So Which Budget-- Or, More To The Point, Which Vision Of Governance-- Is Best For Ordinary Americans?

Ryan's Wall Street-hatched plot to turn back the clock is nothing short of catastrophic and, even as a jumping off point, Simpson-Bowles is just barely tangentially better, while still being awful. Yesterday President Obama presented a less dysfunctional, more than a little fairer vision of a brighter path forward. But it was still based on Republican talking points and fallacies. If we were stuck with these three choices, Obama's would be livable... barely. But considering his record of negotiating, if this is the starting point, we are screwed. UNLESS, the starting point for negotiations, if not the end point, is the People's Budget that the Congressional Progressive Caucus proposed.

The Economic Policy Institute did a thorough analysis and then endorsed it. They conclude that the working family-oriented People's Budget "would reduce primary spending by $868.9 billion, increase general revenue by $2.8 trillion, and increase payroll tax receipts by $1.2 trillion over a decade relative to the adjusted CBO baseline. Responsibly ending the wars in Afghanistan and Iraq and recalibrating Department of Defense priorities would save $2.3 trillion. Roughly $1.7 trillion would simultaneously be invested for general public investment and a surface transportation reauthorization bill, including an I-Bank. Health care savings would decrease deficits by $308.1 billion from 2012 to 2021, more than offsetting the 10-year cost of maintaining the current rate of Medicare physician reimbursements, adjusted for inflation. Based on all of these policy adjustments, net interest payments are projected to fall by $856.3 billion over 2012-21.53 In total, the People’s Budget would reduce deficits by $5.6 trillion over 2012-21 relative to the adjusted CBO baseline."
Alternatively, just forget anything reasonable ever coming out of the Beltway. It's just too damn tied up with special interests money. In next week's Rolling Stone Matt Taibbi asks the pertinent questions about the budget, starting with "Why isn't Wall Street in jail?" And if you follow Taibbi's writing-- you're crazy if you don't-- you know he's got the answers as well.

Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size-- a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.

Now, following an act of Congress that has forced the Fed to open its books from the bailout era, this unofficial budget is for the first time becoming at least partially a matter of public record. Staffers in the Senate and the House, whose queries about Fed spending have been rebuffed for nearly a century, are now poring over 21,000 transactions and discovering a host of outrages and lunacies in the "other" budget. It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure. The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loans each to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. "Our jaws are literally dropping as we're reading this," says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. "Every one of these transactions is outrageous."

...And then there are the bailout deals that make no sense at all. Republicans go mad over spending on health care and school for Mexican illegals. So why aren't they flipping out over the $9.6 billion in loans the Fed made to the Central Bank of Mexico? How do we explain the $2.2 billion in loans that went to the Korea Development Bank, the biggest state bank of South Korea, whose sole purpose is to promote development in South Korea? And at a time when America is borrowing from the Middle East at interest rates of three percent, why did the Fed extend $35 billion in loans to the Arab Banking Corporation of Bahrain at interest rates as low as one quarter of one point?

Even more disturbing, the major stakeholder in the Bahrain bank is none other than the Central Bank of Libya, which owns 59 percent of the operation. In fact, the Bahrain bank just received a special exemption from the U.S. Treasury to prevent its assets from being frozen in accord with economic sanctions. That's right: Muammar Qaddafi received more than 70 loans from the Federal Reserve, along with the Real Housewives of Wall Street.

Perhaps the most irritating facet of all of these transactions is the fact that hundreds of millions of Fed dollars were given out to hedge funds and other investors with addresses in the Cayman Islands. Many of those addresses belong to companies with American affiliations-- including prominent Wall Street names like Pimco, Blackstone... It's one thing for the federal government to look the other way when Wall Street hotshots evade U.S. taxes by registering their investment companies in the Cayman Islands. But subsidizing tax evasion? Giving it a federal bailout? What the fuck?

As America girds itself for another round of lunatic political infighting over which barely-respirating social program or urgently necessary federal agency must have their budgets permanently sacrificed to the cause of billionaires being able to keep their third boats in the water, it's important to point out just how scarce money isn't in certain corners of the public-spending universe. In the coming months, when you watch Republican congressional stooges play out the desperate comedy of solving America's deficit problems by making fewer photocopies of proposed bills, or by taking an ax to budgetary shrubberies like NPR or the SEC, remember Christy Mack and her fancy new carriage house. There is no belt-tightening on the other side of the tracks. Just a free lunch that never ends.

Oh, I almost forget to mention, corporate Democrats led by Chris Van Hollen, the ranking ineffectual Democrat on Ryan's Budget Committee, proposed some silly little of this/little of that nonsense as well. It's 100% based on Ryan's table settings and, it's not any more worth looking at than Ryan's is. It will be defeated today as a Motion to Recommit just before Ryan's budget passes.

Ryan's budget... I was thinking about it today in terms of the sociopaths in the corporate headquarters when I used to be president of Reprise Records. The most important thing I could do for shareholder value was to help build artists for the future. I saw that as one of my primary jobs. Our A&R staff would identify talented artists and work to develop that talents, sometimes over years and years. It took Depeche Mode 6 albums before they broke through. It took Barenaked Ladies 6 as well. The whole time we were being pressured from the corporate guys to drop the bands. I recall one time, when I was a junior VP, the chairman of the company signaled me to come into his office and listen silently to a conversation he was having. It was with a high ranking corporate finance guy who was demanding-- threateningly-- that we drop Eric Clapton. 24 Nights had sold poorly, as had Behind the Sun, August and Journeyman, but none of them were poor quality-wise and the company, at least on the creative side, was still firmly behind Eric. But the corporate guys wanted him off the roster. The chairman showed m how to be both polite and firm in telling them to go screw off. The next record Eric delivered was Unplugged, which sold over 10,000,000 albums, in the U.S. and far more overseas and basically kept the company running for a year. I'm sure the corporate executive congratulated himself for not forcing us to drop him. That was millions of dollars in shareholder value. These corporate guys only think about the quarterly bottom lines-- and their bonuses (based on that) or, the real far-thinking ones, actually have a whole year time horizon. The Republicans are like that. Their perspective is corporate and disastrous. It doesn't take the future into account. Had we dropped Depeche Mode and the Barenaked Ladies before they were fully developed, tens of millions of dollars would never have been realized for the shareholders. It was a never-ending battle. It's worse with the Republicans, especially because they have Fox and the right-wing echo chamber blaring their short-sighted foolishness day in and day out. I wish Obama had what it takes to stand up to them... the way the chairman of Warner Bros Records did.