Economic Terrorists

This is what happens to dealmaking when the terrorist wants to kill the hostage regardless. No ransom is high enough. President Obama's "grand bargain" deficit deal is "indefensible" for House Republicans, even though it's to the right of the Gang of Six bi-partisan group in the Senate.

Look, we all know what needs to be done.

- Eliminate tax loopholes and superfluous exemptions in exchange for lowering the corporate and income tax rates generally. I'm looking at you yacht depreciation write-off! (Gang of Six / Obama proposals)

- Raise the Medicare eligibility age from 65 to 67 in slow, steady increases over 5 years with reasonable exemptions for people that actually work do physical labor for a living (like coal mining and firefighting).

- Spend some immediate funds on INFRASTRUCTURE - we're still in a recession people. Unemployment in the construction market is roughly 22%, borrowing costs are at historically low rates (Unless House Republicans blow up the economy due to the fact that President Obama won't let them personally steal DeShawn's breakfast from him "Because that's MY HARD EARNED MONEY!!!"), and those construction workers will end up - yes that's right - buying some stuff which will grow the economy and reduce our deficit.

- But I'm sick of the "Jobs, Jobs, Jobs" Congress, because they've actually been the "abortion, unions, deficit" Congress and have achieved absolutely jack.

Republicans Are Not Serious About the Deficit

News outlets are noting that budget negotiators are "inches away" from a deal to avert a government shutdown, but that the one item holding a full deal back is the Republican's policy rider for fully de-funding Planned Parenthood, under the auspices that no tax dollars should go to fund abortions.

Unfortunately, there's just one small hitch. It is already federal law that no federal dollars go to funding abortion services; it's called the Hyde Amendment. And in fact abortion services makeup only 2% 3% of the services Planned Parenthood provides. So what does Planned Parenthood do, you ask? They largely provide basic health services for low-income women. Things such as mammograms and standard GBYN health exams and drum roll please...birth control! Perish the thought!

Most economists have called the funding of Planned Parenthood a deficit reducer. Why?

What do you think costs more? The $10-15 subsidy a month so a low income young woman can buy birth control? OR... The cost of the Child Income Tax Credit for 18 years? Let's also assume that this young woman is a single mother who has to stay home from high school and will probably never end up paying a tax dollar in her life. Hmmmmm... I wonder.

Methinks the birth control pills are cheaper for the government to help pay for.

Now, you might say maybe teens shouldn't be having sex at all! But your problem is not with Planned Parenthood, but with the man upstairs. It is His PERFECT design (right?) to make teens hornballs with larger and more active amygdalas and less active frontal lobes during this crucial timeframe. Too bad he designed humans so poorly to have intercourse when they were most fertile and physically healthy.

So Republicans, take the deal. We can argue (again) about abortion in 2012. And if you're serious about reducing the deficit, buy the damn birth control. Isn't having fewer poor people walking around the U.S. your favorite thing ever, anyway?

Senate Democrats are big pussies!

You heard me!

Senate Dems are afraid of holding a vote on the Obama administration's policy of continuing the Bush tax cuts for "middle-class Americans" making less than $250,000 per year because some "conserv-a-dems" are afraid of appearing to raise taxes on small business.

As a recent study suggested, ending the Bush tax cuts altogether at the end of this year WOULD BALANCE THE BUDGET BY 2015!  Let's see if Republicans want to take a bite out of that apple. In any case, a majority of Americans support the middle approach advocated by the Obama administration which advocates tax cuts for the middle class over 10 years.

(Note: Ernie actually supports the compromise advocated by former OMB director, Peter Orszag that all of the Bush tax cuts should be extended for two years in-full and then fully expire.)

However, even though a majority of Americans support the Obama administration's proposal Dems are afraid of taking a tough vote that would appear to raise taxes on some segment of the population.  I have respect for Republicans because at least they play to win!

Dems need to find their plums if they want any chance at holding the House and Senate. They'll get votes if they lead with purpose not if they just seem to cover their ass every chance they get!

Surprise! Republicans are Keynesians too

I thought Republicans really wanted to stop the "runaway spending" of the Obama administration and take a huge axe to the national debt.  But apparently, they realize that doing so during a recession is not the best idea.

Watch below as House Minority Leader, John Boehner of Ohio, advocates to keep the Bush tax cuts at a cost of roughly $3 trillion dollars added to the national debt, because he believes (correctly, in my opinion) that job creation is better for the long-term debt reduction than cutting economic stimulus during a recession.

(FYI, the Obama administration's proposal would keep the "Bush" tax cuts (2001, 2003) for taxpayers making less than $200,000 or $250,000 if they are a couple. This extension would add $2.5 trillion dollars to the national debt)

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Where Boehner's reasoning is wrong, is that you can't have it both ways.  Republicans since Reaganism during the 80's have held the Laffer curve as dogma, which means that larger tax cuts means more revenue coming in! That's right! The less money you have coming in, the more money comes in! This makes complete sense, doesn't it?

Unfortunately, according to former Fed chair, Alan Greenspan, this economic model does not ring true. You either stimulate the weakened economy driving up your short term deficit or you try and balance your budget as fast as possible with repercussions of systemic unemployment in the high double digits, furthering economic collapse and deepening the debt due to collapse of tax revenues.

Keynes once famously responded to a critique of his economic theory which advocated government intervention to mitigate current economic cycles of recession and depression. Critics posed to Mr. Keynes, "What about the debt the government owes in the long run?"

He replied, "In the long run, we are all dead."

This is why Obama's President

During the campaign McCain proposed a British parliamentary style "question time" for the President in front of Congress.  This isn't exactly it, but it's damn close.  We have to work together if we're going to solve America's big problems.

Below Obama takes questions from the GOP House caucus for 60 minutes.  Enjoy.

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