mykeystrokes.com

"Do or Do not. There is no try."

Debt Ceiling Warning: Inaction Would Double Interest Rates, Crash Market

Public efforts by both House Speaker John Boehner and President Obama to convince skeptical new Republican House members to add $2 trillion to the nation’s burdensome $14 trillion debt ceiling are being reinforced by dire warnings from business leaders that failing to OK the increase will lead to inflation, an immediate doubling of interest rates and a killer Wall Street crash.

“If they don’t increase the debt, there will be a huge impact on the economy,” a Wall Street executive told Whispers on background. “Interest rates would spike. S&P and Moody’s would downgrade U.S. debt, raising the price of borrowing, there would be a market sell-off, it would be a disaster.”

While Boehner, who yesterday called for a deal that would OK the debt ceiling increase in return for trillions of dollars in spending cuts, Wall Street lobbyists and banking and business leaders are meeting with several of the new Tea Party-backed House members who pledged to stop raising the ceiling to explain the impact of standing pat.

“A lot of freshmen are new to the issue,” said one of those meeting with the new members, some of whom signed pledges not to raise the debt ceiling no matter what.

Among the specifics the sources say they are telling the new members:

— Inflation could jump, though they aren’t giving any percentage growth.

— Interest rates could double if U.S. debt is downgraded. House loans, for example, that are now below 5 percent, could surge to 9-10 percent, killing any chance of fixing the housing slump or cutting the unemployment rate, now at 9 percent.

— The stock market could suffer a 10 percent drop, far more significant than the 778 point thrashing Wall Street took when the House rejected the government’s $700 billion bank bailout plan in September 2008.

“That market sell-off will look small compared to what we’ll see,” said a Wall Street executive.

So far, the campaign to turn the naysayers around is starting to work, say those involved. Helping is the expectations that the debt ceiling won’t actually be breached until August.

While there have been warnings that the vote must come sooner due to expectations that the cap will be breached this month, officials explained that Treasury can make several moves to postpone that until about August 2.

By: Paul Bedard, U. S. News and World Report, May 10, 2011

May 10, 2011 Posted by | Banks, Businesses, Congress, Conservatives, Debt Ceiling, Deficits, Economic Recovery, Economy, Financial Institutions, GOP, Government, Government Shut Down, Jobs, Lawmakers, Lobbyists, Politics, President Obama, Republicans, Right Wing, Tea Party, Unemployment, Wall Street | , , , , , , , , , | Leave a comment

We Don’t Have A Spending Problem, We Have A Fraud Problem

Conservatives seem to have a knack for changing the subject whenever their backs are up against the wall. Over the last several weeks, there has been an orchestrated chorus  by the House Republicans in particular to define the so-called “deficit problem” in terms of a wild spending binge by the federal government and the Obama administration. They seem to have easily forgotten who got us into this mess in the first place. That aside, everyone from Speaker John Boehner to Sen Mitch McConnell have been bellowing throughout the halls of Congress and at every available microphone that “We don’t have a revenue problem, we have a spending problem”.

It’s amazing how we all have bought into this line. The media, in its usual rush to get a headline or sound bite, immediately picked up this line and has been the waterboys for the GOP by enabling this hoax on the American people. The focus in most circles has been on spending cuts. Well, we need to re-characterize what is actually going on here. We don’t have a spending problem..we have a fraud problem.

This fraud has been played on the American people by an ideologically depraved Republican party for at least the last ten years. They have made everybody believe that if we just make the wealthy wealthier, somewhere down the road, we will all benefit. There would be job creation with full employment, small businesses would thrive, home prices would fall, gas would cost less than two dollars a gallon and there would be a chicken in every pot. And we believed it hook, line and sinker. Now we are back to square one. None of these things have happened except the fact that we have indeed made the wealthy wealthier. In 2010,  the 400 Americans with the highest adjusted gross revenue incomes averaged $345 million. The average federal income tax was 17%, down from 26% in 1992. The income gap just keeps getting wider. Why  does this continue to happen? Because we let it happen.

Just last week, Standard and Poor’s accentuated the Republican clarion that the sky is falling. This call comes from the same S&P who supported every toxic waste subprime security under the sky, the same S&P  who sold its ratings to the highest bidder. Regulators have also assisted the GOP in their fraud. The Office of the Currency has gone out of its way to protect its clients, ie the banks. Efforts to reign in the banks and stop their predatory loan practices have been foiled at every turn. Even the banks are too big to fail. Profits for banks, corporations, CEO’s, Wall St and the wealthy just keep soaring. There is a lot of back scratching going on here, by and for a lot of wealthy people.

Now that the cat is out of the bag, all of these wealthy people are trying to figure out a way to take the spot light off themselves. They are beginning to see that they may not be able to stave off demands any longer that they pay their fare share. People who have been adversely affected for so many years are now demanding that this fraud be stopped. Teachers and other low wage earners, the poor, seniors, students and union members have all come to believe that they have sacrificed enough. Even some tea party members are beginning to see the light.

For too many years, the Republicans and their wealthy friends have had their hands in everybody’s pockets. Your pocket was the revenue stream for them. General Electric and the Koch Brothers were probably happier than anyone. The Republicans were also happy because their happy friends provided the cover that allows them to do whatever they want to in terms of policy. Being the ideologues that they are, this protection gives them unimpeded opportunity to push forward with their agenda, from dissolving women’s rights, overturning the Affordable Care Act, union busting, replacing Medicare with vouchers and completely eliminating any sense of environmental protection just to name a few. With happy and contented wealthy backers behind you for so many years, how could you go wrong. My, how things are changing.

The revenue stream that the Republicans have depended on for so long is now drying up…that stream is you. They are finding that when they put their hands in your pockets now, they are feeling the seam of the sewn pocket. There just isn’t any more money there. They become flushed and filled with extreme panic, finally realizing that they are going to have their taxes raised after all these years. Their backs are against the wall. So what do they do now? Change the debate..”Let’s raise taxes on everybody”. Nice try!

It’s well past time that shared sacrifice mean exactly what it says. It is no longer acceptable that the poor, under privileged, seniors and the disenfranchised continue to carry the load for corporations, Wall St and their deadbeat tax-evading friends. No, let’s not raise taxes on everybody. Let’s end the fraud and insist that the wealthy start paying taxes just like everyone else. This being Easter Sunday, this may be a good symbolic time to increase taxes only for the rich. We should leave that rate in place for oh say, the next 40 years. Besides, they have accumulated a fair amount of wealth over the years and should easily be able to live off that profit during that time. Perhaps take a trip or two or just wander around the world enjoying their spoils. We will pledge to re-visit this issue after that time. If, and only if,  the middle class has reached a level playing field, then we can talk about lowering the tax rate for the wealthy. I think Moses and the Pharaoh’s would be happy with this compromise.  So it is written, so let it be done.

By: raemd95, mykeystrokes.com, April 24, 2011

April 24, 2011 Posted by | Affordable Care Act, Banks, Businesses, Class Warfare, Congress, Conservatives, Consumers, Corporations, Deficits, Democracy, Economy, Equal Rights, Federal Budget, Foreclosures, General Electric, GOP, Government, Health Care, Ideologues, Ideology, Income Gap, Jobs, Journalists, Koch Brothers, Labor, Lawmakers, Medicare, Middle Class, Politics, President Obama, Press, Public, Pundits, Regulations, Republicans, Right Wing, Standard and Poor's, Tax Increases, Taxes, Tea Party, Unemployed, Unions, Wall Street, Wealthy, Womens Rights | , , , , , , , , | 1 Comment

What’s In The Compromise Spending Bill?

After a marathon four-day bill drafting session, the House Appropriations Committee early Tuesday morning unveiled compromise legislation to fund the federal government for the remainder of the fiscal year and cut $38.5 billion from current spending levels.

House Republican leaders struck a deal with Senate Democrats and the White House late Friday after pushing to cut $61 billion from current spending levels. GOP leaders hope to put the bill on the floor Wednesday, with Senate action expected Thursday. The current stopgap funding measure expires Friday.  

Overall, labor, health, and education programs received a $5.5 billion cut from last fiscal year’s level, including the cancellation of 55 programs for savings of more than $1 billion. The final legislation prevents 218,000 low-income children from being removed from Head Start and rejects education grant funding that would have cost approximately 10,000 jobs and reduced educational services to 1 million students, according to Senate Appropriations Committee summary.

Here’s where the spending cuts (and, in the case of Defense, the increases) come from:

  • TRANSPORTATION AND HOUSING. These programs would receive the largest cut under the compromise, $12.3 billion from fiscal 2010 levels, including a total of $2.9 billion in cuts for high-speed rail, $991 million in cuts to transit programs, and a $3.2 billion rescission of highway funding, including $630 million worth of old earmarks. The Department of Housing and Urban Development’s community development fund would get a $942 million cut.
  • SCIENCE. The continuing resolution also blocks funding for the establishment of a Climate Service at the National Oceanic and Atmospheric Administration; for the approval of new fisheries catch-share programs in certain fisheries; and for NASA and the Office of Science and Technology Policy to engage in bilateral activities with China.
  • AGRICULTURE. Agriculture programs would see $3 billion in cuts from fiscal 2010, including a $10 million cut to food and safety inspection, but the plan allows “for uninterrupted meat, poultry, and egg products inspection activities of the” Agriculture Department, the committee said. The USDA’s Special Supplemental Feeding Program for Women, Infants, and Children, also known as WIC, received $6.75 billion, which is a $504 million cut from the fiscal 2010 level.
  • ENERGY. Energy and water programs were reduced by a relatively modest $1.7 billion. The bill funds the Army Corps of Engineers at the president’s request level of $4.9 billion and supports existing applications for renewable energy loan guarantees at the Department of Energy.
  • WASHINGTON, D.C. The compromise restores a long-standing provision against the use of federal and local funds for abortions in the District of Columbia, and includes the reauthorization of the D.C. Opportunity Scholarships, along with a $2.3 million funding increase, to stop the termination of the program and allow new students to participate.
  • HOMELAND SECURITY. A $784 million net reduction over last year, including a $786 million cut to Federal Emergency Management Agency first-responder grants and elimination of $264 million in funding that was previously targeted to earmarks.
  • DEFENSE. Funded at $513 billion in the CR, about $5 billion above last year. The bill also includes an additional $157.8 billion for overseas contingency operations (emergency funding).

By: Humberto Sanchez, National Journal, April 12, 2011

April 13, 2011 Posted by | Budget, Congress, Deficits, Economy, Education, Energy, Environment, Government, Health Care, Homeland Security, Jobs, Labor, Politics | , , , , , , , , , , , , , | Leave a comment

Republican Budget Cuts Promote ‘Trickle Up’ Poverty

How appropriate that Washington’s most challenging budget crisis in decade coincides with the Republican Party’s centenary birthday celebration of Ronald Reagan, whose attacks on “welfare queens” and the social safety net in the name of deficit reduction caused indisputable collateral damage to middle class Americans. The Ronnie-like budget cuts that Republican leaders are proposing today—against unemployment insurance, food stamps, Medicaid and subsidized housing—all boast the potential to carry on the Reagan tradition of hurting the very middle class they aspire to help. 

Why? Because the cuts to the programs the Republican leadership in the House of Representatives are targeting would increase poverty, and more poverty lowers property values, diminishes the quality of life, and drives up family taxes and expenses of middle class Americans. 

Cuts to federal housing programs will increase homelessness. Combine increased homelessness with vacant public housing and you have a cancer that will spread, reducing property values in communities across our nation. Or consider cuts to unemployment and food stamps. These are likely to cause grocery stores in urban, suburban, and rural areas—many of which serve the middle class—to either close or lower the quality and selection of their wares, just to preserve profit margin. 

A persistently high unemployment rate may well also translate into desperation and increased property and personal crimes. Not only will more crime lower our quality of life, it will drive up the cost of local policing. That could mean higher local taxes meet crime-fighting demands.

Public schools were once the first choice of middle class families; these schools are the first to fail as poverty rises. Where school was once free, poverty forces many middle class families today to shell out thousands of dollars to educate their children. These new costs are a fact of life for more and more middle class Americans as poverty spreads across the country. Sadly it’s at just the time they can least afford it.

Let’s be clear. No one rejoices at the prospect of spending billions of dollars for subsidized housing or food stamps or Medicaid. And Glenn Beck acolytes and progressives alike can agree that good paying jobs are better for families than a plethora of government subsidies. But the problem is that our economy and the policies that drive it are not creating enough decent paying jobs for all able-bodied Americans to cover their basic household expenses. Federal subsidies for basic needs make up for the shortcomings in our economy. And they help a surprising number of people. 

To be sure, we can find ways to run these programs more effectively and more efficiently. And that’s where the hard work of budget cutting should concentrate. The ubiquity of technology, even in low-income communities, presents a huge opportunity to shed administrative costs. We should also find ways to better align these programs so that they enable workers and their families to more successfully move out of poverty. If we are serious about protecting and expanding the middle class, then the tough discussions on how to overhaul the delivery of these income-support programs need to commence.

But it’s simply not in the interest of most Americans to swing an ax at these programs amid a nascent economic recovery. Today, over 10 million Americans are collecting unemployment, and nearly that many citizens are in apartments with rents subsidized by the federal government. More than 40 million Americans put food on the table with the aid of food stamps. Fifty million Americans are able to go to the doctor or the hospital because of the Medicaid program. And fully one in six Americans is dependent on federal and state support for their basic necessities of life. 

The consequences of reducing federal income supports will be devastating on the poorest among us. But the impact will not be contained to them. Remember: Ronald Reagan tried to convince us that wealth trickles down. His enduring legacy, however, is that poverty trickles up. 

By: Donna Cooper,  Senior Fellow-Center for American Progres, February 14, 2011

February 14, 2011 Posted by | Budget, Deficits, Jobs, Politics | , , , , , , , , , , , , , | Leave a comment

%d bloggers like this: