Why is there a Federal Deficit?

The rich hardly pay any taxes. That’s why there’s a federal deficit, at least in part. Let’s get something straight; corporations are rich people, just ask Mitt Romney. Okay Mitt is an idiot. Always has been. We all know corporations are not people. But they are tools of the rich that enable them to redistribute income from the 99 to the 1 percent.

Corporations have bought off tons of politicians of both political parties with their tax breaks, such as Wall Street Fetch Boy Ron Wyden, supposedly a senator from Oregon, but on matters of income redistribution, the senator always sides with the Wall Street one-percenters.

Corporate profits are currently at an all-time high (while worker wages as a percentage of the economy have plummeted to record lows–Thank you Senator Wyden). Guess what? Corporate income tax revenue is going to be about 1.5 percent of GDP this year, below the recent average and far below the amount raised by the tax just a few decades ago. Just look at the chart below, back in the early 1950s, corporate profits were taxed high enough that they were about 35 percent of federal tax revenues.

So Mitt? Why aren’t these people taxed at a higher rate? The answer is simple. Wall Street is a Ponzi scheme. If corporate profits don’t always go up in the long-term, they would either stay stagnate or go down. In which case, Wall Street would go down with corporate share prices. The Ponzi scam would self-destruct.

As income has been redistributed for the last 30 years, the demand for goods and services has shrunk. That means corporations have to boost income in other ways than selling more of their stuff. So they ship jobs overseas and pay legislators big bucks to pass legislation allowing them to reduce their tax burden. That’s what has occurred over the last thirty years. That means more money flows to the 1 percent via higher profits, dividends and share prices. The rest of us pay the price, such as reduced government services, lower paychecks, rotting schools and more lumpy streets. That you Senator Wyden.

We’ve got idiots like Wyden talking about cutting Medicare, Medicaid and Social Security benefits for the aged and the infirmed. That’s crazy. Especially since the Social Security Trust Fund has a $2.5 trillion surplus that earns about $118 billion a year in interest.

Let’s solve the problem easily. Tax corporations more, like in the good old days, and watch the Wall Street Ponzi Scam collapse. We’d be saving our livelihoods, our economy and a lot more.

As the Century Foundation noted in the chart below, the corporate income tax, as a share of total government revenue, used to track reasonably well with corporate profits. But in the last decade, the two have become decoupled:

Corporate profits are up, dividends are up, share prices are up, and corporate tax payments are down, down, down. Anybody see a relationship here?

By the way, the video below is when Mitt the Twit said corporations are people. But Dumb Dumb never figured out in what hospital any of them were given birth.

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The Fiscal Cliff: Just Another Lie in the Grand Strategy?

We’ve been told a ton of bull shit about the deficit and the looming fiscal cliff, which is a combination of tax increases and spending cuts that will kick in shortly after the end of 2012. We’re told by our corporate leaders, like Barack Obama, Joe Biden, Ron Wyden, Mitt Romney, John Boehner and others that the deficit is too great! They tell us there must be spending cuts and tax increases to solve the problem. This is a total load of bull shit in a grand farce being played out in the halls of congress and the white house to fool the American people. There is no great problem too big to solve. The short term answer to the so-called deficit problems can be found in the words and actions of Federal Reserve Chairman Ben Bernanke.

Back in 2008 or so, the Federal Reserve (the Fed) printed up $26 trillion and loaned it to several banks. According to Bernanke, the banks paid most of the money back by 2011. That means the Federal Reserve has somewhat short of $26 trillion it can simply give the US government. It’s money that’s just sitting there, hopefully collecting interest.

Think about it. The Fed was willing to bail out rich investors, but Obama, the Democrats and the Republicans are unwilling to ask the Fed to do the same thing for the rest of the American people, even though the Fed is sitting on stacks and stacks of cash. Their attitude is simple; what’s good for the 1 percent is way too good for the lower class 99 percent.

Political grand theater is occurring right before our eyes. It’s a great way to get us emotionally involved in an argument with an easy solution other than tax increases and spending cuts.

Yes I know. There are people who will say that it is not possible to use the $26 trillion to save the American people, although it was okay use it to save rich investors from their own stupidity. And these people would be right, but for all the wrong reasons.

Here’s the real reason why it can’t happen. Bernanke lied. The recipients of the $26 trillion never paid it back (Check out the story below). The Fed cooked it’s books, the recipients cooked theirs, to make it appear they paid it back, which was mathematically impossible.

But that doesn’t mean the Fed couldn’t simply print up a trillion or so dollars and help out the other 99 percent of the American people. It should because it can, but it can’t because to do so would change the hidden rules of the grand charade being played out by the 1 percent and their representatives in government, in order to mislead the 99 percent again.

Related stories

Breakdown-of-the-26-trillion-the-federal-reserve-handed-out-to-save-rich-incompetent-investors-but-who-purchase-political-power–JohnHively.wordpress.com

Obama Willing to Compromise on the Fiscal Cliff–Guardian.UK

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The USA Doesn’t Need a Sociapathic Liar Like Mitt Romney as President

We’ve had sociopathic liars in high office before. Ronald Reagan comes readily to mind, so does George W. Bush and Dick Cheney come to mind. Yes, I know. President Obama has lied plenty of times, like when he told a crowd in Ohio in 2008 that he would renegotiate NAFTA if elected president, but Obama is not sociopathic! He’s just a liar. Wall Street Mitt the Twit Romney is an habitual liar and a sociopath.

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Soak the Poor: Mitt Romney’s Real Economic Plan

Mitt Romney plans to redistribute income and benefits from the poor to the 1 percent should he become president in January. Click the link below to see how he’ll eliminate income and benefits for the poor in order to give already rich one percenters a tax cut that will destroy more jobs and redistribute more income from the 99 to the 1 percent.

Click here–Soak the Poor: Mitt Romney's Real Economic Plan–MotherJones

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What Will the Rich Do With the Extra Money They Get With Mitt Romney’s Proposed Tax Cuts?

Mitt Romney’s proposed tax cuts for the rich will destroy jobs. That’s because the 1 percent invest their money in things like derivatives. According to Wikipedia, “A derivative is a financial instrument whose value is based on one or more underlying assets.” In other words, the value of derivatives and the money the owner of the derivatives receives comes from such underlying assets as car loans, mortgages, student loans, other commodities, stocks, bonds, interest rates and currencies. Currently, there is an estimated 200-500 trillion dollars in derivatives.

The rich invest mostly in derivatives. None of these derivatives create jobs, except on Wall Street; most help to destroy jobs by pressuring CEO’s to ship them overseas. The very existence of derivatives often place pressure on corporations to force employees to work longer while earning less per hour. Virtually every derivative forces the 99 percent to pay more for things, and the difference between the old, lower rate at which people paid for things and the new, higher rate goes into the pockets of the 1 percent via their derivatives.

Take student loans, for example. When somebody on Wall Street created a bond backed by student loans more than thirty years ago, Wall Street placed pressure on politicians to cut Pell and other government educational grants, so as to force students to take out more loans, which served the interest of Wall Street investors, which Wall Street’s President, Ronald Reagan was happy to comply with. Since business leaders insist that education is the key to a strong economy, the government made a move against the interests of the US, and they did it all to appease rich investors. Student loan debt now exceeds $1 trillion, which is more than total credit card debt. That’s why we now pay more in student loans; it’s thanks to the development of the derivatives market.

Derivatives attract investors, and therefore they compete with stocks and bonds, which also need investors, otherwise the value of these assets will plummet to zero. To keep stock prices competitive with derivatives, CEOs are forced to ship jobs overseas, and the difference between the old higher pay in the US and the new lower pay over there goes into the pockets of the 1 percent. The middle class people who lose their jobs pay the price. But it’s worse than that because when jobs are shipped overseas, part of the tax base that supports schools, police, road building and repair, fire fighters and other jobs are shipped oversea, or so it appears. In reality, the lost part of the tax base is shipped into the wallets of the 1 percent. That’s why there’s so many cuts in education nowadays, kindergarten through universities.

That’s how rich investors have become parasites to the 99 percent. And that’s the kind of havoc that Wall Street Mitt the Twit’s tax cuts will wreck on the US economy. They will also redistribute massive amounts of income from the 99 to the 1 percent, and utterly destroy the demand for goods and services in the process. His economic plan is a disaster waiting to happen.

Derivatives are where the rich will invest much of their newly available cash if they get a tax cut from President Mitt. And we’ll all be paying for those cuts, not benefiting from them. By the way, what I have outlined here is also why trickle down economics is really trickle up economics.

According to Wikipedia, “Under US law and the laws of most other developed countries, derivatives have special legal exemptions that make them a particularly attractive legal form to extend credit. The strong creditor protections afforded to derivatives counterparties, in combination with their complexity and lack of transparency however, can cause capital markets to underprice credit risk. This can contribute to credit booms, and increase systemic risks. Indeed, the use of derivatives to conceal credit risk from third parties while protecting derivative counterparties contributed to the financial crisis of 2008 in the United States.

Financial reforms within the US since the financial crisis have served only to reinforce special protections for derivatives, including greater access to government guarantees, while minimizing disclosure to broader financial markets.

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Mitt Romney’s Plan to Destroy the American Economy — Part 1

Part 1 of Mitt’s plan is to destroy organized labor, what little is left.

Labor leaders have painted a stark picture of what might lie ahead should Romney win.

“’A worker voting for Mitt Romney is like a chicken voting for Colonel Sanders,’” Richard Trumka told the magazine, “In These Times during an AFL-CIO rally in August. Romney wants to “’annihilate organized labor as we know it,’” Teamsters President James Hoffa said in September.”

Mitt's Plan to Destroy the Labor Unions — In These Times

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Mitt Romney’s Budget Plans Would Destroy Jobs

According to a study by the Economic Policy Institute (EPI), Mitt Romney’s budget plan would destroy jobs.

His plan includes cutting taxes on the rich. Those kind of reductions destroy jobs because CEO’s seek to get investors with the newly available cash to purchase their stocks and bonds. That means a bidding war usually begins among CEOs. The best way to attract the cash is to raise profits, dividends and share prices. And the best way to do that is to cut jobs, wages, salaries and other employee compensation, and that typically means sending jobs overseas. The EPI study does not count this reality in ascertaining the certainty that the Romney plan will kill jobs in this country.

Romney’s plan is simple enough. Redistribute income from the 99 to the 1 percent by cutting taxes on the rich, and paying for the reductions by killing government jobs. People will be fired so the rich can have more tax cuts. Great Plan! Of course, those jobs have a multiplier effect throughout the economy; they support other jobs in the private sector, and so the EPI study understates the jobs losses under “Dumbed-Down Wall Street Mitt the Twit Romney.”

The gist of the study is thus:

“* The budget plans put forward by Mitt Romney would lead to small job gains of 87,000 in 2013 and a loss of 641,000 jobs in 2014, relative to current policy, if his proposed tax cuts were fully deficit-financed.
* If some of Romney’s proposed individual income tax cuts were revenue-neutral (he has said that they would be, but has not specified what “base-broadening” adjustments he would make to the tax code to accomplish that), his plans would instead lead to employment losses of 608,000 in 2013 and roughly 1.3 million in 2014.
* The weaker job growth and outright job losses under the Romney plan are driven by his proposal to cap government spending at 20 percent of gross domestic product (GDP), a move that implies very large cuts to overall spending.”

Who would promote job growth most in the near term?–Economic Policy Institute

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Are We In the USA Better Off Than Four Years Ago?

Everybody with half a brain knows we in the US are better off than four years ago. The US was on the verge of an economic collapse four years ago, thanks to Republican policies. The policies of President Obama and the Federal Reserve saved the day. Under the Republican plan, which Wall Street Mitt the Twit Romney and his running mate Paul “Complete Idiot” Ryan plan to resurrect, the US economy was on the verge of a complete collapse, like during the Great Depression.

On the other hand, the US remains on the verge of collapse and Obama and Federal Reserve Chairman Ben Bernanke have no intention of doing anything about it. And it’s worse than I make it out to be. With over 93 percent of all US income growth going to the 1 percent, it’s only a matter of time before the economy continues to collapse.

Only the federal deficit, the Great Society programs like food stamps, and the New Deal (Social Security, unemployment insurance, etc…) have kept demand at a high enough level to stop the coming Great Collapse.

Click the link below for why the Democrats should celebrate Obama’s successes, but not his failure.

Is the USA Better Off Now Than Four Years Ago? The Guardian UK

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Seven Facts About Wall Street Mitt’s Economic Scam He Doesn’t Want You to Know About

Wall Street Mitt the Twit of the Twit Twins economic scam will only make things worse for the 99 percent. He plans to redistribute income from the 99 to the 1 percent. Here are seven facts about the Mitt Scam that you should know about from Thinkprogress.org.

The scam…”gives the rich and corporations a massive tax cut. Romney’s proposal to give every American a tax cut is a giveaway to the rich that is four-times larger than the Bush tax cuts. Half the benefit would go to the richest five percent of Americans, and each member of the top 0.1 percent would get at least a $264,000 cut. Romney says he will balance the cuts with the closure of tax loopholes, but he can’t name which ones he’d close and even if he did, the plan wouldn’t generate enough revenue to offset revenue lost to tax reductions. His corporate tax plan, meanwhile, results in more than $1 trillion in tax cuts.”

Mitt’s scam also “raises taxes on the middle class. A Tax Policy Center analysis found that Romney’s plan would raise taxes on middle class families by up to $2,000 if he were to keep his promise to maintain the current level of revenue. A later analysis that added in the cost of Romney’s corporate tax cuts nearly doubled the size of the tax hike on the middle class to as much as $4,000 for a family of four.”

Click the link below for the complete story.

Seven Facts About Wall Street Mitt's Economic Scam He Doesn't Want You to Know — Think Progress.org

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Video: The Lost Decade of the Middle Class; Thank You George W. Bush and Those Tax Cuts for the Rich

Notice from the chart that the era of Republican Party government has brought about the greatest income redistribution scam in the history of the nation. The Democrats have gone out of their way to help their alleged Republican rivals to financially disenfranchise the middle class.

Ever since the election of the “Great Liar,” President Ronald Reagan, tax cuts for the rich have been destroying the middle class. There is not a shred of evidence that tax cuts for the rich have ever created a single job. That’s because they destroy jobs. The evidence is all around us and in the video below.

The money the rich receive from their tax cuts are used to put greater pressure on CEOs and politicians of both major political parties to redistribute income from the 99 to the 1 percent. And why wouldn’t they do that?

In the long run (about a year or somewhat less) if the values of corporate assets, such as stocks and bonds, don’t go up, then they must go down. There is no middle ground. Rather than see their assets decline in value, the rich prefer to redistribute income from the 99 to the 1 percent so that the affluent can continue to purchase these assets and bid up their prices. It’s a never ending process until the point at which the economy must collapse when the parasite (the 1 percent) weakens the host (the 99 percent) too much.

This occurred during the 1920s and resulted in the Great Depression. It’s also happening now. The affluent have used politicians such as Wall Street Senator Ron Wyden to steal from the 99 percent using free trade treaties and deregulation legislation, or to pass weak Wall Street regulations. There are a variety of other legislative and governmental actions that can achieve the same results, but not as effectively as free income redistribution trade treaties and deregulation. That is why the Trans Pacific Free Income Redistribution Treaty is sought by the forces of the 1 percent.

Only the New Deal, the Great Society Programs and the federal deficit are holding the economy up. They keep putting money in the hands of the declining middle and lower classes, thereby increasing the demand for goods and services. Still, the economy is getting worse. Our situation will continue to deteriorate regardless of whom is elected president in November 2012.

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