The Congressional Budget Office has released its latest report and it contains this rather distressing fact: the federal government is now borrowing 46 cents of every dollar spent in fiscal year 2013. I have long been a critic of the fiscal policies of both parties, but it is astonishing that the American people have not thrown out the whole lot of these people — Democratic and Republican. We look like an utter ship of fools as politicians allow the country to drift toward an unprecedented financial collapse. In the meantime, the Administration is borrowing this money to simply give Israel a $100 million building complex and pour billions into corrupted governments in Iraq and Afghanistan. China of course continues to hold much of our debt and is going on a buying spree in the U.S.
The government chalked up a $172 billion deficit in November alone — part of a $300 billion deficit for the first two months of the fiscal year. While both sides talk about the need to reduce spending, they have been spending like drunken sailors for years. For those of us who are skeptical about the use of tax increases in this economy, it is unnerving to think of giving more money to these same players. We need new revenue because of their horrible record over the last eight years. We must need however a third party to break the monopoly of power in this country — a monopoly that has left the entire country captive to these self-perpetuating parties.
It is clear that neither party wants to make hard choices and continue to hand out hundreds of millions of dollars to curry favor with different groups as with the $100 million gift of a building. There is also no serious accountability for the waste of billions under Bush and Obama as “stimulus” funds. I agree with the need to raise taxes but I have little faith in the Obama Administration or Congress in using such money responsibly. You do not get to a point of borrowing virtually half of every dollar spent without a complete lack of leadership and responsibility. Even if this figure falls, the point is that Congress still makes hundred million dollar gifts to wealth countries without a sound of objection or concern. Yes, all countries borrow money but we have a massive debt and continues to grow — an politicians who pledge to be more responsible in the future. The need for revenue is likely to change but not the need for responsibility in Washington.
Source: Washington Times
“What I don’t understand is how Boehner and his fellows cannot understand that they are burning down their own house. Whether candidates are sincere or lying, the voters want to believe they are choosing a candidate who has principles other than simply staying in office for personal gain. To publicly advertise that anyone who believes in a balance budget and an unencumbered economy is simply going to be excluded from “the club” is to invite being kicked out of office. Boehner has got to realize that he can’t just pretend to care about the looming debt crisis and continue to not do anything about it.
As it stands now, Boehner has pretty much publicly demonstrated who in Congress belongs to the future of the Republican Party, assuming the GOP has any future at all.
As far as I can guess, Boehner hopes to see Democrats keep the White House and plans that Republicans will be forced to vote for, and lose with, the kind of candidates we have had to put up with for the last two election cycles. His value to the ruling class will be in diverting Conservative energy into supporting non-Conservative Republican candidates.
But I don’t think Boehner is going to get his way. The more desperate the American economy gets, the more Boehner will have to openly work to put down Conservatives in Congress. And the more Boehner’s evil work becomes visible to all, the more he is going to enrage conservative voters.
My hope and prayer is that 2014 give us a new GOP in Congress.”
lastresistance.com ron-paul-attacking-tea-party-is-not-a-good-plan-for-gop
David Blauw,
I missed all the Congress bit for the empathic plea for space travel.
Am glad to hear of your thrill watching all that. The last step ushered in with his dedication to mankind was a thrill to me too.
My idealism is based on my hope/belief that mankind can cooperate and not just compete. The evidence of both are still prominent and my hope remains. Both are necessary, and at least competition seems built in both us and society. Our roads and our mutual defense system speak for the cooperation aspect, plus the numerous other cooperative organizations, etc.
Right now we are steered in ways which involve paring of 650,000 public sector jobs in 3 years, accdg to a comment/citation above. Good? Bad? I don’t know. But elimination of school quality, letting Medicaid be used by Walmart to avoid paying for health insurance for those (all) working LESS than 30 hours a week, using food stamps to feed the families dependent on their meagre wages from Walmart, etc etc is not a system of cooperation. It is not a fair sharing of our burdens in accordance with the dogma of our three chief religions, nor the morés of the secular minded either.
I say use the fusion of the sun by converting it to electricity and retire fossil fuels from the energy role—-completely. I say let us use the earth as it is, and not created mono-culture crops dependent on and promoting GMO and GMO farming methods to the profit of Montsanto. Let us find the secrets of the compounds that nature has produced. Let us find the real natural remedies which are neglected now because no one may patent a natural plant compound.
The NIH which has a patent of cannabis, as some mistakenly claimed, did in fact only patent (I belleve) a process developed to isolate a certain group of compoundsf from cannabis, which may be useful in helping neurodegenerative sicknesses, and which group does NOT have psycho active effects.
Just exemplifying the conscious use of laws to control or eliminate competition, which would otherwise be existing in the study and use of natural compounds. (and has existed)
Yes I have dreams, and the internet has fulfilled many of them together with the computer. I expect more from both, while these things also serve as threats in surveillance and control of us.
Our system is sick if we mean in terms of a functioning democracy influenced by its citizens . Our votes count for less than bribes and insider tips delivered to cooperating congressmen.
My dream includes righting that by a form of vetting of congressional candidates by public non-partisan organizations. The purpose is to be able to offer support to capable and honest politicians for election. My comment suggesting it got no comments. Peculiar.
Of course a large measure of FEC and other restricitions are also needed to correct the present mess.
Excuse for asking, and answer if you will my question, as to your age. Mine is 76.
Not pulling rank 🙂 just curious which era you belong to.
”Globalization is the result of powerful governments, especially that of the United States, pushing trade deals and other accords down the throats of the world’s people to make it easier for corporations and the wealthy to dominate the economies of nations around the world without having obligations to the peoples of those nations. Nowhere is the process more apparent than in the creation of the World Trade Organization in the early 1990s and, now, in the secret deliberations on behalf of the Multilateral Agreement on Investment (MAI).”
Profit Over People – Noam Chomsky
https://fbcdn-sphotos-h-a.akamaihd.net/hphotos-ak-ash4/385584_368557513229051_1459792824_n.jpg
Any time I see someone link to Paul Krugman or Stiglitz I have found my tell…that I am dealing with a group of economic ignoramuses.
My favorite is “Governments don’t (need to worry about repaying debt)— all they need to do is ensure that debt grows more slowly than their tax base”
It’s funny…because the second part IS THE HARD PART!!! It’s like saying I don’t have to worry about increasing my own personal debts I just have to make sure I earn more, faster than my debt accumulates….
We are already in the death spiral. The money spigot will open up to full any time now with full consent of the Krugman’s and Stiglitz’s because when the sh!t does hit the fan the can blame the conservatives and the 1% and wash their hands of bad advice.
“Any time I see someone link to Paul Krugman or Stiglitz I have found my tell…that I am dealing with a group of economic ignoramuses.”
Any time I see a quote like the one above I laugh because I know I’m dealing with someone who doesn’t know what they’re talking about, but has the Chutzpah to talk anyway. Sort of like a Fox News broadcaster.
I wonder of Willard Romney’s bank down in the Cayman Islands will loan me the money that I owe on my 2012 income taxes. That way the Willard could make money off of the lower 47 percenters.
Idealist, my purpose of the link was to highlight what I consider to be Tysons very valid statement on Congress. Sound and Fury signifying nothing.
I got lost in my search for the longer version which included his take on NASA and his support of it. .
I fully support your comment that we must take care of today …today. Goodness knows we should have started solving these problems yesterday! 🙂 …..
However with the handle of Idealist, I presume you do have dreams for a better future. One in which our childrens will not have to pay so dearly for the screwups of We adults.
I am old enough to remember being glued to the TV set, listening to Walter Cronkite. My whole family when available watched. It did create a National feeling of unity ….for a positive reason.
The moon landing created a worldwide feeling of unity within the ENTIRE population of the world. For one brief moment all humans tingled with an internal pride of the achievement of Humankind, and an optimism for the future. Wow I still tingle remembering.
I am unaware of any such other thoroughly positive moment in History.
There were no sides to this, The whole world was victorious.
It was a Dream made reality. I do support some funding for dreams. Maybe doable fusion is the next one. Perhaps the computer and internet is a slow growing one. We are slowly being accustomed to its’ incredibleness. I got my 1st one 1 1/2 years ago. I am still awed by the access I have to basically everything. I put the computer #2 on my list of achievements of humankind, and it is continuing to improve.
I don’t think Tyson is a con man,…I think he is a dreamer.
I thank the stars and the firmament for dreamers.
Tony C. It’s not an argument with me 😉 I’m fully aware that cross subsidization exists and that without the bulk of the infrastructure, financed by revenues largely contributed by the non-rich, the rich would lack these basic elements of society as well. Having that infrastructure, as I believe you are saying, redounds to the benefit of the rich since they skim the top off the wealth that is produced by the economy.
http://www.politifact.com/truth-o-meter/statements/2012/dec/06/alan-grayson/alan-grayson-says-more-walmart-employees-medicaid-/
Always remember money is a facade, it is but a promise we make, only the representation of value. Maybe it is time we consider the renegotiation of world wide debt, and addition of a Constitutional amendment removing money from our politics.
@DonS: That the rich “get exactly the same governmental services” can also be seen in an absolutist way; who could argue.
I can. Nearly without exception, the rich are rich because the lower and middle classes work for them, and those workers collectively generate more income for the rich person’s business than they cost in pay, benefits, business insurance costs or the employer’s share of payroll taxes. That is the whole point of employing somebody.
However, one of the reasons those employees do not demand a much higher salary is that many of their life expenses are covered by the government. Free roads, a financial retirement plan, a medical plan for retirement, unemployment insurance, police protection, fire protection, food inspection, and so on.
The rich employers are beneficiaries of all that free and at-cost infrastructure; if employees had to cover all of those expenses themselves with for-profit companies, their living costs would be much higher and they would demand much higher wages in order to have the same buying power they do now after all life expenses.
The rich do not get “exactly the same services,” their fortune is a result of infrastructure provided at-cost with zero profit margin by modestly paid civil servants.
While Worker Pensions Fail, CEOs Get Rich
CBS News
11/19/2009
http://www.cbsnews.com/8301-18563_162-5714036.html
Excerpt:
The traditional pension is quickly becoming an endangered species. But today, a government report found some executives have gotten huge retirement packages, even as their companies were dumping employee pension plans onto taxpayers as CBS News correspondent Sharyl Attkisson reports.
At the very same time pensions were drying up for 122,000 United Airlines workers, its top executives were cutting deals to make their own golden years comfortable and secure.
CEO Glenn Tilton, CFO Frederic Brace and COO Peter McDonald together got $7.6 million worth of retirement benefits in four years – from 2002 to 2006 – and earned a combined $55.5 million compensation, with perks like a car and driver and country club memberships.
That’s one small sample of the outrage packed into a new Government Accountability Office report. It studied 10 of the largest companies to dump their underfunded pension plans into the laps of the federal Pension Benefit Guaranty Corporation, which is $22 million in the red.
Together, the 10 companies underfunded their pension plans by more than $11 billion affecting 200,000 workers. But their executives drew a total of $350 million in compensation.
The 10 companies are not named in the report, but CBS News has learned that they are: Polaroid, United, US Airways, Reliance Group, Republic Technologies, National Steel, LTV Steel Corp., Pillowtex Corporation, Westpoint Stevens, and Harvard Industries, Inc.
Reliance Group Insurance underfunded its plans by $121 million in the five years before it failed. But its top management brought home $70 million in salary, bonuses and benefits. Chief executives Robert Steinberg and George Baker used the corporate plane and helicopter for $200,000 worth of personal travel. That included family trips to China, Greece and Hawaii.
If the Pension Benefit Guaranty fund can’t get out of the red, it’s taxpayers who will have to pick up the slack. That’s why some members of Congress think they should step in.
DonS,
I guess one could say the rich–the ones who actually pay taxes–are doing more financially…in a literal sense. That said, one has to consider what a person paying 25% of an annual income of $50,000 does to his/her buying power as opposed to a person paying 25% of an annual income of $1,000,000. Is there really any comparison in what the two earners would have left to spend?
*****
25% of millionaires pay lower tax rates than many middle-class Americans, study says
By LUCY MADISON / CBS NEWS/ October 13, 2011
http://www.cbsnews.com/8301-503544_162-20120147-503544.html
Roughly 25 percent of American millionaires pay a lower tax rate than millions of middle class earners, according to a new study by the nonpartisan Congressional Research Service.
According to the report, which was based on 2006 data, about a quarter of millionaires (about 94,500) paid less than 26.5 percent of their income in federal taxes, while about 10 percent of moderate-income taxpayers (about 10.4 million taxpayers) paid more than 26.5 percent in taxes. Moderate-income taxpayers were defined as those with an adjusted gross income less than $100,000.
The study validates claims recently touted by billionaire investor Warren Buffett, that the percentage he paid on his taxable income in a given year was “a lower percentage than was paid by any of the other 20 people” in his office. Buffett argued in an August opinion piece that lawmakers in Washington should raise taxes on the “mega-rich” who have been “coddled long enough by a billionaire-friendly Congress.”
His comments inspired the so-called Buffett Rule, an Obama administration initiative that endeavors to change the tax code so that “no household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay.”
According to Thomas Hungerford, who authored the report or the Congressional Research Service, Buffett’s claims of disparity in the tax code are not without basis.
“The current U.S. tax system violates the Buffett rule in that a large proportion of millionaires pay a smaller percentage of their income in taxes than a significant proportion of moderate-income taxpayers,” he writes.
The study points out that the while, on average, millionaires do pay more in taxes than middle-class earners (about 30 percent compared to about 19 percent), the use of average tax rates in discussions surrounding the issue “hides a great deal of variation in the tax rates that taxpayers actually face.”
“The primary reason for this is the higher-income taxpayers with low tax rates receive a very high proportion of the income from long-term capital gains and qualified dividends, which are taxed at low tax rates and not subject to payroll taxes,” Hungerford says.
Lower-income taxpayers, however, earn most of their income from wages – which are subject to payroll taxes.
Elaine M, here’s a cropped repost of my response to Mespo’s question on the ‘rich urinating on the poor thread below
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“Mespo says —-> “Would you agree that however you characterize it, the rich are doing more financially than those who pay less? If so, would you agree they get exactly the same governmental services as the guy paying less or nothing at all? If you agree with those two statements, how you define “fair” except in confiscatory language?”
————————–
Mespo gives an extremely narrow and technical reading to the notion of fairness as relates to the tax code, such that no one could argue the conclusion that the rich are paying more, notwithstanding that the burden on the rich has decreased significantly over the past few decades, without even including the notion of loopholes and tax dodges that the rich benefit from, and the corporate framework that also disproportionatley contributes to their wealth. I say:
1 ) the “rich are doing more financially”, to me, is a quintessential question of relativism. It is meaningless except in absolutist kind of universe
2) That the rich “get exactly the same governmental services” can also be seen in an absolutist way; who could argue. But in the real world, the rich DON’T NEED many governmental services because they can pay to circumvent/supplement them. Think gated communities with private police forces; think private jets; etc. Of course at some point when the infrastructure tumbles to the point that the chauffered limo can’t get to the airport even the rich might not be able to buy their way out of a jam. BTW, the rich get to live in a stable society to the extent that all citizens are treated fairly.
3) I suppose my definition of “fair” might not equate to another’s concept of confiscatory, legal or otherwise. I am not saying, of course, that fair is only that level of participation at which everyone suffers the same deprivation or surplus, not even in a theoretical way.
4) There are many degrees of well being between poor and filthy rich, and I don’t think we are in danger of the system abetting such confiscation that the rich will howl with pain for a serious reason.
I am fully confident that the Citizens United Supreme Court will adequately protect their corporatist minded sympaticos, and see no irremediable prior harm that will be done that the Court will not readily address
5) Of a more touchy freely nature: comparing poor/middle class dollars, and rich dollars, one for one, is barely laughable. In the real world, a ‘rich dollar’ is throwaway money’ that probably goes into investment, expenditure or savings that has little negative impact, probably positive, on the rich’ bottom line, and certainly does not reduce money available for reasonable essentials. As we go down the economic scale, each marginal dollar is more and more critical to the overall health and well being of the taxpayer, with each additional dollar extracted being reflected in some marginal deprivation (whether you consider it frivolous or critical it has an impact)
The entire deficit is about the size of the GDP, or “annual earnings” of the country. The average annual earnings for individuals in our country is around $50K, so that is approximately each earner’s share of the debt. But all they ever have to pay is the interest of about 3%, which is $1500 per year. That is covered in their taxes, easily.
Nobody that earns $50,000 a year is going to go bankrupt over 3% of it. Yes, it would be nice if it were $500 or $1000 instead of $1500, but $1500 is not an unmanageable sum, especially if the times demand spending to avoid even worse disasters, and especially since inflation will eventually reduce the capital to insignificance.
I think national budget and deficits should always be framed in terms of individual shares, because people seem to be inherently alarmed by anything involving billions or trillions, and seem to forget the burden is shared by over 120 million adults working every day. Look at your fair share of the total interest (3% of your annual income), which is all you will ever have to pay, and all alarm fades away.
Maybe I’ll go back and listen to more of Neil. His enthusiasm is uplifting.
I find this topic very depressing. There are solutions but we have and have had Congresses and administrations (regardless of party) that cater to the super wealthy. We have Congress where many/most members engage in insider trading, provide themselves and others outrageous tax breaks and gifts. Corruption is rampant where those who commit war crimes get away with it b/c the new guys commit war crimes, those who play financial games pay for new laws so they can legally commit fraud and then further empty tax payers pockets by being “too big to fail”. It’s really too bad that we haven’t followed the example of Iceland which threw out the government and jailed the banksters. We might have done the same but the choices for the voters is controlled so that won’t happen. We have become an empire that will fall eventually b/c out biggest expenditure is the military and the people get squeezed. And now that big military is being expanded into this country so that those in power can use it to keep those being squeezed in line. All of these threads intersect and intertwine. I’m going back to bed.
Great links Elaine. The rich get richer and poor get poorer.
Swarthmore mom – both the left wing and the right wing establishment economists have been saying the same things you quoting for years. Only, instead of discussing the USA, they were discussing western European governments who have been running deficits for years. I was an undergrad economics major – we were taught then, the things you are quoting now. Notably, everyone thought that gov’t debt doesn’t matter for the reasons you are stating. Unfortunately, it does not pass the common sense test. It does not make sense then, and it does not now. Interest compounds – you can not run deficits endlessly – your debt pile gets to infinity.
Current economic facts demonstrate undisputedly, that these arguments are patently and demonstrably false. Italy, Greece, Ireland, Spain, France – all collapsing under the weight of their debt load that “doesn’t matter”. To continue to make these arguments in the face of all of this evidence is absurd. Keynes is often quoted in “debt is okay” arguments like you are putting forward. However, there is so much misinformation regarding Keynes these days – to an economist – at least by training, its very frustrating.
Weather you agree with Keynes or not (so leave out the “left and right” arguments for now), no one has ever tried his theories. We allays hear about Keynes when gov’ts want to spend money they don’t have. However, while it is true that Keynes recommended that gov’ts use deficit spending to stimulate the economy in downturns in the economic cycle, HE CLEARLY STATED THAT THEY SHOULD ALSO PAY DOWN THOSE DEFICITS WITH SURPLUS IN THE “BOOM TIMES” OF THE ECONOMIC CYCLE. SOMETHING NO GOV’T HAS EVER DONE. No one, Krugman or any of today’s supposed “Keynsians” ever mentions the pay down part.
That is why debt matters, even to governments. Just like a family, if you use debt wisely (investment and stimulus when the economy needs a boost) and pay it off as soon as you can (when the economy comes out of its slump) then, and only then, is it an effective tool.
Finally, people often mention the very small surplus under Clinton. While it is true we had a very small surplus — no one ever even considered using it to pay down the principal amount owed. That is the problem.
As Jim mentioned in the post, both parties are equally to blame. They spent us into this whole together. The only difference is, they spend it in very slightly different ways. IF YOU HAVE NO MONEY – I.E. YOU CURRENTLY SPEND MORE THAN YOU TAKE IN – IT DOESN’T REALLY MATTER IF YOU GIVE MONEY TO UNITED WAY OR BUY YOURSELF A ROLEX – YOU ARE STILL SPENDING MONEY YOU DON’T HAVE.
DonS,
Executive Excess 2012: The CEO Hands in Uncle Sam’s Pocket
How our tax dollars subsidize exorbitant executive pay
By Sarah Anderson, Chuck Collins, Scott Klinger, Sam Pizzigati
http://www.ips-dc.org/reports/executive_excess_2012/
Excerpt:
Nationwide, budget cuts have axed 627,000 public service jobs just since June 2009. Schools, health clinics, fire stations, parks, and recreation facilities—virtually no public service has gone unsqueezed. Tax dollars haven’t seemed this scarce in generations.
Yet tens of billions of these scarce tax dollars are getting diverted. These tax dollars are flowing from average Americans who depend on public services to the kingpins of America’s private sector. They’re subsidizing, directly and indirectly, the mega-million paychecks that go to the top executives at our nation’s biggest banks and corporations.
Exorbitant CEO pay packages have, of course, been outraging Americans for quite some time now. Every new annual CEO pay report seems to bring a rash of predictably angry editorials and calls for reform. But little overall has changed. Wages for average Americans continue to stagnate. Pay for top executives continues to soar.
One key reason why: Our nation’s tax code has become a powerful enabler of bloated CEO pay. Some tax rules on the books today essentially encourage corporations to compensate their executives at unconscionably higher multiples of what their average workers are paid.
Other rules let executives who run major corporations routinely reduce their corporate tax bills. The fewer dollars these corporations pay in taxes, the more robust their eventual earnings and the higher the “performance-based” pay for the CEOs who produce them.
In effect, we’re rewarding corporate executives for gaming the tax system. Our tax code is helping the CEOs of our nation’s most prosperous corporations pick Uncle Sam’s pocket.
In this latest Institute for Policy Studies Executive Excess annual report, our 19th consecutive, we take a close look at the most lucrative tax incentives and subsidies behind bloated CEO pay and highlight those executives who have reaped the highest rewards from tax code provisions that actively encourage outrageously disproportionate executive pay.
We also identify the top executives who have benefited the most from what have become known as “the Bush tax cuts”—the reductions in federal income tax rates on top-bracket, capital gains, and dividend income enacted in 2001 and 2003.
Among our findings:
– Of last year’s 100 highest-paid U.S. corporate chief executives, 25 took home more in CEO pay than their companies paid in federal income taxes. Seven firms made the list in both 2011 and 2010.
– The CEOs of these 25 firms received $20.6 million in average total compensation last year. That’s a 24 percent increase over the average for last year’s list of 2010’s tax dodging executives.
– The four most direct tax subsidies for excessive executive pay cost taxpayers an estimated $14.4 billion per year—$46 for every American man, woman, and child. That amount could also cover the annual cost of hiring 211,732 elementary-school teachers or creating 241,593 clean-energy jobs.
– CEOs have benefited enormously from the Bush tax cuts for upper-income taxpayers. Last year, 57 CEOs saved more than $1 million on their personal income tax bills, thanks to these Bush-era cuts.