IMF: United States Lacks Credibility on Debt Reduction

The International Monetary Fund has finally stated the obvious: the United States lacks any “credible strategy” to stabilize its mounting debt — and our lack of restraint is now posing a threat to the world economy. The IMF does not mention President Obama’s decision to launch a third war and spend billions in Libya.


In the meantime, Obama is reportedly about to call for higher taxes. The failure of the Democrats to deal with the debt crisis and the decision to go to war in Libya will undermine the credibility of the Administration on the issue. Because of their failure to control congressional spending for years, the Democrats will now go into the next election with a demand for higher taxes and record spending. This is not to forget the wasteful and wild spending of George W. Bush. However, the Democrats had an opportunity to show greater fiscal control and anti-pork policies. They did not.

The IMF rebuke is well deserved. What is astonishing is that we have political system that appears immune from the disaster caused by leaders of both parties.

Source: FT

116 thoughts on “IMF: United States Lacks Credibility on Debt Reduction

  1. If people do not believe that this is an issue take a look at the gas prices…. It is directly correlated…

    Attempting to overcome national debt
    Gas prices have been a huge money gusler and have taken a toll on people from all places.
    Oil shipments fell Tuesday after China said it would raise interest rates again to help control inflation. Declining gasoline demand and a rare oil shipment from Libya also pulled crude lower later in the day.
    Benchmark West Texas Intermediate agreed for May delivery to give up 13 cents to settle at $108.34 per barrel on the New York Mercantile Exchange. In London, Brent crude added $1.23 to settle at $121.89 per barrel on the ICE Futures exchange.

    http://wcsshield.blogspot.com/2011/04/attempting-to-overcome-national-debt.html

    So spend on war…with out production increases in the US and giving corporate with giving more tax breaks and credits is causing alarm all around the world…China has the ability but is not…Japan a major US investor…well…the are playing shake, rattle and roll right now….

  2. We spend more on defense than the rest of the world combined. Oh, and by the way, that does NOT include the $170+ billion a year we are pissing away in Iraq and Afghanistan. We pay LESS in taxes than any industrialized country in the world. We also spend less on social services and infrastructure per capita.

    SO there really is only one possible serious answer we can discuss. Cut taxes even more and eliminate all social service spending. Congressman Ryan has a magical pony for us all.

  3. Yep. We have one party far more interested in transferring wealth to the already rich than they are in balancing the budget, and another so terrified of losing power that they won’t raise taxes and think that reducing the budget deficient from its current, absurd levels is enough to “win” the issue while doing nothing to reduce the national debt.

    It’s true, we have zero credibility on this issue.

  4. Anybody here heard of an outfit called ‘Waterfall TALF Opportunity?’

    Matt Taibbi wrote about them. Waterfall TALF is a case study in welfare for the wealthy. The rest of us? Not so much.

    DKos diarist ThOrn analyzes it and comments on Taibbi’s story:

    http://www.dailykos.com/story/2011/04/12/966272/-Taibbi:-Waterfall-TALF-Opportunity:-A-Case-Study-in-Welfare-For-the-Rich

    Here is Matt Taibbi on Waterfall TALF Opportunity, an innocent enough sounding name, but with malignant properties:

    Do not have anything in your mouth when you click the link. The cartoon at the top of the page spells it all out for the reader.

    http://www.dailykos.com/story/2011/04/12/966272/-Taibbi:-Waterfall-TALF-Opportunity:-A-Case-Study-in-Welfare-For-the-Rich

  5. EDITORIAL: Kagan’s government money grab
    Obama team makes feds, not citizens, supreme

    When President Obama outlines his tax-increase plan on Wednesday, it’ll be based on the liberal assumption that all money belongs to the government, with Americans retaining only what bureaucrats allow. That’s the dangerous argument Supreme CourtJustice Elena Kagan, an Obama appointee, made last week in a case on education funding.

    Arizona Christian School Tuition Organization v. Winn involved a tuition tax credit whereby Arizonans can contribute to groups providing scholarships for private schools. Some cranks argued that because the scholarships can be used at religious schools, the tax credit amounted to unconstitutional government support for religion. The Supreme Court majority ruled that the complainants didn’t have legal standing to sue because none of their own tax money was being funneled to religious organizations.

    http://www.washingtontimes.com/news/2011/apr/12/kagans-government-money-grab/

  6. “The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients. “Consumption supported by wages and salaries is a much stronger foundation for economic growth than consumption based on social welfare benefits.”

    The economist gives the country two stark choices. In order to get welfare back to its pre-recession ratio of 26 percent of pay, “either wages and salaries would have to increase $2.3 trillion, or 35 percent, to $8.8 trillion, or social welfare benefits would have to decline $500 billion, or 23 percent, to $1.7 trillion,” she said.

    http://www.cnbc.com/id/41969508

  7. At a time when the economy should be rebounding the latest GDP number for the first quarter of 2010 shows that the Obama economic policies have failed.

  8. When 2011 began, Macroeconomic Advisers, a forecasting company, expected that America’s economic output would shape up to rise at a 4.1 percent annual rate in the first quarter, the highest pace in over a year.

    But economic reports coming in over the last few months have been increasingly disappointing.

    Today, after an especially weak report on February’s trade deficit, the group’s economists lowered their first quarter G.D.P. estimate to a sorry 1.5 percent annualized. If borne out, that rate would be slower than each of the last two quarters, at a time when the economy desperately needs to be rocketing forward so that companies will hasten their hiring.

    The Commerce Department will release its preliminary number for first quarter G.D.P. on April 28.

    http://economix.blogs.nytimes.com/2011/04/12/g-d-p-forecast-for-first-quarter-slides/?partner=rss&emc=rss

  9. “The failure of the Democrats to deal with the debt crisis and the decision to go to war in Libya will undermine the credibility of the Administration on the issue. Because of their failure to control congressional spending for years, the Democrats will now go into the next election with a demand for higher taxes and record spending. This is not to forget the wasteful and wild spending of George W. Bush. However, the Democrats had an opportunity to show greater fiscal control and anti-pork policies. They did not.”

    I can’t think of a better way to sum up our present clusterf**k – Well said, Professor.

  10. If the present world economy soon totally collapses, (Jared Diamond?) will that likely make things better or worse after a thousand more years?

    What about the view of Stavrianos, “The Promise of the Coming Dark Age”?

  11. Obama kept all the ol’ boys and those numb-nuts lacked the intellectual vision needed to solve the problems. Obama has no excuse as he was warned over and over again that failure to bring really smart people on board would result in failure. He is now reaping that which he sowed.

  12. Both major political parties have proven time and again that they are not trustworthy with our federal budget nor guarding our liberties. We must turn our backs on them and give the minor parties the opportunity to win our trust.

  13. If you or any member of your IMF team is caught, the Director will disavow any knowledge of your existence. This country will self-destruct in five to ten years.

  14. anon nurse,

    Yep … we haven’t been in good shape since Nixon … that pardon opened the door for all kinds of changes. All for the worse.

    I’m not trying to be simplistic … in my opinion Ford’s pardon of Nixon stated loudly and clearly that we were no longer a nation with principles or ideals. Reagan’s Administration set that statement in concrete and it’s been all downhill since … trickle-down and down and down …

  15. smallguvguy, when my car breaks down or needs a part, I get it fixed. I do NOT have it hauled off to the junk yard. That is an analogy to what you are advocating.

    If it ain’t broke, don’t fix it. If it is broke, then is the time to fix it.

    It is time to fix things, not abandon them.

  16. smallguvguy,

    Sorry … I haven’t seen a minor party express the vision needed to set this country on the right path. They are all too caught up in me-ism.

  17. Blouise,

    “Obama kept all the ol’ boys and those numb-nuts lacked the intellectual vision needed to solve the problems. Obama has no excuse as he was warned over and over again that failure to bring really smart people on board would result in failure. He is now reaping that which he sowed.”

    **********
    I don’t think those people are numb nuts. I think they are smart people with a perverted view of how our economy should work and who it should enrich. They are/were just taking care of their own kind. In addition, I think President Obama wants to get re-elected–and he knows where the money is. Think of how much money his 2008 campaign got from Wall Streeters.

  18. OS wrote:

    “It is time to fix things, not abandon them.”

    —–

    Yes.

    ==============

    Blouise wrote:

    “…in my opinion Ford’s pardon of Nixon stated loudly and clearly that we were no longer a nation with principles or ideals.”

    Well said. “Downhill” we go… and where we’ll stop, nobody knows…

  19. anon nurse,

    “Well said. ‘Downhill’ we go… and where we’ll stop, nobody knows…”

    Some French chick named “Marie” just called.

    Said she might have an answer for you.

  20. Obama is dependent on the Wall Street people because he does not get the Koch brothers money. I think Wall Street would much rather have Romney this time. The system is corrupt but is not changing as there is no movement toward campaign finance reform. The Citizens United decision hurts also.

  21. Smom,

    I submit that Citizens United does far more than just hurt.

    I submit that it was the wound that completely undid democracy in this country.

  22. Buddha Is Laughing 1, April 13, 2011 at 11:44 am

    Smom,

    I submit that Citizens United does far more than just hurt.

    I submit that it was the wound that completely undid democracy in this country.

    ==========

    And from where I’m sitting, it’s painfully clear that our democracy has, in fact, come undone…

  23. I agree that the Citizens United contrivance was the straw that broke the back of our election system. With secret money coming in from corporations, foreign and domestic, without any required paper trail and limitations, allows the Corporate Monster to eat everything and everyone in its path. Until we get the money out of the system, we will be getting more and more bought and paid for politicians.

  24. Blouise,

    “Obama has no excuse as he was warned over and over again that failure to bring really smart people on board would result in failure.”

    Robert Reich comes to mind …

  25. “Keep holding on
    When my brain’s ticking like a bomb
    Guess the black thoughts
    Have come again to get me

    Sweet bitter words
    Unlike nothing I have heard
    Sing along, mockingbird
    You don’t affect me

    That’s right
    Deliver it to my heart
    Please strike
    Be deliberate

    Wait, I’m coming undone
    Unlaced, I’m coming undone
    Too late, I’m coming undone
    What looks so strong, so delicate

    Wait, I’m starting to suffocate
    And soon I anticipate
    I’m coming undone
    What looks so strong, so delicate

    Choke, choke again
    I find my demons were my friends
    Getting me in the end
    They’re out to get me

    Since I was young
    I tasted sorrow on my tongue
    And this sweet sugar gun
    Does not protect me

    That’s right
    Trigger between my eyes
    Please strike
    Make it quick now

    Wait, I’m coming undone
    Unlaced, I’m coming undone
    Too late, I’m coming undone
    What looks so strong, so delicate

    Wait, I’m starting to suffocate
    And soon I anticipate
    I’m coming undone
    What looks so strong, so delicate

    I’m trying to hold it together
    Head is lighter than a feather
    Looks like I’m not getting better
    Not getting better

    Wait, I’m coming undone
    Unlaced, I’m coming undone
    Too late, I’m coming undone
    What looks so strong, so delicate

    Wait, I’m starting to suffocate
    And soon I anticipate
    I’m coming undone
    What looks so strong, so delicate.”

    – Korn, “Undone”

  26. Stamford Liberal,

    And how about Joseph Stiglitz too?

    I think people like Reich, Stiglitz, Krugman and some other economists/financial experts aren’t financial sociopaths like many of the folks who work on Wall Street, Ben Bernanke, Greenspan, and some others. Look who is Secretary of the Treasury–a man who wasn’t even paying his income taxes! I wonder where I’d be now if I failed to pay my income taxes–even for one year. Only some of us have to follow the rules…and have pay our own way. The “entitled” can do whatever the hell they want.

  27. I guess the IMF should know. Their programs have caused countless under-developed countries to languish under enormous debt with no relief in site. So is the IMF suggesting that the U.S. will soon resemble Third World nations. Things that make you go hmmmmm.

  28. Elaine, I don’t think we are there until the tea party wipes out the unions and Ryan gets rid of Medicare.

  29. Elaine M,

    “And how about Joseph Stiglitz too?”

    Absolutely.

    “I wonder where I’d be now if I failed to pay my income taxes–even for one year.”

    When I was unemployed, I had to supplement my lavish unemployment compensation with my retirement plan the first year. Trust me, the IRS was all over me like white on rice.

    We are mere peons whose sole purpose is to ensure that we are run through the grinder so the wealthy can reap the benefits.

  30. Swarthmore,

    “Ryan gets rid of Medicare.”

    Don’t forget Medicaid … those ungrateful and lazy recipients are the first to get the boot off the government teat.

  31. The projected “budget” by Paul Ryan is the final straw on the economic camel in this country. If allowed to be implemented, the disparity between rich and poor will climb even higher and we will grow closer to real battles in the streets. Very sad.

  32. “Don’t forget Medicaid … those ungrateful and lazy recipients are the first to get the boot off the government teat.”

    The great majority of medicaid recipients are elderly in nursing homes and the handicapped.

    Such a showing of concern by you to boot the elderly out of their nursing homes, and let the handicapped fend for themselves.

  33. For those who may have missed this Vanity Fair article written by Joseph Stiglitz–which I previously posted on another thread:

    Of the 1%, by the 1%, for the 1%
    Americans have been watching protests against oppressive regimes that concentrate massive wealth in the hands of an elite few. Yet in our own democracy, 1 percent of the people take nearly a quarter of the nation’s income—an inequality even the wealthy will come to regret.
    By Joseph E. Stiglitz
    Vanity Fair, May 2011
    http://www.vanityfair.com/society/features/2011/05/top-one-percent-201105

    Excerpts:
    It’s no use pretending that what has obviously happened has not in fact happened. The upper 1 percent of Americans are now taking in nearly a quarter of the nation’s income every year. In terms of wealth rather than income, the top 1 percent control 40 percent. Their lot in life has improved considerably. Twenty-five years ago, the corresponding figures were 12 percent and 33 percent. One response might be to celebrate the ingenuity and drive that brought good fortune to these people, and to contend that a rising tide lifts all boats. That response would be misguided. While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall. For men with only high-school degrees, the decline has been precipitous—12 percent in the last quarter-century alone. All the growth in recent decades—and more—has gone to those at the top. In terms of income equality, America lags behind any country in the old, ossified Europe that President George W. Bush used to deride. Among our closest counterparts are Russia with its oligarchs and Iran. While many of the old centers of inequality in Latin America, such as Brazil, have been striving in recent years, rather successfully, to improve the plight of the poor and reduce gaps in income, America has allowed inequality to grow.

    Economists long ago tried to justify the vast inequalities that seemed so troubling in the mid-19th century—inequalities that are but a pale shadow of what we are seeing in America today. The justification they came up with was called “marginal-productivity theory.” In a nutshell, this theory associated higher incomes with higher productivity and a greater contribution to society. It is a theory that has always been cherished by the rich. Evidence for its validity, however, remains thin. The corporate executives who helped bring on the recession of the past three years—whose contribution to our society, and to their own companies, has been massively negative—went on to receive large bonuses. In some cases, companies were so embarrassed about calling such rewards “performance bonuses” that they felt compelled to change the name to “retention bonuses” (even if the only thing being retained was bad performance). Those who have contributed great positive innovations to our society, from the pioneers of genetic understanding to the pioneers of the Information Age, have received a pittance compared with those responsible for the financial innovations that brought our global economy to the brink of ruin.

    Some people look at income inequality and shrug their shoulders. So what if this person gains and that person loses? What matters, they argue, is not how the pie is divided but the size of the pie. That argument is fundamentally wrong. An economy in which most citizens are doing worse year after year—an economy like America’s—is not likely to do well over the long haul.

    **********

    Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.

    The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

  34. After accruing $14,225,706,915,227, as of 12:27 central time 4/13/2011, I think that it is time we rid ourselves of the current batch of kleptocrats and give someone else a chance.

  35. Bob From District9,

    Are you from the alien race? Oh, never mind …

    Since you appear to be new to this world, allow me to clarify … my comment was meant to be sarcastic …

  36. Elaine M,

    “For those who may have missed this Vanity Fair article written by Joseph Stiglitz–which I previously posted on another thread:”

    Thanks for reposting as I forgot where else you posted it :)

  37. “The International Monetary Fund has finally stated the obvious: the United States lacks any “credible strategy” to stabilize its mounting debt — and our lack of restraint is now posing a threat to the world economy.”

    Good for us. Not Obama should tell the IMF the US needs to concern itself with our problems, not their petty concerns. America’s debt would not be a big concern to the rest of the world if the rest of the world had not been feeding off the US for decades. Time for the US to stop being a dinner plate for China etc.

    The debt is not the crises, the debt is a symptom. The real crises is unemployment. With an unemployment rate over 15%, that’s U6, the real unemployment rate, we are in a domestic crises that outweighs any concern with the IMF. Until we bring down unemployment, below 5% real (U6), everything else is a joke. A bad joke.

    Ryan and his budget are ideologically driven, not economically. He and his followers have no real concern for the American worker.

    See http://www.shadowstats.com for the unemployment rates.

  38. “Bob From District9,

    Are you from the alien race? Oh, never mind …

    Since you appear to be new to this world, allow me to clarify … my comment was meant to be sarcastic …”

    No, from Ohio congressional district 9.

    Sorry, you did it so well it looked like you meant it.

  39. Smallguvguy

    “After accruing $14,225,706,915,227, as of 12:27 central time 4/13/2011, I think that it is time we rid ourselves of the current batch of kleptocrats and give someone else a chance.”

    Are you allowing for the fact that GW Bush left Obama nearly $12T of that debt?

    Are you allowing for the fact that the growth in debt as a percent of GDP from WW2 till Jan 2009 was 100% under three anti-tax republican presidents?

    Are you allowing for the fact that we have not yet recovered from a near depression that may yet turn into a full scale depression?

  40. I’m a little confused about, “In the meantime, Obama is reportedly about to call for higher taxes. The failure of the Democrats to deal with the debt crisis and the decision to go to war in Libya will undermine the credibility of the Administration on the issue. ”

    I’m reading that as saying that the tax increase wouldn’t address the deficit. It seems to me, if we’ve got a problem with a deficit, raising income as well as lowering spending might be a good idea (of course I haven’t had time to read the proposed tax increases, so I won’t endorse them just yet).

    I also wonder why we all like to pretend that we’re the only country when we’re discussing this sort of thing. I mean, why not go and look at countries that DON’T have a deficit problem, and see what they have in common, and borrow the policies that we can. Heck, why are we pretending this country doesn’t have a history? I bet if we look REALLY hard, we can figure out when the debt started to take off…

  41. Bob From District9,

    “No, from Ohio congressional district 9.”

    Got it – I thought you were referring to the movie, “District 9.”

    “Sorry, you did it so well it looked like you meant it.”

    No problem – stick around long enough and you’ll see that sometimes, sarcasm rules the day.

  42. Corporate Tax Holiday an Even Worse Idea the Second Time Around
    April 11, 2011 at 5:15 pm

    A coalition of large multinational corporations has launched a major lobbying campaign for a temporary “repatriation tax holiday” that would allow companies to bring foreign-generated profits back to the United States at a strikingly low tax rate of about 5 percent. They’re promoting the measure as a cost-free way to boost domestic investment and jobs — the same pitch that proponents used to sell Congress on a similar tax holiday enacted in 2004.

    Amount of Foreign Earnings Reinvested Abroad Rose Dramatically After 2004 Holiday. But as we show in a new paper, the first holiday mainly benefited corporate shareholders, not the U.S. economy, and a second holiday would be an even bigger mistake. Far from being cost-free, it would expand deficits by tens of billions of dollars over the coming decade. And just as many companies responded to the 2004 holiday by shifting even more profits overseas (see graph), a second holiday would further embed the shifting of investment, jobs, and profits overseas as a major tax avoidance strategy — precisely the opposite of what its backers claim.

    Here are our key findings:

    * A tax holiday enacted in 2004 failed to produce the promised economic benefits. The evidence shows that firms mostly used the repatriated earnings not to invest in U.S. jobs or growth but for purposes that Congress sought to prohibit, such as repurchasing their own stock and paying bigger dividends to their shareholders. Moreover, many firms actually laid off large numbers of U.S. workers even as they reaped multi-billion-dollar benefits from the tax holiday and passed them on to shareholders.

    * Repeating the tax holiday would increase incentives to shift income overseas. If Congress enacts a second tax holiday, rational corporate executives will conclude that more tax holidays are likely in the future. That will make corporations more inclined to shift income into tax havens and less likely to make investments in the United States. That’s why Congress, in enacting the 2004 tax holiday, explicitly warned that it should be a one-time-only event and should not be repeated.

    * The claim that a tax holiday would increase domestic investment by freeing multinationals from cash restraints is extremely dubious. U.S. non-financial corporations currently have $1.9 trillion in cash and other liquid assets, the highest level as a share of total corporate assets since 1959. The ten companies lobbying hardest for a new tax holiday alone have at least $47 billion in cash and other liquid assets that could be used for domestic investments — without triggering additional tax liability.

    * Some of the biggest beneficiaries of a tax holiday would be firms that have aggressively shifted income overseas. Companies in the technology and pharmaceutical industries have been particularly aggressive in shifting income abroad because they rely on intellectual property, which is relatively easy to shift to other countries as a tax avoidance strategy. Half of all repatriations from the 2004 tax holiday came from companies in these two sectors alone. The same corporations and sectors would stand to benefit disproportionately — and enormously — from a second tax holiday.

    http://www.offthechartsblog.org/corporate-tax-holiday-an-even-worse-idea-the-second-time-around/

  43. It would be wise if everyone would remember the Era of Good Feelings and then 20 years later we had the depression of 1837. In the early 90s the .coms revolution began and here we are about 20 years later with a debt crisis. Currently it takes 2.4 years to pay off our national (secured) debt of 14 trillion if we spend $186,000 per second and 9.4 years to pay off our unsecured debt of 55 trillion at the same rate. If Liberals don’t wake up then we will see our country fall apart. The solution if what we did in the 1840s. High tarriffs and begin building everything at home. Not more taxes for the rich!

  44. Elaine M.
    1, April 13, 2011 at 11:30 am
    Blouise,

    “Obama kept all the ol’ boys and those numb-nuts lacked the intellectual vision needed to solve the problems. Obama has no excuse as he was warned over and over again that failure to bring really smart people on board would result in failure. He is now reaping that which he sowed.”

    **********
    I don’t think those people are numb nuts. I think they are smart people with a perverted view of how our economy should work and who it should enrich. They are/were just taking care of their own kind. In addition, I think President Obama wants to get re-elected–and he knows where the money is. Think of how much money his 2008 campaign got from Wall

    ======================================================

    I agree … I was typing with the 2 year old on my lap so was taking shortcuts thus “nunbnuts”

  45. Blouise,

    “I agree … I was typing with the 2 year old on my lap so was taking shortcuts thus “nunbnuts””

    Using the grandchild as an excuse again, I see …
    :D

  46. Blouise

    It would be wise if everyone would remember the Era of Good Feelings and then 20 years later we had the depression of 1837. In the early 90s the .coms revolution began and here we are about 20 years later with a debt crisis. Currently it takes 2.4 years to pay off our national (secured) debt of 14 trillion if we spend $186,000 per second and 9.4 years to pay off our unsecured debt of 55 trillion at the same rate. If Liberals don’t wake up then we will see our country fall apart. The solution if what we did in the 1840s. High tarriffs and begin building everything at home. Not more taxes for the rich!

  47. Bob From District 9,

    Greetings from Ohio Congressional District 13(Sutton) and 10(Kucinich)

    Kaptur is doing steady work on foreclosures.

  48. Jim,

    Don’t forget the savings and loan crisis that our country had to deal with starting in the late 1980s. So many of our country’s financial problems have been brought upon us by…deregulation. We can thank both Republicans and Democrats for that–and Alan Greenspan.

    **********

    Blouise,

    Wake up, you dumb, financially challenged Liberal, will ya! Leave those poor rich folks alone. Let them spend taxpayers’ bailout money to their hearts’ delight.

    ;)

  49. Someone should clue in John Bonehead, Eric Cantdo, Mitch McConjob and Paul “The Whiz” Lyin’, that trickledown is not an internationally acknowledged method to help anyone but the rich. And go wake up Reagan, and tell him. Tell him, tell them that some of us have been on to them from the gitgo, and always will be.

  50. Jim,

    “The solution if (is) what we did in the 1840s. High tarriffs and begin building everything at home. Not more taxes for the rich!”

    In the 1840’s we had:

    Approx. 23,191,876 population (1850 census)compared to 308,745,538 (2010 census)today. Also the population from 1840 to 1850 had increased by 35% which created a whole different set of economic situations such as a rapidly-growing economy … at least in the North. In fact, in the South where population growth was smaller,the tariffs you mention were hated and are part of the problem that eventually led to the Civil War.

    Also, and very important, a great deal of the economy between 1840 and 1850 was based on slave labor.

    Try again ….

  51. Elaine M.
    1, April 13, 2011 at 4:00 pm
    Jim,

    Don’t forget the savings and loan crisis that our country had to deal with starting in the late 1980s. So many of our country’s financial problems have been brought upon us by…deregulation. We can thank both Republicans and Democrats for that–and Alan Greenspan.

    **********

    Blouise,

    Wake up, you dumb, financially challenged Liberal, will ya! Leave those poor rich folks alone. Let them spend taxpayers’ bailout money to their hearts’ delight. ;)

    ==================================

    Poor Jim … he honest to god wants to go back to the good old days of slavery

  52. Did someone suggest a corporate tax holiday??? Why do they need a holiday when most of the big ones don’t pay any taxes now? How about a taxpaying special where all corporations are allowed to pay their full tax rates without any credits or deductions for one year only. That increased revenue could go a long way.

  53. Okay, so not all rich people are douche bags … but I bet the Koch Bros. are having temper tantrums right now …

    “Patriotic Millionaires”: Raise our taxes, please!
    By Justin Elliott

    Patriotic Millionaires for Fiscal Strength, a group of dozens of the wealthiest Americans that formed last year during the fight over whether to extend the Bush tax cuts, is now jumping into the budget battle just as President Obama is expected to call for an end to the Bush cuts on the rich.

    “For the fiscal health of our nation and the well-being of our fellow citizens, we ask that you increase taxes on incomes over $1,000,000,” the group writes in a new letter to Obama, Harry Reid, and John Boehner. “We make this request as loyal citizens who now or in the past earned incomes of $1,000,000 per year or more.”

    Last year, Obama signed a bill to extend the Bush tax cuts after originally proposing that the two highest tax rates return to 36% and 39.6%, up from the Bush tax cut levels of 33% and 35%.

    One of the signatories of the new letter, film and television producer Linda Gottlieb, explained her participation to me this morning: “For me to be sitting and hoarding my money is insane,” said Gottlieb, whose producer credits include Dirty Dancing and who now teaches at NYU’s Tisch school. “We all give to charity, but that’s not the same as creating a more equitable society.”

    Gottlieb said she has been upset by the experience of her grandchildren, who attend a New York City public school where arts education has been cut and parents have had to organize an auction to try to fill the gaps. She added that raising taxes on the wealthiest people would be an important way of reducing the deficit.

    “For rich people to moan and groan — nobody likes to pay increased taxes — but it’s not going to change your life in any important way,” she said. “What it can do is help your country.”

    The millionaires who comprise the group are in the process of reaching out to more of their wealthy peers and may take a trip to Washington at some point down the road, according to Erica Payne of the Agenda Project, the New York-based progressive group that is behind Patriotic Millionaires.

    Meanwhile, Speaker John Boehner said Tuesday that any tax increases are a “nonstarter.” So expect a big fight on this ahead.

    http://www.salon.com/news/taxes/index.html?story=/politics/war_room/2011/04/13/millionaires_demand_higher_taxes

  54. Stamford Liberal
    1, April 13, 2011 at 3:33 pm
    Blouise,

    “I agree … I was typing with the 2 year old on my lap so was taking shortcuts thus “nunbnuts””

    Using the grandchild as an excuse again, I see …

    =================================================

    I need sympathy here … this child is an expert on the iPad and she has learned how to sync it to everything. I have one of those new apple boxes and she manages to get onto my TV and my computer via her iPad … I’m happily typing away when bam … a youtube video of Sesame Street starts playing in a window on my computer. Scares the hell out of me while she laughs and laughs. She is 2 1/2 years old!!! If I hold her on my lap she is sometimes content to just try and interrupt my typing.

    She’s napping now.

  55. Blouise,

    Shame on you for letting facts and context get in the way of those po’ ol’ rich folk bilking the masses and destroying the economy for their own selfish ends!

    Have you no shame?

  56. Speaking of John of Orange … now we really know why he gets all sniffly and weepy when he sees kids in the school yard …

    Poverty in John Boehner’s District
    Greg Kaufmann
    April 11, 2011

    For forty years, Tina Osso has worked on food and poverty issues serving nearly all of speaker John Boehner’s 8th Congressional District of Ohio. She came to that work in 1973, when the oil embargo resulted in her losing her job, and she unexpectedly found herself in line at a food pantry, where she began volunteering.

    Ten years later, she founded the Shared Harvest Foodbank where she still serves as executive director today. The food bank distributes food to pantries, soup kitchens, homeless shelters, nutrition programs for seniors and children, and operates antipoverty programs as well.

    Osso describes herself as “an aging hippie, a political activist and a stand-up comedian wannabe, trying her best to do the right thing at the right time.” But among her colleagues she’s earned a reputation as “a longtime people’s advocate,” according to Lisa Hamler-Fugitt, executive director of the Ohio Association of Second Harvest Foodbanks in Columbus.

    “She has her finger to the pulse of those in need in the 8th District as much as anyone, and that need is greater now than it has been in decades,” says Hamler-Fugitt.

    Indeed in 2009, childhood poverty rose over six points in the Boehner district to reach 19.1 percent, or 29,173 kids. Overall, 14 percent of Boehner’s constituents live below the federal poverty line of $22,400 per year for a family of four. Shared Harvest’s work has more than doubled—it distributed approximately 7 million pounds of food in 2007, and 16 million pounds in 2010.

    To respond to increased child hunger, the food bank started a backpack program that provides weekend meals to kids identified by schools as chronically hungry. The warning signs include physical manifestations such as sunken eyes or crusting around the mouth, or behaviors like rushing food lines or hoarding food.

    “These are kids ages three to twelve who are at a critical point in their brain development and need adequate nutrition,” says Osso. “We’re only in eleven of the forty-eight school districts in our territory and we now serve about 2,100 children a week. It’s stunning.”

    Boehner has many constituents living above the official poverty line who are struggling with hunger as well. In 2010, the number of residents enrolled in the food stamp program (SNAP) in the six counties represented by the Speaker climbed to over 152,000, an increase of over 47,000 people since 2008. Nevertheless, food stamps would be slashed under the House GOP 2012 budget.

    “It’s no crime to have childhood poverty and hunger in a district,” says Melissa Boteach, manager of Half in Ten, a national campaign to reduce poverty by 50 percent over the next ten years. “But it is a crime not to do anything about it.”

    Osso has a history of reaching out to Boehner to try to get him to understand his constituents’ needs, beginning in the mid-1990s, when he was Chairman of the House Republican Conference. She attempted unsuccessfully to involve him in work on a “trigger mechanism” policy to potentially raise funding for an Emergency Food Assistance Program that hadn’t seen an increase in thirteen years.

    More recently, she wrote Boehner a letter describing the impact Republican cut proposals would have on seniors in his district. Shared Harvest provides 1,750 senior citizens a monthly box of food, at $20 per box, through the Commodity Supplemental Food Program. The need is far greater, however, and Osso writes of seniors routinely reading the obituaries to see if a participant has passed away, thereby opening a slot. The House Republican cuts would result in 500 current participants being removed from the program.

    “How do I go about doing that?” she asks the Speaker. “Explaining that they will have to go hungry because of a budget deficit?”

    She invited Boehner to a CSFP distribution site in Hamilton, Ohio, to meet people like “Mr. Murray, who is 94 and outlived his children, or 97-year-old Mrs. Garret, who lost her husband in World War II.”

    Boehner has neither visited nor responded to the letter.

    “It’s just been a battle to have him even understand what his constituency is going through,” says Osso, “and I don’t think he even understands to this day.”

    Osso attributes Boehner’s lack of empathy to “his perception of his own life and how he was able to quote-unquote pull himself up by his bootstraps. It’s just his inability to understand anyone else’s life experience and circumstances other than his own, so he uses that as the stick by which he measures people.”

    Within the district, however, she sees many of Boehner’s constituents learning the hard way that struggles with poverty and hunger are far more pervasive than they ever imagined.

    “So many people find themselves in line at food pantries who never thought they’d be there,” says Osso. “I think the best thing that could come out of this Great Recession is for people to understand that it only takes one or two paychecks for most people before they’re standing in line. Maybe that will change the conversation in this nation and we stop blaming poor people for being poor, and start working on solutions to poverty.”

    Like other advocates, her frustration with the budget debate is palpable.

    “It’s not just the cuts to the programs that we manage. It’s the overall meanness of this budget that targets the most vulnerable populations in our country—the weakest and the ones with the smallest voice,” she says.

    Despite years of frustration in trying to get Boehner to respond to his constituents who are struggling, Osso hasn’t entirely given up, and she still has a message for him.

    “We just want you to meet your constituents who are involved in making sure their neighbors have enough to eat, and we want you to meet those neighbors who are suffering silently behind closed doors. They are so embarrassed to be hungry,” she says. “We’re fighting each other over crumbs when we should be seeing each other for who we are and working together.”

    http://www.thenation.com/blog/159861/poverty-john-boehners-district

  57. Blouise,
    keep that little one away from the Ipad! I never even bring mine out when my grandsons are over. Our two year old just love to push buttons and turn things on and off!

  58. Buddha Is Laughing
    1, April 13, 2011 at 4:32 pm
    Blouise,

    Shame on you for letting facts and context get in the way of those po’ ol’ rich folk bilking the masses and destroying the economy for their own selfish ends!

    Have you no shame?

    =============================================

    Where in the hell do people get these ideas?! The 1840’s?!

    Buddha, how in the hell are we going to get anywhere when so many of our fellow countrymen are that badly educated?

  59. Blouise

    You forget one thing, we got out of the depression. Also, how many illegal immigrants are living here and we don’t even know it? The number is quite high as I do live next to the Mexican border. Circumstances are exactly the same. We don’t build anything anymore and yet we want everyone to get a college education to do what I don’t know. I do know that our debt problem is an American killer if we don’t address it. No pain no gain! Tough cuts are necessary and I am tired of hearing the rich should pay more. The rich are already paying more. If someone pays 10% and another pays 35% then the one paying 35% pays more. It doesn’t matter how much one has. This is the problem with Liberals. They don’t understand basic accounting.

  60. Blouise,

    “I need sympathy here … this child is an expert on the iPad and she has learned how to sync it to everything. I have one of those new apple boxes and she manages to get onto my TV and my computer via her iPad … I’m happily typing away when bam … a youtube video of Sesame Street starts playing in a window on my computer. Scares the hell out of me while she laughs and laughs. She is 2 1/2 years old!!! If I hold her on my lap she is sometimes content to just try and interrupt my typing.”

    Lol – I feel your pain, sister! My daughter was raised in the computer age and STILL knows more than I do! She cannot understand how we functioned before computers …

    “She’s napping now.”

    QUICK! Do stuff!

  61. rafflaw
    1, April 13, 2011 at 4:33 pm
    Blouise,
    keep that little one away from the Ipad! I never even bring mine out when my grandsons are over. Our two year old just love to push buttons and turn things on and off!

    =================================================

    I don’t own an iPad. This is hers! Her father bought it for her last year and she takes it everywhere. The really scary thing is, rafflaw, she knows how to use it. He set some kind of parental control on it and she gleefully goes through scads of youtube sesame street and muppets and other ones she’s allowed on. I told him he needs to make certain when we go out to eat that he has that feature shut off so that she can’t mess with the establishment’s TV’s … can’t you imagine some important play being interrupted by Bert and Ernie

  62. Oh, we understand basic accounting, Jim. It’s you and your neoconservative greed is good brethren who don’t understand disproportionate representation and the very real threats to social stability that record income inequalities are creating. Almost every empire that has crumbled from within has had those features in common: the rich partied and rode rough shod over the needs of society as a whole as the poor starved and suffered. That is the poor starved and suffered until they came for the rich whom they outnumbered vastly.

  63. Buddha Is Laughing

    Your problem is that America has been giving to the needy. Remember the war on poverty. It didn’t work. The Roman Empire didn’t give to the poor. Get your facts in order when making comparisons to History.

  64. “If someone pays 10% and another pays 35% then the one paying 35% pays more. It doesn’t matter how much one has.”

    Jimmy, Jimmy, Jimmy … It has nothing to do with basic accounting, dingleberry, but everything to do with the wealthy having the means to hide their money … tax shelters, off-shore accounts … .

    “This is the problem with Liberals. They don’t understand basic accounting.”

    HHHHHHHHHHAAAAAAAAAAAAAAAAAAAAAA!!!!!!!!! That’s funny coming from you …

  65. Blouise,

    “Where in the hell do people get these ideas?! The 1840′s?!

    Buddha, how in the hell are we going to get anywhere when so many of our fellow countrymen are that badly educated?”

    Well, one percent of us are going to say “Let them eat cake.”

    Some of us are having a sale:

    Fire-proof hand baskets – $2
    Torches – 3 for $10
    Portable Guillotine Hip Holster – $15

  66. Stamford Liberal

    Your answer still doesn’t address the numbers. Hiding money is one thing. Different rates is another. Change the tax code to avoid these loopholes and I believe that is part of Ryan’s plan.

  67. Jim,

    “The Roman Empire didn’t give to the poor. Get your facts in order when making comparisons to History.”

    What part of “Almost every empire that has crumbled from within has had those features in common: the rich partied and rode rough shod over the needs of society as a whole as the poor starved and suffered. That is the poor starved and suffered until they came for the rich whom they outnumbered vastly” has escaped your remaining brain cell?

  68. Jim,

    What part of the qualifier “almost every” didn’t register? Rome’s downfall was most certainly assisted by the decadence of the wealthy ignoring the needs of the state, however, the needs they were ignoring didn’t relate to the poor but rather to the maintenance and control of the outermost regions of the Empire which were allowed to slowly fall in to barbarian hands until the day that the barbarians were actually at the gates. The effects of the stupidity of avarice upon society can be manifold.

    And the “War of Poverty”? Yeah, well, get back to me when a war on that front actually starts and then we can discuss the nature of its success or failure. Historically the only war on poverty in this country was the reforms instituted by FDR which worked quite well. The only war on poverty currently going on in this country is an effort to destroy those advances and further perpetuate war on the impoverished. That’s not the same thing as a War on Poverty.

    You should also learn the difference between “charity” and “necessary social support mechanisms”. Or ignore them like the French and the Russians did. See how that works out.

  69. Jim,

    Not that I have high hopes for this, but…

    There are several axis of political beliefs. Liberal’s opposite is not protectionist, it’s authoritarian. You’re applying a term (liberal) that refers to one’s position on equality and freedom to essentially economic positions.

    Furthermore, one’s stances on intentional trade and protectionism are not directly related to ones position on a progressive tax system. For instance, I like the idea of tariffs on goods that can be made in the U.S. and I also support a progressive tax system.

    Words are tools, don’t use a knife when you need a screwdriver.

  70. Jim,

    “Your answer still doesn’t address the numbers. Hiding money is one thing. Different rates is another.”

    Well, Jim, higher rates don’t apply if they’re not reporting the higher numbers as income … it isn’t brain surgery. Really, it isn’t.

  71. SL,

    Jim is just proving that his knowledge of English and history is on par with his knowledge of accounting and economics.

    That is to say practically non-existent.

  72. Jim,

    “If someone pays 10% and another pays 35% then the one paying 35% pays more. It doesn’t matter how much one has. This is the problem with Liberals. They don’t understand basic accounting.”

    Apparently you’re the one that’s bad at accounting.
    If I pay 35% of $1 I pay #.35 if I pay 10% of $10 I pay $1.
    $1>$.35

    It very much matters what that percentage is based on.

  73. Mel Brooks said it better than me, although you probably shouldn’t listen to this at work or around anyone that doesn’t know you laugh at profanity.

  74. Gyges,

    I was always hoping Mel would get around to making “History of the World, Part II”.

  75. Jim
    1, April 13, 2011 at 4:47 pm

    Buddha Is Laughing

    Your problem is that America has been giving to the needy.

    *******

    Ya, Buddha, we’ve been giving to the needy rich–but no matter how much they get they NEED more and more, doncha know!

  76. BIL,

    “Jim is just proving that his knowledge of English and history is on par with his knowledge of accounting and economics.

    That is to say practically non-existent.”

    Lol – He’d be pretty entertaining on “Are you Smarter than a Fifth Grader?”

  77. Blouise,
    An IPad for a 2 1/2 year old? Yikes! Yes, you should be careful in restaurants!!
    Jim,
    I am a little late, but you mentioned above that tax cuts are in Ryan’s budget. Yes, they are. Tax cuts for the wealthy and tax cuts for the corporations are part of his budget. Now, with that one trillion dollars of revenue is lost, guess who has to pay for it? The poor, middle class and seniors. A perfect storm for Teapublicans. Greed is such a wonderful vice.

  78. 12 Tax-Dodging Corporations Spent $1 Billion To Influence Washington Over The Last Decade
    By Zaid Jilani
    Think Progress, 4/13/2011
    http://thinkprogress.org/2011/04/13/tax-dodging-lobbying-congress/

    Excerpt:
    As ThinkProgress has been reporting, while Main Street Americans are having their services gutted and public investment is being slashed, some of the country’s most profitable corporations are getting away with paying little to nothing in taxes.

    A new report by Public Campaign examines how these major corporations have influenced Congress to craft a tax code that lets them get away with making so much money and paying so little taxes in return. In its report, “The Artful Dodgers,” Public Campaign juxtaposes the limited tax liability of dozen major corporations with the companies’ campaign contributions and lobbying expenditures, which amount to more than a billion dollars over the last decade:

    EXXON MOBIL: The oil giant that was the world’s most profitable corporation in 2008 has spent $5.7 million in campaign contributions over the last ten years and $138 million in lobbying expenditures. Its federal corporate income tax liabilities for 2009? Absolutely nothing. Not only did it pay nothing, but it also received a tax rebate the same year of $156 million.

    CHEVRON: Chevron spent $4.4 million in campaign contributions and $91 million in lobbying expenditures over the last decade. It received a tax refund of $19 million in 2009 while making $10 billion in profits and $324 million in government contracts in 2008.

    CONOCOPHILLIPS: The Texas-based gasoline giant spent $2.5 million in campaign contributions and $63 million in lobbying expenditures over the last decade. It received “$451 million through the oil and gas manufacturing deduction,” a special tax break, between 2007 and 2009, despite $16 billion in profits over the same period of time.

    VALERO ENERGY: Valero spent $4.1 million in campaign contributions and $4.8 million in lobbying expenditures from 2001 to 2010. It received a $157 million tax rebate in 2009 despite $68 billion in sales during the same year. It received “$134 million through the oil and gas manufacturing deduction” over the last three years.

    BANK OF AMERICA: Bank of America employees contributed $11 million to federal political campaigns from 2001 to 2010 and spent $24 million lobbying over the same period of time. It made $4.4 billion in profits in 2010 while receiving a tax refund of $1.9 billion.

    CITIGROUP: Citigroup employees contributed $15 million to federal political campaigns from 2001 to 2010 and spent $62 million lobbying over the same period of time. It made $4 billion in profits in 2010 while paying absolutely nothing in federal corporate income taxes. It also received a $1.9 billion tax refund.

    GOLDMAN SACHS: The mega-bank Goldman Sachs, which is often called “Government Sachs” in insider circles because of its clout over Washington, spent $22 million in campaign contributions and $21 million in lobbying over the last decade. It paid an ultra-low tax rate of 1.1 percent in 2008, while also receiving $800 billion in governmentloans to help weather the financial crisis.

  79. Bob From District 9 1, April 13, 2011 at 1:47 pm

    Are you allowing for the fact that GW Bush left Obama nearly $12T of that debt?

    US debt when W took over 5.6T. When W left 10.6T. Current 14T. So sure why not the number is too big to quibble over 1.4T.
    linky http://www.skymachines.com/US-National-Debt-Per-Capita-Percent-of-GDP-and-by-Presidental-Term.htm

    Are you allowing for the fact that the growth in debt as a percent of GDP from WW2 till Jan 2009 was 100% under three anti-tax republican presidents?

    Sure, it also grew under teamblue, ergo both are at fault.

    Are you allowing for the fact that we have not yet recovered from a near depression that may yet turn into a full scale depression?

    The rate at which we are de-valuing the dollar via QE2, very high inflation versus a possible depression…pick your poison. We are screwed either way.

    Again both parties spend, tax and borrow with reckless abandon. Until WE fire enough of them to get serious, cheer-leading for either of the two major parties is delusional. They are both in bed with big businesses, check the tarp vote. Constantly send the same fools to DC will give us the same results.

  80. smallguy, “Different fools” were sent to DC in 2010, and they are making things worse. State government has been negatively affected by the new governors that were elected in 2010.

  81. Are you allowing for the fact that GW Bush left Obama nearly $12T of that debt?

    US debt when W took over 5.6T. When W left 10.6T. Current 14T. So sure why not the number is too big to quibble over 1.4T.
    linky http://www.skymachines.com/US-National-Debt-Per-Capita-Percent-of-GDP-and-by-Presidental-Term.htm

    Have you forgotten, or didn’t you know, the fiscal year runs from Oct 1 to Sept 31 of the next year? Obama did not get a budget until Oct of 2009. At that time the national debt was somewhere around $11.8T. IOW, nearly $12T. Yes, that is worth quibbling about. Bush alone was responsible for half the debt Obama inherited. If you consider the fact that Clinton left Bush balanced budgets calculated to pay off the national debt in 10 years, and it is now 10 years after Clinton left office, I could reasonably attribute 100% of the national debt to GW Bush.

    Are you allowing for the fact that the growth in debt as a percent of GDP from WW2 till Jan 2009 was 100% under three anti-tax republican presidents?

    Sure, it also grew under teamblue, ergo both are at fault.

    Wrong! Look at the stats available from the Federal Budget History Files. Note I said the debt as a percent of GDP. From the end of WWII till 1981 the debt as percent of GDP (The debt burden) went down consistently, under republican and democratic president. After 1981 the debt burden went from 33% of GDP to 67% when Clinton took office. When Bush took office it was down to 57% of GDP. When Obama took office it was pushing 90% of GDP.

    100% of debt burden growth, debt as percent of GDP, growth from the end of WWII till 2009 was republican.

    Are you allowing for the fact that we have not yet recovered from a near depression that may yet turn into a full scale depression?

    The rate at which we are de-valuing the dollar via QE2, very high inflation versus a possible depression…pick your poison. We are screwed either way.

    Not exactly the same. depression is collapse of the economic system, leaving most people with little or nothing, and nothing to counterbalance the fall. Inflation does hit incomes, but with any sort of COLA it also reduces the burden of debt. Deflation doesn’t do that. That is the big difference, and the reason to prefer inflation over deflation.

    Again both parties spend, tax and borrow with reckless abandon. Until WE fire enough of them to get serious, cheer-leading for either of the two major parties is delusional. They are both in bed with big businesses, check the tarp vote. Constantly send the same fools to DC will give us the same results.

  82. Swarthmore mom

    The re-election rate in 2010 was 86%, with the lifer still in charge of the committees.

    Bob From District 9
    1- Take a breath before you give yourself a heart attack.
    2- W’s and teamred’s spending topped even LBJ’s great society and Vietnam War spending, so they are as culpable as you think they are. Obama and teamblue have upped the ante in relation to W’s disastrous spending.
    3- I lived in Brazil in the mid 80’s so I know what happens when the federales print money like there is no tomorrow. The difference between no money and worthless money is negligible when you can’t feed your family.

  83. Iceland shows the way with it’s people refusing to pay the debt incurred by the world’s criminal class. So should we. Why aren’t we arresting the perpetrators of the economic crisis and forcing settlements from them? The US does not have a debt crisis, it has an ethical/legal crisis. If we get out of the bloodshed business, prosecute our war and financial criminals, we’ll have plenty of money to rebuild a society that works for our people. Here’s some news on part of the criminal class who runs our govt.

    “by Halah Touryalai

    A Senate panel released a damning report accusing the likes of Goldman Sachs of engaging in massive conflicts of interest, contaminating the U.S. financial system with toxic mortgages and undermining public trust in U.S. markets in the months leading up to the financial crisis.

    Senator Carl Levin says Goldman execs may have committed perjury in their Senate testimony last year. Just when you thought Washington lawmakers were over that whole financial crisis thing, Senator Carl Levin, D-Mich., and Senator Tom Coburn M.D., R-Okla, blast Wall Street in a 635-page report stemming from a 2-year bipartisan investigation on the key causes of the crisis.

    The report comes at a time when much of the feeling from lawmakers in Washington is that Wall Street is being over-regulated by the new Dodd-Frank rules.

    The report from the Senate’s Permanent Subcommittee on Investigations however takes an opposite view by citing internal documents and private communications of bank executives, regulators, credit ratings agencies and investors to depict an industry that was rife with conflicts of interest and reckless during the mortgage surge.

    Senator Levin said in the release yesterday:

    “Using emails, memos and other internal documents, this report tells the inside story of an economic assault that cost millions of Americans their jobs and homes, while wiping out investors, good businesses, and markets,” said Levin. “High risk lending, regulatory failures, inflated credit ratings, and Wall Street firms engaging in massive conflicts of interest, contaminated the U.S. financial system with toxic mortgages and undermined public trust in U.S. markets. Using their own words in documents subpoenaed by the Subcommittee, the report discloses how financial firms deliberately took advantage of their clients and investors, how credit rating agencies assigned AAA ratings to high risk securities, and how regulators sat on their hands instead of reining in the unsafe and unsound practices all around them. Rampant conflicts of interest are the threads that run through every chapter of this sordid story.”

    The report takes specific issue with the way Goldman Sachs touted investments to clients on one end but bet against them on the other. A similar accusation against Goldman by the SEC lead to a $550 settlement last year, but Levin and his team don’t think that punishment fits the crime. From the report:

    When Goldman Sachs realized the mortgage market was in decline, it took actions to profit from that decline at the expense of its clients. New documents detail how, in 2007, Goldman’s Structured Products Group twice amassed and profited from large net short positions in mortgage related securities. At the same time the firm was betting against the mortgage market as a whole, Goldman assembled and aggressively marketed to its clients poor quality CDOs that it actively bet against by taking large short positions in those transactions.

    New documents and information detail how Goldman recommended four CDOs, Hudson, Anderson, Timberwolf, and Abacus, to its clients without fully disclosing key information about those products, Goldman’s own market views, or its adverse economic interests. For example, in Hudson, Goldman told investors that its interests were “aligned” with theirs when, in fact, Goldman held 100% of the short side of the CDO and had adverse interests to the investors, and described Hudson’s assets were “sourced from the Street,” when in fact, Goldman had selected and priced the assets without any third party involvement.

    New documents also reveal that, at one point in May 2007, Goldman Sachs unsuccessfully tried to execute a “short squeeze” in the mortgage market so that Goldman could scoop up short positions at artificially depressed prices and profit as the mortgage market declined.

    This isn’t the first time Levin is gunning for Goldman. Back in April 2010, the Senator had a memorable back-and-forth with a Goldman executive during a testimony where the two discussed a “shitty deal” the firm was selling to clients.” (find at common dreams)

  84. “Iceland shows the way with it’s people refusing to pay the debt incurred by the world’s criminal class. So should we. Why aren’t we arresting the perpetrators of the economic crisis and forcing settlements from them? The US does not have a debt crisis, it has an ethical/legal crisis. If we get out of the bloodshed business, prosecute our war and financial criminals, we’ll have plenty of money to rebuild a society that works for our people.” -Jill

    Well said, Jill. (And thanks for the common dreams article.)

    Something’s gotta give — it’s bad out there… There’s wicked stuff going on in our communities and on our streets… Unbelievable stuff…

    We need congressional hearings. The Patriot Act needs to be addressed…, “war and financial criminals” need to be prosecuted (as you rightly say)… and the list goes on…

  85. anon nurse,

    Glenn Greenwald takes this on in today’s column. You are right that there is wicked stuff going on. It makes me very sad. We have so much going for us in the US and it is all being snuffed out. A nation who will destroy its own people to increase the wealth of a few at the top (or for any reason) is in serious trouble. We don’t have much time left.

  86. “Bdaman 1, April 13, 2011 at 9:06 am

    At a time when the economy should be rebounding the latest GDP number for the first quarter of 2010 shows that the Obama economic policies have failed.”

    First quarter 2010? Nice bit of absurdity.

    Obama’s economic policies are succeeding … BUT … they will be limited at best, and may be sunk by republican politics.

    Obama’s policies will have limited effect because he was not bold enough. He was weak enough to cave to republicans and make tax cuts 40% of his stimulus. He was weak enough not to stand by the buy American provision.

    This time around he was weak enough to let the republicans make policy changes part of the continuing resolution.

    That weakness may be his downfall yet.

  87. “Stamford Liberal 1, April 13, 2011 at 2:06 pm

    Bob From District9,

    “No, from Ohio congressional district 9.”

    Got it – I thought you were referring to the movie, “District 9.”

    Congrats, you are the first to make the intended double meaning.

    “Sorry, you did it so well it looked like you meant it.”

    “No problem – stick around long enough and you’ll see that sometimes, sarcasm rules the day.”

    Oh, I am used to sarcasm, but you did it so well it looked like you meant it.

  88. “smallguvguy 1, April 13, 2011 at 8:50 pm

    Swarthmore mom

    The re-election rate in 2010 was 86%, with the lifer still in charge of the committees.”

    86% of incumbents, or 86% of those running? The end result was, the republicans took the house and weakened democratic control of the senate, both bad things.

    “Bob From District 9
    1- Take a breath before you give yourself a heart attack.”

    If I don’t straighten out those so badly in error, like you, what is the point of life?

    “2- W’s and teamred’s spending topped even LBJ’s great society and Vietnam War spending, so they are as culpable as you think they are. Obama and teamblue have upped the ante in relation to W’s disastrous spending.”

    W inherited a balanced budget and thriving economy. Obama inherited a nation on the brink of economic collapse. Big difference. Obama did the only thing he could to stop the fall. Now he has to fight to keep the right from turning the US into a third world country.

    The only problem the democrats have had is they have not been bold enough.
    3- I lived in Brazil in the mid 80′s so I know what happens when the federales print money like there is no tomorrow. The difference between no money and worthless money is negligible when you can’t feed your family.

  89. Bob From District9,

    “Congrats, you are the first to make the intended double meaning.”

    Yay!

    “Oh, I am used to sarcasm, but you did it so well it looked like you meant it.”

    You will fit in quite nicely.

    “The only problem the democrats have had is they have not been bold enough.”

    And I couldn’t agree more – particularly where Obama is concerned …

  90. Jill,

    I’ll check out Greenwald’s column…

    re: ” We don’t have much time left.”

    I know that you’re not exaggerating, if what I’m seeing is any indication… Some of what’s going on is the stuff of the past, but it’s much worse…

  91. anon nurse 1, April 14, 2011 at 2:48 pm

    http://www.salon.com/news/opinion/glenn_greenwald/

    Thursday, Apr 14, 2011

    The two-tiered justice system: an illustration

    By Glenn Greenwald

    Of all the topics on which I’ve focused, I’ve likely written most about America’s two-tiered justice system — the way in which political and financial elites now enjoy virtually full-scale legal immunity for even the most egregious lawbreaking, while ordinary Americans, especially the poor and racial and ethnic minorities, are subjected to exactly the opposite treatment: the world’s largest prison state and most merciless justice system. (end excerpt)

    … and vigilante “justice” becomes the norm…

  92. rafflaw,

    You know it as well as anyone… we’re in a whole world of trouble… (I think I posted pretty much the same comment on the latest Manning thread, too…)

    As is the case with many on this blog, thanks for being one of the good guys…

Comments are closed.