Daily Archive: 12/11/2012

Dec 11 2012

Punting the Pundits

“Punting the Pundits” is an Open Thread. It is a selection aof editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

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Amitai Etzioni: Cut Medicare? Cut Fraud!

There is reason to believe that if the GOP will agree to raise the taxes on the super rich, President Obama will agree to cuts in Medicare. It is morally abhorrent to cut benefits to any current or future seniors before much greater efforts are made to stop large scale raids on the Medicare coffers by nefarious corporations. [..]

Bilking Medicare is much easier and the risk of being caught and punished is much smaller than selling controlled substances. Crooks buy patient lists and bill the government for expensive items ranging from scooters to prostheses, all to the tune of some $60 billion a year. Because Medicare is required by law to pay all bills within 15 to 30 days and has a small accounting staff, it often cannot vet claims before the checks go out. By the time Medicare authorities do find out a storefront’s bills are phonies, the crooks close it and open one next door under a different name. [..]

I say do not cut anyone’s benefits until the government triples its accounting staff, quadruples the number of corporate crooks in jail, and reduces Medicare shortfall by cutting fraud at least by half.

New York Times Editorial: Taking Aim at Michigan’s Middle Class

The decline of the middle class in this country has paralleled that of the labor movement, which has been battered by the relentless efforts of business groups and Republicans to drive down wages, boost corporate profits and inflate executive salaries and bonuses. Now that campaign is on the verge of a devastating victory in Michigan, home of the labor movement, which could transform the state’s economy for the worse. [..]

These measures are misleadingly known as “right to work” laws, and their purpose is no less deceptive. Business leaders say workers should not be forced to join a union against their will, but, in fact, workers in Michigan can already opt out of a union. If they benefit from the better wages and benefits negotiated by a union, however, they are required to pay dues or fees, preventing the free riders that would inevitably leave unions without resources.

John Nichols: John Boehner Has No Mandate

House Speaker John Boehner has grown increasingly belligerent in his “fiscal-cliff” fight with the Obama administration. Struggling to hold together a caucus that never really respected his “leadership,” Boehner is trying to rally his troops by ripping President Obama’s supposed disregard for Republican control of the House of Representatives. [..]

It is true, of course, that Boehner and his caucus control the majority of seats. While their numbers are diminished from where they were in 2010, the Republicans still maintain a 234-201 advantage in the chamber. But that advantage in not based on the popular will; it is based on the manipulated maps created by the redrawing of congressional districts following the 2010 Census, and on the fact that Democratic votes are concentrated in urban and college-town districts, as well as those with substantial minority populations.

Richard (RJ) Eskow: 4 Republican Medicare Secrets … and a $600 Billion Funeral

The Republicans are demanding $600 billion in Medicare cuts over the next ten years. Their only concrete proposal is to deny Medicare coverage to Americans during what is now their first two years of eligibility, at ages 65 and 66. But their official offer isn’t even that specific. It just throws out that figure: $600 billion. But you can’t get there from here. [..]

In fact, there are only two paths to $600 billion in savings. One’s macabre and morbid, and is offered here only to make as a Swiftianmodest proposal.” The other would take a chunk out of corporate profits.

Which path do you think the GOP would prefer?

This entire Medicare debate’s being held under false pretenses. Here are four multibillion-dollar Medicare secrets they don’t want you to know – along with that funereal “modest proposal”: [..]

Ari Berman: The GOP’s New Voter Suppression Strategy: Gerrymander the Electoral College

For a brief time in the fall of 2011, Pennsylvania GOP Senate Majority Leader Dominic Pileggi unveiled a plan to deliver the bulk of his state’s electoral votes to Mitt Romney. Pileggi wanted Pennsylvania to award its electoral votes not via the winner-take-all system in place in forty-eight states but instead based on the winner of each Congressional district. Republicans, by virtue of controlling the redistricting process, held thirteen of eighteen congressional seats in Pennsylvania following the 2012 election. If Pileggi’s plan would have been in place on November 6, 2012, Romney would’ve captured thirteen of Pennsylvania’s twenty Electoral College votes, even though Obama carried the state with 52 percent of the vote. [..]

Will the GOP’s bid to gerrymander the Electoral College be more successful now than it was last election cycle? Let’s hope not. Pileggi’s plan divided Pennsylvania Republicans and ultimately went nowhere. Husted had to quickly backtrack from his statements due to the national uproar. Here’s an idea for Republicans: instead of diluting the votes of your opposition, how about supporting policies-like immigration reform and a more equitable distribution of taxes-that will win you more votes from a growing chunk of the electorate?

Wendell Potter: Congress Needs to Close Loopholes in Obamacare Insurers Are Using to Boost Profits

I’ve often said that the Affordable Care Act is the end of the beginning of health reform. It addresses many problems associated with health insurance, but more must be done to control costs and access real universal coverage. And flaws in the law need to be fixed.

However, the reform law will end some of the most abusive insurance industry practices, such as blackballing folks with pre-existing conditions and cancelling policyholders’ coverage when they get sick.

And health insurance companies now have to spend at least 80 percent of our premiums on actual health care. If they devote more than 20 percent to administrative overhead and profits, they are supposed to send rebate checks to their policyholders. Since that 80/20 rule went into effect last year, consumers have saved almost $1.5 billion, mostly in the form of those rebates, according to a new study by the Commonwealth Fund.

Dec 11 2012

On This Day In History December 11

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

December 11 is the 345th day of the year (346th in leap years) in the Gregorian calendar. There are 20 days remaining until the end of the year.

On this day in 1946, In the aftermath of World War II, the General Assembly of the United Nations votes to establish the United Nations International Children’s Emergency Fund (UNICEF), an organization to help provide relief and support to children living in countries devastated by the war.

After the food and medical crisis of the late 1940s passed, UNICEF continued its role as a relief organization for the children of troubled nations and during the 1970s grew into a vocal advocate of children’s rights. During the 1980s, UNICEF assisted the U.N. Commission on Human Rights in the drafting of the Convention on the Rights of the Child. After its introduction to the U.N. General Assembly in 1989, the Convention on the Rights of the Child became the most widely ratified human rights treaty in history, and UNICEF played a key role in ensuring its enforcement.

Of the 184 member states of the United Nations, only two countries have failed to ratify the treaty–Somalia and the United States. Somalia does not currently have an internationally recognized government, so ratification is impossible, and the United States, which was one of the original signatories of the convention, has failed to ratify the treaty because of concerns about its potential impact on national sovereignty and the parent-child relationship.

In 1953, UNICEF became a permanent part of the United Nations System and its name was shortened from the original United Nations International Children’s Emergency Fund but it has continued to be known by the popular acronym based on this old name. Headquartered in New York City, UNICEF provides long-term humanitarian and developmental assistance to children and mothers in developing countries.

UNICEF relies on contributions from governments and private donors and UNICEF’s total income for 2006 was $2,781,000,000. Governments contribute two thirds of the organization’s resources; private groups and some 6 million individuals contribute the rest through the National Committees. UNICEF’s programs emphasize developing community-level services to promote the health and well-being of children. UNICEF was awarded the Nobel Peace Prize in 1965 and the Prince of Asturias Award of Concord in 2006.

Most of UNICEF’s work is in the field, with staff in over 190 countries and territories. More than 200 country offices carry out UNICEF’s mission through a program developed with host governments. Seven regional offices provide technical assistance to country offices as needed.

Overall management and administration of the organization takes place at its headquarters in New York. UNICEF’s Supply Division is based in Copenhagen and serves as the primary point of distribution for such essential items as vaccines, antiretroviral medicines for children and mothers with HIV, nutritional supplements, emergency shelters, educational supplies, among others. A 36-member Executive Board establishes policies, approves programs and oversees administrative and financial plans. The Executive Board is made up of government representatives who are elected by the United Nations Economic and Social Council, usually for three-year terms.

Following the reaching of term limits by Executive Director of UNICEF Carol Bellamy, former United States Secretary of Agriculture Ann Veneman became executive director of the organization in May 2005 with an agenda to increase the organization’s focus on the Millennium Development Goals. She was succeeded in May 2010 by Anthony Lake.

UNICEF is an inter-governmental organization and thus is accountable to governments.

Dec 11 2012

The Debt Ceiling Myth & the Platinum Coin

US Mint Platinum CoinOnce again the Republicans in Congress are threatening to refuse to raise the debt ceiling in order to get concessions from the Obama administration. Those concessions would involve severe cuts and changes to the social safety net that our most vulnerable citizens rely on to stay out of poverty but would not solve the so-called problem of the US debt obligations and deficit spending. We’ve been down this road before and it resulted in the extension of the Bush tax cuts and an increase in the deficit.

This could all be rendered irrelevant quite easily and very legally by the minting of one or more platinum coins in denominations determined by the Treasury Secretary. Here’s the law, 31 USC § 5112 – Denominations, specifications, and design of coins:

§ 5112. Denominations, specifications, and design of coins

(a) The Secretary of the Treasury may mint and issue only the following coins: [..]

(k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

Those coins would be deposited with the Federal Reserve and used to make good on the obligated debt of the United States.  This is a legitimate option  for President Barack Obama and the argument has been made that it may be his duty to order the minting of Trillion Dollar Platinum Coins  to protect the US from failing to pay its obligations. Here is the explanation of what a trillion dollar coin does from blogger letsgetitdone at Correntewire:

If the Mint coins money in denominations appropriate for commonplace retail transactions than the coins involved can be exchanged among parties as needed. But what happens if the Mint coins platinum money with face values in the trillions of dollars? Then that money can’t be used for exchange as a practical matter, because there are no buyers who will accept the trillion dollar coins in exchange. So, if the Treasury wants to use such coins to fill the public purse with money it can later spend on debt repayment or Congressional deficit appropriations, it must transform high face value coins into divisible money; i.e. reserves in its Fed spending account. [..]

In the case of $One Trillion proof platinum coin, the profits are its face value minus a few thousand dollars. So that amount would be “swept” into the Treasury General Account (TGA), which is the account used by Treasury to perform Government spending.

A very good way to look at high value platinum coins is that they are legal instruments for the Treasury to use the unlimited “out of thin air” reserve creation authority of the Fed to fill the public spending purse, the TGA, for public purposes. In effect, platinum coin seigniorage involves the Treasury commandeering the power of the Fed to create reserves and place them in the TGA, perhaps, depending on what the Treasury chooses to do, in the many Trillions of dollars.

The coin’s value is not limited to one trillion dollars, according to the law, the Treasury Secretary sets the value. Letsgetitdone makes the argument for a $60 trillion coin that would be a political game changer:

{..} because it institutionalizes the idea that there is a distinction between appropriations, the Congressional mandate to spend particular amounts on particular goods and services, and the capability to spend the mandated accounts by having the funds (electronic credits) in the public purse (the TGA). In a fiat currency system, the capability always exists if the legislature provides for it under the Constitution, as it has under current platinum coin seigniorage legislation.

But the value of the $60 T coin, and the profits derived from it, is that it is a concrete reminder of the Government’s continuing ability to buy whatever it needs to meet public purposes, and its continuing ability to harness the authority of the Central Bank to create reserves to support the needs of fiscal policy. It demonstrates very clearly that the Government cannot run out of money, and that the claim that it can is not a valid reason for rejecting spending that is in accordance with public purpose.

So, please keep in mind the distinction between the capability to spend more than government collects in taxes, and the appropriations that mandate such spending. The capability is what’s in the public purse, and it is unlimited as long as the Government doesn’t constrain itself from creating credits in its own accounts. With coin seigniorage its capability could be and should be publicly demonstrated by minting the $60 T coin, and getting the profits from depositing it at the Fed transferred to the Treasury General Account (TGA).

On the other hand, Congressional appropriations, not the size or contents of the purse, but whether the purse strings are open or not, determines what will be spent, and what will simply sit in the purse for use at a later time. So there is a very important distinction between the purse and the purse strings. The President can legally use coin seigniorage to fill the purse, but only Congress can open the purse strings through its appropriations.

Is there anything congress could do to stop the president from issuing a coin like that? No, there isn’t. Could they impeach him? Well they could try, but I doubt they would get 67 votes in the Democratic held Senate. Nor would impeachment of a president who rescued the economy be very popular with the public.

Last year during the last budget hostage situation, Jack Balkin, Knight Professor of Constitutional Law at Yale Law School, wrote this:

Like Congress, the president is bound by Section 4 of the 14th Amendment, which states that “(t)he validity of the public debt of the United States, authorized by law . . . shall not be questioned.” Section 4 was passed after the Civil War because the framers worried that former Southern rebels returning to Congress would hold the federal debt hostage to extract political concessions on Reconstruction. Section 5 gives Congress the power to enforce the 14th Amendment’s provisions. This does not mean, however, that these provisions do not apply to the president; otherwise, he could violate the 14th Amendment at will.

Section 4 requires the president not to put the validity of the public debt into question. If the debt ceiling is not raised in time, there will not be enough incoming revenues to pay for all of the government’s bills as they come due. Therefore he has a constitutional obligation to prioritize incoming revenues to pay the public debt: interest on government bonds and any other “vested” obligations. [..]

An angry Congress may respond by impeaching the president. However, if the president’s actions end the government shutdown, stabilize the markets and prevent an economic catastrophe, this reduces the chances that he will be impeached by the House. (After all, he saved the country.) Perhaps more important, the chances that he will be convicted by a two-thirds vote of the Senate, which has a Democratic majority, are virtually zero.

Since Pres. Obama is no longer faced with reelection and the Republicans in the House are again threatening to default on its obligations without deep cuts to the social safety net and protect the 1% from tax hikes, there is no reason for the President not to mint that coin.

These are the articles by letgetitdone that were referenced and are all well worth reading:

Coin Seigniorage: A Legal Alternative and Maybe the President’s Duty

Beyond Debt/Deficit Politics: The $60 Trillion Plan for Ending Federal Borrowing and Paying Off the National Debt

Origin and Early History of Platinum Coin Seigniorage In the Blogosphere

What Does The Trillion Dollar Coin Do?

The Trillion Dollar Coin Is A Conservative Meme

Dec 11 2012

The Real Financial Crisis: Income Disparity and Poverty

Steve Kornacki, MSNBC host sitting in for Chris Hayes on Sunday’s Up with Chris Hayes, discussed the political posturing on fiscal negotiations with David Cay Johnston, Pulitzer Prize winner and distinguished visiting lecturer at the Syracuse University College of Law; Joan Walsh, MSNBC political analyst, editor at large of Salon.com; Laura Flanders, founder of GritTV; Neera Tanden, president and CEO of the Center for American Progress; and Avik Roy, former member of Mitt Romney’s health care policy advisory group, senior fellow at the Manhattan Institute. Unlike the usual talk show, where right wing talking points are rarely challenged, Up pushes back and debunks those memes for the hollow myths and out right lies they are. This panel talks head on how income disparity and poverty are the real financial crisis and the insanity of “shared pain.” Topics about taxes on Wall Street transactions, defense cuts and closing loop holes that only benefit the wealthy were mentioned. You won’t hear that on “Meet the Press” or “ABC’s This Week”.

Heather at Crooks and Liars pointed out the conversation in the second video and responses in the third video to Avik Roy arguing how things are different now that when Bill Clinton was president and the nonsense that the rich already pay too much in taxes. The responses from the panel shredded Roy’s talking points. Here are just some of the comments from the panel:

   DAVID CAY JOHNSTON: The average income of the bottom 90 percent of Americans has fallen back to the level of 1966 when Johnson was president, and the top 1 percent of the top 1 percent have gone in today’s dollars from 4 million to 22 million. In 2010, the first year of the recovery, 37 percent of all of the increased income in the entire country went to 15,600 households.

   We have created a privatized system to redistribute upwards and the reason people at the top are sharing a larger share of the income taxes because their incomes are growing at this enormous rate, but their burden is falling. And to suggest we don’t need to raise more revenue by applying it to people who are a success depends on this government, on living in this society, with its rules that make it possible to make that money is just outrageous. It is arguing that we should burden the poor and help the rich.

   […]

   LAURA FLANDERS: No, you’re right. we have 50, 5-0 million Americans living in poverty at this point with food stamp help for many of them. We’ve got 9 million Americans over the age of 50 who are food insecure. One in three of us have no savings whatsoever.

   I mean, you talk the Johnson years, in that period, ’65 to ’73 the war on poverty reduced poverty by 43 percent. We know how to do it. It works. That’s what we should be talking about. We are in a crisis where we’re going to see stimulus. We’re going to see stimulus of poverty and hunger in this country and it’s shameful. And again, going back to ’63, you had more than 60 percent of Americans, I think even in1983, 60 percent of Americans had private pension plans. Now, it’s under 20 percent.

   So these elders that you’re talking about, young people with greater unemployment than ever before. I mean, this is the stuff that we want to be talking about after the last election, children and poverty are exploding.

   JOAN WALSH: And also… we need higher tax rates for the tippy top earners because everybody likes to talk about building the middle class or rebuilding the middle class. Well, the top tax rate that the middle class we in the ’40s,’ 50s and ’60s. The top marginal rate was in the 90’s. I’m not saying you should go back to that, but you can’t say at 37 percent.