Obama's blueprint for austerity

[Hannah Bell]

The National Commission on Fiscal Responsibility held its inaugural hearing on Tuesday, launching the process through which the Obama administration plans to introduce drastic attacks on social spending and living standards to make the working class pay for the crisis of American capitalism.

The commission, consisting of 10 Democrats and 8 Republicans, is charged with discussing ways of slashing trillions of dollars from future federal budget deficits and making recommendations to the White House and Congress six months from now. The December 1 report-back deadline, four weeks after the next congressional election, was chosen to ensure that the American people have no say in the process. (In Washington-speak, this is called “insulating the commission from politics.”)

In his statement formally opening the commission, President Obama declared, “Everything has to be on the table.” This is a lie, since the commission will be barred from considering cuts in military spending, rescinding the bank bailouts, or forgoing massive interest payments on the federal debt — one of the principal means of enrichment of the financial elite.

“Everything on the table” is another Washington code phrase, meaning that cuts in Social Security, Medicare and Medicaid, the major entitlement programs, will be among the measures to be considered and proposed. Obama is also abandoning his election campaign pledge not to raise taxes on people making less than $250,000 a year, giving the commission a green light to propose a Value Added Tax, an across-the-board federal tax on consumption that would in large measure replace the income tax and end the last remnants of progressive taxation...

http://www.wsws.org/articles/2010/apr2010/pers-a29.shtml

[Subdivisions]

1. Anyone who has been paying attention will not be surprised by this and

will know that austerity measures are imminent. They also know it won't be enough.

[Ken Burch]

2. Why would he ever put Pete Peterson on this commission?

Peterson, the man who wants to privatize Social Security, is the ENEMY of everything Democrats stood for. We can't privatize Social Security and still BE Democrats. Peterson is not offering anything we as a country need.

[William Z. Foster]

7. why indeed

Why have so many positions in the administration been filled by people antagonistic to the goals that people thought they were voting for in the last election?

[msongs]

3. the Bush agenda marches on and on and on nt

[FarLeftFist]

4. I would say cutting defense budget but....

The republiCons will paint it as leaving our troops ill-equipped, they are foaming from the mouth waiting to see the 2011 budget. Things will need to be cut, thats the reality of it.

[William Z. Foster]

6. the problem with that

If we tailor what we do according to some anticipated Republican reaction, we wind up being no different from them.

News flash - the Republicans will oppose everything the Democrats do no matter what it is. Trying to appease them, or cower in anticipation of their reaction, is a fool's game and dead certain to be a losing approach.

Let them foam at the mouth. The electorate thoroughly and resoundingly rejected the Religious Right and Reaganomics in the past two elections, or else the Democratic party politicians would not be in power in the first place. Playing it cautious and cringing and cowering in fear of Republican backlash betrays the electorate, not to mention perpetuates and promotes right wing policies at a time that they could be fatal not just to the Democratic party but to the country.

If the Republicans regain power it will not be because the Democrats failed to move sufficiently to the right, although I predict that the centrists will claim exactly that when the losses start.

Things do not need to be cut, and that is not "the reality of it." That is the right wing program, pure and simple. Why would Democrats embrace and defend that?

The right wing program - crush the public infrastructure, and expand the police state apparatus. Everything else is window dressing to distract and confuse people. Yet we have Democrats, many right here on thread after thread, and we have Democratic party politicians supporting and promoting those two main pillars of the right wing agenda. Why?

[FarLeftFist]

9. Trust me, things will need to be cut.

But it's do to the republicons failure to manage money and pay for shit. So now were fucked and were all going to have to pay the price for their failures at governing. And some people still want to hand them the keys to the car. Insane.

[William Z. Foster]

16. not unless we buy into the extreme right wing idea about this

You say on the one had that things will need to be cut, and then turn around and say it has only been a year and we should be patient. Which is it? "Things need to be cut" is the right wing program, so that then has nothing to so with impatience about the sped of progress but rather a matter of the progress being in the wrong direction. If we are going in the direction of "things need to be cut" then I have all of the patience in the world - I hope progress on that is very slow, and that we don't get there.

"Things need to be cut" always means less for the working people, while it is the working people producing the wealth in the first place. Why would we support or promote that as Democrats? That makes no sense.

Why do "we all have to pay the price?" We are all already paying the price, and that is a horrible injustice. Why don't the people who took the wealth the people produced need to "pay the price?" Why are you arguing the extreme right wing position on this?

What needs to be cut is the flood of wealth into the hands of the few, leaving the other 99% - the workers and producers - in w0prse and worse condition. That is the New Deal position, the organized Labor position, the liberal/progressive position, the Democratic party position. Is that position now controversial or unwelcome among Democrats, or do you think it should be?

Do you really think that supporting the Democrats in taking the side of the haves over the have nots helps the party? Saying "things need to be cut" is what every local Republican running for office here is saying. If that is not support for the haves over the have nots, I can't imagine what would be.

Embracing and promoting the extreme right wing framing of these social issues as Democrats will either destroy the party, or else turn it into the more conservative party of the two major parties. Both of those have happened in the past. Do you wish to see the party collapse, or become a conservative party? If not, why are you promoting this right wing "things need to be cut" idea?

[IndianaJoe]

5. If he does that -- imposing a VAT

He's absolutely going the wrong way. We'll see. I want to like the guy, but he keeps pulling things like offshore drilling; stalling on "Don't Ask, Don't Tell"; slow-stepping the closing of Gitmo; putting immigration reform on a back-burner; dropping single-payer; wasting time trying to get "bipartisanship" from Republican's who aren't inclined to be; etc. etc.

For all his vaunted "pragmatism" he sometimes strikes me as politically very naive.

[FarLeftFist]

10. Dude, its only been a year.

[JDPriestly]

11. VAT is a good thing. It's the reason that Europeans have a better

safety net and a healthier manufacturing sector than we do. I lived in Europe for some years. The VAT equalizes the tax burden on imports and exports. The portion of our tax burden that falls on our wages and on our employers is too great. Add to that the fact that most of our health care costs are paid by employers and that goods produced in other wages are not taxed to support health care, you can see why other countries actually have higher social standards of living -- by that I mean a higher standard of living in terms of hours worked, health care costs and availability, the cost of education, etc. than we do. We may have higher consumption of consumer goods (not even sure about that) and as a nation we may spend more on the luxury end of housing, but we do not enjoy nearly the standard of living when it comes to social benefits like good pensions, health care, education, etc. The VAT tax could make funding a better life possible for all Americans.

And don't tell me that it is regressive. Imagine how much tax the government could get just from VAT on the sale of I-Phones to the prosperous. That money could be used to pay for health care for everyone. Exempt food and, of course, services, from the VAT and the tax is progressive. The more money you earn, in general, the more you spend on non-food items and of course, the more you would pay in VAT. The VAT is not nearly as regressive as Social Security tax.

[JCMach1]

12. We have better alternatives to a regressive VAT

-Slashing the military (it needs to be done).
-Raising the top tax on SSec.
-Means testing Soc. Security.

[mopinko]

21. you cannot means test ss

you might just as well fold it up and throw it away. it is the heart of the program that people are saving for retirement and get it back when they retire. if you try telling people that have paid the max for 40 years that they aren't going to be getting that money back, well, lets just say it would be pretty ugly.
but worse than that is telling someone who proudly pulled their own weight at a shitty job that they get this money not because they earned it, but because they didn't save enough or make enough.

it is just 100%, completely and utterly wrong. teddy kennedy used to slash and burn people who suggested this. i'm with teddy.

[Hannah Bell]

14. it *is* regressive. if you want to tax imports, tariffs work fine.

the purpose of a vat is to shift costs to consumers & make small businesses more uncompetitive.

social security is regressive in its collection, progressive in its payout, & dedicated in its purpose.

there is no indication whatsoever that a US VAT would bring european-style social welfare with it. in fact, that's being scaled back both here & in europe.

the more money you earn, the less money, proportionally, you spend on consumption & the more you spend on "investment" of various kinds. vat taxes every cent the middle & the poor control while leaving vast swathes of capital at the top untouched.

1.6

"In general, financial services are exempt from VAT."

2.7 Foreign exchange transactions
Foreign exchange transactions are normally exempt supplies.

2.8 Clearing and settlement services
A service supplied by a clearing-house for settling indebtedness between members is an exempt supply.

.1 Securities for moneY
The issue of a security for money is exempt.

.1 Loans, granting of credit and advances
If in the course of your business for a consideration you supply credit, advance money in the form of loans, provide overdrafts or other advances
your supply is exempt. The charge you make for a loan, advance or credit facility is usually described as interest. The value of the exempt supply in the grant of credit or loan is the gross interest or other sum received, but not the repayment of capital loaned. Interest received on money deposited is consideration for an exempt supply.

The provision of instalment credit in these situations is exempt...

ETC.


http://webcache.googleusercontent.com/search?q=cache:X6FVQu-aQ1IJ:customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal%3F_nfpb%3Dtrue%26_pageLabel%3DpageLibrary_ShowContent%26id%3DHMCE_CL_000111%26propertyType%3Ddocument+vat+exemptions+bonds&cd=4&hl=en&ct=clnk&gl=us


FINANCE, INCLUDING INTERNATIONAL FINANCE, IS A PRIVILEGED SECTOR UNDER VAT REGIMES. VAT HITS PRODUCTION & CONSUMPTION, BUT NOT FINANCE, & ALLOWS THE FINANCE SECTOR TO CONTINUE MOVING CAPITAL AROUND THE WORLD AS IT PLEASES.



The Tax Policy Center estimates the VAT breakdown as follows:

“A VAT would raise taxes roughly equally across-the-board — with one exception. The tax is a boon to high-income taxpayers, who make much of their money from VAT-free savings and investments. On average, the 5 percent VAT would reduce after-tax income by about 2.7 percent. The lowest earners would face an income loss of 2.8 percent while middle- and upper-middle class taxpayers would lose about 2.9 percent. But the highest earning 1 percent would see their after-tax incomes fall by only 2.1 percent.”

Lack of transparency.

With a pure sales tax, the tax owed is printed right there on the receipt. But under a VAT, consumers would likely find it difficult to know how much they are being taxed, since value is added to the consumer transaction at several checkpoints. Since every level of production feels the pinch, it’s hard for consumers to know what exactly it is they are being taxed. In Europe, this lack of transparency has proven problematic, as various governments have rigged the system by hiding new taxes in the VAT for popular social programs, relying on the VAT’s complicated structure to hide the dirty deed.

http://www.bankingmyway.com/save/what-value-added-tax-means.

various "investment" transactions are exempt; but only the rich "invest" much: most people spend most of their income. this also benefits the financial industry specially, helping to increase the domination of finance over the global economy.

http://www.thefreelibrary.com/UK+VAT+exemption+for+fund+management+services-a0189427348

http://www.reedsmith.com/_db/_documents/pensions_alert_18_july_2007.pdf

http://www.allbusiness.com/government/government-bodies-offices-law-courts-tribunals/7469783-1.html

"investment" grade gold is exempted:

http://www.taxfreegold.co.uk/


There are also exemptions for non-profits, the biggest benefit of which goes to foundations run by & for the super-rich, such as the Gates Foundation, which is actually bill gates, inc's untaxed investment & policy making arm.

[JDPriestly]

8. Cut social programs and you will merely multiply the social problems.

Cut Social Security, for example, and you will have to increase welfare to cover the cost of the many indigent elderly people in nursing homes. The homes take the Social Security checks of their patients. In fact those checks don't begin to cover the cost of the care that is required for very elderly, very sick patients.

Cutting Medicaid will also result in horrific human tragedy.

The only thing that can be cut in any meaningful way is the military budget. If you cut the education budget at the federal level, then the burden of funding education will simply fall on the states. The only thing that is truly discretionary is the military budget.

[BzaDem]

13. "forgoing massive interest payments on the federal debt" -- are you kidding me?

Do you think we voluntarily pay a higher interest rate than we need to?

Interest rates on federal debt are determined by what rates buyers of T-bills are willing to get to part with their money. Are you saying we should take existing contracts and just arbitrarily reduce the interest rate paid to T-bill holders (i.e. defaulting on our debt obligations)? If this is your position, can you name one single person (other than yourself) who would ever buy another T-bill after the default?

[Odin2005]

15. The Shock Doctrine.

[blindpig]

17. Well, fuck that shit.

This is the 'lesser of two evils'?

This is actually much worse than anything the Bush Administration could ever get away with.

Why don't the parties just merge and be done with it? Oh, I forgot, those dogs and ponies need work, gotta amuse the marks.

[4 t 4]

18. Why doesn't President Obama raise taxes on the

top 1-2 % like right NOW. Can't he do that with an executive order? He should have already done it.

[Starbucks Anarchist]

20. The Bush tax cuts will expire next year.

[4 t 4]

22. we need it yesterday, not next year just sayin n/t

[amborin]

19. K&R