Here's the Thing

According to the New York Times, Republicans planned to shutdown the government months ago in something called a "blueprint to defund Obamacare." Surprised? You shouldn't be. Republicans have done everything they could short of throwing tea into the Potomac to sabotage President Obama's terms in office. Never mind that their obstructionism has hurt the economy and job growth, or that their objections have been at times at odds with things they've recommended in the past, or that their own 2012 candidate for president, Mitt Romney, had implemented an Obamacare-like health program in Massachusetts, or that the 2013 Congress has been the least productive in U.S. history -- they don't care. The health of the Republic, the state of our democracy, the plight of every-day working Americans -- none of that matters to a Republican Party gone mad from losing two presidential elections to a man who is not only not white, not a member of the good ole [rich] boys club, and not someone they'd want to have a beer with, but is also -- horrors! -- an intellectual.

Don't be surprised if these Republicans cause the United States of America to default on its debt [on purpose] for the first time in its storied history. These crazies just might do it, because they're mad. They're mad because:

• they think government is overreaching (such as when it prevents air and water pollution),
• they believe in free markets (such as those that practically bankrupted the nation in 2008)
• they believe we are moving towards a socialism (because the 1% only own 42% of the nation's wealth, while the bottom 80% own a big 7%)
• they lost the 2008 presidential election and worked real hard to obstruct everything Obama tried to do only to lose again in 2012 (Fucking hell! What've gotta do to get back in power, burn the White House to the ground?!)

Don't be surprised if they do.

Compromise, Hell!

Wendell Berry | Orion Magazine

Oak Fork, Letcher County, Kentucky

"Can we actually suppose that we are wasting, polluting, and making ugly this beautiful land for the sake of patriotism and the love of God?"

In Our Backyard (A Monsanto Introspective) from Namreblis Ekim on Vimeo.

The Debt Does Not Exist

VIEWPOINT: The Debt Everyone Is Freaking Out About Does Not Exist
JEFF SPROSS, FEBRUARY 24, 2013

Excerpts:

The debt that’s got everyone worried is the part we haven’t yet incurred. And that debt, by definition, does not exist. It’s not a certainty, it’s merely a projection by the Congressional Budget Office. And trying to model how the federal budget, not to mention the entire American economy, will behave years or even decades in the future is a devilishly treacherous business.

By fixating on a problem that may or may not exist, Washington has trapped policymaking in a weird, postmodern dilemma. We’ve declared there’s a crisis because we’ve produced a hypothetical number, tethered to reality only by a host of assumptions and guesswork about what will happen in the next several decades. Then we insist this “crisis” isn’t “solved” until we’ve made policy changes that shift the math designed to spit out said hypothetical number. Policymaking becomes less about solving concrete problems and more about made-up numbers on an Excel spreadsheet.

In a depression, spending cuts suck demand out of the economy, leading to slower growth. Europe has so far pursued austerity with markedly more enthusiasm than the United States, and its economic performance predictably tanked as a result. Spain and France are anticipated to miss their latest debt-cutting targets, and the Continent as a whole will probably not see renewed economic growth for another year.

The vast majority of the deficits we’ve seen since President Obama took office were due to the 2008 collapse. Under depression conditions, deficits are a feature, not a bug.

We’ve already cut non-defense discretionary spending to 40-year lows, endangering all sorts of investments in America’s infrastructure, health, safety, communities, and future productivity. This massive failure to invest or aid saps the economy’s skills, education, networks, and future prospects.

The Federal Budget Isn't Like Your Household Budget

by L. Randall Wray

Whenever a demagogue wants to whip up hysteria about federal budget deficits, he or she invariably begins with an analogy to a household’s budget: “No household can continually spend more than its income, and neither can the federal government”. On the surface that, might appear sensible; dig deeper and it makes no sense at all. A sovereign government bears no obvious resemblance to a household. Let us enumerate some relevant differences.

1. The US federal government is 221 years old, if we date its birth to the adoption of the Constitution. Arguably, that is about as good a date as we can find, since the Constitution established a common market in the US, forbade states from interfering with interstate trade (for example, through taxation), gave to the federal government the power to levy and collect taxes, and reserved for the federal government the power to create money, to regulate its value, and to fix standards of weight and measurement-from whence our money of account, the dollar, comes. I don’t know any head of household with such an apparently indefinitely long lifespan. This might appear irrelevant, but it is not. When you die, your debts and assets need to be assumed and resolved. There is no “day of reckoning”, no final piper-paying date for the sovereign government. Nor do I know any household with the power to levy taxes, to give a name to — and issue — the currency we use, and to demand that those taxes are paid in the currency it issues.

2. With one brief exception, the federal government has been in debt every year since 1776. In January 1835, for the first and only time in U.S. history, the public debt was retired, and a budget surplus was maintained for the next two years in order to accumulate what Treasury SecretaryLevi Woodbury called “a fund to meet future deficits.” In 1837 the economy collapsed into a deep depression that drove the budget into deficit, and the federal government has been in debt ever since. Since 1776 there have been exactly seven periods of substantial budget surpluses and significant reduction of the debt. From 1817 to 1821 the national debt fell by 29 percent; from 1823 to 1836 it was eliminated (Jackson’s efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to 1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a third. Of course, the last time we ran a budget surplus was during the Clinton years. I do not know any household that has been able to run budget deficits for approximately 190 out of the past 230-odd years, and to accumulate debt virtually nonstop since 1837.

3. The United States has also experienced six periods of depression. The depressions began in 1819, 1837, 1857, 1873, 1893, and 1929. (Do you see any pattern? Take a look at the dates listed above.) With the exception of the Clinton surpluses, every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction. The Clinton surplus was followed by the Bush recession, a speculative euphoria, and then the collapse in which we now find ourselves. The jury is still out on whether we might manage to work this up to yet another great depression. While we cannot rule out coincidences, seven surpluses followed by six and a half depressions (with some possibility for making it the perfect seven) should raise some eyebrows. And, by the way, our less serious downturns have almost always been preceded by reductions of federal budget deficits. I don’t know of any case of a national depression caused by a household budget surplus.

4. The federal government is the issuer of our currency. Its IOUs are always accepted in payment. Government actually spends by crediting bank deposits (and credits the reserves of those banks); if you don’t want a bank deposit, government will give you cash; if you don’t want cash it will give you a treasury bond. People will work, sell, panhandle, lie, cheat, steal, and even kill to obtain the government’s dollars. I wish my IOUs were so desirable. I don’t know any household that is able to spend by crediting bank deposits and reserves, or by issuing currency. OK, some counterfeiters try, but they go to jail.

5. Some claim that if the government continues to run deficits, some day the dollar’s value will fall due to inflation; or its value will depreciate relative to foreign currencies. But only a moron would refuse to accept dollars today on the belief that at some unknown date in the hypothetical and distant future their value might be less than today’s value. If you have dollars you don’t want, please send them to me. Note that even if we accept that budget deficits can lead to currency devaluation, that is another obvious distinguishing characteristic: my household’s spending in excess of income won’t reduce the purchasing power of the dollar by any measurable amount.

If you put your mind to it, you will no doubt come up with other differences. I realize that distinguishing between a sovereign government and a household does not put to rest all deficit fears. But since this analogy is invoked so often, I hope that the next time you hear it used you will challenge the speaker to explain exactly why a government’s budget is like a household’s budget. If the speaker claims that government budget deficits are unsustainable, that government must eventually pay back all that debt, ask him or her why we have managed to avoid retiring debt since 1837-is 173 years long enough to establish a “sustainable” pattern?

Roosevelt Institute Braintruster L. Randall Wray is Professor of Economics at the University of Missouri-Kansas City.

A Path Forward

House Republicans voted down a proposal to pass a "clean" continuing resolution (CR), i.e., one that doesn't call for delaying/defunding the Affordable Care Act, i.e., "Obamacare." The shutdown continues. Some Congressional Republicans claim the shutdown is no big deal, and have started calling it a government "slim down," a phrase being parroted by conservative news outlets and talk radio. It's far from that. It degrades important government functions, damages the economy, and hurts the government workers who have been sent home.

But rather than talk about why this shutdown is such a terrible thing, let's talk about what can be done about it.

Republicans have painted themselves into a corner. They've bragged to their TEA Party base about standing on principle, and pissed off a lot of other people by shutting down the government. Now they feel they can't just back away from the shutdown (which was, after all, a bargaining chip) without getting something for their efforts (misguided as they may have been).

"We're not going to be disrespected. We have to get something out of this. And I don't know what that even is."

Rep. Marlin Stutzman (R-Ind.)

Republicans have been pushing for a delay in the implementation of Obamacare, they've tried passing a CR defunding Obamacare, and they've tried piece-mealing reopening some facets/functions of government like National Parks and the VA (an obvious ploy to make Democrats look bad).

None of this has worked.

What might work?

Back room negotiations in which the Democrats agree to formation of a bipartisan panel to review implementation of Obamacare and make recommendations for changes, in exchange for a clean CR from the Republican-led House, plus an agreement to raise the debt ceiling.

Republicans could attach other requirements to future legislation that helps ensure Democrats and the President will seriously consider the panel's recommendations, and not just let them stagnate until 2016.

Right now, Republicans aren't offering anything that Democrats could agree to, and sitting at a table across from empty seats where non-negotiating Democrats aren't sitting, ain't gonna cut it.

Goldman Sachs Reach

Should the United States Intervene Militarily in Syria Over the Assad Regime's Use of Chemical Weapons?

The 1997 Chemical Weapons Convention (CWC) prohibits the production, acquisition, stockpiling, transfer, retention, and use of chemical weapons (classified as WMD under Title 50, USC). Syria is not a signatory.

A UN inspection team reported that the nerve agent sarin, a fluorinated organophosphate, was used in the Ghouta area of Damascus on 21 August 2013. Some 3600 people were affected; 355 died. The U.S. presented convincing evidence that the Bashar al-Assad government was responsible for the attack. Assad denies this.

Assad also denied having chemical weapons, but has now agreed, as part of a US - Russia brokered deal, to sign the CWC and place his chemical weapons under the control of the UN-affiliated Organization for the Prohibition of Chemical Weapons (OPCW). Syria has already submitted an initial declaration outlining its inventory of chemical weapons to the OPCW.

Identifying all of Syria’s chemical weapons and chemical weapons manufacturing facilities and materiel will be a massive undertaking fraught with difficulties. Nevertheless, the process should be allowed to proceed under the auspices of the OPCW. US military intervention in Syria should be undertaken only as a last resort, should the Assad government fail to abide by its CWC obligations.

The US should now concentrate its efforts on effecting a ceasefire in the Syrian civil war, in which, according to UN estimates, over 100,000 people have been killed.