“Wasting Our Minds”: A Young Mind Is A Terrible Thing To Waste
In Spain, the unemployment rate among workers under 25 is more than 50 percent. In Ireland almost a third of the young are unemployed. Here in America, youth unemployment is “only” 16.5 percent, which is still terrible — but things could be worse.
And sure enough, many politicians are doing all they can to guarantee that things will, in fact, get worse. We’ve been hearing a lot about the war on women, which is real enough. But there’s also a war on the young, which is just as real even if it’s better disguised. And it’s doing immense harm, not just to the young, but to the nation’s future.
Let’s start with some advice Mitt Romney gave to college students during an appearance last week. After denouncing President Obama’s “divisiveness,” the candidate told his audience, “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”
The first thing you notice here is, of course, the Romney touch — the distinctive lack of empathy for those who weren’t born into affluent families, who can’t rely on the Bank of Mom and Dad to finance their ambitions. But the rest of the remark is just as bad in its own way.
I mean, “get the education”? And pay for it how? Tuition at public colleges and universities has soared, in part thanks to sharp reductions in state aid. Mr. Romney isn’t proposing anything that would fix that; he is, however, a strong supporter of the Ryan budget plan, which would drastically cut federal student aid, causing roughly a million students to lose their Pell grants.
So how, exactly, are young people from cash-strapped families supposed to “get the education”? Back in March Mr. Romney had the answer: Find the college “that has a little lower price where you can get a good education.” Good luck with that. But I guess it’s divisive to point out that Mr. Romney’s prescriptions are useless for Americans who weren’t born with his advantages.
There is, however, a larger issue: even if students do manage, somehow, to “get the education,” which they do all too often by incurring a lot of debt, they’ll be graduating into an economy that doesn’t seem to want them.
You’ve probably heard lots about how workers with college degrees are faring better in this slump than those with only a high school education, which is true. But the story is far less encouraging if you focus not on middle-aged Americans with degrees but on recent graduates. Unemployment among recent graduates has soared; so has part-time work, presumably reflecting the inability of graduates to find full-time jobs. Perhaps most telling, earnings have plunged even among those graduates working full time — a sign that many have been forced to take jobs that make no use of their education.
College graduates, then, are taking it on the chin thanks to the weak economy. And research tells us that the price isn’t temporary: students who graduate into a bad economy never recover the lost ground. Instead, their earnings are depressed for life.
What the young need most of all, then, is a better job market. People like Mr. Romney claim that they have the recipe for job creation: slash taxes on corporations and the rich, slash spending on public services and the poor. But we now have plenty of evidence on how these policies actually work in a depressed economy — and they clearly destroy jobs rather than create them.
For as you look at the economic devastation in Europe, you should bear in mind that some of the countries experiencing the worst devastation have been doing everything American conservatives say we should do here. Not long ago, conservatives gushed over Ireland’s economic policies, especially its low corporate tax rate; the Heritage Foundation used to give it higher marks for “economic freedom” than any other Western nation. When things went bad, Ireland once again received lavish praise, this time for its harsh spending cuts, which were supposed to inspire confidence and lead to quick recovery.
And now, as I said, almost a third of Ireland’s young can’t find jobs.
What should we do to help America’s young? Basically, the opposite of what Mr. Romney and his friends want. We should be expanding student aid, not slashing it. And we should reverse the de facto austerity policies that are holding back the U.S. economy — the unprecedented cutbacks at the state and local level, which have been hitting education especially hard.
Yes, such a policy reversal would cost money. But refusing to spend that money is foolish and shortsighted even in purely fiscal terms. Remember, the young aren’t just America’s future; they’re the future of the tax base, too.
A mind is a terrible thing to waste; wasting the minds of a whole generation is even more terrible. Let’s stop doing it.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 29, 2012
“In The Rearview Mirror”: GOP Already Backseat Driving Romney Campaign
It seems awfully early in the campaign for campaign-strategy kibitzing, but Republicans are already leaning into the front seat to tell Mitt Romney what he should be doing differently. The New York Times reports on a host of Republicans fretting over the “angry tenor” of Romney’s campaign. Likewise, the Wall Street Journal editorial page urges Romney to be more positive. (And also, um, more mean: “One of Mr. Romney’s trickiest challenges will be how to handle Mr. Obama’s, er, veracity. … Mr. Romney can’t let the President get away with this.”)
Campaign backseat driving, as a rule, tends to be crap. There is a grain of truth here. In any incumbent election, voters tend to have pretty firm opinions about the incumbent. The campaign dynamic therefore hinges largely on the acceptability of the challenger. (Obviously, if the incumbent is popular or unpopular enough, the challenger’s standing doesn’t matter much.) The 2004 election, an election that seemed to revolve almost entirely around defining John Kerry, offers a good illustration. An incumbent hanging around the 50 percent approval mark will tend to devote his energy to disqualify the challenger, and the challenger will tend to focus on building himself up.
The problem for Romney’s campaign is that his staff is built to run a negative campaign.
Jason Zengerle’s fantastic profile of Eric Fehrnstrom, Romney’s all-purpose guru, underscores how and why his campaign has behaved as it has. Fehrnstrom is tabloid hit man by trade, a cynical man who is filled with resentment at the liberal swells. He excelled at crafting a series of attacks against Romney’s parade of Republican challengers, knocking each of them off one by one. But a big-picture visionary he clearly is not. The undercurrent of early criticism probably reflects the fact that Romney’s main advisers are not deeply rooted in conservative-movement ideology.
An additional problem is that Romney doesn’t have a politically attractive vision to offer. The Journal counsels him to move beyond his gauzy paeans to capitalism and American greatness and instead embrace the Paul Ryan agenda more specifically. Of course, Romney had to embrace the Ryan plan to make it through the primary, but his campaign pretty clearly grasps that this is a liability, and the more closely he’s tied to its specific policies, the worse he’ll fare. A bold and centrist agenda might work — say, an embrace of a Bowles-Simpson type of plan, perhaps coupled with some alternate proposal to ensure universal coverage. But the Ryan plan precludes that.
The Journal also argues that Romney should inoculate himself from the inevitable charge that he represents a return to the Bush era by attacking Bush’s record from the right:
Before Mr. Obama’s stimulus, Mr. Bush joined with Nancy Pelosi and Larry Summers on the blunder of “targeted, temporary” tax cuts. Mr. Bush began playing business favorites for ethanol and green energy fads. Republicans in Congress spent like Democrats and protected Fannie Mae and the housing lobby. And Mr. Bush and most Republicans embraced an easy-money Federal Reserve that favored Wall Street and asset bubbles at the expense of real middle-class incomes.
The interesting thing about this isn’t the political-advice aspect. It’s that the Journal is really giving away the game on the right-wing hysteria against Obama. After all, the point here is that many of Obama’s policies truly are a continuation of traditional bipartisan approaches. Republicans (including the Journal) have spent more than three years decrying Obama’s plans to destroy American freedom with a nefarious new agenda of profligacy and crony capitalism. Here, they’re basically admitting that Obama is just doing stuff they all considered, at worst, a minor annoyance until he proposed it. For better or worse, the party that’s departing from long-standing tradition here is the GOP. I don’t know if it matters much one way or another politically, but it’s quite an admission.
By: Jonathan Chait, Daily Intel, April 26, 2012
“Behind The Eight Ball”: John Boehner Flat Out Lies On Student Loans
Setting the groundwork for the GOP congressional capitulation to President Obama’s insistence that interest rates not be raised on college loans, Speaker John Boehner announced today that the House will vote to keep the rates at the current level and will pay for it from a ‘slush fund’ in the Affordable Care Act.
In making his announcement, Boehner claimed there was never any intent on the GOP’s part to raise the rates on student loans and that President Obama had simply manufactured this disagreement to score political points with young voters and their families.
I wonder, then, how the Speaker would explains the provision in the Ryan Budget—passed last month by all the Republicans in the House but ten—that doubles the student loan rate to 6.8 percent on July 1, 2012?
And that Obamacare ‘slush fund’ the Speaker intends to raid to pay for holding the line on the student loans?
It turns out, the fund in jeopardy was created in the Affordable Care Act to screen women for breast and cervical cancer in addition to providing funds for the treatment of children with birth defects.
This, apparently, is Speaker Boehner’s idea of a slush fund.
While it was clear from the start that Congressional Republicans had handed the president a political gold mine by opposing the freeze on student loan interest rates, it is not only Speaker Boehner’s troops that find themselves behind the political eight ball. Presumptive GOP nominee Mitt Romney, after managing to work out that supporting the hike was a serious political loser, came out in support of the President’s position earlier this week. By doing so, Romney has now put himself in opposition with the Ryan budget for which he has previously offered up his strong and complete support.
BY: Rick Ungar, Contributor, Forbes, April 25, 2012
“At Odds With Reality”: Three Conservative Myths About Government
The Path to Prosperity blueprint of House Budget Committee Chairman Paul Ryan—the foundation for the budget that the House passed last week—reflects conservative politicians’ war on government. As my Center on Budget and Policy Priorities colleagues conclude about a Congressional Budget Office, or CBO, analysis of the Ryan plan:
The CBO report, prepared at Chairman Ryan’s request, shows that Ryan’s budget path would shrink federal expenditures for everything other than Social Security, Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and interest payments to just 3¾ percent of the gross domestic product (GDP) by 2050. Since, as CBO notes, ‘spending for defense alone has not been lower than 3 percent of GDP in any year [since World War II]’ and Ryan seeks a high level of defense spending…the rest of government would largely have to disappear.
The conservatives’ war is sustained by a series of myths.
Myth No. 1: Spending Is Out of Control, and Only Draconian Cuts Will Rein It In
As my colleagues at the center have shown, however, noninterest spending outside Social Security and Medicare spiked in the Great Recession but is scheduled to fall substantially as a share of GDP as the economy recovers (see chart).
To be sure, government spending will rise as a share of gross domestic product as the population continues to age, healthcare costs throughout the economy continue to rise, and more Americans become eligible for Social Security and Medicare. But, my Center on Budget and Policy Priorities colleagues have written:
When Americans hear talk of the government exploding in size and reach, they don’t usually think this means that more people will receive Social Security and Medicare because the population is growing older or that Medicare will cost more because of factors like the aging of the baby boomers and advances in medical technology that improve health and prolong life but at significant cost. Outside of those demographic and health cost factors, the portrait of a rapidly growing federal behemoth is simply at odds with reality, since costs are shrinking to levels well below their historical averages.
Myth No. 2: The Country Faces a Looming Debt Crisis Due to the Debt Incurred In the Past Few Years
That myth fueled irresponsible brinksmanship over legislation to raise the nation’s debt limit last year, and it stands in the way of meaningful deficit-reduction.
While the policies that Presidents Bush and Obama and Congress enacted to combat the financial crisis and Great Recession helped drive up deficits after 2007, those policies were temporary and will have little effect on deficits and debt going forward. The weak economy and the legacy other policies enacted under President Bush (especially his tax cuts) play a far larger role. Indeed, the Congressional Budget Office calculates that under current law (which calls for the Bush-era tax cuts to expire at the end of this year), deficits would fall over the coming decade as the economy improves, and debt would fall to 61.3 percent of GDP in 2022.
Yes, the gap between spending and revenues will rise again as a share of GDP in later decades if we don’t take prudent action to rein in future deficits. Policymakers and analysts who are not ideologically committed to radically shrinking government recognize that this will require a balanced mix of revenue and spending measures. But such a balanced policy runs up against myriad tax myths, including the following:
Myth No. 3: Americans’ Tax Burden Is High and Rising
That’s certainly the impression the Tax Foundation wants to convey in its latest “Tax Freedom Day” report released earlier this week: “Americans will work 107 days into the year, from January 1 to April 17, to earn enough money to pay this year’s combined 29.2% federal, state, and local tax bill. ”
But notice, the report does not refer to “every” American or the “typical” American. That’s because, as this Center on Budget and Policy Priorities report demonstrates, four out of five U.S. households likely pay a much lower average tax rate than the one highlighted in the Tax Foundation report. Moreover, average federal income rates are at historic lows for typical taxpayers. When total taxes, including federal and state and local taxes, are taken into account, the United States has one of the lowest average tax rates among all industrialized countries.
So, here’s the question:
Are those who advance these myths interested in fixing the deficit and debt problem, as most Americans would hope, or are they conducting a bait-and-switch in pursuit of antitax advocate Grover Norquist’s quest to “reduce [government] to the size where I can drag it into the bathroom and drown it in the bathtub?”
By: Chad Stone, Chief Economist at The Center on Budget and Policy Priorities, Published in U. S. News and World Report, April 5, 2012
Ryan Budget Plan: Pink Slime Economics “Flavored With Sulfuric Acid”
The big bad event of last week was, of course, the Supreme Court hearing on health reform. In the course of that hearing it became clear that several of the justices, and possibly a majority, are political creatures pure and simple, willing to embrace any argument, no matter how absurd, that serves the interests of Team Republican.
But we should not allow events in the court to completely overshadow another, almost equally disturbing spectacle. For on Thursday Republicans in the House of Representatives passed what was surely the most fraudulent budget in American history.
And when I say fraudulent, I mean just that. The trouble with the budget devised by Paul Ryan, the chairman of the House Budget Committee, isn’t just its almost inconceivably cruel priorities, the way it slashes taxes for corporations and the rich while drastically cutting food and medical aid to the needy. Even aside from all that, the Ryan budget purports to reduce the deficit — but the alleged deficit reduction depends on the completely unsupported assertion that trillions of dollars in revenue can be found by closing tax loopholes.
And we’re talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Center points out, to make his numbers work Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That’s a lot of money, even in an economy as big as ours. So which specific loopholes has Mr. Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close?
None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That’s the loophole that lets Mitt Romney pay only 14 percent of his income in taxes, a lower tax rate than that faced by many middle-class families.)
So what are we to make of this proposal? Mr. Gleckman calls it a “mystery meat budget,” but he’s being unfair to mystery meat. The truth is that the filler modern food manufacturers add to their products may be disgusting — think pink slime — but it nonetheless has nutritional value. Mr. Ryan’s empty promises don’t. You should think of those promises, instead, as a kind of throwback to the 19th century, when unregulated corporations bulked out their bread with plaster of paris and flavored their beer with sulfuric acid.
Come to think of it, that’s precisely the policy era Mr. Ryan and his colleagues are trying to bring back.
So the Ryan budget is a fraud; Mr. Ryan talks loudly about the evils of debt and deficits, but his plan would actually make the deficit bigger even as it inflicted huge pain in the name of deficit reduction. But is his budget really the most fraudulent in American history? Yes, it is.
To be sure, we’ve had irresponsible and/or deceptive budgets in the past. Ronald Reagan’s budgets relied on voodoo, on the claim that cutting taxes on the rich would somehow lead to an explosion of economic growth. George W. Bush’s budget officials liked to play bait and switch, low-balling the cost of tax cuts by pretending that they were only temporary, then demanding that they be made permanent. But has any major political figure ever premised his entire fiscal platform not just on totally implausible spending projections but on claims that he has a secret plan to raise trillions of dollars in revenue, a plan that he refuses to share with the public?
What’s going on here? The answer, presumably, is that this is what happens when extremists gain complete control of a party’s discourse: all the rules get thrown out the window. Indeed, the hard right’s grip on the G.O.P. is now so strong that the party is sticking with Mr. Ryan even though it’s paying a significant political price for his assault on Medicare.
Now, the House Republican budget isn’t about to become law as long as President Obama is sitting in the White House. But it has been endorsed by Mr. Romney. And even if Mr. Obama is reelected, the fraudulence of this budget has important implications for future political negotiations.
Bear in mind that the Obama administration spent much of 2011 trying to negotiate a so-called Grand Bargain with Republicans, a bipartisan plan for deficit reduction over the long term. Those negotiations ended up breaking down, and a minor journalistic industry has emerged as reporters try to figure out how the breakdown occurred and who was responsible.
But what we learn from the latest Republican budget is that the whole pursuit of a Grand Bargain was a waste of time and political capital. For a lasting budget deal can only work if both parties can be counted on to be both responsible and honest — and House Republicans have just demonstrated, as clearly as anyone could wish, that they are neither.
By: Paul Krugman, Op Ed Columnist, The New York Times, April 1, 2012
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