With budget deficits now estimated to hit $448 billion for FY 2005, and the president calling for permanent extension of his tax cuts and $2 trillion in new debt to privatize Social Security, threats to progressive priorities are real and present.
The conservative strategy is well under way: aggressively slash taxes on the wealthy; run up huge budget deficits on the premise that no one cares; and then force massive cuts in critical domestic spending.
Progressives must be vigilant in exposing this ruse to the American public and highlighting the wrong choices and moral-less values of conservative leadership.
American Progress has been working to develop clear, concise messages to defeat the president’s initiatives and to promote a progressive alternative focused on increasing economic opportunity, rewarding work, and building a solid middle class.
We certainly hold no monopoly on the truth on these issues but wanted to share some of the ideas and approaches that have emerged thus far. We hope to continue our work on this front and would welcome your input and suggestions going forward.
Based on this work, we suggest a 4-part message strategy to help define the contrasts with the president and Congress and then provide some core principles to help define a progressive alternative.
The Problem with the Conservative Economic Agenda
“Wrong Choices. Wrong Priorities.” This is the core of the criticism of conservative economic agenda. Americans expect their leaders to make the right decisions and push the right priorities. President Bush and a conservative-led Congress have failed to make the right decisions and now Americans will have to pay the price.
Here is a suggested message to highlight the damage done by conservative economic policies:
“President Bush and Congress squandered historic budget surpluses that could have saved Social Security. They have spent over $200 billion on a war in Iraq that is plagued by mismanagement and lack of planning. They’ve racked up huge trade deficits and mortgaged our children’s future to foreign banks and governments.
Conservative priorities have made the struggle of the middle class even more of a challenge: jobs are going overseas; quality health care is increasingly out of reach; educational opportunities are down; and the tax system is rigged not to help them, but big corporations and the top 1% of wage earners instead.
And what does the president want to do?
He wants to make it worse. More tax cuts for the wealthy. A $2 trillion dollar plan to privatize Social Security. More deficits. More foreign borrowing.
Americans know these are the wrong choices and the wrong priorities. We need leaders who will make the right choices and push the right priorities to keep America strong.
Under progressive stewardship of the budget, the economy was strong, the middle class was better off and America’s budget’s were balanced. There are better choices to be made.”
“Cutting investment in what keeps America strong.” The White House is seeking to make the most of its incompetence and mismanagement by forcing massive cuts and harsh caps on discretionary spending and entitlements. Progressives must make the most of these efforts by highlighting the severe budget implications for ordinary Americans.
“Relying on budget cuts to finance an irresponsible tax cut and a mismanaged war short changes investment in what helps America stay strong — a vibrant and thriving middle class.
Your community; your safety; your schools; your health care will be sacrificed to pay for President Bush’s wrong choices. It’s our veterans, seniors, kids, and the poor who will have to suffer for the president’s wrong priorities.
Conservative budgets do not reflect the values most Americans would want to see from their government — promoting the interests of the few over investments in the future and opportunity for the many is not the right choice.
The degree to which America is fulfilling its promises as a country is measured by the health, safety, security and opportunities for the middle class. By that measure, President Bush’s economic agenda has failed to invest in critical ways to keep our country strong.”
“We now see WHO and WHAT conservatives really value.” The absolute surrender of conservative politicians to the needs and desires of corporations and the wealthy presents important openings for progressives to stress the lack of moral vision and wrong values that drive conservative tax and budget policies.
“President Bush claimed to be a ‘compassionate conservative.’ He said he wanted to reward those who worked hard and did their part for the country.
Now we see what he really values: Wealth over work. Corporations and the wealthy over the middle class.
At a time when the president is asking American soldiers and middle class taxpayers to sacrifice for the country, he is telling corporations and the wealthy that they owe nothing and have no obligation to support the national interest. He’s giving them tax breaks for doing nothing.
We now know who and what the president truly values. Unfortunately, it’s not what Americans signed up for.”
“The consequences for America are dire.” Progressives must highlight how conservative stewardship is undermining America’s economic strength. Fiscal mismanagement affects everyone. We must raise the stakes for Americans and show them the very real consequences of the wrong choices and wrong priorities of the president and Congress.
“The severe mismanagement of our economy can not continue without serious repercussions.
In the short term, skyrocketing deficits and fiscal irresponsibility will affect everything from education and health care to the environment and traffic on our roads.
In the long term, the administration’s mismanagement threatens to turn America into a ‘debtor nation’ with diminished global power. We are mortgaging our country to foreigners and losing control of our own economic security.
All for what? To pay for the wrong choices and the wrong priorities. Tax cuts for the few. The privatization of Social Security. A mismanaged war in Iraq.
The consequences for America are dire. They must be addressed now before the president and Congress turn America into a second-rate economic power.”
A Progressive Framework on the Economy
As we make the case against conservative leadership on the economy, progressives have a real chance to show Americans our principles for moving the country forward. Americans need to hear what we believe as much as they hear about the programs and specific policies we advocate.
While no means exhaustive, we identified three primary components of a progressive alternative on the economy:
1. Bringing together all Americans. First, and foremost, progressives need to stress our commitment to providing economic opportunity and social mobility for everyone — rich, poor, and middle class alike. America is stronger when a secure and growing middle class is recognized as essential to the economic security of our nation; when economic policies are fair; and when public policies like our budget are driven by religious and moral principles of fairness, compassion, and respect for others.
2. Building and investing in America’s future. Working together, we must recommit ourselves and our resources to building and investing in people, research, technology, training, and workplace environments that can keep the American economy strong. We should not sit by and watch as the rest of the world makes the necessary public investments to remain competitive in the global economy. Our citizens deserve and need this investment and our economy demands it.
3. Rewarding work. The heart of America has always been its middle class. America should reward individual initiative, ingenuity and hard work and provide people with the economic and social opportunities to make the most of their talents and dreams. We must return to policies that spread the tax burden fairly and require those with sufficient means to pay their fair share. We should pursue budgets that invest in people and promote opportunities to get ahead. Rewarding work is critical to maintaining a fair and equitable society and a strong economy.
You nailed it. I do not have a fundimental problem with some self direction is SSS. I just do not trust Bush to do it without a massive giveaway to someone other than the average guy. And I base this opion on every other big issue he has accomplished. Right effort, wrong man.
February 2nd, 2005 at 11:02 pmI agree entirely. Where I am doubtful is in getting the message out to the public. The Dems are always shut out in TV discussions, their arguments are marginalized, they are out-talked, talked over and otherwise diminished. The press is complicit in this – they are like presidential lapdogs.
February 2nd, 2005 at 11:06 pmKeep up the good work. This country was founded and has prospered by making our middle class an integral part of our society. We need to take public education, health care, and taxes back from the party in power. There are many people reading your Progress Report every day and are counting on you to give us the real story.
February 2nd, 2005 at 11:13 pmThis famous “personal” account from payroll tax will be given not the the owner’s account but to be managed by the government?. Would this make this money more accessible to be counted twice or thrice to repair the deficit?.
February 2nd, 2005 at 11:22 pmI agree too. A pet peeve, though, is that liberals are always telling each other “this what the left should be saying,” rather than just saying it. We’re all pretty smart, and good tactics and turns of phrase will be replicated. There’s no teach liberals, other than by example.
The third point is much better about this than the first or second.
February 2nd, 2005 at 11:22 pmWhy not take the offensive on Social Security? Propose replacing the current payroll tax structure with a progressive tax which will simultaneously produce more revenue, while at the same time giving us a nifty talking point:
“Under our plan, a family of four making $50,000 a year will receive the exact same Social Security benefits upon retirement, but will receive a $2000 tax cut which they may invest as they choose.”
February 2nd, 2005 at 11:29 pmStay on top of local news and information by visiting Pacific Northwest Portal or making it your start page. Easy access to forward thinking blogs and “newswires” for the NW states and the nation.
February 2nd, 2005 at 11:49 pmTotally agree. Progressively tax investors; workers provide all wealth. If any oppose social security, it proves their classist disposition.
February 3rd, 2005 at 12:02 amThe people who want to destroy our government are not “conservatives” as you call them. They are radicals and it doesn’t help us to name them as conservatives, because conservation is good.
February 3rd, 2005 at 12:09 amThe terms liberal and conservative are misleading.How can a conservative endorse Bushs’ desire to amend the Constitution?My “liberal” political ideals wouldn’t allow any present politician to amend our Constitution.Greed is the major problem we face.Peace
February 3rd, 2005 at 12:53 amThe Neo-Cons are filled with so much hate and greed that they don’t seem to care what happens to the elderly. Remember how they laughed at Grandma Millie over the Enron overcharging. Check out this message from the past, history is repeating it’self.
February 3rd, 2005 at 1:21 amI don’t get it! When there is so much information at your fingertips; and you can now seek the TRUTH rather than being “spoonfed” the usual propaganda, lies and misinformation that is constantly spread by the “mainstream media”, how is it that more people aren’t aware of the power shift that has happened in the last however many years (since the neoconservatives started thier nation-wide movement) and the ramifications of the policies of those who are in power?
February 3rd, 2005 at 2:11 amWith the judiciary across the country about to be in the pocket of this movement that is going to lead us to a state much like the Depression, how is it that more people are not seeking the truth or justice in their own communities, or even just questioning those in these powerful positions, instead of just blindly following along?
It is our duty as citizens, to ask questions of our government, of fellow citizens, of everything and everyone to find the truth that has been so far removed for so very long.
Thank you for your endeavors, in making the truth available, for questioning those who decide to put business interests and globalization of the economy ahead of the honest, hardworking citizens.
Thank you for all that you do, and please know that YOU DO MAKE A DIFFERENCE!
I just read the pre-SOTU question & answer for the press. I found the link at All Spin Zone.
If you read the entire article, at about the last part you will see the unnamed adm. source said the cost for the switch to privatization was closer to $10.4T than $2T.
Also, for every increase in your private account your social security account decreases.
February 3rd, 2005 at 4:55 amThe Republican Party has been co-oped by the Libertarians who base their economic policy on a work of fiction, ATLAS SHRUGGED, by Ayn Rand, where profit and greed are the only motivaters and the only god.
February 3rd, 2005 at 8:48 amI agree with your arguments. However, I wish that you, Mr. Podesta, and other leading progressive thinkers would get the word out in fora other than the web. What needs to be undertaken is nothing short of what the current administration is doing – essentially stumping, taking the message on the road to everyone willing to listen. That’s the only way that the neo-cons and their disinformation campaign can be countered. I understand that you, and others like you, have already labored hard for the benefit of our country. Believe me, your efforts have been much appreciated. But, please, I beg you to step away from the computer & get the message out in person via a great communicator (such as President Clinton) – someone with a large endowment of charisma. That is the only way to beat these folks.
February 3rd, 2005 at 10:03 amThanks a lot for this site. I found this by way of listening to Air America Radio, which is one way the progressive message is getting out to the “red states” where it’s sorely needed. People in Phoenix or Fort Worth or Shreveport don’t have the luxury of Pacifica and only a few of them listen to NPR (the NPR stations in the red states are 9 times out of 10 owned by state universities which sometimes bow to conservative pressure). I think the 2004 campaign shouldn’t stop just because Bush “won”; I agree with Dwayne that more “in your face” “campaigning” needs to be done on a constant basis – and groups like yours should not wait on Barbara Boxer or Howard Dean to do it. Find a great communicator and CONSTANTLY be in the public’s face. Go around the major networks, but file suit against them if need be to get equal air time.
February 3rd, 2005 at 11:00 amNo one disagrees that progressives have a trenchant critique of the State of our dismal union. The level of challenge we face is reflected best in how “business” news get reported. By the minute stock price qoutes, hourly updates from Wall Street and a good portion of the 24-hour-day news cycle create
February 3rd, 2005 at 11:07 aminflate the importance of of the stock market over the real interests of middle class Americans–that is to say, good, high paying jobs, accessible higher education, and affordable healthcare. Of the voices on the economic left (i.e, Krugman, Reich) there is scant attention paid beyond an op-ed or an appearance on the NewsHour, The Diane Rehm Show or AirAmerica Radio. The former offer up the left as a counterbalance to the right when reality and all three branches of the government now fall under the hands (neo-) conartists to which, of course, the only effective counterbalance is a movement, not an effective sound-bite no matter how clever or concise.
The progressive framework is great, but I would like to add a fourth idea to the progressive framework that impacts both international and national politics: Debt Relief. Last night, Harry Reid hit the nail right on the head when he pointed out that we are leaving our children with a “birth tax” of over 36,500 dollars. The U.S. government spends over 300 billion dollars alone on the debt. If we paid down the debt, then we wouldn’t have to talk about cutting social security, privatizing or funding other activities. The money would be there. Also, the United States must commit to what Bill Clinton and Tony Blair pushed in the late 1990s: a global social contract for all nations, where debt relief was the number policy priority in order for developing nations to get their proverbial houses in order. The unfortunate thing about this president is that you will never see him understand, mention, or try to develop a plan for globalization–which is an issue that desperately needs to be discussed by American progressives and progressives across the globe. How do we shape globalization so that it uplifts everyone? This was a priority for Clinton’s administration and it should be a priority for this one too.
February 3rd, 2005 at 2:15 pmIn their talk about “insolvency”, it seems that everyone forgets that, by their definition, today’s present gov’t is “insolvent”. So, do we need to get rid of Congress, the President (well, I think so, but that’s beside the point), and the budget because of it? No. Bush talks up the economy but then says that all hell is going to break loose once SS actually just breaks even. It’s running a surplus right now and will simply run a deficit (as does today’s gov’t) if nothing is done in 50 YEARS. Are we really ready to say that the sky is falling? Let’s get this message out there. Dammit, I’ve had it with these idiots…
February 3rd, 2005 at 2:57 pmI like the progress report and think progress. Thank you. I believe that that the problems that are so evident that the blind could see it, are not being seen or are being ignored for a very good reason. The reasons are set out in the book “CONFESSIONS OF AN ECONOMIC HITMAN, BY JOHN PERKINS. I would suggest reading it to understand what is going on and why Bush is pushing what are essentially bizzare economis and social issues. Thank you for your work.
February 3rd, 2005 at 3:37 pmThe tax system is rigged so that the middle class pays for corporate welfare. And most of that corporate welfare is going over seas!
February 3rd, 2005 at 4:11 pmExcellent points! Thank you for this.
One of my favorites is – “Your community; your safety; your schools; your health care will be sacrificed to pay for President Bush’s wrong choices. It’s our veterans, seniors, kids, and the poor who will have to suffer for the president’s wrong priorities”
I would add something about – Statistics show that the Upper middle Class wage earners are also suffering as their incomes are rasing at a rate far below inflation, while the top .5-1% are growing at astronomical rates. Even that is eaten up by increases in healthcare, energy expenses and intrest rate increases.
I mention this because in our “messaging” we need to make sure that those sitting comfortably in their nice house, with 2.5 kids a 2 SUV’s realize Bush’s policies are doing them disservice as well.
February 3rd, 2005 at 5:00 pmWhen is someone commenting on the State of the Union speech going to note that if George Bush had given this speech about democracy liberty and freedom as the rationale for going to war in Iraq a few years ago, he would have been laughed off the front pages.
But that was before we did not find any WMD, nor any Iraqi real plans to acquire them.
February 3rd, 2005 at 10:22 pmSo this new rationale will be the centerpiece of the adminstration’s rhetoric, at least until there is a need for another new after-the-fact rationale.
In general, i think you’ve done a good job here, especially in the points about wealth versus work and in the last three paragraphs. I do have some suggestions to offer, which i hope are still welcome, some of them simple amendments to your text, from which i quote:
“They have spent over $200 billion on a war in Iraq that is plagued by mismanagement and lack of planning.”
I would suggest: “They have spent over $200 billion on a war in Iraq that is plagued by mismanagement, lack of planning, no-bid contracts, and billions simply gone missing.”
“We now see WHO and WHAT conservatives really value.”
I would suggest: “We now see WHO and WHAT Republican so-called conservatives really value.”
The modern republican leadership is not conservative at all, and you shouldn’t underestimate the resentment that is building up against them amongst the sincerely conservative. Given that most of them do believe in such liberal notions as public education and affordable health care, they may be potential converts to a Democratic message of fiscal responsibility and personal liberty. At this point, it wouldn’t be hard to run against big government republicans – on both the issues of government intrusiveness and government expense. A good start is not calling them conservatives – don’t let them continue to coast on the credit that label has accumulated. Divide your implacable enemies from your potential friends. The authoritarian and theocratic strains taking over the Republican party is giving the old conservative strain the willies.
“Now we see what he really values: Wealth over work. Corporations and the wealthy over the middle class.”
This is where we need to be, and i think you do a pretty good job of it. I would amend ‘everybody else’ for ‘middle class’ – and speak a little more inclusively throughout. I think the democrats should be aiming at -almost- everybody – so many things, after all, are in the best interests of all of us.
It should be a Democratic line in the sand that work should never be taxed more than wealth. Or, as Abraham Lincoln put it, “Labor is prior to, and independent of, capital. Capital is only the fruit of labor and could not exist if labor had not first existed. Labor is the superior of capital and deserves much the higher consideration.”
How about raising the minimum wage? It’s very low by historical norms, raising it is very popular with the American people, it would likely eliminate much of the problem with Social Security and Medicare by increasing the revenue for those programs, and would provide a much-needed demand-side antidote to all the supply-side doctoring we’ve had. Both supply and demand need to be present for the economic circuit to close, and the record cash hoards being held by corporations in conjuction with the very low corporate investment levels is a clear signal that the problem isn’t on the supply end of this equation. They have nothing to invest in because the demand isn’t out there to support new goods. Raising the minimum wage would dramatically turn that around and give the corporations something to spend on.
“America is stronger when a secure and growing middle class is recognized as essential to the economic security of our nation; when economic policies are fair; and when public policies like our budget are driven by religious and moral principles of fairness, compassion, and respect for others.”
I, for one, and i suspect many others, would rather you take ‘religious’ out of it -’moral’ takes care of it just fine. Most of us still believe in separation between church and state – believe, in fact, that it’s in the best interests of both church and state. We do agree, however, with the theocrats, on the importance of morality in our political decision-making – and the theocrats see morality as inherently religious anyway. Perhaps replace “religious and” in the text with “our shared”.
The biggest issue that it seemed to me that you missed in your paper is the issue of labor and environmental protection. It is often argued that we make ourselves less competitive by demanding some basic level of decent treatment of employees, but any such concern can be more than balanced out with a determination to demand fair labor standards from any business that wants to trade with America – not just American businesses. Doing so also helps reduce the incentive to outsource for exploitatively cheap labor by setting some decent minimum standard – and keeps Americans from having to compete with the exploited.
Environmental protection is simply a refusal to allow some people to shift the costs of their profit onto other people who don’t share in the profit. Dumping my waste in my neighbor’s yard is wrong even if it does help my budget. (I would suggest a pollution tax on items reflecting the cost of cleaning up after their production, use, and disposal.)
I very much agree that the Democrats need to develop a positive (and popular) agenda on these issues to get back in the ring – and what better way to encourage critical evaluation of the Republican proposals than to offer an attractive alternative that leaves people wanting to know why they can’t have it? I applaud your efforts.
February 4th, 2005 at 7:51 amI’d like to add a bit on trade policy. Why can’t we take the Starbucks stance on trade? Their company uses a we win-you win policy to ensure that their products come from a farm that treats well its employees and vendors. In order to do business with Starbucks, you must upgrade your employment and purchasing policies. You could institute a form of Total Quality Management by which you could constantly increase the standards to which each vendor is held, thus keeping high the standards of each trading partner.
This approach could easily be adapted to trade policy where the US makes it a requirement that, to get the low tariffs (as in NAFTA) you must meet X, Y, and Z standards of rule of law, labor practices and laws, and property rights. Without meeting these standards, your country will pay higher tariffs…or not get any trade at all. This provides each country, wishing to trade with the US, an economic incentive to improve their processes and laws. Both sides win as Americans will get higher-quality products and services and the vendor country will get greater income, rights, and standards of living.
This policy could work to reduce tensions, anti-US sentiment, and poverty in developing nations and could work a national-security angle in these senses. By providing the gov’ts AND the people with economic incentive (big American wallets thristing for better, cheaper stuff), we reduce (not eliminate – $$$ is not everything to some cultures) the bad spirits abroad and make our country safer.
This will even have a positive effect on American businesses as the playing field will be leveled so that everyone has an equal chance. This will keep companies in China from being able to whip 13-year-old girls into working 12-hour days and working in unsafe factories, for example. Since US companies cannot do this, they suffer the economic consequences as compliance with laws costs $$$. The best thing that ever happened to the American auto industry was Japanese competition. Japan was on a level field and we all got better stuff because of it. This type of policy could go toward the same ends.
February 4th, 2005 at 9:39 amTo DaedelusNemo:
You’re right on the money! I completely agree with your comments on demand and supply. It almost sounded like a letter I would have written. Especially where you said “and would provide a much-needed demand-side antidote to all the supply-side doctoring we’ve had. Both supply and demand need to be present for the economic circuit to close, and the record cash being held by corporations in conjunction with the very low corporate investment levels is a clear signal that the problem isn’t on the supply end of this equation. They have nothing to invest in because the demand isn’t out there to support new goods.” Amen!
That’s what I’ve written in my own blog. We need more attention to the demand side and less attention to the supply-side. As you have suggested, the markets are “glutted with capital” according to the Wall Street Journal.
Investment capital’s only benefit is to increase production. There is no benefit to increased production without increased demand. This is a very simple concept that should be quite popular with the majority of Americans. However, they rarely here it. Democrats should make sure they do. The simplest version is that profits are made by SALE of goods, not by production. Produced goods must be sold to have any value. Consumers need to have enough money to buy those goods. If they do not, production slows and our economy stops growing. Consumer spending drives our our economy, not investment capital. Supply does not create demand, period. For example, I could make square wheels for the rest of my life, and no one would ever buy one. But if people wanted round wheels and didn’t have them, someone would definitely begin to make them.
The same applies to dollar-value of consumer spending. If the sum total of all consumers can only pay for $5 trillion of goods per year, there’s no benefit to producing $6 trillion of goods per year.
But it’s actually worse than that. Because if that $1 trillion is carried over to the following year, with no increase in consumer demand, it reduces the necessary production to $4 trillion. It reduces the demand for production from $5trillion to $4 trillion. Which means less labor demand, more layoffs, less consumer income, and even less consumer spending. So we’re actually worse off from the previous year’s overproduction. The demand in total consumer dollars for goods decreases even further. This cycle will continue to depress consumer income and demand for production. Further unfunded tax cuts for the affluent worsen this problem. It increases inflation, further decreasing consumer buying power.
We need to increase labor and consumer income to maintain demand. We don’t need to encourage further investment by high-end tax cuts. This is not only better for the majority of people, it is better for the economy. Increased consumer income WILL increase our economic growth. Further investment will not benefit economic growth ANY at the present time. More production will not occur unless DEMAND increases. Demand is the weak link of our current economy, not investment. Check my blogsite for a further discussion of this at http://www.unlawflcombatnt.blogspot.com/
I agree that promotion of a more demand-side economy is more beneficial, not only in terms of economic “justice,” but economic growth as well.
GDP can be increased on paper through investment by increasing our underutilized industrial capacity and by increasing inventories. But these are “paper” gains, not real gains. Production will not continue to increase unless there is DEMAND for the production. Increasing the industrial capacity of an already underutilized industrial capacity is not real growth. Neither is the increase in inventories. The artificial increase in GDP will simply be a result of increased floating investment capital, which may well be paid out to CEOs and rich shareholders as dividends and earnings. That does our economy no good whatsoever. Sinking consumer income will eventually sink consumer demand. All the investment capital in the world will not help.
Mike
http://www.unlawflcombatnt.blogspot.com/
February 5th, 2005 at 10:45 pm_____________________________
When will Democrats start aggressively opposing our unlimited Free Trade policies?
An overwhelming majority of Americans oppose them.
Instead of policies about “How we can adjust to it”, we should be worrying about “How we can reduce it.”
Trade adjustment assistance does almost nothing. Retraining workers for the “new jobs” is idiotic. We have plenty of adequately trained workers. Further education is not helping. Workers have already been retrained for the “new” jobs. Many of them have already been laid off.
We need to worry more about what’s best for American workers, and less about foreign workers. Our government’s #1 role is to help AMERICANS, not the rest of the world. We can’t help the rest of the world if the AMERICAN economy collapses. Prevention of an AMERICAN economic decline should be our 1st, 2nd, and 3rd priorities. Protecting American jobs and working conditions should be #1, not protecting the welfare of the international work force. We need to develop a policy of Economic Nationalism. A company owned by Americans that has factories in another country is not an American company. It’s a FOREIGN company,
and should be treated as such.
Jobs are outsourced to take advantage of cheap foreign labor. That means labor income loss to American workers. It is American workers that provide the income for consumer spending that drives our economy. Outsourcing that income outsources the engine of economic growth, consumer spending. It reduces the power of the
consumer spending engine. Price reductions of foreign imports NEVER make up for the loss of the outsourced wages.
The impetus of the Democratic Party’s trade policy should be to STOP OUTSOURCING, not to make it more tolerable.
Mike
http://www.unlawflcombatnt.blogspot.com/
February 6th, 2005 at 8:32 pmthe issue need to be Framed.ie ”They are stealing our money”
February 7th, 2005 at 6:36 pmI liked the slogans expressed by Democrats Abroad Switzerland on Air America to describe our progressive ideas. Let’s use words the average American can relate to. Bush is the “credit card” president. We do not own, we owe. We should not use Bush’s language “social security reform.” Instead call it the benefits and security reduction plan: the alternative minimum tax is “tax augmention” plan; the permanent tax relief is “tax discrimination”plan ; constitutional amendment banning same-sex marriage is “marriage discrimination amendment.”
February 7th, 2005 at 11:26 pmI appreciate all the great comments on this subject. I agree that we need to develop our own language to combat the right wing propaganda. I suggest instead of ownership society it’s YOU’RE ON YOUR OWN SOCIETY. We shouldn’t be afraid to call them radicals and it’s BUSH’S RADICAL RIGHT WING AGENDA.
Calling Bush the “credit card’ president is good or we could even use the FREE RIDE ADMINISTRATION.
I would love to see Bill Clinton or someone stumping in competition with Bush to talk about how irresponsible this admistration is.
The anti-tax crowd has brainwashed people to believe that taxes should be cut no matter what, even if it’s the most wealthy who benefit. We need to remind people that liberalism brought this country out of the Great Depression and made us a world leader to be admired.
February 8th, 2005 at 12:54 amThe only thing Soc Sec needs saving from is the bush administration. So stop using THEIR terminology. The surplusses would strengthen and improve SS, not save it. Saving it implies a crisis, and AS WE ALL KNOW, there is no Social Security Crisis.
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May 29th, 2005 at 5:04 amREPUBLICAN TAX CUTS
Today I heard someone ask: “Why do Republicans cut taxes without cutting expenses?” I thought it was an excellent question, with no logical answer. Let me attempt to regurgitate their illogical answer, and explain why it’s illogical.
Republicans claim their tax cuts will stimulate economic growth. In fact, they’re doing the opposite. Cutting taxes on the top 2% is supposed to increase investment. But there’s a catch to this “theory.” There needs to be something to invest in. It’s only benefit is to increase the SIZE of our industrial capacity. But current industrial capacity is under-utilized. Investment to increase the size of an already underutilized industrial capacity makes no sense. There’s simply no current benefit to increasing its size. As such, there is no current benefit to increasing investment.
We need to increase the % UTILIZATION. Investment supposedly increases production. When it does, it does so by increasing industrial capacity size. It has no effect on percent utilization. No amount of investment will increase industrial capacity utilization rates. Only consumer DEMAND increases utilization.
In order for production to increase, there must be an increase in production DEMAND. No amount of investment will increase demand for production. As a result, much of this potential investment capital sits idle. It goes into overvaluation of the stock market, overvaluation of real estate, increased business “cash-on-hand” accounts, foreign bank accounts, CEO bonuses & salaries, stockholder dividends, and last, but not least, Republican campaign contributions.
Meanwhile, the inflationary effect of these tax cuts reduces spendable consumer income, reducing consumer spending. This REDUCES the very “production-demand” necessary to stimulate production, and reduces job growth for workers to provide that production. Thus, the top 2% tax cuts are not only unhelpful, they are detrimental. They slow economic growth. Their inflationary effect reduces inflation-adjusted consumer spending, which reduces the demand for production. Financial analysts have stated on many occasions that investment capital is plentiful at present. Consumer income is not. Consumer income limits consumer spending, and the production demand it creates. High-end tax cuts are not helpful at present, because increasing potential investment capital is of no benefit. It is NOT growing our economy. It’s shrinking it, due to the inflationary reduction of “real” wages caused by these cuts.
It’s worth mentioning here that CONSUMER SPENDING is 2/3 of economic activity. It’s the largest component of the GDP equation, where GDP=ConsSpen+Invstmt+GovSpen+TradeBal.
It makes a lot more sense to try to increase consumer spending at present. It is a larger component than “Investment” capital, and it is in far shorter supply. We need to “change-the-course” back to fact-based economic reality, instead of “faith-based” economic mythology. Investment does NOT create jobs. But demand for production DOES create jobs.
unlawflcombatnt
EconomicPopulistCommentary
http://www.unlawflcombatnt.blogspot.com/
_____________________________
Investment does NOT create jobs. It only “allows” for their creation. Increased Demand for goods creates jobs, because it necessitates hiring of workers to produce more goods. Investment “permits” job growth. Demand necessitates it.
Building a factory does NOT create jobs. Demand for production DOES create jobs. Goods are not produced if there is no demand for them. Without demand for goods, there is no demand for workers to produce them. Without demand, no amount of investment creates jobs.
June 11th, 2005 at 8:41 pmÇà ´º¶»
June 29th, 2005 at 6:50 pmzz51.51.net
GDP overstates ECONOMIC GROWTH
Again, it appears that the calculated GDP has overstated actual economic growth. Today’s published GDP figure of 3.8%, is the same as the last quarter of 2004. However, growth of the 2/3’s of economic activity due to consumer spending is slowing. The “final sales” growth, which many consider a better indicator of “growth,” has declined for the 2nd straight quarter. In addition, growth of most “investment” parameters are also slowing.
The link to these numbers can be found at Briefing.com’s GDP section at:
http://www.briefing.com/Silver/Calendars/EconomicReleases/gdp.htm
The 1st quarter GDP has now been revised upward to 3.8%. Again, this is the same as the 4th quarter of 2004. However, of the multiple factors used to compute this number, only 2 have increased significantly. The 1st of these is INVENTORIES, which increased from $47.2 billion in the 4th quarter of 2004 to $66.8 billion in the 1st quarter in 2005. This is a 42% increase over the previous quarter. The 2nd major increase was in “residential investment.” (Housing & Real Estate) Here there was a 338% growth in the 1st quarter of 2005, from 3.4% in Q4, 2004 to 11.5% for Q1 of 2005.
Final sales growth declined for the 2nd straight quarter. Final sales growth decreased to 3.0% from the 4th quarter’s 3.4%. This marks a 13% DECREASE. The 4th quarter’s final sales also decreased from the 3rd quarter’s 5.0%. Thus, GDP sales are not keeping up with the measured GDP. Ultimately, the GDP must be sold to create profits. The declining “final sales” growth, in relation to the the total GDP, suggests the GDP is overestimating economic growth.
All other measures of consumer spending declined as well. Total personal consumption spending (PCE) growth decreased to 3.6% from the 4th quarter’s 4.2%. All 3 components of PCE declined as well. Durable goods sales growth decreased 54%, declining from 3.9% in the 4th quarter to 1.9% for Q1 of 2005. Nondurable goods and services also decreased.
Nonresidential investment growth also decreased 72%, from 14.5% in Q4 of 2004, to 4.1% in the 1st quarter of 2005. Not only did growth in nonresidential investment not increase, it actually decreased in Q1 of 2005. The growth rate was actually -2.4%. Growth in equipment and software investment decreased from 18.4% in Q4, to 6.1% in Q1 of 2005.
Thus, GDP growth was maintained almost exclusively from increased real estate investment and increased unsold inventories. All indexes of consumer spending growth decreased. This comes as no surprise, considering inflation-adjusted wages also decreased during that time. Decreased consumer spending power usually decreases consumer spending.
It appears the calculated GDP has again overstated actual economic growth. Goods are being produced in excess of what consumers are purchasing. Excessive goods production drives down demand for labor to produce goods. This decreases the number of employed workers, as well as wages of those who are still employed. This results in a further decrease in the aggregate consumer income necessary to purchase goods.
Growth of inventories and real estate investment are all that have increased during the 1st quarter of 2005. Does this really represent economic “growth”? Doesn’t declining growth in consumer spending imply an economic slowdown? Do isolated increases in unsold goods and real estate investment truly indicate economic growth? Can unsold goods and real estate investment really be substituted for consumer spending? Can profits lost from declining goods sales be replaced by production and investment increases? How does that increase profits? Doesn’t someone have to buy products for profits to be made?
unlawflcombatnt
EconomicPopulistCommentary
http://www.unlawflcombatnt.blogspot.com /
______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers’ ability to buy the products of capital investment.
There must be balance between the “means of consumption” and the “means of production.”
June 29th, 2005 at 11:28 pmECONOMIC PROPAGANDA
The Bush propagandists are still publishing optimistic reports about the economy. There are so many negative statistics that it’s getting very hard to spin them. Regardless of any spin they put on it, this pseudo-economic growth has relied on massive borrowing and overinflated real estate values. Some sources estimate that 70% of the wealth created during Bush’s economic “reign of terror” has been in real estate, which means it’s nothing more than the hot air filling the real estate bubble.
Residential (home) construction has declined almost 5% in the last 3 months. May’s -1.7% followed April’s -2.2%, which followed March’s -1.0%. This can be found at http://www.briefing.com/Silver/Calendars/EconomicReleeases/const.htm
According to the Mortgage Bankers Association, mortgage applications decreased 1.1 % in the week ending June 24. This followed a 13.2% decrease for the previous week. This information can be found in the 6/29/05 Reuters-Yahoo News article at:
http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2005-06-29T113340Z_01_N10103329_RTRIDST_0_ECONOMY-MORTGAGES-UPDATE-1.XML
In addition, the median new home price decreased from $232,000 in April of 2005 to $217,000 in May. This means median home prices have decreased 6.5% in 1 month. Demand for new homes is clearly on the decline. The housing bubble is starting to deflate.
Year over year GDP growth ending Q1 of 2005 has decreased drastically to 3.7% from the 5.0% ending Q1 of 2004. The economy is definitely slowing down.
What’s worse, the best indicator of economic growth, the “GDP Final Sales” for 2004 was only 2.8%. The non-inflation adjusted numbers for this can be found at http://research.stlouisfed.org/fred2/data/FINSAL.txt
Total construction spending has declined 3 months in a row. The drop to a seasonally adjusted annual total of $1.1 trillion surprised economists, who had been forecasting a 0.5 percent increase in spending. May’s -0.9% followed April’s -1.1% which followed March’s -0.2%
The Chicago PMI fell 0.5% to 53.6% — the lowest level since September of 2003. The total decline from March 2005’s 69.2 to June’s 53.6 is -15.6 points. This marks a 22% DECREASE in the last 3 months. Thus Midwest manufacturing has been rapidly declining over the last 3 months. This can be found at http://www.briefing.com/Silver/Calendars/EconomicReleases/chi.htm
The employment component of the Chicago PMI DECLINED a whopping 5.8 points, to 48.9 from May’s 54.7. Less than 50% indicates contraction. Thus, the level of manufacturing employment in the Midwest is DECLINING.
The Index of Supply Side Managers, which came out July 1st, increased for the first month in the last year. It had been on a nearly constant decline since January of 2004, when it was 63. Friday’s reading was 53.8. This marks a 15% DECREASE since January of 2004.
The employment part of the ISM index was less than 50 for the 2nd month in a row. Again, less than 50% indicates contraction.
The leading indicators index has fallen a cumulative 1% over the last 6 months, including May’s -0.5%. April was falsely revised upward from its original -0.2%, to avoid setting off the “recession alarm.” This can be found at http://www.briefing.com/Silver/Calendars/EconomicReleases/leader.htm
http://www.briefing.com/Common/Images/Content/PageContent/EcData/leadnt.gif
Real, monthly disposable personal income has actually declined from $8,473 in December to $8,211 for the month of May. This can be found at http://research.stlouisfed.org/fred2/data/DSPIC96.txt
Unemployment is lower because we are using a lower labor force participation rate. If we used a labor force participation rate of 67.2%, instead of the current 65.8%, it would put 2 million more people into the participating labor force. This was the labor force participation rate used when Clinton was in office. Using the same labor force participation rate used during Clinton’s presidency, unemployment would be 7.1% at present.
The projected budget deficit, when not padding it with Social Security taxes, is $780 BILLION for 2005.
The national debt is now $7.7 TRILLION and rising.
We are heading for an Economic Armageddon. Bush is the worst president in U.S. history. His legacy will be to have done more damage to our economy and country than any other president. He has destroyed our economy, our military, and our country’s reputation with the rest of the world.
unlawflcombatnt
EconomicPopulistCommentary
http://www.unlawflcombatnt.blogspot.com/
______________________
Capitalism cannot function without consumer income. The benefits of capital investment are limited by consumers’ ability to buy the products of capital investment.
There must be balance between the “means of consumption” and the “means of production.”
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