Taxes are way too low in this country. They need to be raised, but only on the high income groups, and raised somewhere around where they were during our great post-World War 1 economic boom.
Bob, while I agree with you, and respect Felix Rohatyn greatly, his being “one of the biggest supporters of the creation of an infrastructure bank” does not answer the question of whether the government (we) can afford it.
I’ve recommended readers subscribe to John Mauldin’s weekly E-Letter before. http://www.frontlinethoughts.com… While I disagree with Mauldin’s politics (Republican) and almost of his socioeconomic policies and prescriptions (e.g., blasting Obama on national healthcare), to get economic facts he offers a concentrated and readable dose for free. This past Friday’s letter begins: “As of this week, total US debt is $11.3 trillion and rising rapidly. The Obama Administration projects that to rise another $1.85 trillion in 2009 (13% of GDP) and yet another $1.4 trillion in 2010. The Congressional Budget Office projects almost $10 trillion in additional debt from 2010 through 2019. Just last January the 2009 deficit was estimated at ‘only’ $1.2 trillion.” Mauldin goes on to explain why this is an optimistic set of estimates, followed by data on Europe and “The Global Recession Gets Worse” that reminds of Mr. Brooks’ image today of the “disembowelment scene in ‘Braveheart.'”
Mauldin asks where is the money going to come from?
“The world is going to have to fund multiple trillions in debt over the next several years. Pick a number. I think $5 trillion sounds about right. $3 trillion is in the cards for the US alone, if current projections are right.” He then talks about why bond rates are rising in what appears to be a deflationary period and concludes this thought with “I think the bond market is looking a few years down the road and saying that $1-trillion deficits are simply not capable of being financed. And if the debt is monetized, then inflation is going to become a very serious issue.”
As much as I dislike Republicans, sometimes we have to know what the analytical and thoughtful among them are saying. Mauldin is not a Bush, or Cheney, or Limbaugh. The irony is that while his facts appear to be sound, and pale yours today, he never seems to even realize that he’s making an argument for national healthcare, a wealth tax, slashing military spending, and in various ways coming up with enough funds for such as an infrastructure bank.
Way down deep — perhaps not all that deep — guys like Mauldin and the superrich (he’s more their advisor than one of them, as best I can tell) are worried that when the music stops they will no longer have a chair. And they’re correct, I think. We simply cannot have a nation in Great Recession I and almost in depression — sure to come if we don’t act — that does not take some drastic steps. Since there is no surplus at the bottom, and consumer-spending our way out of the crisis cannot be done, there remains only the top to pay for getting us out. Given that they got us into this mess, why not require them to bail us out? Yes, I know, the American consumer went a little crazy. Perhaps really nutty crazy. But who aided and abetted them? And who gained from consumer madness? We all know who, including our politicians in bed with these irresponsible and greedy Masters of the Universe. Bring ’em down, before we all go down.
— Butler Crittenden, San Francisco, CA
My man, Butler Crittenden is at it again. See my earlier post, Response to Krugman.
The “Bob” who Butler is replying to is Bob Herbert who has a great Op-Ed, Our Crumbling Foundation, in the NYT today.
Butler agrees with Bob that it would be great to have a national infrastructure development bank to turn this economy around, but asks how are we going to pay for it? So why not increase taxes on the super rich who got us into this mess, and who are way under taxed compared with those in most industrialized countries?
And I agree with him! In fact I think it’s time for a mass revolt in this country!
Here’s another sobering response to Bob’s article:
How many times have we heard these concerns voiced before? Add them to the lengthy list of things we know we need to do in the U.S. that go unaddressed while we save the skins of corporate bankers with trillions in taxes on current and future generations. It is interesting how what now look like insiginificant tens of billions were unthinkable sums to spend on education, health, transportation and infrastructure, while all it took was one weekend’s thought to cough up hundreds of billions, trillions, when it came time to save the banks.
One of the lessons the right wing took from the rebellions of the 1960s is that a populace that is well paid, educated and free is a danger to their wealth and position. They will bring the whole house down on our collective heads rather than risk masses of Americans who are free from fear and ready to ask that the resources that they produce be put to good use rather than merely fill the coffers of the wealthy.
— Vincent Amato, New York City
Right on, Vincent!
But in reality what will we do? Sit back and do nothing.
Boy am I pissed. Is anybody else?
Let’s rise up, masses, and fire calls and letters at our senators and reps, form community groups of like minded people, send barrages of letters to our newspapers (newspapers?), hit the incredibly stupid right wing talk shows. Blast Limbaugh, Cheney, and all the other idiots on the right. Blast the mainstream media as well. As we know, they just go along with their corporate sponsors!
Boy, am I pissed. Is anybody else?
OK, I’ll let CJGC have the last word:
The question is whether good sense and an acknowledgment of our obligation to address our social and physical structural problems to prevent even more dire problems in the future is going to prevail over the small-minded bean counters who can’t see beyond the ends of their noses and those politicians who want nothing more than for Obama to fail.
It’s touch and go. A perfect example is serious reform of health care financing by offering a single payer option. It’s the only way to cover everyone and bring costs under control. So far only the health care industry and the health insurance industry have been invited to participate and Senator Baucus assures us that single payer will never pass.
“Yes we can and change we can believe in” have morphed into “No we can’t. The comfortable hold the reins of power so the rest of you just sit down and shut up.” Of course the comfortable are also going to fall into the holes they think they are just digging under our feet.
Are there special bridges for the defenders of the status quo so they won’t fall in the river too?
Yes, it should be a no-brainer. Sadly, many sitting in comfortable chairs don’t themselves have enough brains to notice. Too smug.
— CJGC, Cambridge, MA
Tags: bob herbert, bond market, bush, Butler Crittenden, congressional budget office, felix rohatyn, global recession, inflation, john mauldin, mainstream media, national healthcare, nytimes, Obama, single payer, trillion deficits, world war 1