[P2P-F] Fwd: Don't Fall for the GOP (and Obama) Lie...by Robert Reich with an introductory reflection by Rabbi Lerner

Sun Jul 31 08:29:28 CEST 2011

---------- Forwarded message ----------
From: Rabbi Michael Lerner, Network of Spiritual Progressives <
rabbilerner at tikkun.org>
Date: Sun, Jul 31, 2011 at 12:54 PM
Subject: Don't Fall for the GOP (and Obama) Lie...by Robert Reich with an
introductory reflection by Rabbi Lerner
To: Michelsub2004 at gmail.com

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  We at Tikkun have been saying for the past 3 years what former Sec. of
Labor and economist Robert Reich says below and what Paul Krugman has been
saying for the past 2 years: there is no serious budget crisis.
 Instead, we have an employment and housing crisis.
 It is true, as Robert Reich says below, that the Republicans have been
running with this lie for the past several years in order to prevent the
Democrats, when they had the majority in both houses of Congress, and the
presidency, 2009-2010, from doing what the country needed: a massive Work
Progress Administration (WPA) employment program coupled with a freeze on
mortgage foreclosures and a law requiring the banks to renegotiate mortgage
interests to what it was when the mortgage was first offered to the buyers.
      But Reich plays down the huge culpability of Obama and his economic
advisors (who could have been Reich and Krugman, and no Republican forced
Obama to go with the pro-corporate advisors he actually chose form the
start).
 Obama accepted the framing of the problems that the right-wing had
developed, and has for 3 years been mis-educating people about the nature of
the problem we face. No wonder, then, that he boxed himself in to the
current situation in which he may now have few options left. Had he spent
the past years educating people to the true situation, he would have had
much greater flexibility to stand up to the Republicans in Congress.
       Even now, he continues to waffle. He has offered, and pushed Senate
Democrats to offer, a "deal" that is 3/4 of what the Republicans want and
zero what working people and poor people need, just so he could get a
lifting of the national debt ceiling, something he has the power to do in
other ways (the 14th amendment provides such a route, though it has never
been used before).
       Instead of being such a wimp, Obama could even now simply announce
the following plan for what will happen if the debt limit isn't reached: he
will pay the social security, medicare and other benefits to those
Congressional districts whose representatives voted to raise the debt limit
and not to those which did not. And similarly all other federal services.
Military installations in the Congressional districts whose representatives
did not vote for the raising of the limit will be immediately shut, and all
military personnel outside the U.S., starting with Iraq and Afghanistan,
will be ordered to return to the U.S.  They play hardball, so could a
progressive Democrat, if we happened to have one in office, which we don't.
 If the Supreme Court ordered him to not follow this path, he could tell
them to enforce it on their own, because he has the Constitutional
responsibility to defend the U.S., and this is the best way to do so.
        So lets understand, that all of this comes down to Obama's
capitulations to the Right, on almost every level (except for glbt rights,
important and to be commended, but not enough to build a presidency on).
        We'll talk more about Obama in the next issue of Tikkun (yes, there
will be a print issue in the Fall for anyone who is a current subscriber or
NSP member (or anyone who joins NSP or subscribes now), but there won't be
Tikkun at the newsstands anymore. You want it? Then: subscribe
please<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=eZmQYcwqzuIJOnNO7SJoVfqkRODCDUAU>.
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       Warm regards,
      RabbiLerner at Tikkun.org
 [image: www.readersupport/479189E1.jpg]
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
[image: www.readersupport/0E1C5389.jpg]<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=BCbjiur4VaO7Hrw%2FTAgIrPqkRODCDUAU>

 *Don't Fall for the GOP Lie*
By Robert Reich, Robert Reich's Blog
29 July 11

*Don't fall for the GOP lie: There is no budget crisis. There's a job and
growth crisis.*

 friend who's been watching the absurd machinations in Congress asked me
"what happens if we don't solve the budget crisis and we run out of money to
pay the nation's bills?"
 It was only then I realized how effective Republicans lies have been. That
we're calling it a "budget crisis" and worrying that if we don't "solve" it
we can't pay our nation's bills is testament to how successful Republicans
have been distorting the truth.
 The federal budget deficit has no economic relationship to the debt limit.
Republicans have linked the two, and the Administration has played along,
but they are entirely separate. Republicans are using what would otherwise
be a routine, legally technical vote to raise the debt limit as a means of
holding the nation hostage to their own political goal of shrinking the size
of the federal government.
 In economic terms, we will not "run out of money" next week. We're still
the richest nation in the world, and the Federal Reserve has unlimited
capacity to print money.
Nor is there any economic imperative to reach an agreement on how to fix the
budget deficit by Tuesday. It's not even clear the federal budget needs that
much fixing anyway.
Yes, the ratio of the national debt to the total economy is high relative to
what it's been. But it's not nearly as high as it was after World War II -
when it reached 120 percent of the economy's total output.
 If and when the economy begins to grow faster - if more Americans get jobs,
and we move toward a full recovery - the debt/GDP ratio will fall, as it did
in the 1950s, and as it does in every solid recovery. Revenues will pour
into the Treasury, and much of the current "budget crisis" will be
evaporate.
 Get it? We're really in a "jobs and growth" crisis - not a budget crisis.
 And the best way to get jobs and growth back is for the federal government
to spend more right now, not less - for example, by exempting the first
$20,000 of income from payroll taxes this year and next, recreating a WPA
and Civilian Conservation Corps, creating an infrastructure bank, providing
tax incentives for small businesses to hire, expanding the Earned Income Tax
Credit, and so on.
 But what happens next week if Congress can't or won't deliver the President
a bill to raise the debt ceiling? Remember: This is all politics, mixed in
with legal technicalities. Economics has nothing to do with it.
 One possibility, therefore, is for the Treasury to keep paying the nation's
bills regardless. It would continue to issue Treasury bills, which are our
nation's IOUs. When those IOUs are cashed at the Federal Reserve Board, the
Fed would do what it has always done: Honor them.
 How long could this go on without the debt ceiling being lifted? That's a
legal question. Republicans in Congress could mount a legal challenge, but
no court in its right mind would stop the Fed from honoring the full faith
and credit of the United States.
 The wild card is what the three big credit-rating agencies will do. As long
as the Fed keeps honoring the nation's IOUs, America's credit should be
deemed sound. We're not Greece or Portugal, after all. We'll still be the
richest nation in the world, whose currency is the basis for most business
transactions in the world.
 Standard & Poor's has warned it will downgrade the nation's debt from a
triple-A to a double-A rating if we don't tend to the long-term deficit.
But, as I've noted, S&P has no business meddling in American politics -
especially since its own non-feasance was partly responsible for the current
size of the federal debt (had it done its job the debt and housing bubbles
wouldn't have precipitated the terrible recession, and the federal outlays
it required).
 As long as we pay our debts on time, our global creditors should be
satisfied. And if they're satisfied, S&P, Moody's, and Fitch should be, too.
 Repeat after me: The federal deficit is not the nation's biggest problem.
The anemic recovery, huge unemployment, falling wages, and declining home
prices are bigger problems. We don't have a budget crisis. We have a jobs
and growth crisis.
 The GOP has manufactured a budget crisis out of the Republicans'
extortionate demands over raising the debt limit. They have succeeded in
hoodwinking the public, including my friend.
 ------------------------------

*Robert Reich is Chancellor's Professor of Public Policy at the University
of California at Berkeley. He has served in three national administrations,
most recently as secretary of labor under President Bill Clinton. He has
written thirteen books, including "The Work of Nations," "Locked in the
Cabinet," "Supercapitalism" and his latest book, "**AFTERSHOCK: The Next
Economy and America's
Future*<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=P5otm0BzI%2FxEzmbOBSbjXPqkRODCDUAU>
*." His 'Marketplace' commentaries can be found on*
*publicradio.com*<http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=9O%2BNP2mrDqXSfOW7NNhFtPqkRODCDUAU>
* and iTunes.*e

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