Economics

Why is it that Americans are discovering that the U.S. now has the largest increase in poverty in more than a half a century under the administration of a U.S. president that may be one of the most sympathetic to the needs of the middle class and the poor of all presidents during this period? One answer might be that it reflects a long tail of a previous president due to the engagement of elective wars with poor outcomes and disastrous tax and social policies. This will most likely be at the heart of the political rhetoric of the Democratic party during the the 2010 mid-term and 2012 presidential election. However, there may be a deeper truth, which our national leadership and the American public is missing, or is unwilling to speak about. American society has deep structural problems from long-standing policies and socio-poliical behaviors stemming back to the early 1980s and before, that have aggregated into disastrous unsustainable, yet well entrenched, societal patterns. The key question is "When will the sociopolitical climate be ripe for political leadership to emerge that can speak honestly with the American public about the federal debt?

In a rare OpEd in the New York Times, David Stockman, former Republican Office of Management and Budget Director under the Reagan Administration, lambasts the Republican party for its irresponsible stand on maintaining the Bush tax cuts during a time of ballooning Federal deficit. -- An important read. By DAVID STOCKMAN Published: July 31, 2010 IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase. More fundamentally, Mr. McConnell’s stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too.