The issue of insider political trading, with members and staff buying and selling stock using privileged information, has continued to plague Congress.Hey, "it's legal." They made sure of that.
Donald Trump’s presidency will have geopolitical consequences. Most of the world wants to know what he will do. But that depends on what he can do. That, in turn, will be determined by the political dynamics within the United States as well as by counteractions of other nations. This is a case where politics rises to the level of geopolitics. Trump’s actions will be conditioned by the actions of other players, particularly in Congress. Trump, after all, will only be the president and his unilateral powers will be limited. For most of the things he wants to do, he needs Congress to go along. Therefore, the American stance toward the world will depend, for the moment, less on what Trump wishes than what Congress decides to do.…Trump's dilemma arises from not having a popular mandate, yet wanting to be a transitional president.
Amendments to a controversial Pentagon program to sell military gear to domestic police forces have quietly extended the scheme to provide war on terror weaponry directly to the U.S. Department of Homeland Security (DHS).
The amendments for FY2016, passed by Congress in late 2015, were highlighted in a briefing note published by the Congressional Research Service in February 2016. Under the controversial “1033” program, the Department of Defense (DoD) is able to provide “surplus” military-grade equipment to law-enforcement agencies.
The program, legislated for in the National Defense Authorization Act (NDAA), provided local police forces access to billions of dollars worth of high-tech military equipment, including armoured tanks, rocket launchers, automatic weapons, night-vision goggles, and other supplies traditionally used by the U.S. Army in foreign war theaters.
The DHS often provided multimillion-dollar grants to law-enforcement agencies to purchase the military equipment.To let you feel safer.
Members of Congress are chosen by the American people to faithfully represent them. Our constituents don't send us to Washington to audition for a job with a special interest group. Unfortunately, growing numbers of these public servants are leveraging their constituents’ trust for cold, hard cash after leaving Capitol Hill.
It wasn’t always this way. In 1974, only 3 percent of members of Congress became lobbyists after leaving office. But today that figure has jumped dramatically – 50 percent of Senators and 42 percent of House members become lobbyists after they leave Congress. In fact, the Center for Responsive Politics found there are now 28 registered lobbyists for every member of Congress.
The Center for Responsive Politics also found that over one third (27 out of 75) of members of Congress who left during or at the end of the 113th Congress have already taken up lobbying as a career. Over half of the former members of the 112th Congress are currently engaged in lobbying contracts.
It’s not hard to see why - a study by Republic Report found that, on average, lawmakers who became lobbyists boosted their salary by 1,452 percent, with many exchanging their public careers for seven-figure salaries.
As former representatives and senators move through the revolving door to K Street, they continue to earn pensions paid for by you, the American taxpayer, as they rake in huge salaries to lobby current federal legislators.Operationally, Rep. Loebsack is incorrect about taxpayers funding the federal government but practically speaking he is technically correct under the current rules of PAYGO.
This morning 42 members of the European Union Parliament delivered a letter to the United States Congress. Like U.S. Congress, EU Parliamentarians have also been shut out of the negotiating process for rigged corporate trade deals like the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TiSA). They are doing everything in their power to stop this corporate takeover and we must continue to do our part. If we are able to stop Fast Track, we will deliver a huge blow to the world’s most exploitative multinational corporations. Many thanks go to our allies in EU Parliament.
Read the text of the letter:Neoliberalism unraveling due to voter pushback?
Moscow wants to remind Washington that other formations of the National guard of Ukraine are no better than the "Azov" battalion. This was stated by the official representative of Russian Foreign Ministry, Alexander Lukashevich, in connection with the ban on allocation of funds for training of "Azov", which was supported by the House of Representatives of the U.S. Congress.
"It took more then a year for the US Congress to realize that this unit is a bunch of outright Nazis, flaunting the emblems of Nazi SS troops and behaving like the Nazis on the occupied territory. But better late than never", — said the diplomat.
The next logical step - is to recognize, finally, that last year's coup in Kiev, strongly supported by Washington, was done by the hands of those same Nazi thugs.For Russ
"Obviously, the other formations of the National guard of Ukraine are no better than "Azov", — he noted.
Few people realize how radical the new U.S. budget law was. Budget laws are supposed to decide simply what to fund and what to cut. A budget is not supposed to make new law, or to rewrite the law. But that is what happened, and it was radical.
Wall Street’s representatives in Congress – the Democratic leadership as well as Republicans – took the opportunity to create an artificial crisis. The press called this “holding the government hostage.” The House – backed by the Senate – said that it would shut the government down at some future date if two basic laws were not changed….
The recent Congressional budget act states that pension funds with more than one employer – such as construction industry funds, teamster funds for truckers and public service workers funds – can be scaled back in order to pay Wall Street creditors.
Labor now is told to go to the back of the line behind Wall Street. If the economy is too debt strapped to pay everyone what is owed, then the new motto is Big Fish Eat Little Fish.
Wall Street is eating the pension funds.
This goes hand in hand with Obama’s fight to scale back Social Security and, ultimately, to privatize it. Now that Republicans are in a majority of both the House and Senate, the Democrats will be able to take an anti-labor position and then try to blame it on Republicans.
Yet Democrats themselves were the leading advocates of the anti-labor, anti-pension fund policy. This special “rider” to the budget bill was known last spring to the House Budget Committee. Yet something tricky happened: While the committee approved the anti-labor pension rule, no record was taken of which members and which party voted for the radical change, and who opposed it.…
So this is the problem: the supposedly liberal Democrats are in the lead for scaling back pension funding, Social Security and labor protection in general.…Michael Hudson
Study: Popular movements strangled by influence of the wealthy elite in Congress (via Raw Story )
Report: Senate Democratic staff took secret CIA documents years before anyone noticed (via Raw Story )
Emails show how Democratic congressman Alan Grayson repeatedly asked to meet John C Inglis, the deputy director of the NSA, but was continually rebuffedThe Guardian (UK)
The Big Picture
Summing up the possibilities across all 35 Senate races yields a net gain of four to five seats for Republicans, just short of the six they would need to win back the majority.
However, the margin of error on the calculation is very high at this early stage. Keep in mind that in each of the last four cycles, one party (Democrats in 2006, 2008 and 2012; Republicans in 2010) won the vast majority of the competitive races. If Republicans swept all the “lean” and “tossup” races, they would gain a net of eight seats from Democrats, giving them a 53-to-47 majority in the 114th Congress. If Democrats swept instead, they would lose just one seat and would hold a 54-to-46 majority. Considering the uncertainty in the landscape, estimates from betting markets that Democrats have about a 63 percent chance of holding their majorityappear to be roughly reasonable.
One last factor to consider is that as difficult as the Democratic Senate map looks in 2014, Republicans could face an equally challenging one in 2016. In that year, seven Republican-held seats will be up in states won by Mr. Obama in 2012, while no Democrats will face re-election in states won by Mr. Romney.The New York Times | Five Thirty Eight
Thus, as ridiculous as it might seem to look so far ahead, the most important reverberations from the 2014 Senate races might not be felt until 2016 and beyond. Republicans will need to make considerable gains next year to open up the possibility of a Republican-controlled Congress after 2016. If Democrats hold their ground, conversely, it would provide for the outside possibility of their holding a filibuster-proof majority after 2016.
This week’s post returns to the topic I discussed just two weeks ago (Fiscal cliff lessons from the ’30s, November 26). I wrote that last post after I had given Congressman Dennis Kucinich a presentation on the fiscal cliff, and he asked me to return to Washington to give a public briefing in Congress. Today’s post is the document I spoke to at that briefing, and it’s substantially more detailed than the draft published two weeks ago.Steve Keen's Debtwatch
The assumptions underlying the current budget debate are erroneous. Historical analogies include “the earth is flat” and “the earth is the center of the solar system.” Chicken Little has returned, and the consequences are counter agenda for all parties.
The noble attempt by Congress to balance the budget will result in a weaker economy with a true depression a possibility. Every time there is a drop in the budget deficit, as a percent of GDP, the GDP growth rate drops a few quarters later. It is only after the deficit begins to expand again that the economy recovers. The historical correlation is 100%. Lowering interest rates, in an attempt to boost the economy, is seldom effective. Since the government is a net payer of interest, lower rates reduce spending, thereby increasing fiscal drag.
Governments are monopoly issuers of fiat currency. The incorrect , but prevalent, understanding is that issuers of fiat currency must tax, borrow, or otherwise raise revenue so they can spend it. Taxing and borrowing are considered “funding” operations. Consequently, the discussions revolve around how governments can raise “needed revenue” to fund spending. Revenue shortfalls are of great concern; witness the latest government shutdown.
Contrary to general perception, fiat money is driven by the fact that taxpayers need the government’s money to pay their taxes. By levying a tax, the government creates a need for its fiat currency. It creates this need, presumably, so it can obtain the real goods and services it desires via the spending of its currency.
From inception, the only source of money needed to pay taxes is the issuing government. The government cannot actually collect the tax it has levied, nor borrow any of its fiat currency, until it first spends, or otherwise provides, the funds.
A balanced budget, from inception, is therefore the theoretical minimum that a government can spend. The previous statement represents an accounting identity. If individuals and businesses desire to hold actual cash, that money must be “left over” after taxes are paid. All cash held by the public must be money provided by the government in excess of the need to pay taxes (deficit spending). This is also true for all dollars held by foreign central banks at the Fed. For these, and other structural reasons, the possibility of a balanced budget does not exist, and the current attempt to balance the budget will likely result in severe deflation. When the government does not spend enough to cover the total need for dollars created by taxes, the usual result is a recession and a concurrent shortfall in revenues. A deficit remains. Accounting identities have a way of being satisfied, one way or another.
Likewise, the government can borrow its currency only after it has provided it to the private sector. Government borrowing, therefore, functions to support interest rates, not as a funding operation. Nominal savings is not diminished, nor displaced - it is given a place to earn interest. If the government were to spend more than it subsequently collected in taxes, and did not offer securities for sale, the fed fund rate would immediately fall to 0% bid. Treasury spending is a reserve add. Selling securities, by the Fed or Treasury, is simply a reserve drain, a monetary operation. This underlies the empirical evidence that nations can run any debt ratios they want, in their own fiat currencies, and still “fund the debt.”
For all practical purposes, there is no such thing as a balanced budget. Singapore, for example, shows a budget surplus, but that does not include all government spending in excess of collected taxes. The central bank spends Singapore dollars to buy foreign currencies. This “off balance sheet” spending brings the consolidated spending to about 2% higher than collected taxes. The same happens in Czechoslovakia - fiscal policy is tight enough that the only way to get enough local currency to pay taxes is selling foreign currencies to the central bank. When the central bank makes the taxpayers “beg”, as evidenced by currency appreciation, the economy gets softer (Japan is another good example).
Consider inflation. Because the taxpayers need the government’s money, the government is able to define its currency by what it pays for goods and services. By changing what it pays, the government redefines its currency. Currently, the government fights inflation by maintaining an economy weak enough for the private sector to be under pressure to sell goods and services. This selling pressure keeps prices from rising.
How large a deficit is prudent? Let the market decide! This option has not even been considered. For example, the government could offer a job to anyone who wanted one, at some minimum rate of pay deemed appropriate, and let the deficit float. This would end unemployment and unemployment compensation, eliminate the need for minimum wage laws, and promote price stability. Employment (rather than unemployment) would define the currency and become the stabilizer. The price of labor would be stable. Private sector wages would be related to the benchmark of government employment. If the government labor force were larger than needed by the government, taxes could be lowered. This would result in fewer government workers and reduced government spending as the private sector hired these workers.
The Fed sets short term rates. Congress has ultimate control over the Fed. Short term rates go up because the Fed, and ultimately Congress, wants them to - not because of market forces. These rates are not determined by market forces. Treasury securities are not necessary unless the government wishes to support higher long term rates. Short term rates could be maintained simply by paying interest on excess reserves held at the Fed.
The Federal debt is all the money spent but not taxed. It was borrowed after it was spent, so the holders of the money might earn interest. The government pays interest, voluntarily, depending on how much it wants savers to be able to earn. Have you ever heard an owner of government securities say, “I wish the government would stop selling securities so I can get my money back!”?
The current budget debate is based on erroneous assumptions. Washington does not understand fiat money. Until it does, efforts to reduce the deficit will continue, and the economy will continue to underperform.EPIC | A Coalition of Economic Policy Institutions
