Wednesday, January 15, 2014

" Trickle down economics ." Revisited .

Trickle down only works one way . It's always UP!
WE just had a showcase of budgets lately .  You could read the entire 1,582-page, $1 trillion omnibus spending plan announced in Congress. If You all remember that there is a economic theory once spouted but not quite so forgetting . Called "Trickle-down economics" and the "trickle-down theory" are terms in United States politics to refer to the idea that tax breaks or other economic benefits provided by government to businesses and upper income levels will benefit poorer members of society by improving the economy as a whole.[1] The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."[2] The term is mostly used ironically or as pejorative. This year is the 50th anniversary of President Lyndon Johnson’s War on Poverty, and a new paper published by the National Bureau of Economic Research puts us in a far better position to judge how it’s gone. It appears that government programs significantly reduce the number of people living below the poverty line. Yet at the same time, by any global standard, America’s performance in turning economic growth into poverty reduction is incredible—as a negative.If treating the symptoms of poverty were not the answer, then, perhaps, we should address the real problem - the U.S. economy. As it is currently configured, the U.S. economy has failed to provide opportunity and adequate income to care for our citizens. As a consequence, citizens cannot afford medical care, education for their children, or save for a retirement. In addition, there is increased unemployment and income inequality that further threaten our tenuous economy.We have a fundamentally flawed economy. It is unbalanced (jobs in some sectors;none in others); we import much more than we export (a $17 trillion cumulative current account deficit); we have lost numerous industries, because other nations have better technology (we need more engineering research); we reward outsourcing by both corporations and individual investors with tax breaks (why does an investor pay 15% on dividends derived from production in China or Korea that does not create jobs at home?); the fixed exchange rate of Chinese currency to the dollar favors Chinese exports to kill jobs at home .  The  budget lists BIG LOSERS in the Congress spending plan , are here quoted from a recent newspaper article San Jose Mercury News:
Parts of the Congress plan  has cut some of the "pork" out as you can see.
EPA: The deal restores some of the funds cut by sequester to the Environmental Protection Agency, but not all. In a summary of the measure, Republicans boasted that with this bill, they have cut the EPA's funding by 20% since 2010.

IRS: The tax agency's funding has been cut to 2009 levels, according to the Republican House Appropriations Committee. And just to send a more direct message, this appropriations bill states that the agency cannot use its funds to target citizens or groups based on their ideology.
TSA: You have millions of passengers to screen everyday and now Congress has capped the number of employees you can hire. If passed, the deal would set a limit of 46,000 TSA screeners and require the TSA to find a way to make half of the traveling public eligible for "expedited" screening by the end of this year.

Russia: Two reasons. 1. Sen. Mark Kirk, R-Illinois, told CNN the deal fully funds a U.S. missile defense system in Romania, which the Russians do not like. 2. The measure makes it harder for the United States to buy weapons from Russia, including some controversial helicopters. To get around the ban, the omnibus requires the Pentagon to reveal the number of anti-aircraft missiles the Russian weapons agency has sold to Syria's Bashar al-Assad.

Obamacare: (And see above.) If the Obama administration needs more funds to implement the health care law, it isn't going to get them from Congress. The bill doesn't add any funding and also blocks the administration from dipping into a prevention fund as a backup pool of money.
Generals and admirals: Flag and general officers in the military would see a cut in their staff expense budgets under this plan.
The president of Afghanistan: The bill specifically prohibits any of its funds from going to "the direct personal benefit of the president of Afghanistan."
Portrait artists: The bill bans government officials from spending money to have a portrait made.
Jerry Brown: No funds for you. The California governor hoped to get some federal funds for his dream of a $60 billion high-speed rail line between L.A. and San Francisco. But Republicans successfully blocked the idea in this deal.

Now jumping to  Jerry Brown’s 2014-15 budget last week was a cause for celebration in Sacramento. In news conferences all over the state, Brown triumphantly announced that his budget would invest in California’s schools, expand health-care coverage for millions and continue work on the state’s troubled high-speed rail project. All of this while Brown and his allies have been touting what they call California’s comeback as an example for other states to follow. Missing in the budget and in Brown’s public pronouncements is any serious mention that California still faces a jobs crisis, and has an economy that, while recovering, is doing so at an anemically slow pace. His only policy prescription for jobs and growth seems to be the high-speed rail project, which is already over budget and may never really get going because of legal challenges. Absent from the governor’s budget are proposals to encourage sustained job creation or long-term economic growth, despite being chock-full of new spending in almost every area of state government. California has persistently high unemployment, and its 8.5 percent unemployment rate is sixth highest in the nation. Almost 18 percent of the state’s residents are unemployed, have stopped looking for work, or have part-time jobs but want full-time employment. Of the 10 metropolitan areas with the highest unemployment rates in the country, seven are in California. I would rather discuss later about Brown's intentions to run for Governor again , mean while the bucks are rolling in .

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