Reposted from Bruce Krasting’s blog with his permission.
The Treasury Department emailed its fans a blog entry setting out its position on extending the debt limit. The very fact that the Treasury Department feels the need to post blogs on this topic worries me. They wouldn’t be doing this if they actually thought that passing the ceiling was a slam-dunk.
Dr. Jan Eberly made numerous arguments as to why the debt ceiling should not be an issue at all. Some were valid. As part of the last go around on the debt ceiling there was an agreement to cut spending. The terms of that deal led to $2T of budget cuts. That being done, there’s no valid reason to dispute the matter. At least that is the position of Treasury.
Possibly, the Treasury’s own mind-set will trip it up. It acts like it hasn’t gotten the memo on what the debt ceiling issue means to most folks. Read what Eberly had to say about the consequences of failing to raise the ceiling:
Really Jan? I don’t think this is correct. Changes in the trajectory of the debt ceiling would most certainly have a significant effect on revenues, spending, the size of the deficit and the amount of outstanding debt.
Liquidity moves markets!Click here to learn how you can follow the money.
I think the debt ceiling will be increased. It’s politically the wrong time for this fight. But in a year from now the gloves will come off. They have to. At some point the Administration will have a tough fight on their hands, and it won’t win any arguments pretending that the size of the debt does not directly impact spending. That’s exactly what this debate is all about.
Citizens for Tax Justice has a report out on one of my hot-button topics. Corporate taxes. They produced a list called the Dirty Thirty. The time span covered 2008 – 2010. The results compare 30 companies’ actual tax rates and how much they paid to lobbyists. The list:
I don’t think these companies are actually cheating on their taxes. But they are cheating the American public. They are allowed to avoid paying taxes (and getting monstrous refunds to boot) because of the tax code. The problem is that the same folks who run these companies are also creating the tax laws that they greatly benefit from.
The best proof of that is #2 on the list. GE has a negative tax rate of 45% on over $10b of domestic income. Shameful. Yet the boss at GE, Jeff Immelt, is best buds and a senior adviser to the President. Shameful.
Not that long ago Bank of America got hit with a shovel from its customers after it tried to jack up fees. BAC was on the nightly news and the blogs. It folded under the pressure. The CEO of BAC (what’s his name) acknowledged today that it was the backlash from consumers that forced the change in policy.
It worked perfectly with BAC. Public outrage and customers closing their accounts forced good old what’s-his-name to change direction. I wish it was as easy with the likes of GE. BAC was stealing nickels and dimes. GE is in it for the billions.
An interesting report from the CBO today examines various efforts to contain the costs of delivering healthcare. The report reviews 34 separate programs over a twenty-year period.
The conclusion after this multi-decade, multi-billion dollar effort?
The evaluations show that most programs have not reduced Medicare spending
In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program
It wouldn’t be fair to blame the caregivers or the administrators for the failures. The patients were suffering from chronic heart/lung diseases and diabetes. There are no “cheap” alternatives in treating these conditions.
The cost of healthcare in general, and Medicare in particular, will eventually sink the country. I don’t see any disagreement on that conclusion.
We will hear plenty on this topic over the next 10 months. Both Reds and Blues will claim that waste and inefficiency are the problem. That “They” have a plan to contain the costs and make the problems go away. Don’t listen to them. The CBO says so.
We need a Plan B. It will not be a very pleasant discussion at all.