In Praise of Bob Rae. A Goodbye to a Good Man

On the day that he announces his political retirement, I come not to bury Bob Rae, but to praise him.

Not only did I vote against Rae twice when he was leader of the Ontario NDP, I actually enjoyed doing it. But I don't vote for someone as much as I vote against everybody else. Indeed, the proudest ballot I ever cast was for a transvestite to be mayor or Toronto, so convinced was I that he/she would be less embarrassing than Mel Lastman.

Having said that, there's much to respect and even admire about Rae.

He's easily one of the smartest people in Canadian elective office in my lifetime. Even those that disagree with him, as I repeatedly did, acknowledge that he's a heavyweight. And that's something that's profoundly lacking in public life today, where stupidity is too often considered a virtue.

Rae also engaged in the single greatest act of political bravery in my lifetime. For all intents and purposes, he pulled the plug on his time at Queens Park because he thought it was necessary.

Shithead conservative bloggers and dishonest Sun Media hacks, like Brian Lilley, enjoy pummelling Rae for Rae Days, all the while heaping praise on Republicans like Scott Walker for doing essentially the same thing.

Rae Days requires absolutely no courage for conservatives, since that's what their base vocally wants, anyway. However, the public sector unions were Rae's political base, and he knew it. And he still immolated himself doing what was right. If that's not bravery, I have no idea what is. Moreover, it speaks to the bald hypocrisy of his critics.

Speaking of hacks like Lilley,  (who, full disclosure, is apparently a friend of my ex-girlfriend) He joyously posted this retarded and fundamentally dishonest chart from Sun News on his Facebook page this evening.

Did Premier Rae spend a literal shit-ton of money in the face of what was then considered a brutal recession? He sure did. And that's the primary reason I voted against his government in 1995.

What is nicely left out is the fact that there was a worldwide recession during Rae's tenure at Queens Park. What those lying fucks at the Sun neglect to point out are the federal and U.S employment and deficit figures at the time.

Why is that? I suspect that it's because the prime minister of Canada during the worst of it was Progressive Conservative Brian Mulroney and the president of the United States was Republican George H.W Bush, who to varying degrees, did pretty much exactly what Rae did as premier of Ontario. All three raised taxes, all three had high unemployment, and all three had massive deficits.

But Rae is studied not only in isolation from the context of the time, the figures also leave out what his conservative peers were doing at the time.

By the way, why does Sun poster boy Stephen Harper get a pass? Unlike Rae, Harper started out with a $13 billion surplus, which he immediately pissed away on electioneering hucksterism. Then, in the guise of his Keynesian "Action Plan," he created tens of billions of dollars in new deficits, which he spends millions more advertising on television, five years after the fact. And none of that happened twenty years ago, when Keynesian economics were the the accepted wisdom, Harper's doing it now.

I point that out not to defend Rae, but to highlight the intellectual dishonesty and gullibility of what passes for the Right these days. Not only can we not win on our merits when we engage in nonsense like this, we don't deserve to.

I made no secret of my opinion that Bob Rae was the Liberal party's last, best chance of surviving, if not actually winning power. He was uniquely qualified to call the Harper government on its own bullshit. Rae was not only smarter than the rest than the rest of the federal leaders, he was more politically experienced and intimately familiar with the pitfalls of having headed a party and a government before.

If Rae compared his record in Toronto to Harper's in Ottawa, I believe it would have been devastating ... for Harper. And I think the Tories knew that, too.

But the Liberals insisted on being the Liberals. They continue to hate one another more than they hate Harper, and they refuse to renounce their addiction to stunt leaders, like Michael Ignatieff and Justin Trudeau. And that's precisely why "Canada's Natural Governing Party" is going to cease to exist by the end of the decade. By forcing Rae out of the permanent leadership race last year, I think they signed their own death warrant.

Although I opposed almost everything that he did in public life, I never doubted Rae's sincerity. I believe him to be someone who actually got into politics to serve what he thought was the greater good, rather than personal enrichment or self-aggrandizement.

Unlike most of the ward-heelers out there, I'm of the opinion that Bob Rae will better off without politics. Sadly, politics will be worse without Bob Rae.

I never voted for him and I never would, but I wish the man well in private life.

Plowing Through More Republican Horseshit, IRS and NSA Edition

Most of you remember my old blog, dont'cha? I spent shitloads of time there from 2005-2008 bitching endlessly about the power of the US federal government and the potential abuse thereof.

And you know what I got for my fucking trouble? A endless amount of nonsense about the Unitary Executive Theory and the righteousness of George W. Bush. Most of those people would describe themselves as Tea Partiers today, and not readily admitting to knowing who Bush even was, let alone ever having supported him so throatily.

Then there's the Citizens United decision, which I've always had a mighty bug up my ass about.

I'm on the record as having said that political activity should get no preferential treatment under the tax code, from deducting lobbying costs right on down to deducting political contributions from your taxes. Shit, I don't even support the charitable deductions for charities that actually accomplish something other than shitty commercials.

If you're interested in knowing why, I'll tell you.

The more deductions you allow in the tax code, the higher the rates have to be to generate the revenue the government needs to operate. And if you want a government with the capability of both providing accessable health care to everyone and being prepared to bomb everyone from Jakarta to Winnipeg, we're talking about a fair bit of revenue.

Advocates of a flat tax have never been able to answer that basic fact. The more you deduct for yourself, the more everyone pays in higher rates. And this is what made the Ryan-Romney tax proposals last year such a bad fucking joke to anyone with a basic grasp of arithmetic.

My personal hero, Velociman, has one of the most misguided things I've ever seen up here.

A Redress of Grievances
That was, and is, the crime of the Tea Party groups. They are loose, and unaffiliated. When anyone attempts to wrest control of the Tea Parties at any level above the community they are whipsawed, and lashed.
That was the fearful thing. That is what keeps Obama awake at night. The First Amendment guarantees freedom of assembly and the right to redress grievances not as a sop of government, but as a natural right of man. From God, if you will. The Tea Parties were actually fomenting during the Bush bailout leading up to the 2008 election. They have never been specifically anti-Obama. Merely anti-spending. And yet they have been targeted and reviled as mutants, and racists.

There are any number of factual errors in those paragraphs, not least of which is that the Tea Party isn't almost wholly constituted by mutants.

Firstly, nothing calling itself the "Party Party" existed before Rick Santelli's retarded rant of February 2009, and that addressed relief to underwater homeowners under the thumb of the cocksucker banks, who themselves were just bailed out. And that Santelli said this from the floor of the Chicago Board of Trade went almost completed unnoticed by everyone that isn't me.

Second, it's almost impossible to know if Tea Party groups are "loose, and unaffiliated" in light of Citizens United, which restricted disclosure of their donor base.

Thirdly, this isn't about a redress of grievances or even the First Amendment.

Let me repeat that. This isn't about a redress of grievances or even the First Amendment. The Obama administration never shut down the right of Tea Party groups to speak and, if they tried, they did a godawful job of it, since I couldn't escape those mutants last year.

It's actually about administrative tax law.

The Tea Parties weren't asserting a right, they were seeking a favour from the government in the form of non-profit tax status. And correct me if I'm wrong, but I'm not aware of the right to tax-exempt status for anyone but Indians in the Constitution. Anyone who suggests otherwise is either ignorant of lying.

My ultimate problem with these shithead Republicans is that they want other taxpayers to subsidize the cost of their bitching about how taxes are so high. Their right to free speech isn't inhibited as much their ability to get other people to pay for it is, so fuck them.

Now, do I think that that the administration specifically targeted conservative groups through the IRS? Sure I do.

Is that "Watergate," like so many idiots suggest it is? No, it is not.

President Nixon specifically targeted individuals for IRS harassment,  just as Johnson and Kennedy did before him. The difference is that they weren't organized groups seeking deductions in a post-Citizens United world, which begs such scrutiny. Nixon went after individual members of groups, journalists and sundry political enemies, which is a clear abuse of power and something no one has accused Obama of.

Then there's the recent NSA scandal, to which I ask ...... What did you think was going to happen? 

Most of you will remember that I went apeshit when I first heard about the Bush NSA program that was implemented in secret, without congressional authorization, after 9/11. I went on about it for years, actually.

But the people who were fine with it then - and in some cases demanded the prosecution of journalists that reported on it - are out of their tiny pinheads about it now. Of course, these are almost universally the same twats that want a secret war in Syria, so go figure.

However there are a couple of important distinctions.

First, Obama sought a FISA warrant for the records, which Bush never did, and Republicans insisted that he didn't have to under Unitary Executive Theory, the Authorization to Use Military Force Resolution of 2001 and the "Because ....Lincoln!" argument that they deploy whenever it fucking suits them.

Second, the GOP voted to change the law to to allow for exactly what Obama is doing today. Something I would advocate impeaching Obama for, Republicans legitimized way back when.

And that goes back to the tax case. Do you want to pay higher tax rates just because shiityy people with dishonest thinking don't wantto pay any at all?

Why a Balanced Budget Amendment is Silly

I like the idea of a balanced budget amendment to the U.S Constitution. Columnist George Will certainly outlines the need for one. Unfortunately, no Republican has ever proposed one that wasn't balls-out stupid.

Proponents for an amendment usually fail to point out that debt-ridden basket cases like California and Illinois have balanced budget amendments. They, like most of the states, just use accounting tricks to make their books appear to be balanced, when in fact they're a shocking mess and only likely to get worse.

Conservative proponents of an amendment also display an almost incredible level of dishonesty when they compare deficit numbers from the Bush years to the present day in an attempt to demonstrate that Republicans are more fiscally responsible. A cursory look at the charts they present seem to make their case clear, but they neglect to tell you about the accounting tricks that the GOP employed from 2001 through the beginning of 2007.

The wars in Afghanistan and Iraq are prime examples of the budgetary chicancery they used. The Bush Administration didn't primarily fund the wars through the usual annual budget process. They instead went to Congress several times a year to seek military funding through emergency supplemental bills. Remember the $87 billion that John Kerry voted for before he voted against it? That was an emergency supplemental. And the costs of the wars through 2009 was roughly a trillion dollars.

The beauty of those those bills is that because they aren't part of the budget, they bypass annual deficit reporting numbers. Instead, they are added directly to the debt. So, when you're shown graphs listing deficits from the Bush years, you're only getting half the story. You're being lied to without the people doing it actually lying. But it's really no different from Enron accounting. It's the same kind of math that the Bush and Obama Treasury Departments used to prove that the Too Big To Fail banks were solvent when they weren't.

I mention this because these are the same people who most strongly advocate a Balanced Budget Amendment (BBA). You shouldn't take anything these people say on faith, given their demonstrated history of ignorance, duplicity, or both.

For an amendment to be effective, it would have to be clean. The language should have to look something like this: "Congress shall each year enact a budget that is in balance without exception." Another option is to require balance over three or five year periods, but there cannot be exceptions.

The lack of exceptions is key. If there's an emergency, such as a war, natural disaster or financial calamity that requires deficit spending, that money should be subtracted from the following year's budget (or the next three or five.) Or there would have to be an automatic tax increase to pay down the deficit.

I have yet to see a "clean" amendment proposed by anyone. More often than not, they're riddled with exceptions that Republicans like spending money on, or spending that is politically advantageous to them. It's important to note that the biggest deficits in U.S history were created by Republican presidents. Even the current Obama deficit is driven mostly by the wars, the Bush tax cuts, and program spending, such as Medicare Part D and No Child Left Behind that the GOP categorically refused to pay for when they controlled the process. The Obama stimulus (to date, his biggest ticket spending item) was a one-time outlay, whereas the Bush programs were structural and almost impossible to repeal.

More importantly, most of the Republican BBA proposals I've seen require a supermajority (usually three-quarters) vote to raise revenue. By 2016, just the cost of servicing the debt will be roughly equal to the Pentagon's budget, making balancing the budget by spending cuts alone almost impossible. New revenue will be absolutely necessary to avoid a catastrophe, and the denial of same demonstrates the singular unseriousness of most Republican proposals.

If a supermajority is necessary anywhere, it would be in passing emergency supplemental spending, which bypasses the budget process entirely and would also presumably get around any proposed amendment. Since most such spending tends to be military in nature, it would also make lawmakers think twice about going to war. At a minimum, it would make them be more forthright about the costs of war.

Before a balanced budget amendment is introduced, Congress is going to have to be serious about its accounting practices, which currently do not factor the single largest threats to the U.S economy: the unfunded liabilities of future Medicare and Social Security spending. Democrats point to the "balanced budgets" of 1998-2000, but if a private business or individual budgeted that way, they would find themselves being indicted. The unfunded liabilities might cost as much as $75 trillion by 2050 and no reasonable person thinks that the American economy is going to grow at anything near the rate necessary to absorb that cost.

An amendment will finally have to recognize that tax cuts actually are spending, and will require other spending costs to offset their cost. The single biggest driver of the deficit today remains the Bush-Obama tax cuts, which cost over $3 trillion over the last decade and produced almost nothing in economic growth.

From 2001-07, the Republican Party proved beyond any doubt that "fiscal responsibility" is nothing more than a rhetorical wedge for them. They say they deserve another chance, but their continued lies about the nature of the Obama deficits undermine that case. For that reason, they shouldn't be trusted about a BBA.

I believe that a balanced budget amendment is going to be necessary, but not before Congress undertakes a number of significant and painful reforms. Otherwise, it's nothing more than a rhetorical stunt and all of the trick accounting in the world isn't going to fool the international markets.

Praying for the Apocalypse: Dispatches From the GOP's Last Stand

One of the great joys of this past week has been watching the Tea Party-Republican reaction to the fiscal cliff deal reached on Tuesday morning. I wrote about my displeasure with it here and I have many of the same grievances with the bargain that hardcore Teapublicans do. The only difference is that I'm telling the truth and they aren't.

Most of the commentary that I've seen railed against the tax increase and the $4 trillion in new debt. The only problem with this critique is that if the GOP got it's way, the debt would have been much worse.

The Congressional Budget Office has estimated that almost all of the $4 trillion comes from the expansion of the Bush tax cuts for those making under $400, 000 and the permanent patch to the alternative minimum tax. The "new spending" (and that term requires that you believe that tax cuts that aren't paid for aren't spending, which they are) equals about $300 billion.

But Republicans generally, and the Tea Party in particular, wanted all of the Bush tax cuts made permanent, plus the patch of AMT, which would have made CBO's deficit projections larger still. That's the math, folks. Arguing with it doesn't change it.

That would have been fine if Republicans had a plausible way of paying for it. Luckily for them, Republican dogma dictates that tax cuts aren't spending, so the deficits that result from them, in the immortal words of Dick Cheney, "don't matter."

Of course, that brings us to loophole reductions highlighted in the various Ryan plans and the Romney campaign. These of course were nothing short of blatant lies, which we know because no one ever presented a list of deductions to be eliminated or the math behind them. The only reason to leave that information out is because you know that it would be politically impossible to pass. Romney and Ryan would have gotten their tax cuts, to be sure. But they either wouldn't have been paid for or the burden of doing so would have fallen squarely on the middle class.

And if deductions and loopholes are such a wonderful way of paying for tax cuts, why wasn't the idea explored in 2001 and '03? It had been done rather successfully in 1986 and there was certainly no shortage of economists in the Bush White House. My guess is - and this is only a guess because I'm not aware of anyone else asking the question - is that they either knew that the math didn't work or the optics of having the middle class pay for it would be politically worse than the deficits themselves.

But you can cut spending to pay for tax cuts, right?

Yes, that's theoretically possible. But Republicans have never actually tried it before. Neither Reagan or the second Bush tried cutting spending anywhere close to the costs of their tax cuts. In fact, both dramatically ramped up defense spending, which obliterated the savings from domestic spending cuts. But that too was okay because the GOP doesn't believe that defense spending is "spending," either. Indeed, Mitt Romney promised a third surge in security spending without bothering to figure out how he was going to pay for it.

Nor has anyone complaining about Obama's budgeting bothered to come up with anything close to $4 trillion in domestic cuts over a decade. They've promised a lot of reforms, but none of those take effect for a decade after enactment and are guaranteed to have monstrous transition costs. President Bush's 2005 Social Security plan was estimated to cost a trillion dollars in the first ten years, and I expect that Medicare reform based on personal plans would cost at least that much, and probably much, much more.

If the Grover Norquists and Erick Ericksons of the world had their way and everyone in the U.S government was suddenly a Republican, the projected deficits over the next 10 years would grow faster and larger than those currently on the table. Though they like pretending otherwise, their policies have costs, too. Both history and simple arithmetic teach us that.

As I've said before, I was fine with the sequester with its brutal, wide-ranging and immediate cuts. It was the GOP who objected to it most strongly because half of those cuts came directly from the Pentagon's hide, and the Republican platform calls for a dramatic increase in military spending. Another ideological perversion of the Republican Party is their failure to understand that defense spending, being wholly dependent on foreign policy, is the most discretionary spending of all. And at over $600 billion a year, it's the biggest discretionary program of all.

So when Republicans refuse to pay for their tax cuts or cut spending in a serious or timely way, they're left with one fallback position - shut down the government and possibly default on the debt.

You get a good idea of how unserious these people are when you read something like this;  "Specifically,( Pennsylvania Senator Pat)  Toomey tells Joe Scarborough, “We Republicans need to be willing to tolerate a temporary partial government shutdown, which is what that could mean, and insist that we get off the road to Greece because that’s the road we’re on now.”

Excuse me, but what in the fuck is a "temporary partial government shutdown?"

My guess is that it means that the parts of the government (which also happen to be the biggest parts of it) that Republicans like, such as the military and the CIA, continue conducting business as usual. The GOP might be stupid, but it isn't as suicidal as you might think, so Social Security checks will continue to go out and doctors will keep getting paid under Medicare and Medicaid. All "a temporary partial government shutdown" means is that there's no urgency to reach a deal.

Not being a real government shutdown, that allows people like Erickson to think that Republicans have room to maneuver. This is because people like Erickson don't know how life works outside of their silly ideological bubbles.

Friends, this isn't going to be a replay of 2011. Back then, both sides were negotiating before the government hit the debt ceiling and continued as Treasury was juggling existing money to pay the bills. In this case, the ceiling was reached on Tuesday morning, Obama is on the record as saying that he isn't going to negotiate serious spending cuts and Boehner has said that he isn't going to negotiate with Obama at all. In addition to that, I expect the intellectual misfits in the Tea Party to start calling for a default by the end of next week.

The timing of this suggests to me that a default is a serious possibility this time. In fact, I think it's probable.

The markets freaked out in 2011 just because the GOP talked about defaulting and America's credit rating was downgraded for the first time in history. Can you imagine what will happen if those crazy bastards actually do cause a default?

Remember the meltdown following the Lehman Brothers bankruptcy? This will be much worse. At least the government had access to $1.6 trillion for TARP and the Recovery Act then, which it won't this spring because no one will lend America money at anything less than ruinous interest rates. The economy won't "slow down," it'll come to a screeching halt and the United States could start losing a million jobs a month immediately.

By the way, do you know how hard killing terrorists will be when Congress doesn't even have change for the bus? China might also use the opportunity to ramp up its ambitions in the South Pacific, and God only knows what signals Iran will read into a U.S default and Depression.

And all of it will happen at the insistence of alleged "fiscal conservatives."

It's time to finally, finally admit that these people are fiscal conservatives the same way that Lindsay Lohan is sober and chaste. They are to sound economic policy what snake handling is to modern spirituality.

These people are willing to usher in Armageddon based solely on the factually unsupportable belief that Jesus will be waiting at the other side.

If you live outside America, you would be wise to get whatever money you have there out soonest. And if you live in the United States, know that Glenn Beck is probably right and you should start stockpiling gold, canned goods, firearms and explosives forthwith

The Republican Party is going down and they're fixing to take America down with it.

A Fiscal Cliff Deal That Makes Things Worse

At least in financial matters, it's hard to come to any conclusion other than that the United States is governed by emotionally damaged and intellectually challenged children. All things being equal, it is not as different from North Korea as you might have been lead to believe. I'm only sort of kidding when I say that I hope that Pakistan is developing a plan to take control of America's nuclear arsenal because Americans can no longer be trusted with it.

I never had all that much faith in a fiscal cliff deal that accomplished much of anything, but what passed last night made things spectacularly worse. It's actually pretty impressive when you think about it.

You might remember that the fiscal cliff itself was a product of the 2011 debt ceiling clusterfuck. Just off  the top of your head, can you name the other grown-up countries that have a debt ceiling at all? The correct answer is "none." Has the ceiling done anything to control U.S debt? The answer to that is pretty clearly no. It's an archaic and dangerous tool that long ago outlived any usefulness it may have had.

This completely invented crisis began with the Republican Party's singular inability to tell the truth about the debt. Ronald Reagan tripled it and George W. Bush doubled it again, but it's all Barack Obama's fault. That set the stage for the GOP to hold the economy hostage in the summer of '11 and very nearly caused the first default in U.S history.

This week presented the last best opportunity for the United States to right its fiscal ship. Not only was the "sequester" - drastic, automatic spending cuts - set to take effect yesterday, the Bush tax cuts and Obama's payroll tax holiday were set to expire. Oh, and the debt ceiling limit was hit at midnight on New Year's Day. Never again will there be a chance as good as this one to make a serious effort to address the coming catastrophe. America is now guaranteed to hit an economic iceberg and they will do so soon.

The positions of both sides were childish, ineffective and based more on politics than economics. President Obama spent the last five years saying that he wanted to make the Bush tax cuts permanent for everyone making under $250,000 a year and cut almost nothing in spending, whereas House Republicans wanted all the tax cuts made permanent, sought "entitlement reforms" that took over a decade to be enacted and wanted further Pentagon spending. While the Democrats were slightly more serious than the Republicans, that isn't saying much, since it's almost impossible to be less serious than the Republicans.

House Speaker John Boehner is incapable of controlling the Tea Party mongoloids in his caucus, making him less than useless as a negotiating partner. So he insisted that a deal come from the Senate, despite the Constitutional dictate that money bill originate from the House. That left it to Vice President Joe Biden and Senate Minority Leader Mitch McConnell to hammer out a deal.

Here's what they came up with.

— Tax rates will permanently rise to Clinton-era levels for families with income above $450,000 and individuals above $400,000. All income below the threshold will permanently be taxed at Bush-era rates.
— The tax on capital gains and dividends will be permanently set at 20 percent for those with income above the $450,000/$400,000 threshold. It will remain at 15 percent for everyone else. (Clinton-era rates were 20 percent for capital gains and taxed dividends as ordinary income, with a top rate of 39.6 percent.)
— The estate tax will be set at 40 percent for those at the $450,000/$400,000 threshold, with a $5 million exemption. That threshold will be indexed to inflation, as a concession to Republicans and some Democrats in rural areas like Sen. Max Baucus (D-Mt.).
— The sequester will be delayed for two months. Half of the delay will be offset by discretionary cuts, split between defense and non-defense. The other half will be offset by revenue raised by the voluntary transfer of traditional IRAs to Roth IRAs, which would tax retirement savings when they’re moved over.
— The pay freeze on members of Congress, which Obama had lifted this week, will be re-imposed.
— The 2009 expansion of tax breaks for low-income Americans: the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit will be extended for five years.
— The Alternative Minimum Tax will be permanently patched to avoid raising taxes on the middle-class.
— The deal will not address the debt-ceiling, and the payroll tax holiday will be allowed to expire.
— Two limits on tax exemptions and deductions for higher-income Americans will be reimposed: Personal Exemption Phaseout (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000.
—The full package of temporary business tax breaks — benefiting everything from R&D and wind energy to race-car track owners — will be extended for another year.
— Scheduled cuts to doctors under Medicare would be avoided for a year through spending cuts that haven’t been specified.
— Federal unemployment insurance will be extended for another year, benefiting those unemployed for longer than 26 weeks. This $30 billion provision won’t be offset.
— A nine-month farm bill fix will be attached to the deal, Sen. Debbie Stabenow told reporters, averting the newly dubbed milk cliff.

Congratulations everybody! You just accomplished nothing!

Republicans say that America has a spending problem, while Democrats insist that the problem is with revenue. Anyone with any brains knows that the issue is with spending and revenue. This deal addresses neither.

Obama's insistence on returning to the Clinton tax rates for everyone making over a quarter million dollars raised negligible revenue. And he settled on $450,000 which raises even less.

Guess what this mess costs? Actually, you don't have to. The Congressional Budget Office estimates that it'll be a fortune.

The extension of lower tax rates for a bulk of the nation's taxpayers and the addition of a permanent patch to the alternative minimum tax would add roughly $3.6 trillion to the deficit over the next decade, the CBO said. Other individual, business, and energy tax extenders would add another $76 billion. The extension of unemployment benefits would cost roughly $30 billion, and the so-called "doc fix" would tally another $25 billion through fiscal 2022.

The CBO says the budget agreement will lead to an overall increase in spending of about $330 billion over 10 years.

When all is said and done, all the White House and Congress managed to do was increase the debt by $4 trillion.

Oh, and it was political clusterfuck for everybody involved, too! Liberals and conservatives are both furious with their own representatives. Pretty much everybody's credibility was destroyed yesterday.

And because the debt ceiling wasn't raised and sequestration was delayed for two months, the worst part of this mess is yet to come. More interestingly, neither side has a particularly strong hand to play. President Obama has shot his load on taxes and the GOP is still too rattled and scared from the November elections to be effective at much of anything. Nobody has the juice to make a Grand Batgain at the end of February. The Bush tax cuts are now effectively the Obama tax cuts, taking away the negotiating leverage he had on the revenue side.

As of Monday night, the United States has no authority to borrow. The Treasury Department can juggle around existing money until about the first of March, but that's it. After that, the federal government shuts down. At the same time, the sequester takes effect, automatically making excruciating cuts everywhere.

Since both sides have lost the trust of their respective bases, I can't see how a deal is made. I can't imagine that the GOP will give Obama a debt ceiling increase without drastic, non-defense cuts and the president would be a fool to give a weakened, scared and divided Republican conference anything close to what they want.

What is likely is the trifecta of ugliness: a government shutdown, brutal automatic sequestration cuts and a default on the national debt - all within about a week of each other.

If you think the markets are going to respond well to that, you're out of your friggin' mind. The stock exchange will crash harder than it has since 2008 and the international bond market may start to melt down. Treasury Bills will very probably become worthless overnight and the U.S government will have trouble funding itself when it resumes operation.

Both unemployment and interest rates could skyrocket, which might throw the country into a depression, possibly causing another round of bank failures. The meltdown of the European PIGS (Portugal, Ireland, Greece and Spain) would seem leisurely compared to a complete political and financial collapse in the United States. It's also important to remember that there's nobody capable of bailing America out.

Oh, and did I mention that the United States added $4 trillion to it's national debt last night? Because the United States added $4 trillion to its national debt last night. And they did that while accomplishing nothing more than delaying the apocalypse by 60 days.

Good work everybody!

Why am I the only one wondering why Americans hate america so much? I rather liked it when it was a serious country.

Who is Rick Santelli and Why is He Saying These Stupid Things?

I knew that the Tea Party movement was doomed to long-term irrelevance, brutal stupidity and almost cosmic hypocrisy the second it was formed around the now infamous "Santelli rant" of February 19, 2009.

Rick Santelli is a former hedge fund cocksucker who later migrated to the equally devious, unethical and wrong profession of financial journalism. He really is the worst of both possible worlds.

For my right-wing friends that love disseminating conspiracy theories about George Soros and his profiteering from the collapse of world currencies, you should know that Soros Fund Management is also a hedge fund. Long-Term Capital Management was also a hedge fund that required a massive Federal Reserve-supervised bailout in 1998, after it put all of it's eggs in the east Asian and Russian currency basket, which subsequently crashed. Because of the nature of their trading, hedge funds are largely unregulated, despite the enormous potential for destruction that they cause.

Even in the wildly overrated journalism, financial reporters are among the very worst, at about the level of gossip columnists and fucking astrologers. That anyone believes anything these assholes have to say tells you everything you need to know about why capitalism is the mess that it is today.

If you want to take a walk down memory lane, I highly recommend that you read back through what those fucking people had to say about the banking and real estate sectors from 2002 through the middle of 2007. You'll look long and hard before you find them saying anything negative. This is because financial reporters are the most cronyistic motherfuckers on God's green earth. Shit, even political reporters are embarrassed by them.

But the Santelli rant of Ought-Nine was unique onto itself for it's balls-out ignorance and hubristic hypocrisy. If you never saw it, here it is. If you haven't seen it in awhile, you should watch it again.



Remember, that was Santelli on the floor of the Chicago Board of Trade, not quite five months after all of those dumb fuckers were bailed out by the Troubled Asset Relief Program (TARP.) There were no populist rants from those people in September of 2008 because they were too scared to fucking speak without shitting themselves to death.

This guy says that Santelli was against TARP, which isn't exactly true if you watch the clip he provides. Santelli acknowledged that the government had to do something, but that it should wait a few days.



And that would have been fucking crazy. Not only was the financial service industry rapidly melting down, it was beginning to take the stock market with it. The consequences of that for the larger public were catastrophic and most people still haven't recovered from them.

Back in the 80's, employers moved from Defined Benefit Packages (which you know as pensions) to investing contributions in 401K plans, which were almost all in stocks. When Lehman Brothers collapsed, the market lost over half of its value in a single day. When the GOP started fucking around with passing TARP - and it failed to pass the House the first time - the market bled out even more.

Those 401K lost over half of their value. Some lost closer to two-thirds. If you were anywhere near retirement in the fall of 2008, you were basically fucked.

Because of the interconnectedness of the debt, most through derivatives like credit default swaps, all of the investment banks would have gone down. The ones that weren't directly taken out by the mortgage meltdown wouldn't have had anyone to borrow from to meet their overnight margin requirements. And because the repeal of Glass-Steagall Act allowed them to become bank holding companies, the commercial banks would have started toppling like dominoes very shortly thereafter.

No one who knows anything about anything has ever suggested otherwise. After four years of my asking, people like Santelli have never told me how you maintain a modern civilization without a banking industry. Like it or not (and I hated it) TARP was the least bad available option out there. No sensible person thought there was a guarantee that the markets would have survived another week.

But when the government rather timidly suggested that the banks (which caused the problem in the first fucking place and had just been given tens of trillions of dollars in loans and guarantees) renegotiate the mortgages of the actual victims of the crisis, shitheads like Santelli and his cocksucker friends with their bailout bonuses burning a hole in their fucking pockets had the incredible temerity to get indignant about it on the CBOT floor.

Fuck them. No wonder the Tea Party is so goddamned dumb. They're based on a fundamentally stupid premise. If Rick Santelli was capable of shame, he would've ended his rant by putting a gun in his mouth and pulling the trigger.

Yet Santelli can't stop bringing the stupid. Just this morning he was bringing it hard.



Jesus God, the stupid just doesn't stop with this guy, does it?

We're not even talking about ancient history here, folks. We're talking about 1990-'93. The first President Bush increased marginal rates and President Clinton moved them slightly further northward. and you know what? The world didn't end. Innovation didn't stop and capital didn't flee the market anymore than it already had because of globalization.

Look, I know that the tech buble was responsible for the economy of the 90's and the balancing of the budgets (to the extent that they were, which was not at all,) but the modestly increased rates certainly helped

But look at what happened subsequently. The second Bush gutted the rates, fought two wars and dramatically expanded entitlement spending without paying for any of it.

From time to time, you'll see incredibly misleading nonsense like this (which you know is partisan horseshit because it labels the 2000-'01 downturn as "The Clinton Recession," while the 2007-'09 near-depression is called "The Mortgage Crisis" instead of "The Bush Calamity."

The main reason those charts are misleading is because they focus only on the deficits and not the consistently growing debt. Bush and the GOP Congress engaged in a really neat accounting trick during much of that administration. Specifically, the funded much of their crap - and the wars almost exclusively - through continuing resolutions, which bypassed the budget process entirely. That spending went directly to the debt and wasn't reflected in the annual deficits.

To the right, you'll see a chart of the gross federal debt, as opposed to the deficits, that you'll see consistently went up throughout the Bush years.

Here's something else you need to know about George W. Bush: He's the only person I'm aware of in human history who actually cut taxes while waging not one, but two land wars in Asia. That was so fucking crazy that even Hitler knew better than to try it.

One of the reasons that the deficit exploded under Obama is because he put all of that spending back on the books. Once you do that, of course the annual numbers will be unskewed against previous years. But dishonest hacks will continue to try to throw that hack trick at you because they think you're retarded.

Even with the massive 2001 and '03 tax cuts, combined with hack accounting tricks that would send you directly to fucking prison of you tried them in the private sector, American GDP only grew by an average of 1.6% during the second Bush administration. Growth under George H.W Bush and Clinton was 2.1% and 3.8% respectively. Even after inheriting a catastrophe, Obama's average growth numbers are likely going to be better than Bush 43's were.

The great Jay Batman said something this week that I've been saying for years and I couldn't be happier that someone finally is joining me in saying it.

Social issues and their alienating power are but one problem the Republican Party must overcome; in order to address the utter lack of credibility it has on fiscal issues, Republicans must realize some very hard truths indeed.

When you have to finance an initiative with the issuance of debt, you are spending money. When you cut taxes and create deficits, the deficit and the tax cut that created it will be financed with the issuance of debt. The tax cut thereby becomes a spending item.

No one seriously argues that financing the purchase of a television or a car with debt in the form of a loan or credit isn't spending; however, Republicans will argue until the sun goes down that a tax cut is not spending no matter how much debt it creates. No tax cut that is unaccompanied by a commensurate cut in spending items should ever be passed into law. You can have whatever you damn well wish to pay for, but as it relates to government spending, it is better to pay as you go than to pay with interest because the government has the unique ability to print money in order to lessen its debt obligations. The net result of such practices is that Americans pay higher prices over time and lose purchasing power in the process.

Santelli knows that you can raise taxes without raising the rates, but he won't tell you that because he and his asshole friends love the virtual welfare that the tax code gives them. And no, I'm not talking about capital gains, dividends, or the corporate rates, which are fine where they are or could even come down some.

The carried interest rate, for example, should be a prime target for raising to regular income rates. Contrary to popular opinion, carried interest isn't capital gains or dividend income. It's essentially a "management fee" paid to the hedge funds and private equity firms by companies that are the targets of leveraged buyouts (LBOs.) It's regular income that was given a cute name that suggests that it's something different by lobbyist bloodsuckers.

If you want to know why Mitt Romney paid only 13% in the years that he released returns from, it's because his income was primarily carried interest from Bain Capital, which he resigned from "retroactively" in either 1999 or 2002, depending on who you believe.

There are other neat tricks in the tax code that can be fixed, too. Did you know that people in Santelli's (presumed) income bracket can claim the home mortgage deduction on second, third and maybe even forth properties?

Pretty much everyone agrees that the real time bombs are Medicare, Medicaid and Social Security. What you probably don't know is that those programs aren't financed with general revenue from the income tax. That money comes from the payroll tax, which for whatever bonehead reason, is capped at $100,000. Get rid of that artificial cap and you can lower rates, thereby creating more disposable income from the middle class and the working poor, while helping the solvency of the programs.

Granted, you'll still need to raise the retirement age, limit benefits and means test both Medicare and Social Security to guarantee their long-term survival, but eliminating the payroll tax cap gives you some breathing room in how you go about doing that.

Santelli started this morning's rant off with a brutally fucking dumb premise. He said “The only people who bring tax revenues to the party are people who work, and the discussion is mainly about the people that are working, that are way at the top.”

No shit, Rick. People who don't have an income are actually pretty famous for not paying the income tax. Go figure.

While I think that taxing the rich is as good a place as any to start, I also know that the numbers don't work if you end there. Barack Obama is being singularly irresponsible in suggesting that they can, just as the Republicans are being overpoweringly stupid in thinking that you can fix this exclusively with cuts.

The middle class are going to have to take it in the nuts, too. Firstly, that's where the real fucking money is. Secondly, those are the assholes that voted America directly into the hole it's in.

Remember the fake budget wars of the 1990s? Back then, the GOP wasn't fighting for cuts. They just wanted to limit the rate of growth. It's well past time for that now. These days, shit - including and especially defence, which is the largest ticket item in discretionary spending - is going to have to be pared down dramatically. And if that has to go, it becomes harder to justify all the goodies in the tax code for the middle class.

Supposed conservatives, just like liberals, have fallen down on explaining the responsibilities that accompany rights. Just as much as liberals have, conservatives have encouraged people - mostly the middle class - into believing that they can vote themselves stuff without any cost to them.

They always assured you that economic growth would pick up the difference, despite thirty years of evidence to the contrary. But not only did those fucking people vote for tax cuts, they voted for higher program spending, too. Remember, George W. Bush didn't lie to anyone about his plans. He was upfront about doubling federal education spending giving hard-on pills to grandpa. And that spending disproportionately befitted the middle class.

Well, as you now know, there is no fucking free lunch, and the waiter is standing by your table with the bill. I'd suggest that you keep your credit card in your wallet because it's maxed out.

As I've said before many times, the U.S debt bomb is more dire a threat than even World War II was. Propaganda aside, there was never a real threat that the Nazi war machine was ever going to occupy western Pennsylvania. But nothing will destroy the American way of like quite like a national default.

That means shared sacrifice. Everybody's going to have to take a hit. It would be nice if the poor and the working poor could be spared, but I'm not sure that's even possible. $16 trillion is, after all, a shitload of money.

If you parse through the tax code and the budget, you very quickly find that the overwhelming majority of it is geared to the wealthy and, especially, the middle class. It's welfare that has been called anything but for far too long now.

Rick Santelli and his well-heeled asshole friends think that if you can get away with not paying the piper, they won't have to, either. But as a nation, you called the fucking tune and one way or another, that piper's getting paid.

Tim Hudak Finally Has Good Idea, But Figures Out a Way to Fuck You With It

I haven't written about politics here in Ontario in months, and I really should have. In fairness, I've been preoccupied with an utterly predictable presidential election in the United States and the flash and bullshit surrounding the end of Toronto mayor Rob Ford's career. I'm also dating again, which keeps me awfully busy.

But the shenanigans at Queen's Park have been endlessly fascinating. Liberal Premier Dalton McGuinty, who is among the most unpopular people in the English-speaking world, saw his majority government reduced to a minority in October 2011. Why only a minority? Because the opposition leader, Progressive Conservative Tim Hudak, is the dumbest motherfucker on earth, and managed to antagonize everybody who might have voted for him. That's a pretty impressive accomplishment.

As I've mentioned before, the rest of the world isn't like the United States. When given the choice between evil and stupid, Canadians will usually embrace evil. If nothing else, evil is at least predictable and not infrequently rather clever. Americans, on the other hand, have a fabled history of taking stupidity to their collective bosom, which explains the state of the U.S economy.

That isn't to say that we like evil. We try to punish it to the extent that we can without stupidity winning. In a nutshell, that's how McGuinty was reelected, albeit only with a minority.

However, a minority situation was less than ideal for ol' Dalton. The corruption and politicized, wasteful nonsense that defined his two majority mandates were about to catch up with him. It was only a matter of time before the opposition PCs and NDP combined to drive his government out in a confidence vote and force an election that McGuinty would almost certainly lose, probably to the NDP.

So McGuinty did the only thing left to him: he resigned and prorogued the legislature. Of course, this put Liberals - who howled with self-righteous indignation when Stephen Harper prorogued the federal Parliament - in a position where they found themselves cheering McGuinty's tactical genius and personal grace.

(For the record, I oppose prorogument in all but the most extreme circumstances. Were it up to me, shutting down the government on a political basis would mean exactly that. The government would stop dead. The civil service wouldn't be paid, nor would government benefits to the citizenry. Contracts would immediately be in breach and the government would be liable for it. That way, the government would be too scared to prorogue without accompanying legislation that a minority couldn't pass. A bare minimum, prorogument should be introduced as a confidence motion in the legislature.)

When you get down to it, all McGuinty will have accomplished in the end is his face being out front when the Liberals are finally defeated. As soon as the Liberals have a new sacrificial lamb and the legislature resumes sitting, I expect that the government will be vaporized on the first available confidence vote.

That means that Ontario is already in an unofficial campaign, which puts the Grits at a decided disadvantage, since they don't have a leader who can issue policy proposals. And whoever wins the Liberal leadership (and I expect it will be Gerard Kennedy, if they're smart) will only be premier for about 15 seconds, so he or she won't have time to put together a platform.

Tim Hudak, being Tim Hudak, took an obviously good idea and watered it down with his trademark stupidity.

The sale of beer, wine and spirits in corner stores and supermarkets would give Ontarians more freedom of choice, but not necessarily lower prices, says Tory Leader Tim Hudak.

Hudak told reporters Tuesday a Progressive Conservative government would “end the LCBO and Beer Store monopolies” without forgoing the revenue from hefty provincial taxes.

“Let’s let the private sector into the alcohol business, let’s have some more competition,” he told reporters outside an LCBO outlet in Toronto’s Liberty Village that refused to let him hold his news conference inside.

Hudak said it’s time Ontario opened up its liquor retailing, like Alberta and other jurisdictions.

“A lot of states and provinces have moved out of the public control of alcohol and they actually found they increased choice and increased revenue for the government at the same time,” he said.

There is absolutely no reason for a government monopoly on alcohol sales that isn't statist, stupid, or both.

The "public safety" argument is easily the most specious and the most dangerous.

If a product is as dangerous as statist shitheads suggest it is, government should be banning it instead of profiting from it. What kind of government knowingly finances itself through the ruination of the citizenry? What kind of a fuckheaded moral example is that? And that goes for alcohol, cigarettes, and lotteries and casinos. By the way, why are marijuana, cocaine, heroin and prostitution left out of the mix?

The idea that high taxes will discourage the use of a good or service is economically boneheaded. Government rather rapidly becomes dependent on the revenue and a downturn in sales only hurts government revenues, which will have to be recouped elsewhere. The entire argument for "sin taxes" is idiotic and self-defeating when you think of what happens if those taxes accomplish their objective of eliminating the sin. At some point, the law of diminishing returns kicks in.

I'm not against taxes and recognize that they are the cost of a somewhat civil society. If it were up to me, we'd be taxing income or consumption, but that's another argument for another day. Having said that, I'm against using the tax code as a means of behaviour modification. After all, we already have the criminal law for that.

It's also singularly ineffective. Look at cigarette taxes as a prime example. When tobacco taxes got to high in the early 90s, everybody bought cigarettes that were smuggled in from the United States. Then the Chretien government cut the taxes by about two-thirds without a dramatic increase in smoking. After the individual American states jacked up taxes and sued the tobacco companies, Canadian smokers started buying untaxed tobacco from Native reservations, which are protected by treaty.

One of the great truths in life is that when you raise taxes beyond a certain point, you essentially incentivize tax avoidance. Liberals and statist social conservatives don't get that and they never fucking will, mostly because neither recognizes economic reality.

Misfits across the ideological spectrum offer three other cases for strict government controls on booze. These are health care, drunk driving and the fucking children. I'll address each now.

I smoke and drink, and I'm taxed disproportionately for both. Not only am I paying for my heath care, I'm paying for yours, too. There's virtually no chance that I'll see my 50th birthday, so I wind up saving the system a shit-ton of money.

People who have fun and die young are always cheaper than those that live clean and take decades to finally die. Just think of all cash you'll save from my not consuming government retirement benefits. Also, I've read that 85% of the health care you consume will be in the last 18 months of your life, assuming you meet ordinary life expectancy.

More likely than not, I'll either drop dead of a coronary or actually explode with cancer over the course of about three weeks. When the taxpayer is providing endless goodies to old people, it only makes economic sense that they should want to limit the number of old people around to collect. I'm doing my part. Are you?

I used to spend a lot of time in California. I was shocked to learn that you could buy beer and wine there, not only in corner and grocery stores, but at fucking gas stations! If anything is going to "encourage" drunk driving, you would think it would be that. But I'm not aware of California having a greater incidence of drunk driving, per-capita than Ontario. This very probably has a lot to do with California putting drunk drivers in jail more often (and for longer) than we do.

It appears then that the criminal law is much more effective at dealing with drunk driving than government monopolies on distribution of alcohol are. And I don't know how to break this to this shitheads at MADD, but driving under the influence is already against the law.

That brings me to the motherfucking children. The argument goes that only the government is clever and responsible enough to prevent kids from getting booze. Sadly, that's belied by the anecdotal evidence.

If you live in Ontario, look around. Are you really seeing a shortage of drunken teenagers out there?

Even if the current system is working ideally, which it isn't. you've created a perfect situation where it's easier for kids to get illegal drugs from a criminal market than it is for them to get a fucking drink. Ever notice how countries with looser alcohol laws, like France, Spain and Italy, have far lower instances of teen drunkenness and all around fuck-uppery than we do in North America? I sure as shit have.

That's because parents are actually interested in their maggot children there. They allow kids to drink, but they monitor it and acclimate them to the experience. We want the goddamned government to do it for us, ignoring entirely how well the government does things like deliver mail, which has your address on it and everything! According to this philosophy, a government that demonstrably can't balance a fucking checkbook is supposed to take care of your kids for you. Good luck with that.

But, as Jan Wong explains,  there is one really good idea for keeping a government monopoly on booze.

Today, the LCBO downplays the control aspect while struggling to satisfy its dual mandate of turning a profit without turning people into drunkards. The subliminal message of Food and Drink, the LCBO’s free magazine, remains paternalistic: don’t drink on an empty stomach. The hypocrisy is astounding. The LCBO goes further than most stores in trying to persuade you to buy its product for every social occasion short of a toddler’s birthday party. What other retailer has dreamed up 300 styles of gift bags, boxes and bottle-friendly containers in the past five years? Chris Layton, an LCBO spokesman, says the gift bags earn $3.5 million a year—although consumer interest is now shifting to gift cards.

According to Layton, Food and Drink is the LCBO’s single most popular marketing initiative. Six times a year, the LCBO prints 500,000 English copies and 20,000 French copies on glossy 60-pound stock. It turns a comfortable annual profit of $350,000 to $400,000 after expenses. Here’s one of the secrets to its success: wineries must submit marketing plans—including how much they will spend on advertising in Food and Drink—before they can obtain coveted shelf space at the LCBO. Food and Drink competes for scarce advertising dollars against private-sector magazines that aren’t bankrolled by government monopolies.

Truth be told, Torontonians would buy alcohol without any encouragement from fancy stores or glossy magazines. If we could save money, I’m fairly certain we’d shop at a no-frills warehouse with fluorescent lights. To get an idea of how monolithic the LCBO is, I checked out another monolithic retailer, but one that offers the warehouse shopping experience: Costco. First, consider that Ontario’s population is a tiny fraction of that of the U.S.—4.1 per cent. Then note that while Costco is one of the biggest wine retailers in the U.S., it must compete with thousands of private liquor stores. Now check out these numbers: last year Costco grossed $1.3 billion (U.S.) in wine sales; the LCBO’s wine sales grossed $1.58 billion, according to its most recent annual report. Despite its much smaller territory and consumer base, the LCBO actually eclipses that other monolith to the south, Costco.

In fiscal 2010–2011, the monopoly paid a dividend of $1.55 billion to the Ontario government. It was the 17th consecutive record annual dividend, and it does not include the various taxes levied (a total of $749 million). The annual report also lays bare the secret behind the LCBO’s profit margins: we’re paying double. At Costco, a bottle of Woodbridge sauvignon blanc costs $6.99; at the LCBO it’s $11.95. Costco sells Veuve Clicquot for $38.99 a bottle; the LCBO charges $66.30. When I asked for pricing examples for table wine, some markups were 137 per cent. For a wine that retails for $10.45 (the LCBO didn’t provide actual product names), it pays wholesalers $3.77 if it’s a U.S. or non-Ontario Canadian wine; $3.72 if it’s another imported wine; and $4.10 if it’s Ontario wine. And these wholesale prices may be inflated.

It isn't so much that Ontarians are in imminent danger of alcoholism as the government of Ontario is already in the throes of it. They're addicted to the money. That's why David Peterson,. Mike Harris and Dalton McGuinty himself all made the promise of privatization, but never followed through.

And Tim Hudak, being Tim Hudak, is doing nothing at all to change that.

Hudak addressed social concerns that some — like MADD Canada — might have with easier accessibility to booze, by noting there aren’t “riots in the streets” in other more liberal jurisdictions.

The Beer Store’s Jeff Newton said while consumers assume such changes would mean lower prices, Ontario’s high tax rates on alcohol prevent that.

“Their assumption is automatically that means prices are going down based on their experience from shopping in the corner store … in Florida or Buffalo,” he said.

But Newton said the Ontario tax on a case of 24 cans of beer in Ontario is $9.80, compared to 32 cents in New York or $1.08 in Florida.

With the existing tax structure, he said the cost of distributing beer to thousands of stores — and markups — mean consumers would pay more.

Sobeys, which operates 112 stores in Ontario and supplies 213 franchises, welcomed the initiative, saying what “Tim Hudak is proposing is of great interest to us.”

“We’re supportive of anything that provides our customers with greater choice and convenience,” said Sobeys’ Andrew Walker.

In a perverse way, the Ontario government's monopoly is actually subsidizing drinking by limiting the distribution costs of the product, while making tons of money in taxes.

Hudak isn't talking about lowering the alcohol tax in Ontario, he's talking about actually expanding it. If you increase the distribution chain to the private sector, the HST and provincial income and business taxes apply each step of the way. One assumes that individual corner stores and groceries would still need to be licensed to sell booze, so there would be fees in that. Plus, a Hudak government could generate billions more in selling off or franchising existing LCBO retail locations, who would also be licensed and taxed.

This is an enormous tax grab from a supposedly "conservative" candidate. It's also retarded if you know anything about economics.

Hudak is essentially proposing to expand on a liberal economic tax model in ways that hurt consumers even more. Business will make out like bandits with increased sales and the tax base on those sales increase dramatically. But because of increased distribution and (presumed) increased compliance costs, prices go up at the retail level.

Everybody wins but you and me. Businesses that sell alcohol aren't going to swallow those taxes, fees and compliance costs. They're going to pass them along to you, which is exactly what happened in Alberta.

Even if Hudak cut the tax down by 90% to match Florida's, the expanded base would more than make up the revenue. The deeper market penetration should expand sales, which should drive the price down. Unless, of course, the hidden hand of government actually drives them up for no reason at all.

If Tim Hudak is going to run on this, conservatives are going to have to pin the stupid cocksucker down on his plans before anyone votes for him. Because my guess is that he's going to follow up this populist (meaning stupid) nugget of an idea with a dramatic cut in corporate taxes. That'll mean that you're further subsidizing, say, the auto companies - and their unions - every time you have wine with dinner.

Forget the nonsense you hear about other Canadian provinces. In one way or another (with the possible exception of Quebec,) they've expanded the market while keeping taxes high and continued monopolized distribution. Alberta, in a particular, doesn't have a provincial sales tax, which tends to drive "sin taxes" higher, so there's no offset in retail price.

Unless Hudak is willing to commit to an American model of lower taxes and greater distribution, conservatives and libertarians should kill the dumb fucker dead on this.

Let's Talk About Bain: Capitalism, Private Equity and Leveraged Buyouts

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Truth and Consequences: Simpson-Bowles or the Fiscal Cliff?

One of my greatest personal joys in the aftermath of Tuesday's election is watching Republican shitheels bemoan the fact that "the American people voted to continue fiscal irresponsibility." The basic fact of the matter is that the American people weren't given a choice in the matter, other than possibly supporting Gary Johnson's Libertarian ticket.

President Obama never really had a plan and the GOP couldn't stop lying about theirs. Both sides were dealing in fantasy economics that were predicated on not ending a sixteen trillion dollar debt (which makes it important to remember than American GDP is only fourteen trillion) without touching their beloved middle class or current entitlement recipients, which is a recipe for disaster.

You can't say that you're going retire a debt of that size - or even significantly reduce deficits - in a reasonable period of time without going to where the money is.

The Romney-Ryan plan cut rates in ways that no mathematically literate adult thought they could pay for and was more than made up for with trillions in new defense spending. Furthermore, by cutting entitlement spending only for future retirees, they exploded the short-term deficits.

Republicans said that they oppose any tax increases because they would hamper future economic growth, which is another indication that they don't know what they're talking about if they're, in fact, telling the truth.

As I've mentioned before, what happened in September of 2008 wasn't a recession. The recession started in the summer of 2007. The collapse of Lehman Brothers precipitated a financial panic, which is a very different breed of animal. History tells us that financial panics take a decade or more to fully recover from. The world's third-largest economy, Japan, still hasn't recovered from its 1990s financial panic.

There are other reasons to doubt a full American recovery. Most significantly, The economic superpower status of the United States was artificial to begin with. America grew the way that it did after World War II for the simple reason that all of its major competitor economies were destroyed by the war.

By the time that Europe and Japan fully recovered from the war, in the early 1970s, real American household income stagnated, which was hidden by massive borrowing, both public and private. By 1980, the frugality of the "Greatest Generation" was dead, American families began living on credit and inflation was rampant. President Reagan broke inflation by inflicting the 1982 recession on the economy, but his tax cuts exploded the public debt. Throughout it all, Congress ballooned both military and entitlement spending. Private business grew the economy in the late '80s with the Leveraged Buyout (LBO) phenomenon, but that further raised the level by which debt as a driver of economic growth.

Globalization aggravated the problem by almost entirely wiping out the U.S manufacturing sector. Without manufacturing, there was no way that America could sustain its already artificially high living standards, except through the debt of last resort: their home equity. As manufacturing died, the financial service industry replaced it, but only for a time. You can only grow an industry like that so long as there remains a window to create debt.

In the fall of 2008, the bottom fell out of the debt-driven economy that sustained everything for almost forty years and that window slammed shut. Worse, there's not going to be anything to replace it in the near or mid-terms. I have no reason to believe that the United States will ever return to the levels of its Golden Age.

Neither the Republicans or the Democrats are going to tell you the truth about that. Ever. To do so would burst the bubble of the American Dream that has kept Washington from ever being questioned in anything resembling a serious way.

All that leaves is debt. In perverse way, the death of American economic expansion creates the ideal atmosphere in which to address that debt. Even a really bad recession won't look or feel much worse than what the United States is in now, so Washington doesn't really need to worry about the political cost of structural economic reform that minimizes at least the pubic debt. Of course, that requires the political class finally telling people the truth for once in their fucking lives.

The Republican party, in particular, has been singularly unwilling to do that, instead relying on Paul Ryan's almost pornographic fantasies to save them. This brings me to The National Commission on Fiscal Responsibility and Reform, which most of you know as Simpson-Bowles.

Contrary to Republican assertions, Obama didn't "walk away from Simpson-Bowles. The GOP strangled it in the cradle.

Any realistic solution to an intrinsic problem is going to cause pain and if there's one thing a democracy abhors, it's pain. That's why commissions like Simpson-Bowles are created in the first place, to do the job that Congress can't.

Simpson-Bowles was supposed to be modelled after the military base closing commission that was created after the end of the Cold War. Presidents Bush and Clinton, along with Congress, knew that base closings were to be an all or nothing proposition.

For that reason, Congress created a commission that severly limited its own powers. The commission's final report would be introduced and Congress could only give it "an up-or-down vote," meaning that amendments couldn't be attatched to it and it wouldn't be subject to the Senate's filibuster rule. It worked beautifully with base closings and it was supposed to be the model for Simpson-Bowles.

Then the six Republicans that had sponsored the enabling legislation to create Simpson-Bowles voted against it on final passage. That meant that if Obama introduced its final report to Congress, it would be amended to death in the House and filibustered in the Senate. Worse, the GOP would be able to demagogue all of the worst parts of it on the campaign trail this year. The President would have been crazy if he did that.

And the GOP continues to be singularly dishonest. On Wednesday, Speaker John Boehner took a break from crying to say that "We’re willing to accept new revenue under the right conditions." That sounds great until you realize that what he means by "revenues" is closing loopholes through tax reform, but not raising new revenues with tax increases.  Basically, he's using the Romney plan as his negotiating position.

Now, I don't know how many of you were paying attention this week, but the Romney plan was pretty thoroughly discredited. Unless he's completely out of his mind, I can't see why Obama would bother to win an election only to pass the crown jewel of the loser's economic plan. Can you?

To be fair, the Democratic plan to raise taxes on "the top 2%" is also horseshit because it doesn't raise anywhere near the revenue needed to address the problem in a serious way. Also, the rich aren't driving the debt, the middle class is, with all of its insane entitlements and tax breaks. The Bush tax cuts need to expire for everybody. That alone raises about $4 trillion over the next ten years.

There's absolutely no chance of a "Grand Bargain" between now and December 31. And Washington should definitely not be allowed to kick the can down the road by passing legislation to defer the sequester by even a second. If you do that, you effectively make the Bush tax cuts permanent and make things even harder to negotiate down the road.

That leaves two choices: A clean vote on Simpson-Bowles or the fiscal cliff. I prefer either to waiting and seeing nothing get done.