – we’d be bringing wheelbarrows of money to buy a stick of gum.
TARP was a necessity because of the ratings manipulations by Moody’s and the others, pressured by Goldman Sachs (who is being investigated for fraud because of their involvement in the rating scandal) to rate their derivatives as AAA (the same rating given to Treasury Bonds!). By dividing these CDOs into tranches, Goldman and others were able to hide toxic subprime mortgages given KNOWINGLY to people who could not pay them back in securities rated so high, rated as SO SAFE that even government pensions – who have a HOST of limitations on what they can be invested in – could get in on what was touted as :free money”.
The Wall Street Bailout was necessary so banks had the liquidity to meet their obligations – AIG’s bailout billions went almost immediately to pay Goldman Sachs for CDS’s they had purchased from AIG to ensure their own CDOs. O.o Fair? Not by a long shot. Necessary? Unless you have ANOTHER 13 multi-trillion dollar banks lying around, uh, yup.
Detroit paid it’s bailout money back with interest.
The stimulus did a great job at creating jobs – main problem was that the spending portion was too small, and it was too reliant on tax cuts. Most tax cuts went to paying off existing debt, not purchasing goods and services. Paying off debt does not drive production, so it doesn’t create jobs (see below).
So railing at the government against the bailouts is like yelling at the doctor for stitching up that gaping hole in your head made by a burglar. If you want to yell, yell at the burglar – Wall Street and their Washington cronies (there are PLENTY of Democrats that have gone along with the corporate takeover of government. However, I’d call none of them “Liberals”).
3. The economy is a result of more than 2 decades of deregulation. The financial meltdown is a perfect example. Credit derivatives, the engine of that downfall, were not only left unregulated, but laws were passed specifically to keep them out of the purview of ANY regulatory body. So more and more banks leaned on this method of hiding risk (selling consumer credit and mortgages to Wall Street to be securitized, while insurers like AIG insured these falsely rated securities). A benefit of moving the risk of consumer default to investors is that banks then met far lower standards for capital reserves. Hey, this freed up capital to create jobs, right? Uh, no. Instead, the Financial Services sector rose from 21.7% of GDP in 1980 to 31.8% in 2005.[BEA].
As Daniel Gross states:
But since the Obama presidency started, the trajectory in quarterly profits has reversed. Quarterly profits (reported at an annualized rate) rose from $1.18 trillion in the second quarter of 2009 to $1.42 trillion in the fourth quarter of 2009 to $1.64 trillion in the second quarter of 2010. In the second quarter of 2010, corporate profits were up 39.2 percent from the year-before quarter.
Corporate profits aren’t just rising in absolute terms, they’re rising in relative terms. Corporate profits as a percentage of GDP are back up to nearly record highs. Check out this assemblage of quarterly GDP data for the last several years. If you divide line 17 (corporate profits with inventory and capital-consumption adjustments) into line 1 (overall GDP), you can calculate corporate profits as a percentage of GDP—i.e., the chunk of the economy that corporations are keeping as profits. If companies and business were under assault, you might expect that this proportion would be falling. But as the chart here shows, that’s not what is happening.
After hitting a low point in the fourth quarter of 2008, the measure has risen in every quarter and checked in at 11.25 percent in the second quarter of 2010—the highest level since the last quarter of 2006. In other words, the chunk of the economic pie being reserved for business owners and bosses has been growing sharply in the past couple of years, despite slow growth, and is generally back at the levels it was during the business-friendly Bush administration.
Why is corporate America doing well when so many powerful forces seem to be arrayed against it? Some sectors are benefiting from government policy. Banks are profiting from low interest rates and the ongoing federal subsidies and guarantees. Even as the industry squawks loudly about demonization and tough regulation, banks just reported their best quarter results in three years, according to the FDIC.
Strangling the economy? Quite the opposite, apparently. Indeed, the fact that corporations are being given the freedoms THEY whine about in order to -as they claim – make jobs, turns out it just makes profit. Why?
Because most people who use Google as a fact finding tool instead of, you know, critical thinking, fundamentally accept some great mistruths about the way the economy works. We have endured “supply side” economic theory for so long that the Wall Street/Washington echo chamber seems to forget a teensy little fact about the economy: aggregate demand is as driven by wages as by desire. In other words, aggregate demand is limited by the amount of money consumers have to actually make purchases. This means that the economy CANNOT grow beyond the consumers’ ability to pay. In this case, this means that the “real” economy will stagnate until the lower and middle class (the OTHER 95% of Americans) regain purchasing power.
Corporate America has been able to artificially stagnate real wages by getting consumers to use consumer credit, and then home equity to make up the gap between wages and corporate profits. Wage inequality is at the greatest level sine the Great Depression. Simply put, people don’t have the money to drive production. Increased production is the ONLY thing that actually creates jobs (oh, except that corporations are getting more productivity out of fewer workers by threatening them with a host of horrors: http://motherjones.com/politics/2011/06/speed-up-american-workers-long-hours).
So if you look at what is ACTUALLY stagnating the economy (the part that ISN’T record profits for corporations), that would be our (that’s “We The People”) lack of protections against corporate power. Traditionally, this means strong Unions and government regulation. These are OUR tools against the decades-long attack on OUR FUCKING FREEDOM by corporate interests.
There is a clear link from Ron Paul’s idiot-ideology of dismantling government to Reagan’s “Voodoo Economics” and even Clinton’s business friendly deregulation to create the sweet freedom of, say, feudal England, or sharecropper Dust Bowl Kansas, or Coal Mining Company Town Appalachia, is this notion of “freedom” itself. I don’t recall you fellas screaming when Bush suspended Habeas Corpus, or when we OK’d wiretapping, rendition, waterboarding or even the assassination of US civilians abroad under Obama. Now we get groped in our own airports and you geniuses think that giving corporations and Conservative ideologues MORE POWER is the answer?
Seriously, you guys, go read a book. Stop looking up chemtrails and HAARP on your fucking computers and go learn something about economics and politics. You’ve been brainwashed into thinking that the only power structure that actually WORKS FOR YOU is working against you. Government is just made of people – if you think the people suck, elect new ones. But for fuck’s sake, please educate yourselves beyond “weed should be free and I hate wearing a helmet”.