Me: Oh, I get it, you’ve suddenly discovered the problem with a large national debt.



Me: I know you are half-kidding here, but I had a minute this morning to check the numbers:

The debt at the start of each fiscal year is available (http://www.treasurydirect.gov/govt/reports... and http://www.treasurydirect.gov/govt/reports... ), and while it isn’t perfect, you can use the amounts at the end of the years after presidents leave office (the last fiscal budgets that are signed under them) as a rough estimate of how much they have added to the debt during their administration.

Our current total debt is about $10.9 trillion dollars (http://www.treasurydirect.gov/NP/BPDLogin?... ), so where did that come from?

At the end of the last fiscal year that Carter signed (9/30/1981), our debt was just under 1 trillion dollars, 997 billion.

At the end of Reagan fiscal years (9/30/1989), our debt was $2.86 trillion, so Reagan built up about 1.86 trillion in debt

At the end of Bush I’s fiscal years (9/30/1993), our debt was $4.42 trillion, so Bush I built up about 1.56 trillion in debt (in half the time of Reagan!)

At the end of Clinton fiscal years (9/30/2001), our debt was $5.8 trillion, so Clinton built up about 1.4 trillion in debt (less than Bush I, over twice the amount of time!)

At the end of Bush II’s fiscal years (9/30/2009), our will be at least $10.9 trillion, so we can attribute at least $5.1 trillion in debt to Bush II. (We can estimate the actual deficit for fy2009 to be about $900 billion ($485 billion is the official number, but that doesn’t include the two wars we are fighting), and since we are only about halfway through fiscal year, we can expect that number to go up about $450 billion – making Bush II’s share of the total more like $5.5 trillion.

Let’s add Carter to really make this comparison: He added $300 billion to the debt. (9/77 to 9/81)

So, who bankrupts the country the fastest?

President How much Per year

Carter $300 billion $75 billion
Reagan $1.86 trillion $232 billion
Bush I $1.56 trillion $390 billion
Clinton $1.4 trillion $175 billion
Bush II $5.1 trillion $637 billion (so far)

So, if you really want to bankrupt the country quickly, elect a Bush. Remember, their good buddy Grover Norquist has stated that is exactly their strategy – to bankrupt the government and make it so small and weak that it can be “drowned in a bathtub”.

What do we learn from these numbers? That Dumbya nearly doubled our already enormous federal debt. He dug a hole that was almost twice as big as the preceding 42 presidents COMBINED. Wow.

We also see that roughly 80% of the staggering current debt was accumulated under just three presidents: Reagan, Bush I, and Bush II.

Now, about Obama. His stimulus package came in at under $800 billion (http://www.foxbusiness.com/story/markets/i... /). And his proposal for fiscal year 2010 calls for a deficit of about $1.75 trillion (http://www.foxnews.com/politics/2009/02/26... /). So, by 9/30/2010, when he will have been in office almost 2 years, he will have added roughly $2.55 trillion to the debt (that is $1.27 trillion per year, roughly twice the rate of Dim Son’s spending). What do we learn from this?

That Obama hasn’t added to the debt nearly as much as Bush did, by a long shot, since the money from the stimulus is just beginning to be spent, and the rest won’t begin being spent until October of this year. Still, he is talking about spending quickly. Why might that be? BECAUSE W. RUINED THE GLOBAL ECONOMY. What did W. “buy” with that $5.1 trillion (and counting)? Let’s see: Two unnecessary and unwinnable wars, the destruction of our privacy and food safety systems, and a bubble which has now popped and is sending the world into worldwide economic collapse. Obama HAS to spend money to try to fix the massive, expensive problems that Bush left for him.

Republican defenders of Bush the lesser better hope to hell that Obama succeeds at what he is trying, because only if he manages to pull us out of this will Chimpy/Cheney ever hope to be considered anything other than the worst administration ever. If Obama can’t, Bush’s name will be shit for the rest of history.

As far as being “leveraged”, since your guy DOUBLED the debt and left the world in a complete clusterfuck, I suggest you STFU for a while about Obama’s spending for a while (say 2-3 years) and just see what happens.

Have a nice day, and welcome to the world of fiscal responsibility.

Note: This analysis is imperfect – these are real dollars, not inflation adjusted dollars, as I couldn’t find any by year debt records in adjusted dollars past 2004 or so. That adjustment would make Clinton and Bush II look more frugal, and Reagan, Carter, and Bush I like much bigger spenders.

A few weeks ago I was writing to defend the New Deal, to show that it did bring the US out of the Depression, and that in any case, spending for WWII (which is often cited as the actual end of the Depression) was also Keynesian. Keynesian stimulus (getting money into the hands of the lower classes, often while hiring them to do useful things by the government, the employer of last resort), is thus doubly proven to be effective. I was pleased to see this week that there was some support for that thesis on the airwaves (where the New Deal is almost never defended). The first was by Rachel Maddow, the smartest television host on today. At about the 3 minute mark in this video, Rachel shows that the New Deal really did work to arrest and turn around the Depression. She doesn’t make the connection that spending on WWII was Keynesian, though. That connection is made here by Jonathan Alter, who also shows the rare ability to just come right out and state that a Republican is talking nonsense. It’s good to see this narrative finally making an appearance. Is it too much to hope that Democrats will now start to tell it?

Part I

Part II

We’ve seen that unregulated capitalism enriches the already rich and leads inevitably towards feudalism, with the wealth concentrated at the top of the economic ladder, followed by economic collapse. The corporatists in this country have been following a strategy to achieve this for the last 30 years, using flag-waving, gay-bashing, and abortion as cover, all the while delaying the inevitable collapse by pumping money into a series of economic bubbles to create the illusion of prosperity while moving as much money out of the lower classes’ pockets as they can before the fall.

In fact, the powerful forces of corporations and the rich in this country have turned our federal government into an agency which, instead of moving money back down the ladder, actually moves money into the hands of the already wealthy, at ever greater speeds, in ever greater amounts. This policy means economic disaster for the country, and for many years the traditional Republicans in the party were frightened to go down that path. Witness: Reagan’s “biggest tax cut” in the early 1980s, which was the corporatist’s first big venture into being economically irresponsible in modern times. They were, instead of continuing to fund the redistribution of money, going to keep their money and let it “trickle down” against the natural flow of money upwards. The predictable economic downtown followed immediately, and the Reagan administration, spooked, ordered the largest tax increase up until that time to right matters. But the GOP has learned to embrace irresponsibility, cutting more and more taxes, generating huge federal debt, strangling the federal government’s ability to move money to the lower classes.

We are now on the brink of a terrible economic crash, with essentially only two options: one path includes government taking back on the mantle of redistribution, taking money from the wealthy and putting it back into the lower classes. The other, which at first seems unthinkable, is to go in exactly the opposite direction. Let’s take a closer look at those two options.

In the Stock Market Crash of 1929 and the start of the Great Depression, Hoover’s response was essentially to do nothing. The idea of the government employing people, of giving money to people in need, was anathema to the business class, of which he was part. The country’s response was to elect Franklin Roosevelt, who halted and then reversed the effects of the depression by getting money into the hands of people who needed it – widows and orphans, the maimed, the blind, the elderly. He created Social Security. He employed thousands of the unemployed to repair and build the country’s infrastructure, bringing electricity to rural areas, roads, bridges, trails, buildings. He made the humane move, using government to get people through hard economic times and in essence saving capitalism from its own inevitable end, in feudalism and most likely, revolution.

FDR’s solution was to create MORE social spending, more safety net, more help for people.

Amazingly, though, in many countries around the world, the exact opposite approach has been used; when other economies have gotten in trouble, the response has been to REMOVE the social safety net, to get rid of the minimum wage, to destroy organized labor, to sell off public resources to private interests, to lift regulations and to move towards much more unfettered and brutal pure capitalism.

In those countries, their right-wing regimes have had to use violence and even torture to keep their populaces in line, for of course instead of relieving their pain, they have increased it. These measures have taken various names, including “economic shock therapy” and “strong medicine”. And they have worked out just peachily for the already rich, the multinational corporations, and the politicians willing to front for those interests. Those histories are summarized in Naomi Klein’s book The Shock Doctrine.

So, this country faces a certain binary choice: in the face of economic collapse, and that is surely what we are facing, will we INCREASE social spending, regulation, and the safety net, or will we DECREASE it?

INCREASING the government’s response to the crisis is surely the path of sanity. That way would keep this country from becoming a third-world shithole, and it seems to be Obama’s stated objective. Most of America would probably back this path (if our citizenry were educated better and not propagandized), and most experts with a slice of sanity or humanity back it.

DECREASING the government’s response is now being proposed, though, by the GOP. They are on the floor of Congress, spinning tales about how the New Deal didn’t work. They are trying to make the federal government, which has already been turned into an instrument for funneling more and more money to the already rich (witness: Bush’s tax cuts, the incredible boondoggle in Iraq with its “missing” trillions, the blatant and outright theft by the rich that is TARP - - is anyone objecting to those?), even more so with MORE tax cuts. They are already saying that gee, since everything is so bad, we are going to have to cut Social Security and Medicare because people need to “sacrifice”.

Other bad signs for this country going down the sane path are:

1) There has been a constant propagandizing against New Deal type spending ever since the New Deal, to the point where many Americans have a dog-whistle negative response to anything called “socialism”.

2) There is no sign that the anti-corporatist sentiment in this country has any real power at all. Sure, we can elect a nominally populist President to preside over a bankrupt nation about to go up in flames, but there is zero sign that that President or any of the members of Congress, can stop the looting of the treasury or strengthen our safety net. They are incapable of even prosecuting corporatist war crimes.

3) It is clear that the entire GOP and about half of the Democratic party are on board the corporatist money train, and those that aren’t have been spied on by our NSA for at least the last eight years and are either vulnerable to or already under extortion and control.

4) The corporatists have been quietly preparing for the inevitable popular uprising which will follow the crash and the “shock therapy”. They have gutted Posse Comitatus, created new crowd control weapons including microwave and robotic weapons, tested American’s knowledge of and commitment to their civil liberties and found them almost non-existent (Jose Padilla, a US citizen, was held without charges and tortured into insanity with nary a peep from the citizenry), and set up a surveillance system that captures virtually all communication. When the uprising comes, they will be ready.

5) Our national media is completely on board with the corporatist program. For example, every time things start to get tough in this country, our media elite start asking whether we shouldn’t start gutting Social Security. Duh! That is exactly the opposite of the right thing to do.

6) Even though some Democrats in Congress talk a pretty good game, the party leadership is completely feckless, weak, and frightened. They “allow” themselves to be outmaneuvered constantly by the GOP, even when Republicans are in extreme minority. True populist victories are few and far between.

7) The most ominous sign of our country’s coming economic demise is the appointment of Larry Summers as the head of the National Economic Council under Obama. Summers and Robert Rubin worked towards deregulation of the financial industry under Clinton, and Summers as the head of the World Bank, shepherded the economic shock therapy in Russia as the Soviet Union fell apart. That really worked out well for the people of Russia:



Summers, and Geithner, who are cut from the same Chicago-school, Milton Friedman-ite cloth, will surely engineer the dissolution of our social safety net in the next few years.

8) Our only hope for some kind of economic upturn in the immediate future is that Obama and the one or two Democrats who understand what is going on can wrest some dollars out of the hands of the rich and give them to the poor. And I don’t see that happening. The redistributionist argument is not even being made, let alone defended, and the ever increasing wealth and power of the wealthy and powerful make their money that much harder to get at. The idea that the mighty CEOs would except even the smallest tax increase, even to help out their fellow Americans, seems almost laughable.

Part I

Unregulated capitalism rapidly concentrates wealth into the hands of a small, powerful minority, which is why one of the most important functions of a government is to move money back down the Wicked Witch of the West’s hourglass. This is done either directly, with payments to people who cannot exchange their labor for income (the aged, the sick, the orphaned, the widowed, the recently unemployed – these payments also have the salutary effect of - usually – preventing people from literally dying of need), or indirectly, by enacting and enforcing labor regulations that move enough money back down into the pockets of the lower classes.

There are, however, people in this country that lay awake at night, awash in a feverish sweat, afraid that some of their money is going to find its way into the pocket of a poor person someday. They have seen the government moving the sand back down to the bottom of the hourglass, and they don’t like it. Some of it was once, after all, their sand. And even though government redistribution keeps the whole system going and flowing, they’ve decided that they’d like to keep their money and try feudalism for a change.

They have used their political power, which is considerable because of their wealth, to cut taxes for people at the top. They attack and weaken labor laws, they weaken the department of labor, they fight raising the minimum wage, they try to ship jobs overseas, where they can again dictate the wages. They begin dismantling the safety net, by trying to lower Social Security payments, or raising the retirement age. They try to limit Medicare because it “costs too much” (which is doubly evilly ironic because this same class of people keeps the rest of us locked into the most expensive medical system on earth) They cut unemployment benefits. They gut bankruptcy laws. They try to weaken the power of the government in general, by starving it of money and by buying up all of the bribable public servants until there are very few left who understand/care about the government’s important redistributive function. In short, they do everything the Republican party (and about half of the Democratic party) has been doing for the last 30 years.

This creates two distinct problems, though. The first is the problem of perception. Because their policies will ultimately result in feudalism and economic collapse, and because our capitalist system is grafted onto a democracy where the people have some indirect control over the policies we follow, the corporatist polices have been sold to the public with one of the most dazzling and thorough PR campaigns ever waged. Dressing up raw, ugly, and destructive greed is not easy. But the steps have been fairly obvious. First, they play up tax cuts as if everyone in the country is getting something great, when most people see an insignificant change while the rich get huge cuts. But that charade only goes so far. The real trick has been to fan anti-government sentiment by linking the government to social policies that deal with real world issues, but that make people squeamish. So, for example, they rail against abortion. And gay rights. And treating people with other cultures and languages like people. And gun control. And they wrap themselves in the bible and the flag, and sell their suicidal policies to the masses. They have been largely successful in getting people to sell out their own economic interests in exchange for Neanderthal social values. This is the thesis for What’s the Matter with Kansas?, Thomas Frank’s book, which is currently being turned into a movie. They have also created negative feelings towards unions, liberals, diplomacy, even human rights through propaganda, all for the ultimate goal of stopping the government from redistributing wealth. It’s working like a charm.

The second problem corporatist policies create is the actual economic collapse. It’s obvious to people like Alan Greenspan that without the government moving money back down the chain, this country will soon collapse, and then all of their hard PR work will be exposed for the fraud it is. And so what they have done is to delay the inevitable. The wealthy have used their new found surpluses to create bubbles: first the dot com bubble, then through manipulation of interest rates and deregulation of lending practices, the housing bubble. All this maneuvering has delayed the inevitable economic collapse, by creating the illusion of growing wealth, by allowing people to take the money out of their homes and use it to continue to push money up to the top of the hourglass. The business powers have figured out ever more ways for people to get themselves into debt to continue the economic flow of money up the chain. But we are coming to the end of that. People are maxed out on their credit cards, and have taken all of the money out of their houses. And their incomes are dropping away by the thousands. The economic engine is grinding to a halt, and without money coming from the top down to the lower classes, we will have achieved the ultimate goal: feudalism and economic collapse.

Next: the current crisis, and our prospects for getting out of it

There is a huge problem with capitalism, and it is this: like the Wicked Witch of the West’s hourglass, the money in capitalism flows up, from the people who don’t have much of it to the people who already have a lot of it. This suits the “haves” just fine, of course, because they become richer and more powerful over time, but it isn’t good for the system overall because of two negative consequences: first, people with little money run out of it quickly, and people with no money are a huge problem. Secondly, the money soon stops flowing and you have economic collapse. When the music stops you are left with a feudalistic society; money and power concentrated in the hands of a few overlords, with serfdom for the rest of us.

So, unfettered capitalism leads to people with no money and economic collapse. That unhappy outcome is as old as capitalism itself, and so humans, being clever little monkeys, have put on our thinking caps and devised ways to avoid it.

What do we do about people with no money? For one thing, we promote the social virtue of people living within their means. People running themselves into penury do nobody much good, and so we encourage people to save, to budget, to scrimp, to be careful, to plan for education and retirement costs, to earn, and to take care of themselves. When people run out of money or are in danger of doing so, we have set up systems to provide it for them so they can take care of their basic needs: aid to widows and orphans, Social Security, unemployment benefits, bankruptcy, Medicare and Medicaid, disability, food stamps. All of these systems provide a safety net for people who are unable to exchange their labor for money sufficiently, including but not limited to people who cannot do so because of their age or illness or sudden loss of employment.

The other thing that we do to keep economic collapse at bay is to slow down the rate at which money flows upward by making sure that it goes from the haves to the have-nots at a sufficient rate. So the government enforces things like the 40-hour work week, overtime rules, the minimum wage, and other labor laws including support for unions, which ensure that the captains of industry reward work enough to get money back down to the bottom, to keep the system flowing.

In a capitalistic society, therefore, one of the government’s most important jobs is to take money from the top of the hourglass and put it back on the bottom, either directly through progressive taxation to support the safety net, or indirectly by forcing capital to exchange enough money for labor. It takes from the rich to give to the poor (where have I heard that before?), but the upside is that people aren’t rioting in the streets, we have a generally good standard of living, and (most) people don’t live in economic slavery.

Rich people hate that. A fair chunk of their income (and in some cases their wealth) is taken by the government to give to needy people, and many of them are forced – horrors – to pay living wages to their employees. Shortsightedly, many of them don’t see the benefit of living in a society where the government intermediates on behalf of the have-nots. What is worse is that we have designed our corporations to behave like sociopathic rich people on steroids. And as corporate power has grown, the rich have been eying and opting for feudalism and economic collapse. We are in another Gilded Age, and they just might get it.

For corporations and some rich people (for convenience, let’s call this mindset “corporatist”), feudalism and economic collapse aren’t bad things to be avoided, but rather features. The government can be starved into impotence, the safety net can be taken apart, and the less wealthy will then have to rely on the largess and good will of the rich. Of course, the great unwashed won’t be happy about this, but the corporatists will also have private armies and crowd-controlling weapons, so there is nothing to worry about. And what’s left of the government can be used to serve them as well.

Next: implementing the plan so far

After the Great Depression, a large portion of our population understood that FDR’s policies of government spending to stimulate the economy actually worked. It was Keynesian economics, in which the government in times of economic downturn becomes the employer of last resort. FDR created programs to put people to work, building infrastructure (dams, roads, electric power plants and grids) and doing just about every other damn thing under the sun. Painting murals. Maintaining hiking paths. Halting soil erosion.

From the beginning, the business and moneyed interests in this country hated the New Deal and its works programs. They began and continue to this day to employ a disinformation campaign that has left the current American public of today not knowing if the New Deal was a good thing. This ignorance never would have worked on the public in the 40s and 50s, when people understood exactly what the stakes were to Hoover’s “continue to do nothing” strategy (there are still idiots in the same mode today). They understood because FDR explained it to them. He told them that his programs were going to end the Depression, and that his opponents had done nothing and didn’t care about them. How horribly rude and partisan his speeches seem in today’s climate, when merely giving the GOP the richly deserved blame for the financial crisis gives our media the vapors.

Any analysis of economic health from the era shows that the recovery was slow, but after a few years the economy was back about where it was when the downturn began during Hoover’s administration. But the economy didn’t start to boom until WWII. The difference was that before the war, FDR didn’t have the political capital to really spend and employ his way out of the Depression the way he wanted to. His opponents watered down his spending proposals, demanded that he try to balance the budget, hindered him. When it comes to killing people, though, no expense is too large for the US of A. (and, to be fair, Japan and Germany did present a real risk to our nation and to our European allies). Once in the war, the government could deficit spend to its heart’s content, put people to work, etc. And it worked like magic.

Today people say “the New Deal didn’t work” or they say that the New Deal failed and it was only WWII that worked to really end the Depression. I’ve even heard people say that FDR’s policies actually prolonged the Depression and that Hoover’s “do nothing” strategy would have worked faster. But the proof is in the pudding: the government employing people on a massive scale really boosts the economy.

But, I hear you object, that was the war, not the New Deal. Pretending that there is some qualitative difference to war spending and other stimulative spending is the real fallacy.

Corporatists and conservatives weep and gnash their teeth about the government paying people to paint murals or build roads (in the current go-round, the GOP has objected strenuously to money for the Park Service to maintain the National Mall). And so they pretend to scrutinize every penny to judge its stimulative effect. The truth is, anything that employs someone to do anything is stimulative, and highly so.

In the Keynesian spending to fight WWII, we employed a huge number of people to build battleships, fighters and bombers, munitions, aircraft carriers, supplies,etc. And where did all of that stuff go? Most of it is at the bottom of the sea, rusting and poisoning the environment. Yet, the stimulative effect was very high. We could have had people building ships and sending them to the bottom of the sea ourselves in the absence of Japan, and it would have had the same effect. What’s the difference? Just that in the case of making weapons everyone can see that it is a smart thing to do when you have an enemy.

So, you can employ people to do anything and boost the economy doing it if you employ enough of them. The smart thing is to have them do something useful, or beautiful, or necessary, or leaving you with something valuable afterwards, like a greatly improved infrastructure. But WHAT they do isn’t what boosts the economy, as the GOP wise men who rub their chins now like they know something would like to pretend. Only THAT they do it, and get paid, and get that money circulating.

My advice for the Obama team? Fashion a bill that employs a huge number of people, spending a vast amount of money on our infrastructure, and EXPLAIN what you are doing to the American people, so that they aren’t left wondering if more tax cuts (god forbid) would have been better.

Well, Obama managed to pull it off and get himself elected despite having to run against a clearly mentally inferior Republican, a disadvantage which defeated both Gore and Kerry. Hooray USA. It seems that a small group of Democrats decided to actually pay attention to how campaigns could be won and lost, used a lot of very smart media buys, innovated in fundraising, followed Howard Dean's gameplan for competing in all fifty states, and had an incredibly disciplined candidate who was excellent at framing - something that Republicans have traditionally been very good at and Democrats not so much. Obama's team was incredibly savvy about the media. Here, for example, is a great analysis of a truly inspired move by our new WhiteHouse spokesman against raging idiot Sean Hannity.

So, ok, Obama's people know how to campaign, which is totally great and unexpected in a group of Democrats. But what about governing? As George W. Bush tragically demonstrated, winning elections and governing competently are two entirely different things. And the track record of Democrats in fighting evil and incompetence is not reassuring. The Democratic leaders in the Congress are terrible, full of the most cowardly, unprincipled, puling wretches who couldn’t be bothered to defend the law, the Constitution, or our freedoms if their livelihoods depended on it. They continually make choices that are not only bad policy but bad politics. The way they act is a continual source of shock, outrage, and disappointment to their base. It’s like trying to fight Darth Vader with a limp lasagna noodle. There are only a few, such as Marcy Kaptur, Dennis Kucinich, Russ Feingold, and Bernie Sanders (who isn’t a Democrat, of course) who break through the nod-and-wink charade of pretending free market capitalists are not the lying thieves they have proved themselves to be.

Any student of recent politics knows that the GOP excels at being very effective in opposition. Here's what they do: they demand and demand and demand compromise on legislation, which the Democrats always give in to, always too much and too early. Then, when the legislation has been made completely ineffective, they vote against it anyway. This is exactly what they are doing with the stimulus bill. A recent piece by the Rude Pundit puts it this way:



Now, long after the thieving horses have left the barn, they are closing the barn door. In a pattern repeated many times in history, a regime that tortured people and spied on their own citizens has left, leaving a popular new regime saddled with debt and a bunch of Chicago School economic advisors to forbid them from doing anything useful about it. This happened in Poland, in South Africa, in Russia, in country after country in South America . . . and now it is happening here, right on schedule. Read “The Shock Doctrine” by Naomi Klein, if you haven’t already.

We await evidence that the Obama team is just as smart about governing the GOP as they were at campaigning against them. The only effective way to approach this stimulus bill is to devise it with no compromises, to make it an actually effective bill, to reject yet more tax breaks, and to pass it without the GOP. Obama doesn’t need them.