There are certain things that seem like they are off the table. Certain things that are on.
Catherine Austin Fitts likes to say "if we can face it, we can fix it," and this is the heart of our democracy, our political economy, the first ingredient of which is to collect and
keep good data. Needless to say, none of what we are hearing from either side passes the smell test.
The Clinton legacy is off the table. Clinton is off the table himself, and so is Hillary, nary a peep from the most popular woman in America. Kosovo, off the table, Macedonia off the table. Sudan, and the Clinton missile strike on the country's major drug production facility, off the table. Colombia off the table. The years 1979 - 2000 in US clandestine foreign policy, off the table. DynCorp off the table. Nary a peep about Feith anymore or Nick Berg's jumpsuit, or Condi's lies or Leiberman's mealy mouthed war cries.
The table is set very carefully with a big old plastic turkey.
The Budget surplus:
The Phony Budget Surplus
March 17, 2000
Dear Friend:
You've probably read or heard news accounts claiming that federal coffers will be bulging with a $1.9 trillion surplus over the next decade. It sounds tempting, but are the projections based on anything resembling reality?
This nearly incomprehensibly large number has set off a bidding war among congressional Republicans and Democrats, as well as presidential candidates, about how best to spend the surplus. Tax cuts? Reducing the national debt? Providing additional resources for critical education or health care programs? Shoring up Medicare and Social Security?
Reasonable people can disagree about the merit of each proposal. However, I think you'll agree that this debate becomes more philosophical when we examine the accounting tricks behind the numbers. In fact, the projected $1.9 trillion surplus does not yet exist and may never materialize. Before we begin dividing up projected surpluses, we need to closely evaluate the assumptions underlying the rosy projections. Projections, after all, are highly sensitive to changes in the underlying assumptions.
Even the Director of the Congressional Budget Office (CBO) warned against making premature plans for the surplus in recent testimony before the Senate Budget Committee. In a little noticed portion of his prepared testimony, Director Dan Crippen said that if the economy slows and entitlement programs such as Medicare and Medicaid grow faster than expected, "the on-budget (excluding Social Security) surpluses that CBO is projecting in its baseline would never emerge. Instead, the on-budget deficit would rise to more than $290 billion a year by the end of the decade." A $290 billion deficit is a far cry from a $1.9 trillion surplus.
So, how then does the CBO come up with the $1.9 trillion surplus projection widely touted by those in Washington? Please bear with me as I try to explain the numbers. CBO assumes that Congress will keep discretionary spending (such as defense, education, law enforcement, and environmental protection) within the budget caps established in 1997. These caps are supposed to continue through 2002. CBO also assumes that spending will only grow at the rate of inflation for years after 2002. Under these assumptions, surpluses would total $1.92 trillion over 10 years. I think reasonable people would agree these assumptions are unrealistic and we should not base the future budgets on such a projection.
This year CBO took the unusual step of also detailing two alternative scenarios. One scenario assumes Congress will freeze spending at levels enacted in 2000, with no increase for inflation, for the next decade. The other scenario assumes spending will only increase at the rate of inflation. Under these alternative projections, the surplus would be $1.86 trillion or $838 billion, respectively. But, even these assumptions are shaky. In the year 2000 budget, Congress exceeded the budget caps and allowed several programs to experience more than an inflation-adjusted increase.
Clearly, the assumptions used greatly effect the resulting surplus projection. Therefore, next we need to determine which, if any, of the CBO baselines realistically reflect what Congress is likely to spend over the next several years. I would argue that all three measures vastly overstate what surpluses are likely to be. Here's why.
In 1997, Congress approved the Balanced Budget Act, which dramatically cut federal spending through 2002. CBO's rosy scenario assumes Congress will adhere to the strict 1997 limits on federal spending. To do so would require cuts in discretionary spending - for things like national defense, Head Start, and the FBI - of 11 percent. If defense spending was spared from cuts, as seems likely, then all other programs would have to be reduced by 40 percent by 2010. Congress is not likely to cut Head Start or law enforcement funding nearly in half. Recent history proves it. Over the last two years, Congress has evaded the budget caps by using budgetary gimmicks such as declaring the 2000 Census an "emergency" and thus not subject to the spending caps. The final spending bills approved last year exceeded the caps by $34.8 billion. To think Congress will refrain from using these gimmicks in the future is a fantasy.
The surplus projections are also unrealistic because they are based on there being no changes to current law. CBO's projections assume no tax cuts, no emergency spending, no natural disasters, no new military deployments, and no new programs requiring additional spending through 2010. In other words, they assume Congress will do nothing for the next decade. While CBO is doing nothing wrong - traditional budget forecasting must always be based on current circumstances, they can't predict what Congress will enact - it is dangerous to lock in massive tax cuts or increased spending based on the assumption that Congress will sit idle for a decade.
The past two years have seen Congress providing billions in relief for unanticipated events like the collapse in farm prices and natural disasters like the hurricanes in the Carolinas and Central America. Similarly, Congress has funded military operations such as Kosovo. It is not unusual for Congress to approve $8-12 billion or more in such additional spending a year. CBO assumes no such circumstances. Using recent history as his guide, former Director of the CBO, Robert Reischauer, makes a conservative prediction of $50 billion in emergency funding over the next decade. The current surplus projections assume none.
CBO also assumes Congress will pass no new tax cuts and will let expiring tax breaks disappear from the tax code. If Congress only extends these 21 expiring tax provisions, as has been done routinely, then projected surpluses would be reduced by $100 billion.
Finally, the assumption that Congress and the Administration will, at the most, allow spending to increase with inflation is faulty. President Clinton has already announced he will seek a real (higher than inflation) increase in the Pentagon budget for 2001 for a total of nearly $300 billion in defense spending. Congress seems likely to approve such an increase if not provide even more funding than requested by the President.
As a nation, we should certainly be pleased that federal government revenues have turned from deficits "as far as the eye can see" to projected surpluses. But, we must not sacrifice fiscal responsibility in our zeal to spend money that doesn't actually exist. Particularly by locking in massive tax cuts that primarily benefit the wealthiest Americans.
Instead, we need to rearrange federal budget priorities to close the "investment deficit" in areas such as education, environmental protection, and health care, but still rein in unnecessary spending. If surpluses do emerge, we should devote a sizable portion to paying down our debt - currently around $20,000 per citizen - so we don't leave a legacy of debt to burden future generations.
Sincerely,
[signed]
PETER DeFAZIO
Member of Congress
http://defazio.house.gov/iss-budgetphonysurplus.htm
What is the debate here? That Bush squandered what Clinton conjured out of thin air? Kerry will no more bring back the bull of the 90's than pigs will shit iced cream. Simple fact.
The truth is the crash of 98 was bigger and deeper and more lame in one glaring aspect than 29, only the little guy got screwed.
Less than 20% of the population owns over 50% of the market.
Yes there are two Americas: Fascists, and resistance.
One in four Bay Area families can't afford the basics of housing, food, health and child care without government aid, according to a report released Tuesday by the United Way of the Bay Area.
The study, called "The Bottom Line: Setting the Real Standard for Bay Area Working Families," looks at income and prices across the region to come up with a "self-sufficiency" standard for each of the nine Bay Area counties. It found that across the region 493,058 of 1,996,186 households lived below the standard. The figures do not include Bay Area households made up of elderly or disabled people."It's not just poor families, it's also working- class families," said Tse Ming Tam, a director with the National Economic Development and Law Center, speaking at a San Francisco news conference where the findings were announced. "We're seeing the erosion of those working families also."
The self-sufficiency standard was developed in 1996 and is considered by many activists and academics to be a more accurate measure than the more widely used federal poverty guidelines, which fail to account for cost-of- living variations within and between states.
The federal poverty level for a family of three is $15,260. That guideline is used to determine eligibility for programs such as Head Start, food stamps, National School Lunch and the Children's Health Insurance Program.
But the United Way study found that an adult with a preschool-age child living in Alameda, Napa or Contra Costa counties would need to earn about $20 an hour -- or $39,153 to $57,169 annually -- to afford the basics. The same family would have to make $23 an hour to live in San Francisco and $27 an hour to live in Santa Clara County, according to the study.
Family advocates and United Way officials said many families often had to choose between eating and paying their rent, even with government subsidies.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/09/29/BAGU590OJP1.DTL
The second I can't pay my rent, or you can't pay your mortgage, and, that could be a matter of weeks if oil spikes higher, the housing "bubble" goes and the real depression sets in.
This house is built on debt, war, and dope money.
It is up to the free and the brave to build it on equality, equity, and sustainability, positive return, for our kids.
Vote early and often.