There is nothing here to disabuse me of my long-held notion that most economists reach their conclusions by cutting up a sheep on a rock and reading the entrails.
This error is needed to get the results they published, and it would go a long way to explaining why it has been impossible for others to replicate these results. If this error turns out to be an actual mistake Reinhart-Rogoff made, well, all I can hope is that future historians note that one of the core empirical points providing the intellectual foundation for the global move to austerity in the early 2010s was based on someone accidentally not updating a row formula in Excel.
And are we at all surprised that a certain zombie-eyed granny-starver of our casual acquaintance was one of the delivery mechanisms into our politics for what may be one of the great public-intellectual blunders (or worse) of the century?
Why, no, we are not at all.
This has been one of the most cited stats in the public debate during the Great Recession.Paul Ryan's Path to Prosperity budget states their study "found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth." The Washington Post editorial board takes it as an economic consensus view, stating that "debt-to-GDP could keep rising - and stick dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth."
The Republican bargaining habit is well-established -- take Obama's "final" offer as the new starting point and demand further concessions. With this strategy, our president has let them take him to the cleaners for more than four years now, and is still hoping that sweet reasonableness will produce compromise. It never has and never will.
If Democrats stand for anything, it is defense of Social Security and Medicare -- America's two most broadly beneficial and most beloved government programs -- and the president just gave away this last bit of product differentiation. In the past, Republicans have saved Obama from himself by refusing to consider any tax hikes. Now, I'm beginning to think, it's time for Democrats save him from himself. And the Democratic Party. And us.
Congress and the Administration are considering, as a means of deficit reduction, a legislative change to the consumer price index - the so-called "chained CPI." This change would have a particularly negative impact on Social Security benefits - here's why:
1. Chained CPI compounds over time.
As a result of a chained CPI, there will be a 0.3% annual cut in Social Security cost of living adjustments (COLAs). Social Security loses $112 billion over the next 10 years.
(That $112 Billion is probably how much the Koch Brothers will be worth when this is over. -z)
2. The greatest impact will be on the most vulnerable older Americans.
As retirees age, they have less income, fewer financial assets, and are more dependent on Social Security. Specifically, women tend to live longer than men and tend to have lower incomes, so women and poorer households are more at risk of falling into poverty with any cuts to Social Security.
3. Benefits for disabled and retired veterans would be cut.
3.2 million disabled veterans and another 2 million military retirees would see their benefits cut if chained CPI is adopted.
(And here I thought everyone in Washington, DC, loved our veterans and vowed to uphold our nation's promise to them. -z)
4. Chained CPI is a less accurate measure of inflation
(Google it if you don't believe the AARP. -z)
5. Social Security does not drive deficits, and should not be cut as part of a budget deal.
(And has never been part of a budget deal. -z)
So now the questions are:
Can Michael Bennet find enough new and returning senatorial candidates who support these cuts that he can support as chair of the Senate Campaign Committee?
I firmly believe Coloradans didn't vote for this B.S. last November. It's quite obvious who wants to cut Social Security and thinks it's a good idea politically and will somehow fix the budget: The 1%, The Donor Class, The Third Way Co Chairs Jared Polis, Pete Peterson, every elected Republican since FDR, All 3 of the Koch Brothers, Jon Caldara, Mike Rosen, and the list goes on.
Oh, and Barack Obama, Jared Polis, Michael Bennet and Mark Udall.
Those big-time donors and Republican mouthpieces might have the ear of legislators by virtue of their gifts of gab and cash. But, unfortunately for them and fortunately for us, they still only have one vote to cast next time Polis and Udall and Bennet are up for a contract renewal to their cush jobs with killer benefits.
Like the Koch Brothers, Peterson has funded many "independent" organizations specifically tasked to work against Social Security and put undo attention on our nation's debt -- which is definitely not the problem Peterson, his front groups and his other flacks argue that it is.
Fix the Debt took only $5 Million to get rolling. Here's some of what he got for that miniscule investment:
Fix the Debt is the most hypocritical corporate PR campaign in decades, an ambitious attempt to convince the country that another cataclysmic economic crisis is around the corner and that urgent action is needed. Its strategy is pure astroturf: assemble power players in business and government under an activist banner, then take the message outside the Beltway and give it the appearance of grassroots activism by manufacturing an emergency to infuse a sense of imminent crisis.
Behind this strategy are no fewer than 127 CEOs and even more "statesmen" pushing for a "grand bargain" to draw up an austerity budget by July 4. With many firms kicking in $1 Million each on top of Peterson's $5 million in seed money, this latest incarnation of the Peterson message machine must be taken seriously.
Fix the Debt has hired such powerful PR firms and lobby shops as the DCI Group, the Glover Park Group, the Dewey Square Group and Proof Integrated Communications, a unit of the PR firm Burson-Marsteller, which was the go-to firm for Big Tobacco. In the run-up to the "fiscal cliff," these firms launched a flashy $3 million media campaign, blanketing Capitol Hill with TV, Internet, Metro and newspaper ads featuring slogans like "Got Debt?" and "Just Fix It."
Fix the Debt's stable of CEOs are a PR flack's dream. Not only are they able to get meetings with everyone from John Boehner to President Obama; they can flood cable news with laughable messages of "shared sacrifice" and be treated with fawning respect.
Fix the Debt's David Cote, CEO of Honeywell, "brings serious financial muscle to the table" when he pushes "market credible solutions," chirps The Wall Street Journal. There is no mention that Cote is a tax-dodging, pension-skimping hypocrite: Honeywell has a negative average tax rate of 0.7 percent and underfunds its employee pensions by $2.8 billion, making Cote's workers even more reliant on Social Security.
Creating a crisis is key.
"America is more than $16 trillion in debt," Fix the Debt's website warns, calling it "a catastrophic threat to our security and economy." The CEOs echo this warning, writing to Congress of the "serious threat to the economic well-being and security of the United States."
To foster the illusion of a grassroots uprising, Peterson has nursed what the National Journal calls a "loose network of deficit-hawk organizations that seem independent but that all spout the Peterson-sanctioned message of the need for a 'Grand Bargain.'"
Sound Familiar? High power deficit hawks spread the lie that our nation's debt is causing an economic crisis that can only be fixed by implementing the shared sacrifice of cutting Social Security.
Udall and Polis, you can throw Michael Bennet in there too, fit the bill. They are playing the Oligarchs' game that will harm the Middle Class that they tell themselves they are helping.
Within one week Republicans are going to grab the national spotlight on two huge issues that should be the realm of the party who stands up for the little guy. That party used to be the Democratic party. How can they let this happen?
They are letting this happen because campaign cash is still more important than any policy decision. Most campaign cash comes from those who can afford it (duh), who then get more face time to ply their representatives. And if a policy threatens those with face time, you know who wins that battle: the Big Donors.
On Friday, at the CPAC convention, Federal Reserve Bank of Dallas President Richard Fisher is going to call for breaking up the big banks in the wake of a failed Dodd-Frank bill.
This is mind blowing. First a Republican, Rand Paul, filibusters to get answers about the targeted killing program and now at CPAC, a speech calling for breaking up the TBTF banks. Where are the Democrats?? The last thing we heard from the party was that the executives can't be held criminally liable, via Eric Holder and Lanny Breuer.
Can you imagine Jared Polis or Michael Bennet or Mark Udall saying this?
End "Too Big to Fail" Once and for All
[...]"Third, we recommend that the largest financial holding companies be restructured so that every one of their corporate entities is subject to a speedy bankruptcy process, and in the case of banking entities themselves, that they be of a size that is 'too small to save.'"
Here's a fun secret: Tax reform (in this case referring to eliminating or scaling back "tax expenditures") is technically a conservative policy priority, even if elected Republicans refuse to ever support it for real.
This is a compromise in which conservative policy is being offered in exchange for conservative support for a conservative policy.
The sequester and Obama's Bargain quest mean that Republicans can choose between allowing a Democrat to "take credit" for cutting the two most popular programs in the country or they can just live with the already-passed government spending cut that they are also able to blame on the president.
They will say it is inevitable, as Digby summarizes:
Obama said that he has made clear to his advisers that some of the difficult choices -- particularly in regards to entitlement programs like Social Security and Medicare - should be made on his watch. "We've kicked this can down the road and now we are at the end of the road," he said.
To now say that they have no choice but to cut entitlements because of the sequester (which they agreed to) is just too clever by half.
Mark Udall has said he's willing to lose his job over it. I wish he would.
And if Senator Mark Udall had even one gut, let alone the "guts" to push what he thinks is the only solution to Social Security's incredibly small budgeting issue, he'd write that law and submit it to the Senate...and put his fate as a legislator in the hands of Colorado's voters next year.
The Grand Bargain is the tool by which our leaders in Washington, DC, will inflict austerity on the poor and elderly. Its "purpose" is to fix the budget deficit - a deficit that is shrinking by the day as our economy continues its mostly-Republican-imposed, austerity-delayed recovery.
The Grand Bargain's implementers are most Republicans and enough Democrats to make it a bipartisan love fest that will be praised by editorial writers everywhere. Some locals who just can't wait to implement this Grand Bargain are Democrats Mark Udall, Jared Polis, and Michael Bennet.
Among the implementers, the "facts" that they "know" that are forcing this "inevitable" decision to take down Social Security are not facts at all.
They are the rhetorical weapons of the wealthy that have been whispered in the ears of legislators for years now. Their constant refudiation (h/t Palin) is the seemingly thankless, though necessary job, of economists and bloggers everywhere.
Two U.S. Senators who "know" these counter-factual facts are our very own Mark Udall and Tea Party Radical Ron Johnson of Wisconsin.
But the problem here is the lies have already been told so many times, and internalized by otherwise "smart" senators like Udall, Johnson, and Michael Bennet, that by now they might be impossible to stop -- no matter how contrary to facts and how harmful to America's seniors. As the bipartisans among us prepare to cut one of the most successful and popular social welfare programs in the history of man, the lies used against the programs, by those who will benefit from their elimination, are an almost immutable political force.
The continued ignorance of our leaders makes the continuing fight against that ignorance an almost impossible task. And if that's the case, it'll be a win for the 1%-ers once again, and a gigantic loss for the stability and welfare of America's Middle Class and its hard-working, and thoroughly entitled, retirees.
Sen. Bernie Sanders (I-Vt.) today introduced legislation cosponsored by Senate Majority Leader Harry Reid (D-Nev.) to strengthen Social Security by making the wealthiest Americans pay the same payroll tax that nearly everyone else already pays.
Rep. Peter DeFazio (D-Ore.) introduced the companion bill in the House. He joined Sanders at a news conference in the Capitol to discuss their bill to bolster Social Security without raising the retirement age or lowering benefits.
"Social Security is the most successful government program in our nation's history. Through good times and bad, Social Security has paid out every benefit owed to every eligible American," Sanders said.
"The most effective way to strengthen Social Security for the future is to eliminate the cap on the payroll tax on income above $250,000 so millionaires and billionaires pay the same share as everyone else."
Reid said, "I want to thank Sen. Sanders for his outstanding leadership in support of Social Security and the millions of Americans who rely on the program. His legislation should make people think twice before assuming that the only way to strengthen Social Security is to take away benefits that seniors have earned, or raise taxes on the middle class."
DeFazio added, "Despite the hype, Social Security is not now, and never was, the cause of our deficit. Those spreading these false claims are the same people who have for years been working with Wall Street to privatize the program. We shouldn't cut benefits or try to balance the budget on the backs of seniors who have earned these benefits. We can just close a tax loophole that allows millionaires and billionaires to pay a lower percentage of their income into Social Security than everyone else."
That Radical Sanders. DeFazio. Reid.
No Bennet. No Udall. No Polis.
History won't remember the vote count on the Grand Bargain that betrays the values of the Democratic Party. It will record the names of Democrats who enacted the wrong policy at the wrong time for the wrong reasons - all for political expediency.
This is the gold standard for Members of Congress willing to put their own careers on the line to protect working families.
With the Norquist pledge, the Republicans have lined up on the side of millionaires, billionaires and multinational corporations.
With our No Cuts pledge, we are lined up on the side of seniors, sick people, and poor people.
We are comforting the afflicted, and they are comforting the comfortable."
That "we" Grayson refers to includes many fine Democrats.
That "we" does not include Colorado's Democratic Represenatives Jared Polis, nor Ed Perlmutter, nor Diana DeGette.
Here's the "No Cuts" pledge our three haven't bothered signing on to:
"We will vote against any and every cut to Medicare, Medicaid, or Social Security benefits-- including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need."
I sure hope they aren't holding out for a Grand Bargain that will harm so many who voted for them and who put them in office to protect the programs that are today condemned by their silence.
Congress has a lot on its plate these days. Immigration reform and gun control have taken center stage in the Senate, and House Republican leaders are ramping up their calls for a balanced budget. But the one issue that Americans routinely say matters the most appears to have taken a back seat: jobs.
Gone are the days of party leaders demanding action on "jobs, jobs, jobs." When Senate Majority Leader Harry Reid (D-Nev.) recently outlined the top 10 priority bills for the year, just two of them were directly related to job creation. (A third one has jobs in the title, but the "Agriculture Jobs Bill" is actually just the farm bill).
House GOP leaders, meanwhile, emerged from their annual party retreat last month with their members fired up about one issue: their "No Budget, No Pay" proposal, which would temporarily withhold lawmakers' pay if they don't pass a budget.
Young graduates are in debt, out of work and on their parents' couches. People in their 30s and 40s can't afford to buy homes or have children. Retirees are earning near-zero interest on their savings.
In the current listless economy, every generation has a claim to having been most injured. But the Labor Department's latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath.
These Americans in their 50s and early 60s - those near retirement age who do not yet have access to Medicare and Social Security - have lost the most earnings power of any age group, with their household incomes 10 percent below what they made when the recovery began three years ago, according to Sentier Research, a data analysis company.
Their retirement savings and home values fell sharply at the worst possible time: just before they needed to cash out. They are supporting both aged parents and unemployed young-adult children, earning them the inauspicious nickname "Generation Squeeze."
Paul Krugman went on Morning Joe to discuss the realities of the economy. And while Joey Scabs lied about the programs and policies that were tried, Krugman refuted his lies by highlighting how each policy was shrunk to its minimum by deficit-hawk legislators, was skewed to tax cuts that are the least effiective economic tools in situations like this, and pushed back against the continuing effort of these deficit-hawks who want to balance the budget on the backs of the Middle Class.
Here's the key Krugman quote highlighted by Crooks and Liars:
"How many times do people like these have to be wrong and people like me have to be right?"
WASHINGTON - A Democratic push to ban roughly 150 types of assault-style weapons Thursday has placed Colorado Sens. Michael Bennet and Mark Udall in a tough spot.
Neither Democrat has committed to supporting the legislation carried by their Senate colleague Dianne Feinstein of California, saying Thursday they want to study the proposal to make sure it aligned with Colorado values.
"The Second Amendment and a strong tradition of gun ownership, particularly for hunting and sporting, are a vital part of Colorado's heritage," Bennet said. "Just as strongly as we honor that tradition, we must do more to keep the wrong guns out of the wrong hands.
Both senators are the very definition of safe and bland. Wonder Bread meets Miracle Whip.
Aside from the fact that both senators have so far managed to evade most of their responsibility for the very jobs they were elected to, along with their spineless inaction on the highly abused filibuster, they have virtually guaranteed another 2-4 years of gridlocked senate.
Colorado's two freshman senators, Mark Udall and Michael Bennet, are part of a self-described centrist group of 15 Democrats meeting regularly "seeking to restrain the influence of party liberals in the White House and on Capitol Hill."
Digby has an extended piece up deconstructing the principle-free composition of today's Democratic Party. We know what Republicans are for: low taxes approaching Zero for everyone but working stiffs; a giant military-industrial-energy complex that guarantees enough profits to guarantee enough political donors to guarantee the Republican Party/Tea Party survives; and Sharia-like social engineering based on The King James Bible.
Here's Digby getting to the point about Social Security, Austerity, and ConservaDems:
[T]oday, at a time of great economic turmoil and insecurity, the Democrats have taken on the role of tax collector for the austerity regime. We know the Republicans aren't serious about any of this. ("It's yer muneee!" - GWBush)
They will gin up a war in a New York minute if they need some stimulus and most of the country will shout "hooyah," when they do it.
Just look at their campaign. Despite Ryan's dystopian hellscape plans, they are running as the protectors of Medicare and protectors of the weak and vulnerable --- and half the voters believe them. They have fashioned an entire brand that says "government is horrible except for what it does for me personally" and it works.
The Democrats, meanwhile, are bragging about how much they're willing to slash everybody's benefits out of some deluded belief that this is what people want to hear. But it's not.
Digby quotes another blogger on the optically illusive principles:
Democratic spending is buried in the indirect incentive changes and obscure tweaks of the tax codes. But there is no ideal or purpose important enough that people are willing to say "screw it, we'll come up with the money somehow - the sweat of our brow tomorrow, for the debts we incur today."
Revenue neutrality, offsets, CBO estimates - those are the buzzwords of Democratic fiscal policy.
The dull, mind-numbing repetition of wonkspeak is not just a policy program, it is a totemic incantation, hoping to make something real out of the apparition of a party without projects.
And a party without principles I might add.
Digby highlights and expounds on today's Principle-Free Democrats and in the process describes our own Senators Udall and Bennet to a 'T'.
They are too fearful to be true Democrats à la Truman or FDR. They are politically cowed by big business and too beholden to The 1% Club - members of which they are firmly a part of, if not now then surely at the end of their terms during which they will earn a cool $Million-plus: $1,020,000 to be exact.
If you don't believe my conclusions here, take a closer look at what Harry Truman and Franklin Roosevelt did when times were tough just like they are today. They would say what I say; it would carry the weight of history and the knowledge that austerity is a principle that doesn't, and will, never work.
You don't think we should raise taxes on America's most wealthy to extend and strengthen Social Security. American Citizens say we should.
I suggest you take some of these polls into account when you're deciding whether or not to be on Squack Box the next time they need someone to lie about Social Security.
Social Security - Polling Report Poll conducted by GfK Roper Public Affairs & Corporate Communications. Aug. 16-20, 2012. N=1,006 adults nationwide. Margin of error ± 3.9.
Poll: Don't cut Social Security - Associated Press - POLITICO.com - Most Americans say go ahead and raise taxes if it will save Social Security benefits for future generations. And raise the retirement age, if you ...
The Do-Nothing Congress is currently in the process of creating a phony budget crisis and calling it a "fiscal cliff" to drive up fear among you and me. On this particular issue both sides do "do it": Republicans because they hate Barack Obama and are willing to tank the economy for political gain, and Democrats - mostly in the Senate - because they are too cowardly to be proactive on taxes and because they value bipartisanship over principle at almost every turn.
After two years and two failed attempts to gin up public support for their horrific austerity agenda known as the Simpson-Bowles plan (aka the Catfood Commission plan here and elsewhere), the deficit scolds are coming out of the woodwork to form an astroturf supergroup called Fix the Debt.
The Social Security proposal from the co-chairs of President Obama's fiscal commission is not a suitable starting point, let alone a reasonable outcome, for Social Security reform because it relies far too much on deep benefit cuts to restore solvency to the program and makes a number of harmful changes.
Recently, he had a public presentation in his district that purported to allow his constituents to provide their input to the budget process. From a Polis campaign letter:
I recently convened town hall budget workshops in Erie, Westminster and Boulder that focused on balancing the federal budget. On a Saturday afternoon, hundreds of Coloradans showed up ready to help restore fiscal integrity, create jobs, and get our economy going. In group exercises conducted by the Concord Coalition, a non-partisan national organization that supports fixing the federal budget, your friends and neighbors voted on a series of proposals aimed at restoring fiscal responsibility in Washington, D.C. I thought you might be interested in the results.
It seems like a good idea until the Concord Coalition is unveiled. In The Nation, Nov 21, 2011, an article by Ari Berman paints them as "penny pinching, anti-government and pro-corporate ideologues with board filled with K street lobbyists and corporate executives." Robert Kuttner in the Boston Globe wrote, "As for Social Security and Medicare, the Concord Coalition is an ideological attack on social insurance masquerading as concern for the common good."
Here's a spreadsheet that gives further details on the budget discussions Polis had.
Jared obviously wanted the job as representative in the second district. Though local input is very important, by facilitating this exercise, and allowing the Concord Coalition - a decidedly conservative and debt-focused organization - to significantly affect the parameters of the discussion, Jared, like his senate co-workers Mark Udall and Michael Bennet is ignoring the proposals of the Congressional Progressive Caucus, is deferring responsibility for tough budget decisions to his constituents and outside lobbying organizations, and worst of all, is allowing the Conventional Wisdom with regards to the economy, the budget and taxation to exercise its will over what should have been a free-ranging discussion of our country's current economic policies.
All this makes me ask just one thing of the Congressman:
If you didn't want to make the decisions, Congressman, why did you want the job?
So far this Congress, anti-LGBT Republicans have introduced at least ten major anti-gay bills, resolutions, and amendments in the U.S. House of Representatives. While 144 Members of Congress have sponsored or co-sponsored at least one of the proposals, seven signed on to five or more of the pro-discrimination measures, a ThinkProgress analysis reveals.
The list includes.......
Rep. Doug Lamborn (R-CO), a third-term Republican who came under fire for racially insensitive comments that associating with President Obama was like "touching a tar-baby."
In the interests of our economy, House productivity, and dare I say bipartisanship, may I be the first to suggest that our first openly gay Congressman Jared Polis, after calling Lamborn's office and warning his staffers, come over there a give Doug a big humanistic hug.
Realizing he hasn't caught the Cooties, Doug Lamborn might then lose some of the fear of his homosexual co-workers, friends, and neighbors, he might quit harassing them - and Big Bird - and finally, he might get his ass in gear and start working on some real policies that create jobs, take care of the soldiers and their families in his district, and quite possibly improve the lives of all of his constituents.
If he doesn't lose that fear of Teh Gay soon, I fear Doug Lamborn's pursuit of happiness will never be consummated. That would be a real drag...