recession

With the deal announced to raise the debt ceiling and instill trillions in cuts during a recession, it is time to declare the that the right owns the economy.

So just how bad is this deal? Here's Paul Krugman's take:

For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

So yes, the right owns this economy and they will continue so. Again from Krugman's article today:

And then there are the reported terms of the deal, which amount to an abject surrender on the part of the president. First, there will be big spending cuts, with no increase in revenue. Then a panel will make recommendations for further deficit reduction — and if these recommendations aren’t accepted, there will be more spending cuts.

Republicans will supposedly have an incentive to make concessions the next time around, because defense spending will be among the areas cut. But the G.O.P. has just demonstrated its willingness to risk financial collapse unless it gets everything its most extreme members want. Why expect it to be more reasonable in the next round?

It has been a growing problem in this nation for decades and it continues to increase every year – income disparity:

The income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession.

The top-earning 20 percent of Americans - those making more than $100,000 each year - received 49.4 percent of all income generated in the U.S., compared with the 3.4 percent earned by those below the poverty line, according to newly released census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968.

A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.

The census also shows that those making over $180,000 a year (the top 5%) saw an increase in income last year, while those making less than $50,000 saw their income decline. Like wise lower-skilled adults from 18 to 34 saw the largest increase in poverty levels last year.

The wingers have been going on about a report in USA Today last week showing a record increase in the number of people receiving federal aid:

Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand.

More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor, a survey of state data by USA TODAY shows. That's up at least 17% since the recession began in December 2007.

At first glance you would think a 17% increase is disproportionate to the economic problems. I mean unemployment has only gone up 5%, so why has things like Medicaid enrollment gone up 17%?

A big contributor can be seen in the underemployment numbers – those seeking fulltime employment but having to settle for part time. A vast majority of these people have to settle for a big pay decrease and accept jobs that have no benefits. A lot of these people are the bread winner for the family, so their economic woes translate into economic woes for their dependents; spouse, children.

Then what about medical costs? In other countries a person making the equivalent of $30,000 a year and raising a family can afford a lot of medical costs out of pocket. That’s not true in the U.S. A lot of preventive care and prescription drugs cost up to ten times what they cost in any other country. Those costs have also continued to increase beyond the rate of inflation and despite the current recession. Likewise the cost of health care coverage has continued to increase at historic rates. All of this amounts to more people having to seek help.

Robert Gibbs has issued a statement trying to walk back his critique of the “professional left” in an interview with The Hill. Here’s Gibbs statement (via The Plum Line)

I watch too much cable, I admit. Day after day it gets frustrating. Yesterday I watched as someone called legislation to prevent teacher layoffs a bailout -- but I know that's not a view held by many, nor were the views I was frustrated about.

So what I may have said inartfully, let me say this way -- since coming to office in January 2009, this White House and Congress have worked tirelessly to put our country back on the right path. Most importantly, to dig our way out of a huge recession and build an economy that makes America more competitive and our middle class more secure. Some are frustrated that the change we want hasn't come fast enough for many Americans. That we all understand.

But in 17 months, we have seen Wall Street reform, historic health care reform, fair pay for women, a recovery act that pulled us back from a depression and got our economy moving again, record investments in clean energy that are creating jobs, student loan reforms so families can afford college, a weapons system canceled that the Pentagon didn't want, reset our relationship with the world and negotiated a nuclear weapons treaty that gets us closer to a world without fear of these weapons, just to name a few. And at the end of this month, 90,000 troops will have left Iraq and our combat mission will come to an end.

That’s what leading economists are saying (via Cesca):

The recovery is shaping up to be stronger than expected and there is little risk the economy will slip back into a recession, according to USA TODAY's quarterly survey of 46 leading economists.

Yet most still say the rebound will fall short of the sharp, V-shaped upturns that often follow severe slumps, and the 9.7% jobless rate will fall slowly.

As the Fed meets to assess the economy this week, seven in 10 economists say they're more optimistic than they were three months ago.

"I think we've gotten to a point where it's a self-sustaining recovery," says Standard & Poor's chief economist David Wyss.

Even Joe Scarborough is going on about the economy improving this morning. This kind of news will really help Democrats out this fall, especially if you tie it to the Republicans filibustering financial reform. Then you can also add the countless sound bites of Republicans saying “get rid of the stimulus” and you got a big winning campaign for the Democrats. Now we only need the powers to be to seize on all this news and inform the American people of what is happening.

John McCain blasted off a campaign email last night that stated the following:

During his first year in office, President Obama and Congressional Democrats have amassed a $12.4 trillion deficit that is growing each day.

A trillion dollars a month? Wow that’s amazing for a party that hasn’t accomplished that much due to Republican obstructionism. So we need to mark that as a flat out lie.

But it gets even better. This is from Media Matter’s fact check:

In fact, the FY 2009 deficit, which totaled $1.4 trillion, was already estimated to be $1.2 trillion when Obama came into office and "virtually the entire deficit over the next ten years" are due either to policies implemented under President Bush or to the recession, which began during Bush's tenure, according to the Center on Budget and Policy Priorities.

Now what big policy implemented under Bush would have raised it so much? Maybe TARP – the bank bailout. And yes this would be the very same bank bailout that McCain suspended his campaign to go to Washington and help make sure it passed.

I would much rather see some tea bagger win McCain’s seat than him get sent back for another term. This guy isn’t just a hypocrite – he’s a flat out liar.

(h/t Cesca)

I’m sure we’ll all be breaking open our wallets soon:

Evangelical pastor Rick Warren appealed to parishioners at his California megachurch Wednesday to help fill a $900,000 deficit by the first of the year.

Warren made the appeal in a letter posted on the Saddleback Church Web site. It begins "Dear Saddleback Family, THIS IS AN URGENT LETTER."

"With 10 percent of our church family out of work due to the recession, our expenses in caring for our community in 2009 rose dramatically while our income stagnated," the letter reads.

This really puts a damper on the whole notion that private charities can handle social problems better than the government. When you have severe economic down turns like we are in right now, then people don’t have the money to donate to these groups. That was also seen over Christmas as charities had to turn away needy families wanting food for Christmas. It also boils down to simple common sense, and since the right never exhibits that trait it’s no wonder they are the ones pushing for the charities to become the nation’s giver of social services.