U.S. Debt Clock

http://www.usdebtclock.org/

US Uncut: Corporate Tax Cheats Are Bankrupting America

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According to its website,

"US Uncut is a grassroots movement taking direct action against corporate tax cheats and unnecessary and unfair public service cuts across the U.S. Washington's proposed budget for the coming year sends a clear message: The wrath of budget cuts will fall upon the shoulders of hard-working Americans. That's unacceptable."

Republican cuts would cost 700,000 jobs

In the March 1, 2009 article "Republican cuts would cost 700,000 jobs: Report," Zachary Roth reports that Mark Zandi, a prominent economic forecaster, suggests that the budget cuts proposed by Republicans will slow economic growth and reduce the number of jobs. The logic is that a primary determinant of the number of jobs is the overall demand for newly produced goods and services, which economists refer to as aggregate demand (AD). And a key source of demand, especially in economic downturns and their recoveries, is government purchases. Less government spending translates into less aggregate demand and fewer jobs.

According to Roth:

A new report by a leading economic forecaster finds that budget cuts passed by the House of Representatives would cost 700,000 jobs over the next two years if enacted.

"The House Republicans' proposal would reduce 2011 real GDP growth by 0.5% and 2012 growth by 0.2%," according to the study, by Moody's Analytics chief economist Mark Zandi. "This would mean some 400,000 fewer jobs created by the end of 2011 and 700,000 fewer jobs by the end of 2012."

Zandi is no left-wing ideologue. He was on the economic team for Sen. John McCain's 2008 presidential campaign, and has advised members of both political parties. His findings point in the same direction as those of an even more pessimistic Goldman Sachs report, leaked last week, which concluded that the proposed cuts would reduce second- and third-quarter growth in 2010 by 1.5 to 2 percentage points.

Although the economy has been growing of late, it's not adding jobs fast enough to start significantly bringing down the unemployment rate, which stands at 9 percent. Writes Zandi: "Imposing additional government spending cuts before this has happened, as House Republicans want, would be taking an unnecessary chance with the recovery."

America already faces a jobs crisis, having lost around 8 million jobs since the start of the recession in late 2007.

Zandi argues that the government does need to cut spending--but that it should wait to do so until unemployment has come down further. "Significant government spending restraint is vital," he writes, "but given the economy's halting recovery, it would be counterproductive for that restraint to begin until the U.S. is creating enough jobs to lower the unemployment rate."

The House proposal cuts spending by around $60 billion from 2010 levels. The Senate and the Obama administration will weigh in before any cuts become law.

Charts reveal shocking income inequality

"Some new data crunches show how the gap between rich and poor has widened into a chasm."

In the February 23, 2011 Yahoo! article, "Separate but unequal: Charts show growing rich-poor gap," Zachary Roth summarizes the Mother Jones article," It's the Inequality, Stupid" that appears in its March/April 2011 issue:

The Great Recession and the slump that followed have triggered a jobs crisis that's been making headlines since before President Obama was in office, and that will likely be with us for years. But the American economy is also plagued by a less-noted, but just as serious, problem: Simply put, over the last 30 years, the gap between rich and poor has widened into a chasm.
Gradual developments like this don't typically lend themselves to news coverage. But Mother Jones magazine has crunched the data on inequality, and put together a group of stunning new charts. Taken together, they offer a dramatic visual illustration of who's doing well and who's doing badly in modern America.
Here are three samples:
• This chart shows that the poorest 90 percent of Americans make an average of $31,244 a year, while the top 1 percent make over $1.1 million:

• According to this chart, most income groups have barely grown richer since 1979. But the top 1 percent has seen its income nearly quadruple:

• And this chart suggests most Americans have little idea of just how unequal income distribution is. And that they'd like things to be divvied up a lot more equitably:

To see the rest of these fascinating charts, click on over to Mother Jones.

Winner Take All Politics: How Washington Made the Rich Richer – and Turned it s Back on the Middle Class.

Winner Take All Politics: How Washington Made the Rich Richer – and Turned it s Back on the Middle Class - by Jacob S. Hacker

From the publisher's website:

Description

A groundbreaking work that identifies the real culprit behind one of the great economic crimes of our time— the growing inequality of incomes between the vast majority of Americans and the richest of the rich.

We all know that the very rich have gotten a lot richer these past few decades while most Americans haven't. In fact, the exorbitantly paid have continued to thrive during the current economic crisis, even as the rest of Americans have continued to fall behind. Why do the "haveit- alls" have so much more? And how have they managed to restructure the economy to reap the lion's share of the gains and shift the costs of their new economic playground downward, tearing new holes in the safety net and saddling all of us with increased debt and risk? Lots of so-called experts claim to have solved this great mystery, but no one has really gotten to the bottom of it—until now.

In their lively and provocative Winner-Take-All Politics, renowned political scientists Jacob S. Hacker and Paul Pierson demonstrate convincingly that the usual suspects—foreign trade and financial globalization, technological changes in the workplace, increased education at the top—are largely innocent of the charges against them. Instead, they indict an unlikely suspect and take us on an entertaining tour of the mountain of evidence against the culprit. The guilty party is American politics. Runaway inequality and the present economic crisis reflect what government has done to aid the rich and what it has not done to safeguard the interests of the middle class. The winner-take-all economy is primarily a result of winner-take-all politics.

In an innovative historical departure, Hacker and Pierson trace the rise of the winner-take-all economy back to the late 1970s when, under a Democratic president and a Democratic Congress, a major transformation of American politics occurred. With big business and conservative ideologues organizing themselves to undo the regulations and progressive tax policies that had helped ensure a fair distribution of economic rewards, deregulation got under way, taxes were cut for the wealthiest, and business decisively defeated labor in Washington. And this transformation continued under Reagan and the Bushes as well as under Clinton, with both parties catering to the interests of those at the very top. Hacker and Pierson's gripping narration of the epic battles waged during President Obama's first two years in office reveals an unpleasant but catalyzing truth: winner-take-all politics, while under challenge, is still very much with us.

Winner-Take-All Politics—part revelatory history, part political analysis, part intellectual journey— shows how a political system that traditionally has been responsive to the interests of the middle class has been hijacked by the superrich. In doing so, it not only changes how we think about American politics, but also points the way to rebuilding a democracy that serves the interests of the many rather than just those of the wealthy few.

Infographic: Visualizing the National Debt

Infographic Source: National Debt LifesLittleMysteries.com

Click the image above to see it completely.

Give It Back for Jobs

The "Give It Back for Jobs" website (http://giveitbackforjobs.org/) encourages people to donate to charity the amount of money they will save by the extension of the Bush tax cuts for 2011 and 2012. According to the website:

Calculate, Pledge, and Donate Your Tax Cut

Americans who've benefited from the extension of the Bush tax cuts should give what they can afford - in large amounts or small - back to the public, by supporting organizations that promote fairness and economic growth.

The government has, by extending the cuts, deprived itself of the resources required to support the policies that will secure a vibrant middle class. But joint action by visitors to this site will begin to replicate good government policy, outside the government and free from the grip of obstructionists within it.

Beware of Politicians Who Do Not Understand Economics

The following quotation is attributed to Abraham Lincoln in the 1912 three-volume publication Industrial Development of Nations by George Boughton Curtiss. The story is also recounted in the book Free Trade, the Tariff and Reciprocity by Frank William Taussig.

“I do not know much about the tariff, but I know this much, when we buy manufactured goods abroad, we get the goods and the foreigner gets the money. When we buy manufactured goods at home, we get both the goods and the money.”

The quotation is a good example of a passage that sounds persuasive in a political speech, but has no merit when subjected to scrutiny and the application of basic economic principles. To see the fallacy of the protectionist sentiment, use the same logic on a personal level:

When I buy food and clothes from stores, I get the food and clothes and the store owners get the money. When I grow my own food and make my own clothes, I get the food and clothes and get to keep my money.

It is essentially an argument to never buy anything from anyone. But that is absurd. It ignores the economic concepts of specialization, trade, and opportunity cost. People and societies benefit when they devote their time and energy to goods and services they can produce at a relatively lower absolute or comparative cost than others. People then use the income from their specialized activities to purchase the things they are not able to produce as efficiently. Indeed, one of the primary sources of economic growth and prosperity is the willingness and ability to specialize and trade.

Modern politicians are equally guilty of populist appeals that lack economic credibility, such as claims that the primary source of economic growth is lower taxes and reduced regulation of business, or that tax cuts increase government revenues, or that significant reductions to the U.S. budget deficit and the U.S. public debt can be achieved without sacrifices in the form of higher taxes and reduced government benefits.

Bernanke's Monetary Policy: Why a Little Inflation is Good

In the November 12, 2010 TIME magazine article "Bernanke's Bum Rap: What's Wrong with a Little Inflation?," Michael Grunwald provides a defense for Fed Chairman Ben Bernanke's monetary policy.

Ben Bernanke teaches at Jacksonville University

Ben Bernanke, the Chairman of the Board of Governors of the Federal Reserve System, came to Jacksonville University on November 5, 2010 to be a guest lecturer in the Money and Banking course. He spent most of the time answering questions from students. The 45-minute video of the class is available from C-SPAN.

Norway has the highest quality of life.

According to a United Nations report, Norway has the highest quality of life in the world. Read more here.

According to the 2010 Human Development Reports, the world rankings are:

Human Development Index (HDI) - 2010 Rankings

Very High Human Development

Norway
Australia
New Zealand
United States
Ireland
Liechtenstein
Netherlands
Canada
Sweden
Germany
Japan
Korea (Republic of)
Switzerland
France
Israel
Finland
Iceland
Belgium
Denmark
Spain
Hong Kong, China (SAR)
Greece
Italy
Luxembourg
Austria
United Kingdom
Singapore
Czech Republic
Slovenia
Andorra
Slovakia
United Arab Emirates
Malta
Estonia
Cyprus
Hungary
Brunei Darussalam
Qatar
Bahrain
Portugal
Poland
Barbados

High Human Development

Bahamas
Lithuania
Chile
Argentina
Kuwait
Latvia
Montenegro
Romania
Croatia
Uruguay
Libyan Arab Jamahiriya
Panama
Saudi Arabia
Mexico
Malaysia
Bulgaria
Trinidad and Tobago
Serbia
Belarus
Costa Rica
Peru
Albania
Russian Federation
Kazakhstan
Azerbaijan
Bosnia and Herzegovina
Ukraine
Iran (Islamic Republic of)
The former Yugoslav Republic of Macedonia
Mauritius
Brazil
Georgia
Venezuela (Bolivarian Republic of)
Armenia
Ecuador
Belize
Colombia
Jamaica
Tunisia
Jordan
Turkey
Algeria
Tonga

Medium Human Development

Fiji
Turkmenistan
Dominican Republic
China
El Salvador
Sri Lanka
Thailand
Gabon
Suriname
Bolivia (Plurinational State of)
Paraguay
Philippines
Botswana
Moldova (Republic of)
Mongolia
Egypt
Uzbekistan
Micronesia (Federated States of)
Guyana
Namibia
Honduras
Maldives
Indonesia
Kyrgyzstan
South Africa
Syrian Arab Republic
Tajikistan
Viet Nam
Morocco
Nicaragua
Guatemala
Equatorial Guinea
Cape Verde
India
Timor-Leste
Swaziland
Lao People's Democratic Republic
Solomon Islands
Cambodia
Pakistan
Congo
São Tomé and Príncipe

Low Human Development

Kenya
Bangladesh
Ghana
Cameroon
Myanmar
Yemen
Benin
Madagascar
Mauritania
Papua New Guinea
Nepal
Togo
Comoros
Lesotho
Nigeria
Uganda
Senegal
Haiti
Angola
Djibouti
Tanzania (United Republic of)
Côte d'Ivoire
Zambia
Gambia
Rwanda
Malawi
Sudan
Afghanistan
Guinea
Ethiopia
Sierra Leone
Central African Republic
Mali
Burkina Faso
Liberia
Chad
Guinea-Bissau
Mozambique
Burundi
Niger
Congo (Democratic Republic of the)
Zimbabwe

Note: The HDI rankings featured above were published in the Human Development Report 2010, The Real Wealth of Nations: Pathways to Human Development. Information about the HDI. PDF version Table 1 - Human Development Index and its components [108 KB].

How Obama Saved Capitalism and Lost the Midterms

In the November 2, 2010 online New York Times commentary, "How Obama Saved Capitalism and Lost the Midterms," Timothy Egan explains that the partisan attacks on President Obama's handling of the U.S. economy are misguided and untrue.

Egan writes:

If I were one of the big corporate donors who bankrolled the Republican tide that carried into office more than 50 new Republicans in the House, I would be wary of what you just bought.

For no matter your view of President Obama, he effectively saved capitalism. And for that, he paid a terrible political price.

Suppose you had $100,000 to invest on the day Barack Obama was inaugurated. Why bet on a liberal Democrat? Here’s why: the presidency of George W. Bush produced the worst stock market decline of any president in history. The net worth of American households collapsed as Bush slipped away. And if you needed a loan to buy a house or stay in business, private sector borrowing was dead when he handed over power.

As of election day, Nov. 2, 2010, your $100,000 was worth about $177,000 if invested strictly in the NASDAQ average for the entirety of the Obama administration, and $148,000 if bet on the Standard & Poors 500 major companies. This works out to returns of 77 percent and 48 percent.

But markets, though forward-looking, are not considered accurate measurements of the economy, and the Great Recession skewed the Bush numbers. O.K. How about looking at the big financial institutions that keep the motors of capitalism running — banks and auto companies?

The banking system was resuscitated by $700 billion in bailouts started by Bush (a fact unknown by a majority of Americans), and finished by Obama, with help from the Federal Reserve. It worked. The government is expected to break even on a risky bet to stabilize the global free market system. Had Obama followed the populist instincts of many in his party, the underpinnings of big capitalism could have collapsed. He did this without nationalizing banks, as other Democrats had urged.

Saving the American auto industry, which has been a huge drag on Obama’s political capital, is a monumental achievement that few appreciate, unless you live in Michigan. After getting their taxpayer lifeline from Obama, both General Motors and Chrysler are now making money by making cars. New plants are even scheduled to open. More than 1 million jobs would have disappeared had the domestic auto sector been liquidated.

“An apology is due Barack Obama,” wrote The Economist, which had opposed the $86 billion auto bailout. As for Government Motors: after emerging from bankruptcy, it will go public with a new stock offering in just a few weeks, and the United States government, with its 60 percent share of common stock, stands to make a profit. Yes, an industry was saved, and the government will probably make money on the deal — one of Obama’s signature economic successes.

Interest rates are at record lows. Corporate profits are lighting up boardrooms; it is one of the best years for earnings in a decade.

All of the above is good for capitalism, and should end any serious-minded discussion about Obama the socialist. But more than anything, the fact that the president took on the structural flaws of a broken free enterprise system instead of focusing on things that the average voter could understand explains why his party was routed on Tuesday. Obama got on the wrong side of voter anxiety in a decade of diminished fortunes.

“We have done things that people don’t even know about,” Obama told Jon Stewart. Certainly. The three signature accomplishments of his first two years — a health care law that will make life easier for millions of people, financial reform that attempts to level the playing field with Wall Street, and the $814 billion stimulus package — have all been recast as big government blunders, rejected by the emerging majority.

But each of them, in its way, should strengthen the system. The health law will hold costs down, while giving millions the chance at getting care, according to the nonpartisan Congressional Budget Office. Financial reform seeks to prevent the kind of meltdown that caused the global economic collapse. And the stimulus, though it drastically raised the deficit, saved about 3 million jobs, again according to the CBO. It also gave a majority of taxpayers a one-time cut — even if 90 percent of Americans don’t know that, either.

Of course, nobody gets credit for preventing a plane crash. “It could have been much worse!” is not a rallying cry. And, more telling, despite a meager uptick in job growth this year, the unemployment rate rose from 7.6 percent in the month Obama took office to 9.6 today.

Billions of profits, windfalls in the stock market, a stable banking system — but no jobs.

Of course, the big money interests who benefited from Obama’s initiatives have shown no appreciation. Obama, as a senator, voted against the initial bailout of AIG, the reckless insurance giant. As president, he extended them treasury loans at a time when economists said he must — or risk further meltdown. Their response was to give themselves $165 million in executive bonuses, and funnel money to Republicans this year.

Money flows one way, to power, now held by the party that promises tax cuts and deregulation — which should please big business even more.

President Franklin Roosevelt also saved capitalism, in part by a bank “holiday” in 1933, at a time when the free enterprise system had failed. Unlike Obama, he was rewarded with midterm gains for his own party because a majority liked where he was taking the country. The bank holiday was incidental to a larger public works campaign.

Obama can recast himself as the consumer’s best friend, and welcome the animus of Wall Street. He should hector the companies sitting on piles of cash but not hiring new workers. For those who do hire, and create new jobs, he can offer tax incentives. He should finger the financial giants for refusing to clean up their own mess in the foreclosure crisis. He should point to the long overdue protections for credit card holders that came with reform.

And he should veto, veto, veto any bill that attempts to roll back some of the basic protections for people against the institutions that have so much control over their lives – insurance companies, Wall Street and big oil.

They will whine a fierce storm, the manipulators of great wealth. A war on business, they will claim. Not even close. Obama saved them, and the biggest cost was to him.

Show Me the Stimulus

Show Me the Stimulus provides links to news and commentary about the effects of federal government spending from the American Recovery and Reinvestment Act in the state of Maryland.

This nine-month Maryland Morning series is funded by The Joseph and Harvey Meyerhoff Family Charitable Funds, The Baltimore Community Foundation, Melnick-Newell and Associates, and Persels & Associates.

Dow Jones Industrial Average (1900 - Present Monthly)

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Dow Jones Industrial Average (1900 - Present Monthly)

Source: StockCharts.com

Charlie Rose Interview with Andrew Sullivan

Charlie Rose interview with Andrew Sullivan.