Economics

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Banks and Our Money

Are the banks using TARP money to – successfully – lobby the Senate?  Sure looks that way.  I first heard this story on Keith Olbermann’s Countdown when he interviewed Arianna Huffington.  But the best story  is by Ryan Grim on the Huffington Post.

The Senate on Thursday rejected an effort to stave off home foreclosures by a vote of 51 to 45. It was an overwhelming defeat, with the bill’s backers falling 15 votes short — a quarter of the Democratic caucus — of the 60 needed to cut off debate and move to a final vote.

The death of the bankruptcy reform measure — which would have allowed a small number of homeowners who met strict conditions to renegotiate mortgages under bankruptcy protection — is a major tactical win for the banking industry. But allowing the foreclosure crisis to continue unabated may end up being a failed strategy for the financial sector.

A little background from the Washington Post.

The measure would have allowed bankruptcy judges to modify troubled mortgages, lowering the interest rate or principal balance, a process known as a cramdown. Bankruptcy courts can already make those changes for a second home or investment property, but not a primary residence.

This would impact owners who are seeing home values drop to the point that the mortgages are larger than what the home is worth.  Sentator Richard Durbin was the primary sponsor and the bill was back, a little tepidly, by the Obama Administration. So back to Ryan Grim.

The Chamber of Commerce has deemed the vote a crucial one that will be heavily counted in its annual scorecard, and those who voted yes will pay a financial price from the Chamber and the banking industry.

Other Democrats stuck with the banks against the homeowners. Sen. Robert Byrd (D-W.Va.) was wheeled into the chamber and pointed his finger in the air, signaling a yes vote, then dramatically swung it down, as if taunting the backers of the bill.

Sens. Jon Tester (Mont.), Mary Landrieu (La.) and Ben Nelson (Neb.) all voted with the banks, as they told the Huffington Post they would. Sen. Blanche Lincoln (D-Ark.) voted no, as did the new Democratic Sen. Arlen Specter of Pennsylvania.

Sen. Michael Bennett (D-Colo.), Sen. Tim Johnson (D-S.D.) and Max Baucus (D-Mont.) voted no as well.

Earlier this week, Durbin concluded that banks that “frankly own the place.”

How much did the Senate go for?

The banking and real estate industry has funneled roughly $2,000,000 into Landrieu’s campaign coffers over her 12-year career, according to data from the Center for Responsive Politics. The financial sector is Nelson’s biggest backer; he’s taken $1.4 million from banks and real estate interests and another $1.2 million from insurance firms. Tester has fielded roughly half a million in his two years in office. Lincoln has taken $1.3 million from banking and real estate interests.
Carper has raked in more than $1.5 million. Baucus, chair of the finance committee, has been on the receiving end of $3.5 million over his career. Specter has hauled in more than $4.5 million and Johnson has gotten some $2.5 million.

So don’t these Senators realize how we got into this mortgage mess to begin with?  I see crazy loans made way above a homes value even in good times whose owners are now in trouble.  Where are the mortgage bankers getting the money to lobby?  I thought they were in trouble and needed taxpayer help.  I say, no more bailout for any mortgage bank which lobbied against this bill.

By the way, there is also a list of Senators who voted their consciences:  Evan Bayh, Mark Warner, Jim Webb, and Ted Kaufman (who is not running for re-election).  We need to thank them for their votes.

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National Crisis but Local Impact

I’m sure that every community large or small has similar issues.  Development is stalled, often in the midst of construction.  This is what the credit crisis has done to all of us.  Yvonne Abraham writing in today’s Boston Globe articulates what I think many have been feeling.  She calls her piece “Holes in the Heart.”

A lot of people are mighty mad about the giant pit where Filene’s used to be, and rightly so. Ditto the fenced-off disaster that was to have been the South End’s Columbus Center. The stalled megaprojects are ugly gashes in the heart of the city.

But there are other holes in Boston that are just as damaging to the city. They lie at the center of lively and struggling neighborhoods. They are not high-rise luxury hotels or ritzy condos. They are less ambitious than that and more important.

Much of the development she writes about is housing and small commercial space in actual neighborhoods.  I drive by at least two of the sites she writes about several times a week.  They are all large vacant lots in mostly residential neighborhoods.  The housing was mostly designed to be affordable rental housing in a city where many – even those who work for the City – have problems finding places to live.  All are developments my city agency is working with the community organizations to create.  We’ve put in our federal money as has the state.  Now we wait for bank loans and tax credits.  The projects are in all parts of town, but here are the two I see most often.

On Centre Street in Jamaica Plain, plans for the site of the old Blessed Sacrament Church are also stalled. That project was a huge victory for the local community: locals rallied behind a project that would give low-income residents housing and the neighborhood a place to gather, instead of pricey condos in a primo location.

The development, which was supposed to be underway last summer, will include 81 affordable rental units, 16 condos for first-time buyers, and places for 29 formerly homeless men and women.

The JP Neighborhood Development Corporation, which heads the project, is also developing the corner of Centre and Lamartine streets. But those 30 affordable units are also frozen, a yellow earth mover stranded atop a mound of dirt in a fenced-off lot.

Why are they all stalled? Large chunks of the funding were supposed to come from tax credits, which the federal government gives to developers of affordable housing. The developers then sell the credits to profitable companies looking to reduce their tax bills. But the companies’ profits went away, and so did the market for tax credits. It’s a different side of the economic meltdown that has frozen the luxury condos across town.

…Vacant lots make communities feel gutted. Stalled renovation projects leave residents feeling abandoned. Trophy buildings like Filene’s and Columbus Center get ink and outrage, but this is where the real hurt is.

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Following up on Tea Parties

Here are some observations on the April 15 Tea Parties.  In all the news clips, I saw not a single person of color.  I think this is because they were basically anti-Obama demonstrations with more than a tinge of racism.  These demontrations were mostly not about taxes.  They were about how President Obama is not a citizen, was not legitimately elected, and will take away your Second Amendment rights. 

Then there is the question of attendance.  Nate Silver who has been tracking this at fivethirtyeight.com reports his final total to be more than 300,000.  He writes

 promised that I wasn’t going to put much more work into estimating crowd sizes for yesterday’s tea party events, but here is one last update. The important thing is that we now have a credible estimate for Atlanta at 15,000 persons; we were previously relying on an estimate of 7,000 that the Atlanta Journal-Constitution had initially made yesterday evening but then pulled back upon.

It’s not surprising that Atlanta had the largest turnout (in fact, the largest turnout by far, according to our collection of nonpartisan estimates). Turnout was much higher in state capitals than in other cities, and seems to have been much larger in the South than in other regions of the country. Atlanta, being by far the largest Southern state capital, therefore did very well.

His list ranges from the high point in Atlanta to 12 at the Fort Point, NY tea party.  300,000 is really not a lot of people when you think about it.  Maybe the rest of us should be glad of that.  As for the larger turnouts in the South,  I believe that Southern whites just cannot believe that a black man is really President.

So what exactly do the Republicans do with this Fox New movement?

Dan Baltz wrote in today’s Washington Post

The teabag protests that marked tax day on April 15 represent an opportunity and a risk for the Republican Party. Opportunity because they offer a jolt of energy for a battered party after two dismal elections. Risk because they supply at best only a partial answer to what ails the Republicans

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For now standing back and saying no to Obama may be enough. But opposition to Obama’s policies represents an incomplete message for a party seeking to regain power. Republicans still must confront larger questions of how they can appeal nationally and how they would govern were they given the opportunity again.

Will the Republican Party try to use the issues of the Tea Parties to try to revive?  I don’t think that is the road back.  I hope and believe that Americans are beginning slowly to more past issues of race and gender.  Certainly the youngsters I see on the subway in Boston are often in mixed groups and couples are often interracial.  Maybe the race issue and the anti-Obamaism is why more people turned out in the South.  Plus we have that black president with very high approval ratings.  We will probably find out how tea parties work as a strategy when we know the results of the Kay Bailey Hutchinson v. Rick Perry (king of the Texas Tea Party) race for the Republican nomination for Texas governor.

Here are two final looks are the Tea Parties.  Tom Toles from the Washington Post

The Republicans should maybe remember Jim Jones.

And last but not least a link to Jon Stewart.

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Let’s Tea Party

I don’t know how anyone else feels but I think it is very clear that the Republican Party is caught in a timewarp.  Maybe not 1980, but sometime in the early Reagan Year or even pre-Reagan years.  And they are also trying to be 2009 hip.  The combination is ripe for hilarlity – unfortunately for the Republicans.  First there was Chairman Steeele saying he wanted to appeal to the hip hop crowd kinda like Karl Rove and his famous rap, I guess.  Now there is tea-bagging.  The tea baggers don’t seem to get it that we did really well with the higher tax rates – look at the Clinton years.  It is the Clinton tax rates the President wants to restore.

The original Boston Tea Party in 1773 protested the tax on tea without representation in Parliament.  If I recall my history, we had not yet decided to split from Mother England but just wanted to have some guys in Parliament.  I don’t think it was a protest on the tea tax directly.  The tax on tea touch everyone.  President Obama’s tax plan only effects the very top earners since the rest of us will get a little cut.  Bruce Bartlett, writing in Forbes.com, has posted some very interesting statisitics.

Next week is April 15, the day when most Americans have to file their federal income tax returns. To protest the allegedly high level of taxation in the United States, various right-wing groups are organizing tea parties around the country in the spirit of the Boston Tea Party of 1773.

The irony of these protests is that federal revenues as a share of the gross domestic product will be lower this year than any year since 1950. According to the Congressional Budget Office, the federal government will take only 15.5% of GDP in taxes this year, compared to 17.7% last year, 18.8% in 2007 and 20.9% in 2000.

The truth is that the U.S. is a relatively low-tax country no matter how you slice the data. The following tables illustrate this fact by comparing the U.S. to other members of the Organization for Economic Cooperation and Development, a Paris-based research organization.

As Table 1 shows, total taxation (federal, state and local) amounted to 28% of the GDP in the U.S. in 2006. Only four of the 30 OECD countries had a lower tax ratio. Taxes averaged 35.9% for the OECD as a whole and 38% in Europe. Citizens of Denmark and Sweden paid very close to 50% of their total income in taxes.

Table 1: Total Taxes as a Share of GDP, 2006

Denmark

49.1

U.K.

37.1

Ireland

31.9

Sweden

49.1

Hungary

37.1

Greece

31.3

Belgium

44.5

Czech Rep.

36.9

Australia

30.6

France

44.2

N.Z.

36.7

Slovak Rep.

29.8

Norway

43.9

Spain

36.6

Switzerland

29.6

Finland

43.5

Luxembourg

35.9

U.S.

28.0

Italy

42.1

Portugal

35.7

Japan

27.9

Austria

41.7

Germany

35.6

Korea

26.8

Iceland

41.5

Poland

33.5

Turkey

24.5

Netherlands

39.3

Canada

33.3

Mexico

20.6

Source: OECD

Bartlett ends with an interesting observation. (I should say that he also has other charts comparing individual tax rates.)

The point is that one can’t look just at the taxes people pay here or elsewhere without looking at what they get in return. It doesn’t automatically follow that the places with the lowest taxes are the best places to live and work. This is obvious when we think about where to buy a house. We always look at the quality of local schools as a major factor and are willing to pay higher property taxes in return for good schools. The same is true at the national level as well. Higher taxes may pay for services that people value and thus are not as burdensome as they might appear at first glance.

So what are these tea parties really about?  And is this the best the Republicans can do to find a voice?  Once again we have to turn to Rachel Maddow.  Gabriela Resto-Montero writes this intro for the Nation

The “Tea Bag” movement spawned by a rant on CNBC by Rick Santelli seeks to protest the Obama tax cuts by imitating the revolutionary fathers’ Boston Tea Party, which in fact protested taxation without representation (the opposite of a tax cut). While the logic behind the protest is confusing, the right-wing’s complete lack of awareness about the term “Tea Bagging” is even more so. Rachel Maddow and Ana Marie Cox have some fun at the expense of clueless conservatives and point out that at long last Senator David Vitter may have found a worthy cause to champion.

And I have a really stupid question:  Are they throwing in the tea or the entire tea bag?  If it is the entire tea bag, they are really polluting our lakes and rivers with paper made not to dissolve in water.

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After the G-20

The meeting seemed to go well.  The world leaders fell all over themselves to get pictures with President Obama who was his usual cool self even though he didn’t get the Europeans to cough up  stimulus/recovery money of their own.  They seem to like the idea of regulations a lot more.  

 I wrote a piece a few weeks ago on the Gramm, Leach, Bliley Act as an example of degegluation that led to things like AIG.  I think the Europeans at the G-20 would like us to reinstitute some things like a version of the Gramm, Leach, Bliley Act.  Are the Administration and Congress really waiting to see the economy stabilize before the begin to write regs, or is it just a big stall hoping we will forget about it? 

Paul Krugman wrote an interesting op-ed yesterday in which he tied bankers/financiers salaries to bad stuff happening. 

Thirty-plus years ago, when I was a graduate student in economics, only the least ambitious of my classmates sought careers in the financial world. Even then, investment banks paid more than teaching or public service — but not that much more, and anyway, everyone knew that banking was, well, boring.

In the years that followed, of course, banking became anything but boring. Wheeling and dealing flourished, and pay scales in finance shot up, drawing in many of the nation’s best and brightest young people (O.K., I’m not so sure about the “best” part). And we were assured that our supersized financial sector was the key to prosperity.

Instead, however, finance turned into the monster that ate the world economy.

This is a cycle that began during the Great Depression

Before 1930, banking was an exciting industry featuring a number of larger-than-life figures, who built giant financial empires (some of which later turned out to have been based on fraud). This highflying finance sector presided over a rapid increase in debt: Household debt as a percentage of G.D.P. almost doubled between World War I and 1929.

During this first era of high finance, bankers were, on average, paid much more than their counterparts in other industries. But finance lost its glamour when the banking system collapsed during the Great Depression.

So now we have the heads of AIG, CitiBank (or whatever they call themselves now) saying they deserve their money and bonuses even though they contributed mightily to the current recession.  Even Larry Summers is fat and happy from feeding out of the financial trough.  Robert Sheer writes in The Nation

Not surprisingly, Lawrence Summers is convinced that he deserved every penny of the $8 million that Wall Street firms paid him last year. And why shouldn’t he be cut in on the loot from the loopholes in the toxic derivatives market that he pushed into law when he was Bill Clinton’s treasury secretary? No one has been more persistently effective in paving the way for the financial swindles that enriched the titans of finance while impoverishing the rest of the world than the man who is now the top economic adviser to President Obama.

It is especially disturbing that Summers got most of the $8 million from a major hedge fund at a time when such totally unregulated rich-guys-only investment clubs stand to make the most off the Obama administration’s plan for saving the banks. The scheme, as announced by Treasury Secretary Timothy Geithner, a Summers protégé, is to clean up the toxic holdings of the banks using taxpayer money and then turn them over to hedge funds that will risk little of their own capital. At least the banks are somewhat government-regulated, which cannot be said of the hedge funds, thanks to Summers.

 It was Summers, as much as anyone, who in the Clinton years prevented the regulation of the hedge funds that are at the center of the explosion of the derivatives bubble…

So do we have the makings of another crisis rather than a solution?  Here is Krugman again

The banking industry that emerged from that collapse was tightly regulated, far less colorful than it had been before the Depression, and far less lucrative for those who ran it. Banking became boring, partly because bankers were so conservative about lending: Household debt, which had fallen sharply as a percentage of G.D.P. during the Depression and World War II, stayed far below pre-1930s levels.

Strange to say, this era of boring banking was also an era of spectacular economic progress for most Americans.

The bottom line is we need to make banking boring again by regulating it so the Larry Summers of the world don’t get all the gain and the rest of us can do well also in our more modest way.

And finally, in case you missed it, is Paul Krugman on the Rachel Maddow show.

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Cutting the Defense Budget

How do you tell someone their favorite defense program is no longer going to be funded?  Secretary Gates did it as well as anyone could have when he made his announcement earlier this week.  I think that will turn out to have been the easy part.

So what are people saying about his proposals?

From the Boston Globe  article titled “Deep Cuts, New Chances”

For the defense sector, which in recent years has posted big profits from a rapid run-up in military spending, the new focus was a mixed message. Big programs appear to be in jeopardy, but others may be built up under Gates’ plan.

“This budget represents an opportunity, one of those rare chances to match virtue to necessity, and ruthlessly separate appetites from real requirements,” Gates said of his $534 billion spending plan for the 2010 fiscal year.

Many defense stocks jumped Monday even as the broader market fell. Shares of Lockheed Martin Corp. and Northrop Grumman Corp. each rose nearly 9 percent. Analysts said the big gains, which occurred as Gates made his early afternoon speech, were likely because the budget cuts were not as bad as some investors had anticipated.

The New York Times said the reaction was mixed

Members of Congress and advocates for the armed services pushed back on Tuesday against Defense Secretary Robert M. Gates’s plans to pare billions of dollars from a variety of Pentagon weapons systems, but others said that the cuts were prudent and that fights over them would be limited to several leading programs.

Military analysts said the biggest lobbying campaigns would be focused on Mr. Gates’s proposed cutbacks in the F-22, the advanced stealth fighter that critics call a relic of the cold war, as well as his trimming of the Army’s $160 billion modernization project, called the Future Combat Systems.

Members of Congress from Georgia and Oklahoma, where the jet and the Army project mean jobs, promised a fight. The arguments, which were frequently directed by Republicans against one of their own — Mr. Gates, one of two Republicans in President Obama’s cabinet — were cast in terms of national security and moral responsibility.

But the best commentary is from Jon Stewart in a segment titled “Full Metal Budget”

The fight between regions, technologies and the future of the military has begun.

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Credit Card Blues

Like most Americans I use credit cards.  I use them to buy online and to save the hassle of carrying cash.  Mostly these days I use my debit card but credit cards are great if your stove dies and you need to pay a repairperson or buy a new stove.  Or help with expenses if you are going to graduate school late in life as I did.  But they are a trap.  I remember a time when I cringed if I didn’t pay off the balance each month.  Those days are long gone.

James Surowiecki wrote a great piece for the New Yorker’s  Financial Page  in which he explains very clearly why credit cards companies need regulation as badly as the other financial markets.

It’s little wonder, then, that credit-card companies are now scrambling to shed the customers they think are most likely to default, and to limit the amount that others can spend. In effect, they’re trying to follow the advice given by Larry Selden and Geoffrey Colvin in a book called “Angel Customers & Demon Customers.” Not all customers are equal, it turns out: some are tremendously profitable, while others, like the guy who calls customer service six times a day to check his account balance, cost more than they’re worth. To boost profits, you must cultivate the angels and protect yourself against the demons.

That sounds easy enough. But credit-card companies have created a strange business, in which there’s a fine line between good and bad customers. Their best customers aren’t those who dutifully pay off their balance every month; instead, they’re the ones who charge a lot and pay only a little every month, carrying a sizable balance and racking up interest charges and late fees. These are the “revolvers,” and the credit-card business feeds on them. Credit-card companies don’t necessarily want revolvers to pay off their debts; if they did, there’d be no interest or fees to collect. They want their loans to be, in the words of a banking regulator, “a perpetual earning asset.”

One of the things that credit card companies are doing is increasing interest rates – even on money borrowed at a lower rate.

This increase is partly a response to the greater risk of default, but it also takes advantage of the recession. Many cardholders don’t have enough money to pay off their balance in full, so when interest rates rise they aren’t able to just close their account and get a different card. Effectively, they’re captive customers. And since credit-card companies, unlike most lenders, are allowed to change the terms of their loans at any time, people who borrowed a big chunk of money at, say, nine per cent may now be paying seventeen per cent on the loan.

These tactics are not going to improve the credit-card industry’s dismal reputation. They’re also not going to help an economy in recession, since reduced credit lines take away an important cushion for consumer spending, and higher interest rates and increased fees are likely to drive more people to default. But the odd thing is that while less access to revolving credit is a bad thing for us in the short run, having people rely less on credit cards is a good thing in the long run.

Will Congress and the administration step up to help ease this transition?  A good first step would be higher rates only on new balances to let people pay off the old ones at a reasonable rate – both time and interest.

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Making Sense of the G-20

OK.  All the leaders of all these countries got together in London.   Before the meeting it looked like the bad boy from Dick Cheney’s “old Europe”, Mr. Sarkozy of France, would walk out, leave the meeting in a huff.  Never happened.  Instead, President Obama, the new kid, got France and China to agree on some critical language on tax havens.  The world seemed astonished that a president of the United States of America could actually walk and chew gum. 

I first saw this in Friday’s print addition of the New York Times (yes, I still love that newsprint and reading without staring into a lit screen.) and after some searching found the online link and it turns out it is actually a blog turned into print.  Go figure.  Anyway, this story was titled “On a Scale of 1-10, G-20 scores a 7.” 

For someone like me who is struggling to understand the details of the economic crisis it helped decode the G-20 meeting by lisiting the 10 issues which needed to be addressed and how they did in addressing them.   The authors are Edward Hadas and Christopher Hughes.

The G-20 deserves a mark of seven out of 10. The London summit meeting, which concluded Thursday, hasn’t solved everything. But it has made important strides in both battling the current crisis and preventing future ones.

The score comes by grading the world’s leaders on the top 10 issues the G-20 faced. Each issue was scored with a zero, half a point or a whole point. But note that this is not a finely calibrated exercise. Zero doesn’t mean the G-20 achieved absolutely nothing; equally, a whole point doesn’t mean perfection.

The high scores went to fiscal stimulus, trade finance, preventing financial crisis, tax havens and confidence.  I think this last one is important because the part of the global fiscal crisis is created by uncertainty and fear.

The zero went to trade imbalances, while the rest got half points: making banks healthy, fighting protectionism, increasing the International Monetary Fund, and exit strategy.

In his Friday column about China and the dollar, Paul Krugman ended with this

The bottom line is that China hasn’t yet faced up to the wrenching changes that will be needed to deal with this global crisis. The same could, of course, be said of the Japanese, the Europeans — and us.

And that failure to face up to new realities is the main reason that, despite some glimmers of good news — the G-20 summit accomplished more than I thought it would — this crisis probably still has years to run.

I think the sticking point is that pesky financial regulation issue never mind stimulus money.  Jordan Stancil put it this way in the Nation

Abelshauser [Werner Abelshauser, an economic historian at the University of Bielefeld in Germany and a leading expert on differences in transatlantic economic cultures] argued that it’s hard to change these deeply rooted practices; therefore, Europe can’t succeed under deregulated finance, since it destroys the stability on which Europe’s economy relies. Abelshauser thought a positive outcome of the crisis would be that Europe would return to its proven model of finance.

This is an important point, because it underscores the extent to which the crisis for Europeans is fundamentally about re-establishing a financial system they think serves their interests. Thus the Euro- American debate isn’t really about whether to do stimulus or regulation first–it’s about whether the United States is going to do regulation at all.

America lacks credibility on this count, partly because Obama has not taken a strong stand against the power of finance in the United States. On the contrary, he plans to use taxpayer dollars to subsidize purchases of “toxic assets”–now renamed “legacy assets.” Against that background, the newly stern rhetoric of erstwhile deregulators like Larry Summers is not convincing because it’s clear that the Obama administration is not using the collapse to reorganize American banking along healthier lines. Instead, the US position calls to mind a line from Rousseau’s Confessions: “I pretended to reproach myself for what I had done, in order to excuse what I was going to do.”

The significance of this has not been missed in Europe. Jacques Attali, a key economic wise man in France who has advised both Socialist and conservative governments, told a business daily, “The bankers [in the United States] are going to accept a minimum of regulation. Not more. We see this clearly with the Geithner plan, which reinforces the mechanisms that led to the crisis…. Besides, do you think it’s normal to have taxpayers loaning money to investors so the investors can make profits?” According to Attali, there will be no fundamental change in US behavior on questions like leverage, securitization and debt because “the Anglo-Saxon world lives off that.”

I think this is the big problem.  Will the Obama administration listen only to people like Larry Summers and Tim Geithner who believe in the  American Capitalism free for all or will we move on to a more regulated system that protects the middle class and creates more equality?  Or will he also isten to France and Germany and Paul Krugman?  I thought a hallmark of the Obama administration was to be the ability to listen to opposing points of view before making a decision.

The compromise between France and China on tax havens negotiated by President Obama shows that we could compromise also.  Regulation in the United States could land closer to Europe without us becoming, to the horror of Republicans, just like Europe.  I’m not sure this is an either or situation, but we do need more regulation of the financial industry.  Congress and the President just need to act soon.

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Republican April Fool

Last week the Repbulicans released a budget with no numbers .   Today, April First, they released one with numbers.  Who stages their events and didn’t they know what day it is?

The Washington Post’s Lori Montgomary wrote

After getting blasted last week for presenting a budget plan light on details, House Republicans today unveiled a more complete proposal that would cut taxes for business and the wealthy, freeze most government spending for five years, halt spending approved in the economic stimulus package and slash federal health programs for the poor and elderly.

This seems to be back to the future.  Didn’t we already try this?  Representative Paul Ryan who presented the alternative said it offers “lower spending, lower deficits, lower debt and more jobs.”  The argument is always that lower taxes for businesses (repeat the mantra “the United States has the highest corporate tax rates in the world.”) will create jobs.  I guess that after Boehner and Cantor, the party needed to try a new face.

Here is Dan Gross on 1600 Pensylvania Avenue with David Gregory.

The White House Reaction

“If you expected a GOP alternative to the failed policies of the past that got our country into the worst economic crisis since the Great Depression, then I have two words for you: April Fool’s,” said Kenneth Baer, communications director for the Office of Management and Budget.

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More on the Party of Zero

In case you haven’t been reading fivethirtyeight.com since the Presidental election, you really should check in once in a while.  There is Nate Silver’s advance look at the the details to be released later.

Eric Cantor is said to want to eliminate North Dakota rather than Idaho, while Thaddeus McCotter has suggested using the balance of TARP funds to purchase scratch-off tickets

You have to see the diagram to get the rest.