Archive for February, 2013

Who owns the Federal Government? Hint. It’s not the voters.

Think about this. The Federal Reserve bails out rich investors even as these investors are sucking the middle class financially dry. See Breakdown of the $26 Trillion the Federal Reserve Handed Out to Save Incompetent, but Rich Investors. Also, the Federal government has gone out of its way to bail out the one percent, while the rest of America wilts.


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Wall Street Senator Orrin Hatch and three other senatorial conspirators are launching another military style campaign to redistribute income from the 99 to the 1 percent. These leisure class warrior have proposed letting more and more high tech workers into the USA via the H1B visa. Their reasoning, regardless of the lies they tell us, is simple. Flood the market with workers, the supply of workers will exceed the demand, wages and salaries of those workers will drop, and the difference between the old wages and the new goes into the pockets of the 1 percent via higher dividends, share prices and soaring earnings.

These senators tell us there is a shortage of high tech workers in the USA and that we’ll be able to attract the best and the brightest in the world. These are lies. First of all, don’t assume that your well-being is dependent on US corporations getting these workers. There’s no connection, no livability symbiosis, between the health of publicly traded corporations and members of the 99 percent. Just look at the second great lie of these senators; There is no shortage of high tech workers in the US, but there is high unemployment among them, partially due to the H1B visa. The reality is that the biggest users of H1B visas are “all in the business of outsourcing and offshoring high-tech American jobs. Many of the jobs that went to H-1B workers should have instead gone to U.S. workers, but employers are not required to recruit them before applying for an H-1B, and can even replace their U.S. workers with H-1Bs. The top 10 H-1B employers were granted an astonishing 40,170 visas; nearly half the total annual quota. The table also shows each firm’s immigration yield: the ratio of permanent residence applications to new H-1B petitions for these companies. It is evidence of the companies’ intention to hire and keep their H-1B workers in the country permanently.

There are two reasons these firms hire H-1Bs instead of Americans: 1) an H-1B worker can legally be paid less than a U.S. worker in the same occupation and locality; and 2) the H-1B worker learns the job and then rotates back to the home country and takes the work with him. That’s why the H-1B was dubbed the “Outsourcing Visa” by the former Commerce Minister of India, Kamal Nath.

Rather than keeping jobs from leaving our shores, the H-1B does the opposite, by facilitating offshoring and providing employers with cheap, temporary labor – while reducing job opportunities for American high-tech workers in the process. The I-Squared Act does nothing to protect against this, while vastly expanding the size of a deeply flawed program that accelerates the offshoring of American high-tech jobs and reduces America’s future capacity to innovate.”

That’s precisely what Senator Hatch, the least patriotic of Americans, wants and he knows it. He want’s to lower the wages and salaries of most American citizens. On behalf of his Wall Street masters, like a well trained attack dog ordered to take a bite out of middle America, Hatch is proposing offshoring and outsourcing US jobs on behalf of the 1 percent. This is another one of his many income redistribution plans that redistributes income from the 99 to the 1 percent.

Top 10 users of H-1B guest worker program are all offshore outsourcing firms -Economic Policy Institute

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The Chairman of the Federal Reserve looked mighty uncomfortable Tuesday being grilled by Sen. Elizabeth Warren (D-MA), a former Harvard professor and economics expert who posed one very blunt question to him that many Americans have been asking for years: “When are we going to get rid of too big to fail? Then Bernanke lied to her. As chairman of the Federal Reserve, Bernanke’s primary job is to make the world safe for investment banks and rich investors. So the Fed will always be there to bail out these dumb people from their own foolish investment decisions. Click on the title above to get the complete report…

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A recent poll by the Pew Research Center shows that 71 percent of the US public favors raising the federal minimum wage. Nineteen states already have higher minimum wages. Fifty percent of Republicans also support an increase, as opposed to 47 percent opposed.

Wall Street is also against raising it. That’s because when wages go up, share prices go down. That’s because higher wages can cut into corporate profits in the short term. In the long term, however, rising real wages increase demand, spur sales, push up profits and create jobs. Recent studies show raising the minimum wage has a small impact on unemployment, most likely because it increases the demand for goods and services.

According to a study by the Economic Policy Institute, “The multiple positive effects that would result from a higher minimum wage are clear: It would boost the earnings of working families hardest hit by the Great Recession, spur economic growth, and create about 100,000 net new jobs. In an economic climate in which wage increases for the most vulnerable workers are scarce, raising the minimum wage to $9.80 by July 1, 2014, is an opportunity that America’s working families cannot afford to lose.”

Despite the positive impacts of a raise, on behalf of Wall Street, House Republicans will vote in goose step against any increase, as will some corporate Democrats.

Conversely, when wages go down, share prices go up. That’s good if you’re a member of the 1 percent, but it’s bad for the economy and the 99 percent in the long term. When real wages go down, so does the demand for goods and services. In the long run, corporate profits cannot be constantly raised, which is something that must occur in the long term, otherwise, the Ponzi Scam known as Wall Street would collapse.

As demand goes down due to the massive redistribution of income from the 99 to the 1 percent legislatively undertaken over the last 32 years by the federal government, Wall Street has had to invent new investment instruments that redistribute income from the 99 to the 1 percent. In the past, this has included bonds backed by home mortgages and credit default swaps, neither of which has been good for the economy.

So overall, an increase in the federal minimum wage will be a good thing (however tiny) for the vast majority of Americans, as well as for the economy. They’ll have more money to spend. Better yet, CEO’s and rich shareholders will possess less money with which to purchase politicians.

Click below for related links.

Study from the Economic Policy Institute

One study on the impact of raising the minimum wages

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Did Walt Whitman Say It Best?

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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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Paul Ryan Care

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