Measuring the country’s debt. Why Gross Debt is the WRONG measure.

Republicans have been busy for some time scaring Americans to death about the amount of debt citing studies such as the one by University of Maryland professor Carmen M. Reinhart and and Harvard professor Kenneth Rogoff that Gross Debt over 90% of GDP, close to where we are now, is disasterous for the country.  Turns out Gross Debt maybe the wrong measure and the country may be in much better shape debt-wise than Repubs would like you to believe.  This from a study by the Center on Budget and Policy Priorities:

[C]laims that gross debt (as the term is used in the United States) is an economically meaningful measure of national debt and that the United States is approaching an economic danger zone are extremely dubious for several key reasons:

• Most economists agree that debt held by the public — rather than gross debt — is the proper measure on which to focus because that’s what really affects the economy.
• Reinhart and Rogoff used a measure of debt that, for most of the countries they researched, is consistent with the standard measure of national debt that the International Monetary Fund and the Organisation for Economic Cooperation and Development use. Although those institutions call that measure “gross debt,” it is very different from what is called gross debt in the United States because it excludes most intragovernmental debt. The Reinhart-Rogoff data for the United States and Canada, however, differ significantly from the IMF and OECD measures because these Reinhart-Rogoff data reflect gross debt as that term is commonly used here — and thus include large amounts of intragovernmental debt, such as the money that the Social Security Trust Funds have lent to the Treasury.

That leads to two conclusions:

• First, since the gross debt measure that Reinhart and Rogoff use for countries other than the United States and Canada does not include significant amounts of intragovernmental debt, the Reinhart-Rogoff data do not allow them to reach valid conclusions about the effects of intragovernmental debt on economic growth.
• Second — and of particular note — the authors’gross debt measure for countries other than the United States and Canada isroughly equivalent to what, in the United States, is called debt held by the public. In both cases, the measures essentially exclude intragovernmental debt. And by this measure, the U.S. debt-to-GDP ratio equaled 53 percent at the end of fiscal 2009 and, under current policies, will not reach 90 percent until around 2020.

So, relax a litte.  Sure, we need to get debt under control long term but don’t believe the “sky is falling” predictions from the Repubs.  It just ain’t so.

You can read the fully analysis here: http://www.offthechartsblog.org/

It’s all about turnout

The outcome of the mid-term elections and Democratic control over the House and Senate may hinge on one thing—turnout.  Forget the economy, forget jobs, forget immigration, forget Afghanistan; it’s going to all come down to turnout.  The party that’s gets the largest percentage of its supporters to the polls will win.  Right now, that party appears to be the Republican Party.  Pew Research reports a significant enthusiasm gap between Democrats and Republicans.  56% of Republican voters say they are enthusiastic about voting this year, only 42% of Democratic voters say they are.   Worse, younger voters who helped Obama be elected are much less inclined to vote this year.  Only half say they are certain to vote.  Compare that to people over 50 who heavily vote Republican.  80% of over-50 voters say they are certain to vote.  Bottom-line.  Our success in the upcoming elections will depend upon our ability to get Democrats to the polls. 

For more on this go to http://pewresearch.org/

The Tea Party racist “Letter to Lincoln”

So, there aren’t any racists in the Tea Party, right?  Well, here is a “Letter to Lincoln” Mark Williams, Tea Party Express spokesman, posted on his website recently.  Williams later took the post down but we found a copy courtesy of the Hillbillyreport.  The Tea Party Express has been a major player in the Tea Party movement and Republican politics.  As CNN notes (see What is the Tea Party Express? at http://politicalticker.blogs.cnn.com/2010/07/19/whats-the-tea-party-express/?fbid=IcKxjiC9144 ) the Tea Party Express spent hundreds of thousands of dollars on ads for Republican Senate candidate Scott Brown in Massachusetts who upset Democrat Martha Coakley to fill the late Sen. Ted Kennedy's seat.  More recently, they helped little-known Sharron Angle win the Republican primary in Nevada to face Senate Majority Leader Harry Reid, endorsing her and spending about a half-million dollars on ads for her.

You can see a screen shot of the original Williams post by going here:

http://www.hillbillyreport.org/diary/1754/mark-williamstea-party-letter-to-abraham-lincolnyou-aint-gonna-believe-this

Williams “Letter to Lincoln” follows:

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Dear Mr. Lincoln

We Coloreds have taken a vote and decided that we don’t cotton to that whole emancipation thing. Freedom means having to work for real, think for ourselves, and take consequences along with the rewards. That is just far too much to ask of us Colored People and we demand that it stop!

In fact we held a big meeting and took a vote in Kansas City this week. We voted to condemn a political revival of that old abolitionist spirit called the ‘tea party movement’.

The tea party position to “end the bailouts” for example is just silly. Bailouts are just big money welfare and isn’t that what we want all Coloreds to strive for? What kind of racist would want to end big money welfare? What they need to do is start handing the bail outs directly to us coloreds! Of course, the National Association for the Advancement of Colored People is the only responsible party that should be granted the right to disperse the funds.

And the ridiculous idea of “reduce[ing] the size and intrusiveness of government.” What kind of massa would ever not want to control my life? As Coloreds we must have somebody care for us otherwise we would be on our own, have to think for ourselves and make decisions!

The racist tea parties also demand that the government “stop the out of control spending.” Again, they directly target coloreds. That means we Coloreds would have to compete for jobs like everybody else and that is just not right.

Perhaps the most racist point of all in the tea parties is their demand that government “stop raising our taxes.” That is outrageous! How will we coloreds ever get a wide screen TV in every room if non-coloreds get to keep what they earn? Totally racist! The tea party expects coloreds to be productive members of society?

Mr. Lincoln, you were the greatest racist ever. We had a great gig. Three squares, room and board, all our decisions made by the massa in the house. Please repeal the 13th and 14th Amendments and let us get back to where we belong.

Sincerely
Precious Ben Jealous, Tom’s Nephew NAACP Head Colored Person

Sounds pretty racist to me.  What do you think? 

How can we reduce the national debit? The impact of various proposals.

The Center for Economic and Policy Research (CEPR) has posted a Debit Calculator that allows you to see what effect various debt reduction proposals would have on reducing the debt burden the U.S. faces.  Want to know what effect allowing the Bush tax cuts to expire, freezing discretionary spending, raising the cap on Social Security, or other proposals would have on the national debt?  You can find out by using CEPR’s Debit Calculator.  For example the Debt to GDP ratio is now expected to be 85% by 2020.  If we allow the Bush tax cuts to expire, that ratio could be cut to 78%.  Allow the tax cuts to expire AND increase the cap on Social Security and the ratio drops to 74%.

Visit http://www.cepr.net/calculators/calc_deficit.html to try the calculator out yourself.

Who is really responsible for the deficit and the lack of income growth for the middle class? Republicans, that’s who.

Worried about the deficit?  Worried that your income hasn’t seemed to have grown very much over the past couple of decades?  Two interesting charts from the Congressional Budget Office point to the cause of the deficit AND your lack of income growth.  They both point to George W. Bush and the Republican Party. 

The first chart below and here http://www.cbpp.org/cms/index.cfm?fa=view&id=3036

looks at the true cause of the deficit.  If you look to 2012 and beyond, the future deficit Tea Party folks and Republicans are so concerned about, was caused by—their boy Bush and the No/Nothing Repub tax cuts for the rich.  Yep, without those tax cuts the government would be in pretty damn good shape deficit-wise.  Take a look:

Here’s another chart showing what the Bush/No Nothing Repubs did to you.  Does it feel like your income hasn’t grown very much over the last couple of decades?  Well, you’re right.  The Bush/No Nothing Repub tax policies insured that income growth went to the top 1% richest people, not to you. Take a look at this CBO chart below or go here http://www.cbpp.org/cms/index.cfm?fa=view&id=3220.  The income of the top 1% went up 281% from 1979 to 2007.  Middle Americans like you got an increase of just 25%.  Aren’t you happy for how the Repubs helped the rich out?

What to do?  What to do?  Well, you could keep voting for the Repubs.  Or, you could say, another is another and kick them out of office.  I suggest the latter.  What do you think?

How the Repubs would govern

Think the Tea Party/Know Nothing Repubs are on your side?  Think again.  Here's a video from the DNC laying it on the line.  If you're not rich, and I mean really, really rich, the Repubs have nothing to offer you but misery.  See on YouTube:  http://www.youtube.com/watch?v=fLGtNI5BJn8&feature=player_embedded