Are Republicans Willing to Destroy America to Hurt Obama

Since the election of Barack Obama, the strategy of many in the right wing has been to promote failure for the United States. Success of the left and Barack Obama would conspicuously advertise the failure of the Republicans during the Bush administration. Moreover, success by the left would legitimize the role of government in preventing economic ruin and pulling the country back from the brink of disaster that the country was facing when Obama took office.

Evidence of right wing obstruction and efforts against America:

1. During the first two years of the Obama administration, the Republicans in the senate, in a move to delay and disrupt legislation, performed and threatened more filibusters than any time in US history.
2. Republicans are even rooting against the success of America because if America succeeds under a liberal administration their own right wing policies will be more glaringly shown as failures. Here is a video showing a conservative group breaking out in spontaneous applause upon hearing the breaking news that America lost the Olympic bid. Wow, it never occurred to me to root against the US Olympic hockey team just because Reagan was president or to cheer as the WTC buildings collapsed because George Bush was president. The Republican hatred of Obama clearly trumps any love they might have for America.
3. Day in and day out, the repeated doomsday predictions for America have an effect on the psychology of our country. There is an element of self full-filling prophesy in the calls for financial Armageddon. A recent poll shows that 79% of Americans now believe a financial disaster is looming.
4. Now the Republicans are threatening to refuse to raise the debt ceiling. Practically all economists agree that even to talk about not raising the debt ceiling will have a negative effect on the economy but to actually refuse to raise it will be epic economic suicide, forcing the country into a full blown depression. The repeated doomsday predictions and the prevailing belief in economic ruin are the fuel vapor in the room while the threat of American default on our debt may prove to be the spark that sets it off.

The Republicans have clearly brought all their weapons to bear in order to make sure the Obama administration fails. Many Republicans have made a cynical calculation that if Obama, and by extension America, fails that it will benefit them politically. As Rush Limbaugh said, "Let's be honest. Every Republican in America is hoping for Obama's failure." The Republicans are holding a gun to the head of America, threatening to kill us and they are insanely blinded by hatred of Obama (Obama derangement syndrome). The peril is real.

Can Tax Cuts Magically Increase Revenue

Since Reagan, Republicans have been operating under the illusion that tax cuts somehow magically increase government revenue. As an example here is a 2001 article by the Heritage Foundation erroneously predicting that the Bush tax cuts would pay off the entire national debt by 2011. It is worth noting that the idea of tax cuts increasing revenue can actually work in certain circumstances as shown is this simplified graph of the Laffer Curve.

Note on the graph, if we are at point B and reduce taxes, revenue would go up while if we are at point A and reduce taxes, revenue would drop. The problem is that Republicans ALWAYS think we are at point B even when we are clearly at point A.

Selling Only High Risk Insurance is Bad Business; The Solution to Medicare

The original idea of insurance, whether is was for life, fire, health or what-have-you, was that everyone paid the same small amount into a fund and then if someone had the misfortune to need it, they were covered. The idea was to spread the risk of catastrophe among a large number of people. In any given year, most people paying the insurance would not need it.

Insurance evolved into a for-profit business and actuarial tables allowed the business to assign probabilities to the insured and separate them into risk pools. Insurance companies learned that if they could remove those most likely to collect on the insurance from the pool, their profits would soar. Now instead of everyone paying into a pool that was there for those that needed it, the business of insurance became one of trying to identify who might need it and excluding them from the pool. So if you are in the business of selling life insurance, you love to sell it to that 20-year-old but forget that 95-year-old. Selling life insurance to a 95-year-old is bad for business unless the premium is astronomically priced close to the face value.

In recent times, insurance companies have become better and better at predicting who might need actually need the insurance so they can be excluded or placed into a high risk pool.

When it comes to medical care, older people on average need a lot more medical services than younger people; the older they are, the more medical services the are likely to need. We all get there eventually; when we are young, we rarely need medical services but as we get older, things start going wrong and we need more medical help. Insurance companies don't want to sell medical insurance to old people because they have to charge them an exorbitant premium of thousands of dollars a month. Few old people could afford these premiums so they would wind up dying on the steps of the for-profit-hospitals; denied medical care. Not a pretty picture.

Enter Medicare. The government assumes coverage for the old people high risk pool and old people only have to pay a modest monthly premium that the government subsidizes. Health insurance companies are happy because the people most likely to need health care services are removed from their pools. They make more money because they get to sell health insurance to people who are not likely to need it and the government bears the brunt of health care for old people.

The problem is that selling only high risk insurance is bad business; adverse selection results in an insurance death spiral. If you are only covering people that need the services, you will go bankrupt; it really isn't even insurance anymore since everyone is needing service; there is no spreading of risk among a large group. It is just paying a relatively small fee for a large amount of healthcare.

The solution is to get back to the original idea of insurance; everyone pays the same into the pool. Do away with separating people into higher and lower risk pools. The premium that everyone pays is determined so that the pool is sufficient to pay all healthcare; young, old, healthy and sick alike. Everyone is covered with an affordable premium. Twenty-somethings pay more than they would if separated into a low risk pool but someday those twenty-somethings will be seventy-somethings so it all evens out in the long run. Everyone is covered; the program is self funded and adds nothing to the deficit and grandma doesn't have to die curled up on the steps of the hospital denied healthcare.

Democrats Should See the Republican's 61 Billion and Raise Them 200 Billion

The House Republicans are crowing about their 61 billion in cuts from Head Start, school lunches, Planned Parenthood, NPR and other small left wing programs and challenging the Democrats to put up or shut up. Sixty-one billion is about three percent of the deficit and is almost meaningless if you actually want to balance the budget. The Republicans are waging a propaganda war and trying to paint themselves as the party of fiscal responsibility and lower deficits for the 2012 elections.

Look how insignificant the 61 billion is in the big picture.

The Republicans are at a disadvantage with a very limited stake in the no limit poker game of deficit reductions since the only bets they can place come from non-defense discretionary spending which is a small part of the budget. The Democrats on the other hand have an almost unlimited stake since there is plenty of room to raise taxes from the present low levels and find cuts in the bloated military budget. The Democrats, holding a virtual royal flush, are in a no lose situation but they don't realize it and will probably wind up folding.
If the Democrats had any brains, they would see the Republican's 61 billion and raise them 200 billion. The 200 billion can easily be found by combining some cuts from the huge pentagon budget with very modest tax increases on the wealthy; the two things that are verboten to Republicans. Then every time a Republican crows that they can't get Democrats to agree to close the deficit, the Democrats could point out that they are trying to close the deficit even more but the Republicans will not go along.

I said "if the Democrats had any brains"; unfortunately, unless the Democrats radically depart from their history, they will play right into the messaging of the Republicans and allow the Republicans to convince Americans that the Republicans are the responsible party of smaller deficits.

Is Birtherism Rooted in Racism

My take is that birtherism is indeed rooted in racism. Did anyone demand to see George Bush's birth certificate or Bill Clinton's or HW Bush's or Reagan's? No. It was never an issue until we had someone with dark skin running for president. Then crowds of older white people started claiming that he is not one of them and questioning his legitimacy. It is clearly because he is of African descent; clearly racism.

You Want to Balance the Budget; It's Really Not Too Hard

Hey Republican Tea Party, so you want to balance the budget? Are you serious or just using your new found disdain for deficits as an excuse to cut tiny and budgetarily insignificant programs with which you have a partisan disagreement like Pell Grants, Planned Parenthood or school lunches. If you are serious about balancing the budget, you are going to have to make HUGE changes to expenditures and revenue. That means raising taxes AND cutting discretionary spending.

Here are some ideas that would actually make a difference:

1. When you or I go to a Las Vegas casino and place a bet, a portion of our bet goes toward taxes. When a giant hedge fund or bank goes to the Wall Street casino and places multi-billion dollar bets, the bets are tax free. Here's an idea; place a tiny one tenth of one percent tax on the 500 trillion dollar Wall Street casino handle. The result would bring in $500 billion to the treasury and put us on a trajectory to a balanced budget within the decade.

2. Most workers and tax payers pay 12.4% for Social Security taxes yet Bill Gates and other extreme high earners only pay a tiny fraction of one percent. So here is a dose of common sense: Have everyone, rich and poor alike, pay the same 12.4% tax. This would make Social Security solvent into the far future so it would be there for all our kids.

3. The lion's share of discretionary spending is found in our military budget. Do we really need a gigantic world girdling military? Do we need 1000 plus military bases stationed all over the world? Are the vast Canadian hordes poised to sweep down on us the minute we let our guard down? Over the course of the decade we can phase out about 90% of our foreign military bases which will still leave us with about 100 military bases outside our country. For comparison, do you know how many military bases China has outside its country? Zero.

4. Raise taxes on income over $500,000 to levels comparable to what we had in the 1950s, 60s and 70s. After World War 2, we had a bigger debt than we have now as a percent of the economy and we didn't go broke. We raised taxes on the wealthy to over 90% and guess what? The rich prospered along with the middle class. As it turns out the rich heavily invested in business creation in order to avoid the high taxes, and in the process created millions of new jobs resulting in increased tax revenue. A win-win-win scenario that resulted in decades of robust growth and low deficits.

Our current fiscal problems are solvable. We just have to overcome 30 years of Republican propaganda that has convinced most Americans, liberal and conservative alike, that low taxes on the wealthy creates jobs. It does not; it is just the opposite. Our country has been in similar circumstances before; the playbook has been written and it has worked before. All we have to do is open our eyes and see the obvious truth that taxes must be in line with our spending.

Thirty Years of “Starve the Beast” has Crippled America

The Republican “Starve the Beast” strategy of cutting taxes depends on the mistaken idea that government spending will somehow magically follow tax revenues down. Thirty years of this magical thinking as regards tax policy has crippled America and left us with massive deficits.

Instead of proposing politically unpopular spending cuts, Republicans in the 1970s developed a strategy called “Starve the Beast” by which they would promote massive tax cuts, with the deliberate intention of worsening the deficit. With the high deficits, spending cuts could then be sold as a necessity to deal with the budget short falls; a sort of fiscal bait-and-switch. Bruce Bartlett, a conservative who worked in the Reagan and H.W. Bush administrations, provides an insightful history of Starve the Beast.

If you raise taxes to pay for government programs, you’re essentially making government programs more expensive. Conversely, if you cut taxes, you’re making government programs cheaper. Econ 101 tell us that when you reduce the price of something the demand for it goes up. Therefore, tax cuts make government programs cheaper thereby increasing demand for said government programs; the exact opposite of the theoretical intended effect of the Starve the Beast strategy.

The simple and obvious solution to 30 years of Starve the Beast idiocy is to raise taxes back to the pre-STB levels of the 1950s, 60s and 70s.