July 8, 2012
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The Republican Recession - A Rant
I wish the Democrats would start calling our current economic problems what they are: A Recession caused and maintained by one political party.
During the first few years of this century a combination of decisions by the Republican Party leaders, including the presidency of G W Bush, which included the decisions to deregulate much of Wall street and even encourage risky investment behavior, reduce government income, and engage in two very expensive wars, led to a general collapse of the investment banking infrastructure and rise in the US public debt and yearly budget deficit which snowballed into a world-wide economic collapse.
This led to the decision to use the US government's faith and credit to bail out Wall Street and the election of Barak Obama and a Democratic Congress. Obama suggested two major reforms during his first year in office: A major Health Reform Bill, and an immediate stimulus designed to add more jobs.
The Republican congressional minority managed to control and thwart much of the original idea behind Health Reform, that of removing major health financing from the private insurance industry - as had been done with Medicare - and thus easing the insurance load from industry; and at the same time insuring the continuing domination of health care by the insurance industry.
At the same time, a Republican House majority beginning in 2011, managed to continue to thwart Democratic attempts to use government stimulus to re-start the economy. A unified Republican Senate minority whose openly stated major goal was to defeat Obama's efforts to end the recession had resulted in thwarting many of his programs.
Philosophically, it could be argued that government (taxpayer) stimulus was the best way to do this, or that private competitive business was the way to go, but the practical result of the Republican obstruction is that little has been tried or accomplished. Those acts Obama has managed to get through congress have had a modest positive effect but Republican demands for government spending reduction at national and state levels has led to the loss of many public sector jobs - mostly teachers, police and firefighters. These public sector job losses have an immediate and obvious impact on local economies: those public salaries are not going back into the private economy - a sure case of penny -wise and pound foolish political decision making.
The only obvious quick solution to our present economic mess is election of a Democratic veto-proof congress as well as the re-election of Barak Obama.
Comments (16)
Woooooooooop Democrats
The Republicans scare me
I have no idea what will fix the mess that our government has created. I just think back though and even when the President and the congress matched up they still had trouble getting things passed and moving. It seems no one really cares about the people they were elected to serve anymore, they are just worried about doing what they need to do to get reelected. I have a hard time trusting anyone in the government anymore.
@rush24a - Bill, you have to trust the people you elect to get the job done, even though it may result in compromises not exactly to your liking. A major problem of modern democratic government is the selection of congressmen unwilling to compromise and, as you say, being more focused on their reelection than on serving the needs of their constituents. You should be very familiar with this phenomenon there in CA, as that state government's impasse has led to really serious state problems. You live in the most expensive living cost state in the nation which at the same time has a crumbling infrastructure - ranging from roads to teachers.
Dear Dick,
I agree 1000%.
Or even more.
Michael F. Nyiri, poet,philosopher, fool
I am not sure that the issue is really as simple as your post sounds, although I do agree that the Republican party has contributed to it.
I think this situation has been building for my entire life. I am a Baby Boomer. Our government has known since the Baby Boomers were born that we were the largest segment of the population, and it has known that there was no boom following us for the last 35 to 40 years. Now as we retire, we are a huge drain on the economy. Instead of planning ahead to handle that problem, our government borrowed against Social Security to fund other things.
I hate to say it, but I think the unions have also contributed to the problem. Having worked most of my life in education, I shudder to think what the plight of teachers would be if they had not had unions. Even with unions, teachers do not do well compared to other professions with similar education. The unions have been allowed to negotiate the salaries of certain segments of the workforce to a point where the average person could not afford the products that they produced. That is what caused the collapse of the auto industry and the outsourcing of many manufacturing jobs. The economy has been progressively getting more out of balance for my whole life.
One thing that I do lay at the feet of the Republicans, though, is the state of our schools. It's my belief that the destruction of the public school system is part of the Republican agenda, although they would never say that. They will not put money into education, though, and education is the key to climbing out of our economic situation.
In this country, there is an education gap that widens every day. We have fewer and fewer unskilled jobs in this country. It is absolutely imperative that people have some type of credential beyond high school in order to be be able to support themselves, yet we still have many people who end their education with less than a high school diploma. Our educational system is not preparing people for the jobs that exist in our country at this time. We need to be putting money into developing a system that can do that.
The whole issue of health care is very frustrating. We are the only developed country that does not take care of its people. We spend twice as much per capital on health care than any other country in the world with poor results. We rank #37 in the effectiveness of our system. There is something tragically wrong with that picture. It's not caused by the Republicans, though. Many Republican presidents have tried to introduce national health care systems but have failed. For some reason, many people in this country have an outdated fear of "Socialism" which dates back to the Cold War, a period of history that few now remember.
It's a multi-layered problem.
@Nance1 - Hi Nance
Almost all of those entitlement programs Americans have become so fond of and dependent on were originally designed to be "off budget"and self-supporting through FICA taxes. To now claim they are a drag on the economy doesn't make any sense - It would be a fairly simple measure to increase the FICA taxes to a level which would support Social Security, Medicare, etc and people probably would not object. If Medicare was enlarged to assume care for all citizens, the FICA increase would be far less than the current private health insurance costs (Medicare is not a for-profit institution and regulates its fee payments) Social Security has a long history of FICA adjustments to remain viable.
@tychecat - I agree completely! Unfortunately, that is a hard sell to the Republicans, and also to many Democrats and Independents.
@tychecat - I also have a problem with the phrase "entitlement programs". Programs like Social Security and Medicare are mandatory insurance programs. We have no choice but to pay into them. It is our money that we are investing in a system that we did not choose. We have the same right to receive it as we have to receive payments from a 401K. People interpret "entitlement program" to mean that the recipients of the payments are asking for something that is not rightfully theirs. I know that is not what it means, but that is the way people understand it. I do understand that I might not "need" my Social Security, but I will be angry if it is take away from me because it is my money and I could have invested it in some other way if I had not been forced to pay into Social Security.
I don't think that having to pay into Social Security is a bad thing. If we did not have to do that, there is a segment of the population that would make no plan at all for retirement. Social Security is not a good plan in the sense that it is very difficult to live only on Social Security, but at least it is something.
@Nance1 -
Sigh, Nance you have been duped by a bit of propaganda dating from the very start of Social Security. Back in the mid-thirties in order to persuade congress to pass the original law, it was widely touted as a "Savings" program and has been so described ever since. Actually it was always intended to be a safety-net welfare program for retired workers who could no longer depend on extended family support in their old age, and was designed to be financed primarily by those still working - as it currently is.
If you are retired, check out the actual amount you contributed and how much you will receive - you will find it is several orders of magnitude over what you could have accumulated if you'd invested the money - and your personal investments would never get the annual cost-adjusted raises Soc Sec gets. That's why the attempts to "Privatize"Soc Sec are such a terrible idea.
@tychecat - According to information released today, that is not true anymore. Couples retiring now (that's my husband and me) will be the first generation who can expect to get back less from Social Security than they paid in. We were forced to invest in a mandatory retirement plan that does not even offer an even return on our investment. I would be the first to admit that many people, would not have invested that money any better or at all, so Social Security is a very good thing because it guarantees that we will have some (minimal) retirement income. It also provides benefits to surviving dependents and the disabled. However, we will not get back more than we paid in and we cannot leave what is left to our children. Pension plans are like that, too. If you die, whatever is left is lost. That is the advantage of a 401K, which was not available to us during most of our working life. At least that money belongs to the investor and will pass to his/her dependents upon death. New Social Security Report
@Nance1 - I stand corrected, Nance. My wife and I retired in 1985 (!) and we have long since received back our earlier contributions. remember one thing about SS is that it is indexed for inflation - something your private or 401K investment has trouble keeping up with. My wife and I have been very lucky in that our net worth now is more than five times what it was when we retired (not including real estate value) mostly because of smart investments. We retired early because we figured it was actually costing us more to keep working - and we wanted to travel - you name it, we've probably been there.
@tychecat - Oh, I definitely do not object to Social Security and I want the government to do what needs to be done to keep the program going. It is very needed. I just object to people talking about it as if it is something that is not rightfully mine. It's my money. I earned it and I had no choice about contributing it. I expect to receive my payments!
Many people die before they can collect any Social Security at all. Unless they have heirs who are qualified to receive benefits under their account, that money is just lost. There will be lots of people who pay in and never get anything for it. That is also true of pensions. That does not make it a bad program.
We expect our net worth to increase after we retire, too. My husband actually is retired. I will retire within the next year. I actually do not expect to dip into our investments during our retirement. We should have plenty of income without that. I am hoping that there will be a nice amount of money to leave to our kids and grandkids.
@Nance1 - I'm with you Nance. We will have a bunch of very happy heirs - though my wife mutters about leaving it all to a home for homeless cats
My brother lived long enough to receive one social security check - but fewer and fewer potential recipients are dying before they start collecting. One thing that irritates me is the way politicians talk about entitlement programs as if they were not self-supporting but are somehow paid for out of general revenue. Social security is required to be self-supporting (Remember the famous "Lockbox"?) but Medicare/medicaid has been allowed to fall into deficit - which is made up by general revenue - this happened when Medicare part 4 - the drug program was implemented; it cost far more than first estimated, but instead of raising the amount of FICA taxes and SS deduction to pay for it - the Bush Administration just let it ride. So far Obama's AFC act as it was passed, has done nothing to correct this. This part of Entitlement"probably won't be straightened out until we come to our senses and pass a Universal Single-payer health plan.
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