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Posts Tagged ‘federal deficit’


President Donald Trump has proposed tax cuts for the rich and corporations, which is another way of saying Trump wants tax cuts for the rich and then more tax cuts for the rich. In other words, the person who will most likely benefit from the Donald Trump tax cuts is billionaire Donald Trump. The 99 percent will get virtually nothing. In other words, Trump’s tax plan is designed to create greater income and wealth inequality in a nation that already has the most income and wealth inequality among the industrialized nations.

You will note in the video above, while they make some good points about Trump’s tax cuts for the rich, the folks at MSNBC fail to mention growing income and wealth inequality because the Wall Street controlled Democratic leadership doesn’t want its station MSNBC to mention it any more than the billionaires who control the Republican Party want their news outlets to mention it. Currently, the rich steal anywhere from 24 to 38 percent of all income produced in the United States, compared to 8 percent in 1980. In addition, the richest 10 percent of Americans own more wealth than the bottom 90 percent, a historic and still growing record.

As corporations get tax cuts, much of those tax savings will go to the rich via higher corporate profits, rising dividends, and surging stock prices. The rest of us will suffer the consequences. In addition, of course, corporations will have more money to invest, supposedly to create jobs, as if giving corporations tax cuts will magically increase consumer demand. That’s not likely. So what will they invest in?

Historically, US corporations buy other corporations, especially rivals, when they receive tax cuts or higher profits. This, of course, creates redundancies in a variety of job areas, such as accounting and computer technicians. When mergers occur, employees are the first thing to go in order to eliminate those redundancies. Of course, to help pay for these mergers, income will be redistributed from those who work for a living to the idle rich as US jobs are exported to low-wage nations and the difference between the higher paying US jobs and the new lower wage jobs in China, India and elsewhere will fuel corporate profits, and push up dividends and share prices. This fuels the bank portfolios of the rich, and this obviously creates greater income inequality. That’s what those free trade treaties have been negotiated to do, and Democrats, like Wall Street Senator Ron Wyden, are not stupid little boys and girls who are ignorant of this fact.

This is one of the reasons why there is not a shred of evidence that supply-side economics, otherwise known as tax cuts for the rich, has ever created a single job, but there is plenty of evidence tax cuts for the rich and corporations have destroyed US jobs. Under President George W. Bush, tax cuts were enacted for the rich, making certain that the growth in jobs and real wages were negative, the only time in US history that has occurred under a single president since Republican Herbert Hoover.

Naturally, there are other things the Republicans are refusing to mention.

Gary Markstein / Creators Syndicate

There will be an increased federal deficit of $2.5 trillion, which is typical under irresponsible Republican administrations and Congress, just like the Reagan years, and the other twelve years under the Bush presidents. Naturally, cutbacks in federal spending will be proposed.

Republicans and some Democrats will insist the US is not spending a sufficient number of dollars on its military, so that will not be subject to reductions. The US spends more on the military than the next 25 nations combined, 24 of whom are US allies, but clearly, that’s insufficient because US military spending is quite profitable. However, social security, Medicare, Medicaid, and other less profitable programs that help the politically powerless will be on the table for cuts if Trump’s tax cuts for the rich sails through Congress.

The rich, of course, have stolen just about all real income and wealth increases over the last thirty-five years, thanks to their financial abilities to corrupt both major political parties and the federal government in the process. Naturally, their dirty money has also corrupted most state and city governments. So, obviously, the financial and political deck is completely stacked against the 99 percent.

Luckily, the Democrats in the US Senate will object to this irresponsible behavior because the billionaires of Wall Street who control the party will object to it. That’s the only reason why Democratic senators like Ron Wyden will likely oppose the legislation. Even some Republicans may oppose Trump’s tax plan because it is completely against the national interest, that is if one assumes the citizens of the United States who make up 99 percent of the population are a part of that national interest.

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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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Many thanks to Jack Kelle for producing this visual.

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Bernie and the Deficit

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Why Do We Borrow Money from China?

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“The health of the US economy is set to dominate the second day of the Democratic convention in Charlotte, North Carolina Wednesday, offering a rejoinder to Republican attacks over President Barack Obama’s economic management.”

The Dems aren’t likely to boast much about the state of the economy, since it is still sliding toward a complete economic collapse, albeit more slowly than when Obama took office, thanks to Republican economic policies. The collapse will likely occur just a few more years down the road.

That’s because the 1 percent is reaping almost all of the benefits of economic growth by using their cronies in the Democratic and Republican parties to pass federal and state legislation that redistributes income from working folks to the rich. That’s the game plan of both parties. The rich are their masters.

Nonetheless it’s interesting to look a “side-by-side comparison of Obama and Mitt Romney’s plans to reduce 8.3 percent unemployment, speed up lackluster 1.7 percent growth and tackle the $16 trillion national debt.” None of the plans deals with real issues, which is why both schemes continue to redistribute income from the bottom to the top. Wall Street Obama’s so-called plan seems to be to steal income from the 99 percent and give it to the 1 percent more slowly than Wall Street Mitt the Twit’s scam. Click the link below for the comparison.

Comparing the Economic Scams of Obama and Mitt the Twit — Rawstory.com

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