The Red Zone

Even the most casual observer today, whether they be from the inner city streets or on up to the top corporate executive--and everyone in-between--can diagnose the current tension surrounding the Capitol, Wall Street and Main, as deriving from one, central issue: TAXES! It's something that affects us all, but especially over the past decade when misguided policies have made clear the link between issues of taxation and budgeting to that of our national, and even our personal, wealth. Whether we should tax more, or less... what to cut, and what to fund... are the current issues of the day. Everyone able to add and subtract can read the writing on the wall, and it clearly says: 'anyway you dice it, cuts need to be made across the board to make up for the excessive spending that has been happening since 2001.' 2001, of course, was when Bush instituted his now all too known tax cuts, benefiting a segment of the nation's population who least needed those credits that, as of last year, have totaled: $1.3 trillion.

Of course, if you think back to where you were when this happened, and what was being talked about at that time, you'll remember the debate of that day mainly focused on such issues as 9/11, the Jihadists, Anti-American sentiment, and our foreign policy, etc.. Bush effectively--and strategically--used the veil of 9/11 to redistribute the federal budget surplus of $127 billion amongst the wealthiest of Americans, with little notice or fanfare. As Federal revenues plunged, this coincided with an exponential increase in spending that has today created the situation at the top of this post....
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When former President Clinton left office to then incoming President Bush, The Congressional Budget Office had projected that by the end of the decade (last year in our time, of course) we would have not only paid off the entire national debt, but we also would have had a $2 trillion surplus... instead, what we have (as of this writing) is a $15 trillion public debt--and the difference between those two numbers is mainly due to the Republicans giving tax cuts to the rich, raising two wars, and providing prescription drugs for seniors and putting it all on the layaway plan before bailing on the check.

Until Bush, never in our nation's history has any president raised any war without commensurately raising taxes. Today, both Iraq and Afghanistan each cost $5 to $7 billion a month--multiply that by the number of months that we have had a military presence in each country, and then multiply that by two, to account for each theater of war, and you arrive somewhere near the current total , which has remained on the layaway plan ever since their signings as police actions (that's right, they are not wars per se, or at least they are not on paper).
 
And then there's the anomaly of Medicare Part D, which has been called by the
former U.S. Comptroller, General David Walker 'the most fiscally irresponsible piece of legislation since the 1960s.'" It never made sense to anyone as to why the "fiscally conservative" Republicans went so all out to provide free drugs for seniors, especially when it was added to what at that time amounted to the largest national deficit of $475 billion, in 2003. A lot of observers have surmised that this was a political maneuver to shore up votes among seniors ahead of Bush's reelection, who, according to the 2003 polls, was headed to defeat in the 2004 presidential elections. Today, Medicare Part D is projected to consume 100% of the Federal Budget by the year 2050 if its current spending remains unadjusted.

Keeping on that theme, Bush continued to use--what I like to call--"restructuring of entitlements" to solicit to another voting block, the general electorate. The Bush Tax Cuts were pandered to the American public by Bush himself as he said such things like, "enough's enough folks, it's time to give our folks some tax relief in America..." and "...we always have to remember who's money it is we are talking about, it's not the Government's money, it's the people's money!.."1 Although this policy mostly provided tax relief to the highest income earners, it still garnered significant popularity and votes for the Bush administration by segments of the populace who were the furthest from receiving those Government returns.
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Former President Ronald Reagan established the modern Republican brand when he signed a series of significant tax cuts that were this Country's largest at that time since World War II. However, unlike Bush, he was a realist; so when a deficit grew from the disparity between the revenue to expenditure created by his cuts, he reversed his position by signing one of the largest peace time tax rate increases since the depression.

Again, however, history repeated itself with Bush the 1st when he too tried to not only remain consistent with his campaign promise of no new taxes, but when he also attempted to push through large tax cuts. When deficits were spawned from those cuts, he also reversed himself and reset the tax code for even higher increases. Moreover, Bush the 1st also instituted the pay as you go scheme, which created the budget surplus that everyone mistakenly attributes to Clinton. Unfortunately, as the pay as you go policy expired in 2001, when his son came into office, it allowed the Government to spend more than it took in, giving Bush the 2nd the opening he needed to redistribute the nation's surplus to its top earners.
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Because of avaricious consumption, it seems as though every sector of society panders to the Government for everything from corporate welfare, Fannie Mae and Freddie Mac to Social Security and Medicare. Yet at the same time, as each of us benefits from the Government in our own way, we all want to lower taxes, and cut spending, so long as what we get from the Government is not cut too, God forbid!

Americans by a 2 to 1 margin want more money to be spent on healthcare. Moreover, 62% of tea party members say that they want social security and medicare, and that those programs are worth the cost, while more than 90% of them also say that Government needs to drastically cut spending and be reduced altogether. 

There's a disconnect in America between revenues and expenditures, and it is one of the main reasons why our Country is in the hole that it's in. However, to get out of it is to put to challenge the very basic notion of what defines the average American: consumption. Our success in surmounting the above deficit is contingent upon how much we can reign in on our consumeristic appetite for more... and more. It will take a huge psychological adjustment on not only the part of our legislature, but on our collective conscious; for as long as we continue operating within the same mindset, the deficit will continue to grow, because it is by deference to foreign countries through borrowing that we can maintain our conflicting and irreconcilable appetites for lower taxes and more services. Unfortunately, it's an unsustainable system, because one day, we will have no willing buyers amongst our most trusted consumers of the U.S. Bonds being bought by Japan, China, and Saudi Arabia, and which has been the only thing keeping the Federal Government going. No one ever imagined that it could happen to Germany, but it just has... and now, it is only a matter of time until it happens to us--that is, if nothing changes.

1George W. Bush at the "Tax relief of America" signing, 2001.

Why Bill Clinton Sucks!

Here's the top ten... but for a summary of his lackluster performance as C- president, check this out--> link!

1) Rwandan Genocide (850,000 people died because of his retarded African policy, starting from Black Hawk Down!)
2) The repeal of the Glass Steagal Act (allowed banks to become too big to fail)
3) De-regulation of Wall Street, vis-à-vis, the Futures Commodities and Modernization Act
4) The gagging of Brooksley Borne of the CFTC
5) The Community Reinvestment Act
6) The continuation of the Reagan economy! How you ask?... keeping the Federal Reserve intact with such douches as, yours truly, Alan Greenspan... and the rest of the Goldman Sachs gang.
7) ...speaking of which, America's least wanted, number two (and this was Clinton's pick), Robert Rubin, US Secretary of The Federal Reserve.
8) Defense of Marriage Act (DOMA)
9) Don't ask don't tell
10) The common fallacy of "Correlation does not imply causation" that people always seem to make in sizing up his presidency... or, in other words, the mass delusion amongst just about every liberal who thinks that the good economy we had during Clinton had to do with him--please!... nothing could be further from the truth!

Bottom line, Clinton sucks!... and 2008 proved it!... but, then again, 2008 also proved that George W. Bush sucked--not that we needed any more confirmation on the matter... but more on W later.

Why I am Not A Republican

My long time friend Mike implored me the other night as to whether I believed that cash in our pockets was money that could be put to better use than if it were in the Government's... and although I wanted to say a lot, I hesitated looking for the right answer, because unlike the sound bites of the media, it needed an answer that was as deep as the economic hole we are in... so Mike, here is my answer, taken from an email to you, copied and pasted here for others to give their two cents....
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Mike,

Hope you are well.

Just wondering about your feedback here to something you raised, so please read when you have a chance.... because I would really like to hear your response... (if you have one).

You asked me whether I agreed that money is better in our hands than in the Government's. Basically, you were asking the tea party question of did I like higher taxes, and to that, I really do not mind paying a few more bucks in taxes because for what I get from that money goes a longer way than when it just sits in my savings account, depreciating, or on whatever uselessness I seem to spend my money on whenever I have more to burn. The people who are most against such tax hikes are those who have more cash... "the job creaters." When there's a tax hike, they feel it, because taxes are like interest, the more cash you have, the more it affects you, whereas if you do not have as much cash, it is negligible. The old, and now debunked, argument (that you cannot argue against Mike because the job numbers don't lie) is that giving rich people tax cuts have not trickled down... and have not created jobs. Since the Bush tax cuts (2001 was it?), we've lost a tremendous amount of jobs... Obama, by the way, came into office right after Bush at a time when 3 quarters of a million jobs were being lost a month!. The so called "job creaters" did what with their money except give themselves large bonuses? They sure did not, and have not, and are not creating jobs.

Government can be improved, as with anything, but it is not the bogey man the tea party makes it out to be. The taxes we have paid to the Government have created the internet I am using to send you this email, and has had a tremendous commercial application; IBM / Apple / Facebook / Google--countless companies and countless jobs that have been created from a Government project, with Government money that went to fund the D.A.R.P.A. program which spawned the internet--GPS--sequencing of the human genome, which, I found out from my company is a huge success, and which is why I have a job at all. Although the typical tea partier would today oppose the $300 or so million for initial program funding of the research associated with the sequencing, it is today estimated to have contributed 100s of billions (and counting) to our economy--not to mention priceless medical discoveries that are allowing us to live better, healthier lives. And how about clean-up of the gulf oil spill?... And why Government oversight /regulation such as through imposing building codes, for example, leaves a country like Chili well intact after their 2010 earthquake, with little damage and loss of life as when compared to Haiti--a country with no such Government code enforcement / oversight, that was devastated by an earthquake that was 100s of times smaller than the one that hit Chile... but don't ask a tea partier if we should spend money on such things, because it would get cut, right? Now, that kind of spending, versus me buying new Nikes, booze, or apps for my phone is much more meaningful. Of course consumer spending accounts for 70% of the American economy, and 20 - 25% of world GDP, but that is mainly the typical American consumer we are talking about.. not the few people at the top. The American consumer is the reason why the guys at the top are even there in the first place... because the guy at the top has so many people below him, the army of American consumers, with disposable income buying his products and services he makes money. Without the consumer, there is no profit; without profit, there is no guy at the top... there is no business... and there is no job! And so it goes. Bottom line, I can afford a few more dollars in taxes, I don't care... to be honest, I probably would not even notice. I'd probably just loose that money on the slots at Vegas or at the bar here meandering through a boring night... and the guy at the top, although not seeing how having to get hit with higher taxes actually positively affects him, should not mind it either. This whole argument over big Government might in some instances be true, but really it is mainly based on self interested motives. People just don't want to pay more taxes... that's all it is. The sad thing about it though is that everyone benefits from those taxes, even the people at the top (if not through the consumers adding to his bottom line, then with Government infrastructure that allows him to even have and operate his business in the first place).

The fact is, I got through college with the help of the Pell Grant and other Government programs. If I did not have those programs to help me, I would have most likely not have been able to attend, and let a lone graduate college. And if there was a way, but just harder, then it would have taken longer for me to get to working, and cost more (i.e. interest + time = more money on the loan). But, regardless, because the Government put up some few pennies from its spending in my direction, I am now making many, many, many more times the wages than without my degree. Now, instead of McDonald's, or some other remedial job, I work at a biotech making good money. Now, the Government not only gets back what money they put up for me in getting this degree (through taxes), but for the rest of my life, they are also due to get it back ten to one hundred fold over what would have been if they did not invest in me. Not only that!.. but now I have more money to spend that will appear on the earnings reports of the guys on top. NOT ONLY THAT!!! but now, I, as well as others like me, are in better positions to be the job creaters ourselves than the guys at the top who do not deserve another excuse to avoid paying their fare share!... which, more than me, they can afford.

Hope that answers your question...

Kind regards,
Mike