Politics & Law

National Fiscal Hypocrisy Week

Robert Reich

Welcome to National Fiscal Hypocrisy Week.

Today (Monday), Congress takes up a measure delaying by one month a scheduled 23% cut in federal reimbursements to doctors. The cut will automatically go into effect unless Congress acts. But of course Congress will act. Doctors threaten to drop Medicare patients if their rates are cut. Congress has delayed scheduled Medicare cuts for years.

The best outcome would be an agreement to contain future health-care costs by allowing Medicare to use its bargaining power with drug companies and medical suppliers to reduce rates; by allowing Americans to buy drugs from Canada; by applying the antitrust laws to health insurers; and by giving the public an option to buy their health care from a government-run public option.

Likelihood of any of this happening over Republican and DINO objections is zero.

Tuesday, the President meets with Republican and Democratic congressional leaders to begin working out a compromise for extending the Bush tax cuts. Both parties say they want to preserve the tax cuts for lower- and middle-income families. But this would cost $3 trillion over the next decade. Republicans also want to extend them permanently for the top 2 percent of earners, for an added $700 billion. The top don’t need the cuts, don’t deserve them, and won’t spend the windfall (and thereby stimulate the economy).

The best outcome would be an agreement to extend the tax cuts for the bottom 99 percent, for two years. This would stimulate the economy in the short term when it most needs it, and reduce the long-term deficit.

Likelihood of this happening over Republican and DINO objections is zero.

Meanwhile, unless Congress agrees to extend unemployment benefits by Tuesday, 800,000 long-term unemployed will start running out. Extended benefits are not only necessary given the record number and level of long-term unemployed, but they’re also one of the best means of stimulating spending. The unemployed will spend every dollar of benefits they receive.

The best outcome would be another six-month extension, at a cost of $34 billion. This would help an additional 4 million long-term jobless who would otherwise run out of benefits over the next few months. Add in a new WPA that offers work to the jobless — everything from teacher’s aides to improving public parks and installing insulation in public buildings.

Likelihood of this happening over Republican and DINO objections is zero.

Finally, on Wednesday, the President’s deficit commission will issue a report on how to reduce the nation’s long-term deficit. The initial draft was regressive — cutting $3 of spending for every $1 of tax increase, and decimating the Earned Income Tax Credit, among other things.

The best outcome would be a unanimous report that focused on taming rising health-care costs (see first item above), rejected Republican calls to extend the Bush tax cuts for the wealthy (see second item above), and supported extending unemployment benefits for the long-term jobless and a new WPA (third item). Ideally, the report would also call for new investments in infrastructure and education that would grow the economy and thereby shrink the deficit as a share of GDP.

Likelihood, zero.

National Fiscal Hypocrisy Week may be carried over into next week, too.

Cross-posted from Robert Reich’s blog.

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Comments to "National Fiscal Hypocrisy Week":
    • Bill

      The part that is missing is that Dems and Republicans are in it together. Currently, all of the stuff you want to happen could happen since Dems control the House, Senate, and Presidency with a super majority. Until the end of the year, Dems have just as much control/power as they did when they passed healthcare. So, when you say, “Likelihood of this happening over Republican and DINO objections is zero” it just doesn’t make sense. Dems don’t need Republicans to vote with them to pass anything right now. So why don’t they?

      Because they want to make you believe that it is the GOP that is stopping them. Make you a more devoted follower.

      GOP is guilty of the same thing. They won a landslide election on Nov. 2nd, yet they aren’t doing very much even though the majority of the country currently agrees with them.

      So, take yourself out of your party loyalty for a second and really question what is going on. It is my firm belief that this is a huge shell game. Dems have their followers, Republicans have their followers. Yet, neither seem to be able to reduce health care costs, save Social Security, reduce poverty, reduce the deficit, stop sending jobs overseas, close Gitmo, end the war on terror, drugs, poverty, make Amtrac profitable, keep the USPS solvent, or anything else.

      It would be hard to name a success that either party has had based on their promises to us. Why is that? My guess is that they are in it together to keep power and keep the masses in control. When you stop looking at D vs. R, you will be on your way to seeing a lot more clearly. The news channels MSNBC and Fox news are just shells to get people to devote themselves to follow their parties more closely. Neither are unbiased. They are just a public way to get people to align with them while the government slowly takes away rights we were guaranteed by our Constitution.

      Wake up.

      [Report abuse]

    • Greg Yuhas

      John Kennedy called on us to, “Ask not what your country can do for you. Ask what you can do for your country.” Perhaps now is the time to reflect on those words and ask ourselves if we, as individuals, are doing what we can for our country. Are you giving a full day’s work for a full day’s pay, are you paying all your taxes, are you voting intelligently, are you taking responsibility for your health, education, welfare, retirement and finally, are you demanding the same of your children? If we can answer “yes” to these questions,things will get better.

      [Report abuse]

    • Steve Shackley

      Geez, Robert is correct as usual. The real sadness here, besides the points elucidated by others in this blog, is that the electorate, that’s right especially Californians, voted for this madness to be this way. Linda Davis writes that things “won’t change until we are marching on Washington and demonstrating that ‘there are more of us than there are of them”. I’m not sure that there are more of us than them.

      I believe that Robert has also noted that it costs a lot more to remedy the stupidity of Washington than to do it right in the first place (i.e. single-payer health care). So, even if the nitwit American voter figures this all out, it’ll cost a lot more. What a great country.

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    • James R

      “Ideally, the report would also call for new investments in infrastructure and education that would grow the economy and thereby shrink the deficit as a share of GDP.”

      We spend more money per student than any nation on earth. The question is not why are our students so uncompetitive but rather why do we spend so much on uncompetitive students? Our Big Ed system targets most federal money at the worst kids, and conversely, it spends almost nothing extra on children with >125 IQs — the ones who would benefit the most from special opportunities, thereby becoming important engines of creativity and prosperity for our national economy 10 – 20 years down the road.

      Moreover, through our immigration rules (which are hardly understood by the average citizen) and our lack of border border control, we are exponentially growing the left hand side of the Bell curve. Nearly 65% of legal immigrants coming into the US are family members of recently nationalized citizens (average IQ ~89, based on national origin data convolved with Prof. Richard Lynn’s estimates of average intelligence by country) — not exactly a gifted and talented bunch — and another source of ungifted children, especially in the SW states, are illegal immigrants, who are filling ESL and special education classes in public schools with their offspring (average IQ ~83 according to Jason Richwine, Harvard U).

      Clearly, it never occurs to Reich that we could “invest” our tax money to much greater effect. For example, spending $23,000 annually (the equivalent of tuition to an elite private school) to educate the average kid in DC is not exactly a wise investment: it’s about as wise as investing in subprime mortgage backed securities. Reich thinks all we need to do is consume more (which contradicts the green mantra of get by on less) and “invest” more in education to get us out of our economic doldrums and steer us toward a brighter future. Perhaps he should consider the possibility that we are reaping the inevitable economic consequences of immigration driven demographic change coupled with progressive social policies. Instead of demanding more left wing Hope and Change, and blaming Republicans, DINOs, and old White people for why the economy is going sour, perhaps he should take off his PC glasses and walk back exactly what’s been happening in this country over the past 25 years.

      When you’re in a (financial) hole, time to stop (spending) digging. America should go on a careful budget which gives it more of the things it needs (national defense, better schools for demonstrably smart kids, cheap nuclear power — especially in the SW where a new manufacturing base could be built) and less of what it doesn’t need (a larger population).

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    • Sharon Page-Medrich

      Dear Professor Reich,

      Is anyone in the media or government saying how the jobless are supposed to sustain themselves without extension of federal unemployment benefits, while state and local social service budgets are being slashed to the bone? What is the expectation or vision of Republicans, DINOs, and Tea Partyers for the outcome of their preferred policies: that more of our countrymates become (more) hungry and homeless or (if they are lucky) move in with their parents or children and line up at food banks and soup kitchens? Why isn’t public discourse focusing on the actual effects on people’s lives of the disastrous let-them-eat-dirt fiscal policies?

      I wish more inside the Beltway were listening to you.

      [Report abuse]

    • Linda Davis

      So what can we do? What can an individual say that will have any impact?

      I will call my senators and tell them to read this blog entry and I emailed my Congress person over the weekend.

      Things probably won’t change until we are marching on Washington and demonstrating that “there are more of us than there are of them.” Unfortunately it’s usually too late by then.

      Thanks for speaking out — keep it up! Linda

      [Report abuse]

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