The Crisis of the Democratic Party

From Z Magazine, “So we see in this country not a revitalized Democratic Party working congruently with the needs of this culture and demands of fundamental change, but one so paralyzed by dependence on money and internal divisions that it is unable to mount a credible defense of a sinking welfare state and finds it easier to go after “terrorists” and join in the fight to contain the debt. The intransigent Republicans have been making mincemeat of the far-too-little-intransigent Democrats.”

Click the following link for the full story from Z magazine. The Democrats in Crisis

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Trickle Down Economics: Just Another Weapon In the War Against the Middle Class

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The US Tax System Stacked Against The 99 Percent

Our tax systems has been broken by the corrupt US government, which is currently owned by the 1 percent.

“Conservatives like to point out that the richest Americans’ federal tax payments make up a large portion of total receipts. This is true, as well it should be in any tax system that is progressive — that is, a system that taxes the affluent at higher rates than those of modest means. It’s also true that as the wealthiest Americans’ incomes have skyrocketed in recent years, their total tax payments have grown. This would be so even if we had a single flat income-tax rate across the board.”

What should shock and outrage us is that as the top 1 percent has grown extremely rich, via redistributing income from the 99 percent, the effective tax rates they pay have markedly decreased. Our tax system is much less progressive than it was for much of the 20th century. The top marginal income tax rate peaked at 94 percent during World War II and remained at 70 percent through the 1960s and 1970s; it is now 39.6 percent. Tax fairness has gotten much worse in the 30 years since Ronald Reagan lead the revolution of the 1 percent of the 1980s.

Here’s what conservatives and Corporate Democrats don’t want you to know. Citizens for Tax Justice, an organization that advocates for a more progressive tax system, has estimated that, when federal, state and local taxes are taken into account, the top 1 percent paid only slightly more than 20 percent of all American taxes in 2010.

The United States has among the lowest top marginal income tax rates for developed nations. These low rates are not essential for growth. In fact, they destroy growth and jobs. Consider Germany, for instance, which has managed to maintain its status as a center of advanced manufacturing, even though its top income-tax rate exceeds America’s by a considerable margin. And in general, our top tax rate kicks in at much higher incomes. Denmark, for example, has a top tax rate of more than 60 percent, but that applies to anyone making more than $54,900. The top rate in the United States, 39.6 percent, doesn’t kick in until individual income reaches $400,000 (or $450,000 for a couple).

The same is true of US based corporations. General Electric, for instance, has become the symbol for multinational corporations that have their headquarters in the United States but pay almost no taxes — its effective corporate-tax rate averaged less than 2 percent from 2002 to 2012. Many US corporations don’t pay any taxes, yet get rebates and refunds from the government, meaning they have negative tax rates.

One reason for the poor US economic performance is the large distortion caused by the tax system. The one thing economists agree on is that incentives matter — if you lower taxes on speculation, say, you will get more speculation. We’ve drawn our most talented young people into financial shenanigans, rather than into creating real businesses, making real discoveries, providing real services to others. More efforts go into “rent-seeking” — getting a larger slice of the country’s economic pie — than into enlarging the size of the pie. But the rich also use their money to push legislators to enact laws that redistribute income from the 99 to the 1 percent. That’s precisely why the US economy is performing so badly.

Because this legislatively enacted income redistribution scam is a continuous process, incomes for the middle class have stagnated and declined for the last thirty-three years. Their incomes and wealth are being redistributed to the 1 percent.

The consequences of our broken tax system are not just economic. Our tax system relies heavily on voluntary compliance. But if citizens believe that the tax system is unfair, this voluntary compliance will not be forthcoming. More broadly, government plays an important role not just in social protection, but in making investments in infrastructure, technology, education and health. Without such investments, our economy will be weaker, and our economic growth slower.

Society can’t function well without a minimal sense of national solidarity and cohesion, and that sense of shared purpose also rests on a fair tax system. If Americans believe that government is unfair — that ours is a government of the 1 percent, for the 1 percent, and by the 1 percent — then faith in our democracy will surely perish.

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The Rise of the New Hoovervilles: Income Redistribution From the 99 to the 1 Percent Equal Homelessness in the USA

Over thirty million jobs have been shipped out of the US since 1990. One to two million are being off shored every year, according to the Federal Reserve. The results are simple. The rich are getting richer, there are rising numbers of US citizens unemployed or who have stopped looking for work, homelessness and joblessness are rising, school district budgets are constraining since much of the tax base has been redistributed to the 1 percent via free trade treaties and their congressional supporters, such as Wall Street Senator Ron “Fetch Boy” Wyden. We know homelessness has been created by congress and the president via legislation that redistributes income from the 99 to the 1 percent so much that Hoovervilles have been rising up all over the nation.

During the Great Depression, a Hooverville was anywhere and everywhere people found places to live along road sides, and they were named after another Wall Street president, Herbert Hoover, whose Republican economic policies, and those of his predecessor, President Calvin Coolidge, destroyed the nation.

Two videos are below. The first is about the original Hoovervilles, and the second is about the modern Obama/Bush43/Bush41/Clinton/Reaganvilles. The jobless have become the homeless.

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The Great Propaganda Hoax: Automation is the Great Job Killer

Automation is not the great job killer, shipping jobs overseas is the great job killer and tax base destroyer. That’s why the deficit is so great.

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Income Redistribution: Average Student College Loan Is Going Up and Up and Up!

The average college student who graduated in 2011 had $26,600 in student loans, according to a new report, which estimates two-thirds of 2012′s college graduates had student loan debt.

The average debt is the largest since the Institute for College Access and Success began compiling the figures in 2005, and it comes amid soaring college costs, record loan defaults, and a persistently difficult job market for college graduates.

While unemployment among college graduates is only slightly higher than the overall rate, the study found a stunning 37.8 percent of recent graduates are working in jobs that do not require a college degree. The study said that means wages are depressed, making the situation for graduates even more difficult.

“Recent college graduates have entered an enormously difficult job market, which poses particular challenges for those who need to begin paying back student loans,” the study said.

There are several things the study did not say. For example, student loans have been pushed on students by Wall Street, which influenced congress and President Ronald Reagan to cut federal grants so that students would need to borrow more and more money in order to obtain an education. Investment firms take the loans, slice and dice them, and use the payments to back bonds, which they sell to rich investors. That means the payments made by students go directly into the pockets of the 1 percent because the government under Reagan decided this was a good income redistribution scam. These same rich investors receive all sorts of government welfare, and they’re shipping jobs overseas and destroying the US tax base in the process.

In other words, student loans are a carefully orchestrated scam by the 1 percent to redistribute income from the 99 percent to the 1 percent.That’s why student loan debt exceeds over a trillion dollars and is greater than all US credit card debt, which, coincidentally, is another income redistribution scam perpetrated by the 1 percent.

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How to Short the Student Loan Bubble

“Houston, we have a problem,” writes Jordan Walthem. “After years of more and more aid, more loans, and fewer jobs, the student loan bubble looks ready to pop. The Federal Reserve Bank of New York released a report that indicated that 35% of people under 30 who have student loans are at least 90 days late. Despite all the talk of an economic recovery, more people under 30 are now late on their payments than in 2008.”

Click below for the complete story.

How to Short the Student Loan Bubble

Student loans have been pushed on students by Wall Street, which influenced congress and President Ronald Reagan to cut federal grants so that students would need to borrow more and more money in order to obtain an education. Investment firms take the loans, slice and dice them, and use the payments by students to back the bonds. Wall Street then sells the bonds to rich investors. The payments made by students go into the pockets of the those investors, the same ones that are receiving all sorts of government handouts, and that are shipping jobs overseas and destroying the US tax base in the process. In other words, student loans are a carefully orchestrated scam by the 1 percent to redistribute income from the 99 percent to the 1 percent.That’s why student loan debt exceeds over a trillion dollars and is greater than all US credit card debt, which, coincidentally, is another income redistribution scam perpetrated by the 1 percent.

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President Obama, the Republicans, and the Proposed Unnecessary Cuts to Social Security, and the lies and myths about Social Security

The Social Security Trust Fund has grown every year since 1983, thanks to President Ronald Reagan and the adjustments to funding that he initiated. It even grew last year and the year before despite the cut in payroll taxes from 6 to 4 percent.

However, the corporate press will only let you know about about the Social Security Trust Fund deficit between the taxes it takes in and the money it pays out even though the system is sitting on a $2.7 trillion surplus that collects about $120 billion in interest per year. When you count the interest, there has always been a surplus, at least since 1983.

Take a look at part of the report from the trustees of the Social Security Trust Fund from 2012. Italics and bold are mine.

“Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that these expenditures will remain greater than non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the economy slows after the recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Redemption of trust fund assets from the General Fund of the Treasury will provide the resources needed to offset the annual cash-flow deficits. Since these redemption’s will be less than interest earnings through 2020, nominal trust fund balances will continue to grow. The trust fund ratio, which indicates the number of years of program cost that could be financed solely with current trust fund reserves, peaked in 2008, declined through 2011, and is expected to decline further in future years. After 2020, Treasury will redeem trust fund assets in amounts that exceed interest earnings until exhaustion of trust fund reserves in 2033, three years earlier than projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2086.

A temporary reduction in the Social Security payroll tax rate reduced payroll tax revenues by $103 billion in 2011 and by a projected $112 billion in 2012. The legislation establishing the payroll tax reduction also provided for transfers of revenues from the general fund to the trust funds in order to “replicate to the extent possible” payments that would have occurred if the payroll tax reduction had not been enacted. Those general fund reimbursements comprise about 15 percent of the program’s non-interest income in 2011 and 2012.”

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Give Credit Where Credit is Due: The Obama Economic Indices

The economy sucks under President Barack Obama, especially for those under the age of thirty, but if you’re a member of the top 1/2 of 1 percent, you’re doing pretty good since the president intends to use legislation to redistribute income from the bottom to the top. That’s what he’s been doing. That’s why corporate profits are at an all time high when demand is so slack. That’s why the Dow Jones average is at an all time high, because income is continuously being redistributed from the 99 to the 1 percent. Free trade is a perfect example of an income redistribution scam. The president has signed three of them into law, despite government studies showing how they result in job losses. Check out the following link.
http://johnhively.wordpress.com/2013/01/18/the-biggest-income-redistribution-scam-free-trade-treaties/

Still, for the 99 percent it’s a better economy than when George W. Bush left the nation in ruins. However, it’s not as good as under any president since Herbert Hoover (and Bush) left the nation in shambles in March 1933. That’s a lot of presidents.

Think about it this way. Under President Jimmy Carter, the US added 230,000 jobs a month on average, with an economy with 60 percent of the population and 60 percent of the gross domestic product as today. In comparison, it’s an awesome month for Obama if the economy creates 180,000 jobs thirty-three years after Carter left office. Why the difference? It’s simple. When Carter was president, the 1 percent took home about 8 percent of the total national income, compared to slightly over 30 percent today. That’s why there’s such a significant difference in the performance of the economy under Carter and Obama.

The 1 percent invest their money in derivatives, like credit default swaps and bonds backed by home mortgages, and things that produce nothing, and they typically are a drain on the economy. The 99 percent use their money to buy goods and services, which stimulates job growth and wage increases. That’s why income distribution is so important. Obama knows this, but unlike President Franklin Roosevelt, Obama refuses to do anything about it. The president also allows Wall Street criminals to go free, something not even the corrupt and incompetent George W. Bush did when Worldcom and other companies committed criminal acts.

In other words, Obama has no intention of doing anything that makes the nation so ill. His real base is a slice of the 1 percent. Still, give him some credit where credit is due. Okay, not that much credit is due to him except for the gains on Wall Street and the record setting corporate profits. That hasn’t done anything for the 99 percent except suck them financially dry. Check out the graph below.

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The Greatest Acheivement of President Ronald Reagan

In a previous story, I outlined some of the misconceptions about President Ronald Reagan. See
http://johnhively.wordpress.com/2013/02/06/myths-and-accomplishments-of-president-ronald-reagan/
. However, President Reagan had some positive accomplishments even if modern day conservatives and liberals are loath to admit them.

For example, when Reagan was president, the long term outlook for the Social Security Trust Fund did not look good. So Reagan appointed a committee to overhaul the system. The committee’s recommendation included a massive increase in the payroll tax, which mostly hits the 99 percent. Reagan approved and signed the deal.

Today, both Republicans and corporate Democrats (which are 80 percent of the Democratic Party in DC) tell us through the corporate media that Social Security is broke, that it’s filled with worthless IOU’s, and that it needs to be privatized so that recipients can receive less benefits and Wall Street can steal money from the fund. But the Social Security Trust Fund is not broke.

The Trust Fund has a $2.7 trillion dollar surplus invested in US treasury bills, the most secure investment in the world since the US government has never failed to pay its debt when the bill comes due. Those treasury bills collect about $120 billion dollars a year in interest. Even when tax receipts to the fund are less than payouts, the Trust Fund has a positive net flow. For example, in 2010, Social Security paid out $42 billion more than it took in tax receipts. The corporate media reported a crisis, saying Social Security was broke! They lied. They refused to count the interest Social Security received on its treasury bills. The Trust Fund had a $78 billion surplus that year, if you count the interst it was earning.

Thank you President Reagan! One should suggest, perhaps, that this retirement program should be called the “FDR/Ronald Reagan Social Security Trust Fund.” That would be appropriate.

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