National Debt – The Wrongologist

More Fresh Hell In Washington DC

The Daily Escape:

Sunrise, Linville Gorge Wilderness, NC – September 2023 photo by Thomas Mabry

Today is the Autumn Equinox, bringing its shortened days and cooler nights. It reminds us that we’re running out of time to avoid a government shutdown, because the GOP can’t stop fighting among themselves. Republicans no longer represent a serious national political Party.

From the Hill:

“House Republicans abandoned plans to take up a stopgap funding measure this week after members of the fractious GOP conference warned there would not be enough votes to pass a continuing resolution to avert a partial government shutdown next month.

Party leaders informed members that…the House would recess subject to the call of the chair. Lawmakers were advised to keep their plans flexible, and that “ample notice” would be provided for any votes they planned to schedule on Friday or over the weekend.

Members weren’t being officially sent home for the weekend because House leaders lacked the votes to adopt a motion to adjourn…”

Here’s a quote from House Minority Leader Hakeem Jeffries (D-NY): (brackets by Wrongo)

“…[in] 2018-2019, they shut the government down for 35 days. When the shutdown began, Trump was president, Republicans controlled the House and the Senate… They shut themselves down. That’s how much it’s in their DNA”

It’s actually worse than that. Since 1995, there have been 5 major government shutdowns. The GOP controlled the House for all 5 of them. Anyone other than Wrongo see a trend here?

Politico says that members of the Problem Solvers Caucus is working with Speaker McCarthy on a deal:

“Small groups of centrist Democrats are holding secret talks with several of McCarthy’s close GOP allies about a last-ditch deal to fund the government, according to more than a half-dozen people familiar with the discussions.”

“Lawmakers involved in the talks — who mostly belong to the bipartisan Problem Solvers Caucus, the Republican Governance Group or the centrist New Democrat Coalition — have labored to keep their work quiet. Many Republicans involved are incredibly worried about revealing their backup plan, wanting to wait until every other tool in McCarthy’s arsenal has failed.

That moment may not be until next week, just ahead of the Sept. 30 shutdown deadline.”

Any solution to the impasse has to be bipartisan, given the intransigence of a handful of wacko Conservatives. As Rep. Don Bacon (R-NE) said about the conservative holdouts: (brackets by Wrongo)

“So why negotiate with these five or 10 people who [constantly] move the goalposts?”

Or as Andy Borowitz put it:

“Zelensky Offers to Broker Peace Deal Between Kevin McCarthy and House Republicans”

Moving on, Sen. Bob Menendez (D-NJ) was indicted on federal bribery charges by the DOJ on Friday morning:

“…federal prosecutors alleging the New Jersey Democrat accepted cash, gold and other benefits in exchange for using his office to enrich three businessmen and aid the Egyptian government. The charges, brought by the Manhattan U.S. attorney’s office, mark the second time New Jersey’s senior senator has faced public corruption allegations. An earlier criminal case eight years ago fell apart.”

Menendez wasn’t alone in the indictment; his wife Nadine Arslanian was also included on the bribery charges.

Cartoons + Memorial Day Weekend

(There won’t be a Monday Wake Up column this week. Wrongo will return on Wednesday, May 31.)

Memorial Day, Arlington National Cemetery – 2013 photo by William Coyle

Monday will be Memorial Day, when we honor the sacrifice of those who died fighting in America’s wars. We mourn those we knew, and we pause briefly to remember those we never knew. The American public’s job is to say, “thank you for your service”. Saying it has become a reflex, like “bless you” when someone sneezes. Our default position is to thank, but not to think. For most of us, America’s foreign wars are a kind of elevator music. Always present, but we barely notice it.

Maybe we watch our town’s parade, or shop at the mall. There’s likely to be a cookout. It isn’t about love of country. It’s about sad Facebook emojis, Memorial Day mattress sales, and burgers on Monday. On to cartoons.

The old man remembers the soldier:

RIP Tina Turner:

Requiring a clean Debt Ceiling dies as Biden negotiates with Freedom Caucus:

A handy reminder:

Saturday Soother – May 27, 2023

The Daily Escape:

Milky Way, Monument Valley Navajo Tribal Park – May 2023 photo by Hasanur Khan

The WaPo’s Paul Farhi writes about “The looming existential crisis for cable news”:

“As recently as 2016, when Trump was narrowly elected president, just over 70% of all households with a TV had cable or satellite TV subscriptions. Today the figure is just under 40%, according to S&P Global Market Intelligence, a research firm.”

And it’s dropping fast:

“During the first quarter of 2023, another 2.3 million customers (or 7% of the total) cut the cord to traditional cable…the number of homes receiving TV via cable is now about the same as it was in 1992, when the industry was still on the rise.”

So, what does this mean for the Cable TV industry? Last year, the licensing fees collected by the six biggest cable news networks (Fox, CNN, MSNBC, CNBC, Fox Business and HLN) amounted to just over $4 billion. Advertisers added another $2.6 billion.

Farhi quotes Alan Wolk, a veteran advertising executive and media consultant:

“Cable news is dying….Not because it’s become irrelevant, but because the medium it lives on, cable TV, is dying.”

He predicts that cable could:

“…for all intents and purposes, disappear within a decade”.

The popular cable networks are profitable, largely because of how pricing works in the cable industry. The financial foundation of cable news isn’t advertising but the license fees that cable-system operators pay for the right to carry them. Regardless of whether a cable subscriber watches Fox, CNN or MSNBC, their monthly cable payments fund those companies.

The day could soon come when the exodus of cable subscribers leaves cable operators unable to pay the hefty license fees that those cable companies now command.

The cable industry sees what’s coming. They have all tried to distribute programming via streaming apps, YouTube channels, podcasts, and social media platforms in an effort to meet the cord-cutters where they are.

Yet so far, no news app comes close to matching cable in popularity and profitability.

Alan Wolk thinks cable news will have a particular problem in crossing the bridge to streaming: The median cable-news viewer is in their 60s and is resistant to new technologies.

The trouble signs are there. Viewers of the cable lineup other than news has sagged over the past decade as younger viewers have deserted cable. USA Network, once the most popular cable channel, has lost 75% of its nightly audience over the past 10 years. FX is down 68%, while the History Channel is off by 65%.

So what does this mean for US politics? Kyle Tharp posts weekly political advertising statistics on new media:

“…political advertisers spent just over $6.6 million on Facebook and Instagram ads last week…. For the fourth week in a row, the Biden campaign was the top-spending political advertiser nationwide on Facebook and Instagram. Their team continues to lean heavily on the platforms for growing their network of grassroots donors…..Political advertisers in the US have spent around $800,000 on Snapchat advertising in 2023.”

Tharp reports that DeSantis’ campaign launch video was heavily watched across all social media:

“On Twitter, the video received 23.8 million impressions…. compared to 2.9 million impressions for Tim Scott’s…launch video, and 9.1 million impressions on Nikki Haley’s…launch video…..Joe Biden’s launch video received 44.8 million impressions. The [DeSantis] video also received 125,000 views on Facebook, 1.9 million views on Instagram, and 236,000 views on Rumble. It’s a strong showing by any measure.”

(An “impression” is how many times it was displayed or had potential “eyeballs” on it.)

When you learn that Trump’s CNN town hall attracted an audience of just 3.3 million viewers, It’s clear that social media is already a major competitor to cable for the political class.

OTOH, if cable news goes away, how will Wrongo get his daily diet of pharmaceutical commercials?

That’s enough for this week. It’s time to forget about the “groundhog day” feeling that you get with the news bunnies constantly talking about the Debt Ceiling. It’s time for our Saturday Soother.

Here on the fields of Wrong, the baby bluebirds have fledged, and you can see them flying from tree to tree. We seem to be in for about 10 days of warmth and sun, with no rain in sight. People around here will soon need to choose between watering their plants and having a full well.

So grab a chair outside in the shade and put on your sunglasses. Now watch and listen to Dvořák’s “Piano Trio No. 4 in E minor, Op. 90 (the “Dumky”)”. Dvořák completed the trio in February 1891, and it is among the composer’s best-known works. The term Dumky is Ukrainian. It refers to epic ballads.

Here the Dumky is performed in the Herbst Theater, San Francisco in 2008 by the Beaux Arts Trio, with Daniel Hope on violin, Antonio Meneses on cello and Menahem Pressler on piano:

America’s Playing Default Chicken

The Daily Escape:

Ice and clouds, Yellowstone Lake, Yellowstone NP, WY – May 2023 photo by Joethehiker

Wrongo doesn’t know about you, but he’s starting to think that the “bi-partisan” Debt Ceiling negotiations aren’t going to stave off a default on the US’ debt obligations.

Every talking head is still saying that at the last minute, Biden and McCarthy will agree to…something. Something that prevents a government shutdown, and a default on payments for the country’s outstanding debt.

But is that real or hopium? In any negotiation, the idea is to find a point (or multiple points) of leverage that bends the other side toward your viewpoint. That helps the two sides to meet at some place in the middle.

So who’s got the leverage in the current Debt Ceiling negotiation? No one. Biden surely has no leverage over the House Republicans. Republican Speaker McCarthy has some leverage over Biden but has little leverage with his own House members. The Senate leaders, Majority Leader Schumer and Minority Leader McConnell, who normally have leverage to help resolve Debt Ceiling standoffs, are bystanders in this game of Default Chicken.

We’re in a high stakes game of chicken because nobody can deliver their side to the table. Politico reports:

“White House aides privately estimate they may need to deliver as many as 100 Democratic votes to ensure an eventual debt limit deal can pass the narrowly divided House…”

But few Democrats will support the deep cuts to social programs that Biden might be forced to agree to. McCarthy knows that a portion of his GOP House members will vote against ANY compromise bill. House Republicans have already called the legislation they passed last month (lifting the Debt Ceiling in exchange for deep spending cuts) the floor, not the ceiling to the negotiation. Dan Pfeiffer quoted Rep. Matt Gaetz (R-FL):

“I think my conservative colleagues for the most part…don’t feel like we should negotiate with our hostage.”

So Gaetz thinks that Biden and the Democrats are his hostages. If they are, how do they negotiate with the terrorists on the other side?

The positions are clear. The White House is open to budget negotiations but opposed to debt ceiling brinkmanship. Republicans threaten default if their budget demands aren’t met. They’re planning to pull the pin on this grenade and then blame Democrats for making them do it.

Recent polling from ABC and The WaPo gives Democrats a narrow advantage: An equal number of voters from each party—78%—would blame the opposite party for default. While 37% of independents say they would blame Republicans and 29% would blame Biden, with 24% blaming both parties equally.

The Democrats’ negotiating position appears to put them in the worst of both worlds: If the Debt Ceiling is breached, the polls show that they will share the political fallout with Republicans. Otherwise, they may have to agree to significant cuts to crucial programs like welfare and food stamps, which will badly hurt them with their base.

Either way, the Dems will complain about the financial wreckage caused by Republican extremism, and hope voters agree with them. The simplest way out is to agree to a temporary debt ceiling increase as we have many times in the past, to allow both sides to continue negotiating.

Sadly, McCarthy and the House Republicans seem to prefer default to compromise. They’re using passing a new Debt Ceiling as leverage to cut spending for Social Security and Medicare while increasing the defense budget. That’s their idea of “fiscal responsibility”. Sure, our military budget is 10 times Russia’s and three times China’s, but Republicans want grandma to tighten her belt.

At the end of the day, we’re stuck playing Default Chicken: The US must pay the bills it has already incurred as they mature. McCarthy can’t be seen by House Republicans to be giving concessions to Biden. After all, they think their job is to save the country from excess spending, not from the consequences of default. Rep. Marjorie Taylor Greene (R-GA) said on Wednesday that no one in the House Republican conference is concerned about the potential of a US debt default:

“Regular Americans … don’t worry about the government shutting down.”

Negotiating with terrorists is very difficult. The pressure on Democrats to cave to Republican demands for massive spending cuts will become harder to resist. If somehow they do resist, chances are we’ll see America default on its debts.

Links You Can Use

The Daily Escape:

Santa Rita prickly pear in bloom, AZ – May 2023 photo by Wilson Goodrich

Today Wrongo returns to his “Links you can use” format from several years ago.

First up, Bloomberg reports that Trump’s takeover of the GOP helped him to rewrite the rules on how primary delegates to the GOP presidential convention will be awarded. Since leaving office, Trump has gotten 10 more states to award delegates through winner-take-all primaries, even if the winner receives fewer than a majority of the votes. The number of winner-take-all states has grown from seven to 17.

Needless to say, if it’s crowded field and he gets the most votes, even if it’s only 30%, he’ll win.

Second, Republican governors have discovered that they’re getting significant political mileage out of championing people who have engaged in vigilante violence that dovetails with the GOP’s culture wars. Brian Klaas writes about the Right’s open embrace of political violence. In Texas, Governor Abbott has said that he was “looking forward” to pardoning Daniel Perry, who murdered a Black Lives Matter protester. Perry was sentenced to 25 years in prison. He had previously texted a friend that he “might have to kill” some people on his way to work.

Over the weekend, Florida Governor DeSantis tweeted his support for Daniel Penny (Perry and Penny?) after Penny killed the homeless Black man Jordan Neely, on NYC’s subway. DeSantis didn’t hold back:

Lots of dog whistles right there from the governor. NBC 4New York reported that the legal defense fund had raised more than $2 million after DeSantis tweeted the link to Penny’s donation page. This shows MAGAs have found another way to wealth and fame as Daniel Penny now joins Kyle Rittenhouse as a violent millionaire funded by the Republican Right.

Brian Klaas wrote about a study that shows “Who Supports Political Violence?”, conducted by Miles T. Armaly, Assistant Professor of Political Science at the University of Mississippi and Adam M. Enders, an Assistant Professor of Political Science at the University of Louisville. Their findings show some key traits that predict support for political violence:

Perceived victimhood is highly correlated with support for political violence. This is different from actual victimhood. While previous research found that people who are actually being oppressed are more likely to turn to violence, this study shows that it doesn’t really matter whether someone is actually being oppressed; instead, the feeling of being oppressed is sufficient.

This was the strongest predictor of support for violence.

The next strongest correlate was a sense of “white identity.” And the two interact, as those who buy into the Right-wing narrative that white people are under attack in America (due to their loss of social dominance), are also likely to be the same individuals who feel perceived victimhood.

Also, past military service is correlated with a predisposition for vigilante violence. People who previously served in the American armed forces were more likely to express support for political violence than those who have not. None of this is good news for the US.

Third, the Debt Ceiling negotiations are resuming today in the White House after House, Senate and White House negotiators met for three hours Saturday, and then reconvened on Monday. Benjamin Studebaker worries that Biden may be about to repeat Obama’s errors in negotiations with Republicans in 2011:

“Back in 2011…Obama faced the same problem…Biden now faces. Congressional Republicans refused to raise the debt ceiling unless Obama agreed to budget cuts….Obama….Instead…cut a deal. He signed the Budget Control Act of 2011. It committed the federal government to…enormous cuts. Over the course of 2012, it became clear that these cuts would cause serious damage to the economy. So…Obama negotiated another deal that would save most of the cuts for 2013. Over the course of 2013, the same arguments were made again, but this time Obama was unable to secure another delay, and the cuts took effect.”

Sounds like what we’re going through right now. In 2013, we escaped the economic disaster, but at the price of the Fed adding several rounds of Quantitative Easing leading to our current economic situation. If Biden agrees to cut spending, the economy will again be damaged.

And the Federal Reserve will be pressured to limit the damage via lower rates or flooding the market with more dollars.

Republicans will, of course, oppose tax increases. That means the Biden administration won’t be able to raise taxes to help offset the growing deficit or pay for future expenses. Therefore it has to rely on the Federal Reserve’s monetary policies. The weaker economy created by rate hikes is an economy where the current tax rates will generate less tax revenue. That creates more political pressure to cut spending.

All of these stories look like rinse, lather, repeat. And not to the nation’s benefit.

Saturday Soother – January 7, 2023

The Daily Escape:

Snow covered kayaks, Lake Sunapee, NH – January 2023 photo by Juergen Roth Photography

Yesterday was two years since the January 6 attack on the US Capitol. And now, some of the same people are holding the House of Representatives hostage like they tried to do in 2021. From the WaPo:

“All but two of the 20 Republican House members who voted against Kevin McCarthy for speaker in Tuesday’s third ballot round are election deniers who embraced former president Donald Trump’s false claims that the 2020 election was rigged…..14 are returning members who voted against certification of the electoral college count on Jan. 6, 2021.”

Then there’s North Carolina GOP Rep. Ralph Norman who urged Trump to declare “Marshall Law,” (sic) just days before the 2021 inauguration. Look at what Norman is saying now:

This should be your primary concern in the power play between the far right Republicans (McCarthy) and the farther right bat-shit Republicans, including Rep. Norman. As Paul Krugman says in the NYT:

“…even with a speaker in place, how likely is it that the people we’ve been watching the past few days will agree to raise the debt ceiling, even if failing to do so creates a huge financial crisis?”

Friday saw the first major breakthrough in the deadlocked voting when on the 12^th ballot, a group of previous Republican holdouts flipped their votes to support McCarthy, but it wasn’t enough for him to clinch the gavel. Then on the 13th ballot, McCarthy picked up another vote bringing his total to 214.

From Axios:

“House GOP Leader Kevin McCarthy is on the brink of clinching the speakership after a group of 15 previous Republican holdouts flipped their votes to support the California lawmaker on Friday, marking the first major breakthrough in negotiations this week.”

McCarthy fell only three votes short of the threshold needed since there were lawmaker absences. That’s 14 new votes for McCarthy, with a maximum of 218 needed to gain the speakership. This is the current state of play, with more ballots to come late on Friday night.

You should note that McCarthy got Ralph Norman’s vote on Friday, after Norman said on Thursday that he would only switch if McCarthy was willing to shut the government down. So, is that what’s in store for us? As JVL says:

“The sad truth is that McCarthy may be about to become the weakest speaker in history. This fight over the speaker’s gavel is exactly what every important vote in the House over the next two years is going to look like: The speaker’s fight is the debt ceiling fight is the budget fight is the Ukraine aid fight.”

Think about the Republican Speakers of the House since Newt Gingrich 30 years ago. Gingrich’s Contract for America has morphed into MAGA fratricide in a decade. It’s been a bit like watching the British royals fracture because Megan and Harry wouldn’t toe the line inside the family.

Recall that the Republicans do not have a lot of experience with House speakers. Before Newt, Joe Martin of MA served two terms (1947-1949; 1953-1955). And since Newt there have been two:

John Boehner (2013-2015)
Paul Ryan (2015-2019)

Boehner was a mediocrity, but he was a professional legislator. Ryan was speaker during much of Trump’s first term. He’s noted for rewriting the tax code, which helped contribute to our ballooning deficits. McCarthy is inferior to either of these previous GOP speakers, who in their own ways were clear failures.

The Republican Party harbors some very dangerous extremists in their ranks, and McCarthy’s pandering to them is a dangerous game, not only for Democrats, but for all Americans. They don’t want policy; they only want airtime.

From Michelle Goldberg:

“…The movement these characters are part of…isn’t simply ideological. It’s also a set of defiant, paranoid, anti-system attitudes, and a version of politics that prioritizes showboating over legislating. That’s why McCarthy has found himself unable to negotiate with the holdouts.”

It’s looking like McCarthy will manage to eke out the speakership. More from Goldberg:

“It is not possible, however, that he’ll emerge, in any real sense, as a leader. His best-case scenario is that he’d be a fragile figurehead, a hostage…constantly in danger of defenestration.”

We all should know that these self-aggrandizing jokers won’t hesitate for a moment to crash the economy and/or shut down the government just so they can crow about it on Steve Bannon’s podcast.

If they will do this to their own Party, imagine what they will do to the rest of us.

It’s time to take our first break of the New Year from the “All Kevin, all the time” barrage and get to our Saturday Soother. It’s cold and rainy in Connecticut, and so it’s indoor activities this weekend, like maybe taking down some ornaments. Or maybe napping.

To help you get calmer about what a GOP majority in the House might do, grab a chair by a big window and watch and listen to “Capricho Arabe” written in 1888 by Spanish guitarist Francisco Tárrega. He was staying in Valencia, where Muslim, Castilian, and Christian cultures mixed, and you can hear all of those influences in this piece.

Here, British guitarist Alexandra Whittingham plays it in 2017 at the Church of St Pierre in Martignac, France:

Don’t Forget the Debt Limit

The Daily Escape:

After Hurricane Ida, Grays Beach, Cape Cod MA – photo by Casey Chmieleki

With all the screaming headlines about Afghanistan, Texas anti-abortion laws and the march of the Delta variant, you probably missed that the US government is running out of money. Reuters explains it:

“Leaders of the Democratic-led Senate and House of Representatives are expected to force votes to lift the $28.4 trillion debt limit in late September. The limit was technically breached on July 31 but is being circumvented by Treasury Department “extraordinary” steps.”

This is an unavoidable political issue for both Parties, because while people dislike the idea of more government debt, they really like the goodies that come along with that debt.

This is happening while the Democrats are jousting with each other, trying to find 50 Dem votes for the bipartisan infrastructure bill, a budget resolution, and a budget reconciliation bill. But they also need to work on increasing the debt limit. From Ed Kilgore:

“The debt limit was suspended in 2019 as part of a two-year budget deal between Congress and the Trump administration intended to postpone major fiscal fights until after the 2020 elections. The deal expired on August 1, 2021, with the effect that the debt ceiling was adjusted upwards to the level of debt as it exists right now.”

Accruing debt above $28.43 trillion requires an increase in, or suspension of, the debt limit. At current levels of expenditure, the government’s checking account, called the Treasury General Account (TGA) at the Federal Reserve Bank of New York, will hit zero in mid-October. It can be extended by “extraordinary measures” into November, which is when the US government would begin defaulting on its bills.

The politics of government funding and increasing the debt limit are always a farce, and it’s no different this time. Republican Senate Minority Leader Mitch McConnell has already announced that Democrats cannot expect a single Republican vote for a debt limit measure right now.

That’s a political problem for Democrats, because a debt limit increase or suspension is subject to the Senate filibuster, requiring 60 Senate votes unless there’s some way around — like including it in a filibuster-proof budget reconciliation measure.

McConnell helpfully suggested that Democrats should just include a debt limit increase in the Fiscal Year 2022 budget-reconciliation bill. But that would guarantee Republicans could “blame” Democrats in the 2022 mid-term election for an increase in government debt.

The foul Republican tradition of trying to hold Democrats hostage when an increase in the debt limit is required, only goes back to the odious Newt Gingrich in 1996. We all know how the farce ends: Congress will avoid default at the last possible minute, just as it has done 78 times without fail since 1960, after concessions are extorted from the other side.

It’s a farce because Congress has already appropriated the funds to be spent and to be borrowed. It has told the Administration in detail how to spend those funds. Now Republicans in Congress want to say (again): “Nope, you can’t borrow the money to cover what we told you to spend”.

Republican Congress critters know we must pay our bills, but for myriad cynical reasons ̶ or just plain political incompetence, they keep the issue alive budget year after budget year, and vote after vote.

The debt limit shouldn’t be increased; it should be repealed. The passage of a budget or any other legislation has an implicit expectation that the government will need to raise x and/or spend y. It’s really that simple. Congress should bite the bullet, and never again need to fight about it.

When they debate the debt ceiling, remember the only reason it’s happening is because one half of our government is good at politics but has no ethics, morals, or sense of patriotism, while the other half of our government is breathtakingly bad at politics.

Eventually, it will be obvious that the Republicans are really fighting about increasing taxes on corporations and the ultra-rich.

We all would be better off if this bullshit ended, and Congress got on with real work.

Can America Avoid Becoming a Failed State?

The Daily Escape:

Fall sunset, Shenandoah NP, VA – photo by juliend73

Sorry, but this column is going to be a downer.

We’ve been talking for the past few days about how hard it is to get politicians to focus on fixing what’s wrong in America. Wrongo originally started down this path in 2009. His plan was to lay out the problems, and to suggest ways in which America might fix them.

But 11 years later, little of what has been suggested here has occurred. Explaining what’s wrong has made very little difference.

Our really big problems now seem to be locked in: Climate change will happen. We can’t (or won’t) deal with the burgeoning disinformation platforms that threaten civil society. It’s difficult to see what will change our growing income inequality. As always, politicians are itching for a fight with some country. Today, the villain is China. Globalization has won, our supply chains now hold us hostage, and our economic future is increasingly controlled by Asia.

America is fast becoming a failed state: Our president tells people to drink bleach. There are more than 100,000 dead in the pandemic, and a significant percentage of them probably were needless deaths.

We have the ability to deal with the crises,but we’re choosing not to. Trump and McConnell, along with Biden, Pelosi and Schumer, all have access to the same, or more likely better information than we do.

They are choosing to ignore that the country is going to hell. Instead, they use each individual crisis for their own political benefit, and for their patrons’ financial benefit. They choose to ignore the near-certainty of a second wave of infections in the fall of 2020, bringing with it the possibility of a second economic collapse, along with more deaths.

We no longer provide the basics for our citizens. We live in a nation where income, savings, happiness, trust in government, and social cohesion are all in free-fall.

This is a recipe for social collapse.

In America most infrastructure is decrepit, from airports, to schools, to roads, because there hasn’t been much public investment. That’s because Americans don’t want to pay higher taxes like the Europeans do. Politicians on both sides still believe the evidence-free ideology of neoliberalism: We’ll all be rich if we invest in nothing, and wait for Mr. Market to correctly allocate resources.

No one cares about anyone else. Nobody will support any group’s pursuit of any goal unless it is also their goal. American life is becoming purely individualistic, adversarial, and acquisitive.

We haven’t invested in the systems that provide healthcare, education, retirement, and childcare. As a result, the average American family now goes without many of these things, since they’re priced out unless they have high paying jobs.

We pay absurd prices for health care. Having a child? That’ll be $50K. An operation? It will cost about what you would pay for a starter home. If she didn’t have health insurance, Wrongo’s daughter’s medication would cost $10,250/month. These basics of life are affordable in the rest of the rich world, but in America, they cost more than the average person can pay.

The average American now dies with $62k in debt. Life has become a sequence of unrepayable loans. Student debt becomes credit card debt and a mortgage, which leads to medical debt. These forms of debt define life in America. The average American is now a poor person, in the sense that they barely make enough to pay for the basics of life. Today, 80% of Americans live paycheck to paycheck, struggle to pay their basic bills, and 63% can’t raise $500 for an emergency.

These are the statistics of a nation that is descending into poverty.

Can it be fixed? Sure, but who’s going to pay for it? If taxes can’t be raised, if deficits can’t grow, what will happen? Nothing.

Except that we will move closer to a collapse. Our leaders say it’s because there isn’t an alternative. They say that we don’t have the money to pay for the changes we want. 70% of Americans say they want decent healthcare, retirement, and education, but they never vote for it.

Not even when it is offered during the primaries.

And it’s never offered in the general election, because nobody will vote for higher taxes to fund a functioning society. The idea simply isn’t acceptable to either of our political parties.

Wrongo’s decade of writing about what’s wrong hasn’t changed anything. Change requires a commitment to taking political risks, and massive voter turnout.

Otherwise, same old, same old is the path to our society’s destruction.

Funding The Revolution

The Daily Escape:

Lake Louise, Alberta, Canada in snow – photo by Yan Gao

When the President and the incoming Speaker of the House get into a televised shouting match over whether we have enough money to fund Trump’s wall, you know that things have to change in America. They’re fighting over use of a limited resource, the US government’s funding.

We now have within our means the ability to feed, clothe, shelter, and educate everyone. But, as a country, we are unwilling to do so, because we buy into neoliberal economic theory. Never in history have we had the ability to make our species as secure as we do now, but we choose instead to make as many as insecure as possible.

Until about 1980, economic growth created a level of prosperity that earlier generations of Americans could only dream about. But, economic growth no longer makes people more economically secure. We’ve become prisoners in a system that promotes permanent growth, where wages stagnate, schools decay, and Goldman Sachs sits inside our government.

The question we should be asking is: How can our politics provide an answer to our people’s need for economic security? We know that neoliberalism has reduced many of our people to states of economic insecurity. We know that our economic and social order must change, and profoundly, or face an eventual revolution. This isn’t an option, it’s a certainty.

That means that only state funding will create the (peaceful) change we need.

Here’s a big idea from Richard Murphy, a UK tax accountant:

…To put this another way, what may be the biggest programme of change ever known in human history is required in very short order. We need new energy systems; transformation of our housing stock; new transport infrastructure; radically different approaches to food that might even require rationing if we cannot create change any other way; different ways of working and new ways of using leisure time.

Murphy goes on to say:

But this must be done in a way that increases certainty. Jobs must be created on the ground…And I mean, in every constituency….but the transport and other infrastructure must be provided in that case and that does not simply mean more roads. The social safety net must be recreated. That means a job guarantee. It also means a universal basic income. And business must be transformed. Since that process will be incredibly expensive this requires capital and if that means state investment and co-ownership, so be it.

Murphy says that if this was wartime, our government would find the money to fund radical change. He says that we can no longer just extract higher taxes from the rich to solve our funding requirements, we need to create a vision, a plan and funding to achieve the change required.

One way to fund a portion of these requirements may be to restrict funding for the military, to eliminate tax breaks and subsidies for corporations. More from Murphy:

The time for pussy-footing is over. We know what we need to do. We know the scale of the issue. We know the reasons for acting….and we know we can pay for it. This is not left or right as we know it. And any party not addressing it is part of the problem and not the solution.

He’s suggesting deficit financing for societal gain. What are the chances that revolutionary change can happen? Almost zero today. Left to our political class, we’re just going to keep on doing what we’re currently doing, that is, until we can’t.

As we said yesterday, people say, “It’s the system, we can’t change it”.

But, in the Middle Ages, the exact same thing could have been said about feudalism. That institution was deeply entrenched, it was “how things are, and were meant to be.” It was inconceivable that something like democratic government could ever succeed feudalism, yet it did.

Today, our revolutionary task is to allow democracy to express its full potential to reshape and revitalize our social and economic life.

We must begin by setting priorities, taking resources from areas that drain the economy. Then we need to devote those resources to things that will make for a healthier, more secure economy.

One example is to adjust the priority that military defense spending has in our economy. Let’s stop being the world’s policeman, nobody wants us to do it. Then, use the excess resources to build infrastructure, and renewable energy systems.

Everything else we need then will become easier to build.

It’s a matter of deciding what our priorities are, and voting for those who agree with that vision.

Will Dems Counter the GOP’s Plan to Cut Social Security?

The Daily Escape:

Fall in Paradise Valley, Yellowstone NP – photo by Annie Griffiths

The mid-terms are coming, and we are having difficulty focusing on some important issues, because America has a short attention span, and we’ve been Kavanaugh ‘ed and Khashoggi ‘ed so much lately.

Two issues that are linked are the amazing deficit caused by the Trump tax cuts, and the moves being plotted by Mitch McConnell, Paul Ryan and others to cut Medicare, Medicaid and Social Security.

Let’s start with tax revenues. It was clear to critics that the 2017 GOP tax cut was going to quickly increase the budget deficit and add $ trillions of the national debt, and here it is:

The federal deficit grew by nearly $800 billion over the first fiscal year of Trump’s presidency, during which the Republican Congress passed a tax cut targeted mostly to corporations and the wealthy, which is projected to add more than $1 trillion to the deficit over the next 10 years.

And it didn’t take long for Republicans to insist that the deficits were actually caused by Social Security, Medicare, and Medicaid, not their tax cuts for corporations and the wealthy. From Vox:

Fresh off the news that the deficit is increasing under President Donald Trump, Senate Majority Leader Mitch McConnell told Bloomberg News that Congress should target Social Security and Medicare for cuts to address the growing federal debt.

The White House and GOP leaders promised America that the tax cuts would pay for themselves, but they haven’t. The growing federal deficit hasn’t caused Republican leaders to reconsider their tax policy. Instead, they argue that entitlement reform — Republican-speak for cuts to social safety net programs — is what’s really needed to address the federal deficit. From McConnell’s interview with Bloomberg this week:

It’s disappointing, but it’s not a Republican problem….It’s a bipartisan problem: unwillingness to address the real drivers of the debt by doing anything to adjust those programs to the demographics of America in the future.

Republicans have opposed Social Security and Medicare since they were created. But because these programs enjoy overwhelming support from the American people, they would not normally talk about their plans for benefit cuts three weeks before an election.

But, they are doing just that.

This is a real issue, since those programs make up a large share of federal spending: Medicare was 15% of the federal budget in 2017, and it’s projected to grow to 18% by 2028. Social Security is a bigger chunk of the budget (24% in 2016), and our aging population will put a greater strain on the program. Here is the budget breakdown:

Democrats want to expand, not cut these programs. Republicans may see their last, best chance to cut them slipping away with the mid-terms. They seem determined not to let that happen, so this will be a big issue in the lame duck sessions. The GOP will use the cost of their tax giveaways as the excuse to do what they have wanted to do to social programs all along.

If the GOP is talking like this before the mid-terms, imagine the carnage if they keep control of both Houses of Congress!

People who want to defend Social Security and Medicare better work hard to get out the vote in November. And the latest news about the House isn’t encouraging. Larry Sabato’s Crystal Ball reports that Democrats aren’t there yet:

A race-by-race analysis of Democratic House targets shows the party is close to winning the majority, but they do not have it put away, in our judgment, with Election Day less than three weeks away.

Barring a big, positive late change in the political environment in favor of Republicans, the bare minimum for Democratic House gains is in the mid-to-high teens. The needed 23-seat net gain is not that far beyond that and there are many different paths Democrats can take to achieve it.

He says Dems can count on 18, but need 23…

Assuming that the Dems won’t go along with the GOP’s planned social spending cuts, Republicans will try to blame Nancy Pelosi, Chuck Schumer and the Democrats, assuming their cuts to social programs fail.

Republicans will say “Democrats plan to raise taxes on tens of millions of middle-class Americans” to cut the deficit, and that’s true. But, it would be just a part of the package of fiscal moves to cut the deficit, with the primary focus on clawing back some of the massive Republican corporate tax cuts.

Democrats need to talk this up in the next three weeks to counter the GOP’s clearly articulated game plan.

The Wrongologist

Geopolitics, Power and Political Economy

Category: National Debt

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