A Grand Swindle: What We Don’t Need Now Is a Bad “Grand Bargain”

by Sarita Gupta

In the 2012 elections, the American people voted for strengthening our economy and putting people back to work. “We’re all in this together” defeated “You’re on your own.” Or so we thought.

It seems that since Nov. 6, many politicians forgot that the people they represent used their voice at the polls to stand up for working families and the programs they rely on. Democratic lawmakers should resist any “grand bargain” on the budget that protects the wealthy at the expense of the rest of us.

There’s a palpable sense of urgency being manufactured inside the beltway to rush lawmakers into striking a budget deal, but a grand bargain is neither inevitable nor necessary.

The best way to solve America’s debt crisis is to fix our revenue crisis, and we can do that quickly by ending the Bush tax cuts for the wealthiest 2 percent and creating jobs to get our economy moving again.

Working families cannot afford any more cuts when wages are stagnant and poverty is increasing. Economic growth has been too slow, consumer demand is too weak, and average families are tightening their belts while corporate profits are soaring to historic highs.

By pursuing this bargain, Congress is having the wrong discussion about the wrong policy prescriptions at the wrong time. The truth is that the people hawking a “compromise” are wealthy corporate CEOs hiding behind the “Fix the Debt” campaign. A recent Institute for Policy Studies report found that 63 publicly held companies whose CEOs are pushing these bad deals stand to gain as much as $134 billion in windfalls if one of their proposals are approved. It’s time those corporations ante up and pay their fair share.

If we allow the Bush tax cuts for earners of $250,000 and above to simply expire, we save $1 trillion over 10 years and make a critical dent in our federal deficit. Instead of cutting the jobs and entitlements of working class Americans, we need to ask the wealthy to pay a little bit more.

We can’t let corporate America undo the results of the election. Working people won’t take that lying down. And Democrats should hold their ground.

The grand bargain is a grand swindle.

© 2012 The Progressive

Sarita Gupta is the executive director of Jobs with Justice, a national network of more than 40 local coalitions of labor, community, student, and faith organizations, working together to build a broader global movement for economic and social justice.

For background notes on the "fiscal cliff" swindle, see:

This Is Not America’s Deal

by Richard Eskow

Our leaders in Washington heard from the voters last month. They may need to hear from them again.

According to news reports a budget deal is coalescing around some very unattractive and unwise ideas. The deal’s centerpiece is reportedly the “chained CPI,” a back-door tool for gutting Social Security benefits that also raises taxes on all levels of income – all levels, that is, except the highest.

This deal would make voters very unhappy. It reflects neither their wishes, their needs, or their values. They’ve already said so – to pollsters like ours (http://www.ourfuture.org/files/documents/dcor.cafpe.graphs.110812.FINAL.pdf) and in the voting booth on Election Day (http://blog.ourfuture.org/20121108/after-the-election-a-new-mandate-and-...).

These results are easily interpreted as a series of voters’ messages – first to the President and his party during negotiations, then about the deal itself.

On the negotiations:

Don’t overrule us with a “Loser Take All” deal.

The Republicans lost the last election - by a landslide, in fact, in both the Presidential and Senate races. They even lost the House — by more than 1.6 million votes. Only their gerrymandering, vote suppression, and billionaire campaign cash allowed them to retain control of that body despite a popular-vote defeat.

And only their outrageous abuse of Senate rules like the filibuster has allowed them to tie up that body and prevent it from doing its work.

Republicans lost because their ideas are unpopular. But this deal would turn those ideas into policy. This undemocratic ”Loser Take All” strategy will further alienate voters, while encouraging extremists in Congress to keep abusing the system.

Don’t mistake threats for concessions.

Republicans have repeatedly broken with precedent – and common decency – by using the debt-ceiling process to hold the entire nation hostage to foist their unpopular ideas on the public.

Now Boehner has “offered” to avoid using the debt ceiling as a hostage – but only for a year. An “offer”? That’s like plea bargaining with the DA by agreeing not to break the law again … this month.

Please take another look at Boehner’s ‘no-hostages’ offer, Mr. President: It’s not a ‘concession’ or ‘deal point.’ It’s a threat.

Don’t reinforce right-wing myths that undermine American values.

This deal would send the wrong message: that successful programs and policies – Social Security, Medicare, and progressive taxation – are problems to be fixed, not solutions to be implemented and strengthened. These programs reflect our finest values: fairness, self-sufficiency, and mutual support. And they work.

A deal like this would also distract the nation from the real sources of our economic difficulties – like wealth inequity, a shortage of good middle-class jobs, and the misdeeds of under-regulated banks and corporations.

No deal is acceptable that undermines our social contract — our common agreement to work together and help each other — as this one would. They’ve made us strong and prosperous and they must be protected.

On the deal itself:

Don’t use the “chained CPI” because it makes deep cuts to Social Security.

The deal being floated uses the sneaky “chained CPI” to cut Social Security benefits – a lot – for current and future recipients. This supposed “correction” in calculating annual cost-of-living increases makes an already-inadequate formula even less fair to the elderly and disabled.

It’s a drastic cut, too: a 3.7 percent cut for the average 75 year old, a 6.5 percent cut for 85 year olds, and a 9.2 percent cut for 95 year olds.

As Rep. Keith Ellison noted in a press release, this backdoor benefit cut would result in a “$6,000 loss for retirees in the first fifteen years of retirement and adds up to a $16,000 loss over twenty-five years.”

That’s draconian, especially for a program that’s not in immediate crisis and doesn’t contribute to the deficit. And as we’ve written elsewhere (http://blog.ourfuture.org/20110630/The_Social_Security_Chain-CPI_Massacr...), the “chained CPI” targets women, minorities, the very elderly, and the poor. It also hits veterans and their families hard (http://strengthensocialsecurity.org/sites/default/files/VA%20COLA%20Cuts...).

It’s stunning that it’s even being discussed.

Don’t use the “chained CPI” because it raises taxes on the non-wealthy.

The deal describe in the press would also adopt the “chained CPI” across all government agencies – including the IRS. That would raise taxes on income below $400,000 per year (under the President’s reported counter-offer) by forcing all income below that amount higher tax brackets more quickly.

But it wouldn’t be an increase for earnings above that amount because they’ve already reached the top tax bracket.

This tax increase on the middle class would hurt consumer demand and dampen economic growth. It would also be damned unfair.

Don’t ask the already-beleaguered majority to pay twice as much as the coddled rich.

Boehner ‘sinitial offer would raise taxes only for income of $1,000,000 and above, which would decrease revenue by an estimated $366 billion (http://www.cbpp.org/files/5-30-12tax.pdf) compared to the President’s proposal. That’s about half his revenue - revenue we need to rebuild our crumbling infrastructure and heal our wounded economy.

The President’s reported counter-offer of a $400,000 top bracket suggests they’re working toward a final “compromise” that only asks the wealthy to pony up $100 billion or $200 billion more. By contrast, the “chained CPI” would cut an estimated $122 billion in Social Security benefits over the same time period, while taking roughly the same amount from tax-bracket tax hikes that target the middle class.

That’s a two-for-one deal: For every dollar the wealthy put up, everybody else puts in two. And they call that “compromise”?

Deal with our real health care cost problems – and leave benefits alone.

The President’s counter-offer reportedly includes $400 billion in unspecified savings from health programs – presumably Medicare, Medicaid, and veterans’ health. Benefit cuts are both unacceptable and unwise. They would place yet another burden on everybody but the wealthy, and would merely shift costs from Americans’ tax “pocket” to their family budget “pocket” – or leave them without needed medical care.

Our health cost problem wasn’t caused by overly-generous benefits, but by runaway greed in the healthcare system.

We need to address excessive profit margins, fraud, overcharging, and overtreatment – or as the GOP might call them, “sources of campaign funding.”

Do Our Deal, Not Yours

It’s naive for members of either party to think they can sign a deal which overrides the voters and defies their values without paying a steep political price. (And Democrats have more to lose on that score than Republicans.) A deal like this would also reinforce the belief that leaders of both parties are beholden to the wealthy and corporations, not the people. It would suggest that the public’s values and concerns vanish once you cross the Beltway.

It would send a clear message back to the American people: We’re not listening.

Democrats should tell the truth: Boehner and Republicans are demanding unpopular and damaging cuts to programs most Americans want and need by holding our economy hostage for proposals that voters rejected. They’ve also created an artificial crisis, a ticking policy device called the “fiscal cliff” meant to instill panic so that people will accept policies that are unfair, unwise, unpopular, and unnecessary.

The President can show the nation what real leadership looks like – by refusing to panic. He can represent voters by demanding that Congress address our real crises instead – crises of un- and under-employment, of wage stagnation and wealth inequity, of crumbling infrastructure, increased poverty, and unaffordable education.

Read the polls and election results and the voters’ message is clear: We didn’t vote for this deal. We don’t want it. In two words: No deal.

© 2012 Campaign for America's Future

Richard (RJ) Eskow is a well-known blogger and writer, a former Wall Street executive, an experienced consultant, and a former musician. He has experience in health insurance and economics, occupational health, benefits, risk management, finance, and information technology. Richard has consulting experience in the US and over 20 countries.

Richard has also worked in long-range forecasting. With the Institute for the Future in Palo Alto, he participated in an online game where 10,000 players enacted future disaster scenarios. He has also done forecasting and analytical work for the Rockefeller Foundation and other organizations. He is among "fifty of the world's leading futurologists" whose "hopes, fears, and best predictions" are collected in a 2011 book entitled The Rough Guide to the Future.

He is a regular columnist for the science and culture blog 3 Quarks Daily and a Contributing Editor for Tricycle magazine. His reflections on blogging and spiritual principles were included in "Best Buddhist Writing of 2008."

The Right’s ‘Limited Government’ Scam

Exclusive: Libertarians and Tea Partiers pretend they are the only Americans who believe in “limited government” as envisioned by the Framers, but that is a false conceit. The real history is that Madison and Washington devised a Constitution with broad powers to promote the “general Welfare,” says Robert Parry.

By Robert Parry

A favorite line from the American Right – both well-educated libertarians and know-nothing Tea Partiers – is that the Founders believed in “limited government” and the United States must return to that constitutional principle. But the argument is both nonsensical and insulting.

Everyone believes in “limited government” – unless you’re a totalitarian or a fan of absolute monarchies. Liberals, conservatives, socialists, free-market ideologues and pretty much everyone in between believe in limitations of government power. The point of having a constitution is to set the limits and rules for a government.

That is what the Framers did with the U.S. Constitution in 1787. They set limits, but they also vastly expanded the central government’s powers, a fact that today’s Right doesn’t want to acknowledge.

Indeed, that’s why the Articles of Confederation, the Constitution’s precursor, has disappeared from the typical right-wing recitation of early U.S. history, which starts with the Declaration of Independence in 1776 and jumps to the Constitution in 1787 and the Bill of Rights in 1791. Left out of the chronology is what governed the country from 1777 to 1787, i.e. the Articles of Confederation.

The reason that the Articles of Confederation are an inconvenient truth for the Right is that the Articles represented what the Right pretends the Constitution stands for now, strong states’ rights and a weak federal government. The Articles even made the 13 states “sovereign” and “independent” and left the central authority as only a “league of friendship” dependent on the states.

However, under that structure, the young nation was coming apart as states went off in their own directions, the economy struggled and European powers looked to exploit the divisions. Then, in 1786, when a populist uprising known as Shays’ Rebellion rocked western Massachusetts, the federal government lacked the money and means to field a military force to restore order. The revolt was eventually put down by an army financed by wealthy Bostonians.

George Washington, reflecting on the worsening chaos, wrote in support of a plan by fellow Virginian James Madison to give the federal government control over national commerce, declaring: “We are either a united people, or we are not. If the former, let us, in all matters of a general concern act as a nation, which have national objects to promote, and a national character to support. If we are not, let us no longer act a farce by pretending it to be.”

When it became clear that the Articles of Confederation could not be feasibly amended to address the country’s problems, Washington and Madison led what amounted to a bloodless coup d’etat against the states’ “sovereign” powers. This coup was known as the Constitutional Convention. It was conducted in secret in Philadelphia and resulted in the Constitution, which flipped the power relationships between the central government and the states, making federal law supreme and dramatically expanding the powers of the national government.

Today’s Right doesn’t want to acknowledge this history because it destroys the right-wing narrative by revealing the Framers to be advocates of a strong central government and opponents of states’ rights. [For details, see Robert Parry’s America’s Stolen Narrative.]

Still ‘Limited Government’

Yet, as broad as the Constitution’s federal powers were, the fact that they were spelled out – mostly in Article I, Section 8 – meant that the Framers were creating a “limited government,” i.e. one that had to operate within a prescribed set of rules. Those rules were clarified in greater detail by the Bill of Rights in 1791 and have been updated periodically through various amendments.

So, since pretty much everyone agrees that the Constitution established a “limited government,” why does the Right pretend that it’s the only political grouping that recognizes this obvious fact? In many cases, liberals are even more ardent in rejecting government intrusion on privacy and other personal liberties than many conservatives are.

It seems the reason that the Right pretends that it alone stands for the Constitution’s principle of “limited government” is that this argument exploits the national mythology around the country’s founding, at least for the uninformed. The argument also plays to the notion that the federal government’s use of its considerable powers, such as citing the Commerce Clause and the 14th Amendment to outlaw racial segregation in the South, has been somehow illegitimate.

Indeed, this current right-wing attack on “federal overreach” has been around since the 1950s and the civil rights movement, which put an end to Jim Crow laws in the South. The Right’s claim is essentially neo-Confederate and harkens back to the South’s efforts prior to the Civil War to insist that slave-states had the right to nullify federal laws and ultimately to secede from the Union.

Though the Union was maintained by the Civil War, a neo-Confederate movement pushed back against federal efforts to “reconstruct” the South as a more egalitarian society. The neo-Confederates gained political allies among the new industrial elite in the North, “robber barons” who for their own reasons of self-interest wanted to block federal intervention on behalf of impoverished working men and women.

This alliance against federal activism prevailed though much of the late 19th Century and into the 20th Century but suffered severe setbacks when “free-market capitalism” drove the country into the Great Depression. That led to Franklin Roosevelt’s New Deal which imposed tighter regulation on Wall Street financiers and created new protections for the average American, whether in union rights or Social Security. Out of those and other efforts of the federal government grew the Great American Middle Class.

Meanwhile, Southern segregationists also lost out as the civil rights movement of the 1950s and 1960s forced the country to finally confront its racist reality. The federal government, led by liberal Democrats and some liberal Republicans, took action to force integration of schools, restaurants and other public facilities. That intervention provoked a furious counter-reaction from many white Southerners who shifted their allegiance to the Republican Party.

A Revamped Movement

In essence, the old alliance of convenience between Southern segregationists and Wall Street financial interests was rekindled and began building a propaganda infrastructure to persuade other Americans that the federal government was evil and had to be fought.

As part of that propaganda effort, wealthy right-wingers, like the Koch Brothers, invested heavily in think tanks and academic institutions where “scholars” cherry-picked quotes from key Framers, particularly Madison, to distort the history surrounding the Constitution. This false history was then packaged and sold to ill-informed Tea Party types who fancied themselves as channeling the anti-government passions of the Founders.

For instance, one right-wing canard about the Second Amendment is that the Framers wanted an armed citizenry so the people could go to war with the government to protect individual liberties. The reality, of course, was entirely different. Aristocrats like Madison and Washington wanted armed militias so the government could maintain order in the face of disruptions like Shays’ Rebellion as well as to resist Native Americans on the frontiers and to put down slave revolts.

The federal response to the Whiskey Rebellion, which erupted in western Pennsylvania in 1791, revealed this chief idea behind “a well-regulated militia” as cited in the Second Amendment. In 1792, shortly after the Bill of Rights was ratified, Congress passed the Militia Acts requiring all military-age white males to obtain their own muskets and equipment for service in militias.

In 1794, President Washington, who was determined to demonstrate the young government’s resolve, led a combined force of state militias against the Whiskey rebels. Their anti-tax revolt soon collapsed and order was restored. In other words, the key purpose of the Second Amendment was to help the government maintain “security,” as the Amendment says, not to promote disorder.

But the Right’s false narratives are not simply historical fantasies. For the last several decades, they have been powerful political instruments enabling neo-Confederates in the South and Ayn Rand libertarians in the North to redirect the United States onto a path of anti-government fanaticism, a craziness that let Wall Street run wild and has put devastating weapons in the hands of mentally unstable individuals.

This misleading notion that only libertarians and Tea Partiers care about – and should be allowed to define – how the Framers understood “limited government” has led the nation into George W. Bush’s Great Recession and the recent school-shooting tragedy in Newtown, Connecticut.

So, while it’s true that the Framers – like almost every American then and now – believed in “limited government,” it’s wrong to assume that they were anti-government ideologues who would have stood by and done nothing while six-year-olds were being mass-murdered.

The key Framers – the likes of Washington and Madison – could best be described as pragmatic nationalists. They wanted a strong central government because one was needed to protect the country’s hard-won independence.

Another inconvenient truth that the Right would rather people not recognize is that the Framers included in both the Constitution’s Preamble and among the “enumerated powers” of Congress in Article I that a top responsibility of the federal government was to provide for the “general Welfare of the United States.”

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his new book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

Copyright © 2012 Consortiumnews.

8 Deficit Reducers More Ethical, Effective Than 'Chained CPI'

8 Deficit Reducers That Are More Ethical—And More Effective—Than the 'Chained CPI'
by Richard Eskow

News reports say the President’s proposed deal includes the “chained CPI,” which would impose drastic Social Security cuts (http://strengthensocialsecurity.org/sites/default/files/Chained_CPI_Fact...) and tax hikes for everybody but the wealthy. And House Minority Leader Nancy Pelosi says that "Democrats will stick with the President."

They should both think again.

The “chained CPI” is being offered as part of a “deficit reduction” deal, even though Social Security is forbidden from contributing to the deficit. Even if you accepted this unreasoned act, it remains morally unacceptable to reduce spending on the backs of the elderly, women, the poor, veterans, disabled Americans, and the poor.

It’s even more unethical to do it when other options available could save much more money, And it’s even worse when we see who isn’t “sharing in the sacrifice” – a list that includes hedge fund managers, Wall Street gamblers, billionaires, drug companies, defense contractors, and tax-dodging corporations.

Independent estimates say that the “chained CPI” will slash Social Security benefits by $122 billion over the next ten years. Here are eight solutions that will save more money—and really will reduce the deficit—without compromising either our ethics or our sense of fairness:

1. Close multiple loopholes in the capital gains law: $174.2 billion. (1.42x)

Lawmakers could save nearly one and a half times as much money as they’ll get from stripping seniors, the disabled, veterans, and children of their benefits—1.42 times as much, to be precise—by closing capital gains loopholes.

They include the “carried interest” loophole, which taxes hedge fund managers’ service fees at the low “investors’” rate; the ‘blended rate,’ which taxes some quick derivatives trades as if they were long-term investments; the ability to ‘gift’ capital gains to avoid taxation; a dodge for bartering capital gains; and the ability to ‘defer’ gains to future years.

A more aggressive approach—eliminating the capital gains altogether—ould yield more than $900 billion in savings, but that might affect middle-class families and seniors. By using the “chained CPI,” America’s seniors, vets, and disabled are taking a hit so that hedge fund managers can keep their loopholes.

(Source: Calculations based on figures cited by the Center for Budget and Policy Priorities - http://www.cbpp.org/files/9-19-12tax.pdf)

2. Refuse to compromise on the President’s $250,000 figure for increased taxation: $183 billion (1.5x)

The President’s initial tax plan—the one he and his party ran on, the one that voters endorsed—called for letting the Bush tax cuts expire for income above $250,000. That would bring in an estimated $366 billion in added revenue over the next ten years. Now, say reports, he and the Republicans will agree on a figure that’s “somewhere in the middle.”

If true, the deal’s deficit reduction impact will be reduced by $183 billion. That’s one and a half times as much as the “chained CPI” will take from seniors, the disabled, veterans, and their dependents. They’ll pay—so that people earning $250,000 and up don’t have to.

(Source: CBPP estimate, divided in half - http://www.cbpp.org/files/9-19-12tax.pdf)

3. Reduce the budget for US overseas military bases by 20 percent: $200 billion. (1.6x)

The United States maintains 702 military ‘installations’ in 63 foreign countries (it has 4,471 bases altogether), according to the Defense Department’s annual budget statement.

These figures don’t include bases in Iraq and Afghanistan. We’re talking about our military presence in nations like Germany, South Korea, and Japan. While the total cost of these bases is kept secret, the best analysis I’ve seen estimates their ten-year cost at approximately $1 trillion.

A twenty percent cut in that budget is extremely modest under the circumstances, and would save 1.6 times as much as the “chained CPI” cut.

(Sources: US Defense Department; David Vine http://www.juancole.com/2012/12/americas-achipelago-of-garrisons-abroad-... via Juan Cole and Tom Engelhardt - http://blog.ourfuture.org/20121218/Tomdispatch.com)

4. Allow the government to negotiate with drug companies: $220 billion. (1.8x)

Current law specifically forbids the government from using its negotiating power to obtain lower rates for Medicare prescriptions—even though much of the research behind the drugs involved was performed at government expense.

If we allow the government to negotiate with drug companies, that will save an estimated $220 billion. That’s 1.8 times as much money as the “chained CPI”—and it comes from the drug companies, not vulnerable Americans.

(Source: Outterson and Kesselheim, Health Affairs - http://content.healthaffairs.org/content/28/5/w832.full)

5. Enact DoD-friendly cuts to military budget: $519 billion. (4.25x)

A defense think tank conducted an exercise to help the military prepare for the possibility of forced spending cuts under sequestration (the so-called “fiscal cliff”). It convened what it called “a series of strategic choices exercises,” using “experts from across the defense community,” in order to decide how best to cut $519 billion from defense spending cuts over ten years.

The participants were not peaceniks—most were in the defense community, while some were Congressional staffers—and the think tank’s staffed by ex-military and military-friendly consultants. Nevertheless, they were able to come up with options that seemed acceptable by balancing short-term readiness with long-term preparation.

It was a surprisingly smart exercise—and it sounds like a very good way to build consensus around defense cuts (even though that was not its intent). A project leader described (http://www.govexec.com/defense/2012/11/teams-experts-game-out-strategic-...) the exercise as “listening to the future,” while the report itself said that “Failing to recognize and make strategic choices is effectively a form of self-sequestration.”

We can listen to our future selves, since we’ll all need Social Security some day, and say: Make these cuts. That’s better than “self-sequestering” by letting politicians cut Social Security.

(Source: “Strategic Choices: Navigating Austerity,” Center for Strategic and Budgetary Assessments - https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&...)

6. Enact Rep. Jan Schakowsky’s ‘Fairness in Taxation Act’ for very high earners: $872.5 billion. (7.15x)

In 2011 Rep. Jan Schakowsky introduced the “Fairness in Taxation Act,” which would have created additional tax brackets for very high earners. As Rep. Schakowsky noted at the time, today’s tax structure “fails to distinguish the merely ‘well-off’ from the ‘super-duper rich.’”

The bill adds the following tax brackets:

• $1-10 million: 45%

• $10-20 million: 46%

• $20-100 million: 47%

• $100 million to $1 billion: 48%

• $1 billion and over: 49%

It also taxes capital gains and dividend income as ordinary income for those taxpayers with income over $1 million.

The very wealthy would still be paying much less than they paid under Republican President Dwight D. Eisenhower, when the top rate was 91 percent. For that matter, these rates are lower than those we had under most American Presidents of the last century.

This bill brings in more than seven times the “chained CPI” savings by asking the ultra-rich to pay their fair share, instead of targeting seniors and other Americans in need.

(Sources: Rep. Jan Schakowsky; Economic Policy Institute - http://grijalva.house.gov/uploads/The%20People)

7. Eliminate corporate tax loopholes: $1.24 trillion (10x)

A 2007 Treasury Department report (prepared under President Bush) concluded that “corporate tax preferences”—that is, loopholes—resulted in lost revenue of $1,241,000,000,000 over a ten-year period.

That number looks pretty good—especially when it’s stacked up against the “chained CPI” figure of $122 billion.

If we can’t afford to honor our commitment to America’s veterans and their families, or to our seniors, or to the disabled, we sure can’t afford these corporate tax loopholes – excuse me, I meant “preferences."

(Source: United States Department of the Treasury background paper - http://www.treasury.gov/press-center/press-releases/Documents/07230%20r.pdf)

8. Create a financial transactions tax for high-volume Wall Street trading: $1.8 trillion (14.75x)

And here’s our grand prize winner: A financial transaction tax like the one they’ve imposed in the United Kingdom. The UK tax rate is tiny—0.25 percent of each transaction, levied on both parties—but the overall impact is substantial.

Not only would this tax bring in substantial revenue, it would also discourage the massive volume of ultra-high-speed computer-driven transactions that have turned the stock market into both an imperceptible ‘black box’ and a real-time mega-casino operating in nanoseconds.

‘Algorithmic trading’ and other forms of Wall Street speculation don’t build economic value or encourage wise investment. Instead they’re used to drive the kinds of speculation that’s driving out smarter investments – and brought our economy to its knees in 2008.

Dean Baker of the Center for Economic and Policy Research estimates that a UK-style tax would bring in $1.8 trillion over ten years. It could also lead to healthier investment—and potentially might even help prevent another crash. More than 200 economists signed a letter supporting the concept of a financial transaction tax.

So the choice is clear: Tax the folks who ruined the economy, and protect the rest of us in the process, or ask seniors, etc. to sacrifice needed benefits. Guess which one they’re leaning toward right now?

(Source: Dean Baker, “The Deficit-Reducing Potential of a Financial Speculation Tax“ - http://www.cepr.net/documents/publications/fst-2011-01.pdf)

Conclusion These figures don’t even include the tax hike that the “chained CPI” will impose on all but the highest levels of income. But even without those numbers, the public already hates the idea. Confirming our interpretation of polling data yesterday, a new Washington Post poll shows that 60 percent of the people polled found the idea “unacceptable” and only 34 percent found it acceptable.

Imagine how they’ll feel when they learn that’s it coming anyway – and that it’s being used to protect hedge fund managers, Wall Street tycoons, Big Pharma, military contractors, and tax-evading corporations?

Democrats should not “stick with the President” on this one—and the President should not stick with this proposal.

(You can go here to tell President Obama: No deal that cuts Social Security, Medicare or Medicaid - http://action.ourfuture.org/p/dia/action3/common/public/?action_KEY=182)

© 2012 Campaign for America's Future

Richard (RJ) Eskow is a well-known blogger and writer, a former Wall Street executive, an experienced consultant, and a former musician. He has experience in health insurance and economics, occupational health, benefits, risk management, finance, and information technology. Richard has consulting experience in the US and over 20 countries.

Richard has also worked in long-range forecasting. With the Institute for the Future in Palo Alto, he participated in an online game where 10,000 players enacted future disaster scenarios. He has also done forecasting and analytical work for the Rockefeller Foundation and other organizations. He is among "fifty of the world's leading futurologists" whose "hopes, fears, and best predictions" are collected in a 2011 book entitled The Rough Guide to the Future.

He is a regular columnist for the science and culture blog 3 Quarks Daily and a Contributing Editor for Tricycle magazine. His reflections on blogging and spiritual principles were included in "Best Buddhist Writing of 2008."

Obama Will Ride to the Rescue... for Republicans

by Cenk Uygur

The Republicans have put themselves in a holy mess with this Plan B debacle. They now have less than zero leverage. They are a national laughingstock. A majority of the country now thinks they are "too extreme." They just got walloped in the election. And with the tax cuts set to expire the laws are rigged against them as well.

There is only one person who can rescue the Republican Party now -- Barack Obama. And he will. I have been saying for over two years now that President Obama is dying to do the Grand Bargain. He will do it at any cost. In fact, he actively wants to cut Social Security and Medicare. He can't wait for that pat on the back from the establishment when they finally call him post-partisan, above party politics, and a statesman for screwing over his own voters. This is by far his greatest wish.

I couldn't believe that people couldn't believe that President Obama offered to cut Social Security again in this round of negotiations. What are you still surprised at? The man has offered to cut these so-called entitlements every time. When are you going to get it through your head -- he wants to cut them!

Ok, I'm raining on everyone's parade here because this is the moment when the partisans are supposed to be reveling in Republican failure. The Republican Party is split and in tatters. Yes, but to what end? In order for that to be relevant, the Democrats would now have to offer a very different deal where the terms are changed in our favor. If they do and they get a deal where taxes are actually raised on people making above $250,000 and Social Security and Medicare are protected, then I will be dead wrong. I will be wrong now and I will have been wrong for all of these years. You can rub my face in it. And since the Democratic partisans are now feeling triumphant, get that crow ready for me to eat.

But it's not going to happen. I'm telling you this even in the Republican Party's darkest hour, the president will still give them most of what they want. My guess is that liberals will be stunned at the concessions President Obama makes even when he had the Republicans in a corner and totally defeated. Here's what you have to understand -- it's because he doesn't want to "win." Winning is different for him than it is for me and you. To us, winning is passing progressive priorities. To him, it's passing a deal where he seems like he is above party politics. In order to do that, he must cut entitlements (and corporate taxes, too, by the way).

We're going to find out who is right soon enough. I just wanted to make sure you knew what was coming ahead of time, so that you understand President Obama's real motivation. Understand that next time around, and remember he's still here for another four years, asking the president politely doesn't get you anything. He isn't a progressive in his heart, he is an establishment pleaser. The only way he acts like a progressive is if you make him. Next time, instead of applauding so much, put all of the pressure on the world on him. That's what Republicans do all of the time and it is what will allow them snatch victory from the jaws of defeat. Mark my words.

I think we can all at least agree that if ever there was a time to press progressive priorities this would be it. So, this will be a true test of who he is and what he believes. Let's see what he does. You shall know him by his works.

© 2012 Cenk Uygur

Cenk Uygur is host of The Young Turks on Current TV as well as the host and co-founder of The Young Turks online which is the largest news show on the Internet. Uygur is the former host of MSNBC Live and has appeared numerous times on CNN, CNN Headline News, E! Entertainment Channel, Al Jazeera, ABC News, Voice of America and NPR.

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