Submitted by: Mike Spindell, guest blogger
I don’t know about you but I was certainly happy that I woke up this morning. For a few years now there has been great speculation that the world was going to end yesterday. As I fell asleep about 1:00pm last night it was with knowing that in Mexico it was three hours earlier and so that the dread prediction of the world’s end by the Mayan Calendar still may have been possible. The whole idea was a blatant misrepresentation of Mayan belief and hoax-like, yet that didn’t prevent many from making this non-story into yet another way to frighten people. Frightening people with made-up nonsense seems to be a human trait and certainly has been exploited throughout history for one sort of gain or another.
Fear not though, because just as the collective We has just bitten one bullet, another comes along to frighten us once again with disaster and that “disaster” will occur on December 31, 2012, as we come to the end of another turmoil ridden year in societal intercourse. I’m writing, of course, about the “Looming Fiscal Cliff” that has been so very prominent in what our mainstream media calls “news and commentary” and our leaders of both parties call governance. My opinion and that of many others with far more economic expertise than myself, is that the “Fiscal Cliff” is a mere “bogeyman”, used by those politicians on the Right and the Left as leverage to accomplish their particular political agendas.
Since one of the interests of this blog is the Constitution and the consequent Rule of Law that should be its’ result, this comes within our purview because serious issues of national interest are being driven by false mythology grown to myth like proportion. Let’s look at what is behind this mythology and its propaganda.
The premise of the “Fiscal Cliff” is that unless something is accomplished to prevent its dire consequences from occurring on December 31st, our country will slip into the throes of economic disaster. What is the nature of the dire events that will occur?
“The “fiscal cliff’, however, is an invented term applied by politicians to the date various temporary legislative changes to the country’s tax code and spending policy take effect. Politicians began instituting temporary tax cuts with the intention of later transforming them into permanent law in the 1990s. According to a Center on Budget and Policy Priorities report, this practice exploded during the George W. Bush administration and was accompanied by budget gimmickry to hide their affect on the federal deficit.
The Bush era tax cuts, known respectively as the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003, are at the center of the storm that is raging around the “fiscal cliff’. The legislation, which was set to expire in 2010 but was extended to 2012, significantly reduced rates on income, estate and dividends and capital gains taxes and exemptions.
After the sunset of the Bush era tax cuts, estate and gift tax exemptions will end raising the tax rates on transferred estates over $1 million to 55%. Long-term capital gains taxes will rise from its current rate of 15% to 20%. The tax bracket for the country’s wealthiest citizens will rise from the current 35% to 39.6%. In other words, the tax code will largely return to the rates that were in place prior to the George W. Bush administration.”http://www.opednews.com/articles/The-Myth-of-the-Fiscal-Cli-by-Abigail-W-Adams-121218-861.html
Now when I read the above my feeling is what does this have to do with me? The Bush Era Tax cuts did little for me, perhaps an extra few hundred dollars a year in my pocket, but given the cost of living today that effect is negligible. As far as Estate Taxes, my children know enough about my financial wealth to understand that what they stand to inherit could possibly pay for my burial and little else that would make them economically better off. In truth by the ideas presented above it seems those most in turmoil about this “disaster” are those whose income is at the top of the heap. Now those on the Left argue that this will also mean the expiration of the so-called middle class tax cuts. As a member of the middle class I remember those cuts well and my overall impression then as now is, the little extra money was nice, but really insignificant in terms of its effect on my standard of living. Where I guess it had some meaning is in a collective sense of the actual extra money spent being circulated in and therefore boosting our economy. The bald reality is that the extra money gained by the working classes does enter the economy, while the extra money garnered by our elite, is simply re-invested in financial instruments for their interest yield and have little effect on the economy via the hoary theory of “trickle down’. It doesn’t “trickle down”, rather it pools at the top.
“This return to the pre-Bush era tax code, coupled with the implementation of spending cuts to reduce the federal deficit and tax penalties associated with health care reform, have many economists screaming recession. Fear of a recession has politicians scrambling to reach a deal that would prevent the parameters of already established legislation from taking effect. The Republican demand in “fiscal cliff’ negotiations in Congress: the permanent implementation of the Bush era tax cuts.
The Congressional Budget Office reported that the Bush era tax cuts were responsible for 14% of the swing from federal budget surplus to federal budget deficit over 2002-2011. The Council of Foreign Relations projects that a permanent extension of the tax cuts will increase federal debt by $3 trillion over the next 10 years. However, due to the fear inspired by the economic catastrophe that is associated with the “fiscal cliff’, the temporary tax cuts instituted to fulfill the campaign promises of George W. Bush may become permanent under Barack Obama. http://www.opednews.com/articles/The-Myth-of-the-Fiscal-Cli-by-Abigail-W-Adams-121218-861.html
So what are the consequences of jumping off the “fiscal cliff’? According to many experts, there are none, because the “fiscal cliff’ does not exist. Ken Fisher, named as one of the thirty most influential people in the investment industry, pointed out in an interview with Forbes that changes to the tax code and federal spending do not take affect in one fell swoop. He refers to the “fiscal cliff’ as, “more of a fiscal rolling plain.” (Ken Fisher Talks the Fiscal Cliff, Forbes, 12/18/2012)
There is no “Fiscal Cliff” that this country will fall off from immediately in the New Year, but merely a sequence of events that could be adequately dealt with due process and due diligence as 2013 proceeds. However, the major political parties, each for their own reasons, are willing to say “boo” to the American People to push forward their different agendas. My own suspicion is that much of this fear mongering propaganda has been put forth by those whose economic interests are most vitally at stake and those whose political canon dictates less taxes and less government. “Less Government” except for that “government” most vital to their economic interests, with our bloated Defense Budget being a prime example. The other party of the corporatocracy, the Democratic Party, has once again been upstaged by masterful propaganda and so must play along with this “Fiscal Cliff” mythology by adding their own spin to it. Lately, that has included our President seeming to offer up “entitlement cuts” to programs that aren’t really “entitlements”, but must be pretended to be, since the prevailing propaganda war calling Social Security an “entitlement” seemingly has been won by his opposition. Those who pay payroll taxes, in many case significantly more money than their income taxes, should know that Social Security is not an “entitlement”. However, they have become confused by the propaganda created myth that “Social Security” is not an insurance program, which it most certainly is.
What is going on here put in simple terms is that the wealthy elite of our country have used their media minions and pundit hangers-on to control the public discussion and pollute it into mythology. To understand this better I would to present “Ten Numbers the Rich Would Like Fudged” by Paul Buchheit, from a Nationofchange OpEd.
“1, Only THREE PERCENT of the very rich are entrepreneurs.
2. Only FOUR OUT OF 150 countries have more wealth inequality than us.
3. An amount equal to ONE-HALF the GDP is held untaxed overseas by rich Americans.
4. Corporations stopped paying HALF OF THEIR TAXES after the recession.
5. Just TEN Americans made a total of FIFTY BILLION DOLLARS in one year.
6. Tax deductions for the rich could pay off 100 PERCENT of the deficit.
7. The average single black or Hispanic woman has about $100 IN NET WORTH.
8. Elderly and disabled food stamp recipients get $4.30 A DAY FOR FOOD.
9. Young adults have lost TWO-THIRDS OF THEIR NET WORTH since 1984.
10. The American public paid about FOUR TRILLION DOLLARS to bail out the banks.
Bonus for the super-rich: A QUADRILLION DOLLARS in securities trading nets ZERO sales tax revenue for the U.S.” http://www.nationofchange.org/ten-numbers-rich-would-fudged-1353335225
The article linked above provides the backup information and reasoning behin those ten and a bonus numbers that nobody seems to include in this national debate over what the true issues of economic policy entail. The responsibility for this is bi-partisan, since both parties merely represent to different approaches to how to continue the elite in their stranglehold of power in the American System. This is a situation that I think the Founding Fathers might have envisioned, but in giving us the tool of the Constitution, felt the people were those who would have to ensure that their liberties remained in intact.
The question that Americans need to examine is how do they look beyond the propaganda spawned mythology spouted by almost all politicians in this country and come to grips with the real issues that lie below these myths we live by. The “Fiscal Cliff” is a sham and yet we see the most “serious people” in our Nation, like our President play along with it, rather than expose it for the sham it is.
There are deep problems and there are deep divisions in our country that is real and can be agreed with by all. However, the only way to solve these issues is too see what they actually are, rather than solving problems that are chimeric.
Submitted by: Mike Spindell, guest blogger.
As usual I enjoyed the use of others perceptions and my own clap I received by and from MikeS.
Want to say a couple of lines more though.
The impossibility of there being a conspiracy is a consequence of the impossibility of getting billionaires to cooperate and subordinate their own interests. They want to have the hole card of their own staff looking out for THEIR businesses. Branches come and go, but money must still reign, so even in allied companies the knives are sharpened. A conspiracy would be more monolithic, powerful but too obvious and SLOW.
For unreined consequences see: Oryx and Crake.
Dredd’s comment containing info on the international forum of 148 “holding companies” is still valid in its way. We don’t (yet) rule the world, but we are getting closer. So call it the current fruit of corporate cooperation. Behind the control of many governments and the devolving of state powers to the corporations through trade pacts, see TPP.
Why has money not abandoned America? Cause we have the strongest military levers to push other nations with.
The possibility exists that the FINANCIAL elite don’t need gated communities of the most luxurious kind. They have each, their own set of castles around the world solely for enjoyment, not leverage access.
It could be they who are the true top dogs. The turnover of hundreds of trillions per year off the market trading would indicate that a very thin skim would yield a lot of cream and power.
Any idea what the Fed is charging us per year for the money they print and loan us?
Rafflaw,
Two good points. The Medicare one was news to me.
Bill H,
To “prevent massive tax revenue surpluses” was the reason for the tax cuts.??!! You are living in a fantasy world if you believe that. The tax cuts was welfare for the wealthy just as the restriction on Medicare to be able to negotiate its own prescription medicine rates was welfare for the pharmaceutical companies.
Further, the ostensible reason for the Bush tax cuts was to prevent massive tax revenue surpluses, which were projected at the time due to the Clinton tax increases.
“Your response to the first quote does not negate or disprove it.”
Oh, come on, Mike. I was there. objecting to the tax cuts every step of the way. The bill as passed in the House had no time limit, and as it was originally presented in the Senate had no time limit either. The time limit was added by the reconciliation process, and the bill was then negotiated in committee. It was not certain that House Republicans were going to agree to the time limit, because they wanted it to be permanent.
The trend now is to present evgerything in ten-year numbers to exaggerate the effect on the budget in today’s climate of deficir reduction and “balancing the budget” and the dishonesty of that is immense. We only budget for one year at a time, since the 111th Congress can not tell the 112th Congress whgat to do. The idea that these ten-year deals have the slightest trace of validity is absurd, and Democrats engage in this dishonesty as massively as Republicans do.
“The idea that these ten-year deals have the slightest trace of validity is absurd, and Democrats engage in this dishonesty as massively as Republicans do.”
BillH,
Please re-read what I wrote and you might see that on this we agree much more than we disagree.
“To those who do the name calling (tea baggers), I ask why? Do you think yourselves smarter?”
Smarter than teabaggers? Hell yes. Most 5th graders have accomplished that.
Per Mike S’ thought: Since Mark E’s new post puts me in a quasi religious/esoteric frame of mind, we could say that the elites represent the quintessential secular equivalent of an esotericism devoted to material acquisition and secular power. Circles within circles to which you gain admission via unwritten rules, connections and practice.
And if it comes to that, I’m sure the likes of of ID7070 will be on the barricades. But what of the young who seem not to care much, having internalized the message that the government is useless. At least that’s what I hear from the young folks I know, sadly the smart educated ones, that, for example, they don’t expect Social Security to be there when they would need it. I ‘m sure there is a faction of younger folks, 20’s, 30’s, 40’s, who are no so convinced but, on the whole, I observe that the chilling effect of the Raegan years, and all that has happened since, has taken it’s toll. Heckuva job.
“I think politics has become pretty much a “wag the dog” operation, in the sense that what is going to be done is already decided by the people with the power to decide”
“As to all the Dems including the President who insist on using right wing corporate terms in every debate thus setting themselves up for snatching defeat from the jaws of victory, I am sick of it.”
“Just how well organized this shadowy conglomeration is (can’t say conspiracy b/c then you’re a conspiracy nut; but the truth of the confluence of like-minded forces may be more frightening than an actual conspiracy) it’s hard to tell.”
Tony C., Justice Holmed and DonS,
Combining your three quotes above paints what to me is the correct picture of what is happening here, I think it is less a full blown conspiracy, than it is the merging of interests of affinity groups. While there is no doubt some element of conspiracy involved we must remember that the people at the top hang out together in a rarefied atmosphere of wealth that the rest of us can only imagine. I visited friends recently in a completely upscale gated community. They mentioned many celebrities from sports and business who lived there and showed us a magnificent Country Clubhouse and the adjoining fitness center and both took my breath away with their beauty and their accouterments. On our way home that night my wife pointed out to me that within this gated community there was one section that itself was gated, presumably where the “best” homes are located. That is a metaphor to me about the “Elite” that rules over us. They hang out together in an isolation from the mere peasants and that “splendid isolation” that separates the Billionaires from even the millionaires. Being so wealthy means your actions cause ripples throughout society and it is from these ripples that policy is created that affects us all. I don’t think it is a full blown conspiracy, not because it would be impossible, but because I don’t think those in the “Elite” are all that perceptive to plot it out. They are in my opinion driven more by the basic drives towards lust and power. Each member of this “Elite” sees themselves as “Top Dog” and in the interstice of this ego-driven madness there is lack of homogeneity and perhaps a small opportunity.
“i say organize as Saul Alinsky taught, and start digging away at their foundations locally.”
ID707,
This indeed is our only option and opportunity to gain some measure of relief from the :Elites” ruling power.
“Politicians began instituting temporary tax cuts with the intention of later transforming them into permanent law in the 1990s”
“There were not enough votes in the Senate to pass the tax package, so it was passed under a process known as “budget reconciliation,” which requires a simple majority vote.”
Bill H.,
Your response to the first quote does not negate or disprove it. The intent was there, since the proponents of the tax cut didn’t have the votes at the time they used reconciliation, with its ten year limit, to get it passed. The intent was there, it is just that the process called for a longer range plan.
.
Bill H is well-informed.
And Working Man is very astute.
They had to gerrymander a district to get HW Bush a rep seat.
As a freshman, he was entitled to zilch. In fact he was the first freshman congressman to go direct to Way and Means. Source: Russ Baker ibid.
Tony,
I’m taking a wait and see position if the TRepublicans will vote the way they are told. I’m thinking we have a new dynamic due to the strength of the gerrymandered districts. Those reps don’t need the party and their “establishment” campaign funds any more. They have their own hard right funding machines. They can do what they want and continue to be re-elected for at least the next ten years. They are essentially “warlords” now and just as dangerous.
Politicians began instituting temporary tax cuts with the intention of later transforming them into permanent law in the 1990s. According to a Center on Budget and Policy Priorities report, this practice exploded during the George W. Bush administration and was accompanied by budget gimmickry to hide their affect on the federal deficit.”
This paints a false picture of the ten-years term limit of the Bush tax cuts. The tax package was not intentionally term limited and the limitation was not imposed for the purpose of hiding the effect on the deficit. There were not enough votes in the Senate to pass the tax package, so it was passed under a process known as “budget reconciliation,” which requires a simple majority vote. That process can only be used for revenue bills, and any bill pasased using the process can last for only ten years.
Gene & OS,
👿
Can’t you just see Obama playing golf with Boehner (sp?).
==========================================================
can’t see that it would make much difference driving off the tee, but it might make putting difficult.
Blouise,
You should give a warning before you do that. Now I have to clean my keyboard.
You win the Internets tonight.
Blouise,
Don’t confuse the stupid teabagger people with facts. It’s their right to be as ignorant and ill-informed as they like just like it is our right to make fun of them for it. Oh. Wait. Nevermind.
Paul
1, December 22, 2012 at 12:48 pm
To those who do the name calling (tea baggers), I ask why? Do you think yourselves smarter?
——————————————————–
Yep.
Millions For Defense, But Not One Cent in Tribute!
A good phrase and battle cry from the past when we were dealing with Tripoli pirates. So, why today do we give billions to Egypt, Pakistan, Afghanistan, et al? If we are broke then end the tributes now.
Push Egypt off the fiscal cliff. The new elected dictator doesnt give a rats arse about the rights of Coptic Christians or others.
Looks like Elaine’s boy of orange is not gong to pull it off….. But hey….. The American public is more important than pirate economics……
Michael….. Good article…..
Eternity is so Ephemeral. …. IMO. fleeting fairness is better than fleeting greed.