GOP election strategy: They want the economy to fail – again, and to blame Democrats for GOP obstructionism

Posted by AzBlueMeanie:

For weeks, Senate Democrats have tried to pass what's called the "tax-extenders bill" — a key economic package that extends unemployment benefits, maintains popular tax breaks, protects doctors from Medicare cuts, and boosts state aid to prevent massive job layoffs in the states. The bill went down to defeat today, this time as the result of a GOP filibuster on a motion for cloture (60 votes necessary). Sen. Ben Nelson (D-NE) joined the Republicans on a 57-41 vote. This almost certainly kills the bill as presently packaged. Parts of the bill can possibly be revived later.

Steve Benen of The Washington Monthly offers this theory behind the GOP obstructionism:

The country needs this bill to pass, but Republicans won't let it come up for a vote.

In the hopes of finding a compromise, Dems have repeatedly scaled-back the measure, watering it down and removing worthwhile investments. The GOP has responded by insisting the reductions aren't enough, and that they still won't allow a vote.

* * *

In the real world, this means millions of jobless Americans will lose their already-modest benefits, and hundreds of thousands of workers will be laid off over the next year, including teachers, police officers, and firefighters. All of this will happen because Republicans are more concerned about the deficit — a deficit they created under Bush/Cheney — than the economy.

It's unpleasant to think about, and I really hope it's not true, but it may be time for a discussion about whether GOP lawmakers are trying to deliberately sabotage the economy to help their mid-term election strategy. After all, these same Republicans have supported deficit-financed tax-extenders before — there's no credible reason to change course now. On the contrary, with the economy struggling to break through, the need for this package is more obvious, not less, if your goal is to actually improve economic conditions.

Steve Benen is not the only one who sees the Republicans deliberately sabotaging the economy as part of a cynical mid-term election strategy. (Republicans have, of course, been engaged in an obstructionist strategy since the first day of the Obama administration).

Sen. Debbie Stabenow (D-MI) held a conference call with reporters today and accused Republicans of doing just that. Sen. Stabenow: Republicans "willing to take the people of this country down with them":

[Sen. Stabenow] explained that, after spending "days and days and days, and weeks and weeks and weeks" to get just one Republican to join with Dems in passing the legislation, "it's very clear that the Republicans in the Senate want this economy to fail. They see that things are, things are beginning to turn around…. We're gaining jobs, not as much as we need, but thing are beginning to move in the right direction…. In cynical political terms it doesn’t serve them in terms of their elections if things are beginning to turn around."

She continued, "In addition to just taking a general position of 'no' to everything, they are protecting wealthy investors, corporations that are sending jobs overseas, and oil companies," because in addition to extending unemployment benefits and providing aid to states for Medicaid and other programs, [the bill] has provisions that tax investors, ends tax incentives for corporations that outsource jobs overseas, and raises the fee oil companies are charged for the oil spill liability fund from $.08/barrel to $0.49.

She also complained about the moving target that meeting Republican concerns has become. When asked what happens if the cloture vote fails, she said "We'll put it temporarily aside. We don't have any other choice. We've met every objection on the other side and every time we've done that they've changed the concerns." She said that, specifically Sen. Snowe has had "numerous issues," that she insisted be addressed, and that "they keep changing" as Dems try to answer them. It's cruel, legislative whack-a-mole.

She talked about the consequences. In her state, in Michigan, by the end of the month there will be 87,400 people who will lose their benefits. Who won't be able to pay the mortgage or the rent, or put gas in the car to go look for a new job.

From Mother Jones:

What’s the price of this political obstructionism? In addition to the millions of Americans who stand to lose unemployment benefits, a huge number of private and public sector employees will lose their jobs due to state budget cuts. Without federal help, states will have to pour more money to prop up Medicaid, forcing them to make cutbacks in other parts of the budget. As a result, Moody's chief economist estimates that 200,000 jobs could be axed without federal Medicaid support, and the Center for Budget and Policy Priorities puts the number as high as 900,000—jobs belonging to teachers, firemen, police, and social workers, among others.

While federal and state governments both contribute to Medicaid funding, the economic crisis has left the states in a terrible budget crunch. The federal government has tried to step in, devoting over 60 percent of the federal stimulus money to propping up Medicaid so states wouldn’t have to make other cuts. But that money is now set to expire, and the states have yet to recover from the effects of the recession to make up the difference.

In addition to the unemployment benefit and job losses, the cuts to social services could be brutal.

This should come as no surprise to anyone here in Arizona where the Republican Party has been radicalized by its John Birchers, Tenthers, Dominionists, nativists and Teabagger fringe elements. They speak of the U.S. government as a foreign occupying force. They openly speak of sedition and secession, and even of taking up arms against the U.S. government. It should not be surprising then that Republicans would deliberately sabotage the economy as part of a cynical mid-term election strategy to cause the economy to fail – again, and to blame Democrats for GOP obstruction.

0 responses to “GOP election strategy: They want the economy to fail – again, and to blame Democrats for GOP obstructionism

  1. Which one is a conservative reporter and blogger – who just resigned from the Washington Post under pressure from the very same conservatives for having disparaged them (“insane”) in private e-mails – and which one is a Nobel Prize winning economist and professor of economics who has written several textbooks on economics in wide use? Maybe you should try reading one given your demonstrated level of economics-ignorance.

  2. David Weigel says Paul Krugman is obviously insane.
    http://3.ly/Qeas

  3. “There being no particular harm to trading securities …” Again, have you been living in a cave?

    Securities deregulation written by John McCain’s “financial guru” Phil Gramm led to the creation of exotic investment devices such as derivatives and credit default swaps that lie at the heart of the financial collapse in 2008. These ideas were not new. Exotic investment devices were in existence in 1929 as well. The repeal of the Glass-Steagall Act permitted the return to exotic investment devices that turned Wall Street into a casino betting parlor, betting on the return from these exotic “investment” devices rather than investing in actual businesses that create jobs. Hence, no job creation during the “lost decade” of 2001-2010. Fewer jobs existed at the end of the decade than when it began. But Wall Street grew to almost 2/3 of GDP and the financial services sector of the economy became dominant. This created an upside-down economy. Fund managers and securities traders became fabulously wealthy while average Americans saw their earnings stagnate (or decline) and their purchasing power decline, forcing them to incur debt just to tread water. And when the giant Ponzi scheme of Wall Street collapsed, average Americans saw their meager retirement funds vanish, they lost their jobs, and their homes went into foreclosure. They have not recovered.

    But Wall Street and the “investor class” has recovered. The people who created the financial collapse with their reckless gambling using other people’s money (pension funds, for example) were bailed out by the federal government to keep the country from falling into a Great Depression. Fund managers and securities traders demanded their multi-million dollar bonuses, despite nearly destroying the world’s financial markets with their recklessness, and they got them. The investor class has nearly fully recovered its losses from the Great Recession, but average Americans have been left behind. See data discussed at http://www.dailykos.com/storyonly/2010/6/23/878506/-The-re-Gilded-Age.

    A one-quarter cent per transaction tax on securities trading has been under discussion for many years. Applying the payroll tax for social security and medicare to securities trading has also been discussed for many years. Fund managers and securities traders being taxed only the 15% capital gains rate on the billions they “earn” on their gambling winnings in the casino of Wall Street is less than the tax rate average hard working Americans pay on their earned income, particularly when you add in the payroll tax for social security and medicare.

    Taxing securities trading is the minimum we should do. I firmly believe that casino capitalism, betting on exotic security devices of questionable value that no one really understands, is a fraud. These hucksters should be prosecuted for fraud and all of their assets seized under the equitable remedy of disgorgement of ill-gotten gains.

    But we don’t prosecute the wealthy plutocratic elite in this country, do we? Privilege and power protect them.

    As do the economics-ignorant in the media and the public.

  4. More Paul Krugman, from a May column http://www.nytimes.com/2010/05/31/opinion/31krugman.html?ref=paulkrugman

    What’s the greatest threat to our still-fragile economic recovery? Dangers abound, of course. But what I currently find most ominous is the spread of a destructive idea: the view that now, less than a year into a weak recovery from the worst slump since World War II, is the time for policy makers to stop helping the jobless and start inflicting pain.

    * * *

    A similar argument is used to justify fiscal austerity. Both textbook economics and experience say that slashing spending when you’re still suffering from high unemployment is a really bad idea — not only does it deepen the slump, but it does little to improve the budget outlook, because much of what governments save by spending less they lose as a weaker economy depresses tax receipts. And the O.E.C.D. predicts that high unemployment will persist for years. Nonetheless, the organization demands both that governments cancel any further plans for economic stimulus and that they begin “fiscal consolidation” next year.

    Why do this? Again, to give markets something they shouldn’t want and currently don’t. Right now, investors don’t seem at all worried about the solvency of the U.S. government; the interest rates on federal bonds are near historic lows. And even if markets were worried about U.S. fiscal prospects, spending cuts in the face of a depressed economy would do little to improve those prospects. But cut we must, says the O.E.C.D., because inadequate consolidation efforts “would risk adverse reactions in financial markets.”

    The best summary I’ve seen of all this comes from Martin Wolf of The Financial Times, who describes the new conventional wisdom as being that “giving the markets what we think they may want in future — even though they show little sign of insisting on it now — should be the ruling idea in policy.”

    Put that way, it sounds crazy. And it is. Yet it’s a view that’s spreading. And it’s already having ugly consequences. Last week conservative members of the House, invoking the new deficit fears, scaled back a bill extending aid to the long-term unemployed — and the Senate left town without acting on even the inadequate measures that remained. As a result, many American families are about to lose unemployment benefits, health insurance, or both — and as these families are forced to slash spending, they will endanger the jobs of many more.

  5. There being no particular harm to trading securities I don’t favor taxing it.

    As for nailing the war profiteers I am all for it, let’s get the wars ended thereby ending their profits.

    I don’t think raising taxes is any better (or worse) than government borrowing. I think government spending is a problem to be corrected. Eliminating deficits by raising taxes is trading one problem for another – in my opinion.

  6. Paul krugman explained in a recent column http://www.nytimes.com/2010/06/21/opinion/21krugman.html?ref=paulkrugman:

    Right now, we have a severely depressed economy — and that depressed economy is inflicting long-run damage. Every year that goes by with extremely high unemployment increases the chance that many of the long-term unemployed will never come back to the work force, and become a permanent underclass. Every year that there are five times as many people seeking work as there are job openings means that hundreds of thousands of Americans graduating from school are denied the chance to get started on their working lives. And with each passing month we drift closer to a Japanese-style deflationary trap.

    Penny-pinching at a time like this isn’t just cruel; it endangers the nation’s future. And it doesn’t even do much to reduce our future debt burden, because stinting on spending now threatens the economic recovery, and with it the hope for rising revenues.

    So now is not the time for fiscal austerity. How will we know when that time has come? The answer is that the budget deficit should become a priority when, and only when, the Federal Reserve has regained some traction over the economy, so that it can offset the negative effects of tax increases and spending cuts by reducing interest rates.

    Currently, the Fed can’t do that, because the interest rates it can control are near zero, and can’t go any lower. Eventually, however, as unemployment falls — probably when it goes below 7 percent or less — the Fed will want to raise rates to head off possible inflation. At that point we can make a deal: the government starts cutting back, and the Fed holds off on rate hikes so that these cutbacks don’t tip the economy back into a slump.

    But the time for such a deal is a long way off — probably two years or more. The responsible thing, then, is to spend now, while planning to save later.

    As I said, many politicians seem determined to do the reverse. Many members of Congress, in particular, oppose aid to the long-term unemployed, let alone to hard-pressed state and local governments, on the grounds that we can’t afford it. In so doing, they are undermining spending at a time when we really need it, and endangering the recovery. Yet efforts to control health costs were met with cries of “death panels.”

    And some of the most vocal deficit scolds in Congress are working hard to reduce taxes for the handful of lucky Americans who are heirs to multimillion-dollar estates. This would do nothing for the economy now, but it would reduce revenues by billions of dollars a year, permanently.

    But some politicians must be sincere about being fiscally responsible. And to them I say, please get your timing right. Yes, we need to fix our long-run budget problems — but not by refusing to help our economy in its hour of need.

  7. When government borrows more, there is less capital left for businesses to operate with. When there is less capital for businesses to operate with their operating costs go up. When operating costs go up, marginal employees are fired. Government spending (enabled by borrowing) increases business overhead and increases every ones cost of living.

    Would you say that the current recession is being prolonged by a lack of government spending?

  8. If you are so goddamn all fired concerned about deficits — during a depressed economy no less — there is a sure-fired way to eliminate the deficit and that is to collect the hundreds of billions in unpaid corporate taxes that have accummulated and to raise the marginal tax rate on the super-wealthy who have had a tax reprieve since the Bush tax cuts in 2002. This massive transfer of wealth to the super-wealthy — the very people who gambled with our economy in the casino capitalism of Wall Street, and lost — should be asked to pay for their recklessness. How about a modest transactional tax on securities trading? (The equivalent of the sales tax that we all have to pay on everything). How about hedge fund traders and other securities traders pay the same tax rate that you and I do on earned income? And how about asking these war profiteers to pay for the two wars they put on the country’s credit card?

    As for the radicalized Republicans, where have you been? Do you ever read a paper or watch the news? Have you been living in a cave?

  9. Thane, what does government borrowing have to do with unemployment? Seriously, what is the connection because as far as I can tell there is none however there has been ample historical evidence that lack of government spending during severe recessions actually prolongs them.

  10. The sky is falling (unless every single spending bill passes)! The borrowing and spending must continue (or else)!

    If government borrowing and spending hasn’t turned the economy around yet why would voters or their elected representatives support ever more borrowing and spending?

    Senator Stabenow apparently thinks that there is an mine where the US treasury picks up wealth for delivery to unemployed people and medical doctors and that it cannot be exhausted. Hint: It can.

    There is a price to be paid for government (borrowing and) spending on guns and butter. That price is the current US unemployment rate of 9.3%.

    http://3.ly/USunemploymentratepergoogledotcom

    The day the US government puts an end to the tremendously costly occupations of Iraq and Afghanistan is the day you will see the unemployment rate dip and not before.

    I don’t believe that the blame Republicans and Senator Ben Nelson line is going to hold water for another 4.5 months.

    I’d love to read some news about radicalized Arizona Republicans who advocate sedition and secession. If you have a reference, don’t be greedy, post it – if it exists.

  11. Francine Shacter

    I’m sure Jacob Javits and other like-minded Republicans are turning over in their graves watching people who call themselves Republicans behaving badly! Where are the Republicans who understand their responsibility to govern – where are they and, more important, where are their voices???????? It is shocking, to say the least, that “the other party” would make as its prime objective bringing down the government out of pure spite!!!!!!