By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, October 2, 2011
Government Spending Is Just What Our Economy Needs
Our nation’s economy is approaching a precipice. The continuing housing market crisis has stripped about $10 trillion from families’ assets, and nearly 1 in 10 workers are unemployed. Nearly 1 in 10 others are either working less than they want or have given up their job search. Family income is now back where it was in 1996, in inflation-adjusted dollars.
This all means there is less money flowing through our economy. That’s just math.
The lingering consequences of the Great Recession—the housing crisis, the jobs crisis, the fear among businesses to invest their earnings despite record profits—continue to pull against faster economic growth and job creation. Because customers have less money to spend due to the collapse of the housing bubble and the ensuing high unemployment, businesses have little incentive to hire and invest.
Even Federal Reserve Chairman Ben Bernanke says there is a role for fiscal policy. Monetary authorities have already pushed interest rates down to zero. And they have few levers left to spur growth, although there are some steps that would continue to help on the margin.
In short, the economy continues to suffer from a lack of demand.
The federal government can help with this. We know that government spending can help restart an economy. Over the past two years, increased investments in infrastructure have saved or created 1.1 million jobs in the construction industry and 400,000 jobs in manufacturing by March 2011. Almost all of these jobs were in the private sector.
Money targeted toward the long-term unemployed helped not only those individual families hardest hit by the Great Recession but also kept dollars flowing into their local communities, keeping an average of 1.6 million American workers in jobs every quarter during the recession. But now, the threat of jobs again disappearing looms large.
Unless Congress acts, the private sector will continue to generate insufficient demand. A sweeping consensus of economists and forecasters across the political divide now calls for the government to forcefully intervene in precisely this way, to create demand for goods and services, which will in turn boost hiring and business growth. Goldman Sachs, for example, said the positive effect of the president’s American Jobs Act would increase U.S. gross domestic product by 1.5 percent in 2012.
Conservatives want us to believe that America’s broke, that we cannot afford to address our most pressing issue—mass unemployment and stagnating incomes. The reality is that there are clear steps that we can take to pave the way for economic growth. Congress just needs to act.
By: Heather Boushey, Economist-Center for American Progress, Published in U. S. News and World Report, September 27, 2011
Can The Left Stage A Tea Party?
Why hasn’t there been a Tea Party on the left? And can President Obama and the American left develop a functional relationship?
That those two questions are not asked very often is a sign of how much of the nation’s political energy has been monopolized by the right from the beginning of Obama’s term. This has skewed media coverage of almost every issue, created the impression that the president is far more liberal than he is, and turned the nation’s agenda away from progressive reform.
A quiet left has also been very bad for political moderates. The entire political agenda has shifted far to the right because the Tea Party and extremely conservative ideas have earned so much attention. The political center doesn’t stand a chance unless there is a fair fight between the right and the left.
It’s not surprising that Obama’s election unleashed a conservative backlash. Ironically, disillusionment with George W. Bush’s presidency had pushed Republican politics right, not left. Given the public’s negative verdict on Bush, conservatives shrewdly argued that his failures were caused by his lack of fealty to conservative doctrine. He was cast as a big spender (even if a large chunk of the largess went to Iraq). He was called too liberal on immigration and a big-government guy for bailing out the banks, using federal power to reform the schools and championing a Medicare prescription drug benefit.
Conservative funders realized that pumping up the Tea Party movement was the most efficient way to build opposition to Obama’s initiatives. And the media became infatuated with the Tea Party in the summer of 2009, covering its disruptions of congressional town halls with an enthusiasm not visible this summer when many Republicans faced tough questions from their more progressive constituents.
Obama’s victory, in the meantime, partly demobilized the left. With Democrats in control of the White House and both houses of Congress, stepped-up organizing didn’t seem quite so urgent.
The administration was complicit in this, viewing the left’s primary role as supporting whatever the president believed needed to be done. Dissent was discouraged as counterproductive.
This was not entirely foolish. Facing ferocious resistance from the right, Obama needed all the friends he could get. He feared that left-wing criticism would meld in the public mind with right-wing criticism and weaken him overall.
But the absence of a strong, organized left made it easier for conservatives to label Obama as a left-winger. His health-care reform is remarkably conservative — yes, it did build on the ideas implemented in Massachusetts that Mitt Romney once bragged about. It was nothing close to the single-payer plan the left always preferred. His stimulus proposal was too small, not too large. His new Wall Street regulations were a long way from a complete overhaul of American capitalism. Yet Republicans swept the 2010 elections because they painted Obama and the Democrats as being far to the left of their actual achievements.
This week, progressives will highlight a new effort to pursue the road not taken at a conference convened by the Campaign for America’s Future that opens Monday. It is a cooperative venture with a large number of other organizations, notably the American Dream Movement led by Van Jones, a former Obama administration official who wants to show the country what a truly progressive agenda around jobs, health care and equality would look like. Jones freely acknowledges that “we can learn many important lessons from the recent achievements of the libertarian, populist right” and says of the progressive left: “This is our ‘Tea Party’ moment — in a positive sense.” The anti-Wall Street demonstators seem to have that sense, too.
What’s been missing in the Obama presidency is the productive interaction with outside groups that Franklin Roosevelt enjoyed with the labor movement and Lyndon B. Johnson with the civil rights movement. Both pushed FDR and LBJ in more progressive directions while also lending them support against their conservative adversaries.
The question for the left now, says Robert Borosage of the Campaign for America’s Future, is whether progressives can “establish independence and momentum” while also being able “to make a strategic voting choice.” The idea is not to pretend that Obama is as progressive as his core supporters want him to be, but to rally support for him nonetheless as the man standing between the country and the right wing.
A real left could usefully instruct Americans as to just how moderate the president they elected in 2008 is — and how far to the right conservatives have strayed.
Ten Reasons Why Immigration Reform Is Important To Our Fiscal Health
All eyes in Washington these days are on the new congressional super committee. The 12 members from both parties in both chambers of Congress have been assigned the task of developing a plan to reduce the federal deficit by $1.5 trillion over the next decade or risk setting off deficit-cutting triggers that will force sharp cuts to both defense and domestic spending.
There are many ways the members of this committee can reach the $1.5 trillion target between now and their Thanksgiving week deadline. We at the Center for American Progress understand that comprehensive immigration reform is not among the deficit reduction options on the table but want to urge the super committee to consider it. Comprehensive immigration reform is one key to boosting economic growth and thus helping to solve our nation’s fiscal problems.
Here are the top 10 reasons why immigration reform, or the lack thereof, affects our economy.
Additions to the U.S. economy
1. $1.5 trillion—The amount of money that would be added to America’s cumulative gross domestic product—the largest measure of economic growth—over 10 years with a comprehensive immigration reform plan that includes legalization for all undocumented immigrants currently living in the United States.
2. 3.4 percent—The potential GDP growth rate over the past two years if comprehensive immigration reform had gone into effect two years ago, in mid-2009. (see Figure 1)
3. 309,000—The number of jobs that would have been gained if comprehensive immigration reform had gone into effect two years ago, in mid-2009. A GDP growth rate of 0.2 percent above the actual growth rate translates into, based on the relationship between economic growth and unemployment, a decrease in unemployment by 0.1 percent, or 154,400 jobs, per year.
4. $4.5 billion to $5.4 billion—The amount of additional net tax revenue that would accrue to the federal government over three years if all undocumented immigrants currently living in the United States were legalized.
Revenue generated by immigrants
5. $4.2 trillion—The amount of revenue generated by Fortune 500 companies founded by immigrants and their children, representing 40 percent of all Fortune 500 companies.
6. $67 billion—The amount of money that immigrant business owners generated in the 2000 census, 12 percent of all business income. In addition, engineering and technology companies with at least one key immigrant founder generated $52 billion between 1995 and 2005 and created roughly 450,000 jobs.
Taxes generated by immigrants
7. $11.2 billion—The amount of tax revenue that states alone collected from undocumented immigrants in 2010.
Negative consequences of mass deportation
8. $2.6 trillion—The amount of money that would evaporate from cumulative U.S. GDP over 10 years if all undocumented immigrants in the country were deported.
9. 618,000—The number of jobs that would have been lost had a program of mass deportation gone into effect two years ago, in mid-2009. A mass deportation program would have caused GDP to decrease by 0.5 percent per year, which, based on the relationship between economic growth and unemployment, translates to an increase in unemployment by 0.2 percent, or 309,000 jobs, per year.
10. $285 billion—The amount of money it would cost to deport all undocumented immigrants in the United States over five years.
The upshot
Most Americans and their elected representatives in Congress would be pleasantly surprised to learn about the substantial benefits of comprehensive immigration reform to our nation’s broad-based economic growth and prosperity, and thus our ability to reduce our federal budget deficit over the next 10 years. Given how difficult a challenge the super committee faces, we cannot afford to ignore any viable options for strengthening our economy. We hope the super committee takes these top 10 economic reasons into account as they move forward with their deliberations.
By: Angela M. Kelley and Philip E. Wolgin, Center For American Progress, September 29, 2011
Blame Greed, Not Obama For Rise In Health Insurance Premiums
It’s Obama’s fault
Isn’t everything? I can’t believe what I am hearing and reading. Insurance companies are raising their premiums and, of course, that is President Obama’s fault. It’s that damn “Obamacare.” Ah, no, it isn’t.
Insurance companies have been raising their subscriber’s premiums for years before Mr. Obama was president; actually, even before he was “Senator Obama.”
I have a family plan to cover my husband and our two children; but I also own two small businesses and cover my employees’ healthcare at both companies. The large private PPO provider who I won’t name, but has the color of the sky in their title (ahem), has increased my premiums for both group plans and my individual family plan at least once a year for the past five years. And when I phone them and ask why, they don’t have an answer. They certainly don’t say: It’s President Obama’s fault and the passage of the Affordable Care Act.
As a matter of fact, the president of Kaiser also stated that healthcare reform is not the reason for the increased premiums; at best, it might contribute to 1 percent; so what is the other 99 percent? What is the reason these insurance companies keep increasing our premiums?
How can healthcare reform increase our premiums? Due to the increased number of people being covered by the reform act (mostly children and students who may remain on their parent’s plan), there are more people purchasing plans, whether employers or employees, which actually brings more money to those insurance companies. So why the increase?
Every time my plan has been increased, I have phoned to ask what additional benefits I am receiving for that cost increase; and every time the answer is the same: none. When I ask why, no one knows. But I know, it’s greed.
All, not some, all of the heads of these insurance companies earn millions of dollars a year in their paychecks. The insurance companies are one of the few in America not being negatively affected by our economy. Don’t believe me? Check their stock prices, or the stock prices of most medical related companies for that matter.
Actually, the increase in premiums, whether a person has an HMO or a PPO, just helps to support the need not only for healthcare reform, but for further reform, specifically a public option.
These increases are proof that the public needs another option, an affordable option. And the mandate? That drives business to the insurance companies, so they should be reducing the premiums. Insurance companies will say that many people are requesting a higher deductible; of course we are, it’s a bad economy and most of us want to pay less per month, taking the risk that we won’t end up in the E.R. or need surgery, etc.
And according to my doctor-husband, that’s a big risk. He’s an orthopedic surgeon. Patients used to come see him when they were in pain—let’s say their knee hurt. Now they come when their bones are sticking out—when they’re chronic.
So the increased prices by the insurance companies should be blamed on the insurance companies. They are hurting our healthcare system, doctors’ ability to provide proper care, and the economy as well; especially when so many Americans head to the E.R. once they’re chronic, which further bankrupts the system.
Bottom line—don’t blame Obama. Blame the insurance companies. They’re the bad guys this time around.
By: Leslie Marshall, U. S. News and World Report, September 29, 2011
Sharp Rise In Premiums Exposes Health Insurers’ Greed
According to a study released today by the Kaiser Family Foundation, 2011 health insurance premiums for employer-sponsored family healthcare benefits rose 9 percent over last year’s prices, leaving employees to pay, on average, $4,129 and employer contributions at $10,944. The number represents a surprising rise given that increases experienced in 2010 were just 3 percent.
So, why the sudden increase?
We know that Americans are using fewer medical services since the economy took a dive as people are staying away from the doctor and putting off non-life saving surgeries, such as knee and hip replacements, until they have more confidence that they will have the money required to pay deductibles and co-pays. We also know that fewer medical services are being utilized as a result of the increased popularity of Health Safety Accounts which require deductibles in excess of $2,000 per family, and employer provided policies that have increasingly large deductibles and co-pays.
As a result, can it possibly make sense that medical costs are increasing by the 9 percent reflected in the hefty premium hikes? In a word, no.
That will not stop the anti-Obamacare forces, of course, from putting the blame squarely on healthcare reform. In a sense, I suppose the Affordable Care Act does bear some of the responsibility—if you can consider motivating the health insurers to falsely inflate their prices, by forcing them to do the right thing, to be a blamable offense.
Beginning next year, health insurers will be required to justify any increases in premium rates above 10 percent. They will further be obligated to refund money to customers if an insurer is found to have spent less than 85 percent of their premium income on medical expenses. Thus, it is hardly a stretch to conclude that the insurers are simply taking their last chance to raise premium rates before they find themselves having to be more accountable to the government, particularly when they are pretty much admitting to as much.
As noted by Reed Ableson in The New York Times:
Throughout this year, major health insurers have defended higher premiums—and higher profits—saying that their expenses would rise once the economy recovered and people believed they could again afford medical care. The struggling economy will probably keep suppressing demand for medical care, particularly as people pay a larger share of their own medical bills through higher deductibles and co-payments, according to benefits consultants and others. About three-quarters of workers now pay part of the bill when they go see a doctor, and nearly a third have a deductible of at least $1,000 if they have single coverage, up from just one in 10 in 2006, according Kaiser.
So, the insurance company defense is that they expect prices to rise sometime in the future (clearly an undefined period) and they want to be ready. Somehow, this justifies them to dramatically raise their premium prices now, at time when their costs are actually less and their profits are through the roof.
Not only is such behavior astoundingly predatory, the insurers are playing a major role in keeping the economy in the dumps, as it is precisely this sort of unnecessary premium increase that causes employers to avoid hiring more employees.
For those who believe that we should leave it to the free market to establish the prices in the medical system (of which insurance will always be a necessary part), maybe they can explain how the system is working in this instance? In a time where patient control has risen dramatically as consumers decide if and how they will—or will not—spend on medical services now that they have greatly increased responsibility for the familiy medical bills as a result of much higher deductibles, and at a moment where there are substantially reduced claims coming onto health insurers’ balance sheets due to diminished use of medical services, exactly what is the free market concept that justifies an insurance company raising their premium rates? What’s more, at a time when fewer people are using physician’s services, why would costs go up?
Free market principles would suggest that lower demand should produce lower prices. But that is clearly not what is happening.
I know what some of you are thinking—but before you say it’s all the government’s fault, I would hasten to point out that, with an apples-to-apples comparison, there are no substantial new regulations hitting physicians this year that did not exist last year. And before you blame the president’s health care reform program for the insurance companies’ usurious behavior, note that the two million young people who have been added to the insurance roles as a result of Obamacare’s permitting these people to stay on the family insurance policy, would not increase an insurance company’s costs by 9% over last year’s prices. Indeed, adding all of these healthy kids to the insurance pools should help insurers spread risk more effectively while collecting additional premium revenues.
The bottom line is that there is absolutely no justification whatsoever for the health insurance industry hitting employers with a 9 percent increase. It is a simple matter of greed and it is precisely that greed that has long made access to healthcare continuously more difficult for middle class Americans.
By: Rick Ungar, Mother Jones, September 27, 2011
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