David Frum: Wake up GOP -- Smashing system doesn't fix it

[Winehole23]

Wake up GOP: Smashing system doesn't fix it

By David Frum, CNN Contributor
August 1, 2011 7:42 a.m. EDT

http://i.cdn.turner.com/cnn/2011/OPINION/08/01/frum.debt.republicans/tzleft.david.frum.ckennedy.jpg





Editor's note: David Frum writes a weekly column for CNN.com. A special assistant to President George W. Bush from 2001 to 2002, he is the author of six books, including "Comeback: Conservatism That Can Win Again," and is the editor of FrumForum (http://www.frumforum.com/).


(CNN) -- I'm a Republican. Always have been. I believe in free markets, low taxes, reasonable regulation and limited government. But as I look back at the weeks of rancor leading up to Sunday night's last-minute budget deal, I see some things I don't believe in:


Forcing the United States to the verge of default.


Shrugging off the needs and concerns of millions of unemployed.


Protecting every single loophole, giveaway and boondoggle in the tax code as a matter of fundamental conservative principle.


Massive government budget cuts in the midst of the worst recession since World War II.


I am not alone.


Only about one-third of Republicans (http://firstread.msnbc.msn.com/_news/2011/03/03/6179186-first-thoughts-chased-by-a-tiger) agree that cutting government spending should be the country's top priority. Only about one-quarter of Republicans (http://www.gallup.com/poll/148472/Deficit-Americans-Prefer-Spending-Cuts-Open-Tax-Hikes.aspx) insist the budget be balanced without any tax increases.


Yet that one-third and that one-quarter have come to dominate my party. That one-third and that one-quarter forced a debt standoff that could have ended in default and a second Great Recession. That one-third and that one-quarter have effectively written the "no new taxes pledge" into national law.


There was another way. There still is.


Give me a hammer and a church-house door, and I'd post these theses for modern Republicans:


1) Unemployment is a more urgent problem than debt.


The U.S. can borrow money for 10 years at less than 3%. It can borrow money for two years at less than one-half a percent. Yes, the burden of debt is worrying. Yet lenders seem undaunted by those worries.
Meanwhile, more than 14 million Americans (http://www.bls.gov/news.release/empsit.nr0.htm) are out of work, more than 6 million for longer than six months. The United States has not seen so many people out of work for so long since the 1930s.


2) The deficit is a symptom of America's economic problems, not a cause.


When the economy slumps, government revenues decline and government spending surges.


Federal revenues have collapsed since 2007, down from more than 18% of national income to a little more than 14%. To put that in perspective: That's the equivalent of losing enough revenue to support the entire defense budget.


Federal spending has jumped to pay for unemployment insurance, food stamps and Medicaid benefits.


Fix the economy first, and the deficit will improve on its own.


Cut the deficit first, and the economy will get even sicker.


3) The time to cut is after the economy recovers.


Businesses are hoarding cash. Consumers are repaying debt. State and local governments are slashing jobs. (Since 2009, the number of Americans working for government has shrunk by half a million, the biggest reduction in civilian government employment since the Great Depression.) Right now, there's only one big customer out there: the federal government. How does it help anybody if the feds suddenly stop buying things and paying people?
Read more:http://www.cnn.com/2011/OPINION/08/01/frum.debt.republicans/index.html?hpt=hp_c1

[RandomGuy]

I see you are going for the "Obscure Sci-Fi" avatar reference award.

(Logan's Run, one of my favs) (http://www.jeffbots.com/box.html)

To the OP:

We will see a double dip recession as state/local/federal governments cut spending to make the tea party happy, and one of the larger components of GDP, "G" is gutted.

We will get to see the results of Supply Side economics put into action.

Hopefully we can put the final nail in the coffin of that shitty theory once and for all.

[JoeChalupa]

The Tea Party accomplished what it set out to do. You gotta give them that. But the GOP, I feel, will suffer in the long run.

[Ignignokt]

The Tea Party accomplished what it set out to do. You gotta give them that. But the GOP, I feel, will suffer in the long run.

dumbass..

[Ignignokt]

Ofcourse having a balanced budget is not tied to future unemployment in this country. The economy is not interlinked with fed interest rates, lender confidence, nor the strenght of our currency.

You fuckheads have it all figured out. We need to pass a JOBS bill!!! oh yeah, in the meantime we wont address all the factors that contribute to prices skyrocketing, transportation cost soaring, and effects of Employers unwillingness to higher employees.

[ElNono]

But employers do hire employees... just not in America. The question is how you address that competitive factor from America.

[Ignignokt]

But employers do hire employees... just not in America. The question is how you address that competitive factor from America.

deregulation of industry. more individual rights, abolish the minimum wage, abolish corporate taxes and capital gains. More capitalism.

Statism contributes to unemployment. Infact.. involuntary unemployment would be near impossible if everyone had the same access to buisiness ownership. But that's not the case. Liscensing, regulatory boards, etc all give the advantage to the rich.. who can afford to jump through all the hoops.

[DMX7]

More deregulation? You've got to be kidding... Have you not been paying attention the last 3 years?

Corporations shouldn't pay taxes? Oh god, you're stupid. They paid taxes in the 1990's and we actually ran some surpluses. They and people are now paying lower taxes and the economy is in the tank.

Abolish the minimum wage? Yeah, that'll create plenty of jobs, Third World sweat shop jobs...

Great Plan though! :toast

[SnakeBoy]

We will see a double dip recession as state/local/federal governments cut spending to make the tea party happy,

Really? Small reductions in future spending increases is going to cause a double dip recession?

[boutons_deux]

When the GOP's fake patron is St. "Govt IS the problem" Ronnie, smashing the system IS the GOP fix for govt.

[ElNono]

deregulation of industry. more individual rights, abolish the minimum wage, abolish corporate taxes and capital gains. More capitalism.

Not going to do shit when it's still cheaper to hire and live in China, India, etc.

The US needs to break out of that cycle of having China dump all their export money into their bonds. Not that it's going to happen with the current crop of politicians, but that would be the first step IMO.

[Capt Bringdown]

deregulation of industry. more individual rights, abolish the minimum wage, abolish corporate taxes and capital gains. More capitalism.



The GOP Lies: 97% of Small Businesses Would Not be Affected by Increasing Taxes on the Wealthy (http://blog.buzzflash.com/node/12902)

The antitax dogma of the Republican Party is strongly rooted in mythology. The theory that tax cuts create jobs has been discredited by the results of George Bush’s tax policies. The Republicans cling to the myth that “small business” owners are the “job creators,” and so they oppose proposals to eliminate the Bush rate cuts for even those earning over $250,000. But relatively few small business owners earn $250,000—in fact, fewer than 3 percent of the 20 million people who file business income on their personal tax forms (the 1040s) earn that much.

[LnGrrrR]

3 percent of 20 million? That's, uhm... almost... uh...

A LOT! UNACCEPTABLE!

[Wild Cobra]

But employers do hire employees... just not in America. The question is how you address that competitive factor from America.
Employers do not hire when they don't have a sense of if their future costs and profits go up or down. I think the quickest way to get employers highering again is to eliminate Obamacare, and to place a maximum increase on tax increases. If the government could not raise marginal rates by say, more than 1/2% a quarter, then there would be less future negative surprises for employers.

[Wild Cobra]

3) The time to cut is after the economy recovers.Read more:http://www.cnn.com/2011/OPINION/08/01/frum.debt.republicans/index.html?hpt=hp_c1
I would generally agree if I had hope the economy would recover. With the changes since 2007, I worry it never will.

[Winehole23]

From where we sit, it seems a reasonable worry.

[boutons_deux]

"to get employers highering again is to eliminate Obamacare"

WTF?

The Repug cuts are going to hit Medicare, allowing the current "patch" to expire, and then cutting more, meaning doctors will get less and more doctors won't take Medicare/Medicaid patients, fucking over those paitents who will have to switch doctors and/or travel further to find a doctor. Red-state rural bubbas will be hit hard, but they'll keep voting, ignorantly, for Repug sociopathy.

"to place a maximum increase on tax increases"

cutting taxes doesn't create jobs, LIAR. With higher taxes in the Clinton years, 350K jobs/month were created.

[ElNono]

Employers do not hire when they don't have a sense of if their future costs and profits go up or down. I think the quickest way to get employers highering again is to eliminate Obamacare, and to place a maximum increase on tax increases. If the government could not raise marginal rates by say, more than 1/2% a quarter, then there would be less future negative surprises for employers.

You would be wrong, as usual. It's not cheaper taxes or economic certainty that makes GE outsource their jobs to China. It's the cheap labor.

[boutons_deux]

Debt Ceiling Deal Will Cost 1.8 Million Jobs In 2012

The Economic Policy Institute, a top nonpartisan think tank, estimates that the deal struck this weekend to raise the nation’s debt limit will end up costing the economy 1.8 million jobs by 2012.

Top economists and CEO’s have also weighed in against the deal and said that GOP concessions to the Tea Party will cost our economy dearly. Pimco CEO Mohamed El-Erian warned that the deal will lead to less growth, more unemployment, and more inequality. Nobel Prize-winning economist Paul Krugman called the plan “a disaster” and “an abject surrender” that will “depress the economy even further.”

The Center for American Progress’s Michael Ettlinger and Michael Linden argue that while the deal “goes straight in the wrong direction,” Congress can redeem itself by using the so-called “super committee” mandated by the bill to focus on job creation

http://thinkprogress.org/economy/2011/08/02/285599/report-debt-ceiling-deal-will-cost-1-8-million-jobs-in-2012/

======

aka, pro-cyclical govt action (as opposed to counter-cyclical) that deepens/lengthens the criminal Banksters' Great Depression.

[scott]

I think the quickest way to get employers highering again is to eliminate Obamacare

It isn't cutting literacy programs?

[Winehole23]

Absolutely. Unlike the federal government, most states can't postpone the necessary cuts.

[boutons_deux]

States can't print money like a sovereign country (but maybe Ricky Bobby Perry can pray to God for some Alamo dollars)

Pentagon lands extra $50 billion out of debt deal

ut of a bill that was supposed to cut government spending and waste wherever it is found, lawmakers managed to cobble together an additional $50 billion for the U.S. Defense Department's budget, using an accounting trick to disguise the move.

Instead of cutting $400 billion from the Pentagon's budget over the next 12 years like President Barack Obama proposed in April, Republicans put their own cuts at $350 billion over the next 13 years, leaving the nation's defense apparatus an extra $50 billion it hadn't planned on.

http://www.rawstory.com/rs/2011/08/02/pentagon-lands-extra-50-billion-out-of-debt-deal/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheRawStory+%28The+Raw+Story% 29

[Drachen]

I had read that the cuts start slow (21B in 2012). I don't see how 21B = 1.8M jobs.

[Wild Cobra]

You would be wrong, as usual. It's not cheaper taxes or economic certainty that makes GE outsource their jobs to China. It's the cheap labor.
It's not only the cheaper labor. There are other factors, with taxation and regulations being two major factors.

If you weren't so short sighted as for looking for a single solution, then you might understand that all factors need to be looked at.

[Wild Cobra]

I had read that the cuts start slow (21B in 2012). I don't see how 21B = 1.8M jobs.
It's a scare tactic. I'll bet more jobs would be lost with the uncertainty of tax increases. If the government left well enough alone, the economy would be far better I bet. Uncertainty is a killer, and when the party in power talks about tax increases, we always have economic disaster.

[Spurminator]

It's not only the cheaper labor. There are other factors, with taxation and regulations being two major factors.

If you weren't so short sighted as for looking for a single solution, then you might understand that all factors need to be looked at.

Even if regulations and taxes were reduced, would international labor still be cheaper?

If yes, what would be their motivation to hire more expensive American workers? Patriotism? Altruism?

[ElNono]

It's not only the cheaper labor. There are other factors, with taxation and regulations being two major factors.

Not really. Cheap labor is the major factor. Unless you can find Americans willing to work 14+ hours a day for $0.25/hour, it's simply an insurmountable factor.


If you weren't so short sighted as for looking for a single solution, then you might understand that all factors need to be looked at.

Tell me how you address the factor above?. I mean, corps like GE over here already don't pay taxes, and still move their operations to China. So tax cuts ain't going to do it (they already pay none). Even if you get rid of minimum wage, and a bunch of other regulations, you still can't live in the US making the kind of money mentioned above.

Let's hear you multiple solutions to overcome that problem...

[Spurminator]

Our patriotic job creators will hire US workers again when we stop punishing them for earning an honest living. :flag :jesusfish

[Wild Cobra]

Even if regulations and taxes were reduced, would international labor still be cheaper?

If yes, what would be their motivation to hire more expensive American workers? Patriotism? Altruism?
I've covered this before. It depends on cost vs. volume and/or weight. With small items, it favors the cost of labor. With larger items, it favors taxation. You and others seem to focus on a single solution, when in reality, there are several things that need changed together. On larger items, transportation costs are real. However, they are too often lower than our combined cost to business in taxation and regulation. Saddling corporate America with Obamacare will also export more jobs.

Lowering taxes and/or regulations is not a solution to stop importation. It will only make a positive difference to some degree. Any increase in USA production is a step in the right direction, and in that vast grey area, lower corporate taxes will make a difference for some industries.

[ElNono]

I've covered this before. It depends on cost vs. volume and/or weight. With small items, it favors the cost of labor. With larger items, it favors taxation. You and others seem to focus on a single solution, when in reality, there are several things that need changed together. On larger items, transportation costs are real. However, they are too often lower than our combined cost to business in taxation and regulation. Saddling corporate America with Obamacare will also export more jobs.

Do you have any figures to back this up?


Lowering taxes and/or regulations is not a solution to stop importation. It will only make a positive difference to some degree. Any increase in USA production is a step in the right direction, and in that vast grey area, lower corporate taxes will make a difference for some industries.

Why would USA production increase if they can't compete? People already voted with their wallets and will choose cheaper vs country almost in every case.

[Wild Cobra]

Do you have any figures to back this up?



Why would USA production increase if they can't compete? People already voted with their wallets and will choose cheaper vs country almost in every case.

If you don't understand the simplicity of what I said, then bug off. I indicate two extremes and a grey area. I do not need to show numbers and that isn't my intent, if you don't understand the effect is real, then you you don't understand scientific methodology.

As for the people voting... It goes back to an improperly informed electorate. Our media really sucks.

[ElNono]

If you don't understand the simplicity of what I said, then bug off.

You said a lot of stupid things that have no basis on reality.
So I'll take this response as "No, I have nothing to back up my contention".

That's what I thought.


I indicate two extremes and a grey area. I do not need to show numbers and that isn't my intent, if you don't understand the effect is real, then you you don't understand scientific methodology.

As for the people voting... It goes back to an improperly informed electorate. Our media really sucks.

I probably have read and understand more about economics than you do about changing parts. I'm asking you to back stuff up because reality and you rarely make a connection.

As far as media, I agree they suck. You're the epitome of a completely misinformed person.

[Wild Cobra]

You said a lot of stupid things that have no basis on reality.
So I'll take this response as "No, I have nothing to back up my contention".

That's what I thought.



I probably have read and understand more about economics than you do about changing parts. I'm asking you to back stuff up because reality and you rarely make a connection.

As far as media, I agree they suck. You're the epitome of a completely misinformed person.
LOL...

My God.

You are arguing that I have no basis to say there is a change someplace in the "grey area" between two extremes.

You expect anyone to take you seriously?

Bug off.

[ElNono]

LOL...
My God.
You are arguing that I have no basis to say there is a change someplace in the "grey area" between two extremes.

Don't move the goalposts. You made a claim and I asked you to back it up.
Can you back up what you said?


You expect anyone to take you seriously?

Unlike you, I think a good amount of people do take me seriously in here.
They might agree or not with me, but that's a different story.

So, are you going to back up your contention, or we just have to assume you're talking out of your ass again?

[Wild Cobra]

Don't move the goalposts. You made a claim and I asked you to back it up.
Can you back up what you said?

I made a claim that there is a grey area and that tax changes will make a change in some business decisions. I never quantified it. It is you who is changing the goalpost. You either agree that taxes make a difference, or you don't. Stop playing games with my words asshole. If you want to start quantifying it, then I suggest you start.


Unlike you, I think a good amount of people do take me seriously in here.
They might agree or not with me, but that's a different story.

Yep...

Other libtards!


So, are you going to back up your contention, or we just have to assume you're talking out of your ass again?

Why do I need to back up such an obvious truth?

[ElNono]

I made a claim that there is a grey area and that tax changes will make a change in some business decisions. I never quantified it. It is you who is changing the goalpost. You either agree that taxes make a difference, or you don't. Stop playing games with my words asshole. If you want to start quantifying it, then I suggest you start.

Let me refresh your memory, because now you're ranting:


I've covered this before. It depends on cost vs. volume and/or weight. With small items, it favors the cost of labor. With larger items, it favors taxation. You and others seem to focus on a single solution, when in reality, there are several things that need changed together. On larger items, transportation costs are real. However, they are too often lower than our combined cost to business in taxation and regulation. Saddling corporate America with Obamacare will also export more jobs.

Do you have any figures to back this up?

Yes or no. If you do, post them.


Why do I need to back up such an obvious truth?

If it's such an obvious truth, you wouldn't have a problem backing it up, right?

Now put up or shut up.

[Wild Cobra]

My God...

Stop being a Chump.

Again, if those simple truths are incomprehensible to you, then fuck off.

[ElNono]

My God...

Stop being a Chump.

Again, if those simple truths are incomprehensible to you, then fuck off.

So you can't back up your 'simple truths'. Gotcha.

[MannyIsGod]

You should just learn the word no. Its really what you're saying.

[MannyIsGod]

deregulation of industry. more individual rights, abolish the minimum wage, abolish corporate taxes and capital gains. More capitalism.


Which specific regulations? All of them? Some of them? Which ones?

Abolish minimum wage? So that people can be employed at 2 dollars an hour? Whats the point?

Abolish more taxes? Are corporations overtaxed here? HARDLY?

I just see talking points here but I see nothing to show HOW they would benefit the country at all - especially the first few examples.

[Wild Cobra]

So you can't back up your 'simple truths'. Gotcha.
I'm not going to bother finding linkable evidence that you might accept. I have seen quite a bit in my lifetime. I used to work for LSI Logic, and now they do their major production in Malaysia. I was laid off from there. I understand some of these internal corporate decision, and taxation was a major reason. I would have a hard time linking life experiences for you, and not going to look up shipping costs per cubic foot vs. taxes for you.

If you cannot accept that at some price point, any change makes a difference, then you are lost.

[Wild Cobra]

Abolish minimum wage? So that people can be employed at 2 dollars an hour? Whats the point?

I'm not against minimum wages. I myself, think they can be raised to our national benefit rather than detriment. However, we still need to have better control over imports first.

[ElNono]

I'm not going to bother finding linkable evidence that you might accept. I have seen quite a bit in my lifetime. I used to work for LSI Logic, and now they do their major production in Malaysia. I was laid off from there. I understand some of these internal corporate decision, and taxation was a major reason. I would have a hard time linking life experiences for you, and not going to look up shipping costs per cubic foot vs. taxes for you.

If you cannot accept that at some price point, any change makes a difference, then you are lost.

You should've have just said that your 'simple truth' was a personal anecdote, not backed up with anything else. Would've saved us both a few posts.

[Wild Cobra]

You should've have just said that your 'simple truth' was a personal anecdote, not backed up with anything else. Would've saved us both a few posts.
I have seen numbers. I'm not going to waste my time looking for them, especially since the internet might not have them. Tell me, is everything before 1990 to be found on internet searches? Only loser rely on linkable information for the truth in life.

[ElNono]

I have seen numbers. I'm not going to waste my time looking for them, especially since the internet might not have them. Tell me, is everything before 1990 to be found on internet searches? Only loser rely on linkable information for the truth in life.

I'm not disputing it's a personal anecdote, and take it for what it is.
And honestly, you're the master of linking to graphs and charts online. So you're only qualifying yourself there.

[Wild Cobra]

I'm not disputing it's a personal anecdote, and take it for what it is.
And honestly, you're the master of linking to graphs and charts online. So you're only qualifying yourself there.
I can only do so much, and I know that undoctored history before 1990 is hard to find on the internet.

Just being a realist not willing to gamble my time like that.

How about you attempting to prove I'm wrong if you think it's so easy.

[ElNono]

I can only do so much, and I know that undoctored history before 1990 is hard to find on the internet.
Just being a realist not willing to gamble my time like that.
How about you attempting to prove I'm wrong if you think it's so easy.

Well, it's real easy. You say your anecdote is from 1990 or thereabouts (mid-80's?). Since then, we've had higher taxes and lower unemployment.
Furthermore, by stating this was well before Obamacare, you're telling me Obamacare had nothing to do with it.

One other consideration is that the world isn't what was then.
This is China's GDP growth:
http://upload.wikimedia.org/wikipedia/commons/b/b3/Prc1952-2005gdp.gif

Back then, China was nothing.

Proving you wrong isn't a problem. That's why I was curious to see what you based your contention on.