“An Inane Idea”: With A Trillion Dollar Coin, President Obama Can Fight Dumb With Silly
A trillion dollar platinum coin? Really? Has our politics really reached a point where such an obviously inane idea is gaining traction? Well, yes. When your capitol has become Clowntown, U.S.A., you sometimes need to fight bad ideas with silly ones.
The idea, if you haven’t heard, is for President Obama to defuse the forthcoming debt ceiling crisis Republicans are busily manufacturing by directing the Treasury to mint a platinum coin worth $1 trillion. With an extra trillion on the books, the debt ceiling would no longer be an issue. While the Federal Reserve ordinarily is in charge of printing money, there’s a law on the books allowing the Treasury secretary to produce platinum coinage of whatever value s/he sees fit.
Sure, the purpose of the law was to permit the Treasury to issue commemorative coins. But so what? The purpose of the debt ceiling wasn’t to give one party the leverage for a global, economic hostage crisis. Were the debt ceiling not raised, the Washington Post’s Ezra Klein writes, “the damage to the economy would be tremendous, and it would occur at every level, from individuals looking for a loan to buy a house to hedge funders trying to play the markets.” His full article on what happens if we breach the debt ceiling is worth a read.
So when one political party is acting like a political version of a James Bond villain (“Give in to my demands or I will wreck the world economy!”) maybe the answer is for the president to channel his inner Dr. Evil (“One trillion dollars.”)
Again, it all sounds silly but some very serious folks are lining up behind it, including the New York Times’s Paul Krugman, who has a Nobel Prize lying around his office. New York Rep. Jerrold Nadler is also a fan. And despite some suggestions that none of this is legal because it’s not what the law was intended for, Philip Diehl, a former director of the Mint, told Klein that it’s perfectly legal.
So is it a silly idea? Yes. But Republican extremists have brought us into an age of political asymmetrical warfare, passing off crazy, dangerous ideas as serious. Why should the president unilaterally disarm on that front?
By: Robert Schlesinger, U. S. News and World Report, January 9, 2013
“Scottie’s Star Trek Tricks”: Rick Scott’s Parallel Universe Of Ideological “Facts”
Via Think Progress, another item from the ever-increasing database of “facts” Republicans use to buttress ideologically dictated positions comes from everybody’s favorite health care expert, Florida Gov. Rick Scott.
Scott has been bruiting it about that his refusal to implement the Medicaid expansion provided for in the Affordable Care Act, which would have supplied health insurance to a cool million residents of that steamy state, was based on its vast cost: $26 billion over ten years in new state costs!
Them’s a lot of dollars, to be sure. But turns out Scott just kinda made the number up, or more accurately, didn’t bother to share the preposterous assumptions needed to generate it. Health News Florida explains:
The state’s chief economist has warned the staff of Gov. Rick Scott that his Medicaid cost estimates are wrong, but Scott keeps using them anyway, according to a series of e-mails obtained by Health News Florida.
Scott says he opposes expanding Florida Medicaid because it would cost too much: $63 billion over 10 years, he says, with the state paying $26 billion of that.
But those numbers are based on a flawed report, according to a legislative budget analyst and State Economist Amy Baker. A series of e-mails obtained by Health News Florida shows the analysts warned Scott’s office the numbers were wrong weeks ago, but he is still using them. He cited them in a Tampa Bay Times op-ed on Sunday and at at a Washington press conference on Monday.
The trumped-up number, it seems, comes from assuming the federal super-match for the expanded Medicaid coverage provided for in the ACA will never actually materialize. Why? Here’s the response from Scott’s “health policy coordinator,” Michael Anway:
Anway said he doesn’t believe the federal funds will come through. “The federal government has a $16 trillion national debt, must borrow 46 cents of every dollar it spends, and in 2011 had its credit rating downgraded for the first time in history,” he wrote in explanation.
So Scott is assuming the feds will renege on their statutory obligation to provide the Medicaid match. That’s a new one, and is particularly ironic since the only threat to the federal government defaulting on its spending obligations comes from Scott’s conservative buddies in Congress.
Truth is, the most authoritative estimate of state costs associated with the Medicaid expansion, from the Kaiser Family Foundation, put Florida’s costs at $1 billion over ten years, and that doesn’t even include potential savings from costs currently incurred by the state in uncompensated care for the uninsured.
So Scott’s costs estimates are off a mere 96%, at least. But what are facts when it comes to the ontological necessity of thwarting Obamacare and saving a million Floridians from the slavery of dependence on government?
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, January 8, 2013
“Catastrophically Dangerous”: What Happens If The GOP Shoots The Hostage?
Sen. Saxby Chambliss (R) of Georgia raised an interesting point this morning about the Republican debt-ceiling hostage crisis.
To translate this a bit, Chambliss is embracing the hostage strategy with both arms. From 1939 to 2010, the debt ceiling was raised without preconditions by both parties 89 times, but in 2013, Chambliss and his cohorts are demanding a ransom: painful-but-unspecified cuts to Social Security and Medicare.
And if the president refuses to meet the Republicans’ demands, and GOP policymakers follow through on their threats, Chambliss thinks it’s Obama who’ll “suffer the consequences.”
Except, whether he understands the issue or not, Chambliss is mistaken. If Republicans refuse to allow the nation to pay for the money it’s already spent, and in the process push the nation into default by trashing the full faith and credit of the United States, it’s not the president who’ll “suffer the consequences”; it’s the rest of us.
Obama will be fine. Chances are, Saxby Chambliss will get by, too. But if Republicans refuse to do their duty, conditions for the national and global economy will get “very bad, very fast,” including “financial-market chaos.”
“Think about what we’re talking about here,” Steve Bell, director of economic policy at the BPC, told Ezra Klein yesterday. “We’re talking about the reserve currency of the world. We’re talking about the deepest and most liquid markets in the world. And we’re sitting here wondering if we’ll cover our obligations?”
The consequences would be brutal and long-lasting. America’s reputation, global standing, and stability would very likely never — ever — be the same.
So, Sen. Chambliss should probably take five minutes to understand that the fire he’s playing with is catastrophically dangerous. Because at this point, the Republican senator isn’t just threatening to hurt America on purpose, he’s under the misguided impression that Obama’s the one who’ll suffer.
By: Steve Benen, The Maddow Blog, January 7, 2013
“A Pretty Simple Con”: The Conservative Movement Is Still An Elaborate Moneymaking Venture
The conservative media movement exists primarily as a moneymaking venture. As Rick Perlstein explained in the Baffler, some of the largest conservative media organs are essentially massive email lists of suckers rented to snake oil salesmen. The con isn’t limited to a couple of newsletters and websites: The most prominent conservative organizations in the nation are primarily dedicated to separating conservatives from their money.
FreedomWorks, which is funded primarily by very rich people, solicits donations from non-rich conservative people. More than 80,000 people donated money to FreedomWorks in 2012, and it seems likely that only a small minority of those people were hedge fund millionaires. And what are people who donate to this grass-roots conservative organization funded mostly by a few very rich people getting for their hard-earned money? In addition to paying Dick Armey $400,000 a year for 20 years to stay away, FreedomWorks also apparently spent more than a million dollars paying Glenn Beck and Rush Limbaugh to say nice things about FreedomWorks, in order to convince listeners to send FreedomWorks money that FreedomWorks would then give to Limbaugh and Beck. It’s a pretty simple con. Beck, meanwhile, also has a subscriber-based media operation, in which people pay his company money for access to programs where Beck expresses opinions that he was paid to hold. He also spent years telling everyone to buy gold from a company that pays him and defrauds consumers.
As Armey admitted to Media Matters, FreedomWorks at this point essentially raises money for the sake of raising money. It exists to bilk “activists.” Armey at least has the courtesy to be embarrassed by this:
“If Limbaugh and Beck, if we were using those resources to recruit activists and inform activists and to encourage and enthuse activists, that’s one thing,” Armey explained. “If we are using these things to raise money; one, it’s a damned expensive way to raise money; and two, it makes raising money an end on to itself not an instrumental activity to support the foundation work that our organization does.”
Armey also said the relationship with Beck expanded to include rallies that were co-sponsored by Beck and FreedomWorks, and included appearances by FreedomWorks President and CEO Matt Kibbe.
Armey said he objected to these events, dubbed FreePACs, because they often charged admission to FreedomWorks activists.
A review of promotional information for the events found $20 was a standard donation requested at some of the locations, while a Dallas, TX., FreePAC last summer charged prices as high as $971.
But Armey is basically alone. No major right-wing media figures ever speak out against the widespread practice of constantly bilking credulous old people. Newsmax, a company whose email list is regularly given over to blatant get-rich-quick scheme hucksters, publishes basically every major and minor conservative columnist (and Lanny Davis). Newsmax pays to syndicate their columns, and their stature lends the site credibility. None of them ever complain. No one on the right criticizes the Newsmax business model. It seems to be semi-common knowledge that major conservative media figures sell their endorsements. No one says it’s deceptive. No one says Dick Morris should stop marketing his various ventures on Fox, all the time.
This complete contempt for the audience is unique to the right-wing press — if the Huffington Post made its money selling snake oil, liberals would complain. The recent trickle of complaints about the major nonprofit money-making groups, like FreedomWorks and CrossroadsUSA, has come solely because those groups failed to win the election. If Romney, or even a couple of Senate candidates, had won, no one would mind that the two groups enriched their boards of directors on the backs of tens of thousands of small donors. Right-wing reaction to Armey’s admission to Media Matters has thus far been outrage … that Armey talked to Media Matters.
The problem this presents for the movement, beyond the threat of eventually bankrupting the people who give it power, is that the business of money-making, for consultants and media personalities and Herman Cains, is at this point getting in the way of the business of advancing conservative causes. The groups exert massive influence, and they only ever push the Republican Party to get more extreme. Apocalyptic hysteria is much more effective at getting people to open their wallets than reasonable commentary. There are a lot of people whose livelihoods depend on keeping lots of conservatives terrified and ill-informed. The groups that exist to raise funds raise more funds when they endorse the crazier candidate.
So even if you don’t particularly care that regular conservative Americans are constantly being scammed by their media apparatus, you should still worry about the influence of the scammers. The fact that there is a lot of money to be made in acting like Michele Bachmann is part of why the House seems poised to blow up the U.S. economy. The fact that conservatives have that much contempt for their own true believers neatly explains how they govern when they actually have power.
By: Alex Pareene, Salon, January 7, 2013
“Calling The Great Turtle’s Bluff”: President Obama Should Raise The Debt Ceiling Himself
The budget deal that just averted the supposed fiscal cliff was only a warm up. The next fiscal cliff is the $110 billion in automatic budget cuts (sequesters) that last week’s budget deal deferred only until March. But, as long as we are using topographic metaphors, this is less a cliff than a bluff.
On the Sunday talk shows, Republican leaders were full of bravado and swagger. Representative Matt Salmon of Arizona, on CBS “Face the Nation” said it was about time “for another government shutdown.”
Senate Minority Leader Mitch McConnell, speaking with ABC’s George Stephanopoulos, ruled out any further tax increases, declaring that “the tax issue is finished, over, completed.” He insisted, “Now it’s time to pivot and turn to the real issue, which is our spending addiction.”
But is spending really the problem? For most the postwar era, federal tax revenues hovered around 19 percent of GDP, and spending a bit more than that. But for the four years since the financial collapse, federal revenues have been under 16 percent of GDP, thanks to the Bush tax cuts and the weak economy. It’s true that spending is up—it peaked at 25.2 percent of GDP in FY 2009, mainly because of the stimulus. But if it were not for the stimulus, unemployment would be even higher and growth even lower.
The point is that none of these fiscal issues caused the financial collapse, nor are they retarding the recovery. Were Congress to reduce the budget deficit, it would weaken, not strengthen the recovery. That is the real danger of the so-called fiscal cliff.
Spending relative to GDP was as high as 23.5 percent in the Reagan years, a shade above its projected level for this year. So there is no “addiction to spending.” If a free society wants to tax itself more to pay for decent retirement and health benefits, that is a political choice. Even with the slight tax increase of last week’s budget deal, limited to the top one percent, we still have the lowest tax rates of any wealthy country.
Seemingly, the Republicans hold a much stronger hand in the next round of budget talks: If Congress does nothing, the automatic cuts of the sequester take hold.
But Republicans have been blustering on taxes and spending for years. They were never going to raise taxes (Sorry, Grover), but when Obama decided to hang tough they turned around and voted to hike taxes on the richest one percent.
Obama needs to call McConnell’s bluff. On the issue of the debt ceiling, he can invoke his authority under the Fourteenth Amendment, which provides that the U.S. government’s debts must be honored. He’d get wide backing.
On the sequester, Obama can keep Social Security and Medicare cuts off the table. There is more than one way to balance accounts going forward. One way is to raise the ceiling on incomes subject to payroll taxes. That would be a lot more popular than cutting benefits.
And does McConnell really want the sequester to bite, with its $60 billion in Pentagon cuts? In the great budget showdowns of the mid-1990s with Newt Gingrich, Bill Clinton got the GOP to blink first.
If Clinton could achieve that with the Great Newt, Obama can do no less with the Great Turtle.
By: Robert Kuttner, The American Prospect, January 7, 2013
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