The Problem With Cut, Cut, Cut

by lizard

As the president scores some lame duck points, our state republicans are positioned to translate the national GOP corporate hype machine into actual legislative goals. Inevitably it will boil down to slashing taxes, which means killing state revenue, which means pushing local municipalities to make painful cuts in local programs.

All evidence that cutting taxes has the worst stimulative effect will fall on deaf ears. It has been disastrous nationally, so of course it needs to implemented locally.

Our continued economic malaise will be touted as the reason to put more money in the pockets of Montanans, but what never gets properly articulated is how we have gotten to this national nadir.

Allow Pam Martens at Counterpunch to illuminate a mind-numbing number that ALL of us should try to wrap our heads around:

On December 1, the Fed was forced to release details of 21,000 funding transactions it made during the financial crisis, naming names and dollar amounts. Disclosure was due to a provision sparked by Senator Bernie Sanders of Vermont. The voluminous data dump from the notoriously secret Fed shows just how deeply the Federal Reserve stepped into the shoes of Wall Street and, as the crisis grew and the normal channels of lending froze, the Fed effectively replaced Wall Street and money centers banks in terms of financing.

The Fed has thus far reported, without even disclosing specifics of its lending from its discount window, which it continues to draw a dark curtain around, that it supplied, in total, more than $9 trillion to Wall Street firms, commercial banks, foreign banks, corporations and some highly questionable off balance sheet entities. (Much smaller amounts were outstanding at any one time.)

A careful review of these data makes it highly likely the GAO will be releasing some startling findings come next July 2011. That’s when the American people will have a much clearer picture of how the Federal Reserve shoveled taxpayer money to Wall Street by the trillions. As a result of Senator Sanders’ legislative efforts, the Government Accountability Office (GAO) is to complete an audit by next summer of the Fed’s lending programs during the financial crisis.

Our state republicans need to be very clear about how their proposed policies will help Montanans. Will cutting business taxes really translate into new jobs? What kind of industries do we want to support in this state? Is bending over and taking it with big rigs for a few flag waving jobs really worth turning our back on being good stewards of our scenic roadways? Is hurrying through reactive legislation to hobble or kill medical marijuana a good idea? How do we keep Montanans from losing their homes in the great real estate crisis that, according to some experts, is far from being over?

I sincerely hope our state legislators can focus on creating constructive legislative goals to help the majority of Montanans that are hurting right now because, well, that’s their job.

  1. Ingemar Johansson

    You’re right, there’s nothing out there to cut.

    Keep scrolling-there is an end.

  2. Punch drunk, Swede? You’re right, of course. California’s budget has so much to do with Montana …

    ~rolls eyes~

    • Ingemar Johansson


      And just who would you (and the others authors here) have more in common with?

      The average budget concerned Montanan or the policy makers and legislators that created CA’s deficit?

      • Answer your own question, Swede. That makes an argument. Otherwise, you got nothing save Straw men which are your staple for presentation. You got nothing, Swede. Nothing.

        • Ingemar Johansson

          You answer it Rob.

          Were you for HC, The Stimulus, Cap and Tax?

          Are you for more agencies? Environmental regulations? Governmental interference?

          Looks that way to me.

  3. this here’s montana swede. we’re talking about montana. what interests you so much about california anyway? i think their governor has been republican for at least the past 12 years….

    schweitzer has done a pretty good job so far, for a democrat that is……

  4. lizard19

    just let big whatever act the juvenile contrarian. responding to his bullshit just encourages more bullshit.

    i would have thought the article i linked to would be comment worthy. i mean, 9 TRILLION dollars the Fed has shoveled to keep wall street floating. anybody? is this mic even on?

    closer to home, there’s lots to talk about, like what we DO spend money on. for example, when Missoula was awarded 380,000 thousand dollars in stimulus money for 4 new playgrounds, i remember thinking, man, is that really the best way to spend nearly half a million dollars?

    but, i will say it again, what the republicans are going to do is attempt to transpose the cut taxes/cut social programs template to Montana, and i think that’s a terrible idea.

    do we have to be smarter about how to spend tax revenue? of course. is cutting taxes going to cause reinvestment in hiring, creating jobs? doubtful.

    • Maybe I’m just dense — finance isn’t my field — but it seems to me that the net is a lot more important than the gross. What’s our net payout here? I didn’t get it from the article (although it could well have been there).

      • lizard19

        first, which article are you referring to?

        and second, i don’t know if i would be the one to find it since i missed simple information you pointed out to me in that other article.

  5. Oh, sorry. I meant ‘the Fed providing lines of credit, or whatever it was doing’ story.

  6. The Polish Wolf

    As much as we all like hating banks, the fact is that many of our bailouts made money in the long run – banks rushed in to pay them off, with interest, so they could go back to giving themselves bonuses. The way we went about it was all wrong – we bailed out the banks, not the homeowners – but that didn’t directly add to the deficit, at least not he 9 trillion you’re floating. The stimulus did add to the deficit. It could have been spent better, but if Germany and China (the big economies that came out of the crisis the best) have shown us anything, it’s that government spending on infrastructure is the key to success in the global economy.

    • lizard19

      i’m not floating anything, Pam Martens is.

      and i don’t think you appreciate what’s still out there.

      two years out, and we’ve only glimpsed the tip of the iceberg.

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