Reich writes: "The wealthy have to pay their fair share of taxes. That's what the election was all about, and we won."
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
8 Principles to Guide Democrats in the Fiscal Cliff Showdown
03 December 12
emocrats, here are eight principles to guide you in the coming showdown over the fiscal cliff:
ONE: HOLD YOUR GROUND. The wealthy have to pay their fair share of taxes. That's what the election was all about, and we won. It's only fair they pay more. They're taking home record share of national income and wealth, and have lowest effective tax rate in living memory.
TWO: NO DEAL IS BETTER THAN A BAD DEAL. You're in a strong bargaining position. If you do nothing, the Bush tax cuts automatically expire in January, and we go back to rates during Clinton administration. Which isn't such a bad thing. As I recall we had a pretty good economy during the Clinton years.
THREE: MAKE REPUBLICANS VOTE ON EXTENDING THE TAX CUTS JUST FOR THE MIDDLE CLASS. After all the Bush tax cuts expire, have Republicans vote on an extending the Bush tax cut just for the middle-class. If they refuse and try to hold those tax cuts hostage to tax cuts for the wealthy, it will show whose side they're on. They'll pay the price in 2014.
FOUR: DEMAND HIGHER TAX RATES ON WEALTHY, NOT JUST LIMITS ON DEDUCTIONS. Don't fall for Republican offers to limit some tax deductions on the wealthy. Demand we go back to higher tax rates on the wealthy and eliminate their unfair tax loopholes, so they truly start paying their fair share.
FIVE: DON'T CUT SAFETY NETS. Don't sacrifice Medicare or Social Security, or programs for the poor. Americans depend on these safety nets and can't afford any benefit cuts.
SIX: DON'T CUT INVESTMENTS IN OUR FUTURE PRODUCTIVITY. Education, basic R&D, and infrastructure aren't spending; they're investments in our future prosperity. If the return on these investments is greater than the cost, they ought to be made, period.
SEVEN: CUT SPENDING ON MILITARY AND CORPORATE WELFARE. You want to cut, cut spending on the military - which now exceeds the military spending of the next 13 largest military spenders in the world combined. And cut corporate welfare - support to agribusiness, oil and gas, Big Pharma, big insurance, and Wall Street.
EIGHT: PUT JOBS BEFORE DEFICIT REDUCTION. Finally, Don't cut the budget deficit as long as unemployment remains high. Otherwise you'll cause the economy to contract, making the deficit even larger in proportion. That's the austerity trap Europe has fallen into. We need to create American prosperity, not European austerity.
Remember: Jobs come first.
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Comments
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There are a lot of other items (perhaps not directly referred to as the "Ficsal Cliff," but worthwhile) that could be mentioned such as restoring Glass-Stegal, but these eight are all good. Nice proposal.
"The People's Eight Commandments".
Prof. Reich, can you figure a way to get these 'all good' requirements hand carried to the White House? Maybe via Michael Moore?
You ask what you can do? I suggest that you start by writing your congressmen, the newspapers and blogs. You can probably think of other strategies if you put your mind to it. :)
I've decided this year to actually write a personal letter about issues that I feel strongly about instead of just signing petitions. There are millions of us -- imagine if enough of us did that to literally bury the White House under an avalanche of mail! I don't think that could be ignored.
Print the article and mail it to the President, along with a brief cover letter endorsing its contents.
Barack Obama, President
1600 Pennsylvania Ave., NW
Washington, DC 20500
I think we certainly do need to press hard on Oh Bomb Ah to push him into doing justice for all (peace attached). But, keep in mind we must that his m.o. is to allow himself to be pressed/pushed by those in power, and/or with clout. Guess that's how Michael Moore came to mind. Think we the sheeple have already pushed, many of us, as hard as we can, by casting a vote for him. But, speak up and out we must. Lots and lots we've gotta do to.....UNDO THE COUP!
The two are not mutually exclusive. And why do you think that I have loyal support for the (Democratic) "corporately funded political party"? Yes, I think that Obama was preferable-- not good, but preferable. The Republican agenda is dangerously extreme, bad enough to merit voting against them, even when the realistic alternative isn't much better. But I thought that people not residing in swing states should vote 3rd party. I certainly empathize with people voting Green (Jill Stein.)
Or are you speaking rhetorically?
It does nothing to fix "unfair" ineffective taxation. As it stands, whether we expand it out to all income levels or not the payroll tax to support Social Security and Medicare is still regressive. The income tax is almost flat enough to be regressive. A special lower rate for unearned income is regressively, regressive. Taxing people at below poverty levels for Social Security and Medicare is regressive, and lastly having an employment based health insurance model of healthcare instead of a taxpayer based single payer system is downright deadly as well as regressive.
However, as a first step, extending FICA to all income levels will fix Social Security for a long time to come and prevent Congress from getting its hands on it.
ECONOMIC BARGAINING ISSUE.
No salary Cap for SS and Medicare taxes!
Investment income not singled out for preferential tax treatment over the salaried worker.
2. HANDS OFF SOCIAL SECURITY!
3. HANDS OFF THE AFFORDABLE CARE ACT!
4. RETURN TO THE CLINTON ERA TAX RATES FOR THE WEALTHIEST AMERICANS!
5. END TAX BREAKS FOR OUTSOURCING JOBS!
6. END CORPORATE WELFARE FOR BP, AND OTHER CONGLOMERANT BUSINESSES THAT CAN FLOAT THEIR OWN BOAT!
7. HANDS OFF THE DEPARTMENT OF EDUCATION!
8. CUT "CADILLAC HEALTH CARE PLANS FOR THE "DO-NOTHING CONGRESSMEN / WOMEN & SENATORS (START WITH BOEHNER, CANTOR, THE TEATHUGS,"TURTL E" (MC CONNELL; let him laugh at that one)!
9. FLOOD THEIR MAILBOXES WITH THESE DEMANDS!
10. IF THEY DON'T LIKE IT, GO OFF THE CLIFF!
Since they don't want to raise taxes, LET THE RATES EXPIRE! THIS is the line I am drawing in the sand! 'Nuff said!
Or the Eisenhower rate which with loopholes was the same as the Kennedy rate.
As was said about health insurance companies during the healthcare debate, if you want to build an automobile, you don't start out mandating that they use a grand piano.
Vermont and half-a-dozen other states want exemptions from the ACA to establish statewide single-payer systems. If exemptions are allowed for this reason, these systems will likely be overwhelmingly successful, and other states may follow suit. This is certainly an agenda worth campaigning for, perhaps as referendums, and certainly in congress.
But right now ACA is all we have. Let's see if it works, as it did in Massachusetts.
Let's bring back the draft so that everybody, including the rich, will start hating the military.
The alternative is being eaten alive by this machine, similar to what happened to the Soviet Union.
You are absolutely correct about the US being a militaristic nation.
The cure is not to put more people in uniforms and give them guns. The cure is to get control of the Corporate mentality that is permeating all facets of government and society. The disenfranchised "underclass" would just become cannon fodder and pawns in the military expansion throughout the world. As long government is run by a cabal comprised by the three headed monster; Military contractors, Financial MoneyLenders, and the Burning Shit for Power fiends, the militaristic nature of the nation will remain intact.
Mickey Grant
Having said all that, Reich is correct. Democrats must not give in to GOP sociopaths!
They can delusionally boast, "they pray at our feet."
Cut entitlements? Many beneficiaries still have teeth.
Dems - pay heed and hold the line. Tell the Repubs that winning the election has consequences.
Agreed RLF....Obama could and should include a cap on this deduction in the same way that he is proposing that taxes won't go up on the first $250,000 of income he could say that the mortgage tax deduction would only apply to the first xxxx amount of a mortgage but after that there are no deductions which would eliminate millionaires/bi llionairs taking huge deductions on their Mcmansions.
There is a growing movement on the state level to create state banks (along the lines of the state bank of north dakota) but the same initiative needs to be taken up at the federal level.
We should never have to borrow funds at interest from others. A sovereign gov't that controls its own currency never has to and never should do this (this is the problem for Greence and others in the "eurozone" that are having economic/debt problems i.e., the individuals do not control their own currency since they are part of the euro).
We need for people like Reich, Krugman, Stiglitz and others to start championing the notion of "public banks" as part of the solution to our debt/deficit problems and end the lunacy of the US gov't borrowing from Wall Street or any other private financial institutions or gov'ts.
You have been pushing the idea for awhile now. It does make a lot of sense, but there are pitfalls as well.
On the plus side, it gets us away from making all spending over "budget" a wealth transfer from the Federal Government to Treasury note holders. Who as I am sure you know, the Chinese are nothing more than a straw man for the real holders of those the bonds; the 1%, of course. Secondly it provides the government with a ready source for funding infrastructure and other all other necessary government expenses.
The danger is the tendency of humans to spend "free" money with abandon. As I have repeatedly asked the folks that are always clamoring to lower taxes, what point is too low. I will ask the same question of you, at what point have we "printed" so much money that it becomes worthless?
Everything has limits, and I believe that was probably part of the thinking that went into turning over the printing of money function to the Federal Reserve (e.g. bankers).
So, in short; I would whole heatedly agree that the Federal Reserve system needs to be overhauled and in some manner nationalize it and/or parts of the current banking industry.
I don't claim to know the answers here. but I am always leery of any solution that is not tempered by an opposing force and that is essentially what worries me about your proposal.
You raise an important issue ("at what point have we 'printed' so much money that it becomes worthless?") that needs to be addressed in all of this.
I guess my short answer is that it is one of the questions i am trying to work through (have been reading these very interesting "modern monetary/money theory" folks who have a unique take on all of this) in my own head so i'm not sure i have an answer for you at this point but i agree it is a question that "we" (progressives) need to be able to answer/respond.
My main point though, and why this has become one of my mantra's of late (and so you're right i am repeatedly pushing this idea here and elsewhere in the hopes of generating more awareness and discussion) is that whatever level of spending there is and whatever "borrowing" the gov't has to do one of the biggest problems is the gov't borrowing at interest which costs us when it doesn't have to if the gov't prints/borrows money from itself.
Last point i guess is that i don't see public banking as "the solution" and so i temper this suggestion with that and with the recognition that there are many other things that need to be done at the same time....at the same time, i do not see any "solution" without a public banking component both in terms of how we pay for the stuff we want to fund as well as taking some measure of control back and away from "wall street" and the private banksters more broadly.
i guess one concrete "temper" and "opposing force" to my call for public banking is the recognition that just because the banks would be "publicly owned" this means some arm of the fedreal gov't and i have no illusions as to which side "the state" as a whole is on (or both major parties for that matter) which means that even if we get public banking we will still need to have built a powerful enough movement to ensure that these "public" financial institutions make the kind of investments that actually benefit "the public"...no easy task for sure.
Thanks for the tutorial. At first blush it does seem to be a workable idea, that as with any good idea will require tweaking in the real world. I wonder if public banking should compete in the marketplace for business outside of government or not. There are a lot of variables and options, but any enabling legislation must have some hard restrictions and limits, instead of handing that responsibility off to some agency within the Treasury? department.
for me it is not so much that public banks compete against private ones so much as it is a way for us to separate the two and to create financial institutions that function more like public utilities (although i fully recognize that many so-called "public" utilities are anything but) whose mission is to provide a needed service (in this case financing) rather than to maximize profit or "shareholder value". since i am dubious about ever being able to "regulate" or reign in the private financial institutions i think a much better strategy is to try and go around them and create alternative institutions that hopefully "we" will have a much better chance to control (though here too i have no illusions about this being an easy battle).
It's also about trying to get control of existing resources that in theory are ours i.e., investing public monies in public projects through publicly owned/controlle d financial institutions.
I think a good place for us all to start is to get a better understanding of how the state bank in north dakota is working since it provides a real world model.
Republicans will argue and have argued against fairness and equality.
It won;'t work, sad to say.
I was using humor to make the point that the Republicans will not co-operate in using fairness and equality as a guiding principle. All that means is that the Democrats (and Bernie) have to take on that responsibility themselves.
Then there would be no Obamacare/Romne ycare subsidies for HMO insurance companies as enacted under the president's ACA.
HMO insurance companies, nowadays, are all owned by Wall Street and London financial combines--which every Democratic whore well knows. Barney was never very Frank about that.
My HMO in New York charges me no extra premium on my Medicare for full coverage, including prescription drugs.
The ACA subsidy has nothing to do with whether or not an insurance company is an HMO.
I'm no fan of either ruling class party. But even I consider "Democratic whore" to be out of line, as it implies that all Democrats are whores.
The sale completed--some might find the salesman expendable.
I was never an Obama partisan--but I am an admirer of the US Constitution--a nd I dislike violent coups.
Actually a rise in taxes on the wealthiest people and a cut in defense spending would be very good to the US economy. An increase in taxes on the middle class would not be good but it would be OK. Cuts in
Naomi Klein's Shock Doctrines tells how this all work -- create a crisis and then enact policies that benefit the very rich and would not be possible under non-crisis conditons. What republicans want is cuts in so-called "entitlement" programs like social security, workers compensation, medicare or anything that government spends that helps people. Cuts here would be a true disaster, a real humanistic cliff.
Social security and medicare do not contribute to the deficit or debt, but republicans and thier tools say they do every day. Obama evens says they do. Obama is just too weak and stupid to see through what is beign done to 99% of the american people.
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