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Will The GOP Turn The CBO Into A Fantasy League?

Economy Memo Pad Politics

Will The GOP Turn The CBO Into A Fantasy League?


News that Doug Elmendorf will not be appointed to another term as head of the Congressional Budget Office bodes ill for future budget policy discussions.

The CBO is the official non-partisan scorekeeper for all things budgetary. The soon-to-be outgoing chief of that crucial office is held in high esteem by both parties for his fair-minded neutrality.

On occasion, Elmendorf has pleased the Democrats and frustrated the Republicans, but just as frequently the tables are turned.

The CBO’s analysis of the likely 10-year effects of the Affordable Care Act is a prime example. Democrats seized on the overall deficit savings from Obamacare that came from several cost-control measures in the Act and new taxes on “Cadillac” employer-provided insurance plans. For their part, Republicans got political talking points from the estimate that the workforce would shrink when middle-aged workers left jobs they held on to as the only way to maintain their health insurance.

No matter. The (D)s could trumpet the deficit cutting, and the (R)s could say it cost jobs.

Now, if the more aggressive members of the GOP get the kind of CBO head they want, one of the bedrock principles of CBO analyses these past several decades is likely to come to an end. The phrase we hear for the new policy is “dynamic scoring,” and it opens the door for the CBO to apply unproven — some say disproven — economic theories that favor Republican policy goals.

To be sure, even the current “rules” of CBO analyses are subject to partisan gaming. For example, when a bill increases deficits too much to be acceptable in the CBO’s standard 10-year analysis, the bills are often changed to make the expensive (but popular) aspects of the bill expire early. With a wink and a nudge, the bill’s sponsors figure that Congress will extend the popular but expensive features when they are up for expiration.

It can be so rote a change that we give names to them – like the “doc fix” for Medicare. Since 2003, the formula for Medicare spending increases has included a cut in reimbursement to doctors. And seventeen times over these past 11 years, Congress has reversed those cuts in short-term bills with the generic name “doc fix.” But the law that controls Medicare spending continues to be the law, so the CBO projects future deficits based on what is in place.

Another example was the automatic sunsetting of the tax cuts put into place in 2001 and 2003. When they were originally set to expire in 2010, the country was still suffering the after-effects of the 2008 recession, so most of the cuts stayed in place. In political speak, not extending all the cuts was labeled “raising taxes.”

The latter example is especially significant if the new head of the CBO uses the dynamic scoring that radicals like Rep. Paul Ryan (R-WI) want. According to the supply-side devotees that want the new method of scoring, tax cuts always spur additional economic growth, effectively growing our way out of the revenue shortfalls that are inevitable when tax rates are cut.

Remember the discussions before the 2001 and 2003 tax cuts became law? We were told that “deficits don’t matter,” and that the economy would grow so much that there would be huge revenue increases even at the drastically lower rates. It didn’t work out that way, and the final George W. Bush budget had a $1.3 trillion deficit even with the Afghanistan and Iraq wars “off budget,” rather than the zero deficit or surplus that supply-side economic theory had predicted.

In 2005, as the 2001 and 2003 tax cuts weren’t hitting the projected lowered deficits that their sponsors expected, some members of Congress thought they just hadn’t given the economy enough tax cut medicine. So they directed the CBO to study the effects of cutting federal income tax rates by 10 percent, and to explore what would happen if they also assumed that the tax cuts would spur additional growth, as dynamic scoring fans expect from the next director of the CBO. To be clear, they weren’t talking about lowering the 25 percent tax bracket to 15 percent; just lowering the rate by 10 percent (to 22.5 percent), lowering the 35 percent rate to 31.5 percent, and so on.

In that study, the CBO came up with estimates of additional deficits of $522 billion for the first five years, and $1,035 billion over the next five years using CBO’s conventional method of scoring. Those came from the lower tax revenues without adding in any effect of boosted growth.

To project dynamic effects they worked with external consultants at Global Insights and at Macroeconomic Advisors, who were able to give the CBO estimates of additional economic activity over a five-year horizon. Longer-term effects had to be estimated by CBO staff alone.

It’s a tough job, estimating the future, and changing the rules will make it that much tougher. The CBO decided to project multiple future paths for the economy based on how taxpayers react as their rates are lowered, how Congress deals with the revenue shortfalls created by the tax cuts, and whether capital is free to move across borders or not. Across all the scenarios, the CBO estimated that there would be incremental growth in GDP, in annual amounts varying from 0.1 percent up to nearly 1 percent.

If people simply spend and save based on how much money they have in their pockets right now (what the CBO called the “no foresight” model,) the results are not encouraging. The effect was an even higher deficit than the $1.56 trillion that conventional CBO scoring predicted.

So the CBO also imagined that taxpayers would actually change their habits based on believing that Congress would bring the budget back toward balance after 10 years through spending cuts or higher tax rates. In one set of cases, they imagined that the individual taxpayers would plan according to the effects over their entire lives. In other cases, they supposed that taxpayers would actually include the effects of their spending and saving on future generations.

Can I have a show of hands for those without professionally managed multi-generational trust funds who plan over those horizons?

Under these optimistic scenarios where people plan for at least their own lifetimes, some of the trillion and a half dollars added to the national debt by the tax cuts comes back to the Treasury by virtue of the extra growth in the economy and employment. The CBO estimated that our national debt from that relatively modest tax cut would grow by only $1.1 to $1.3 trillion with those positive feedback effects from the tax cuts.

But wait! Maybe there’s a better model, taken from reality. As Governor Sam Brownback said when he pushed Kansas to make drastic tax cuts, he was using the state as his “laboratory” — and he even hired supply-side guru Art Laffer to advise.

Kansas is bordered by four states with very similar economies. They didn’t duplicate his tax cuts. What better real-world experiment could we have?

Since the Brownback/Laffer policies were put into place, the Kansas economy grew slower and unemployment dropped less than in any of the bordering states. This year, Kansas will probably finish depleting its rainy day fund, let its roads fall apart even more, close schools all over the state, and raid specific purpose funds to give them to the general fund. That’s to plug the $279 million gap in this year’s budget that’s still left after last year’s budget cuts. And the problem being pushed into next year is already expected to be more than twice as big ($648 million). So maybe the incoming head of the CBO analysis should use this real data from the real world, where tax cuts seem to make an economy grow slower than no tax cuts.

Now that’s a plan! More unemployment, slower growth, and bigger deficits.

Watch the CBO carefully after the new boss arrives. If they don’t consider the possibility that the economy might actually shrink if taxes and spending are cut, then we know that the days of being a neutral scorekeeper are over, and fantasy sports have taken over for the real players on the field.

Howard Hill is a former investment banker who created a number of groundbreaking deal structures and analytic techniques on Wall Street, and later helped manage a $100 billion portfolio. His book Finance Monsters was recently published.

Photo: University of Michigan’s Ford School via Flickr


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  1. docb December 23, 2014

    Blast the tea gop cretins for this..Paste it to every email and news outlet..This can not stand..Call out congress: Tickle down NEVER WORKED EXCEPT FOR THE LIARS!
    1.866.338.1015 or 1.866.220.0044

  2. Lynda Groom December 23, 2014

    They want the CBO to reflect their fantasy view of economic reality. Pissing down our necks and claiming it’s raining is the plan. It did not work under Reagan and it will not work under our wonderful new Congress. Only action by the American voters in 2016 can overcome GOP fantasy and return to some form of reason and reality. The CBO must be left nonpartisan….at least as much as is possible.

    1. kenndeb December 23, 2014

      Unlike the fantasy of growth our regime puts forth. Anyone that wants to see can tell we are being fed lies. Unemployment is at it highest EVER. Welfare at it highest EVER. Stocks are inflated to keep the peons quiet. It is reported that we have a 17 trillion dollar deficit, which is really bad, but not the truth. According to U.S. Debt Clock.org, our total obligations are a stunning $126 trillion dollars.
      Yeah, continue to believe all the propaganda put forth by a regime that is working AGAINST the American people.

      1. Lynda Groom December 23, 2014

        Oh my!

        1. Independent1 December 24, 2014

          Hopefully every sane person posting on the NM has learned by now that kennidiot is just that – a rambling idiot who’s fetish is to post idiotic statements that end up making absolutely no sense and are effectively nothing but blatant lies and/or distortions of the truth.

        2. Dominick Vila December 24, 2014

          Cut KennDeb some slack. At least they finally discovered the consequences of irresponsible tax cuts, refusing to pay for what we get and benefit from, unfunded wars, and all the contributors to the skyrocketing unfunded liabilities.
          I actually sympathize with their concern, I just wish they had voiced it in the 1980s, when this example of fiscal irresponsibility went into overdrive.

        3. InformedVoter December 24, 2014

          Just look at how blacks have done under Obama! Higher unemployment rate; lower earnings; worse race relations and higher murder rate among themselves!

          1. Independent1 December 24, 2014

            Thanks to the constant racist comments that fly out of the mouths of CONSERVATIVES as they try their best to make the best president since FDR look like a failure – AND JUST WHEN, the 3rd quarter of 2014 showed the biggest economic growth since 2003, the year of 2014 has PRODUCED MORE JOBS than any year since 1999; more jobs were created in November of 2014 than during any month since Clinton was in office; and Obamacare resign ups and new signups are booming!!


          2. InformedVoter December 24, 2014

            Hello ID1.. you made a post about the 2 million folks that got added to Obamacare and touted the 75,000 lives saved. Well let’s just play your numbers game. You make the false assumption that ALL 2 million sign ups were without insurance, so let’s just work on that.
            Last winter, Obama admitted that they had DOUBLE counted 800,000 sign ups for the second straight year! So, you have to net out from the 2 million sign ups the 1.6 million who were double counted. Now let’s look at the 6.5 million who LOST their health insurance because of Obama care. That would mean that there are actually 6 million MORE without health care. So how does your fabricated 75,000 lives saved become a real number? It doesn’t! The truth is, last year, Obama’s team indicated that the number of uninsured was the same as before Obamacare was passed (30 million). But that was before they had to back out the 800,000! So that means that, even using THEIR numbers, 800,000 fewer folks have health care than when Obamacare was passed. Still sticking to your fabricated 75,000 lives saved number? Now let’s add in those who had their incomes cut because they went from full-time jobs to 30 hours/week jobs so their employer would not have to provide health coverage. Now these millions of workers have lower income because they’re working fewer hours (they didn’t get hourly raises to cover the fewer hours worked) and now they have to pay their own health care. So your 75,000 lives saved number is more and more fabricated. But based upon your volumes of garbage posts, I’m sure you think your GARBAGE 75,000 number is gold. You could not handle that Obama spent 100 million of taxpayer money to visit Africa June 26-July 3, 2013. When the president travels for political reasons, his party covers the cost. When the president travels for person reasons, their “friends” cover the cost. When Obama travels, the tax payers cover the costs. Obama had 56 support vehicles, 14 limos and three trucks (to carry the bullet proof glass). The cost would have been closer to 200 million tax payer dollars if Obama had done the safari that he wanted. Fortunately for the tax payers, he relented when he was informed (there’s that word you seem to be lacking in your fantasy life) that the cost would double so that a dozen sharpshooters would be required in case a wild animal got too close. When Clinton went to Africa in 1999, his friends paid. Each time the Bushes went to Africa, they paid the full cost. Obama spent 24 million to throw a Bahama birthday party for his daughter and “several” of her friends and their families. The Obama’s didn’t even flinch at the almost 500 million they have spent on personal vacations. And don’t even mention the improvements that Reagan and Bush had made to their personal homes. As former presidents, the country provides the security for them and their family. And that garbage (there’s another word you should be familiar with) about Reagan and Bush reaping millions from the improvements is just that. If you were to spend $250,000 to have bullet proof glass put on you home, you would not be able to sell your house for $250,000 more than before. Think about it. This was a lengthy post, but you are notorious for long winded posts that contain nothing but GARBAGE information and you think you hold the higher ground. You may be independent, but you are sure without meaningful information.

          3. Independent1 December 24, 2014

            What a waste of time that was – one lie and distortion of the truth after another!! That’s all you RWNJs know how to do. NO 6.5 MILLION PEOPLE LOST ANY INSURANCE THAT’S PURE BS!!!!!!!!!!

          4. InformedVoter December 25, 2014

            Sorry, but all facts are true AND verifiable! Over 3 million lost their insurance within 90 days. The problem with liberals like you is that you can’t handle the truth. Fortunately the voters saw that the emperor was not wearing any clothes and voted his policies out of office. 54 Senate seats, 247 House seats are the greatest majority in 80 years and makes Obama the largest loser in Democratic history. Wait until the SCOTUS votes to uphold the EXACT words in the ACA that STATE means STATE, not the US government. The funding/subsidies for 26+ states go out the window. Kiss the ACA goodbye.
            NOTE: earlier you denied that Obama had spent 500 million taxpayer bucks on his lavish, personal trips. now that the information has been verified, you can’t possibly feel that you weren’t betrayed in that you kept denying it.

          5. Independent1 December 25, 2014

            Sorry but everything you’re saying is a distortion of the truth. Yeah, insurance companies in their efforts to defraud their policyholders did wrongly cancel policies that were grandfathered by ACA, but all but a couple hundred thousand WERE REPLCACED with new policies. Cancelling policies each year HAS BEEN STANDARD PRACTICE for private market health insurers for decades! The only difference, is that in 2013 they cancelled them with the false claim that they didn’t comply with ACA WHICH THEY DIDN’T HAVE TO!!

            They did that as a way to DEFRAUD their policyholders into UNNECESSARILY buying new MORE EXPENSIVE policies.

            And irrespective of anything YOU’RE FALSELY SAYING, none of that CHANGES THE FACT THAT 1) the uninsured rate in America has plumetted!! 2) hospitals across the nation have already saved close to 6 billion dollars because there are millions less uninsureds come in for care they can’t pay for; 3) states across the nation are saving millions/billions. Even the red state of Arizona is not only saving billions in reduced reimbursement rates it was having to pay hospitals, Arizona State University has projected that ACA will add more than 1.6 billion to the Arizona economy into 2016; add 15,000 plus jobs and add over a billion in tax revenues.
            4) a number of “safety net” hospitals have seen such reductions in uninsureds coming in that several are seeing profits for the first time in years and on average ACA is increasing their profit margins from around 4% to over 6%.


          6. Independent1 December 25, 2014

            And so now you’re trying to brag about this 2014 mid term that was as much a DISASTER FOR THE GOP as it was for the DEMS!!!

            If you think having control of both houses of congress when a Democrat is president is going to do the GOP much good, your clearly a RWNJ idiot!! Harry Reid can play the Filibuster game just as well as Mitch McConnell!! And the GOP has no where near a veto proof majority in the Senate.

            Better read this nutjob!!!

            GOP Columnist: The VERY Bad News FOR THE GOP in the GOP’s Midterm Victory

            Republican support grew deeper in 2014, not broader.

            Some other observations:

            a) Republican Senate candidates lost every single race in the Blue Wall.

            b) There were some GOP victories in Governor’s races, but in each case there were no coat tails. None of these candidates ran on social issues, Obama, or opposition to the ACA. Look at Rauner who took out Quinn in Illinois, but Democrats in Illinois retained their supermajority in the State Assembly having not lost a single seat.

            c) Voter turnout was awful. It was more awful for the Democrats but the GOP won 52 percent of 35 percent of the vote: in other words their mandate is 17 percent of the registered electorate (and 13 percent of those eligible to vote).

            d) Good news for the Democrats: They have consolidated their power behind the sections of the country that generate the overwhelming bulk of America’s wealth outside the energy industry.

            e) Voter suppression is working remarkably well, but that won’t last. They key is voter ID. Eventually Democrats will top whining and will help people get the documentation they need to meet confusing new requirements and obstructions. The whole “voter integrity” sham may have given Republicans a one or maybe two-election boost in low-turnout races, but the message to minority (but growing) groups is clear. We GOP don’t give a damn about you.

            f) Every major Democratic ballot initiative was successful, including every minimum wage increase, even in the red states. AND every personhood amendment failed.

            g) Half of the Republican Congressional delegation now comes from the former Confederacy. There are no more white Democrats from the South. All of the Dixiecrats are now GOP.

            h) Democrats in 2014 were up against a particularly tough climate because they had to defend 13 Senate seats in red or purple states. In 2016 Republicans will be defending 24 Senate seats with at least 18 of them very competitive based on geography and demographics. Democrats will be one seat looks competitive.

            i) McConnell’s conciliatory statements were encouraging, but he cannot persuade Republican Senators and Congressmen to cooperate on anything constructive.

            j) This is an age built for Republican solutions. The global economy is undergoing a massive, accelerating transformation that promises massive new wealth and staggering challenges. Ladd say that the GOP could address a this with heads-up, intelligent adaptations to capitalize on those challenges. Republicans, with their traditional leadership on commercial issues, he claims, should be at the leading edge of planning to capitalize on this emerging environment.

            k) Instead, he predicts, what the GOP will spend its time on is: Climate denial, theocracy, thinly veiled racism, paranoia, and Benghazi hearings.

            He closes his essay saying: “It is almost too late for Republicans to participate in shaping the next wave of our economic and political transformation. The opportunities we inherited coming out of the Reagan Era are blinking out of existence one by one while we chase so-called “issues” so stupid, so blindingly disconnected from our emerging needs that our grandchildren will look back on our performance in much the same way that we see the failures of the generation that fought desegregation. Something, some force, some gathering of sane, rational, authentically concerned human beings generally at peace with reality must emerge in the next four to six years from the right, or our opportunity will be lost for a long generation. Needless to say, Greg Abbott and Jodi Ernst are not that force. ‘Winning’ this election did not help that force emerge.”

          7. InformedVoter December 26, 2014

            As usual, you have produced volumes of garbage information. It is Obama’s team that says the number of uninsured has remained the same! Your comments about 6.5 million who actually did lose their insurance shows how poorly you know or understand the issues. Many others have soundly trounced your posts because your “logic” is easy pickings for those armed with real information.

          8. Independent1 December 26, 2014

            More of your rampant lies!! Go stuff it somewhere will you lying sack of crap!!!!!!!!!!!

            Another Health Insurer Caught Falsely Cancelling Thousands of Health Plans

            Following the report that Insurer Humana was fined $65,000 in Kentucky for sending out 6,500 misleading cancellation letters for low-premiums plans only to be automatic re-enrollment in high cost plans before these customers were given a chance to shop on the open exchange for a better and cheaper plan – we now have a new report that Anthem Blue Cross is being sued for tricking people into dropping their “grandfathered” plans.

            Think that’s bad, well this is even worse.


            “Blue Cross successfully enticed tens of thousands of its individual policyholders to switch out of their grandfathered health plans and forever lose their protected grandfathered status,” states the lawsuit. “Blue Cross concealed information about the consequences of switching plans and intentionally misled its policyholders to encourage the replacement of grandfathered policies.”

            And more… http://www.ibtimes.com/

            The lawsuits, filed Monday in Superior Court, may signal an emerging customer pushback against the approximately 900,000 cancellations in California alone of individual health insurance policies that will take effect Dec. 31.

            900,00 Cancellations. False Cancellations of plans that, which under the Affordable Care Act are “Grandfathered” and Don’t Need to be Cancelled. The Insurance Companies are doing it to Scam their Customers into higher cost plans and away from the ACA Exchanges in a practice that violates State Law known as “Twisting”.

          9. Independent1 December 26, 2014

            And here’s more ON YOUR LYING!!!!!!!

            Washington — Fewer than 500,000 people who had their individual insurance policies cancelled will be without coverage on January 1.

            That’s far less than the millions of people that health law critics said would lack insurance after their old policies were terminated because they didn’t meet new minimal standards under the Affordable Care Act.

            Republican lawmakers and conservative groups had maintained that anywhere from four to 14 million people might be without coverage because of the cancellations and difficulty enrolling in new coverage due to technical problems on HealthCare.gov.

            But senior White House officials on Thursday said those estimates were vastly overstated. Insurers are instead auto-enrolling most customers who received cancellation letters into new plans.

            The cancelled policies created a political firestorm in November for President Obama who had repeatedly said the health care law allowed Americans to keep their coverage if they liked it.

            Once millions of policy cancellation letters went out, public outrage mounted against the president, causing him to let people extend their old policies for another year if their insurers and state regulators would allow it.

            Read more here: http://www.mcclatchydc.com/2013/12/20/212275_only-500000-people-with-cancelled.html?rh=1#storylink=cpy

            And even the 500,000 was grossly over estimated!!!!!!!! Go bury your head in the sand, I’m tired of your LYING!!!!!!!!!

          10. Independent1 December 26, 2014

            And you want to talk abouty 6 million cancelled policies – well t hat’s exactly what happened when Bush rolled out Medicare Part D; but instead of the website being fixed in about a month, it took SIX MONTHS for them to get the Medicare Part D website working correctly for a benefit FAR LESS complex than Obamacare:

            Six million lost coverage on first day of Bush Medicare drug program

            With the Affordable Care Act now in full effect, the conservative propaganda factory is working overtime to produce and publicize Obamacare horror stories, real or imagined. So with the federal government, the states, private insurers, hospitals, doctors, and pharmacies scrambling to assist the six million newly insured so far, the GOP’s media water carriers are decrying enrollment snafus, delayed surgeries, emergency fixes in the states, and even national drugstore chains providing a month of prescriptions to customers whose proof of insurance is in limbo. (Breitbart went so far as to suggest that Walgreens and Walmart might be offering that customer service in order to do data mining for Uncle Sam.)

            As it turns out, these furious conservatives are suffering from a particularly acute case of selective amnesia. Just eight years ago this week, the calamitous launch of President Bush’s Medicare prescription drug program left over six million previously insured seniors without coverage. Hundreds of thousands more could not get their medications as problem-plagued government computer systems, confused insurers, and undertrained pharmacists left subscribers panicked and helpless. But unlike today’s sabotage of the Affordable Care Act by Republicans in Congress and in the states, Democrats at all levels helped the Medicare Rx program whose design they opposed.

            As the Washington Post reported in January 2006:

            Two weeks into the new Medicare prescription drug program, many of the nation’s sickest and poorest elderly and disabled people are being turned away or overcharged at pharmacies, prompting more than a dozen states to declare health emergencies and pay for their life-saving medicines.Please read below the fold for more on Bush’s Medicare drug rollout issues.

          11. Independent1 December 26, 2014


            Special Investigation: How Insurers Are Hiding Obamacare Benefits From Customers

            Donna received the letter canceling her insurance plan on Sept. 16. Her insurance company, LifeWise of Washington, told her that they’d identified a new plan for her. If she did nothing, she’d be covered.

            A 56-year-old Seattle resident with a 57-year-old husband and 15-year-old daughter, Donna had been looking forward to the savings that the Affordable Care Act had to offer.

            But that’s not what she found. Instead, she’d be paying an additional $300 a month for coverage. The letter made no mention of the health insurance marketplace that would soon open in Washington, where she could shop for competitive plans, and only an oblique reference to financial help that she might qualify for, if she made the effort to call and find out.

            Otherwise, she’d be automatically rolled over to a new plan — and, as the letter said, “If you’re happy with this plan, do nothing.”

            If Donna had done nothing, she would have ended up spending about $1,000 more a month for insurance than she will now that she went to the marketplace, picked the best plan for her family and accessed tax credits at the heart of the health care reform law.

            “The info that we were sent by LifeWise was totally bogus. Why the heck did they try to screw us?” Donna said. “People who are afraid of the ACA should be much more afraid of the insurance companies who will exploit their fear and end up overcharging them.”

          12. InformedVoter December 27, 2014

            As you are notorious for, volumes of garbage data. Do you actually read what you send out? You quote from the liberal lie handbook and think that their information is valid! I can recall one of your posts before the 2014 elections when you quoted these same “liars (using your term)” and you actually believed them when they claimed that the polls were wrong and the Democrats would hold the Senate and reclaim some of their House seats. And your comments about the insurance companies were out to screw the public and you made it sound like these companies were owned by Republicans. Grow up. For you to think that Democrats don’t work for or own insurance companies shows how naïve you are and that’s why it’s so easy to shred your facts. I don’t know why you keep posting such gibberish that you do. You constantly get you butt kicked in these forums. If you have money in a financial institution, then most likely you are invested in multiple insurance companies. That makes you one of the blood suckers yourself! In the end, I said that the number of uninsured remained the same – 30 million. All Obamacare did was to shift the numbers. More middle class folks are now making less money because the work hours were cut to 30/week and now they have to pay for their own health insurance. All this and an increase in the national debt. Sounds like a winning program to me.

          13. Independent1 December 26, 2014

            And here’s another:

            Don’t Let Your For-Profit Insurer Pick Your New Health Care Plan

            In recent months, thousands of Americans have received insurance cancellation letters offering them plans with ridiculously expensive new premiums. But those who trust their insurers to offer them the most affordable, most beneficial plan available should maybe reconsider that whole trust thing. As Talking Points Memo reports on Monday, some insurers across the country are sending misleading letters to lock people into expensive plans before they can shop around on the exchanges (which will probably, possibly, maybe work by November 30). In September, Washington’s Insurance Commissioner Mike Kreidler told shoppers not to blindly trust the recommendations of their insurers in a consumer alert. “Don’t just take what your insurance company says, make sure you shop around. You have the right to buy any plan inside the new exchange or in the outside market,” Kreidler said.

            Consumers in Kentucky were similarly misled by insurers, when Humana sent letters informing consumers they had to lock-in their old rate by September 20, nearly two weeks before Kentucky’s state exchange opened. Humana was later fined $65,000 by the state for sending “misleading” letter. “They are not giving people the ability to make an informed choice, because the information is not yet out there,” Ray Brundige, who received one of those letters, told USA Today in September. “They’re doing themselves and the community a disservice.” Yes, the same insurers who rejected sick people with pre-existing conditions to maintain profits aren’t above misleading shoppers.

          14. Independent1 December 25, 2014

            Just in case you don’t believe what I said about Arizona, and the sharp decline in the uninsured rate, see this:

            Arizona hospitals already reaping benefit of Medicaid expansion

            Gov. Jan Brewer’s decision to harangue her Republican legislature to accept Medicaid expansion is paying off for the whole state of Arizona, but especially its hospitals. A new report from the Arizona Hospital and Healthcare Association says that uncompensated care has been reduced 31 percent in the last four months compared to the same period last year.

            Uncompensated care is both charity care provided by hospitals and bad debts they have to write off, and in Arizona it spiked after the state decided to drop the childless adult population from Medicaid in July 2011. The numbers of childless adults in Medicaid has rebounded 247 percent since the decision to expand Medicaid and allow them back in, which obviously makes a big difference in the amount of uncompensated care hospitals are providing. One, Tucson Medical Center, reports a 45-percent drop.

            That’s money that the state doesn’t have to try to come up with to reimburse hospitals to help keep them afloat. The business school at Arizona State University estimated that the expansion would bring more than 15,000 jobs to the state by 2016, increase state revenues by over $2.8 billion in the next three years and increase personal disposable income by more than $1.6 billion. The decline in uncompensated care is just a drop in the bucket for what Medicaid expansion is likely to do for Arizona.

          15. Independent1 December 25, 2014

            Tell me!! Are you and your RWNJ friends really proud of this?? Possibly being mass murderers by refusing to expand Medicaid even to our veterans which may mean many of them die prematurely JUST BECAUSE THE GOP REFUSED TO EXTEND THEM INSURANCE!!!!

            The Real Scandal: 258,000 Veterans Lack Healthcare Because Republicans Won’t Expand Medicaid

            While Republicans are trying to blame the problems at the VA on President Obama, the real scandal is that the Republican refusal to expand Medicaid in 23 states has left 258,6000 veterans without healthcare.

            According to a 2013 Urban Institute study:

            Analysis of the 2008-2010 American Community Survey (ACS) indicates that 535,000 uninsured veterans and 174,000 uninsured spouses of veterans—or four in 10 uninsured veterans
            and one in four uninsured spouses—have incomes below 138 percent of the federal poverty level (FPL) and could qualify for Medicaid or new subsidies for coverage under the Affordable
            Care Act (ACA).

            Most of these uninsured—414,000 veterans and 113,000 spouses—have incomes below 100 percent of FPL, and will therefore only have new coverage options under the ACA if their state expands Medicaid. However, fewer than half live in states in which the governor supports their state participating in the expansion, while the majority live in states that have chosen not to expand Medicaid or have not yet decided whether to expand. The extent to which uninsured veterans and their family members with incomes below the FPL will have access to new coverage options under the ACA will depend on whether they live in a state that adopts the Medicaid expansion.

          16. Independent1 December 25, 2014

            And you’re really proud are you that like the GOP you’re just anxious to see them try to repeal ACA so you and your murdering party can reverse the life saving benefits of ACA and DELIBERATELY ALLOW THOUSANDS OF AMERICANS TO DIE PREMATURE LIVES JUST BECAUSE OF MONEY!!!!!!!

            Obama’s decision to reduce hospital errors has saved over 50,000 lives –

            Hospitals are meant to save lives — but they can too often be deadly places to spend time.

            From the infections patients get when they stay in the hospital (which kill about 75,000 peopleannually) to medical mistakes (surgeons left an impressive 4,857 items in patients over the last two decades), hospitals are places where lots can go wrong.

            But hospitals are, just slightly, starting to get better at getting things right. A new federal report shows that improvements in hospital care saved 50,000 lives between 2010 and 2013, all by doing better at not making patients sick.

            The number of patients who had a hospital-acquired condition — anything from an infection of a surgical site or a fall during recovery — fell by 17 percent between 2010 and 2013.

            That translates to 1.3 million fewer harmful incidents than if the 2010 rate had held constant and 50,000 fewer patients death.

            The declines span all different types of care. Surgical infections fell by 19 percent. Pressure ulcers (which patients often develop spending days lying in bed) declined by 20 percent.

            The biggest decline by far was among central-line-related infections, which can happen when bacteria infect a patient through a catheter delivering medication or fluids.

          17. Independent1 December 25, 2014

            And you’re just anxious are you to see health care premiums go up at skyrocketing rates again!! Despite what you and your RWNJ buddies try to sell SANE PEOPLE, ACA has kept down premiums since it was enacted and has saved millions of Americans thousands of dollars a year since 2010!!!!!!! (Analysts projected that in 2013, health insurance premiums would have been at least 25-45% higher than they were had ACA not been enacted!!)

            See this:

            Health Care Spending Continues To Rise Slowly Ahead Of Obamacare Expansion: Report

            National health care spending continues to grow at historically low rates this year — but it will rise faster over the next decade as the economy recovers, the population ages and President Barack Obama’s health care reform law adds millions to the health insurance rolls, according to a federal audit released Wednesday.

            The government, businesses and households will spend $2.9 trillion on health care in 2013, which will be a 3.8 percent increase from the previous year, according to a report published in the journal Health Affairs by the U.S. Centers for Medicare and Medicaid Services Office of the Actuary. The total amounts to approximately 18 percent of the U.S. economy.

            The Office of the Actuary, an independent auditor within the federal health care agency, found that health care spending has been growing at a rate of less than 4 percent each year since 2009, ahead of Obamacare’s expansion of health insurance coverage that begins in 2014. The growth level represents a sharp decline from the average rate of 6.9 percent from 2000 to 2009, and is far below double-digit growth in the early 1990s and early 2000s, the report illustrates. The amount the U.S. spends on health care has almost doubled since 2000 and nearly quadrupled since 1990.

            By the way, having worked for Aetna for 30 years I don’t believe for a moment the projection in the 1st paragraph above that health insurance premiums will grow rapidly in the future, once getting millions of currently uninsureds out of the system which has been the big driver as to why healthcare costs in America are the highest on the planet.

          18. Independent1 December 25, 2014


            See this dummy!!!!

            The expansion of health insurance and Medicaid across the country has reduced the number of unpaid hospital bills dramatically, according to a new report from Health and Human Services on the progress of the law. The agency projects the savings to the nation’s hospitals for 2014 alone will be $5.7 billion. In the states that have expanded Medicaid, unpaid bills have fallen by one third.

            “Hospitals have long been on the front lines of caring for the uninsured, who often cannot pay the full costs of their care,” said HHS Secretary M. Sylvia Burwell. “Today’s news is good for families, businesses, and taxpayers alike. It’s yet another example of how the Affordable Care Act is working in terms of affordability, access, and quality.”

            Projections from today’s report suggest that hospitals in states that have expanded Medicaid under the Affordable Care Act will see greater savings than hospitals in states that have not expanded Medicaid. Hospitals in states that have expanded Medicaid are projected to save up to $4.2 billion, which makes up about 74 percent of the total savings nationally this year. Hospitals in states that have opted not to expand Medicaid are projected to save up to $1.5 billion this year, and which is only 26 percent of the total savings nationally.

          19. Lynda Groom December 24, 2014

            According to the latest figures from the Bureau of Labor Statistics show a decrease of 0.8% in black unemployment rates from March to April, they also show the lowest rate for blacks in over five years. The last time the rate was this low was November of 2008. (remember who was president then?) The rate peaked at 16.9% in March of 2010.

            I hope this is not a surpriese to you, but unemployment among blacks has always been higher than whites. The average from 1972-2004 was 12.4% for blacks vs 5.4% for whites. Clearly this situation did not start with Obama and is actually a tad better today.

            The BLS statistics going back 42 years show that horrible situation has been with us far too long. Trying to make it seem that blacks are suffering because Obama is President is playing loose with the facts and figures.

            The country is still in recovery from the 2nd worse economic collapse in the last 100 years and indeed the earnings of all but the top moneyed elite have lower earnings. According to recents report that is now improving as well.

            Black on black crime and murders rates are terrible. However, it must be pointed out that same race killing is a fact of life. The rate of black on black murders is about 93%. Don’t forget that the rate among white on white murder is 85%. The numbers of murders among both demographics are lower than the period of 1993-1998. Note: Obama was not the man back then either.

          20. InformedVoter December 24, 2014

            Try again. Your numbers are not correct, at least not according to Obama’s press folks. It’s not surprising that liberals spin and spin, but the problem is that when one is caught making up stats, that they can’t get their act together. The reality is that black unemployment is at a record level, as is the number of food stamps! Their wages have decreased by almost 10% in the 6 years Obama has been in office. It’s well documented from Obama himself that blacks are not as well off today as when he took office. But then again, he blames that on you know who.

          21. Lynda Groom December 25, 2014

            They did not come from a TV talking head or from spin doctors within the administration. Please read the recent reports from the Bureau of Labor Statistics. They been keeping records like these for decades. If you wish to ignore them that is of course your right. Indeed folks from all political beliefs tend to find what they wish to find, but I prefer to stick to evidence rather than my personal beliefs.

          22. InformedVoter December 26, 2014

            Hello Lynda, At least your posts are civil, unlike ID1 who spews tons of propaganda that is mostly garbage. My data is from a black editor for a ultra-liberal major newspaper. He said “In the last 6 years black unemployment has risen to more than double the US average & is even higher among black males; income is down almost 10%; those on food stamps is a record high …” Your stats are most likely provided by a white guilt civil servant. I’ll stick with the liberal source. FYI, any neutral paper would have condemned Obama’s record of not helping blacks more, but this editorial “challenged Obama & Holder to step up their efforts”. How sad is that?

          23. Lynda Groom December 26, 2014

            One thing that is important is that Obama did not run for President to serve the cause of African Americans. He got the job to serve all of the people, not just a special interest group. It can be argued pro and con if he’s done any of that. The stats from the Bureau of Labor Statistics certainly did not come from ‘a white guilt civil servant.’ There are more folks involved in the analysis of facts, figures and statistics at that agency than we can count. They been at their jobs for decades providing data using methods that have been in place for a very long time.

          24. InformedVoter December 27, 2014

            Yes, he got the job to serve all the people, but very clearly, the Black voters voted for Obama just because he’s black. Black voters did expect to get extra but not only did they not get extra, they really did slide backwards. In fact, Obama did worse in 2012 numbers with black voters. Entertainment stars like Samuel L. Jackson and Whoopi Goldberg openly said “he’s black, you don’t need any other reason than that to vote for him”. And now Obama is claiming that race relations are better today than 6 years ago? Obama is trying to make up for the 6 years he’s wasted and to come out looking like he made life better for blacks.

          25. Lynda Groom December 28, 2014

            Well from your comment we can only assume that the 6% of African-Americans who voted for Romney did it because Obama was black, or because Romney was white. What about the 39% of whites who voted for Obama? Did they vote that way because Obama was black, or because Romney was not white enough?

            What about the 27% of Hispanics who voted for Romney, or the 26% of Asians who also voted for Romney? Was race a factor for them as well???

            Indeed some so-called celebrity African-Americans said out loud that they voted for Obama because he was black. So what?

          26. InformedVoter December 28, 2014

            The black celebrities that told folks to vote for Obama BECAUSE he’s black are racists and care nothing about the running of the country. Many whites, in 2008, voted for Obama because of white guilt. This has been well documented. But, just as in the black population in 2012, many realized that Obama is not qualified and had been doing a terrible job, and thus shifted parties, hence the landslide shift to the right for the country.

          27. Lynda Groom December 29, 2014

            ‘Landslide shift to the right.’ I hope you are aware that only 1/3 of voters bothered to show up. Indeed the GOP did win the majority of seats with the majority of the fewest voters in recent times. BTW, I’ve neve met a white voter who said they voted for Obama because of guilt. Where this ‘welll documented’ evidence??? Even if true, would that explain both victories???? Where is the evidence that blacks voted for Obama and that they care nothing about the country. Thats just a silly comment. Don’t forget that 7% of so-called Democrats voted for the white guy while 6% of so-called republicans voted for the black guy. Independants voted 45% for Obama and 50% for Romney. Nothng is a simple as you would like to pretend.

      2. WhutHeSaid December 24, 2014

        Speaking of ‘inflated peons’, where is Deb today? I want to know that she’s still OK and not being mistreated in your trailer park.

        17 trillion dollar deficit? Do you even know the difference between deficit and debt? Allow me to offer you some assistance:

        Deficit: The difference between what the federal government is taking in and federal expenses — currently $483 billion. That’s $930 billion less than Bush’s last deficit.

        Debt: The accumulated debt from borrowing money to fund deficit spending, currently $18 trillion. This number grows faster when the deficit is higher, meaning that Bush’s astronomical deficits did FAR more to inflate this number than Obama’s.

        History doesn’t lie — Republican administrations ALWAYS outspend Democratic ones and are bad for the US economy, the deficit, and the US debt.

      3. 788eddie December 24, 2014

        Kenndeb, are your parents still in touch with people from their own planet?
        You said, “Stocks are inflated to keep the peons quiet.” Yo, Bro, “peons” don’t buy stocks! They don’t have the scratch to do so. As for being “inflated,” the stock market is one of the centers of our capital system and works off of supply and demand. The only thing “inflated” here is your own ego for thinking such stupidity.

      4. BillP December 24, 2014

        Ken as usual your ignorance is showing – looking at unemployment rates from 1948 to the present there are a number of times with higher rates of unemployment – 11/1975 – 9%, 11/1982 – 10.8% & 10/2009 – 10%. The rate as of 11/2014 is 5.8%, only in your bizarro right wing mind is this the “highest ever”. Go get your smokes and beer and smoke and drink yourself back into your delusional state. You keep stating that the stock market is inflated but offer no provable facts, just the usual right wing bs.

  3. Independent1 December 24, 2014

    Sounds to me like the GOP is trying to set things up so they can play a little shenanigans just like the Heritage Foundation tried when it FABRICATED DATA in an effort to make the disaster going on in Kansas look like NOT SO MUCH OF A DISASTER.

    This piece is a little bit long, but stay with it until you understand ALL THE LIES the “chief economist’ at the Heritage Foundation pulled trying to keep the GOPs fairytales about tax cuts and high taxes in general from looking as idiotic as they are!!

    How do you make the case that Sam Brownback has been good for Kansas?

    If you are Stephen Moore, the “chief economist” for the Heritage Foundation, you fake the data.

    What’s going on in Kansas is beginning to look a lot like proof that Republican magical thinking about economics has at last run out of fairy dust to cloak itself in.

    Yael T. Abouhalkah is an editorial writer for the Kansas City Star. While researching a piece on the Kansas economy, he couldn’t help but notice that the facts he was turning up were at odds with the “facts” reported in a pro-Brownback piece written by Moore and published the Starearlier this month.

    Moore’s column argued that Kansas needed to give Brownback’s regime more time to work its wonders, because “the national data tell us” that over the last 20 years the nine states without an income tax have had double the population growth and more than double the income growth of states with very high income taxes. These results are statistically significant, which means it is very unlikely they happened by chance. This does not mean all states that cut taxes have growth or that all states with high taxes don’t have growth. It means there is a strong propensity for low-tax and tax-cutting states to grow. Period. This is a problem for the left because places such as New York, Massachusetts, Illinois and California that have been following Krugman’s (and President Barack Obama’s) economic strategy are getting clobbered by tax-cutting states.

    OK. Some of you have already noticed that here we have a “chief economist” abusing the concept of “statistical significance” in a way that would embarrass a first year student of the subject.

    But let’s move on to what Moore said next:

    No-income-tax Texas gained 1 million jobs over the last five years; California, with its 13 percent tax rate, managed to lose jobs. Oops. Florida gained hundreds of thousands of jobs while New York lost jobs. Oops.

    Abouhalkah found FOUR errors in that brief passage.

    No. 1: Moore’s data isn’t from “the last five years”. When challenged by The Star he admitted it was from December 2007 to December 2012. Which is a deliberate deception. The Bureau of Labor Statistics data that Moore was relying on is updated Every. Single. Month. So there is no reason to use 18-month-old data. If Moore honestly wanted to look at the “the last five years” he could have presented the numbers from mid-2009 to mid-2014.

    No. 2: even within his cherry-picked dates, Moore lied about the numbers. Texas did not gain 1 million jobs in that 2007-2012 period. The correct figure was a gain of 497,400 jobs.

    No. 3: Florida did not add hundreds of thousands of jobs in that span. It lost 461,500 jobs.

    No. 4: New York, which has one of the highest income tax rates, did not lose jobs during that time. It gained 75,900 jobs.

    Abouhalkah noted a 5th oddity as well:

    California since December 2012 — when Moore stopped measuring employment growth — has added 541,000 jobs, which is more than Texas’ 523,400. So, high taxes are good?

    1. Kenneth C. Fingeret December 24, 2014

      Hello Independent1, The only thing that Republicans have besides “God, Guns and Gays” is “Lying, Cheating and Stealing”! They have been doing this for more than three decades (full steam ahead) and since Nixon with picking and choosing what they decide to use to bolster their phony arguments!

      1. Independent1 December 24, 2014

        Yeah!! Nixon was such a crook, that the Congress at the time were so concerned that he’d play some slight of hand with federal dollars, that they created the Office of Management and Budget which precludes today’s presidents from being able to sign Executive Orders that need federal funding. Prior to Nixon, presidents could do things like FDR did in creating the WPA which put millions of Americans to work fixing up America (obviously coasting billions of dollars) not depending on Congress but using an Executive Order. It’s because of Nixon that Obama hasn’t been able to duplicate what FDR did in order to start rebuilding America.

        And somehow, Americans need to take control of our government away from the GOP, before America becomes any more of a 2nd rate nation. See this article from the Daily Kos:

        Infrastructure advances in the rest-of-the-world will blow your mind.


    2. sleepvark December 24, 2014

      You mean that in the People’s Republic of Kansas all is not as they advertise? I am shocked, shocked to see gambling going on in their government . . .

  4. Dominick Vila December 24, 2014

    I doubt it. The CBO has been an impartial arbiter throughout its history, and it will remain that way.
    What is likely to see is the GOP taking credit for what the Obama administration has done…and the same Republicans that have been criticizing, distorting, or denying those achievements will embrace them without hesitation. Don’t be surprised if most Americans buy it…

    1. charleo1 December 24, 2014

      Republican Governors already have taken credit for actions President Obama, and a Democratically controlled Congress took by passing the stimulus bill, without a single Republican vote. Some like Rick Perry, and Bobby Jindal, publicly threatening to refuse to accept the Federal help. Even as their State budgets were a shambles. Then, quietly accepting the monies, crowed about their own balanced State budgets, at the ribbon cutting ceremonies, bragging about the job creation, “they provided,” paid for with Federal dollars, you guessed it. From the stimulus bill.

    2. 14hei December 24, 2014

      Dominick I’m afraid that the Republican appointed chair of the CBO will push the same tired, false lies of supply side economics. An try to use dynamic scoring and other accounting tricks to make the numbers appear to look good. We as citizens must be vigilant in our personal investing and in the investments our public officials make with our tax dollars.

  5. Eleanore Whitaker December 24, 2014

    C’mon you guys. I know you are far too savvy too fall for anything the GOP crooks try to manipulate.

    You want book cooking? Look at the number of GOP governors in red and blue states who play games with numbers. In my state (NJ), Christie demanded public worker give backs in the tens of billions. Then, he turns around and uses funds earmarked for dedicated programs to hand his crony capitalists a wink, wink, nod, nod flush of tax dollars. Sure…he stiffs the public workers to make enough funding justification to flush money to his favorite cronies.

    What makes anyone think men of the GOP can be trusted further than you can throw an elephant? Trust is not a word you can associate with GOP men today. The entire object of their backroom agenda is always money, how to get it to red states to keep their economies flush and how to keep their relic industries in existence. Wake up and small the coffee.

  6. Rodger Malcolm Mitchell December 24, 2014

    The entire article is based on the notions that federal deficits are too high, federal taxes pay for federal spending and the federal government could run short of dollars to pay its bills.

    All are false. FICA, for instance, does not pay one dime for Medicare or Social Security.

    Unlike the states, counties and cities, the federal government is Monetarily Sovereign. It creates dollars, ad hoc, when it pays bills. A growing deficit is necessary for a growing economy.

    If all federal taxes fell to $0 or rose to $999 trillion, neither event would affect the federal government’s ability to spend.

    One day, the public will learn about Monetary Sovereignty, and it will come as a great shock.

    1. Independent1 December 24, 2014

      Absolute HOGWASH!! Every word!!

      1. Pi_Boson December 24, 2014

        Perhaps hogwash is not accurate enough.

    2. Independent1 December 24, 2014

      You need to seriously read this article from Seeking Alpha:

      The Fed Is Not ‘Printing Money’

      Mar. 19, 2013 3:44 AM ET |

      The idea that the Fed is “printing money” with abandon, and that this is seriously debasing the U.S. dollar, is a fiction borne of ignorance of how monetary policy actually works. Fed policy may indeed pose the risk of serious debasement in the future, but to date there is little or no evidence to suggest that this has occurred.


      And do a little research on how FICA contributions ARE USED FIRST TO PAY SS benefits before they dip into the SS trust fund which has grown to 2.8 trillion because interest additions are still larger than what they’re having to use to cover the current shortfall in FICA revenues. And how Medicare premiums are not covering Medicare so a lot of its costs are coming out of general tax funds. (When Georgie Boy added the Medicare Part D benefit – he and the irresponsible GOP Congress CONVENIENTLY forgot to FUND IT, so like everything else Georgie Boy did during his disastrous 8 years in office is still adding to our debt.)

      1. SteveD December 25, 2014

        Who said anything about the fed printing money?

        The Treasury does have bank accounts, at the Fed, and at local banks like you and I do. When you or your employer write a check to them for your taxes, they deposit the check into one of those accounts, and it clears through the Fed like any other check you write. Likewise when they cut a check or make an electronic transfer to buy a jet fighter or pay someone’s Social Security.

        In order to keep their account balances positive, Treasury sells bonds to add money to them when they get low, because taxes are less than spending. They create the bonds out of thin air. The Fed buys some of them, so as to prevent the bond selling from raising interest rates. The Fed has no bank accounts. When they buy bonds they simply mark up the sellers’ account.

        It is done this way only because Congress has mandated it. Treasury doesn’t need to have accounts with balances, they could simply instruct the Fed to mark up the balance in your account when they pay you, or mark it down when you pay them, without having any accounts of their own. Government is the SOVEREIGN. They can do whatever they want. That’s what it means to be the sovereign. Instead of creating bonds out of thin air, they could create the money directly out of thin air. The charade of selling bonds and having them bought by the Fed could be done away with, if Congress wished.

        In the days of the gold standard, it was important that there was always enough gold to cover redemption requests, so accumulated deficits were limited by the amount of gold. That constraint was removed in 1971, now the only constraint is inflation.

  7. Theodora30 December 24, 2014

    Please, please read the article in the WaPo “Mr. Giuiliani and the Tax Fairy”. (Sorry but I annot get the link to paste. Thanks for the recent “fixes” Apple.)

    This article makes it crystal clear that even the top Republican economic advisers to Bush the Second did not believe that tax cuts come close to paying for themselves. Democrats should memorize their numbers and repeat them at every chance so that w can finally put a stake through Reagan’s magical tax cuts lie. Too bad this article is one of the very few examples of the media informing the public about this important issue. Maybe if they had Paul Ryan would not dare call for the CBO to use fantasy- based dynamic scoring.

  8. Independent1 December 24, 2014

    “Another example was the automatic sunsetting of the tax cuts put into place in 2001 and 2003. When they were originally set to expire in 2010, the country was still suffering the after-effects of the 2008 recession, so most of the cuts stayed in place. In political speak, not extending all the cuts was labeled “raising taxes.”

    As NM posters reflect on those Bush tax cuts that “were supposed to pay for themselves”; keep in mind that according to David Cay Johnston, those tax cuts HAVE COST EACH OF US – $48,000 in lost income over the past 12 years that they’ve been in effect. Is that how tax cuts “pay for themselves”???

    See this from a Daily Kos article back last July:

    Report: Bush Tax Cuts Gutted Americans’ Incomes 6.6 Trillion Dollars

    According to an analysis by Pulitzer-Prize winning reporter David Cay Johnston, formerly of the New York Times, the Bush tax cuts, touted as a harbinger of prosperity by the Republican Party, actually robbed each American taxpayer of $48,000 in pre-tax personal income during the twelve years of their existence, for a total of approximately 6.6 trillion dollars.

    This is more than enough to pay for every student loan, car loan, and credit card debt in the U.S, while still leaving 2.4 trillion dollars in the pockets of Americans. It is the equivalent of an extra 11 dollars a day lost to each American taxpayer over the last twelve years.

    Johnston analyzed rates of long term average personal incomes as reported by American taxpayers from 2000-2012, adjusting for inflation and population growth. His tables are contained in this article:

    In 10 of the 12 years when the Bush tax cuts were in effect, the average income shown on tax returns was lower than in 2000. In the two upside years, average income rose modestly, up $504 for 2006 and $1,744 for 2007.

    Total those 12 years and the net shortfall per taxpayer comes to $48,010.

    He notes that after twelve years of tax cut mania average real hourly wages are now 6% lessthan they were in 1972-1973.

    Less than they were forty years ago. Where did the money go?

    Of the total national increase in income in 2012 over 2009, an astonishing one-third went to just 16,000 households, and almost 95 cents of each dollar went to the top 1 percent, while the bottom 90 percent lost ground.

    The damage wrought to American incomes was bad enough, but the Bush tax cuts left an even more damaging legacy. While the prosperity of the previous decade was simply wiped out by these cuts, and with it the means and will to sustain prosperity through government investment and infrastructure improvements, the tax cut mentality inspired more of the same down at the state levels, multiplying the effects:

    Here’s the link to the article if you’d care to learn more about HOW YOU’VE BEEN ROBBED OF $48,000:


  9. Bren Frowick December 24, 2014

    This is why I don’t watch shows like “The Walking Dead”: there are ENOUGH zombie notions like what the GOP has been peddling for decades around in the REAL world. I don’t need to see them on TV, too…

  10. Matforce December 24, 2014

    The GOP has been extremely effective in the redistribution of US wealth to the top! Two myths that are broadly accepted as a right wing axiom of economic truths and rarely questioned are:

    1. Free Trade Agreements will create more jobs for USA workers.



    2. USA tax breaks for “multinational” corporations will be more than offset by the large number of hires that will be taxed directly from their paychecks. (see above articles)

    3. Paying for social welfare recipients is a major source of USA debt. Even though a quick study of “individual welfare” costs vs. “corporate welfare” costs show quite the opposite. Corporate welfare is actually estimated to be around $250 BILLION/yr. By combining Corporate “subsidies” estimated at $92 Billion/yr. with other Corporate “tax loopholes” (itemized deductions, write-offs, credits, etc.), estimated at from $150 BILLION to $180 BILLION, together, they total around $242 to $272 BILLION/yr. When you compare $242 BILLION to an estimated $59 BILLION we spend on social welfare, that’s still a staggering difference.

    When you think of that in terms of cost to the much referenced average “tax payer,” social safety net welfare costs $400/yr., while Corporate welfare costs the same avg. “tax payer” $1400/yr.

    1. Independent1 December 24, 2014

      Some great points!! Thanks for doing the research to show just how crafty and deceitful the GOP really is!! Every time I come across stats like you posted, I become more and more convinced that the GOP is nothing more than America’s version of the Italian Mafia.

    2. SteveD December 25, 2014

      In aggregate, that $400/yr. is an INVESTMENT, not a cost. Individual welfare is an immediate and beneficial economic stimulus. Dollars recirculate almost immediately, with a very high multiplier. Not so much with corporate welfare. Money makes money and all that crap, with “that money” never really entering the “real economy.”

      1. Matforce December 25, 2014

        Your point is an excellent one as these links support:

        This one is entitled: “Why American Companies Are Holding Onto $5 Trillion In ‘Cash'”


        This one is a clip by Nick Hanauer, a multi-billionaire venture capitalist:

        1. Ian December 27, 2014

          Matforce, many of SteveD’s references are discussed in the blog, http://www.mythfighter.com
          Feel free to review and submit comments. Many comments are responded to individually by the blogger.

  11. CBODY67 December 24, 2014

    It has seemed that many “Republican Values” have been detrimental to the USA Economy. Remember “Out Sourcing”? Supposed to be a way for businesses to make more profits? This, by observation, led to the loss of factory jobs in the USA, which were “sourced” to China or Mexico. Our loss, their gain, but as other currencies are losing value against the Dollar, more Dollars are returning to the USA from foreign investors. Remember when foreign investors “invested” in CitiGroup, up to about the 15% level and “analysts” considered this a “minor amount”? Much less the amount of US Debt owned by China? A double-edged sword which needs to be finely-managed. On one side, it’s their confidence in the USA economy, on the other, “we” don’t own those assets any more.
    The GWB administration and the many “Republican Values” which were touted as “beneficial” led us to what was predicted to happen (2008), The Republicans “fiddled” as the US Economy was “cratering”. IF you trusted ONLY “the numbers”, things looked good as those touting the numbers seemed to be fully insulated from economic reality (via tenured professorships in colleges/universities or at the top of large business organizations/consultants with private agendas) rather than being “on the ground”. Plus, with our more diverse economy now, it was not a universal “recession”, only in certain segments, unlike in prior times when everybody might suffer.
    Just as with the corporate world, you can’t “cut expenses to regain prosperity” (as the car companies tried to do), you have to make enough profits to invest in the future.
    Remember how the Republican orientation of “We don’t need Federal Money, states can help other states instead” ended with SuperStorm events? NJ couldn’t help NY, for example, as each had more than they could handle themselves, now needing FEMA rather than advocating its demise!
    As things are evolving, everything the Republicans claimed Obama could not make happen, have happened quite well. It might have taken a little more time than they claimed they should have, BUT the DID happen. Job creation numbers are just one area, where Obama’s tenure has produced more new jobs than either of the Bushes combined, for example.
    In general, “Republican Values” have not helped the USA nearly as much as they have been claimed to have. Tax cuts only put more burden on the local taxpayers as somebody has to make up the shortfall in state funding as tax “rates” might not change, but property valuations CAN.
    McConnell’s comment about wanting Obama to “Come to the Middle” to negotiate legislation amuse me. If McC and Republicans are “the middle”, that moves the center of the “Left/Right” continuum more to the right.
    Republicans want “local control” and “self-reliance”, which are good, BUT some things need to be standardized on the national AND state levels IF this country is to keep progressing, which includes “Common Core” and other similar initiatives.
    How much longer before Republicans “tax cut” or “downsize” or “out source” themselves out of a job?
    It’s been proven that the USA Economy does best during times of “higher taxes” as the government can spend money to keep the economy growing. Our last economic growth has happened AFTER the Bush Tax Cuts finally ended. Not to forget a shrinking deficit, either!

    1. Matforce December 25, 2014

      Here’s an article entitled: “19 Facts About The Deindustrialization Of America That Will Make You Weep”

      We had steady trade surpluses up until around 1975 (by then our garment, shoe, textile, toy, electronics steel, etc. manufacturing was being outsourced), after which we had noting but trade deficits. By 1996, two years after NAFTA was voted through and signed into law, our trade deficits reached over $104 BILLION/yr., but when China joined the WTO in 2001 with MFN status, it only took 3 years for our trade deficits to eclipse HALF A TRILLION/yr., and since then, they have not diminished!!! What nation can sustain that?


  12. SteveD December 25, 2014

    “So maybe the incoming head of the CBO analysis should use this real data from the real world (Kansas), where tax cuts seem to make an economy grow slower than no tax cuts.”

    Yikes! The CBO is federal government entity, supposedly “a neutral scorekeeper for all things budgetary.” At the federal level no less. The federal government is Monetarily Sovereign, Kansas is monetarily non-sovereign. The author of this piece has simply provided an apples to oranges comparison that does not prove anything. He seems to believe the federal government’s budget is like a household budget. It’s not!

    Kansas, being monetarily non-sovereign cannot create its own sovereign currency. The Kansas government can obtain dollars from only 4 sources: 1. by selling state owned assets 2. via taxation 3. via borrowing 4. via federal deficit spending. There are no other alternatives for Kansas to obtain money. How ’bout bank loans (borrowing)? Yes, but as a matter of accounting, loan re-payment destroys dollars. How ’bout taxation? Taxation at the state level simply re-circulates an already existing pool of dollars. True redistribution! How ’bout selling state assets? What and for how much? This is known as “privatization” or wealth extraction, that still relies on re-circulated tax dollars after the initial windfall of dollars are paid for the asset, allowing it to remain sustainable. Think “toll roads.” Run privately but still paid for with tax dollars (tolls). Or, how ’bout dollars from federal government deficit spending? See below.

    The American states (Kansas) are monetarily non-sovereign. While they cannot control their money supply, they do have a true source of dollars: The federal government.

    When the federal government spends dollars domestically, it adds those dollars to the money supply within states (and when people pay taxes to the federal government, this reduces the money supply within states).

    The long term survival of any monetarily non-sovereign government requires money coming in from outside its borders. Germany (part of the European Union, uses the Euro) survives by exporting (i.e. importing euros). The American states survive by having, as a group, a positive balance of payments with the federal government.

    The larger the federal domestic deficit, the healthier are the states. The economic formula is: Federal Deficits + Net Exports = Private Saving (Income).

    1.GDP = Federal Spending + Private Spending + Net exports (A growing economy requires a growing money supply.)
    2. All deficit spending grows the supply of dollars.
    3. The limit to federal deficit spending is an inflation that cannot be cured via interest rate control.
    4. The limit to non-federal (private) deficit spending is the ability to borrow.

    1. skeptical69 December 25, 2014

      OK, if you want to look at only federal policy, can you come up with a supply-side explanation for the seven years of GDP expansion and falling unemployment that followed the 1993 federal tax rate increases? At the time, all the Laffer/Reagan acolytes were going berserk over the unavoidable deep recession they predicted. They conveniently ignored their own miserable economic record for the prior 12 years.

      1. SteveD December 27, 2014

        No supply side explanation, what-so-ever.

        Think sectoral balances:

        (S – I) = (G – T) + (X – M)

        The sectoral balances equation says that total private savings (S) minus private investment (I) has to equal the public deficit (spending, G minus taxes, T) plus net exports (exports (X) minus imports (M)), where net exports represent the net savings of non-residents.

        Another way of saying this is that total private savings (S) is equal to private investment (I) plus the public deficit (spending, G minus taxes, T) plus net exports (exports (X) minus imports (M)), where net exports represent the net savings of non-residents.

        All these relationships (equations) hold as a matter of accounting and are not matters of opinion.

        You are speaking of the goldilocks years. The private sector ran up enormous quantities to debt to offset the federal tax increase that sucked way too much money out of the private economy. Higher federal taxes did not improve the economy, unsustainable private debt levels improved the economy. The resultant recession was finally eased in 2002, with a marked increase in federal deficit spending.

    2. Independent1 December 26, 2014

      Your argument doesn’t hold water. Your notion that taxation at the state level is only recirculation of existing money is Pure BS!! Thousands of state residents earn wages from the federal government via SS and or work for corporations who sell goods outside of the state and therefore taxation AT ALL LEVELS interjects new money from the outside. I’m certainly not going to get into a discussion with you because your entire hyperbole is pure BS!!!

      1. SteveD December 26, 2014

        “interjects (sic) new money from the outside…”

        Please refer to the equation toward the end of the comment: Federal deficits + net exports = private savings (income).

        It is also more considerate if you actually examine every aspect of an issue before injecting a know-it-all, other guy’s wrong, I rest my case, you’re an idiot because I said so attitude. Obviously, you are not easily pleased. Rather than call YOUR counter (non-existent) “argument” Pure BS, I will just move along…

        For starters, please try to think in AGGREGATE, then you’ll see why your argument is sadly non-existent…

        Say additional dollars do come into Kansas from a private (non federal govt) source outside the state. If Kansas corporations sell products to Missouri residents, guess what? Missouri residents have fewer dollars and Kansas residents have more dollars. This is called beggar thy neighbor or more correctly, mercantilism. Refer to my mention of Germany-they export more than they import and therefore get more euros from mostly nearby countries and therefore those neighboring countries have FEWER Euros. Great for Germany, not so great for Italy, Greece, France, etc. (The European Union countries are monetarily NON-sovereign just like the US States.)

        Those incoming dollars to Kansas (from Missouri) reduce the number of dollars from the outside source, be it any other state or nation.

        For Social Security, the typical belief is that federal taxes pay for federal spending so therefore it should be assumed SS “dollars” are just another source of recirculated dollars, albeit from both inside and OUTSIDE the state of Kansas.

        Federal deficit spending is the only source of net dollar denominated financial wealth. So for Kansas and Missouri to survive and grow economically, federal deficit spending is REQUIRED.That was the whole point of the comment. The author is clueless about sovereign currency issuance. The federal government (currency ISSUER) is the same as Kansas (currency USER) does not fly.

  13. 1standlastword December 25, 2014

    Don’t look for our salvation with 2016 elections: 2015 will be THE make or break year for average Americans in the working and middle classes.


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