AMY GOODMAN: President Obama is meeting with Democratic congressional leaders at the White House today to discuss the nearly $900 billion economic stimulus package that the Senate will debate this week. Senior Republicans warned on Sunday they were unlikely to back the bill without changes to what they see as controversial spending provisions.On Wednesday, the House approved an $819 billion version of the plan, but despite an all-out lobbying push by President Obama, not a single Republican voted for it. Obama said he hopes to get the bill through Congress by mid-February. In his weekly presidential radio address, he urged the Senate to pass the bill.
- PRESIDENT BARACK OBAMA: Americans know that our economic recovery will take years, not months, but they will have little patience if we allow politics to get in the way of action and our economy continues to slide. That's why I am calling on the Senate to pass this plan, so that we can put people back to work and begin the long, hard work of lifting our economy out of this crisis. No one bill, no matter how comprehensive, can cure what ails our economy. So just as we jumpstart job creation, we must also ensure that markets are stable, credit is flowing, and families can stay in their homes.
AMY GOODMAN: The Senate is taking up the bill as news continues to emerge painting a grim picture of the state of the economy. Major US companies announced layoffs in the tens of thousands last week, and new figures show the economy is shrinking at its fastest rate in nearly twenty-seven years. Meanwhile, the number of Americans seeking jobless benefits has hit a record high.
David Cay Johnston is a Pulitzer Prize-winning investigative journalist. He has the cover story in the latest issue of Mother Jones magazine, called "Fiscal Therapy." His most recent book is called Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill). He joins us now from Rochester, New York.
Welcome to Democracy Now!, David Cay Johnston.
DAVID CAY JOHNSTON: Well, thank you, Amy.
AMY GOODMAN: It's very good to have you with us. Let us start out with your assessment of this nearly $900 billion economic stimulus plan.
DAVID CAY JOHNSTON: Well, probably not big enough, and the Republicans have some credibility on the Christmas tree claim. Even some of the Democrats have not acknowledged this. They need to focus on those things that will increase demand. We've had twenty-eight years of supply-side economics. The data is eminently clear: it was an experiment, a radical idea, that did not work, in general. A few successes, but overall it was an utter failure that put us in this mess.
And so, the concerns need to be on getting money out there right away; more money for people who are unemployed; extending unemployment benefits longer, if necessary; and then investing money in places where it can be spent quickly that will provide a return. Infrastructure does that, but it takes time. There are lots of scientific research projects that were unfunded, particularly medical projects, for a lack of will by the Bush administration to fund them. We could triple the number of projects that were funded overnight. And there are other areas that could get spending going that will result in people being hired, putting money in their pocket and doing something to build for the future.
AMY GOODMAN: Can you talk about--well, in Mother Jones, "Fiscal Therapy" is the title--"Getting the economy back on its feet, giving taxpayers a break, saving your retirement fund and your kid's college tuition? Done. And it won't cost you a penny." What is it that you are laying that you feel could save the economy?
DAVID CAY JOHNSTON: Well, fundamentally, several key pieces. One is, you and I are allowed to save, if we have a 401(k) plan, up to $22,000 a year without paying taxes; if we don't have one, up to six, if you're an older American. But executives, movie stars, athletes are allowed to save unlimited amounts of money. Hedge fund managers, unlimited amounts of money, without paying taxes. We should end those deferrals. It will bring in hundreds of billions of dollars.
Secondly, the Cayman Islands and other little parasitic operations like it are causing enormous damage to the state of our government's finances. In 1990, about ten percent of corporate profits were taken in tax havens like the Cayman Islands. Today, it's roughly one-quarter of all corporate profits. The only purpose served by these operations is to reduce the financial viability of the United States of America government. There's no reason for us to continue allowing these rules. And the ways that individuals use the Cayman Islands are the same devices that are used by terrorist organizations and narcotics dealers to hide their money, as well as spouses trying to cheat the other spouse in a divorce.
One of the things I suggest is that we stop the business of college. We have turned college from an investment in the future of the country into an $85 billion business. It is so unbelievably profitable. Commercial banks, over a long period of time, make a 17 percent annual return on equity, but Sallie Mae makes about 50 percent per year. That's unconscionable. It's unnecessary. And we need to get away from that, so that we develop the most valuable resource we have: young minds.
Leave a comment