FedUpUSA

Archive for September, 2011

You might think that in our much touted Democracy, those representing The People in Congress might be representative of the The People. In a “fair and balanced” report on America’s governing class, NPR’s Andrea Seabrook investigated Who’s Weighing A Tax On Rich? The answer? Millionaires in Congress.

Intro: President Obama continued laying what may be more groundwork for his  re-election campaign Monday, including a new tax proposal. He calls it  the “Buffett rule”: a new tax on people making more than $1million a  year, who currently pay a much lower rate than an average middle-class  American. The president, in fact, proposed this rule to a group of  people with a lot of millionaires in it.

Seabrook [left]: The  number of Americans who are millionaires is pretty low — about 1 percent of the population. Members of Congress who are millionaires? Nearly 50  percent.

That’s according to the Center for Responsive Politics, a nonpartisan watchdog group that tracks money in politics.

Of  the 435 members of the House, “244 current members of Congress are  millionaires — that’s about 46 percent and that includes 138 Republicans  and 106 Democrats,” says Center for Responsive Politics spokesman  Michael Beckel.

Beckel is talking about net worth,  the total amount of money and assets lawmakers have, according to their  own financial disclosure forms. In fact, there are probably many more  millionaires in Congress, since lawmakers don’t have to include the  value of their family home and other details.

I don’t like to state the obvious, but I’ve learned that the obvious is what makes the world go ’round. So, here it is: members of Congress who are millionaires are less likely to vote to increase their own taxes.

Beckel says this wealth already makes life pretty different for  lawmakers than it is for the constituents they represent. A member of  Congress is more likely to be hit by the tax hike they’re considering.

Now  the Buffett rule is not aimed at millionaires per se — but at people  who earn an income of at least $1 million a year. Some in Congress come  under this category too.

But the biggest effect of raising taxes on those making a least one million dollars annually is not on members of Congress. It’s the campaign donors who will likely feel the pain.

“We don’t know how many political donors are millionaires, but we do  know that it takes a certain amount of disposable income to make  contributions,” Beckel says.

Campaigns are  expensive. In 2010, says Beckel, the average winner of a House race  spent $1.5 million. The average Senate winner spent close to $10  million. The hot races are even more expensive. And about half  of that money, on average, comes from an elite group of very wealthy  donors, people who get a lot of attention  from politicians and people who have plenty of opportunities to tell  lawmakers how they feel about a new millionaires’ tax.

“Wealthy Americans have more access to lawmakers than most regular voters and constituents do,” Beckel says.

In a waning Empire, journalistic standards for truth in reporting are low. In fact, such standards can hardly be said to exist. Consequently, our expectations of the media have fallen in line with the decline of those standards. We no longer believe anything the media tells us. But I was excited listening to this NPR story. Although she had not actually used the keywords, Andrea Seabrook was now talking about bribes and access, she was talking about an elite group of very wealthy donors. Money in politics is usually (if not invariably) virgin territory in American journalism. I was ready to nominate Andrea for a Pulitzer Prize.

You can easily imagine my great disappointment as Andrea continued…

Not everyone agrees that the flow of money in politics creates a conflict of interest for lawmakers on some issues.

Roger Pilon of the libertarian think tank the Cato Institute says just the opposite.

“They’re  not going to be affected or corrupted by any single small  contribution,” Pilon said. “In fact, the more money there is, the less  potential there is for such corruption.”

If a  lawmaker votes against a millionaire’s tax, Pilon believes it’s because  of his or her political ideology — not because of a campaign donation.

So  what we have here is a kind of chicken-and-egg question. Which came  first, the donation or the decision on how to vote for a particular  bill?

For the wealthy, opportunities to lobby against the millionaires’ tax  happen every day. All they have to do is pay the minimum donation —  which could be $5,000  or even $30,000.

Which came first? The ideology? Or the donation? Clearly they go together, something the Romans knew over 2000 years ago. Political views can change, and often do. Hard cash is hard cash. Try buying a summer home or a sail boat with an ideology—good luck with that! Ideologies and bribes are mutually reinforcing.

Human obtuseness never surprises me anymore. I am no longer dumbfounded by the fact that people like Andrea Seabrook are so clueless about Human Nature that they do not understand even the basics of human motivation. Cluelessness is a big problem for our species, as I wrote about in Homo laeviculus — “Clueless Man”, but cognitive thickness is not the only problem we have here.

Our mainstream media is kept on a short leash, or keeps itself on a short leash. (These are actually the same thing in practice.) This becomes manifest in the “fair and balanced” news story. In Goodbye to All That: Reflections of a GOP Operative Who Left the Cult, former Republican staffer Mike Lofgren calls it false evenhandedness. He quotes Paul Krugman to make his point.

Paul Krugman has skewered this tactic as being the “centrist cop-out.” “I joked long ago,” he  says, “that if one party declared that the earth was flat, the headlines  would read

Views Differ on Shape of Planet

Yes, views differ on shape of planet. Which comes first, the ideology or the bribe? Same thing!

Unlike the Krugman example, the bribery issue is not partisan. Both parties take bribes, both parties cater to elite groups of wealthy donors. Any Republican or Democrat will tell you that fund-raising is their most important political activity. But it verboten to admit that money determines political decisions. It is not allowed! This is not a conscious rule Andrea Seabrook is following. She is merely protecting the legitimacy of the political system, and her reporting on that system. This is done completely outside of her awareness. She is inside the box.

Mainstream media reporting in America is worthless.

Decline of the Empire

It was all over CNBC this morning, among other places.

The common mantra: The way out of this problem is economic growth.

My blunt response:

Here’s the problem from a historical perspective, looking at GDP growth .vs. debt growth:

In other words we didn’t “grow output”, we bought it by borrowing more and more money.  If you prefer it in “incremental dollars” rather than total outstanding, it’s here:

Now it is true that one might try to economically grow out of debt. 

But in order to successfully do so you must grow the economy while NOT growing the amount of debt outstanding! 

Here’s the ugly reality – since 2000 GDP has grown, on average, by 4.2%.  But debt has grown by 7%, again, on average.

So long as there is a spread between debt growth and GDP growth, and debt is growing faster than GDP (through the entire economy) you cannot “grow out of the hole” – all you’re doing is making the problem worse.

This is the underlying issue with the so-called “economists” who argue this position – they’re raising a true argument but predicated on a false premise – that we can and will grow the economy while either holding the amount of debt across all sectors (private and government) steady or contracting that total amount.

If and only if that takes place – that is, the blue line in the above chart is below the red line and stays there, then one can make this argument.

If not, and history says it is not, then any such claim is a fraud.

Now here’s some news:

OSHA has found Charlotte, N.C.-based Bank of America Corp. in violation of the whistleblower protection provisions of the Sarbanes-Oxley Act for improperly firing an employee. The bank has been ordered to reinstate and pay the employee approximately $930,000, which includes back wages, interest, compensatory damages and attorney fees. The findings follow an investigation by OSHA’s San Francisco Regional Office, which was initiated after receiving a complaint from the Los Angeles-area employee. The employee originally worked for Countrywide Financial Corp., which merged with Bank of America in July 2008. The employee led internal investigations that revealed widespread and pervasive wire, mail, and bank fraud involving Countrywide employees. The employee alleged that those who attempted to report fraud to Countrywide’s Employee Relations Department suffered persistent retaliation. The employee was fired shortly after the merger. Both the complainant and Bank of America can appeal the monetary damages to the Labor Department’s Office of Administrative Law Judges within 30 days of receiving the findings.

“It’s clear from our investigation that Bank of America used illegal retaliatory tactics against this employee. This employee showed great courage reporting potential fraud and standing up for the rights of other employees to do the same. Whistleblowers play a vital role in ensuring the integrity of our financial system, as well as the safety of our food, air, water, workplaces and transportation systems,” said OSHA Assistant Secretary Dr. David Michaels. “This case highlights the importance of defending employees against retaliation when they try to protect the public from the consequences of an employer’s illegal activities.”

The pertinent part is highlighted in bold.  This is clearly CRIMINAL.  So, where are the prosecutions?  Is this ‘equal justice’ under the law?  More like some ‘special people’ are exempt from our laws.

KLEPTOCRACY – noun:

government by those who seek chiefly status and personal gain at the expense of the governed; also : a particular government of this kind

h/t Analyzer on the Forum

There is only one piece of good news with regard to Jeff Miller, and that is that he must stand for election next November and thus we can vote him out.

After this bit of tripe, do you need more reasons to do so?

On Monday, President Obama released a plan for deficit reduction that pushes an agenda of tax increases and lacks serious reforms to entitlements, rather than putting forward a bipartisan proposal for putting America back on a path to fiscal prosperity.

That’s correct, Obama’s “plan” is a scam.  But this sort of misdirection belies the fact that Miller’s ideas are also a scam.  This is the common polit-speak of the polished turd found in our “Conservative” party.  Shall we explore?

After months of negotiating with Republicans on a compromise to reduce the deficit, the President took a turn toward more liberal ideals this week. Unfortunately, the American people are left holding the bag, waiting for a President who promised compromise, but offers none. His plan for deficit reduction is based on worn-out ideas and faulty economics, instead of job creation and spending cuts. These proposals could not pass when Democrats controlled both Houses of Congress, and they will not pass now.

Well then I’m sure you can point to actual spending reductions (that is, below the level of last year’s spending) in your plans, right Mr. Miller?  Oh wait – you can’t.  In fact, Ryan’s plan along with the others increased social spending, with one of those “plans” increasing Social Security spending fifteen percent in each of the first two years.

Cuts?  Where?

Take, for example, the Administration’s proposals for Medicare and Medicaid. For over a year, Republicans and Democrats have agreed that these two entitlement programs need fundamental reform to keep them viable for the next generation of Americans. We disagree on the nature of this reform, but at minimum, we agree reform is needed. However, in these programs which will collectively spend $10 trillion over the next decade, the President’s plan calls for only $320 billion in savings, a roughly three percent savings.

Ok, so what is your plan?  I will remind you that both you and Mr. Southerland stood before a room full of voters a couple of months ago and told us that nobody over 50 would see a change in Social Security or Medicare.  Yet this group of people is the very group of people bankrupting the system – the boomers.  It is the demographic disaster that cannot be changed (short of killing them all, of course) that is driving the problem.  You and Mr. Southerland didn’t like being called on that, probably because half of the people in the room that evening were retired.

But that you didn’t like it, and refused to address the facts, doesn’t change them.

The Medicare and Medicaid cuts would not even cover the size of the “doc fix” that Congress must pass to prevent a 30 percent cut to doctors at the end of the year. The President’s plan assumes the doc fix will be signed into law at a cost of $370 billion, but does not suggest a way to pay for the permanent change. Furthermore, the proposal avoids any changes to the Medicare benefit until after 2017, conveniently timed with the end of a second term in office. Between now and 2017, all of the proposed savings are on the provider side of the equation, including new price controls on pharmaceuticals and cuts to hospital reimbursements, on top of the Medicare cuts found in the President’s 2010 health care bill. This is not the structural reform needed to shore up a system that even the President’s Chief of Staff said will run out of money in five years. These are simply tweaks to a system that is fiscally unsound and will do little to actually reduce the deficit in the future.

So what structural reform are you proposing Mr. Miller?  Please be specific, and keep in mind the above demographic fact, because I intend to tattoo it on your forehead at every opportunity from now until the election.

In addition, I disagree with President on tax increases. Instead of proposing a comprehensive tax system overhaul, as House Republicans have offered again and again, the President’s proposal takes aim squarely at the country’s job creators in the middle of an already lengthy period of high unemployment rates. His deficit reduction plan would allow the 2001 and 2003 tax cuts expire for wealthier Americans, many of whom are small business owners. It reduces the value of itemized deductions to 28 percent, striking a huge blow to charities across the country. It creates a type of alternative minimum tax for those who make over $1 million a year, called the Buffet Rule after billionaire Warren Buffett. And yes, it eliminates depreciation rules for corporate airplanes and subsidies for oil and gas companies.

Ok.  I happen to believe that tax increases are not going to solve the problem, but for a different reason.  We’ll get to that.

I happen to agree with the President that Warren Buffet should not pay a lower tax rate than his secretary. However, the facts do not bear this situation out. The claim that the wealthiest Americans pay less in taxes than middle-class Americans is class-warfare at its finest and moreover, simply not true. In reality, the top 10 percent of earners pay nearly 70 percent of all income taxes, according to the IRS. The IRS also reports that those making over $1 million pay 24.4 percent of their income in federal income taxes. Those making between $100,000 and $125,000 pay 9.9 percent, and those making $50,000 to $60,000 pay 6.4 percent. The Tax Policy Center estimates that 46 percent of tax filers will pay no federal income tax this year.

These numbers are not a defense of tax cuts for corporate jet owners or the rich. They simply show that the President’s basis for tax hikes on job creators are misguided and are only being used to pay for more federal spending. The ratio of tax increases to health care entitlement reforms in his plan is five to one ($1.5 trillion versus $320 billion). The plan then counts $1 trillion in “savings” from ending the wars in Iraq and Afghanistan, which are scheduled to end regardless and should not be counted in deficit reduction savings. With other entitlement changes and fees included, the President’s proposal then includes the $1 trillion in cuts already achieved in the Budget Control Act to reach a target reduction of $4 trillion.

President Obama said it best when announcing his proposal, “It’s math.” Unfortunately, the Administration needs to work on its addition and subtraction. Instead of adding new taxes and fees, we need to be adding jobs. Instead of punting on entitlement reform, we need to start subtracting from the deficit by making major reforms to Medicare and Medicaid. The President’s plan does neither. I hope the President will come back to the table and work with Republicans on our plan to create jobs and to reduce the national deficit.

You have no plan to do that either.  As I said, we’ll get to that.

House Republicans have put forward a plan to reduce the deficit significantly without halting job growth by imposing tax increases. We started with the Republican budget, passed by the House in April, which would reduce and freeze domestic spending, would protect the future of Medicare and Medicaid while making sensible reforms, would shore up Social Security, and would lower both the corporate and individual tax rates.

These are impossible contradictions.  The Federal Government expanded in size at a roughly 7% rate over the last decade.  The economy expanded at roughly 4% rate.  The difference, plotted out over 100 years, looks like this:

You don’t really think that’s going to happen, do you?  After all, the government can’t grow to a greater size than the economy is – that’s impossible.  So let’s see… where does that happen?

Oh, about right at 50 years hence.

So when are you going to stop lying to the American public Mr. Miller?  Never mind that this assumes a 4% GDP growth rate, which is entirely unrealistic given the debt load in the economy today.

Over the summer, House Republicans put forward the Cut, Cap, & Balance plan to cut spending now, cap future spending, and pass a balanced budget amendment to the Constitution. Some of the Cut, Cap, and Balance plan made it into the Budget Control Act signed into law in early August. Federal spending was cut by almost a trillion dollars. In addition, Congress is forced to make at least an additional $1.2 trillion in cuts by Christmas and is required to vote on the Balanced Budget Amendment.

Cut, cap and balance “cut spending” from baseline figures, which were in fact no cut at all.  A cut is a reduction from last year’s numbers, not some automatic escalator.

Most importantly, nothing in our plan for deficit reduction and job creation includes tax increases. In fact, tax rates would be lowered for all Americans, and the tax code would be more simple and fair. Our Plan for America’s Job Creators allows businesses to create jobs by putting in place a system without over-burdensome regulations or high taxes. Senate Democrats and the President need to work with us to pass these reforms now to get our economy moving again. There is too much uncertainty and businesses are waiting on the sidelines to see how much they will have to pay in taxes, how much health care the government will mandate they purchase, and how many new regulations the Administration will enforce. Congress and the President need to come to the table, pass a plan that will cut federal spending, reduce the deficit, and provide jobs to the millions of unemployed Americans who are tired of Washington inaction on the issues that matter most.

Your “plan” is mathematically bankrupt.

The facts are this: Withdrawing deficit spending by either tax increases or actual spending cuts will cause GDP to decrease.  This is because GDP = C (consumption) + I (private investment) + G (government spending) + [x - i] (net exports)

If you cut government spending (“G”) then GDP must decrease dollar for dollar.

If you raise taxes then “C” or “I” must decrease dollar for dollar, because each dollar you take in taxes is one that the person you tax cannot spend on either consumption or investment.

This is literal second-grade math and you insult the intelligence of the voters in your district, not to mention everyone else, when you refuse to address this point, exactly as you did at the Town Hall meeting.

This week Max Keiser and co-host, Stacy Herbert, discuss Babyface Bernanke, Eurotarp and ‘rogue traders.’ In the second half of the show Max talks to Bill Still, director of The Money Masters & The Secret of Oz, about Fort Knox, state banks and monetary reform – specifically creation of DEBT-FREE money.

Speaking of debt-free money, most people really have no idea what this is like, or what it means.  Watch this video and you will understand.  But first, understand that Libya was NOT a welfare state.  It was not ever like Greece, which has for years been a debt-slave state which required politicians to build an entitlement welfare state in order for them to continue to be reelected by those they were enslaving.  The Libyan people worked and worked hard but here is what you didn’t know about Libya:

So, how then, you ask, could the Libyan government provide the things for its people shown in this video?  DEBT-FREE MONEY.

Now you know the TRUTH of why we (unconstitutionally) bombed Libya. It was all about central banking.  Now you understand how debt-free money can free people from the slavery of debt – and more importantly from the slavery imposed by bankers.  It also puts government back into the hands of the people because the banks can no longer control the government by ensuring that their puppets are elected.  Sadly, now the people of Libya are just more slaves to the debt merchants.

THIS debt-free monetary system is what our founding fathers intended for the United States, but their attempt failed almost as soon as the Revolutionary War was ‘won’ – when we were forced (thank you Alexander Hamilton) to repay the Bank of England for our war debts, with interest.  We were enslaved again nearly immediately and pulled back into the for-profit, private, central-banking system.

If we ever hope to put an end to our current economic nightmare, we MUST implement a debt-free monetary system. 

h/t 1lumpor2 from the Forum for the Lybia video

From Reuters:

“I don’t think that banks will get around further charges regarding Greece,” BdB President Andreas Schmitz told Reuters in an interview in Washington, adding that the effects of the Greek crisis were manageable if it could be contained.

Bankster speak to English: We intentionally loaned Greece money knowing they could not pay.  We did so even though we knew Goldman and others had helped Greece lie about deficits and thus their fiscal condition.

Schmitz said that this kind of dissent only added to investors’ concerns and that it was crucial that the German parliament approves the granting of new powers to the existing euro zone rescue mechanism, the European Financial Stability Facility (EFSF) in a key vote on September 29.

Bankster speak to English: Now that we did these stupid things, it is imperative that the public be forced to bail us out.  If they do not the gates of Hell will open and Lucifer will roam the land.

The correct response to the Banksters is as follows:

Go get stuffed.  We will not bail you out.  The bondholders who foolishly gave you money without doing their diligence and your executives must pay for your idiotic acts.   We demand that the government treat any such demand as extortion and terroristic threats and arrest, try, and punish you under existing law for those crimes should you commit them.