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Posts Tagged ‘Cato Institute’

The corporate news pounced on the latest report issued by the Board of Trustees of the Social Security Trust Fund. CNBC News interviewed Michael Tanner of the Koch Brothers funded Cato Institute. Tanner was dumb enough or dishonest enough to say, “Every bond redeemed from the Social Security Trust Fund has to come out of the general revenue, so we’re actually increasing the federal deficit in order to pay off social security.” What a lie, and in many ways.

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The Social Security Trust Fund has a $2.6 trillion surplus. The Trust Fund purchased US Treasury bonds and collects about $160 billion in interest a year. Bonds are loans. The US government borrowed the $2.6 trillion from the Trust Fund, and it will soon be time to pay that money back to the Trust Fund. That will not add to the deficit at all since the Trust Fund did not need to invest in the bonds, but it was a prudent thing to do to collect the interest. But lets get to Tanner’s lie; the US government issues and sells new bonds to pay for any bonds coming due. Only interest is paid from the general funds unless there is a budget surplus that allows for paying down the total deficit. The folks at CNBC News made certain not to question Tanner’s lie. That’s because they want to keep us ignorant.

Second, the Chinese government has trillions of dollars invested in US treasury bonds, as does Wall Street. When the US treasury bonds held by the Chinese or Goldman Sachs, or US hedge funds come due, nobody says that by paying its debt, the US government is adding to the deficit. Why is a different standard applied to Wall Street and Chinese investors on the one hand, and the Social Security Trust Fund on the other hand? The answer, of course, is CNBC wants to keep us ignorant. The Social Security Trust Fund has not contributed a penny to the US deficit, but they don’t want us to know that.

The Trustee report mentioned the coming of a deficit for the Trust Fund in 2034, which will result in payment reductions for retirees of approximately 16 percent, unless something is done to plug the gap. Ethan Wolff-Mann, reporting for Yahoo News, claimed “A root cause for the financial woes for Medicare and Social Security is the aging baby boomer population.”

That’s another lie meant to distract you from reality. Tens of millions of US jobs that paid into the social security trust fund have been exported to low wage nations such as China. The difference between the old US wages and the new Chinese, Vietnamese, Pakistani, and Mexican wages have all gone into the pockets of the rich via higher corporate earnings, rising dividends, and surging share prices. Capital gains from the sale of assets (such as corporate stocks and bonds), and dividends are exempt from social security taxation. The rich, in other words, are not paying social security taxes on the trillions of dollars they have stolen from the rest of us. That’s why there is an impending deficit in the Trust Fund.

So the easiest way, and morally Jesus Christ way, to offset these government policies that have stolen from the Trust Fund is to have a graduated Social Security tax on dividends, as well as on capital gains derived from the sale of stocks and bonds. Of course, a Social Security tax on stock and bond transactions could also achieve the desired effect.

In either case, or in both cases should they be legislatively enacted, the Social Security Trust Fund would be solvent into infinity and most likely a significant raise can be provided to beneficiaries, which would then strengthen the US economy by increasing the demand for goods and services.

Steve Ruis has pointed out, “Note that the SS Trust Fund didn’t choose to buy US Treasuries, it is required to invest all excess funds in US Treasuries by an act of Congress! Some critics have referred to those treasuries as “worthless paper” when trying to undermine the SS system. Amazing!”

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The average US household pays $6,000 a year in subsidies to big business, which is pretty much the same thing as saying the families of the 99 percent are paying $6,000 a year in subsidies to the families of the 1 percent. Pretty much, and not quite, but close enough.

$6,000 in subsidies? It’s also an understatement.

The Cato Institute estimates the US federal government spends $100 billion a year on corporate welfare. That’s an average of $870 for each one of America’s 115 million families.

The International Monetary Fund (IMF) reports US oil subsidies of $502 billion. That’s almost $4,400 per US family by taking into account “the effects of energy consumption on global warming [and] on public health through the adverse effects on local pollution.”

Of course, the Cato Institute didn’t consider war, such as US military expenditures, as well as US mercenaries. Remember, at the height of the occupation of Iraq, when the fighting was the worst, the US employed more mercenaries than it had military personnel in that nation. Those guys were a ton more expensive than US GI’s. At the low end of the pay scale, they cost about $120,000 per. That shows how much money privatization costs, rather than saves the US government since the yearly cost of a GI hovers around $45,000 a year.

As for other subsidies, a New York Times investigation revealed that $696 per family went for business incentives at the state, county and city levels. There is also $722 per family for interest rate subsidies for banks, $350 for retirement fund bank fees, $1,268 for overpriced medications, $870 for corporate tax subsidies, and $1,231 for revenue losses from corporate tax havens, such as the Caymen Islands.

Every family below the 1 percent is paying about $6,000 a year to help corporations push their profits to record levels, year after year, during a time when the middle class can hardly afford these subsidies. This has raised stock prices to record levels, along with dividend payments to the 1 percent. This is called an income redistribution scam, or rather, a series of them. These scams only exist because of the massive corruption of government at all levels in the US, through massive infusions of cash.

Check out the link below for more on the story.

Average American Family Pays $6,000 A Year in Subsidies to Big Business-BIll Moyers.com

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