The introduction to the piece Rob Johnson Hunts for the Budget “Moby Dick” on Newdeal2.0 (which contains the above video) is:

So you’re concerned about the debt-to-GDP ratio? Then listen to Rob Johnson, who separates the real white whales to harpoon from the harmless minnows. A new paper he co-authored with Tom Ferguson points out that austerity and stagnation most threaten our fiscal future. The American people are angry, and “there is a lot of valid rage in our society,” Rob says. But “fears of magic thresholds like a 90% debt-to-GDP ratio or mythologies that have to do with the painlessness of cutting deficits are playing on those fears, but they’re not sending things in a proper direction.”

The warning that matches the headline of the story Soros Warns U.S. Could Be On Verge Of Dictatorial Democracy is pretty dire.

I found the following paragraph at the end of the article to be a nice complement to my previous post, True Motive For Tax Cuts.

In the U.S. Soros said that QE2 has created “bad side effects ” by pushing up the price of assets.

Industry won’t invest in new jobs, plant, and equipment because there is plenty of idle labor, plant, and equipment that could be pressed into service if there were sufficient demand.  So where is all this extra liquidity going to go if not to new jobs, plant, and equipment?  Where it always goes when there is too much liquidity, asset bubbles.

This is further proof, if we needed any, that monetary stimulus is no substitute for fiscal stimulus.  Fiscal stimulus needs to be in the form of government spending on the $2 trillion of infrastructure repair that is needed within the next 5 years to prevent the country from falling further behind in required maintenance.

The way Mitch McConnell sees it, apparently, is that the country’s infrastructure should just be allowed to fall into disrepair so that the government won’t be spending so much money.  I guess highways, railroads, airports, navigable rivers, and other infrastructure are not really needed if all you want to do is ship money around electronically.  Even then, good broadband service might be needed.

Encouraging financial industry instead of manufacturing industry is exactly how we got into the current predicament.  Maybe this is the old “Hair of the dog” remedy.  If a little wacky financial mania has caused a hangover, the solution must be another dose of wacky financial mania.

The Republicans don’t even wait to gloat.

In the story Tax deal passes Senate test vote, the Boston Globe reports:

Senate Minority Leader Mitch McConnell of Kentucky said in a speech yesterday that the tax compromise was an essential first step toward addressing the nation’s deficit, by “cutting off the spigot” of tax income to the federal government to force Congress to make spending cuts.

I suppose the Republicans will next want to whiten the snow falling in DC by painting it black.

Does Obama seriously think that in a Congress dominated by a minority of Republicans that the tax cuts will expire in 2012?  This is the last chance for the Democrats to stop the attack on the nation by the Republicans that want to live in a country where the government is too weak to control the excesses of the ultra-wealthy.

The Koch brothers might be surprised one day by what the Tea Party actually does when the Tea Partiers finally realize they have been had.