On Tuesday, Congressman David Schweikert (R-AZ) introduced H.J.Res 99, the National Debt Relief Amendment (NDRA). This constitutional amendment would require approval from a majority of states before Washington increases the federal debt level.
Oh, what a wonderful idea. This is exactly what this country needs, more gridlock when raising the debt ceiling. We can barely raise it now because of all of the political brinkmanship, and this guy wants to add another component to the already sluggish machine.
But beyond delaying the process, we’d just never get the debt ceiling raised ever again. It’s a well known fact that state legislatures tend to be more radical than Congress, regardless of whether the state leans to the left or the right. In Congress, we all know that the ceiling with eventually be raised, because no matter what, the people in charge of the parties on a national scale know that not raising the debt ceiling has the ability to tank our country’s economy. In state legislatures, however, most people just don’t give a shit.
A Gallup poll from last January found that people who identify as either “conservative” or “very conservative” would rather politicians stick to their principles than actually get anything done. They want gridlock. What’s significant about this, though, is that this is how the conservative members of legislatures in states like Nebraska and Alabama think. If a proposal to raise the debt ceiling came up for a vote, it’s clear that it would be shot down in nearly all of the red states.
But beyond the issue of the debt ceiling not being able to be raised and the resulting crash of the world economy (I know…… but there’s more, trust me), is that the very reason that the amendment was proposed is flawed. This is taken directly from Rep. Schweikert’s press release:
Washington has demonstrated an inability to rein in its reliance on debt and continues to mortgage our future with more borrowing, spending, and bailouts.
Conservatives continue to use the phrase “mortgaging our future” (we can probably thank Mr. Frank Luntz for that), regardless of the fact that when the U.S. government borrows money, it is nothing at all like when a family borrows money from a bank. When the government borrows money, it never has to pay it back. As Paul Krugman wrote in his recent article “Nobody Understands Debt”:
The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.
If a family didn’t repay their debt for 70 years, I think they might be in trouble.
What I’m getting at is that the debt shouldn’t be as pressing an issue as politicians are making it. The legitimate economic fear related to debt is called “Crowding Out”. This idea says that when a government borrows too much, it raises interest rates throughout the country, thus decreasing internal private investment. However, that just hasn’t happened. Despite our large debt, interest rates are still at historic lows.
This amendment would even be counterproductive. Everyone knows that, as of now, the United States will not default on its debt, so our interest rates stay low. If this amendment were to pass, it could rid investors of that perception of security. If investors don’t feel comfortable buying U.S. debt, then interest rates will rise.
So congratulations Mr. Schweikert, you win this month’s competition for shitty legislation.
So then there’s this…
Just as mass incarceration has burdened American taxpayers in major prison states, so is the use of inmate labor contributing to lost jobs, unemployment and decreased wages among workers — while corporate profits soar.
The use of forced labor in prisons took off in the early 1990s. Funny that. So did our incarceration rate:
Our prison industrial complex is nothing but corporate slave labor. Not saying people are purposefully being locked up to be a captive labor force for corporations, but with a largely privatized prison system, plus corporate contracts for labor going to said prisons, it’s an awfully interesting correlation, no?
I know this has been a drug-policy heavy day but it bears mentioning that graph spikes up right around the start of the “war on drugs”.
This blog noted this a while back. Hipster liberal?
Last Friday, I brought a statistic reported by the Economic Policy Institute to the attention of my Economics teacher. The stat is that, as of July of last year, there were 5 unemployed people for every one job opening. He didn’t believe me and then continued on to call the EPI a “communist organization”. So, being the nerd that I am, I decided to work things out for myself, using July of this year for my analysis instead.
Let’s begin, shall we?
By the end of July, there were 13.1 million people unemployed and still looking for work (aka people who were counted in the unemployment rate), according to the Bureau of Labor Statistics (BLS). Also at this time, there were 3.413 million job openings. Now, as your average 4th grader learning long division (or rather, anyone with a 4-function calculator) could tell you, that works out to about 4 people per job opening. And that’s just for people looking for work.
Next, you can factor in the amount of people who are a part of the labor force and don’t have a job, but are just not currently looking for work. These are what the BLS likes to call “discouraged workers” or “marginalized workers”, so called because many have simply given up on the system after being unemployed for so long. There are about 12 million more of these people on top of those who are classified as “unemployed”. If we add on those people to our previous calculations, we end up with more than 7 people without work per job opening.
So, while I don’t even begin to credit myself as an economist, it turns out that the people over at the EPI seem to credit themselves as such. In August, they released updated statistics that confirm the 4 people per job opening number we arrived at earlier. While they don’t touch on the number that deals with people who have stopped looking for work, I’m fairly confident in the number.
To go further with this, this is exactly why the OccupyWallStreet movement began: because the system is broken, and it needs to be changed. Currently, we have conservatives actually blaming the unemployed for not having a job, when the odds are against them from the very moment they start looking for a job.
I think that Herman Cain and those over at the 53 Percent should take a look at this, and hopefully they will think before the next time that they tell an unemployed person to “just get a job”.
Welcome to Tent City: The community where every person has lost their job and home because of the U.S. financial crisis.
In scenes reminiscent of the Great Depression these are the ramshackle homes of the desperate and destitute U.S. families who have set up their own ‘Tent City’ only an hour from Manhattan.
More than 50 homeless people have joined the community within New Jersey’s forests as the economic crisis has wrecked their American dream.
These people have been reduced to living on handouts from the local church and friendly restaurants and the community is a sad look at troubles caused as the world’s most powerful country struggles with its finances.
Read more here.
Modern day Hoovervilles…..
As much as I dislike the Daily Mail, please read this article.