A poll asks a grave question about the deficit and unbalanced budgets

Vanity Fair and 60 Minutes conducted the poll. The most interesting question of the lot is, "What would you do first to balance the budget?" While writing this post the tally of the response is:

75% — Increase taxes on the wealthy

16% — Cut defense spending

4% — Cut Medicare

4% — Cut Social Security

Obama and a lame duck Congress controlled by the Democratic Party just extended the Bush Tax Cuts. Significantly cutting defense spending is not on the agenda while Obama, his party and the incoming Republicans do intend to cut Medicare and Social Security.

Obamanomics…

The New York Times reports that:

President Obama on Tuesday will nominate Ben S. Bernanke to a second term as chairman of the Federal Reserve, administration officials said.

Dr. Dean’s snake oil

The issue: Obama's proposed health care program

The agent: Dr. Howard Dean

The goal: To convince the gullible and uninformed that Obama's health care plan provides a publicly funded, single-payer option

Yet, according to Single Payer Action:

Dr. David Himmelstein says Dr. Howard Dean is lying about the Obama health care proposal.

Himmelstein continues:

"He knows that the public option plan is not single payer and he says it is to try and confuse people," Himmelstein said. "He goes on Democracy Now and other shows and says that people can buy into Medicare when he knows that what is in the plan is not that."

"Medicare doesn't have to compete," Himmelstein said. "That's why it's so efficient."

The Obama proposal is not a single payer plan because participants will need to have additional insurance to cover their medical costs.

Howard Dean's Democracy Now interview can be viewed here:

There is plenty of money for empire while California collapses

Robert Scheer worries about the failure of the Obama regime to address directly and with a workable blueprint for solving California's budget crisis. As well he should given the attack California now plans to make on its safety-net and education system:

Bail out the banks, but not the 500,000 poor families with children served by the CalWorks program, which will be dismantled, or the 928,000 children covered by the Healthy Families program, slated for oblivion.

At a time when the feds are spending with such abandon in an effort to stimulate the economy why is it tolerable to leave states in a position where they are forced to fire teachers? As the Los Angeles Times reported: "Schwarzenegger has proposed slashing state spending on education by $3 billion to help close the budget gap, and the state would pay dearly for canceling classes, firing instructors, cutting class days and shortening the school year, experts said." How can there be federal funds readily available for banker bonuses but not to keep teachers in the classroom with their students? It must have been the kids who caused the meltdown.

Scheer could have also included the money wasted on America's national-security and surveillance state and the empire that state advances.

Obamanomics: Wrongheaded?

According to Mike Whitney, Obama's economic recovery program is very much wrong since it mostly looks set to apply additional monetary WD-40 to the credit market. Even the program's job creation component, the hoped-for byproduct of its stimulus package, means to provide coverage for the demand constraints now afflicting the economy. These constraints take the form of rising unemployment and underemployment, long-term real wage declines, massive personal debt, etc. Yet the stimulus wishes to undo these constraints mostly by incurring additional collective and personal debt. Whitney rightly emphasizes this point along with some of the consequences it entails:

The Obama economic recovery plan is a misreading of the real problem, which is not the availability of credit, but debt. Bernanke, Summers and Geithner are approaching the issue from the wrong end; they want to stimulate the economy through credit expansion and more red ink. This is just more of Greenspan's bubblenomics: the endless boom and bust cycle triggered by low interest crack sold to credulous speculators. The only ones who benefit are the Wall Street insiders….

It should come as no surprise that common Americans now rightly fear the consequences produced by their debt-driven consumption when their consuming will occur during an economic crisis, especially one which promises to be long and difficult. They rightly see the problem as a matter of providing for their personal security, which is, after all, their responsibility. It is because they are afraid and because their fears are rational that they

…will not lead the way out of this economic downturn. It's physically impossible. The country is undergoing a generational shift from profligate consumerism to thriftiness. Stimulus alone won't get people spending. Salaries will have to go up to make up for losses in retirement funds and housing prices; and the face-value of mortgages and credit card debt will have to be written down. Otherwise, spending will continue to falter and the economy will tank. No economic recovery plan has a chance of succeeding if it doesn't address these two key issues: higher wages and debt relief.

Naturally, the Federal Reserve does not want to deal with the underlying causes of the crisis. After all, they're in the credit-peddling business. The Fed's job is to generate business for the financial community, which means creating a favorable environment for credit expansion.

Indeed…. What the crisis demands is a national commitment to debt forgiveness and economic risk reduction for society as a whole, reindustrialization and even unionization! To be sure, a project with these features can only look Quixotic to most Americans.

In any case, the Fed and the government now in power care about more than just securing America's credit-peddling business. Among other things, they care about their internal and external authority, about social stability and system coherence, about their political legitimacy and America's military effectiveness. It is because they care about these specific ends that they must also master the numerous conflicts and related social costs the crisis promises to generate. Most notably these will include: The social disintegration typical of an economy boasting collapsing labor and consumer markets. From what, one might wonder, would most Americans draw upon to construct a collective identity, a sense of national purpose? What would motivate them to sacrifice their short-term well-being if they lack the imperial majesty of Pax Americana as well as immediate access to an abundance of goods and services? If neither guns nor butter are present, if America is not the City on the Hill, the exceptional and indispensible nation, then what? For, why would Americans submissively comply with the rigors of the American way of life if they lack the real and illusory benefits that were once part of that life? They would give their consent to their governors because they have a right to sleep under a bridge?

James K. Galbraith on Obamanomics

I found the link to the Realnews site at EconoSpeak.