Matthew Yglesias on The American Job Act ...

I agree, particularly with the assessment that the bond market is begging the government to borrow more and stimulate. Keynes was right then, he is right now. The Right, as usual, is wrong.

via ThinkProgress » Yglesias by Matthew Yglesias on 9/8/11

The President, wisely, opened his speech with an admonition to the media to focus less on politics and more on substance so I’m going to try to set my cynicism about the impossibility of any of this happening aside and simply note that the ideas in the speech today are good ones. Not every single one is my favorite stimulative idea (the employer-side payroll tax stuff, in particular, wouldn’t have been in my bill) and the President’s exposition of the concepts aren’t totally up to state of the art New Keynesian theories, but these ideas will help. The stuff on the infrastructure side and the stuff on the education side will both directly target problem areas in the labor market. The tax cut stuff will maintain consumer spending. What’s more, the traditional concern that tax-side stimulus isn’t fully spent doesn’t matter that much under the present circumstances. Even if people use that money to pay down debts, it speeds the debt-overhand problem and helps us out.

I do wish the President had spent a bit more time focusing on the slightly wonky subject of bond yield rates, but I’ll do it for him instead. The real yield on the 10-year bond is back to zero percent. At the five-year and seven-year horizons, the real yields are zero. That’s because the marketplace doesn’t want to fund current consumption and it doesn’t want to fund residential investment either. It wants to give the money to the government. It’s time to seize that opportunity.

All that said, in practical terms I think Ben Bernanke’s speech is a bigger deal. If the Fed gets serious about jobs, we’ll get some jobs.

Meanwhile, I can’t help but think that the American economy has performed sluggishly ever since George W Bush gave a speech to Congress successfully calling for a ban on human-animal hybrids. Clearly we need to deregulate this vital sector and win the future with chimera stimulus.

Rick Perry's Ponzi Scheme Lie

This is a pretty good explanation, from The Economist, hardly a left wing publication. But the lie will be told over and over. Is insurance a Ponzi scheme? The payouts for death benefits, or fire damage, are made with premiums of others. Social Security was never sold as an investment, it is social insurance, where premiums paid pay current benefits.

Just more exploitation of Republican selfishness.

via Democracy in America on 9/8/11

GOING into last night's Republican debate, Rick Perry would have known that people were going to take him to task for his stated views on Social Security, which he has called unconstitutional and a "Ponzi scheme." And when they did, the governor came out swinging. Based on the rapid reactions on Twitter and around the blogosphere, I'm outside the pundit mainstream in thinking that this answer was effective in political terms and even defensible on the merits. Let's look at the exchange:

Well, I think any of us that want to go back and change 70 years of what's been going on in this country is probably going to have a difficult time. And rather than spending a lot of time talking about what those folks were doing back in the '30s and the '40s, it's a nice intellectual conversation, but the fact is we have got to be focused on how we're going to change this program.

And people who are on Social Security today, men and women who are receiving those benefits today, and individuals at my age that are in line pretty quick to get them, they don't need to worry about anything. But I think the Republican candidates are talking about ways to transition this program, and it is a monstrous lie.

It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you're paying into a program that's going to be there. Anybody that's for the status quo with Social Security today is involved with a monstrous lie to our kids, and it's not right.

The moderator, citing Karl Rove and Dick Cheney's criticisms of Mr Perry's rhetoric on the subject, pressed. (Incidentally, no one is going to score political points against Mr Perry by citing the wisdom of Karl Rove or Dick Cheney, and Mr Perry's shot at Mr Rove—"I'm not responsible for Karl anymore"—also has the effect of distancing himself from the administration of George W. Bush, which some people still think is his albatross.) Mr Perry continued:

Absolutely. If Vice-President Cheney or anyone else says that the program that we have in place today, and young people who are paying into that, expect that program to be sound, and for them to receive benefits when they reach retirement age, that is just a lie. And I don't care what anyone says. We know that, the American people know that, but more importantly, those 25- and 30-year-olds know that.

In the immediate post-debate spin, Mr Romney's team was arguing that in light of Mr Perry's comments, the Texas governor "has lost" because no presidential candidate can win on a campaign to kill Social Security. Reihan Salam, in this post-debate scorecard, suggests that Mr Perry runs the risk of alienating older voters, who are particularly important in a Republican primary.

I'm not convinced. Mr Perry's comments last night were slightly softer than what he has said before. For example, he didn't talk about abolishing the federal programme and remanding that responsibility to the states, which is an idea that should give everyone pause. His rhetoric was nonetheless hyperbolic, but is that intrinsically problematic? Last night's debate was interesting partly because we saw a couple of the candidates, Mitt Romney and Jon Huntsman, make salient points in calmer terms, which impressed our live-bloggers and commenters. But voters sometimes respond to hyperbolic arguments. Perhaps Mr Perry was right when he argued that "it's time to have some provocative language in this country."

It may be that Mr Perry's style is preferable on issues such as entitlement reform, where the problems are widely acknowledged but politically intractable. I've argued before on this blog that Social Security is "a pyramid scheme", and been scolded for it—which is fair, because my critique was hyperbolic, like Mr Perry's. But I note that in the rebuttal, Kevin Drum of Mother Jones nonetheless acknowledges that some changes need to be made if Social Security is going to pay out its scheduled benefits in the future. That rather glosses over the point that if making such changes were easy they probably would've been made already.

The fact is that Social Security as it stands has a looming shortfall, as depicted in this chart from the Congressional Budget Office.

And the issue that people are upset about isn't Social Security spending as a share of GDP; indeed, given the current strategies for collecting Social Security funds, the size of the programme as a share of spending is somewhat constrained, unlike the fast-growing burdens of Medicare and Medicaid. No, Mr Perry is targeting Social Security because the current system taxes workers under an explicit commitment to provide described benefits that, as it stands, it cannot meet.

I wouldn't characterise that as a "monstrous lie", because the phrase implies a deliberate deception, but it's clearly objectionable. Mr Perry was quite right to describe it as a generational issue. He might also have pointed out that the people who are going to suffer the most from the Social Security shortfalls are those who disproportionately depend on it as their major or sole source of retirement income, namely women and blacks. Those demographic dimensions make it all the more strange, in my view, that many Democrats are so insensitive to calls for Social Security reform in general, even if they object to the particular reforms being proposed. Why don't we see some action from them on this? Mr Perry's language here is intemperate, but at least he's starting a conversation.

(Photo credit: AFP)

From Andrew Sullivan, more on the confessions of Mike Lofgren, the GOP staffer that finally told the truth

The Republicans execute this to perfection, and we are worse for it.  We have silently sat by while they have slandered teachers, unions, and all public servants.  This is a war that one side hasn't been fighting in.  We need to mobilize-   george. Quoting Andrew Sullivan below:


The reflections of Mike Lofgren, a former GOP congressional staffer, have been the talk of the liberal blogosphere recently (see posts by Benen, Tomasky, and Bernstein). A taste of Lofgren's piece:

A couple of years ago, a Republican committee staff director told me candidly (and proudly) what the method was to all this obstruction and disruption. Should Republicans succeed in obstructing the Senate from doing its job, it would further lower Congress's generic favorability rating among the American people. By sabotaging the reputation of an institution of government, the party that is programmatically against government would come out the relative winner. A deeply cynical tactic, to be sure, but a psychologically insightful one that plays on the weaknesses both of the voting public and the news media.

Fallows gets another staffer to comment:

Privately, many of us who have worked in Congress since before the Clinton Administration have been complaining about the loss of the respect for the institution by the Members who were elected to serve their constituents through the institution. I don't think people realize how fragile democracy really is. The 2012 campaign is currently looking to be the final nail in the coffin unless people start to understand what is going on.

Fallows has exhaustively covered the Lofgren cri de coeur here, here and here.


Why would any of these groups vote Republican? If you are elderly, why vote for the party

that wants to destroy Medicare, and enrich the wealthy insurance companies that deny the old and sick insurance even more?

If you are hispanic, why vote for the party that demands ID checks on every function of life, just to prove you are legal, at the expense of your civil rights?

If you are a woman, why vote for the party that would mandate you only have sex for procreation, and would take away the most painful personal decision you could make, even at the risk of your life?

If you work for a living, why vote for the party that facilitates offshoring, the lowering of wages, and the suppression of your rights to safety and fair treatment?

If you are unemployed, why vote for the party that does not give one rat's ass if you get unemployment, health insurance, or even live.

Americans need to realize that the G.O.P. stands for "Good for Other People"

They are not good for America.

Surprise! Romney's plan will produce over 6 trillion in deficits, but it will be worth it

because they give the wealthy and corporations even more of a tax break!  Money well spent.  Also, since the Bush Cheney tax cuts worked so well, let's just make them permanent. And the most important aspect?  Throw away the estate tax, so Romney and the Koch Brothers can build dynasties, providing jobs through eternity for the proletariat!  Of course, wiping the ass of the estate master for less than minimum wage isn't much of a career.