Friday, May 02, 2014

Mimimum Wage Workers Subsidize Our Economy

This is not a perfect exercise.

The value of the federal minimum wage in 1968 was $1.60 according to

and using the inflation calculator at

gives us a value of $10.50 in 2012 but the actual minimum wage is only $7.25. This is a loss of $3.25 per hour or $6,760 a year for a full time MW worker.

According to some 3.55 million wage workers got this minimum wage or below in 2012

6,760 ×
$23.998 BILLION = lost wages

This number only includes those at the minimum wage or below... NOT those between the minimum wage and the $10.50 per hour range.

So who's benefited from this $24 billion a year subsidy the economy got in 2012? And remember these are just rough numbers for one year.

This raises other issues of increased safety net expenditures AND lost tax revenue. But then we can always kick the can down the road by borrowing for those safety net programs so future taxpayers will be subsidizing our irresponsibility today.


Thursday, November 15, 2012

Do Those 27 Amendments "Prove" We Can Really Reform Constitution?

Whenever I bring up the antidemocratic and virtual reform-proof nature of the Constitution someone will invariably protest that we already have 27 Amendments... and this somehow "proves" the Constitution CAN be reformed. With 27 amendments over 223 years that's about one every 8 years. Sounds like there's plenty of flexibility. Maybe they have a point... or not. To which I counter NONE of these amendments reforms any of the core antidemocratic defects of the Constitution. Our system is so antidemocratic that it might never truly be reformed.

Here's a breakdown of amendments by category... feel free to break them down in other ways:

INDIVIDUAL & STATES RIGHTS: 1-10 plus 13th, 14th

FINE TUNING THE CONSTITUTION: 11th, 12th, 16th, 20th, 22ed, 25th, 27th


EXPANDING VOTING RIGHTS: 15th,  19th,  24th,  26th


The first ten amendments, aka The Bill Of Rights, were demanded by the states as the price of ratification. So that leaves 17 amendments over 223 years or one amendment every 13 years.

If we take away the 7 that I've put into the "FINE TUNING" category that leaves 10 amendments over 223 years or one, on average, every 22.3 years. These amendments cover things like presidential terms etc.

Take away Prohibition and its repeal... that leaves 8 amendments over 223 years giving us one amendment averaging about every 28 years.

That leaves 6 amendments that in some way make the Constitution more democratic... that gives us one amendment every 36 years. These amendments fall into two categories.

The first category is expanding the vote to groups who arguably should NEVER have been denied it: slaves (15th), women (19th), those who can't afford a poll tax (24th) and 18 year olds (26th).

The second category deals with some aspect of the antidemocratic structure of the Constitution itself. Here we have but TWO amendments... giving us ONE reform amendment, on average, every 111 years. Those reforms were allowing direct vote for the Senate... and giving EC votes to those in Washington DC. Given how antidemocratic the Constitution is, those reforms are minor tweaks.

The sad reality is NONE of those 27 amendments to date have reformed ANY of the core antidemocratic features of the Constitution all of which are connected with the antidemocratic concept of state suffrage... the EC, the Senate, the exclusive powers of the Senate to ratify judicial nominees or treaties, the amendment process, etc.

That's ZERO serious reform amendments in 223 years!

Which brings us back to my original point... is our system so antidemocratic that it can never truly be reformed? And if so... what are we who value democracy to do as demographic trends make the Constitution even more antidemocratic and more reform-proof?


Tuesday, October 30, 2012

How Would Romney's State-Based "FEMAs" Deal With Superstorm Sandy?

Romney is on record, transcript below, saying he'd like to turn FEMA over to the states... or even the private sector. He justifies this idea based on devolution of power from Washington and also claims it's essential for deficit reduction. So is Romney proposing NO federal disaster management funding go to the states? If not, where's the savings?

There are reasons to move away from state-based solutions. If left to themselves poorer states are incapable of funding anything from quality education, to health care, or their own highways.

By turning over these FEMA function to the states... these state-based "FEMAs", are not going to benefit from the deep pockets of the federal government. How will poorer states deal with disasters? How will tiny Rhode Island deal with a dead on hurricane strike? What if it's hit twice in a year? Who covers disasters that span state lines like superstorm Sandy? How would states coordinate such efforts? Without federal funds does Romney envision nationwide disaster bake-sales to raise the money?

If federal money does go to states... how will it be allocated? The East coast state has more hurricanes. Northern states might have more blizzards. The southeast more drought. So will money be weighted to states with more potential disasters or given out by population? The questions Romney's proposal raises are endless.

While Obama needs to be careful about playing politics with Sandy, it IS a legitimate for his campaign to ask what would Romney's disaster relief plan look like if he were president now having only the resources he's proposed.

This is an area that calls into question Romney's judgment and fitness for office. Here's Romney on June 13, 2011 during a primary debate speaking with CNN's  John King:

KING: What else, Governor Romney? You’ve been a chief executive of a state. I was just in Joplin, Missouri. I’ve been in Mississippi and Louisiana and Tennessee and other communities dealing with whether it’s the tornadoes, the flooding, and worse. FEMA is about to run out of money, and there are some people who say do it on a case-by-case basis and some people who say, you know, maybe we’re learning a lesson here that the states should take on more of this role. How do you deal with something like that?

ROMNEY: Absolutely. Every time you have an occasion to take something from the federal government and send it back to the states, that’s the right direction. And if you can go even further and send it back to the private sector, that’s even better.

Instead of thinking in the federal budget, what we should cut—we should ask ourselves the opposite question. What should we keep? We should take all of what we’re doing at the federal level and say, what are the things we’re doing that we don’t have to do? And those things we’ve got to stop doing, because we’re borrowing $1.6 trillion more this year than we’re taking in. We cannot…

KING: Including disaster relief, though?
ROMNEY: We cannot—we cannot afford to do those things without jeopardizing the future for our kids. It is simply immoral, in my view, for us to continue to rack up larger and larger debts and pass them on to our kids, knowing full well that we’ll all be dead and gone before it’s paid off. It makes no sense at all.



Wednesday, October 10, 2012

Democrats MUST Target Norquist's No New Taxes Pledge

If a congressperson took a "No New Weapons System" pledge to a third party... would that interfere with their constitutional responsibility to defend the nation? I think we'd all agree it would.

So what if a congressperson took a "No New Taxes AND No New Borrowing" pledge... Would that not interfere with those constitutional duties that REQUIRE spending? Obviously. So what about a "No New taxes" Pledge?

Where is the red line where a third party pledge interferes with a congressperson's oath of office? Here's that that official Oath:

"I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter: So help me God."

Even before the Norquist Pledge the GOP was pushing for irresponsible tax cuts hoping crushing deficits and debt would "starve the beast": put pressure on New Deal and Great Society programs... maybe even abolish them. To portray this fiscal irresponsibility as its opposite the GOP cultivated public support for these policies convincing many that tax cuts funded with borrowed money benefited us all. Heck, these tax cuts might even pay for themselves. It was the ultimate Free Lunch! Limbaugh once said if a tax cut... 

"...brings in, say, two dollars for every dollar of tax relief, we'll have more money in the treasury – and thus safeguard programs like Social Security! The idea behind tax cuts is to get the economy to grow. The economy is not static. The pie is not one size forever, with no new slices. The object is to grow so we have more people working and paying taxes. Presidents Kennedy and Reagan proved this with their tax cuts. The Democratic Congress spent every new dollar and more that Reagan brought in, but the fact is that the revenue coming into the treasury nearly doubled over his two terms."

Actually Reagan revenues in constant dollars only rose about 13.5% and that includes his tax HIKES. Individual income tax revenues only rose 8%. There simply was NO revenue boom the Democrats spent. No sensible person should expect the truth from Limbaugh.

To add to onslaught of propaganda coming from what I've dubbed the Orwellian Right, the No New Taxes Pledge added some unintended consequences. Stuck between the voters and Pledge enforcer Grover Norquist himself, GOP politicians found ways to provide goodies voters wanted but to do so in a way that didn't violate Norquist's Pledge. GOPers simply substituted borrowing for taxation dumping the cost onto future taxpayers. Running up massive debt seems to be acceptable to Norquist who, after all, had been quite open of his plan: to "Starve The Beast" until government is back where it was before the New Deal if not the late 19th Century.

This political dilemma forced the Orwellian Right to become more extreme in its propaganda. They were forced to take all fiscal common sense off the table. They convinced many voters in 2000 that even with nearly 6 trillion in debt, if there was a small budget surplus... it was "their" money and they deserved a refund. But if there had only been a 90 billion surplus to date, why would the GOP jump to $1.4 trillion tax cut?  More recently the Orwellian Right has convinced GOP voters that there's no revenue problem despite the fact that in constant dollars individual income tax revenues have yet to rise even back to Clinton's 2000 levels. They've convinced GOP voters that they're "overtaxed" when our generation has pissed away some 15 TRILLION on ourselves the past 30 years and REFUSED to pay for the bill.

The Orwellian Right and Norquist have given birth to what I call the Free Lunch Right... a generation of spoiled rotten GOPers who bitch and moan about Democratic social spending while utterly oblivious about THEIR freebies... including those tax cuts funded with BORROWED money stolen from our kids and grandkids.

If the Free Lunch Right thinks they are overtaxed even after refusing to pay the that 15 Trillion tax bill... imagine the shock there will be if we try to pay down debt with spending cuts alone!  To get to a surplus is, by definition, paying MORE in taxes than what we receive in government spending. We were there in 2000 and we know how irresponsibly the GOP dealt with the surplus then. We're to trust them should we ever get to a surplus again? 

If we ever get to a surplus how will the GOP then educate the voters they spent 30 years encouraging to be fiscally irresponsible? The debt numbers are staggering. Even if NO interest accruing, it would take 32  years to pay down the debt with a true $500 billion on-budget surplus. Problem is the Clinton on-budget Surplus only totaled about 90 billion over two years before the GOP sabotaged it. The idea that we can ever pay down the debt without huge spending cuts AND a large tax increase… and run that sort of surplus, is laughable.

The Democrats have had thirty years to come up with an effective political response to Starve The Beast… to the Orwellian Right lies about how tax cuts create revenue booms but tax hikes only hurt the economy. The political cowardice of the Democrats has made them complicit in the GOP's war against fiscal sanity.

I can only hope the Democrats target the Norquist anti-tax pledge this election cycle. There are some very real advantages to this strategy:

It goes after what enables the Right's Starve The Beast strategy.

It goes after the dysfunctional and dangerous ideological cohesion the Norquist Pledge brings to the GOP.

It exposes the grotesque fiscal irrationality the Pledge has brought to the GOP… they refuse to even recognize the simple reality that in constant dollars revenues have plummeted since Clinton's last year... and even with 16 trillion in debt they are proposing more irresponsible tax cuts.

It goes after Norquist, the chief enforcer of the Pledge and someone who's been immune to attack for too long.

It gives GOPers who want out of the pledge a good excuse to finally break ranks with Norquist.

It can be used against any GOPer who was foolish enough to sign the pledge. Let voters decide whether those who took the Pledge are undermining the Constitution itself and the fiscal health of government's ability to deal with emergencies.


revised: 10-14-12

Monday, September 17, 2012

Where Oh Where Is Bush's Revenue Boom?

The Orwellian Right loves to claim that income tax cuts, especially for the rich, make the rich pay more, and such cuts even bring in more revenue. It's a counter-intuitive claim but the Right makes it all the time. However, if you scratch your head wondering about such claims, then your intuition is right. The claim is untrue. It's the only way to sell irresponsible tax cuts which bring home the bacon to the rich, the only constituency the Right cares about, and secretly sabotaging the US Treasury. To convince the ever-gullible True Believers on the Right, the Orwellian Right disinformation industry has a history of grotesque dishonesty. The Orwellian Right so wants to convince us tax cuts create revenue booms, they routinely include revenue from other presidents, and even have included revenue from other tax hikes. The Right claims there was a revenue boom after the so-called JFK tax cuts LBJ pushed in 1964... thru 1969. They just don't mention the three tax HIKES during that period. In the Reagan years the Orwellian Right swept under the rug two massive tax hikes in 1982 and 1983 and counted that revenue as "proof" the 1981 tax cuts brought in massive amounts of revenue. Yes, that's what they want us to believe. And if there were deficits they lie and blame Democrats for spending the bounty. But there was no revenue boom. In constant, inflation-controlled dollars, even with these tax hikes, Reagan's revenue only increased about 13.5% over his eight years.

If we're to go on a Snipe Hunt looking for such revenue booms we need to look at the specific tax being cut and then look for growth in that area. Since most of the Right's favorite tax cuts are cuts in the federal income tax, it would be unfair to look for revenue in other areas like FICA or corporate taxes. We should at income tax revenues. But since we're looking at revenue effects over time, there are two variables at work here... inflation which is easy to correct for, and % of GDP, that is the size of the economy these revenues represent. That's a topic for another time.

Here's a look at Bush individual income tax revenues compared to Clinton's last year (FY00) correcting for inflation. Numbers are from Table 2.1—RECEIPTS BY SOURCE of the US Historical Budget Tables.

Since this source does NOT correct for inflation in this chart, I used the inflation calculator at to convert to constant 2005 dollars in billions. Using constant 2005 dollars means revenue from years before the target year will inflate in value, those after will deflate. Column one is the fiscal year. Column 2 is income tax revenue in CURRENT dollars collected that year. Column 3 is revenue in billions of 2005 CONSTANT dollars. It could be argued that FY01 is Clinton's last year since the fiscal year began when Clinton was still in office. But Bush's 2001 EGGTRA tax cut was retroactive to Jan 1, 2001.

2000   1004.462 = 1139.206 Clinton's last year.

2001    994.339 = 1096.524

2002    858.345 = 931.822

2003    793.699 = 842.442

2004     808.959 = 836.370

2005    927.222 = 927.222

2006   1043.908 = 1011.285

2007   1163.472 = 1095.899

2008   1145.747 = 1039.299

If my math is correct, what we see is that even after eight years, at the end of Bush's term income tax rates were cut so irresponsibly those income tax revenues NEVER AGAIN EXCEEDED CLINTON'S LAST YEAR. I'm sure some readers will see 8 years of declining income tax revenues as "proof" tax cuts create revenue booms.

But then some people will believe anything.


revised 10-13-12