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Austerity American Style Part 6 - No Jobs Plan

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What you most certainly did not hear from the MSM is that the NASDAQ is still down 42% from its 2000 high of 5,048. None of the brain dead twits on CNBC pointed out the S&P 500 is trading at the exact same level it reached on April 8, 1999. The false storyline last week was the dramatic surge in new jobs...They create new categories of Americans to pretend they arent really unemployed. They use more models to make adjustments for seasonality. Then they make massive one-time adjustments for the Census.
- Illusion Of Recovery, Washington’s Blog, February 2012

President Obama says he wants to help American manufacturers. But cutting their already very low taxes even further is not the way to do so. Repairing our decaying infrastructure and better educating our workforce would be much more promising approaches.
- Obama Promoting Tax Cuts at Boeing, a Company that Paid Nothing in Net Federal Taxes Over Past Decade, Citizens For Tax Justice, February 2012

“Obama’s biggest blemish remains the ongoing tragedy of mass unemployment. Not only does this have a human element - the countless lives harmed or destroyed by poverty and desperation - but it is a huge drag on our economy. Mass unemployment reduces spending - THE ENGINE of our economy - which in turn, reduces growth. And without meaningful growth, there’s no way to reduce long-term debt without inflicting a large dose of harmful austerity. That, in my view, is unacceptable.”
- Obama’s Biggest Blemish, Jamelle Bouie, American Prospect, January 3, 2013

From WIKIPEDIA on the Fiscal Cliff deal; 12/31/2012

Tax effects:

Marginal income and capital gains tax rates would increase relative to their 2012 levels for those with annual income over $400,000 for individuals and $450,000 for couples, but the rates below these levels would remain at their 2012 levels. The income rate of 39.6% (effective on January 1, 2013 under the expiration of the Bush Tax Cuts) is retained, and the capital gains rate increases from 15% to 20%.

A phase-out of tax deductions and credits for incomes over $250,000 for individuals and $300,000 for couples is reinstated. Limits on deductions had existed before the Bush tax cuts, and had disappeared in 2010.

Estate taxes are set at 40% of the value above $5,250,000, indexed for inflation, an increase from the 2012 rate of 35% of the value over $5,120,000.

Changes are made to the Alternative Minimum Tax to permanently index it to inflation and thus to avoid the annual “patch” that was previously required to prevent it from impacting middle-class families.

The two-year old cut to payroll taxes expires. (FICA goes up 2 percent to 6.2 percent.)

Some tax credits for poorer families are extended for five years, including ones for college tuition and an expansion of the Earned Income Tax Credit.

A number of corporate tax breaks are extended, including the “active financing” tax exemption for major corporations (cost $9 billion), a rum tax supporting Puerto Rico rum industry ($547 million in 2009), a tax benefit for NASCAR racetrack owners (around $43 million), tax credits for two- and three-wheeled electric vehicles and hiring of individuals who are members of a Native American tribe.

In all, the bill included $600 billion over ten years in new tax revenue, about one-fifth of the revenue that would have been raised had no legislation been passed. For the tax year 2013, some taxpayers will experience the first year-to-year income-tax rate increase since 1993, although the rate increase came about not as a result of the 2012 Act, but as a result of the expiration of the Bush Tax Cuts. The new rates for income, capital gains, estates, and the alternative minimum tax would be made permanent.

Spending provisions:

The budget sequestration created by the Budget Control Act of 2011 is delayed by two months, to give time for further negotiations on deficit reduction. The $24 billion cost would be offset by a provision allowing 401(k) accounts to be rolled over into Roth IRA plans, requiring taxes to be paid on the assets,as well as a requirement for unspecified cuts of $4 billion for the remainder of FY2013 and $8 billion in FY 2014.

Federal unemployment benefits are extended for a year without a budget offset elsewhere, a cost of $30 billion.

The Medicare doc fix is extended for one year.

A pay freeze for members of Congress is extended, but a general pay freeze for government workers is not.

Some portions of the farm bill that had expired in September would be extended for nine months, but without changes supported by dairy farmers and legislators.

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So What’s Next, Mr. President?
Nearly every decision made during Obama’s presidency has been conducted under the canopy of catastrophe.

David Harsanyi
Reason
January 3, 2013

The worst part of the fiscal cliff deal isn’t the specifics - though they do stink. It’s being reminded again how utterly detached Washington is from reality.

The question, now that we’ve finally hiked taxes on the rich (and doesn’t everyone feel better knowing that life is that much fairer?), is: How are we going to continue paying for the government we’ve been promised? As it turns out, RAISING TAXES rates on the “wealthy,” the most pressing issue of the Obama Age, amounts to a mere $62 billion of new revenue.

To put it in perspective, the deficit spending this year alone was more than $1 trillion. So the fiscal deal will supposedly bring in $620 billion in new revenue over the next decade, which is less than any year’s worth of debt under President Barack Obama. If redirecting resources from private-sector investments to green energy subsidies feels like a victory, congratulations.

But if you’re not a class warrior, a Hollywood studio, a maker of electric motorcycles, a booze producer from Puerto Rico, an algae grower or NASCARall of which are subsidized in the bill - you’re out of luck. For the rest of you, there are higher taxes. The expiration of the payroll tax holiday means that Washington will continue to pretend Social Security and Medicare are “paid for,” and according to the Tax Policy Center, 77 percent of you will see your taxes rise an average of $1,635 per year.

The ”AMERICAN TAXPAYER RELIEF ACT OF 2012” indeed.

For all of you, there is also more debt, as the Congressional Budget Office found that the fiscal cliff deal increases the deficit by $4 trillion.

Yes, this is what Americans voted for in November. But if we’re supposed to believe that this deal reflects a “balanced, responsible” approach as the president asserts, what does the future hold? The GOP has surrendered on its core issue: It voted for a tax hike. Obama? No spending cuts. No tax reform. No debt reduction. No entitlement reform. There is no balance. And none is coming.

How can we expect any useful POLICY to emerge from manufactured crisis, anyway? Nearly every decision made during Obama’s presidency has been conducted under the canopy of catastrophe. The result is hastily assembled legislation that is larded up with goodies. It’s no accident.

And a newly elected Congress will be immediately submerged into another round of “negotiations,” this time centered on the debt ceiling (which we’ve already hit). Failure to surrender to the president’s demands allows the media to portray Republicans as the ones pushing the nation into default/over cliffs/etc. Low-information voters will soon be informed by Democrats that the debt ceiling, rather than debt, is the villain.

Even if we concede that Republicans, with no leverage or leadership to speak of, did the best they could in averting even higher taxes, they still lost. And the dynamics of the debate have not changed. This might be politically fortuitous for the president, but it is a disaster for the rest of us. Obama is unserious about debt because anything that cuts the size of Washington threatens his agenda. But a looming $50 trillion unfunded entitlement crisis is real. And the party in charge hasn’t offered any concrete ideas on how to deal with it.

So now that the rich pay more, it’d be nice if we could stop incessantly complaining about how dysfunctional Washington has becomeas if ideological unanimity were something to be desired in a free nation - and start talking about how indifferent the president has been on one of the critical issues we face.

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Surviving the Fiscal Cliff: Americas Middle Class Has Been “Saved” - Or Has It?

By Danny Schechter
Global Research
January 7, 2013

Long live the middle class now that it has survived the fiscal cliff and been “saved.”

President Obama is basking in the glory of having averted the deepening of a crisis that is more structural than political and hardly resolved.

The markets are cheering, it is said, because markets love stability, unless there is money to be made off of volatility of their own making.

Forget the working class. The term is passe, as is the so-called and usually undefined great mushy middle class moves into its rightful place at the center of everyone’s concerns.

(When asked what class they are in - or aspire to be in - workers, and even the poor say Middle Class. Unless survey questions include the choice of working class that they usually don’t.)

Analysts who looked closely at the big deal so hysterically pushed through Congress as the dramatic end-piece of a year of political warfare, say that there will be very little gain for the middle class with income taxes down but payroll taxes up, insuring that it will be more, at best, of a wash than a redistribution of wealth on any level. Many Americans, not just the rich, will be shelling out more, not less.

Economist Lambert Strether calls it the “fecal cliff,” noting, cuts and tax increases (especially on the rich) are not commensurate. A “sacrifice” where some give up luxuries and others give up necessities is in no way “shared.” A marginal sacrifice for the rich is not commensurate to core sacrifices for the rest of us.

This is an obvious point, but you will have to search through all the sturm und drang in the media about the votes in Congress to find it. Our media prefers to look up at leaders on the national stage than down on the people who have to cope with their decisions.

The headlines, speak of a victory for the middle class while the deal’s details show what an illusion that is.

There is a deeper attack on the middle class underway that is not yet “breaking news.” We can see it at the measures designed to destroy unions and attacks on teachers. We see it in limits imposed on pensions, and inflation that is making everything pricier.

With a new wave of big cuts still to come, its not clear who will benefit - especially not that part of the middle class that relies on public education as the key to their upward mobility,

In city after city, public education is in trouble, underfunded, trapped in bureaucratic warfare, with many public schools facing closure and others cutbacks.

There is a privatization of middle class education underway with the privately run charter school industry hovering in the background, hoping to turn all of education into a business.

In Philadelphia, 17,000 students and more than 1000 teachers are facing whats being called euphemistically a “downsizing” with 37 public schools on the chopping block.

Writes Bruce Dixon in the Black Agenda report: “The fix has been in for a long time, and not just in Philadelphia. Philly’s school problems are anything but unique. The city has a lot of poor and black children. Our ruling classes don’t want to invest in educating these young people, preferring instead to track into lifetimes of insecure, low-wage labor and/or prison. Our elites don’t need a populace educated in critical thinking. So low-cost holding tanks that deliver standardized lessons and tests, via computer if possible, operated by profit-making “educational entrepreneurs” are the “way to go.”

These changes are always advanced in the name of better education “ innovation” in the same way that the “reforms” that deregulated financial markets and led to their crash were labeled “modernization.”

In the Bronx, New York, the venerable De Witt Clinton High School that for over 100 years educated several hundred thousand students, positioning many for the middle class with many famous grades exercising leadership role in private industry, media, the arts and public life, is being threatened with closure as the neighborhoods that sent kids there became poorer and darker, (Disclosure; it was at that high school that I first learned journalism on the school paper.)

Students, teachers and alumni are up in arms fighting the threat with rallies at the school and a petition on line. I have been working for months on a documentary to showcase the School - once the largest in America - and its century of achievement. You can see our trailer on line HERE.

Behind all of this is an unseen, but fundamental shift in our economy, explains economist Michael Hudson:

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers.

Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

In short, debt is often profitable, and will be fought over for years to come.

These stealth trends float beneath the surface of media coverage and public political debate and get lost in the miasma of partisan talking points.

We don’t what we dont see, and all we do see are posturing politicians whose main goal seems to be always appearing to do something but usually in the service of the status quo.

News Dissector Danny Schechter blogs at Newsdissector.net. He made the film “In Debt We Trust” warning of the financial crisis in 2006. He hosts a radio show at PRN.FM. Comments to dissector at mediachannel dot org

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Washingtons Hegemonic Ambitions Are Not in Sync With Its Faltering Economy

By Dr. Paul Craig Roberts
January 9, 2013

In November the largest chunk of new jobs came from retail and wholesale trade. Businesses gearing up for Christmas sales added 65,700 jobs or 45% of Novembers 146,000 jobs gain.

With December sales a disappointment, these jobs are likely to reverse when the January payroll jobs report comes out in February. Family Dollar Stores CEO Howard Levine told analysts that his company’s customers were unable to afford toys this holiday season and focused instead on basic needs such as food. Levine said that his customers clearly don’t have as much for discretionary purchases as they once did.

For December’s new jobs we return to the old standbys: health care and social assistance and waitresses and bartenders. These four classifications accounted for 93,000 of Decembers new jobs, 60% of the 155,000 jobs.

Obviously, the economy is not going anywhere except down. It takes approximately 150,000 new jobs each month to stay even with population growth and new entrants into the work force. Few of the jobs that are being created pay well, and the constant, consistent demand for more poorly paid waitresses, bartenders and hospital orderlies is difficult to believe. If Americans cannot afford toys for their kidҒs Christmas, how can they afford to eat and drink out?

Media spin seeks to create a recovery out of thin air, but these graphs from John Williams (shadowstats dot com) show the reality:

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Keep in mind that the 7.8% unemployment rate (U.3) that is headlined by the financial media does not include discouraged workers who have ceased to look for jobs. The governments U.6 rate includes workers who have been too discouraged to seek work for less than a year. This rate of unemployment is 14.4%, almost twice the U.3 rate that the media prefers to report.

In 1994 the US government defined out of existence unemployed Americans who have been discouraged from finding work for more than a year. John Williams estimates the long term discouraged workers. When his estimate is added to the U.6 measure, the US unemployment rate stands at 23%, three times the reported rate.

The rate of unemployment is so high because millions of US jobs have been offshored and given to Chinese, Indian, and other workers and because remaining businesses have been concentrated in few hands in violation of the anti-trust laws. (Go to THIS URL to see the concentration of the media)

We need to be concerned about a financial media and economics profession that believes a recovery is underway when the unemployment rate is so high and the real median income is so low. It is a mystery how any set of policymakers could possibly have believed that a country whose economy is driven by consumer expenditures can continue to expand when the jobs that produce the incomes that drive the economy are given to foreigners in foreign lands.

Essentially, Americans were told a packet of lies designed to win their gullible acceptance to an economy that produces high returns for Wall Street, shareholders, and corporate executives at the expense of everyone else in the country. The wage savings from the use of overseas labor means large rewards for the one percent and Family Dollar customers who cannot afford to buy toys for their children at Christmas.

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Austerity doesn’t work: New IMF report details the damage

By Georgia Logothetis
Daily Kos
January 3, 2013

What’s the cost of austerity?

The actual cost of severe austerity can’t be calculatedthe number of lives lost or dreams killed because of families free-falling into poverty isn’t an easy number to add up. Now, a new report from the International Monetary Fund has at least quantified the economic damage of austerity ... and it’s a number that will shock you.

First, some background. Back in October 2012, THIS IS WHAT THE IMF REPORTED:

Earlier this week, the International Monetary Fund made a striking admission in its new World Economic Outlook. The IMFҒs chief economist, Olivier Blanchard, explained that recent efforts among wealthy countries to shrink their deficits through tax hikes and spending cuts - have been causing far more economic damage than experts had assumed. (emphasis added)

At the time, Brad Plumer at The Washington Post explained the importance:

Economists tend to agree that tax increases and spending cuts hurt growth. The question is how much they hurt growtha variable that usually changes at different points in time.

This matters a lot for policy. If tax hikes and spending cuts only hurt growth a little bit, then a government with debt problems will want to enact some austerity measures. If a tax increase, on average, raises $10 in revenue but reduces output by $6, that might be painful, but it will ultimately shrink the deficit. (Indeed, those are basically the numbers that policymakers in Britain and elsewhere had been using.) [...]

Blanchard is now arguing that the fiscal multiplier appears to have been much higher over the past few years than policymakers, including the IMF, had assumed. Itԗs not 0.6. Its somewhere between 0.9 or 1.7. If true, then countries in Europe and the United States should have been pursuing stimulus measures to boost growthҗand not insisting on budget cuts. (Not surprisingly, Paul Krugman is claiming vindication, since this was his view all along.) (emphasis added)

Now, a NEW IMF WORKING PAPER released today details the true damage of austerity:

In a new paper published Thursday, IMF Economic Counsellor Olivier Blanchard and research-department economist Daniel Leigh show the IMF recommended slashing budgets too fast early in the euro crisis, starving many economies of much-needed growth.

In “Growth Forecast Errors and Fiscal Multipliers,” Messrs. Blanchard and Leigh calculate IMF and European economists underestimated the euro-for-euro effect of cutting government budgets. While economists expected that cutting a euro from the budget would cost around 50 cents in lost growth, the actual impact was more like 1.50 per euro.

You can read the paper HERE and Howard Sneider’s take on it over at The Washington Post HERE.

In Greece, which has implemented draconian austerity measures at the request of the IMF, the European Commission and the European Central Bank in order to receive bailout funding, the results are seen on the streets where a middle class has plummeted into poverty. One out of three Greeks now lives in poverty and average salaries have been slashed to just several hundred net euros a month. Homelessness, which was rarely seen in that country, is now endemic in certain parts of Athens. The unemployment rate has reached a record 26 percent, with more than 50 percent of Greece’s youth out of a job.

Greece received billions of euros in bailout funds, but a large part of why austerity didn’t work in Greece is because it wasn’t offset by any growth strategy. In a shocking example of how twisted reality became, Greece’s bailout funds at one time were simply wired into an escrow account that the government couldn’t touch and then wired back for debt service to European banks just days later (read the NYT report HERE). In other words, not only was there painful cuts, but any money coming into the country was spent almost exclusively on debt reduction rather than on stimulating the economy.

You would think that politicians and analysts here in the United States would take a lesson from the tragedy that has befallen Greece. Instead, aAS MEDIA MATTERS DOCUMENTS today, pundits are using the situation there to call for more austerity here at home. (More great stuff from Albert Kleine over at Media Matters HERE)

Some politicians recognize that austerity without a corresponding growth strategy is a recipe for disaster. Today, PORTUGAL’S PRESIDENT FOUGHT BACK:

President Anibal Cavaco Silva called for urgent action to halt the “recessionary spiral”, warning Europe’s leaders that the current course had become “socially unsustainable.”

In a speech to the nation, he said Portugal would “honour its international obligations,” but in the same breath called for a tough line with the European Union-International Monetary Fund Troika over the pace of fiscal tightening under Portugal’s 78bn (#63bn) loan package. “We have arguments, and we should use them firmly,” he said.

“Fiscal austerity is leading to declining output and lower tax revenue. We must stop this vicious circle,” he said, cautioning the Troika that “there would be no way out of the crisis until policy was set in the interests of the Portuguese people” as well as foreign creditors.

Portugal’s president has also “asked the constitutional court to rule on the legality of tax rises that come into force this January as well as on further moves to dismantle the welfare state in the 2013 budget,” saying that “[t]here are well-founded doubts over whether the distribution of sacrifice is just.”

Austerity born on the backs of the 99 percent doesn’t work. It not only doesn’t fix the problem, it makes it worse by exacerbating a country’s economic problems. The fact that austerity in Europe resulted in 1.50 euros of lost growth for every euro cut should serve as a major wake-up call to American politicians here at home. Giving in to the debt fetishists and cutting simply for the sake of cuttingand cutting from society’s safety netsҒwhile neglecting at the same time to push forward any robust pro-growth strategy ensures a nightmare situation. The middle class can’t be sacrificed in an attempt to bring a country’s books into the black.

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The Big Fail

By Paul Krugman
NY Times
January 6, 2012

Its that time again: the annual meeting of the American Economic Association and affiliates, a sort of medieval fair that serves as a marketplace for bodies (newly minted Ph.D.s in search of jobs), books and ideas. And this year, as in past meetings, there is one theme dominating discussion: the ongoing economic crisis.

This isnt how things were supposed to be. If you had polled the economists attending this meeting three years ago, most of them would surely have predicted that by now wedd be talking about how the great slump ended, not why it still continues.

So what went wrong? The answer, mainly, is the triumph of bad ideas.

Its tempting to argue that the economic failures of recent years prove that economists don’t have the answers. But the truth is actually worse: in reality, standard economics offered GOOD ANSWERS, but political leaders and all too many economists - chose to forget or ignore what they should have known.

The story, at this point, is fairly straightforward. The financial crisis led, through several channels, to a sharp fall in private spending: residential investment plunged as the housing bubble burst; consumers began saving more as the illusory wealth created by the bubble vanished, while the mortgage debt remained. And this fall in private spending led, inevitably, to a global recession.

For an economy is not like a household. A family can decide to spend less and try to earn more. But in the economy as a whole, spending and earning go together: my spending is your income; your spending is my income. If everyone tries to slash spending at the same time, incomes will fall and unemployment will soar.

So what can be done? A smaller financial shock, like the dot-com bust at the end of the 1990s, can be met by cutting interest rates. But the crisis of 2008 was far bigger, and even cutting rates all the way to zero wasn’t nearly enough.

At that point governments needed to step in, spending to support their economies while the private sector regained its balance. And to some extent that did happen: revenue dropped sharply in the slump, but spending actually rose as programs like unemployment insurance expanded and temporary economic stimulus went into effect. Budget deficits rose, but this was actually a good thing, probably the most important reason we didn’t have a full replay of the Great Depression.

But it all went wrong in 2010. The crisis in Greece was taken, wrongly, as a sign that all governments had better slash spending and deficits right away. Austerity became the order of the day, and supposed experts who should have known better cheered the process on, while the warnings of some (but not enough) economists that austerity would derail recovery were ignored. For example, the president of the European Central Bank confidently asserted that"the idea that austerity measures could trigger stagnation” is incorrect.

Well, someone was incorrect, all right.

Of the papers presented at this meeting, probably the biggest flash came from one by Olivier Blanchard and Daniel Leigh of the International Monetary Fund. Formally, the paper represents the views only of the authors; but Mr. Blanchard, the I.M.F.s chief economist, isnt an ordinary researcher, and the paper has been widely taken as a sign that the fund has had a major rethinking of economic policy.

For what the paper concludes is not just that austerity has a depressing effect on weak economies, but that the adverse effect is much stronger than previously believed. The premature turn to austerity, it turns out, was a terrible mistake.

I’ve seen some reporting describing the paper as an admission from the I.M.F. that it doesnt know what it’s doing. That misses the point; the fund was actually less enthusiastic about austerity than other major players. To the extent that it says it was wrong, its also saying that everyone else (except those skeptical economists) was even more wrong. And it deserves credit for being willing to rethink its position in the light of evidence.

The really bad news is how few other players are doing the same. European leaders, having created Depression-level suffering in debtor countries without restoring financial confidence, still insist that the answer is even more pain. The current British government, which killed a promising recovery by turning to austerity, completely refuses to consider the possibility that it made a mistake.

And here in America, Republicans insist that the’ll use a confrontation over the debt ceiling a deeply illegitimate action in itself - to demand spending cuts that would drive us back into recession.

The truth is that we’ve just experienced a colossal failure of economic policy - and far too many of those responsible for that failure both retain power and refuse to learn from experience.

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Austerity Will Cost the U.S. 3 Million Jobs By 2020

By Chad Kolinsky
Policy Mic
April 22, 2013

With all this talk of austerity, one key aspect of our recovery is lost in the noise. Where is the discussion of growth? How will Washington help the American economy prosper in the 21st century? We might be able to cut our way to lower deficits, but we cannot cut our way to more economic growth. What better way to increase revenues, than through growth inspired policies? The faster the economy develops, the quicker a solution to our debt will emerge.

Like it or not, the government plays an instrumental role in steering the economy. It is time to move beyond the ideology of how we would like our government to be and accept the reality of what government is. Washington has played an important role in the economy for generations. President Eisenhower, a Republican, invested in America’s infrastructure and helped build the interstate highway system which revolutionized interstate commerce. The Apollo program provided advances in technologies ranging from kidney dialysis, to semi-conductors, to athletic shoes. Recall that the Military played an instrumental role in developing the internet - in turn; the technology brought us Google, Facebook and helped propel the Arab Spring.

Imagine what our economy would look like today if the government spent billions on research and development, education, and infrastructure rather than bailing out big banks. What we need today is a smarter government that invests its limited funds efficiently; not a smaller government that you can “drown in a bathtub.”

Investment in infrastructure creates more “bang for our buck” than almost any other type of government spending. A study from the San Francisco Federal Reserve found that, on average, each dollar of infrastructure spending increased state GDP by at least $2 dollars. That is more than a 100% return on investment.

As President Obama stated in the late State of the Union, Americans continue to drive over more than 60,000 structurally deficient bridges everyday. The lack of investment in infrastructure left us in a crisis. In 2002, American infrastructure ranked 5th globally; by 2012 we were 25th, behind countries like Saudi Arabia, Barbados, and Spain to name a few. The American Society of Civil Engineers claims that without investing an additional $157 billion per year in infrastructure, the United States will lose over 3 million jobs and trillions of dollars in GDP by 2020 (and we thought the $85 billion sequester was bad!).

The United States must close our infrastructure gap to stay competitive. Today, China has over 20,000 km of high-speed rail; compared to our one track. The port of Shanghai, handles more containers than the eight largest U.S. ports combined. Sitting back and allowing our nation to fall further behind should not be an option.

We can choose to elect representatives who will maintain the status quo; who will not reform the entitlement spending that is bankrupting our nation. Or we can elect individuals that will make the necessary investments for our country to succeed. For the first time, this past election, more millennials (18-35) voted than senior citizens. As a generation, we must find our voice and make it heard in Washington. We must get out and demand bipartisan solutions to our nations problems and investments in our future!

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5 Reasons Congress Should Be Deeply Ashamed About Jobs
Congress has not only made the job search more difficult for average Americans, but has also impeded the process.

By Paul Buchheit
Alternet
August 13, 2013

U.S. Representative Marlin Stutzman said, “Most people will agree that if you are an able-bodied adult without any kids you should find your way off food stamps.”

That depends on whether those ways can be found. If Stutzman and other members of Congress believe it’s that easy to find a job with a living wage, they’re either ignorant of middle-class life or they are victims of free-market delusion. In either case, Congress, with its shameful response to the people who elected them, has not only made the job search more difficult for average Americans, but has also impeded the process.

Senate Republicans killed a proposed $447 billion jobs bill in 2011 that would have added about 2 million jobs to the economy. They filibustered Nancy Pelosi’s Prevention of Outsourcing Act, and temporarily blocked the “Small Business Jobs Act.” Most recently, only one member of Congress bothered to show up for a hearing on unemployment.

Congress’ unwavering support of big business donors shows a callous disregard for the needs of the millions of Americans they’re supposed to be representing. Here are five of the paralyzing consequences.

1. They’ve stifled the growth of millions of young adults.

In the U.S., more than half of college graduates were jobless or underemployed in 2011. Over the last 12 years, according to a New York Times report, the United States has gone from having the highest share of employed 25- to 34-year-olds among large, wealthy economies to having among the lowest. The Wall Street Journal recently noted that nearly 300,000 people with at least a bachelor’s degree were making the minimum wage in 2012, double the number in 2007. Not since the 1960s have so many young adults been living with their parents.

2. They’ve mocked the concept of a “living wage.”

At the very least, one would think, workers should be able to sustain their lifestyles over the years, to keep from falling backward in earnings. But they’ve lost 30 percent of their purchasing power since 1968. This happened during a time of steady American productivity. It has been estimated that a minimum wage tied to productivity should now be $16.54 per hour, but the current $7.25 is less than half of that, and below poverty level. It’s been getting worse in the last five years.

While 21 percent of post-recession job losses were considered low-wage positions, 58 percent of jobs added during the recovery were considered low-wage. Congress fiddles while more and more American families lose their earning power.

3. They’ve allowed nearly half of America to go into debt.

Our young adults are not only underemployed, but the college graduates among them are dealing with an average of $26,600 in debt, which translates, according to Demos, into $100,000 of lifetime wealth loss. Total student debt has quadrupled in just 10 years.

It goes beyond students to the population at large, many of whom survived the boom years by borrowing heavily on homes and credit cards. In 1983 the poorest 47 percent of America owned an average of $15,000 per family, 2.5 percent of the nation’s wealth. By 2009 the poorest 47 percent of America, as a group, owned zero percent of the nation’s wealth. Their debt exceeds their assets. Yet Congress caters to too-big-to-fail financial institutions while too-little-to-matter American homeowners don’t earn enough to stay out of debt.

4. They’ve persisted with the trickle-down “job creator” myth.

The “low tax = job creation” argument is absurd. Congress need only look at four of its pet projects: Bank of America, Citigroup, Pfizer, and Apple. Each of the first three made much of their revenue in the U.S. over the last two years, but claimed billions of dollars of U.S. losses (big foreign gains, though). Yet with almost zeroU.S. taxes among them, all three companies are among the top 10 job cutters.

Apple is a special case. Rand Paul fumed, “What we need to do is apologize to Apple and compliment them for the job creation they’re doing.” But Apple only has 50,000 U.S. employees, and despite earning about $400,000 per employee, they were the biggest U.S. tax avoider in 2012.

As America waits in vain for corporate job growth, Congress might look in its own backyard for the very worst job cutter, the federal government itself, which has begun to slice up a longtime model of public service, the Post Office.

5. They’ve aligned against the one area that would ensure jobs and a safer future.

A study at the University of Massachusetts concluded that at least 1.7 million jobs could be generated by a commitment to clean energy, about three times as many as in the fossil fuel industry. Half of them would be labor-intensive jobs requiring at most a high school education. And all these new employees would help to reduce their own home heating costs. A recent report by a Kansas energy group, which analyzed data from 19 wind projects, concluded that wind energy generation “is equivalent to, or in some cases significantly cheaper than, new natural gas peaking generation.”

If Congress were really concerned about job creation, and about the cost and environmental impact of energy choices, and about the implications of falling behind China and Germany in clean technologies, they would see that a transition to wind and solar power is necessary. But oil, gas and coal received over twice the level of subsidies provided for renewable fuels from 2002 to 2008. Globally it’s six times more, with U.S. post-tax fossil fuel subsidies of $502 billion leading the world. Even with their subsidy advantage, right-wing groups, funded by Koch Industries, are seeking to repeal renewable energy initiatives in individual states. Their deceitfully named “Electricity Freedom Act” will keep the money flowing to dirty energy. But not the jobs.

Shame, Shame

How can we explain the job-defeating behavior of congressional Republicans? I suggested earlier that they’re either ignorant of middle-class life or victims of free-market delusion. Perhaps it’s more insidious. Thom Hartmann reports on a dinner meeting the night of Jan. 20, 2009, when “Republican conspirators vowed to bring Congress to a standstill, regardless of how badly congressional inaction would hurt the already hurting American economy and people.” In short, they don’t want President Obama to look good. If that’s true, it goes beyond shame. It’s a disgrace.

SOURCE

Austerity American Style
[PART 1] - Ending The Safety Net
[PART 2] - Enough Is Enough
[PART 3] - Big, Bad Businessmen
[PART 4] - Big, Bad Banks
[PART 5] - Selling Out The Public
[PART 6] - No Jobs Plan
[PART 7] - Big, Bad Cronies
[PART 8] - Red-State Model

Posted by Elvis on 01/05/13 •
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