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A Global Recession?

The IMF warns the danger of a new global slowdown – another recession – is “alarmingly high.” We’ll look at the odds and how to beat them.

Protesters hold a shark balloon, featuring International Monetary Fund (IMF) in the northern Greek port city of Thessaloniki, Saturday, Sept. 8, 2012. Greek Prime Minister Antonis Samaras says the final round of austerity measures contains painful and unjust cuts but is necessary to restore Greece's credibility and continue to receive funding from creditors. (AP)

Protesters hold a shark balloon, featuring International Monetary Fund (IMF) in the northern Greek port city of Thessaloniki, Saturday, Sept. 8, 2012. Greek Prime Minister Antonis Samaras says the final round of austerity measures contains painful and unjust cuts but is necessary to restore Greece’s credibility and continue to receive funding from creditors. (AP)

Behind everything else – behind meningitis and Nobel Prizes and Big Bird and debates – there is still the issue of how we’re going to eat and live and work and have a roof over our heads. That is, the issue of the economy. This week, the IMF is putting up warning flares again. The risk of a new global slowdown, global recession, it says, is – quoting them – “alarmingly high”.

In Europe, 80 percent likelihood. And it bleeds out from there. Nobody wants to go back in that hole. Too much pain. How do we avoid it?

This hour, On Point: as America prepares to vote, avoiding another bust.

-Tom Ashbrook

Guests

Simon Johnson, professor of entrepreneurship and economics at the M.I.T. Sloan School of Management.  Co-author with James Kwak of “White House Burning: The Founding Fathers, Our National Debt, and Why it Matters To You.” He blogs at The Baseline Scenario.

Joseph Gagnon, senior fellow at the Peterson Institute for International Economics.

From Tom’s Reading List

Bloomberg “The International Monetary Fund cut its global growth forecasts as the euro area’s debt crisis intensifies and warned of even slower expansion unless officials in the U.S. and Europe address threats to their economies.”

Wall Street Journal “France, Spain and several other euro-zone governments won’t hit budget deficit targets agreed with European authorities, the International Monetary Fund said Tuesday, setting the stage for a contentious debate over whether the governments should pursue more cuts or allow the targets to slip.”

Project Syndicate “Central banks on both sides of the Atlantic took extraordinary monetary-policy measures in September: the long awaited “QE3” (the third dose of quantitative easing by the United States Federal Reserve), and the European Central Bank’s announcement that it will purchase unlimited volumes of troubled eurozone members’ government bonds. Markets responded euphorically, with stock prices in the US, for example, reaching post-recession highs.”

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  • WorriedfortheCountry

    Oh crap.

      Well, at least we have a great economy here in the US.  We know it must be firing on all cylinders because the government told us we added more jobs in September than any single month since 1983.  Pretty heady stuff.
     

    • Don_B1

      The U.S. economy IS recovering, no thanks to Republicans who have forced austerity in the public sector which has held back the recovery.

      The September BLS report may well be UNDER estimating the recovery’s strength; see:

      http://krugman.blogs.nytimes.com/2012/10/06/constant-demography-employment-wonkish-but-relevant/

      and:

      http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/10/08/september-jobs-report-said-the-economy-gained-114000-jobs-heres-why-thats-probably-too-low/

      • WorriedfortheCountry

        Wow.  They are working hard.  I wonder if they would be working this hard if it wasn’t a month before the election.

        I heard a financial analyst (an economist) over the weekend discount the upward revisions in the prior two months because they were almost ALL government jobs and his argument was government jobs cannot create a healthy economy. Further he focused almost exclusively on the more accurate 114,000 number which is really 104,000 because 10K were government jobs.  As many others have mentioned 104,000 isn’t enough growth to handle population growth.

        Sure, better than shrinkage but not robust growth either.

        • Don_B1

          Anything you say is worthless without a link to verify it; you have a track record of false posts. Why do I say that? Because I did READ the BLS report and do not find a single thing to support your (made-up ?) claim:

          “The unemployment rate decreased to 7.8 percent in September, and total nonfarm
          payroll employment rose by 114,000, the U.S. Bureau of Labor Statistics reported
          today. Employment increased in health care and in transportation and warehousing but changed little in most other major industries.”

          From:

          http://www.slate.com/blogs/moneybox/2012/09/27/bls_benchmark_revisions_government_finds_386_000_new_jobs_.html?wpisrc=obinsite

          you might learn that jobs revisions have been mostly upwards lately, and that would support indications that people are feeling an improving economy.

          But of course you are not here to learn anything, but just to spout radical right talking points; that one was pretty lame.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      “The government told us we added more jobs…”

      Job Truthers: The latest title for people who’ve learned that “birth certificate” doesn’t quite have the panache in polite company that it used to.

      • WorriedfortheCountry

         I guess Obama economic adviser Austan Goolsbee was the first ‘jobs truther’.

        In 2003, Obama economic adviser Goolsbee said government ‘cooked the books,’ producing lower unemployment rates in an op-ed.

        • Don_B1

          So now you spread Jack Welch’s libel, without a link?

          Check here:

          http://www.politico.com/news/stories/1012/82254.html

          and here:

          http://mediamatters.org/research/2012/10/11/fox-seizes-on-out-of-context-quote-to-defend-jo/190540

          But then you can go to the original source, where the term, “cooked the books,” is used in a TOTALLY different way, with a TOTALLY different meaning:

          “The government reported that annual unemployment during this recession peaked at only around 6 percent, compared with more than 7 percent in 1992 and more than 9 percent in 1982. But the unemployment rate has been low only because government programs, especially Social Security disability, have effectively been buying people off the unemployment rolls and reclassifying them as ”not in the labor force.”
          In other words, the government has cooked the books. It has been a more subtle manipulation than the one during the Reagan administration, when people serving in the military were reclassified from ”not in the labor force” to ”employed” in order to reduce the unemployment rate. Nonetheless, the impact has been the same. [The New York Times,11/30/03]”

          See:

          http://www.nytimes.com/2003/11/30/opinion/the-index-of-missing-economic-indicators-the-unemployment-myth.html?pagewanted=all&src=pm

          This should be the end of your SHODDY comments, but your troll mission will just not go away, will it?

  • Shag_Wevera

    Well, at least the wealthy and the politicians don’t have to worry.  Isn’t it strange how these two groups do well even if the rest of the world is going to hell?  The one exception to this rule is when they push their advantage so far that the paradigm tips and revolution results.  In America, the populace has been groomed away from revolution through lack of education and abundant food and entertainment.  I suspect that there is still a tipping point, but I’m not sure where it lies. 

    • Prairie_W

      Tipping point?  Probably tumbrels and guillotine?  Tipping the head into the basket?

    • Don_B1

      Just to document your statement, see:

      http://www.nytimes.com/2012/03/09/us/09iht-letter09.html

    • BHA_in_Vermont

       Strange? Not at all. The rich make the rules, sometimes through the politicians whose election runs they finance, to protect and enhance their wealth. Money is power and according to the Supreme Court, money is speech. The loudest ‘voices’ get what they want.

      Some people can not fail, take the stock broker. They get paid anytime you buy or sell stock. It doesn’t matter if YOU make or lose money. Market up or market down, THEY make money.

  • Shag_Wevera

    Can’t wait to see the “austerity hawks” try to come for the French.  French workers don’t screw around.  Produce dumped in the streets, strikes…  They’ll make the Greeks look like model capitalist automatons by comparison.

  • Yar

    I would like to hear Simon Johnson’s take on a plan to link wages to a basic commodity like electricity.  I fear we are in for a period of hyper inflation.  This is is the only way I an envision our debt will ever get paid or be written off.  If you think about it, the crash on Wall Street, the banks’ bailout, the housing bubble, was all just added to a credit card bill that will never be paid.  It will cause revolution, or we can use inflation, but the true bill is uncollectible, or has already been paid, depending on your point of view.
    The concept of connecting wages to a real value, originates with Brazil, where during hyper inflation economists saved the county by developing a virtual currency.  They called it URV or (unit of real value.)  It protects the poor from some of the worst effects of inflation, which avoids revolution.  I don’t see a gradual erosion in our inflation dam, once it is breached, once the dollar is considered a bad bet, I see billions or trillions of off shore dollars flooding back to the US looking to salvage any value they can find.  Grain, minerals, scrap metals, maybe even some manufactured goods will surge on the export market as people and countries attempt to convert their dollars into something real.  
    Explain the difference in top down currency support with a bottom up approach.  We have undermined the bottom of our economy for the past three decades. 
    Finally, please explain the concept of Jubilee as an economic principle, used to re-stabilize an unstable economic system. When the gap between the haves and have-nots gets to a certain point the lightening bolt of anarchy strikes.  Please tell me my visions are wrong, and that failed economies don’t lead to civil war. Explain how we keep the peace.

  • Wm_James_from_Missouri

    _How does Bloomberg expect the ‘US to address the threats to their economy ‘, when it is the big money interest that run the US, and that have created the threat to the US economy ? Wolves make very bad hen house guards.

    __Our “Fed” wants to buy, so called, under priced housing (instruments ) , to shore up prices, so that people who don’t have jobs or don’t have jobs that pay enough, can pay more for a house than they can reasonably be expected to afford ? Huh ?

    __Why doesn’t the “Fed” buy US reconstruction bonds, that a heavily indebted US can sell at cheap interest rates, that will renew our infrastructure, and supplant our addiction to Chinese investment in our debt, thereby, forcing the Chinese to spend some of their wealth on consumer goods that their underpaid workers would then be able to afford ( as it is a state run capitalistic country), thereby creating real jobs in the US, that will allow citizens to acquire the equity they need to actually buy a house that they can afford and put an end to all of this nonsense ? When that market begins to slow up, maybe, they could provide some angel capital or equity for all of the great minds that have more gismos, gadgets, inventions and breakthroughs that we the consumer could use to propel us all into the 21st century !__  Instead of an 8 % plus unemployment rate, we should be talking about a negative 8 % unemployment rate and how we are going to create a more productive android to keep our growth rate soaring !

    _Here is my help wanted sign:

    _Wanted, beautiful princess to kiss the nearest troglodyte that you find, so that he may be the prince he was born to be !

    • BHA_in_Vermont

      Like always, the crash benefits the most wealthy. They are the only ones with the financial ability to buy all the foreclosed underwater houses on the cheap AND do it with historically low mortgage interest rates. They will rent them out and/or wait a few years until things improve and sell at a big profit.

      Those who lost their houses (sometimes due to their own fiscal irresponsibility, sometime just because the housing market crashed around them due to others fiscal irresponsibility) also lost pretty much most of their net worth in the process. Where did it go? It trickled up.

      • Don_B1

        About year ago, Romney told an audience in Nevada that the housing market should be allowed to fall to the (find it’s) “bottom,” so that investors could buy the foreclosed properties and supposedly resell them to new homeowners.

        That fits perfectly with his “47%” comment and shows his unfathomable willingness to tell the world he supports victimizing the poor and middle class for the benefit of the rich.

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          “Find its bottom” sounds a genuinely Libertarian “destroy the middle class to save it” gambit. After all the ways everyone with connected means have had favors extended by government, this is the line in the sand. No more!

          How many more tens of millions of Americans need to spend another two or three years in poverty, kicked out of their homes, unretired, and dropped out of college, before they’re worthy of the assistance we grant to the well-off as a birthright?

          Funny how libertarian ideas and rich people’s bloodless “video game” take on the economy so often intersect.

          • Steve__T

             What do you think would have happened if instead of the Government bailing out the banks gave the money to the home owners who would then pay their mortgages off and slowly pay back the money at a reasonable rate that the Government gave the banks?

  • Michiganjf

    Let’s hope we don’t get the clueless LIAR Romney as President, or Republican’s will screw the country all over, as they have time and again in since ’94.

    President Obama has kept the U.S. economy performing better than pretty much any other advanced economy in the world, despite the mess he inherited from Bush… despite Republican stupidity and obstructionism… despite the horrid economies of other nations continually threatening the U.S recovery… despite the gutting of the American middle-class by short-sighted corporatism and again, Republican stupidity… etc., etc…

    … and President Obama has STILL managed to bring the Bush deficit down from 1.7 trillion/yr to 1.1 trillion/yr, despite reduced government revenues from the recession, again brought on by Republican stupidities and deregulation.

    Bush added 5 trillion to the debt during his eight years, then the Bush deficit of 1.7 trillion per year has added another 5 trillion to the debt during Obama’s first term… we’re lucky President Obama has reduced Bush’s yearly deficit by 300 billion/yr despite the reduced government revenues caused by the recession, and the need to stimulate economic and job growth from the Bush “job-loss spiral.”

    DON’T LET ROMNEY AND RYAN, TWO SERIAL LIARS, TAKE HOLD OF OUR ECONOMY!!!

    Take a look at this AWESOME chart, remembering that the U.S operated under Bush’s final budget through 2009 (Google “Obama’s first budget” for plenty of proof that the first Obama budget took effect in 2010, not 2009 as some Repugnican’s want you to believe):

    http://home.adelphi.edu/sbloch/deficits.html

    LOOK AT HOW THE DEFICIT HAS GONE DOWN EACH YEAR UNDER OBAMA, FROM BUSH’S HORRID FINAL YEAR’S BUDGET!!!

    ALL of the debt added during Obama’s term is due primarily to Bush taking Clinton’s budgetary surplus and turning it into an absurdly huge deficit… Obama STILL managed to reduce the absurd Bush deficit, DESPITE reduced government revenues and the need for stimulus, WHILE NEVER INCREASING TAXES!!!

    Here’s an interesting article showing how people read the Bush deficit situation in December of 2009:

    http://www.nytimes.com/2009/02/27/opinion/27iht-edbudget.1.20481672.html

    Finally, to prove not only Bush, BUT ALL REPUBLICANS have screwed this country whenever they get into the presidency, here’s another nice little chart showing debt under the last several presidents:

    Carter (D) – started debt/GDP 35.8% ended debt/GDP 32.5%Reagan (R) – started debt/GDP 32.5% ended debt/GDP 53.1%Bush I (R) – started debt/GDP 51.1% ended debt/GDP 66.1%Clinton (D) – started debt/GDP 66.1% ended debt/GDP 56.4%Bush II (R) – started debt/GDP 56.4% ended debt/GDP 84.2 !!!!Check for yourself:http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms
    This entire wiki page is Awesome and worth looking over carefully!!!

    I know WIKI data can be faked, but it is correct and reliable over long term periods as it is revised and scrutinized by many…that is what makes WIKI work.

    This data has held up under more than three years of scrutiny!!!

    Please folks, we have a terrific president who has done EXTREMELY WELL for America and Americans!!!

    I’ll repeat:

    DON’T LET ROMNEY AND RYAN, TWO SERIAL LIARS, TAKE HOLD OF OUR ECONOMY, ALLOWING REPUBLICANS TO SCREW US YET AGAIN!!!!!

    • JAIBEEZ

      So why is this not being presented and explained to the American voters? Is it because they are too stupid to listen to anything but slogans and lies!?!?!

      • Don_B1

        It is mainly that the Republicans, beginning in the spring of 2009, realizing that the ARRA was insufficient, started a campaign to emphasize the deficit’s size and talked austerity, making the horribly FALSE analogy that the government needs to act like the voter’s household and cut spending.

        When your spending is my income and my spending is your income, and when an economic shock causes us both to need to save or pay off debt, we both cut spending to do that but then we both have less income and therefore cannot save or pay off debt without further spending cuts. But government can borrow at near-zero (negative real) interest rates, until the shock’s effects have passed and the economy recovers.

        Note that they want to cut spending on the social safety net and “entitlements,” which will further cut private sector spending, lower aggregate demand and reduce the ability of individuals and businesses to pay off (overleveraged) debt, and cause even more unemployment in a vicious circle. It will also continue the trickle-up of wealth from the poor and middle class to the wealthy.

      • BHA_in_Vermont

        Sadly, yes.

      • DrewInGeorgia

        Too stupid to listen, maybe.
        Too selfish to listen, absolutely.

      • Michiganjf

        I agree… it’s infuriating that republicans get away with any stupidity or lie due to willful delusion by half the country.

        … of course, the media and most Dems no longer do their job of calling the right out on every lie and stupidity.

        Evryone should have the same ad and coverage describing Republicans:”Lie! Liars! Lie! Liars!… etc…”

        • Steve__T

           It’s not just Republicans ALL of them lie.
          Our protectors, the press are bought and paid for. WE used to be able to depend on them to tell us the truth, that was the whole reason for the first amendment.

      • Steve__T

         No just that after a few beers they forgot who lied about what get it all mixed up until someone tells them what they think.

  • Michiganjf

    Here’s that chart again, as Disqus ruins everything these days:

    Carter (D) – started debt/GDP 35.8% ended debt/GDP 32.5%

    Reagan (R) – started debt/GDP 32.5% ended debt/GDP 53.1%

    Bush I (R) – started debt/GDP 51.1% ended debt/GDP 66.1%

    Clinton (D) – started debt/GDP 66.1% ended debt/GDP 56.4%

    Bush II (R) – started debt/GDP 56.4% ended debt/GDP 83.4% !!!!

    Check for yourself:

    http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms

    • Ed75

      You haven’t included what the deficit has been under President Obama.

      • Shag_Wevera

        Perhaps because the data isn’t available because his termhasn’t ended yet?

      • Michiganjf

        Read post above and view links for definitive proof that Obama has REDUCED the yearly deficit EVERY YEAR of his term from where Bush left it… again, Bush took a surplus AND TURNED IT INTO AN ABSURDLY HUGE DEFICIT, crfeating all of this debt!!!!

    • BHA_in_Vermont

       How does Bush I, who immediately followed Reagan, start with 51.1% if Reagan ended with 53.1%?

      But your point is made. “Tax and spend Democrats” reduce the debt ratio, “Cut taxes and spend Republicans” increase it. Its all about arithmetic.  

      • Michiganjf

        Thanks… I corrected the typo.

  • JustEdith

    13 trillion pounds is currently tucked away in tax havens.  It belongs to about 92,000 people.  I don’t know what someone needs with so much money.  It seems to me that this is an issue much bigger than deficits and GDP.  Seems to me we are headed towards a kind of neo-feudalism under a global elite that the rest of us will never be able to catch up with. 

    http://www.guardian.co.uk/business/2012/jul/21/global-elite-tax-offshore-economy

     

  • Potter

    So Mitt? How much of this can you pin on Obama?

    • DrewInGeorgia

      An image of Pinocchio stumbling around blindfolded while trying to pin the tail on an Invisible Elephant popped into my head when I read your comment. Wonder what that’s all about…

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        I can’t say, but I’d like a nip from your flask.

  • MadMarkTheCodeWarrior

    Why should we care about th rest of the world: our
    economic situation has absolutely no relationship to the rest of the world, deregulation and financial engineering on wall street, or Republican economics… clearly it’s all Obama’s fault. Mitt has descended from the heavens to rescue us from all of those evil Democratic economic principles that didn’t have a thing to do with the rise of America as the world’s greatest economic and military power for 50 years and the rise of the middle class… Wait, all that happened before the Reagan revolution and the elevation of ‘job creators’ to the
    status of demigods… Hmmm, I better rethink this Randian Mythonomic Theory and make sure it correlates with historical fact before I go on.

    • Shag_Wevera

      And to think Romney MIGHT win.

  • AC

    is the whole world purposefully ignoring the fact that even most classes of manufacturing jobs are about to disappear ? ?
    like, w/i the next few years?????? DYI on steroids::

    http://www.makerbot.com/

    i feel like one of those lunatics holding an end of the world sign. it’s the end of the old, but i can’t wait for the new!! everyone start polishing up on your logic!!

    • Shag_Wevera

      It’s the end of the world as we know it, and the rich feel fine…

  • Gregg Smith

    Keynesian economics always ends this way.

    • StilllHere

      I thought Obama said we were going to export our way out of this mess.

      • gala1

         export what?

        • StilllHere

          Goods, jobs; as usual he wasn’t specific.

          • BHA_in_Vermont

             Stupid partisan answer.

            Fact is EVERY country was going to fix their economy by exporting more goods. Clearly that doesn’t work.

      • Don_B1

        Obama said that increased exports could and would HELP increase jobs here; but he said green (sustainable) energy jobs would stay here and build jobs here and they ARE!

        But you and Gregg would rather cherry pick to distort and disinform in a way to lead the voters toward making a decision to turn this country into a plutocracy (and maybe a theocracy).

        • Gregg Smith

          Another in a long line of “surplus” funded green energy companies went under a day or two ago. People rage against “subsidies” for oil companies but Romney pointed out in the debate Obama spent the equivalent of 50 years of “subsidies” to oil companies with his subsidies to green energy. It was $90 billion. That could have hired 2 million teachers. 

          Please cite a green energy success story.

          • Mike_Card

            This from PolitiFact:  ‘• Romney said, “In one year, (President Obama) provided $90 billion in breaks to the green energy world … into solar and wind, to Solyndra and Fisker and Tesla and Ener1.” That is incorrect in several ways. That $90 billion wasn’t provided in one year, wasn’t distributed primarily via tax breaks, wasn’t primarily provided directly to companies, wasn’t primarily spent on solar and wind, and wasn’t spent at all on Fisker or Tesla. We rated his statement False.’

        • Gregg Smith

          BTW, A week or so ago I told you that you would catch up in a day or two on the Benghazi terrorist attack. I take it you’ve now heard what I told you before.

          “The State Department now says it never believed the Sept. 11 attack on the U.S. consulate in Benghazi, Libya, was a film protest gone awry,”

          It was a lie from day one… as I said.

          http://hosted.ap.org/dynamic/stories/U/US_US_LIBYA?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-10-09-18-50-07

    • Prairie_W

       With Republicans refusing to take any steps to save the economy and then trying to elect more Republicans to continue catapulting us into even worse trouble?

      • Gregg Smith

        The Republican House has passed over 25 jobs bills.

        • Prairie_W

           “Whether they can be described as ‘jobs bills’ relies on the theory that
          cutting taxes, budgets and regulations will stimulate the economy and
          thereby lead to more employment.” …PolitiFact

          http://www.politifact.com/ohio/article/2011/dec/06/so-how-you-do-you-define-jobs-bill/

          • Gregg Smith

            The S&P said “Cut, Cap and Balance”, which never even got a vote in the Senate, would have prevented the downgrade.

            It’s fine if you want to claim Republican proposals won’t work or if you just disagree about them. But you said Republicans refused to “take any steps”. That’s just a lie.

          • Steve__T

             If she had said Democrats you would have been all over it. The fact is NONE of them want a balance, that would make to much sense To busy trying to one up the other not giving a damn who really loses. And the losers are the American public that elected them.

          • Don_B1

            Again, another disingenuous attribution. S&P apparently NEVER said that “Cut, Cap and Balance” would have satisfied them; they said that they were looking for a $4 trillion reduction in the deficit. Republicans, to shift blame for the debt-limit imbroglio, which correctly falls on them for refusing to compromise their position on increases in revenue, have claimed that because that bill would have met the $4 trillion cut requirement, passing it would have avoided the downgrade.

            But S&P did specifically say that a balanced budget amendment would NOT please them, as it would make reacting to this crisis and economic shocks in the future difficult if not impossible. From Political Correction:

            “When Standard & Poor’s downgraded America’s credit rating from AAA to AA+, they cited the tenuous reliability of our nation’s political system. They even took the unusual step of calling out congressional Republicans for their absolute refusal to consider revenue increases as part of a debt-reduction solution. Yet the same Republicans who spent the months leading up to August 2nd playing a dangerous game of chicken with our nation’s fiscal solvency are now trying to wash their hands of the outcome, deciding instead to blame President Obama and the Democrats for the downgrade. They’re also arguing that the passage of a balanced budget amendment would have prevented the downgrade, even though a day after the announcement S&P Managing Director John Chambers stated without equivocation that a balanced budget amendment would hurt, not help, the government’s ability to respond to the fiscal crisis.”

            http://politicalcorrection.org/factcheck/201108110007

            You continue to mischaracterize the issues in every post you make here, like the little boy who threw his ball down the well and wants a new one.

          • Gregg Smith

            “Cut, cap and balance would have overted the downgrade since it is the only serious outlook on the debt” -David Beers Chief Executive of S&PI don’t make things up.

            http://a12iggymom.wordpress.com/2011/08/08/cut-cap-and-balance-would-have-overted-the-downgrade-since-it-is-the-only-serious-outlook-on-the-debt/

  • StilllHere

    Maybe we need a tax policy like Sweden. “According
    to the Tax Foundation, the United States gets 45 percent of its total taxes
    from the top 10 percent of tax filers, whereas the international average in industrialized nations is 32 percent…Sweden (27 percent).”

    • J__o__h__n

      What are the average wages in Sweden?  What percentage of poor people do they have?

      • Ray in VT

        I also wonder about corporate tax rates, both in terms of the rates and the effective rate that companies pay given the various tax breaks/incentives.

      • gala1

        And mention that Sweden is a Socialist republic …

        • jefe68

          Wrong, Sweden is a social democracy.
          They have some policies that are socialist in nature, such as health care and education, but are clearly a capitalist nation in terms of their economic system. Just as Norway, Denmark, and Finland are.

      • StilllHere

        The average wages of Sweden are lower and their definition of poor is different.

      • Steve__T

         Well the thing that Sweden has that we don’t is about 45 more states of population. You know they have about a 10th of our population?
        What works for a smaller Nation isn’t going to work for us.

    • Yar

      Yes, we should copy Sweden, here is a graph of income.  I expect education would show much the same thing. They also have universal healthcare.  
      This is the source of this image below. I have not checked the quality of data.
      http://super-economy.blogspot.com/2010/03/income-distribution-in-us-and-sweden.html

    • Ray in VT

      Have a link for that?

      • StilllHere
        • Ray in VT

          Thanks.  I went to the site, and I looked quickly, but I wasn’t sure where it would be.

          It is interesting to look at.  I wonder, though, if that includes all taxes.  I see that it mentions payroll and income taxes, but there are also the sales taxes, which make up 30-40% on some state incomes, and those tend to fall heavier on the poor.

          As some others have also mentioned, though, would you be willing to trade the sort of universal health care and “free” higher education that a Swedish type social structure offers in return for the type of tax payment distribution system that they have.  Generally when I have looked at such systems, and for what they offer, they seem like a decent deal.

      • Don_B1

        From Wikipedia:

        “Tax Foundation research is generally critical of tax increases,[8][9][10][11] high business taxes,[12] so-called “sin” taxes,[13] tax preferences for the housing industry,[14] and use of the tax code for “picking winners and losers”.[15][16] However, they are against reducing $47 billion in tax credits for the oil industry, and against taxes on growing fossil-fuel carbon emissions.[citation needed] They have spoken favorably of efforts to balance the federal budget with tax reform and significant spending cuts, such as the Bowles-Simpson plan,[17] the Ryan Plan,[18] and the Wyden-Coats plan.[19]The Tax Foundation has received funding from ExxonMobil and from conservative political groups such as the Koch Family Foundations, the Earhart Foundation,[20] and Citizens for a Sound Economy.”

        The Tax Foundation is NOT an independent unbiased thinktank, but as the above advocated policies on tax issues indicate, it works to promote conservative policies that benefit only the rich; it is REGULARLY criticized for methodological errors and your numbers appear indefensible; I suspect that it is focused on ONLY income taxes rather than the full range of taxes that the countries use.

        • Ray in VT

          I figured that it was probably some sort of right leaning or libertarian group (I think that I’ve seen them referenced before), and my hunch was concerned when I saw some reference to “tax freedom day” (just like how chances are if your group has family in it’s title then you’re probably some sort of religious conservative group).

          That having been said, though, I thought that it was worthwhile to pursue the source and try to evaluate it for myself.  Certain questions have been raised about their numbers, and I think that it’s pretty valid and valuable to ask those questions.  It’s the same reason that I read a chapter from The Road to Serfdom this summer.  I thought that the historical analysis sucked, but it was worth the effort to get the perspective.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Ahh, “Tax freedom day”.

            Hey, isn’t The Fortune 500 Corporate Tax Freedom Day tomorrow?

            (For calendar year 2013, I mean?)

    • adks12020

      Something tells me, based on your previous posts, that you wouldn’t be too happy if we adopted a Swedish style economy.  Scandanavian countries are known for things like high taxes and national health care.  They are ranked #16 on a list of countries by taxes and revenue as a percentage of GDP at 51.6%…the U.S., on the other hand is ranked #193 with 15.3%…..something tells me conservatives wouldn’t be ok with changing to their system….. info from the CIA World Factbook.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      That’s perhaps the most context-free nugget of “knowledge” you’ve ever put here. (Talk about a high bar to clear!)

      I don’t know where you warm up. But maybe you should practice your zingers in front of someone besides other right-wing yes men.

  • J__o__h__n

    More proof that austerity is working. 

  • MadMarkTheCodeWarrior

    Starve the cows, expect more milk  – what a revolutionary concept?

    • http://gregorycamp.wordpress.com/ Greg Camp

       Where are you going to get the feed, when the fields aren’t producing enough for the number of cows?  In other words, borrowing and borrowing to make things better only works for so long, and we’ve been doing it for too many decades.

      • Don_B1

        If the fields are watered (by the government) the grass will grow and support more cows making more milk, just like government spending to build infrastructure (roads, bridges, teachers and basic science on which new industries can build, etc.) will increase the earnings of workers in the private sector, which will allow them to deleverage debts and spend, generating demand for other goods and services which businesses will supply by hiring and buying capital goods, generating yet more employment.

        But your view of the economy as driven by supply BLINDS, repeat BLINDS, you to the FACT that aggregate DEMAND is what drives the economy, particularly in a DEPRESSION!

        With corporations sitting on over $2 TRILLION (probably close to $3 trillion now) which they use to buy government financial instruments at NEGATIVE real interest rates, why would they not produce more goods and services where they could get a better return, EXCEPT that they cannot, because no one has the money to buy those “extra” goods and services, at least at the scale $2 trillion could produce.

        UNTIL you can answer that with a viable economic model of showing how supply will push through a piece of limp spaghetti, forget repeating this wrong, ignorant claim. And you NEVER, EVER, will be able to do that, just as nobody can show that a perpetual motion machine will work.

        Supply-side economics is voodoo economics, just as George H.W. Bush stated.

        • http://gregorycamp.wordpress.com/ Greg Camp

           1.  What view exactly do you think I have about the economy?

          2.  I’ve heard the arguments before.  Spend money to boost the economy.  Don’t worry about debt now.  The problem is that when things get better, we just end up spending more money, rather than paying down that debt.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Capitalism is a system dependent on ever increasing growth – the only way infinite growth is possible is by having everything shrink once in a while – if it’s done quickly, it’s a crash, if it’s done slowly it’s a recession.

    But it will happen – it’s just the way capitalism works. We avoided a major reset in 2008, but the problem is, we still need to move several steps back before we can forward again.

    • Don_B1

      You are referring to “creative destruction” or Schumpeter’s gale, I assume? This idea originated with Karl Marx and captured the wild swings of economies without proper regulation. There can be creative destruction at low scales that do not punish the whole country needlessly.

      Just as small businesses are the big job creators, they are also the big job destroyers. When they get handed a bad economy due to arrogant, irresponsible actions by large financial institutions which were not properly regulated. This only happened because the banks bought off the regulators, not because regulated capitalism has to have large destructive periods, instead of the small resets of the normal business cycle; the big destruction you say is necessary destroys MORE than is necessary because its size enfolds others who would not be part of it otherwise.

      By creating demand now, the government can halt that enlarging effect and spread the “destruction” out over time allowing a quicker recovery than having to have so many, not responsible for the excesses, to have to rebuild also.

      • Steve__T

         You had me until you said “the government can”.

        • Don_B1

          I see you must be ideologically opposed to government; I said “can” not “will” or “should” though it should.

          The cost of that spending will be less than that of the safety net, with the result that it is a win-win approach.

  • DrewInGeorgia

    Tom said he thought we were past Banking Problems. lol

    We need an end to The Financial Sector on a Global scale. If we’re too stupid to figure out a better way forward than trying to finance and pillage our way out of the paper sack that Capitalism built perhaps we deserve what’s coming.

  • nj_v2

    Here we go, again. Another program dealing with the economy, and i’ll predict the words “steady-state” will never be mentioned.

    The last time Mr. Johnson was a guest, one of my questions posted here was presented to him. Something like, “Most strategies to ‘boost’ or ‘stimulate’ the economy presume ‘growth’ as a positive, desirable attribute. Yet, growth relies on continuing inputs of increasingly scarce, increasingly more expensive inputs (notably energy and other manufacturing raw materials). How can economic growth be sustainable given these realities.”

    I recall he said it was a “good question,” but i remember being unsatisfied with the (non-) answer.

    I’ll repeat my plea for a show that deals head-on with the surreality of the assumption of the viability of a “growth” economy in a world of finite resources.

    I’ll even provide the reading list, no extra charge:

    http://steadystate.org/

    http://richardheinberg.com/bookshelf/the-end-of-growth-book

    http://www.yesmagazine.org/blogs/david-korten/beyond-the-bubble-economy

    http://www.upne.com/1584654953.html

    • http://gregorycamp.wordpress.com/ Greg Camp

       For the benefit of those of us listening within one hour and with things to do, would you summarize the idea of a steady-state economy?

      • nj_v2

        Anything that can fit in a nutshell belongs there.

        You can check here for something of a summary:

        http://steadystate.org/discover/faqs/

        If you really cared, you can read the links any time. They’ll still be there.

        • http://gregorycamp.wordpress.com/ Greg Camp

           In other words, no you can’t.  We’re having a discussion here, not at some other site.  Looking at the link, I see that there’s a lot of hope, but not too many details in how to make it reality.

          • nj_v2

            No problem. As soon as i come up with a description of how to change a complicated, entrenched socio-/economic/political system that will fit on a cereal box, i’ll post it straightaway.

            In the meantime, if it doesn’t take up too much of your valuable time (i’m sure you have guns to polish or something), check out Norway’s oil policy.

            Energy economy is government/private hybrid, annual cap on annual extraction, resource treated as part of the commons, carbon tax, dedicated fund gleaned from oil revenues used for public benefit, all political parties agree not to politicize energy policy…

            More links you don’t have time for:

            http://en.wikipedia.org/wiki/The_Petroleum_Fund_of_Norway

            http://www.worldoil.com/Norway-oil-policy-ONS.html

             http://www.npr.org/blogs/money/2011/09/06/140110346/how-to-avoid-the-oil-curse

          • http://gregorycamp.wordpress.com/ Greg Camp

             No, today I have to get ready for a discussion of Chaucer and Boccaccio, and I have papers to grade.

        • Bruce94

          Good job providing Greg and the rest of us some valuable insights & sources.  If I understand the idea of a steady-state economy correctly, it would be one created in a society that recognizes at least a theoretical point at which the benefits of continued growth (i.e. expansion of production & consumption) are outweighed by its costs–direct, indirect, immediate, long-term, social, human or environmental.

          In such a society there is an awareness of the limits of growth in terms of non-renewable resource depletion, environmental pollution, and need saturation (e.g. time scarcity and declining satisfaction brought on by rabid consumerism).

          Since history has shown that economic growth can be consistent with an ever increasing gap between rich & poor and a growing proportion of families & children living at or below poverty (i.e. income inequality), steady-state economics also attends to distribution issues and addresses what markets alone may not:  access to the benefits of growth, equal opportunity, structural unemployment, institutional racism, other forms of discrimination, middle-class constriction and dislocation due to innovation as well as unfair foreign competition.

          In other words, growth is not viewed as a panacea and technology is not viewed as an instrument for eliminating scarcity or transcending finite needs as they are by laissez-faire, free-market growth mania advocates whose interest is driven more by short-term gain and hyper individualism, and less by concern for future generations, communitarian values or mutuality.

  • ThisIsNotBritannica

    The IMF is a cartel of private banks releasing propaganda designed to serve the agenda of the the world’s private global banking system.

    Right now, that agenda includes massive fearmongering to create the environment of fear necessary for the bankers to continue their looting of the world’s wealth.

    In short: we should pay absolutely no attention whatsoever to the IMF — in fact, we should shun it – if we truly want to build a prosperous and relatively peaceful world.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Fiscal cliff – when we can’t cut spending or raise taxes without killing the system, you know we’ve already gone over the cliff and have gone past a point of no return.

  • nhStrobaffa

    Not to simplify the issue too much, but we are struggling to come to terms with a global economy in which everything is measured against consumption (of finite resources) and man made notions of money and wealth.  At some point maybe we will realize we should think about better ways to live without depending on a man made system of economic prosperity.

  • BHA_in_Vermont

    Um, yeah, mortgage rates are down, but didn’t we get into trouble with people who couldn’t afford a house being given loans? I think we better be careful suggesting people should go out an buy a house because the rates are low.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Yeah, but don’t worry, I’m sure the people who got paid by the written loan, risking “not their own money” to mortgagers, aren’t going to make the same mistakdfsslkjrhjfhsrrararbglerbrlrfcntk.

      I can’t even finish that sentence without dissolving into laughter.

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         The only people who can afford to buy homes are drug dealers.

        Everyone else doesn’t qualify since no American workers’ job is assured for tomorrow.

  • BHA_in_Vermont

    Romney said he will cut taxes by cutting tax rates. However, he will remove deductions and loopholes to ensure his ‘tax cuts’ do not increase the deficit/debt.

    That means he is NOT cutting taxes at all, just shifting the source of taxes that are paid.

    - Since he said he wants to “broaden the tax base” he will be taxing those that don’t make enough to pay taxes now. 
    - Since he will make long term capital gains on couples making less than $200K NON TAXABLE, and would presumably cut the capital gains tax for every one, his plan, as has been the history of the last 30 years, will further reduce taxes on the wealthy.

    • William

       Going forward is it not a better idea eliminate taxes on dividends/CG (less than 200k income) to encourage people to invest and save?

      • BHA_in_Vermont

         According to the economists, we need to spend to increase demand so jobs will be created. I don’t disagree with that IF you have the money to spend. So how do you save and invest if you are supposed to spend? :)

        And, DO NOT FORGET, investing in the stock market is synonymous with gambling. There are no guarantees you won’t lose it all. Never invest money you can not afford to lose.

        If you DO have money to invest and the tax rate is 15%, as it is now, instead of Romney’s proposed 0%, are you going to instead stuff it in a mattress? I don’t think so. If you make $100 and pay $15 in taxes, you are still $85 ahead. The ‘cut taxes to increase investment’ concept is a red herring.

        “Investing” in existing shares of stock creates ZERO jobs and ZERO
        goods, it just moves virtual money from one person’s investment account
        to another’s account. Only INITIAL shares or bonds issued by a company to raise
        money are of any value to the economy AND only that ONE TIME – other than to the stock broker
        who makes money on all future resales and purchases of those shares/bonds.

        Romney’s “no tax” plan sounds simple and is unworkable. He complains about the 47% that pay no taxes yet he might actually increase that percentage. If a retired couple gets all their income (and it is $200K in LCG&D?  What if you make $100K in LCG&D and $1M from other sources? Still no taxes on the $100K?

        If he is elected and gets this through, be assured that the accountants who work for the rich like him will make sure they pay even lower tax rates than they do now. When you make way more money than you can possibly spend, it isn’t hard to make the excess fit the lowest possible tax rate. Romney’s $20M 2010 income was almost totally LCG&D from a blind trust. No work, no jobs created, no value to the economy and very low taxes. But his net worth after taxes increased ~9%. By what percentage did the net worth of a member of the “99%”, those who work for a living, increase in 2010??

  • JeanBruce

    What about dropping wages and changed distribution of income?

    • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

       You’re watching it – a major piece of the economy is the unwashed masses going out and buying stuff they can’t afford. As they have less to spend (the last decade they did it on credit), there is less and less economic infrastructure needed to chase those fewer dollars, and the whole thing has to shrink.

      • Steve__T

         I would not say the unwashed masses but masses none the less.
         When I lived in California I saw these what I called million dollar cookie cutter Mac mansions going up all around thees giant golf courses, I don’t mean a few, but thousands and they were so close to each other you could literately reach your hand out from one and touch the other. And I thought to myself why would anyone pay that much money for that? And who are they going to sell them to?
         They sold them and people were clamoring to get them. I watched over the months and low and behold they had nothing but new top end Mercedes BMW’s you name it parked in the driveways. I though WOW there are more stupid millionaires than I thought.
         I was sure, to become a millionaire you had to have a little more than common sense and ability to be very shrewd with your money.
         Because you could buy three times that much property and build a house larger for about the same money.

        Then the bubble went pop and they weren’t millionaires any more, just back to being Wanna Be’s crying to anyone who would listen how they were robbed.
        I was very sad for them as I drove my 12yr old truck to my 6K dollar trailer to eat a very nice porterhouse stake dinner and a good Merlot.

        • BHA_in_Vermont

           They probably weren’t millionaires to start with. Just posers who were given way too much leveraged money to keep up with the Joneses. Most millionaires don’t live like people think a millionaire would live.

          • Steve__T

             I think that was my point.

  • http://twitter.com/JPattersonCT Jesse Patterson

    The baby-boomers are too worried to spend, and any young people with jobs have to pay for social security. No cash flow! 

  • MadMarkTheCodeWarrior

     80% Europe / 20% T-party

  • nhStrobaffa

    Too little too late!!!

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Economists (unless they are theoretical economists) are not going to be much help right now – we are boldly going where we never have gone before, we don’t need people versed in the current models, we need people who can predict what the global economy is becoming.

    • Don_B1

      That is basically what Paul Krugman has been complaining about for years. The Chicago/freshwater school has been enamored with developing a basis for macroeconomic theory in microeconomic theory (and even their microeconomics does not take into account “sticky wages,” etc.) rather than making use of what Keynes learned and explicated from the economic lessons of the Great Depression.

      The radical right has been hair-on-fire hell bent to discredit any and all analysis of the Great Depression that shows stimulus works; e.g., Amity Shlaes book, “The Forgotten Man,” a polemic full of cherry-picking and dubious assumptions to create a worthless story full of holes.

      The bottom line: Keynesian Theory WORKS in the current economic condition of a liquidity trap with interest rates at the Zero Lower Bound.

  • bacterial_sizzle

    Oh, imagine that, two “economists” agree that the economy can continue to grow forever without destroying the planet.

  • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

    Simon Johnson is a senior fellow at the Peterson Institute for International Economics. Chairman Peter G. Peterson

    The Peter G. Peterson Foundation, which Peterson established in 2008 with a $1 billion endowment. The group focuses on raising public awareness about U.S. fiscal-sustainability
    issues related to federal deficits, entitlement programs, and tax policies.

    As many of you know by now Pete Peterson is bound and determined to see Social Security and Medicare destroyed.

    Hear every word he says with that in mind.

    He works for a sick, evil man.

    • Mike_Card

      Both guests work at the Peterson Inst.?

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         Great. A NEST OF VIPERS TODAY.

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         And don’t they both sound reasonable?

        Just like you will feel when your life blood is flowing from your body because Pete Peterson and his austerity ghouls have cut your throat

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          You beat me to my schtick: Beltway Inbreds say “reform” + sound reasonable =  Riffraff like me should hold onto their wallets.

    • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

       And then there’s the fact he worked for the IMF.

      IMF = Financial terrorists

      • Don_B1

        He didn’t just work there; he was the Chief Economist from March 2007 to August 2008.

        The IMF has long been a strong austerity advocate although it is slowly recognizing that austerity in a depression is counterproductive. It recently published a report to that effect; for explanation and links to the IMF World Economic Outlook, see:

        http://krugman.blogs.nytimes.com/2012/10/03/the-economic-consequences-of-mr-rajoy/

  • JustEdith

    I’m with Alex, the last caller.  These economists deny the obvious.  You can’t grow exponentially on a finite planet the way the current model requires.  It’s also quite curious the way they deny the obvious fact that we go from boom to bust to boom and bust again continually.  They never question the model though.    

    • AC

      we can grow out!! Kepler 22b looks good…..

  • AC

    if someone comes up with a way to handle nano-waste correctly, i can see nanotech replacing the need for any mined natural resources. You can make nanomaterials from anything….

  • http://gregorycamp.wordpress.com/ Greg Camp

    That’s not an English voice-over.  That’s noise.

  • Roy-in-Boise

    A comment to the caller who asks what we have learned since the S&L crisis of the 1980′s: I agree we have learned nothing. Greed and avarice seem to be a permanent part of the human condition and Romney stands for more of the same.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      “We haven’t learned anything”?

      I wish you were right, but: You’re wrong. Stasis would be preferable to the current situation, in which the media and much of the public are forgetting things like it’s the last chapter of Flowers for Algernon.

      The idea of actual governance, of regulations, is anathema to our economic uberlords and to half our government and most of the media tastemakers covering them.

      Examples since the S&L debacle. Hell, even since LTCM:

      Alan Greenspan, in the role of regulator, fessed up to being shocked that real world financial titans didn’t play like Randian heroes.

      Rich paper-pushers, the croupiers and house-bankers in the casino of Wall Street, have started whining in public about how hard they had it, threatening to take their productivity (sic) to Galt’s Gulch, demanding we bow before them and admire not just their penchant for thievery but their chutzpah for creativeness.

      And Rick Santelli has not yet been beaten to death by an angry mob. He doesn’t even have to travel in a armored limosine.

      • Don_B1

        They sold their schemes to themselves, politicians, regulators and financial instrument rating agencies as “When the s**t hits, you’ll be gone, I’ll be gone, so let’s do it.”

    • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

      Yeah, the criminal rich learned a lot from the S&L crises.

      They learned that the way you avoid prison is to buy off your government BEFORE you steal the trillions of dollars.

      • BHA_in_Vermont

         Or make sure you have a Golden Parachute so you get paid huge money when you quit just before the Feds knock on the door.

  • Bob_in_RI

    What do your guests think of Aftershock people who believe that everything’s going to pot next year?

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Too big to fail – I’ve heard estimates of $300 trillion (that’s trillion – as reference US GDP is around $15 trillion) out there in derivatives. That’s too big to fail.

  • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

    Why are the only guests here today bought and paid for by sicko billionaire Pete Peterson?

  • J__o__h__n

    Cutting defense spending isn’t bipartizan.  Unless he changed his position again, Mitt wants to increase defense spending.

    • brettearle

      Did Romney prove his case that increasing Defense spending would not contribute to the Deficit?

      Obama said, in Debate I, that the Defense Department hasn’t even called for any increases.

      Why didn’t the President take that point, right to Romney, last Wednesday?

      Is Romney gonna say, “Well, Panetta’s your guy”, as a response?   

      I don’t think so…..

    • http://pulse.yahoo.com/_ADZ6TZZKHWRLDNAOP6R2MBBP6A Bob S

      Military’s job is 10% protection of our sovereignty and 90% protection of our access to cheap natural resources worldwide (that is why we have 700+ military bases around the world).  The proper way to fund military would be through a tax on the use of natural resource (mostly energy), not through an income tax. 

  • Davesix6

    European nations have adopted quasi-socialist forms of government with higher taxes, increased government spending and Politicians deciding winners and losers by choosing the investments made with available capital.
     
    As Mitt Romney pointed out in the first debate, President Obama in attempting to pick winners and losers has in fact picked only losers! The same is absolutely true for the European nations that are now in trouble.
     
    Europe is the example of “trickle down government” as Mitt Romney said of the Obama economic philosophy.
     
    Mitt Romney has said he supports parts of Dodd-Frank.
    Mitt Romney said, during the debate, that he would seek to repeal the parts of Dodd-Frank that basically set certain large banks up as ” too big to fail” and has driven smaller banks out of business.
     
    It’s time for a new direction; it’s time to elect a President who knows business and how to deal with economic issues.
     
    We don’t need four more years of failed policy. We need to elect Mitt Romney!

    • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

       Sorry son, but vulture capitalist Romney is going to be the poison pill for what’s left of the middle class in America.

      Not that Obama is much better I’ll grant you that.

      • Davesix6

        That’s the best you’ve got Greg?

        No discussion of the facts or sharing where you beleive I am wrong, just name calling?

        Guess you like Obama don’t have a comeback because you really don’t understand the issues!

    • Don_B1

      There are some functions that are cheaper to do when done collectively, from national defense to first responders, teachers and, yes, healthcare.

      It has long been known (James Tobin, Nobel Laureat, circa 1965) that the nature of healthcare prevents the free market from adequately providing healthcare by market-based insurance companies. particularly for-profit ones.

      The U.S. is prima facie evidence of this as citizens spend twice what citizens of other advanced development countries spend with much poorer results for the total population. Sure, the rich get as good care as anywhere, but once you don’t have a million dollars or more to spend on care, there is less likelihood that you will get that kind of care.

      The problem is that 80% of the costs are generated by 20% of the population, but which part of the population an individual is in is unknown, and that person will find out only when a problem occurs, when it is too late to change anything.

      In a free market, people underinsure (or don’t insure at all) planning to be in the good health segment or unable to afford the insurance payments but then expect treatment when they find out otherwise. But a good society does not let its members suffer when an accident or genetic disease, etc., strikes, so the treatment is provided with taxpayer dollars. This is NOT likely to change.

  • http://neilblanchard.blogspot.com/ Neil Blanchard

    The economy is a SUBSET OF THE ENVIRONMENT, period.

    If we lose more crops (we will) and if the ocean keeps rising (it is) and water becomes even more critical (it will) — then the bankers will have to try to eat their money.

    Renewable energy and sustainable abundance by getting back into synch with our environment are what we must do, right here, right now.

    Another huge point that has not been mentioned: we have a crumbling infrastructure and we need lots of jobs — so rebuild all the bridges, and the railroads and the highways and the electrical grid, and encourage lots of local organic farming — and we will have full employment and a bustling economy in no time.

    Neil

    • AC

      it wasn’t my fav subject – but according to the laws of thermodynamics; everything tends towards maximum entropy (=measurement of disorder). everything. it costs more and more in energy to work to avoid chaos…it’s natural law

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         I’m not sure you are stating it quite correctly.

        But this is a truth, for everything there is a price.

        • AC

          i’m just glad i know the main diff between enthalpy and entropy period :)

      • Don_B1

        Many physicists/mathematicians have pondered how the universe came about in apparent violation of the Second Law of Thermodynamics until they came up with the ways that disorder can be reduced LOCALLY while it is increasing overall (in other places). Jacob Bronowski was one of those mathematicians although I cannot find a reference.

    • http://pulse.yahoo.com/_ADZ6TZZKHWRLDNAOP6R2MBBP6A Bob S

      Neil, you are correct: economy is a subset of the environment.  And that is also why I disagree with your assertion that we need more jobs.  Given the current productivity levels, there is no way we can consume stuff fast enough to give 5 billion working-age people on this planet a 40-hour/week, decent-paying job WITHOUT destroying the environment.
      The only answer is to share the existing jobs among more people. In other words, we need to cut back on the working hours, not try to create more jobs.

      • http://neilblanchard.blogspot.com/ Neil Blanchard

         Bob, if we price things like carbon properly, then that would go a long way toward stop damaging the environment.  Rebuilding infrastructure needs to happen anyway, and doing it sooner rather than later saves a LOT of money, and it employs people doing work that benefits the whole society.

        Another shoe that is ready to drop — is food production.  Climate
        change directly affects our fragile fossil fuel dependent food
        production system.  It is not really farming, but rather it is soil and
        water mining.

        If we switched back to real farming, like we had
        been doing for about 10,000 years before we “discovered” nitrogen
        fertilizer and the internal combustion engine, then here are all the
        deadly problems we would solve, by putting ourselves back into step with
        the cycle of life:

        * We would stop eating oil and gas, which as you and I know are finite.

        *
        We would let the soil come alive again — it decomposes the stuff of
        life and makes it available for growing new life, building and improving
        the soil making it better and deeper and sequestering carbon rather
        than mining it, eroding it, and poisoning our waterways.

        * We
        would cut about 25% of our greenhouse gas output from the
        crappy-water-soluble-nitrogen-to-nitrous-oxide-nightmare, that also
        includes dead rivers and dead fishing zones along the way.

        *
        Local food production not only means far less oil burned transporting
        food around the world (the average food item travels 1,500 miles to your
        mouth!), but it also means far more nutritious, much better tasting
        food that makes us all much healthier — we probably would see cancer
        rates go down, too!

        * We would totally solve both our immigration
        problems and our unemployment problems at the same time.  And we would
        make big dents into our drug problem, our prison problem, our hunger
        problems, and our decaying civil society would be renewing its way back
        to health.

        We have a sustainable abundance of renewable energy –
        up to 16X more energy than the needs of the entire world.  Everybody
        can have as much electricity as they need — and all that economic activity supports all our local economies.

        Since
        renewable energy is available everywhere, to any and all people — then
        the need for a military largely goes away.  Since living soils store
        water much more readily than dead soil, we stop needing to use up our
        fossil water supply.

        We simply must do as nature does — we must
        have zero waste.  Waste means that we are not doing it right: no
        disposable plastic, no disposable people, no disposable land, no
        disposable species.

        Neil

      • Don_B1

        The economy includes more than manufacturing and as long as workers share in the growing productivity, there will be non-consumptive services from teaching, writing, playwriting, music and other intellectual pursuits.

        That does not mean that there are not problems, most notably with population growth which does stress physical resources. Other problems will come with reduced working hours as workers may have problems maintaining skills, as in surgery, a team must perform many operations to maintain proficiency.

        • http://pulse.yahoo.com/_ADZ6TZZKHWRLDNAOP6R2MBBP6A Bob S

          Don_B1, just imagine how much faster we would transition to the “non-consumptive services” if the normal work week was 20 hours instead of 40 :)   People would have tons of spare time to spend with their families or do music.  

  • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

    Do people understand that both these men know that no matter if Obama/Romney wins “Entitlements” are getting cut?

    Now, when Johnson says he wants more revenue, don’t believe for a second he means that the uber wealthy are going to pay much more then they are now.

    This is a smoke and mirrors game. Entitlement destruction is traded for a little tax increase that the wealthy will undo before you can say, bought and paid for Congress.

    • TomK_in_Boston

      There is no left. We have thermonuclear class warfare from the TeaOP and moderate class warfare from the conservadems. They all howl about the bogeyman deficit and it’s nothing but a ruse for redistributing more $ to the top. 

      The “leftist” position is that a secy should pay the SAME tax rate as the boss. Sorry, the superrich should be paying twice what the working stiff pays. Restoring the clinton era rates at the top is the “leftist” position. What a joke. Those are LOW rates. The top rate should be at least 50%.

      Of course there will be a global recession. Austerity kills growth and transfers wealth to the idle rich (aka ‘job creators’), and the euros have gone bonkers with austerity.

      • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

         Pete Peterson has spend over $600 million to destroy Social Security and Medicare.

        He is stepping up his game with millions in ads and organizations right now to go for the knockout blow.

        These two are part of that.

        Really people, if you don’t know how much the rich are spending to make sure you live in poverty you better get a clue and start fighting back.

        • TomK_in_Boston

          …and this forum is full of sheep on SS and medicare who support the oligarch’s agenda, even tho Peterson et al wd call security if they came near them.

          • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

             Peterson and the Teabags could fight it out with their canes.

            The Teabags would lose though because old man Peterson’s cane is solid steel (with a gold interior).

            And the Teabags’ canes are all Chinese fake aluminum.

          • TomK_in_Boston

            Nothing in the USA comes close to being as financially solid as SS, but somehow the alarm bells don’t go off for a lot of my fellow Americans when the oligarchs say it’s really, really crucial to “fix what ain’t broke” by taking more from the middle class. 

            The consensus seems to be developing that simpson-bowles is a good compromise. Wake up, people. The tactic is to propose extreme class warfare so you will settle for moderate class warfare.

            The fact is that there is no need to monkey with SS except for possibly raising the cap, and with an intelligent attempt to control costs there is no need to change the structure of medicare.

  • http://pulse.yahoo.com/_ADZ6TZZKHWRLDNAOP6R2MBBP6A Bob S

    It’s clear how economic growth is good for the 1%. However, there are 5 billion working age people on the planet competing over jobs.  This competition is driving wages (the cost of labor) down for the 99%.  There are two solutions. (1) Grow the economy fast enough (driving up consumption) to give each person a decent paying 40-hour/week job, which would make the planet go up in smoke.  (2) Cut working hours worldwide to compensate for the incredible increase in productivity (computers, robots) we have had for the past 40 years.  Demand 20-hour work week now!!

  • Steve__T

    With out cuts to military spending how can you say we are trying to control spending. Anyone who has been in the military knows that the military wastes money left and right, mainly due to the structure of their  yearly budget. If you don’t spend it all this year you get less next year, that should be addressed.

  • http://pulse.yahoo.com/_ADZ6TZZKHWRLDNAOP6R2MBBP6A Bob S

    Of course, do not expect to hear this from an IMF economist whose job is to protect the interests of the 1%. 

  • 65noname

    the usual range of opinion: one a professional spin dude for a rightwing economic gang disguised as a non-prrofit.  the other, a right of center dude who always thinks that the solution is is to “reform” social security and people’s right to healthcare. 

    what happened?  did you lose dean baker’s telephone number?  Or did your masters in the government order you to lose it? 
     
    the same story frrom government radio, using the same spin dudes pedaling the same old story of destroying the income, retirement and health benefits of working people.  Rommney had it wrong: eliminate these talk shows and keep big bird instead.
     
     
     

  • Pingback: A Global Recession? – WBUR « One broke girl. One million problems.

  • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

    Gee Tom the rich overlords must be cracking down on you.

    Too soft on the middle class and poor riff raff for them I guess.

    Too bad the rich overlords are too late.

    The light has already gotten in.

  • akreglow

    For a very different perspective that also forecasts a major collapse, but followed by a new financial system and new governance and an end to global corporatism and the dominance of the UNITED STATES CORPORATION = IMF = fiat currencies screwing up finance all over the world, see http://www.paoweb.com/sn100912.htm.

  • brettearle

    It’s amazing that, in the aftermath of the 2007 Economic collapse, the country–to put it mildly–apparently has not learned its lesson.

    Why?

    Because the Chieftain of the very epitome of Big Money-No Risk investment–Private Equity–could be on the verge of becoming our next President.

    Is it addiction to Greed or your basic form of unrecognized Masochism?   

    [Hint: Both]

    • Don_B1

      I suspect it is a form of low-information voters (actually the general public) who have not had to deal with an economic situation like the current liquidity trap the U.S. is experiencing.

      What is happening can be modeled as “your spending is my income and my spending is your income. But because the housing bubble broke, putting thousands of workers out of a job and leaving millions of homeowners with homes that were then worth less than their mortgages, an economic shock has hit and because the members of both groups above are cutting spending, other businesses have to cut workers and capital purchases as their sales drop. So both you and I have an incentive to cut our spending and try to increase saving or pay down debt. But lowering your spending reduces my income (and vice versa) so I have difficulty increasing my saving and/or reducing my debt (deleveraging) as you do. It is even likely that we both have to dip into whatever savings we have to buy daily necessities, so we likely end up poorer for trying to save (when everyone is saving).

      But if the government spends money for something the country needs, like infrastructure (roads, bridges, sustainable electric power generation, basic research on diseases, etc.) and first responders and teachers, the new hires and those with secure jobs will spend and support other parts of the private sector in spending as there will be demand for the goods and services they will create.For some inexplicable to me reason, Democrats have not tried to counter the Republican mantra that stimulus is no longer supportable because it will increase the deficit and claim the debt is already at a crushing level. But countries with their own currency can sustain debt-to-GDP ratios much higher than the current U.S. ratio; as an example, the U.K. ran debt/GDP ratios above 200 for roughly half of the 20th Century and Japan is there now.

  • Gregg Smith
    • Steve__T

       Same old BS from some rich guy that CLAIMS he has created 250,000 jobs and hes afraid of Obama.

      • Gregg Smith

        I will agree it’s the same old thing that’s been happening across the spectrum for nearly 4 years.  It’s a microcosm. It’s not BS.

        • Steve__T

           When you … nah you won’t so I look at it like this No right No left Just TOP

          I remember a song by the O jays called For the love of Money. It fits IMO

          http://www.youtube.com/watch?v=Ll3uipTO-4A

      • WorriedfortheCountry

         He’s a Democrat.

        • Steve__T

           I don’t care what his political choice is.

    • jefe68

      That has to be one of biggest pieces of BS I’ve ever heard. Wynn is so full of it. What is it with the entitled billionaires crying like babies?

      • Gregg Smith

        Do you have a basis for that? Where is he wrong? Or is it more drive by hate with no substance as is usual from you?

        • jefe68

          Job growth is about demand.
          Obama has not stopped this.
          As to regulations? What regulations are stopping this man from building his hotel and convention center? Name one.
          The only thing is punters. Which is why Las Vegas is in a huge slump.

          You’re the one who posts all the vile right wing hate buddy, you do it every day for hours on end. you then get your nickers in a twist when someone throws you a curve ball and you have use what little gray matter you have to think. Then you come back with more BS. As I’ve said before, your a real piece of work. I don’t like the kind of person you present here, your right about that.
          I do dislike your act.

          As to Wynn, give me a break that guy is a huge jerk.

    • StilllHere

      Great to hear the perspective of a job creator, sure beats the whining of the parasites below, especially those who hate freedom and believe the state knows better what you should do with your money.

      • jefe68

        So in your sick demented world people who work and disagree with your right wing BS are parasites.
        This man creates jobs based on gambling, talk about a parasite.

  • Adrian_from_RI

    Tom, your guests seem to be arguing how they would rearrange the deck chairs on the Titanic in order to bring to an end the Global Recession. Your guests, like your everyday politicians, seem incapable of looking for some systemic error, some fatal fundamental error of principle that caused this Global Recession.
     
    A banker, who lived through the period of evermore irrational economic policies, just published a book to tell us what he, being on the inside, learned and what the long-term cure must be in order for our economic ship of state to right itself again. I recommend this book to all who are truly baffled by what is going on in the world of economics. The title of the book is: The Financial Crisis and the Free Market Cure. The subtitle is: Why Pure Capitalism is the World Economy’s only Hope. Tom, the writer of this book, John A. Allison, should have been a guest on this show.
     
    By the way, my definition of Capitalism is that it is a social system based on the recognition of individual rights, including property rights, in which all property is privately owned. The result is that in a capitalism economic system people deal with each other as traders offering value for value to mutual benefit.

  • Dee

    More beating around the Bush instead of pointing at the Blame 

    I wish your guests called a spade a spade instead of beating around the Bush (no pun intended) on where the blame lies
    for the lack of spending and growth we ought to be seeing in
    our economy today….And indeed, why a Romney presidency 
    is not only the wrong way, forward but it will lead to riots on 
    streets.  

    I imagine, the Poor and Middle Class are beyond accepting 
    cuts to their income to promote the robber barrons & dirty polluters on Wall Street and corporate America…. Dee

    See the Newseek column on this by Paul Begala and Paul Krugman’s column on Obstruct and Exploit……

    Blame the Right (partisanship over patriotism ) 
    http://www.highbeam.com/doc/1G1-289600983.html 

    Obstruct and Exploit , Paul Krugman , New York Times
    http://www.nytimes.com/2012/09/10/opinion/krugman-obstruct-and-exploit.html?_r=0

    http://www.nytimes.com/2012/06/27/science/earth/epa-emissions-rules-backed-by-court.html

  • hennorama

    FINALLY we get someone on the air who understands the situation and states it clearly.

    Mr. Gagnon properly pointed out that people and businesses worldwide are repairing their balance sheets that were severely damaged by the Great Recession.  They are paying down debt and adding to savings, rather than borrowing and spending.  Until this changes, the recovery for the Great Recession will continue to be low and slow.

    The BBQ recovery, if you will.

    There is no magic bullet to change this.  It will continue to be a long, slow grind, and will continue to feel like a recession, with modest growth and high unemployment.

    • Bruce94

      I agree with your assessment, but think we could be doing better than we are now, but for GOP obstructionism. You cite what Keynes identified as the “Paradox of Thrift,” the truth of which seems to elude the Tea Party extremists who have hijacked the GOP.

      Implicit in the “Paradox of Thrift” is the proven strategy of fiscal stimulus to address the lack of aggregate demand, which most economists agree is responsible for our high employment in the post-recession period.  What is obvious is that Obama took the necessary steps to avoid another Great Depression.  What the brain-dead Tea Partiers fail to recognize is that our long-term debt problem is just that–long-term and can be fixed over time without creating even more unemployment and misery in the short-term.

      History shows that investments in education, targeted job training and infrastructure have worked to improve the job market and create a more robust recovery.  Tax cuts have not worked as well, if at all. 

      The longest period of peace-time economic growth and the largest middle-class expansion in U.S. history occurred under Bill Clinton only AFTER taxes were raised on the wealthiest Americans and a new energy tax was levied.  Clinton’s public investments in education and infrastructure as well as his program to provide tax relief to low-income families succeeded in generating a recovery, the benefits of which were shared broadly in society in contrast to the increasing inequality that characterized both the Reagan and Bush recoveries.

      Fast forward to Sept. 2011.  Obama introduces the American Jobs Act that contains numerous proposals that have historically received bipartisan support only to be stonewalled and killed by GOP obstructionists with a transparent, cynical goal of making Obama a one-term President.

      According to Moody Analytics and experts at the Wharton School of Business, if the American Jobs Act had passed last year, GDP growth could be 2 points higher and the unemployment rate 1 point lower by now.  IMO much of our current malaise can be attributed to an unprecedented number of filibusters and delays by Right-wing ideologues in Congress (e.g. Paul Ryan) who have been bent on sabotaging the President’s job growth agenda from day one.

      • hennorama

        Thank you for your response.

        I agree that we could be doing better, but the idea of further fiscal stimulus and additional debt has been demonized by Republicans, so the prospects for this are nearly zero.

        Imagine what could happen if the American public decided together that it was worthwhile to repair and improve our infrastructure, were willing to pay for it, and we were able to do it in a non-partisan fashion.

        $200 to $400 billion a year for five to ten years could probably do it. $4 trillion max, or about the same as the estimated total costs of the wars in Iraq and Afghanistan, according to scholars at the Eisenhower Research Project at Brown University:

        http://news.brown.edu/pressreleases/2011/06/warcosts

        It’s almost crazy and irresponsible to NOT be borrowing to invest in projects to improve our current and future economic prospects, since interest rates are so super-low.

  • Shag_Wevera

    Maybe a show on the notion of “Infinite growth”?

  • hennorama

    Wow – another fine point, this time from Mr. Johnson, regarding Mr. Romney’s tax and fiscal proposals:

    (chuckles) “I think that’s wishful thinking.”

    • WorriedfortheCountry

      Notice how he misrepresented both Romney’s and Obama’s plan?

      I’m sure it is good for a few yucks in the faculty lounge but this is serious stuff for the American people.

      • hennorama

        Could you be more specific?  What are you referring to?

        • WorriedfortheCountry

          Weren’t you listening?

          I believe Gagnon went first and he described Romney’s plan as: “Romney believes that employers will just hire more workers simply because of their confidence in his Presidency” or something to that effect.  Yup, lots of yucks.

          Romney has a very specific plan for tax and regulatory reform that he believes will grow the economy.  He has posted a white paper by economists explaining how this will create 7M new jobs within 4 years.  Further, he has a specific energy plan that contends will create 5M new jobs (and have  other benefits).

          So either Gagnon is ignorant of Romney’s plan or he is a partisan hack.  He should be exposed either way.  If he disagrees with Romney’s real plan he should say so and state his reasons why.

          I am very disappointed that Tom allowed that to happen.

          Tom, are you listening?

          • http://profile.yahoo.com/GYOKNNUKGSRTSA4RNFMUJRO5WE Greg

             Romney is going to make us energy independent by ending regulations that increase the mpg on cars and trucks.

            Gee, makes a lot of sense to me.

            Not.

            Romney is such a liar that it would be hard to find ANY THING HE SAYS THAT ISN’T A LIE.

            As to his job’s plan.

            Another lie. But hey 7 million minimum wage jobs (if the Republicans don’t abolish minimum wage) will get this economy going.

            Sweat Mormon Jesus.

          • WorriedfortheCountry

            Project much?

            The irony is Obamacare is a real job killer. Did you see what Darden is doing with workers hours to avoid the mandate?

          • Mike_Card

            “Romnesia” (noun). The condition of chronic lying while forgetting the lies told one week previously

          • WorriedfortheCountry

             Do you really think this ‘lie’ nonsense is going to work?  It is easily debunked.

            When you are caught lying yourself for months it become a ‘cry wolf’ moment.

          • hennorama

            I honestly don’t know which of Mr. Romney’s multitude of “plans” or “positions” or “statements” or “white papers” to comment on, since they seem to change almost daily.

            Here are a few quotes:

            “INDIVIDUAL TAXES
            • Maintain marginal rates at current levels
            • Further reduce taxes on savings and investment
            • Eliminate the death tax
            • Long-term goal: pursue a flatter, fairer, simpler structure”

            source: http://www.mittromney.com/blogs/mitts-view/2011/09/believe-america-mitt-romneys-plan-jobs-and-economic-growth page 24

            Then there’s this:

            “Individual Taxes

            •Make permanent, across-the-board 20 percent cut in marginal rates
            •Maintain current tax rates on interest, dividends, and capital gains
            •Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains
            •Eliminate the Death Tax
            •Repeal the Alternative Minimum Tax (AMT)”

            Source: http://www.mittromney.com/issues/tax

            Wait – that’s DIFFERENT than what he said before, right?

            Then there are these, all from the debate:

            “…I’m not going to reduce the share of taxes paid by high- income people.”

            “But in order for us not to lose revenue, have the government run out of money, I also lower deductions and credits and exemptions so that we keep taking in the same money when you also account for growth.”

            “I want to underline that — no tax cut that adds to the deficit. But I do want to reduce the burden being paid by middle-income Americans. And I — and to do that that also means that I cannot reduce the burden paid by high-income Americans”

            “…I won’t put in place a tax cut that adds to the deficit. That’s part one. So there’s no economist can say Mitt Romney’s tax plan adds 5 trillion (dollars) if I say I will not add to the deficit with my tax plan.”

            “I will not reduce the share paid by high-income individuals.”

            “I will not, under any circumstances, raise taxes on middle-income families. I will lower taxes on middle-income families.”

            ” I want to bring down the rates down, at the same time lower deductions and exemptions and credits and so forth so we keep getting the revenue we need”

            “… if we lower that rate, they will be able to hire more people.”

            “And so what I do is I bring down the tax rates, lower deductions and exemptions — the same idea behind Bowles-Simpson, by the way. Get the rates down, lower deductions and exemptions to create more jobs, because there’s nothing better for getting us to a balanced budget than having more people working, earning more money, paying — (chuckles) — more taxes. That’s by far the most effective and efficient way to get this budget balanced.”

            “MR. LEHRER: No, I mean do you support Simpson-Bowles?

            MR. ROMNEY: I have my own plan. It’s not the same as Simpson- Bowles.”

            ” My plan is not to put in place any tax cut that will add to the deficit.”

            “Well, mathematically there are — there are three ways that you can cut a deficit. One, of course, is to raise taxes. Number two is to cut spending. And number three is to grow the economy because if more people work in a growing economy they’re paying taxes and you can get the job done that way.”

            “PRESIDENT OBAMA: There has to be revenue in addition to cuts. Now, Governor Romney has ruled out revenue. He’s — he’s ruled out revenue.
            MR. LEHRER: That’s true, right?
            MR. ROMNEY: Absolutely.
            PRESIDENT OBAMA: OK, so —
            MR. LEHRER: Completely?
            MR. ROMNEY: MR. ROMNEY: I — look, the revenue I get is by more people working, getting higher pay, paying more taxes. That’s how we get growth and how we balance the budget.”

            ” OK, what are the various ways we could bring down deductions, for instance? One way, for instance, would be to have a single number. Make up a number — 25,000 (dollars), $50,000. Anybody can have deductions up to that amount. And then that number disappears for high-income people.”

            “MAKE UP A NUMBER” – Finally, some truth from Mr. Romney.

          • WorriedfortheCountry

             I don’t understand what you have a problem with.

            He released the details of his tax reform plan on Feb 21, 2012.  That is what is on his website and what he has been campaigning on and described in the debates.  Anyone who has been following his campaign would know this.

            If you believe the Obama ads about Romney then that is your problem because Romney has been very consistent.

          • hennorama

            Yes, “Romney has been very consistent.”

            Sure.

            First, he “Maintain(s) marginal rates at current levels”

            But that’s not good enough for the Tea Party folks and conservatives, so then he “Make(s) permanent, across-the-board 20 percent cut in marginal rates”

            Then he says “… no tax cut that adds to the deficit. But I do want to reduce the burden being paid by middle-income Americans. And I — and to do that that also means that I cannot reduce the burden paid by high-income Americans.”

            And “… if we lower that rate, they will be able to hire more people.”

            So – Maintain rates, then cut rates, then no tax cuts that add to the deficit, and no reduced “burden” for high-income Americans, and then lower the rate for high-income small business people …

            Very consistent.

            Which is it? And if it’s now magically deficit-neutral, then WHY BOTHER?

            Not to mention ZERO DETAILS, except “MAKE UP A NUMBER.”

            Very consistent.

            Please.

          • WorriedfortheCountry

             -it makes the tax code more efficient (not as efficient as I would like) and will reduce compliance costs
            -reducing marginal rates IS important for businesses which compete worldwide.

          • Guest

            Thank you for your response.

            Simplification of the tax code is indeed a worthy goal. Not likely to happen, but a worthy goal.

            One other major problem with Mr. Romney’s assertion that “I want to bring down the rates down, at the same time lower deductions and exemptions and credits and so forth so we keep getting the revenue we need” is that we typically get lower rates WITHOUT corresponding cuts to “deductions and exemptions and credits and so forth…”

            Few privately-held small businesses that pay taxes at the individual income tax rates actually “compete worldwide.”

            Both Pres. Obama’s and Mr. Romney’s corporate income tax proposals are similar, rate-wise. There are significant differences in other areas, but the proposed rates are similar.

            Corporations, especially multinationals, are doing just fine. They pay less than 8% of total Federal revenues, even as they’ve had record profits.

            These super-large businesses can shift their operations fairly easily and quickly, so they play various tax authorities against each other, holding jobs and operations and tax revenues hostage in order to get the best tax deal.

            As it stands now, they don’t even have to pay US taxes on non-repatriated foreign profits. So now, during this economic recovery, they are trying to get an even BETTER deal, pushing for a one-time tax holiday for repatriated foreign profits. One big problem – it doesn’t result in much in the way of new jobs or investment, as a study of the well-documented failure of the 2004 holiday shows:

            “Higher levels of repatriations . . . were not associated with increased domestic capital expenditures, domestic employment, or research and development expenditures. . . . Even firms that increased contributions to Congressmen responsible for drafting the [repatriation provisions of the American Jobs Creation Act of 2004] and that belonged to a lobbying coalition that asserted that the tax holiday would allow them to increase domestic investment did not significantly increase their domestic expenditures. [Dhammika Dharmapala, C. Fritz Foley, and Kristin Forbes, "Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act," Journal of Finance, June 2011.]”

            Source: http://www.taxanalysts.com/www/features.nsf/Articles/5FA661506CD7982F85257A320069A85F?OpenDocument

            Mr. Romney wants to do this, and also to shift to a territorial system of corporate taxation. This would ACCELERATE the movement of jobs overseas, to lower-tax countries.

            Another race to the bottom, without jobs to show for it.

          • WorriedfortheCountry

            Challenging whether he can make the math work is perfectly valid.

            However, making claims that if the math doesn’t work that Romney’s priority would be to raise taxes on the middle class is blatantly dishonest and that is what Obama has been doing for months using a bogus TPC analysis.

          • WorriedfortheCountry

            hello hennorama,
            unfortunately your — I’m sure well reasoned — response below was difficult to read with the formatting.

          • hennorama

            I responded again “up top,” to my original post in this thread.

      • Steve__T

         Again we agree It is serious to us, but it’s a joke to them.

    • hennorama

      Worried – sorry about the formatting, but you know how DISQUS is.  Here’s my reply:

      Thank you for your response.Simplification of the tax code is indeed a worthy goal. Not likely to happen, but a worthy goal.

      One other major problem with Mr. Romney’s assertion that “I want to bring down the rates down, at the same time lower deductions and exemptions and credits and so forth so we keep getting the revenue we need” is that we typically get lower rates WITHOUT corresponding cuts to “deductions and exemptions and credits and so forth…”

      Few privately-held small businesses that pay taxes at the individual income tax rates actually “compete worldwide.”

      Both Pres. Obama’s and Mr. Romney’s corporate income tax proposals are similar, rate-wise. There are significant differences in other areas, but the proposed rates are similar.

      Corporations, especially multinationals, are doing just fine. They pay less than 8% of total Federal revenues, even as they’ve had record profits.

      These super-large businesses can shift their operations fairly easily and quickly, so they play various tax authorities against each other, holding jobs and operations and tax revenues hostage in order to get the best tax deal.

      As it stands now, they don’t even have to pay US taxes on non-repatriated foreign profits. So now, during this economic recovery, they are trying to get an even BETTER deal, pushing for a one-time tax holiday for repatriated foreign profits. One big problem – it doesn’t result in much in the way of new jobs or investment, as a study of the well-documented failure of the 2004 holiday shows:

      “Higher levels of repatriations . . . were not associated with increased domestic capital expenditures, domestic employment, or research and development expenditures. . . . Even firms that increased contributions to Congressmen responsible for drafting the [repatriation provisions of the American Jobs Creation Act of 2004] and that belonged to a lobbying coalition that asserted that the tax holiday would allow them to increase domestic investment did not significantly increase their domestic expenditures. [Dhammika Dharmapala, C. Fritz Foley, and Kristin Forbes, "Watch What I Do, Not What I Say: The Unintended Consequences of the Homeland Investment Act," Journal of Finance, June 2011.]”

      Source: http://www.taxanalysts.com/www

      Mr. Romney wants to do this, and also to shift to a territorial system of corporate taxation. This would ACCELERATE the movement of jobs overseas, to lower-tax countries.

      Another race to the bottom, without jobs to show for it.

      • WorriedfortheCountry

         Thanks for moving it up.

        1) Romney has put forward a plan — several of your arguments relate to whether his plan could pass — that doesn’t invalidate the plan
        2) If the resulting law doesn’t have enough loophole closings then it ISN’T Romney’s plan — so again that isn’t a valid point for evaluating ‘the plan’
        3) There will be efficiencies by simplifying the code
        4) It is important for tax reform to have subchapterS rates == to corporate rates so the big guys don’t get a competitive advantage
        5) Repatriation will help — I’ll give you a specific example.  Cisco wanted to expand their video conferencing business.  Since they had about $30B overseas they shopped for a European company ONLY for expansion.  Otherwise they could have bought a small US business and expanded here.
        6) I believe Obama’s jobs council recommended a territorial tax system.

        Anyhow, gotta go.

        • hennorama

          One can sum up the tax and budget proposals from Pres. Obama and Mr. Romney as follows:

          Both want lower deficits, some reforming of the tax code, and to keep overall tax rates low.

          Pres. Obama’s plans favor increased revenue from higher taxes on the wealthy, and decreased spending.

          Mr. Romney’s plans favor decreased spending, and higher revenue only from economic growth.

          Pres. Obama wants to maintain the current personal income tax rates for everyone except those with 2012 incomes over $388,350. He also wants to implement the “Buffet Rule” to have a minimum tax of 30% on those with incomes over $1 million.

          Mr. Romney wants to cut tax rates by 20% across the board, and says he will couple this with cuts to deductions, exemptions and credits to maintain current revenues. He proposes no details as to where he would cut.

          Mr. Romney has repeatedly ruled out ANY new revenues.

          It’s impossible to analyze Mr. Romney’s “plan” completely, as he has only given one side of the equation – lower tax rates.

          Americans only ask of Mr. Romney what is expected of any high school math student:

          SHOW ALL OF YOUR WORK.

          Responding to your points:

          1. Mr. Romney’s “plan” is incomplete as it has no details as to cuts of deductions, exemptions, and credits. He says “Make up a number …”
          2. Right – blame Congress if there aren’t sufficient cuts to offset tax rate reductions. Good luck selling that one.
          3. Agreed. Code simplification would help.
          4. Agreed also, but here’s a problem with a tax holiday on repatriated foreign profits. What do you think would happen to mid-sized and smaller businesses if large multinationals could get ANOTHER advantage from bringing that money back with very little tax impact? Could those smaller businesses compete?
          5. Repatriation COULD help SOME businesses, but it didn’t work overall last time, in 2004. Note also that you did not say Cisco WOULD have purchased a US business.
          6. The Jobs Council did indeed recommend a territorial system, with significant disagreement among the members. Regardless, Pres. Obama is not proposing this. He wants a minimum tax on foreign profits.

          Don’t get me wrong, there are some advantages to a territorial tax system, but there would need to be significant rules and enforcement to prevent gaming the system. Again, I doubt that hiring more IRS auditors is high on anyone’s to-do list.

          Source: http://www.bankrate.com/finance/taxes/tax-proposals-obama-vs-romney.aspx

          • WorriedfortheCountry

            Your ‘SHOW ALL YOUR WORK’ argument is silly.

            If Obama was held to that standard he wouldn’t be elected now or in 2008.

            Romney has outlined his principles and his reasons.  This is how Reagan got tax reform done in the ’80s on a bi-partisan basis.

            ——-
            Regarding repatriation, yes there are no guarantees.  But I would rather have the cash in the US system.  Even if it is used for dividends, it would be helpful.

            ——-
            And I’m not saying Romney’s plan is nirvana.  Perhaps it can be improved on its way to implementation  — that is usually how these things work.

            Major exception — Obamacare — probably the worst possible ‘implementation’ of ANY national health care scheme.
             

          • hennorama

            Thank you for your response.

            Well … Mr. Romney is applying for the most complicated and stressful job in the world, and he has left a big part of his application blank.

            His thesis on the economy goes something like this:

            Cutting personal income tax rates will magically make entreprenuers eager to hire more people. These entrepreneurs have only been waiting for lower taxes in order to hire. They see much unmet demand for their products and services, and yet they have decided to forego the profits from this unmet demand by holding off on hiring until they get lower tax rates.

            Of course.

            Also, corporations have been so hampered by high corporate tax rates that they have been unable to make any profits. Wait .. they actually have record profits? Oh, OK, yes this makes sense.

            Also, facing a trillion dollar-plus deficit, Mr. Romney says we need NO new revenues. We can balance the budget without new revenues AND make massive increases in the defense budget. All with spending cuts, and magical economic growth.

            Yeah, I’d hire the guy with THAT plan.

  • WorriedfortheCountry

    Obama DID water down workfare.  Yet another report explains how.

    http://www.manhattan-institute.org/html/ir_27.htm#.UHWx3FH9V8F

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Please keep linking to the Manhattan Institute. It makes things easier to ignore.

      • WorriedfortheCountry

        Could you please be more specific?  :)

      • StilllHere

        Wow, his paper had 29 references, yours a big fat 0.  Nice work.

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          The Manhattan Institute are a wingnut welfare thinktank. If what they’re saying is true, it’ll be somewhere else.

          • StilllHere

            No references in your refutation.  No surprise there.

    • Ray in VT

      I’m always skeptical of reports like this that come from individuals with a business or ideological commitment to one side or the other.  I mean, the Manhattan Institute is a free market group that pushed for some of the welfare reforms in the 1990s.  It does not surprise me one bit that they’re against this move.

      I did like that it was well sourced, although I thought that a couple were questionable.  I read some of the GAO report.  It doesn’t seem alarmist, as, quite frankly, I think that some of the conservative reaction to the rule change has been.  Some of this stuff is so technical, though, I think that it is not easy for the laymen to make clear sense of it and the potential impacts.

      • WorriedfortheCountry

         It is good to be skeptical — of both sides.  Absolutely.

        • Ray in VT

          Agreed, just like with the polls.

          Here’s a section of the GAO report:

          Implications for Welfare-to-Work Programs

          As discussed above, TANF work participation standards do not apply directly to individuals, though they may influence the design of a state’s welfare-to-work strategy. Allowing states alternative ways of assessing state welfare-to-work efforts might also influence a state’s strategy.

          If performance is tracked using an outcome measure (e.g., rate of entry into employment of TANF recipients), states would no longer risk failing a standard solely by having recipientsengaged in activities that do not count toward a participation rate. Such additional participation might include allowing recipients to engage in pre-employment activities (job search,
          rehabilitative activities, education) beyond the TANF work standard’s limits and restrictions.

          However, if that participation is ineffective in helping the state achieve a good score on the new outcome measure, the state would risk failing the new performance standards.

          What does that mean, practically going forward?  Who knows precisely.  I would be willing to go with that route on a trial basis and then re-evaluate if it is thought that it would have beneficial outcomes.  I understand, though, that some are not willing to give the President and his administration any slack.  I’m not making a claim as to the validity of those views.  I am merely noting that they exist.

        • Steve__T

           On that we truly agree

      • WorriedfortheCountry

         This isn’t the first report.  I read a piece by Robert Rector who helped write the original law who made a compelling case that the new metrics used by HHS are easily fudged because they don’t directly measure work.   Maybe if they change they charge to ‘potentially watered down’ workfare it get a better reception.

        On second thought, no.  We are in political silly season and everything is black or white.

        Megyn Kelly interviewed two HHS -state administrators (one was from NY state) a month ago– and their conclusion was the new HHS rules did water down the work requirement.  They claimed that they were non-partisan (one was a Democrat) but who knows.

        • Ray in VT

          It is a silly season.  So much information, seemingly so few facts.  Maybe after the election some sanity will return, but a good part of me doubts that.

          • WorriedfortheCountry

             I hope so too but I also have doubts.

  • J__o__h__n

    Is Salman Rushdie no longer scheduled for Thursday and if so, will there be another reschedule? 

  • http://synapse9.com/signals Jessie Henshaw

    The shame is that the basic science of how growth systems can stabilize at peak vitality has been well understood for decades. True, most scientists are confused by self-organizing systems no matter how many good examples you show them.

    Growth systems like our economy’s, are ones that keep making up new rules rather than keep following old ones, because they are animated by their learning parts, us. They’re not formulas, and they can’t learn how to climb an ever steeper hill, like natural limits now confront us with.
    http://synapes9.com/signals

    Our economy needs to make up the kind of “new rule” that natural systems do, allowing them to stabilize at a peak of vitality instead of at a peak of exhaustion.

    That’s done by changing how the system uses the resource that drove its growth, in our case the profits from investments. Now for us it’s the creditors that need to become the “spenders of last resort”. Both the wage earners and governments are maxed out on credit, and can’t do it.

    It’s almost exactly like how a family business is operated, sacrificing to grow the business at first, plowing all they can back into expansion. Once the business is big enough the earnings are spend on living better and educating their kids.

    We need to do the equivalent. Even Keynes foresaw that this would be the natural end of capitalism. In the end a basic cost of building things is taking care of what you built. The capitalists need to spend enough of their earnings is how its done, taking care of the world rather than exhausting it…
    http://synapes9.com/signals

  • http://www.facebook.com/Royale.Without.Cheese Eliot Hedeman

    I feel like the guests on tonight show are/were ignoring the points the callers were making. It is just common sense that capitalism is not a permanently sustainable economic model. Our current model of capitalism is not an economy at all. there is no emphasis put on “economizing” our resources. Please don’t just disregard people who don’t agree with capitalism as communists and socialists. In my opinion this is just as ignorant as racism. 

    I really do love public radio, but I am very disheartened by the way you are treating your callers tonight. 

    • StilllHere

      Capitalism economizes resources naturally through scarcity pricing.

      • nj_v2

        As if there’s anything “natural” about capitalism.

        • StilllHere

          It’s all-natural, except when the government interferes, which is pretty much everywhere and always.

    • Don_B1

      I hope that what you are correctly attacking is UNregulated, or IMPROPERLY regulated, capitalism. The reason that capitalism MUST be regulated, as the “founding father,” Adam Smith, recognized in his book, “The Wealth of Nations,” [1776], is that in ANY endeavor there are externalities where the person who is profiting from that endeavor does not pay the costs of harm done to others (negative externalities) or receive the profit from the side benefits of the activity. But it is the negative side, which ends up being paid by the rest of society that can and must be prevented by regulation.

      An interesting website which captures your argument, I believe, is:

      http://hygiecracy.blogspot.com/

      But otherwise, properly regulated capitalism CAN provide the way to allow but harness the expression human desire, dealing with the necessary reality of holding them in check where necessary.

  • http://twitter.com/TongoRad TongoRad

    Shouldn’t you have broadened the discussion of this vital topic by featuring a wider range of viewpoints? The 2 guests represent mainstream/conservative economic perspectives. For example, here’s a little transparency regarding your guest from the Pete Peterson Institute:

    Unmasking the most influential billionaire in U.S. politics
    The most influential billionaire in America is Peter G. Peterson, whose misleading campaign to ‘reform’ traditional social welfare programs has subtly set the terms of the Washington debate.

    It’s a measure of Peterson’s achievement that for Washington Republicans and Democrats alike, the idea that social insurance programs such as Medicare and Social Security desperately and urgently need “reform” has become a foundation stone of the debate, even though Peterson’s evidence can be misleading and his contentions questionable. That points to the question of whose interests Peterson is really promoting when he talks about ratcheting back programs that were designed from their inception as universal benefits.
    http://www.latimes.com/business/la-fi-hiltzik-20121003,0,376906.column

    • StilllHere

      Bizarre.  If you have an argument with some of his points then show your facts that refute his.  Relaying some lame opinion piece is a waste of time.

      • http://twitter.com/TongoRad TongoRad

        You don’t think an economist’s political affiliations and agenda is relevant?
        Bizarre indeed.

        • StilllHere

          Gagnon isn’t mentioned in your article.  Moreover, you didn’t make a connection between the economist’s facts aired during the show and some “journalist’s” opinion of Peterson’s influence. 

          • http://twitter.com/TongoRad TongoRad

            In fact, Gagnon did refer to a “balanced” approach to deficit reduction, which is the main ideological thrust of the Pete Peterson agenda/propaganda. And the article I referenced talked about how this notion has been sold into the national discourse.

            At any rate, there weren’t any other perspectives presented in the show, you cannot argue with this fact. 

  • StilllHere

    An easy solution for Social Security:  you should only get back what you pay in.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Why is it the right wing has a facination with destroying the widows’ and orphans’ survivor benefits in SocSec?

    • Michiganjf

      Yeah, brainiac… no one should ever earn long-term interest when they let someone else hang on to their cash for decades.

      Smart thinking, for a Repugnican.

      • StilllHere

        Good point!  I ammend my solution.

        You should only get back what you pay in + interest!

        Thanks man.

    • http://twitter.com/TongoRad TongoRad

      That’s not how insurance works. Your “solution” is nonsensical.

    • hennorama

      Yes – great idea – all of those spouses who put nothing in should get nothing; all of those children of parents who’ve died before retirement should get nothing.

      Do you work for Paul Ryan?

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