The Weiner Component V.2 #19 – The Trump Budget

Not too long ago President Trump came out with his proposed budget for the year 2018.  It was heavy with a ten percent increase for the military, had draconian cuts for Social Services cutting some programs and illuminating a large number of others.  It also cut out programs for the arts and for scientific research.  It contained what Trump calls Tax Reform.  This is actually a massive cut for the top Two percent of earners and large corporation decreases in taxes.

 

Looking at his Cabinet the indication is that Trump wants a government of the rich, by the rich, and for the rich.  The groups really harmed by his proposal would be the poor who are totally dependent upon the Federal Government for numerous services and the elderly living upon a fixed income like Social Security or a set retirement that decreases year by year as prices slowly rise due to inflation or otherwise.  Their medical insurance would rise significantly but their coverage or protection by the state would decrease significantly.

 

One can suppose a rapid rise in their death rate of the elderly would benefit the government as their producing days are over and they are only consuming.

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In a recent article on the internet a staunch conservative congratulated President Trump for his stance on the budget but then stated that he did not go far enough.  He apparently felt that Trump’s proposed massive cuts to the United States social programs would still be costing too much money.

 

Trump’s Treasury Secretary, Steven T. Mnuchin, was originally a Wall Street financier.  According to his and several other people who are involved in finance and working for Trump have stated and may well believe that following Trump’s budget will raise the Gross Domestic Product (GDP) to 3%.  It was .075 in 2015.

 

These people come from the world of finance.  They are not economists.  To many economists this is wishful thinking nonsense; it’s not about to happen.  In fact with all the Trump cuts, increases in spending, and lowering of taxes for the wealthy the deficit will increase considerably in 2017 and 2018.  Thus significantly upping the National Debt which is currently 19 trillion plus dollars.

 

The National Debt is currently approaching 20 trillion dollars but what it actually is is misunderstood by most people in the country.  Most people consider that this is money owed to countries like China and Japan for the uneven trade that goes on with them.  But this is only partly true.

 

The National Debt consists of two parts: one public and one private.  The public part is the money that the government owns.  It is money that it has lent itself.  The question here is can an entity owe itself money?  In terms of the Federal Government obviously it can.  Several times a year the Federal Reserve transfers billions of dollar in interest to the Treasury.

 

Entities within the government transfer their surplus funds to the general fund.  The government then gives them credit for the transferred funds.  The largest entity to do this is Social Security.  In the 1980s, when Ronald Reagan was President, Social Security was in trouble.  It could conceivably run out of money in the near future.  Congress raised the amounts paid into Social Security by both the individuals and their employers.  And in 1989 Medicare was separated from Social Security.  Additional separate amounts were paid into it by both employers and employees from then on.  Also at this time people who did not pay into Social Security could make payments into Medicare and have it when they retired.

 

From that time on Social Security has had a relatively large surplus.  It is today the largest debt holder of part of the National Debt.  Interestingly Al Gore, when he ran against George W. Bush, has as part of his platform, a lockbox, which would have been banking surplus Social Security funds rather than putting them into the General Fund and spending them.  However with George W. Bush as President the surplus went into the General Fund and was spent.

 

China, Japan and other nations have many individuals and companies within their countries that hold U.S. Government loan papers.  That and loan bonds held by individuals within the United States and other countries would make up the privately held National Debt.

 

The Federal Reserve admits to owning about 50% of the National Debt.  I would estimate it to be more like 60% to 70% of the actual National Debt.

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The FED sells these bonds continually, increasing or decreasing the amount of currency in circulation.  Money is not only cash; it is also credit and debit cards and checks.  The FED regulates the amount of currency in order to control value and limit inflation.  Too much money in circulation decreases the value of the money and too little money being available creates deflation.  The FED has to maintain a balance between the amount of money in circulation and the population of the country.

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In the minds of most people money is an object of value.  It allows people to have what they need and want.  In fact for most of its history money itself was an object of value acceptable all over the world.  Eventually the amount of gold and silver, which was money in the form of coins, was insufficient in terms of all the business that went on in a country.  There wasn’t enough gold and silver available to conduct the necessary business for the country to function properly.  As a result of this the government of each individual nation withdrew the precious metal and began printing its own currency which functioned within its borders..

 

This began at about the first third of the 20th Century and has continued since then.  Money today in the U.S. is a Federal Reserve Note.  It has no real intrinsic value.  It is merely a means of exchange for goods or services.

 

Adam Smith in 1776 published “An Inquiry into the Wealth of Nations.” In this work, which was strongly influenced by French economists called the physiocrats, Smith developed the basis of the modern capitalistic economics.  The true wealth of a nation is what it produces; its goods and services.  These are it Gross Domestic Product.  They are defined as all the goods and services the nation produces in terms of dollars and cents within a given period of time, a fiscal year.

 

This brings us to the basic concept.  What is the actual wealth of a nation?  Today the United States is the wealthiest nation that has ever existed.  Yet according to our current President we cannot afford to take care of our overall population.  I sometimes think that all modern day Republicans would be much happier if they had lived hundreds of years ago when every individual was responsible for himself and for his family and government merely existed to protect him from foreign invasion.  Looking back historically I wonder if such a time ever really existed.

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By following Trump’s budget the government will massively reduce its spending.  The military will have much more to spend.  Trump has indicated that he will massively increase U.S. presence and involvement in the Middle East.  Much of the military funding will be spent overseas and a large percentage of the tax decrease will go to the upper two percent of the population.  They have not noticeably increased their expenditures when their incomes have increased in the past and the probability is that they will not do so in the present.

 

What will happen with his tax cut, if it comes into existence, is that there will be far less money available in the economy for the purchase of goods and services.  The probability is that because of a lack of funds less money will be spent and less goods and services demanded.  The GDP will actually decrease and it could achieve 0 growth or possibly .01% actual growth or even hit a minus figure,

 

There is also the fact that there is a velocity to money spent in the National Cash Flow.  Money when spent is usually spent three to twelve times.  For example a person shops in a supermarket.  He or she spends twenty dollars.  That money may be used to pay the salary of an employee.  The employee spends that money on dinner in a restaurant.  It can again pay an employee’s salary.  The money keeps getting spent until it becomes part of the Natural Cash Flow that can be three to twelve times.  The $20 can generate $60 to $240 worth of increased productivity.  Conversely if the money is not spent that amount of productivity is cut from the GDP.  All of Trump’s cuts will subtract trillions of dollars from the economy.

 

In addition to bringing a tremendous amount of misery Trump could also bring about a tremendous recession of depression.  We are still working our way out of the Great Recession of 2008.  Trump also wants to get rid of the laws that were passed to avoid that situation from ever occurring again.  Concievably the country could be brought back to the point we had reached in 2008 that almost brought the nation to a worse situation than occurred in 1929, with the Great Depression, which was also brought about by a Republican run government,.  This can be done by following what today could be called Trumponomics.

The Weiner Component #110 – Killing of Two Policemen: The Price of a Human Life

Most of the news media have recently wrapped up examining the murder of two policemen last year on the morning of December 21st   in Brooklyn. No one considers this act lightly but former mayor Of New York City, Rudy Giuliani and Patrick Lynch, current president of the Patrolman’s Benevolent Association both stated that there was “blood on the hands” of demonstrators and elected officials who criticized police tactics. Apparently they saw the response to the killing of 18 year old unarmed Michael Brown and the suffocation Eric Garner, in addition to the constant killing of essentially black teenagers and young adults, as well as a twelve year old playing in a park near his home, as the cause of this murder.

I have a problem with these idiot comments by men like the two above who should know better but insist upon taking a simplistic and political approach to life, going ballistic over an unfortunate event and attempting to gain political points for themselves in the process.

The murder of the two police officers in Brooklyn, New York by a lone assailant, Ismaaiyl Brinsley, who happened to be a black man that had a history of mental illness and police arrests going back over a number of years; who after he shot the police officers ran a block to a subway station and there shot himself through the head. If we ask why he did it? The answer would put him on a level with Giuliani and Lynch except that his reasoning was dark and irrational while the other two thinking would be aimed at political gain for themselves.

There is a protest movement going on in the United States about the killing of unarmed young black males by police and others. This currently seems to be at least a weekly event, if not more often, and in practically all cases is ruled, generally by a Grand Jury or District Attorney, as justifiable homicide. Strangely, in a society that is mostly white, I don’t find any cases of young white males or Caucasian children, while playing with toy guns, being shot by officials or others justifiably when unarmed. Something seems to be out of kilter.

The protest movement temporarily quieted down while the memorial and funeral for these two police officers was taking place. Meanwhile a number of policemen are going ballistic in frustration denouncing anyone who refused to absolutely blame the protest movement and any liberals like the President and Attorney General for this heinous crime. One of the leading Fox commentators, who likes to make God-like comments which have no basis in reality, Bill Reilly, has called upon the major of New York City, Bill de Blasio, to resign. I’m surprised he didn’t call upon the President and Attorney General to do likewise.

None of these officials or the police seems to be concerned with the endless number of deaths of unarmed black men caused in many cases by armed policemen. They don’t seem to matter compared to two murdered police officers.

In Milwaukee a policeman who killed an black man in a confrontation  on April 30, 2014 will not have to face charges. The District Attorney called the case “justified self-defense.” The police officer, Christopher Manney, encountered the black man while he was sleeping in a park. He patted him down. The man, Dontre Hamilton, awoke. A physical encounter occurred. Hamilton got hold of Manney’s baton and began beating the officer with it. Manney fired 14 times killing Hamilton with shots to the chest. Hamilton was 31 years old; his family stated that he suffered from mental illness. The police officer was later fired for treating Hamilton as a criminal when he had known he had mental problems.

The issue that emerges here is firing 14 bullets. One shot should have been sufficient to stop him. Firing 14 times indicates a man who has lost control of himself and is blindly responding. In Ferguson the police officer fired even more shots at the18 year old, unarmed Michael Brown. Before the Grand Jury the police officer spoke of seeing the teenager at a living demon. The issue here is: Who hires these people? They seem to have a secret fear of all black males. They certainly don’t have enough emotional stability to be police officers. Isn’t there or shouldn’t there be a battery of tests, written and otherwise, that can at least determine if the individual is stable enough to be a police officer.

The issue here deals with the value of a human life, of all human beings. Are the police officers lives worth that much more than the black youngsters that are killed? Is the implication in the United States that white lives are very valuable but black ones are almost without any real value? What is happening throughout the country would seem to indicate this. And if this is true it is a definite breach of the Constitution which states that all men are equal. The whole system of values seems to be out of kilter.

A human life is a wondrous thing. Each and every individual has a potential for some great achievements, if only within his family. To deprive anyone of his life goes against what this country stands for. Even the perpetrators who are taking these lives diminish themselves in the process. Whatever they feel they are accomplishing they are actually diminished by their act of mayhem, be it legally justified or not.

In the case of the two police officers who were virtually ambushed the question that comes up is: How did the shooter get hold of a gun? To my knowledge no one has asked this question. The man had a criminal record and was mentally disturbed.  By what process could he legally or otherwise acquire a pistol?

I understand that the National Rifle Association, with its influence in Congress and the state legislatures, scores every lawmaker continually on his position toward guns, their sale and use, and will financially support those who favor their position with contributions. I also understand that they are against gun checks of persons securing weapons as, I imagine, this would lessen the amount of pistols and ammunition sold. To what extent are they responsible for the current gun culture in the United States? There are more concealed weapons being carried around today than there were in the wildest days of the wild-west in this country.

Are guns so easy to acquire on the East Coast of the United States that anyone, regardless of his background, can get one at will?  Has the NRA been successful in making the laws so inept that anyone can easily and legally acquire a pistol?  There’s certainly something wrong with the laws on the East Coast of the United States when a crazy with a history of mental illness and a criminal record can show up at his ex-girlfriend’s apartment and threaten to shoot himself and then shoot her the day before he goes to New York City and arbitrarily murders two policemen.

Just a few days ago a twenty-nine year old woman in Idaho was shot in the head in Walmart when her two year old son took her concealed pistol out of her handbag and fired it at his mother. I feel a great empathy for this baby who killed his mother; the act will haunt him from the time he reaches cognizance of what he had done to the end of his life.

If responsibility has to be placed at someone’s doorstep in these cases it should rest at the door of the NRA whose goal seems to be to put a weapon in the hands of everyone regardless of their mental state or their criminal history. Who is responsible for this outrage? Mostly the National Rifle Association and their continuing lobbying policies are. Unfortunately these episodes will play out otherwise.

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A tragic incident has occurred.  No one will question that.  Will we continue to have reenactments of these tragedies? Isn’t it time for legislation both on the state and federal levels to bring about sensible laws concerning gun culture in the United States for both the perpetrators of these tragedies and for their victims?

I am reminded of John Donne’s 17th Century poem which is as valid today as it was when it was first written.

No man is an island,

Entire of itself.

Each is a piece of the continent,

A part of the main.

If a clod is washed away by the sea,

Europe is less.

As well as if a promontory were.

As well as if a manor of thine own

Or of thine friends were.

Each man’s death diminishes me,

For I am involved in mankind.

Therefore, send not to know

For whom the bell tolls,

It tolls for thee.

Photograph taken at the Gay Pride Parade in Ne...

The Weiner Component #28 – Interpreting the Constitution: The Election of the President

Map of number of electoral votes by state afte...

In June of 1776, a year after the American Revolution started, Thomas Jefferson wrote the Declaration of Independence, which was adopted the following month on July 4th.  The Declaration defined the rights of man and demonstrated how the King of England had ignored these rights and forced the colonists to revolt.  The document was a democratic statement, designating that all people were equal and all people were given the rights of “life, liberty, and the pursuit of happiness.” 

 The war ended in November 1782 with the signing of the Treaty of Paris.  The new nation consisted of thirteen independent states loosely bound together under the Articles of Confederation in 1781.

 In 1786 the legislature of the government of Massachusetts in Boston, which was located along the highly populated coastal region of the state, passed a law taxing the inland farmers in order to raise money for the state’s expenses.  These farmers, who were largely under represented in the government, revolted and refused to pay the tax, arguing that if the Southern planters, who had been dependent upon English merchants before the Revolution could during and after the war refuse to pay their debts to these English merchants then why couldn’t they do the same thing and refuse to pay the taxes.  This was called Shay’s Rebellion, named after a Revolutionary War veteran, Daniel Shay. 

 George Washington called out a force of the National Guard and the revolt dissipated by the time the troops reached the area.  The fear of this possibility in the future brought about among property owners, who were the voters, a desire for a stronger central government.  In May of 1787 the Philadelphia Convention met.   Fifty-five delegates came representing twelve states.  They were conservative and moderately wealthy.  They wanted to create a strong government that would be able to protect their interests.

 In essence they believed in “life, liberty, and the protection of property.”  In order to do this they needed a government that was seemingly democratic without really being democratic.  They wrote, over the summer, a constitution that emphasized “life, liberty, and protection of property.

 This document was democratic in form, drawing its authority from the People in the country and establishing a government based upon direct representation in the House of Representatives where those elected would serve for a two-year period, a Senate that was elected by the legislatures of the individual states for a period of six years, and a President who was indirectly elected by the people for a period of four years.  The powers of the President were vague, while the powers of Congress were specifically enumerated.  The only individuals directly elected by the People were the members of The House of Representatives; everyone else was indirectly elected. 

 Some of the states had a Bill of Rights in their own Constitutions and they wanted one added to the National Constitution.  This was promised and shortly after ratification James Madison wrote twelve measures of which ten were passed by three quarters of the states.  These became the Bill of Rights.

 There was no mention of political parties in the document.  Nor had most of the founders envisioned them; but Alexander Hamilton initially created the Federalist Party and was its first head; and through it the electors from the twelve states choose George Washington as the first President of the United States.

.Before the first election could be held a census of the population had to be taken.  The number of Representatives in each state for the House of Representatives had to be determined by population.  Each state was then divided into representative districts.  From these there were elections for each member of the House and also elections for electors who would choose the President.  It was a known that George Washington would be the first President.  Each state, regardless of population, would have their legislature choose two Senators, who would represent the interests of the particular state.  The President, with advice and consent from the Senate, would choose the members of the Supreme Court.

 The voting franchise or who could vote was/is determined by both federal and state law.  The initial voters were male property owners, which limited the number of people who had the franchise.  From 1812 on the property qualification was done away with; all white males qualified for the franchise.  It should be stated that from this time on virtually anyone could get property since the government sold its land for almost nothing.  By 1828, with the election of Andrew Jackson, most white males in the United States had the vote.   The Fourteenth Amendment in 1868 gave the vote to all males.  The Fifteenth Amendment in 1870 specifically gave the vote to non-white males.  In 1920 the Nineteenth Amendment gave women the vote.

 We have come a long way from the original intent of the founding fathers with our Constitution.  First, there are two basic interpretations of the reason for our government: (1) Life, Liberty, and the Pursuit of Happiness, and (2) Life, Liberty and the Protection of Property.  The first position represents the Democratic Party and the second one denotes the Republican Party.  The struggle between the two has existed throughout the history of the nation.  Do we need one or some of both positions?

 The other purpose has to do with elections, particularly the election of the President of the United States.  Should he continue to be chosen by the Electoral College or should it be directly by the majority of votes by the people of the United States? 

 In 1913 the Seventeenth Amendment changed the Constitution by bringing about the direct election of Senators by the people of the country.  There had been numerous abuses in the State Legislations dealing with the election of Senators.  This Amendment corrected that by having the people vote directly for the Senators.

 The President of the United States is still elected by the Electoral College.  The people vote for electors and the electors vote for the President.  There have been two instances where the men elected received the majority of electoral votes but did not get the majority of the popular vote.

 One was in 1876 where Samuel J. Tilden received the majority of the popular vote but was defeated by Rutherford B. Hayes who got the majority of votes from the Electoral College; Tilden got 184 electoral votes while Hayes received 185.  The other instance was in 2000 where Al Gore won the popular vote but George W. Bush gained the majority of the electoral votes; Gore had 50,999,857 popular votes and 271 electoral votes, Bush received 50,456,002 votes and 274 electoral votes.  In both cases the majority of the voters wills were thwarted.

 Would a reversal of these electoral decisions have made a significant difference?   Both of the winners were Republicans.  Hayes agreed to end Reconstruction if he was elected.  It’s from this time that “Jim Crow” began in the South.  It reached its peak in 1896 with the case of Plessey vs. Ferguson that established that “separate but equal was constitutional.”  This decision was not changed until 1954 in the case of Brown vs. the Topeka Board of Education where the Supreme Court reversed itself and declared that “separate but equal” was inherently unequal.

 If Tilden had become President would it have made a difference?  The answer is yes.  The integration of the former slave population would have been different.  How much more positive that difference would have been is not known; but the probability is that it would have been better for the entire country.

 In 2000 if Al Gore had been able to assume the presidency it is highly unlikely that the U.S. would have gotten involved in two wars after the 9/11/2001 attacks on the Twin Towers in New York City.  The Iraq Wa,r after “weapons of mass destruction” that did not exist, would never have happened; and thousands of Americans who died in that war would still be alive today.  Al Gore would never have had George W. Bush’s bellicose attitude and both economic and military conditions would be far less severe.  The National Debt would be considerably lower. 

 In the 2012 Presidential Election the Republican Party in a number of states, particularly those where they had a majority in state legislatures and governors, tried, with a measure of success, to limit democratic votes.  Isn’t it time for another Constitutional Amendment allowing the people to vote directly for the President of the United States?  Or do we have to wait for another massive mishap before we consider this proposition?  

 

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The Weiner Component #27 – Subsidies & Taxes: Is There a Difference?

End crop subsidies

In order for any government to function it must have some source of revenue that allows it to pay its expenses.  In addition, for a nation to grow, both during periods of peace and war, it must have a means of encouraging the development of new or fledgling industries.  A major method of doing this is through subsidies, which reduce taxes in specific areas of economic growth.  These are tax subsidies that are supposed to be used only when they are needed.  Once the fledgling industry can compete on a world-trading basis or can supply the needs of its-own country these subsidies are no longer needed and should be done away with.  Unfortunately that is not always the case.

During the early days of the United States the source of government income was mostly tariffs, a small tax on all goods being imported.  As the country grew so did its need for money to fund its operation and other things within the nation were taxed.  Eventually, with wars, beginning with the Civil War, individual gross income was taxed.  The Supreme Court eventually declared this income tax unconstitutional.  Early in 20th Century the Constitution was amended, Article XVI, legalizing the income tax.  It has existed ever since as one the main sources of revenue for the Federal Government and also for most of the state governments.

This tax, from its beginning was supposed to be a graduated tax; the amount people paid was to be based upon their ability to pay, the more one earned the greater the percent the individual paid.  Thus the amounts paid were based upon the individual or household’s ability to pay.

During the later part of the 20th Century taxable income, the income tax, was divided into two major categories, regular income and capital gain or active and passive income.  Active income was money directly earned by some form of employment; passive income was an increase in value of something, stock, property, art or anything increasing in value over a passage of time.  The object of this was to encourage the sale of the property or stock or whatever the item was, since it could only be taxed when it was exchanged for money.

Also with capital gain the increase in value had to be significant if it were to be sold, otherwise the profit would be eaten up by the amount of the tax.  Consequently capital gain was considered a reasonable extension of the income tax laws.  However over the years many accountants have been able to extend it to cover a goodly percentage of the upper echelon’s income and subsequently have considerably reduced the percentage of their earnings paid in taxes.  Someone like Mitt Romney pays fourteen percent or less of his million plus income while the ordinary citizen earning far less than one hundred thousand dollars a year will pay twenty to twenty-five percent of their income in these taxes.  There is now a move to reduce the capital gains tax and/or increase the tax base of anyone earning a million dollars or more a year.

On the other hand the Federal Government is and has been giving subsidies to many people and companies investing in green forms of power, saving or producing devices like those that make electricity or hot water from light.  These devices are usually installed on the roofs of homes or they can be money invested in electricity producing windmills that generate electricity or similar resource creating devices.  The individual’s benefit derived from this type of investment is not to decrease his overall taxable income by the amount spent on the device but a direct deduction from the money owed to the government.  If you owe fifteen thousand dollars in income taxes that year and the power-saving device cost ten thousand dollars to buy and install, then the tax owed is reduced to five thousand dollars.  If the cost of the device is greater than your taxes then you can carry the difference over to the next year.  It is a means of economically encouraging households “to go green” and inexpensively increase the amount of available resources for the country

In the case of businesses or corporations this encouragement is carried out by “subsidies.”  Subsidies according to Webster’s dictionary are “grants of money by a government to a private person or company to assist an enterprise advantageous to the public.”    Usually these grants are supposed to function as long as it is advantageous for the country to fund that entity.  This usually means allowing a fledgling company to grow large enough to become competitive with similar concerns from other nations or to allow forms of exploration that the concern cannot itself afford, such as drilling for oil in the Gulf of Mexico.  The oil subsidies, for example, were begun in the early 1940’s to allow for rapid exploration during World War II.  With some modifications and additions they are still going on today.  If the government were to stop or limit these subsidies in no way is it taxing these companies which today are making profits in the billions of dollars.

For practical reasons over the years many corporations were given innumerable subsidies, generally for very good reasons.  These subsidies are, in most cases, no longer practical, as currently most of these corporations are multi-profitable.  In point of fact many, like the oil interests, tend to use some of their subsidy money to hire lobbyists and for contributions to both political parties.  While this is not legally bribery, it comes awfully close to being both coercion and bribery.

The current argument in Washington between the Democratic and Republican Parties defines these subsidies as being taxes.  If they were cancelled, John Boehner has argued, it would be raising taxes on “the job creators.”

As we’ve seen the large corporations that get these subsidies use the money mainly to fund lobbyists and to make financial contributions to both parties in both Houses of Congress.  What they are mining is the American taxpayer who indirectly ends up paying their bills.  Isn’t it time we stopped subsidizing companies that are making many billions of dollars in profits.  Subsidies are not taxes and should not be treated as such.  Let’s have a more reasonable system of taxation!

 

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The Weiner Component #26 – Monetary Policy & The Real Estate Market

English: President Barack Obama confers with F...

According to an article on the first page of the Business Section in the Sunday, February 17, 2013 issue of the L.A. Times there is now a shortage of residences available in the Inland Empire housing market, the epicenter of the Southern California housing crash.  There was earlier a profusion of foreclosed housing available there, many more than there were people available to occupy them.  The paper’s position is that “there is a flood of all-cash offers from investors,” with “some backed by Wall Street war chests.”  Now there is a large shortage of properties and new construction is occurring.

Is this true?  Yes, but it doesn’t make the point that they are indicating in their article. These houses have been in the process of being bought-up since shortly after the Housing Crash in 2008 for virtually pennies on the dollar, many of them illegally since the banks that sold them in short sales or otherwise did not really own them; their mortgages had been broken up into innumerable real estate bundles that were then marketed as Hedge Funds.

In point of fact the banks after the 2008 crash and during the government financial bailouts were funding mortgages on a very reduced level.  They required buyers to have good financial records and put down at least twenty percent of the cost of the houses in cash; something most people could not do.  They always accepted full cash payments for the properties they sold.  Actually, in many cases, the banks accepted far less than appraised cash values; thus helping to further reduce property values.

Even with the cash buyers the available housing properties were in the many hundreds.  The syndicates that bought them took over just a fraction of what was available.  What happened?

Currently and for a considerable period of time the major purchaser of real estate in the United States has been the Federal Reserve; they are and have been spending forty-five billion dollars a month purchasing distressed housing which the banks originally sold in bundles after breaking up each mortgage into one hundred to a thousand parts.

Since the midterm Election of 2010 the extreme end of the Republican Party has been in control of The House of Representatives and has passed no bill to aid the housing dilemma or to increase employment.  The Republican minority in the Senate has been able to filibuster anything it didn’t like, particularly bills that had to do with job creation and housing.  There has been no fiscal policy, the Federal Government spending money to upgrade the economy.

The only way possible for money to be added to the economic flow of cash in the nation has been through the Federal Reserve’s use of Monetary Policy.  Under the chairmanship of Dr. Ben Bernanke there have been extremely imaginative uses of Monetary Policy.  The Fed is and has been spending $85 billion a month on Monetary Policy.  Forty billion dollars is being used to repurchase government debt and forty-five billion dollars is going to buy real estate paper.

In essence they are adding $40 billion each month to the National Cash Flow and reducing by $45 billion the number of properties available.  This has allowed for both a slow economic growth and enough of a shortage of houses to allow for new construction throughout the country.

The result of this is phenomenal in slowly bringing about a number of economic solutions.  First off, the banking mortgage debacle created a situation where no one really owned the majority of the houses that defaulted on their loans.  The individual mortgages had been divided into multitudinous pieces where no mortgage owner has more than a very small fraction of ownership in the property and the records kept of these dealings where unbelievably sloppy.  There was no one to legally foreclose on anything.  In point of fact it will take a decade or two to sort this out.  These are the properties upon which the banks were foreclosing.  They did this by computer generating documents that the courts, for a while, assumed to be sacrosanct.  The Fed, by gradually buying up all these mortgages, can sort them slowly, as they get them, putting the pieces together.

The purchase of the real estate paper allows the Fed to do a number of things.  As we’ve seen above it can sort the mortgages and eventually define ownership on these bundled houses.  In the process it has and continues to create a shortage of properties and restart housing construction throughout the country.

Because of the need for more money in the National Cash Flow the FED will not foreclose on any of these properties.  Many of them are not only underwater they are at the bottom of the ocean.  By 2008, before the Crash, many banks were refinancing mortgages at 125 percent of their appraised value.  A large number of these foreclosed properties dropped to half or less of their pre-crash value.

The recipients of these properties pay full taxes on their incomes; they cannot deduct for the interest they do not pay.  The governments, state and Federal, are receiving at least 25% of the money that would have been deducted in interest payments as taxes.  This is adding billions to the National Cash Flow.  It is, as we’ve seen creating a shortage in national housing.  In a period of four to five years the Federal Government is more than getting its investment back in financial benefits for the entire economy.  The Government will eventually be getting back far more than the $45 billion it is spending every month.

Once the bundles are sorted out and the government has full ownership of these properties they will not foreclose because that would take money out of the economy.  The people will live in these properties until they decide to leave or pass on.  Then the property will revert to the government being worth, at that time, far more than they are at present.  Then also the housing debacle will no longer exist.

The Federal government, working through Monetary Policy in order to grow the economy, is bringing about the current housing situation in the United States. It, as we’ve seen, a new creative use of Monetary policy, which has never been done before, and it will effectively solve the bank-created housing dilemma.

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The Weiner Component #25 – Muddling Through: The Minimum Wage

Raise the Minimum Wage

The term commonly used in Great Britain for getting through uncomfortable political, military, and social problems was called “muddling through.”  This was a euphemism for working uncomfortable and complicated situations.  Somehow they beat man’s capability for logically and sensibly solving them.  These situations were just worked through and supposedly came out “all right” at their conclusion.

We have, in a manner of speaking, been “muddling through” the minimum wage for years.  As it exists now, an individual working full time at its current rate of seven dollars and twenty-five cents an hour will find himself at or below he poverty line.   This amount became the official Federal minimum wage on July 24 2009 when it was raised from a lower level and signed into law by President George W. Bush.

The official poverty level for 2013 is $11,170 for a single individual.  For two people the rate increases by $3,960 to $15,130, and for every additional individual it goes up by another $3,960.

At $7.25 an hour, working all 52 weeks of the year and taking no days off, the rate is  $15,080 before Social Security, Medicare, and assorted other taxes, both Federal and state.  Social Security is 6.2% of the gross income and Medicare is an addition 1.45%.  Altogether, the government withholds no less than fifteen percent of the $15,080 earned during an entire year’s labor that is no less than $2,269, with nothing withheld for income tax.  It is probably higher; leaving the minimum wage worker with less than $12,861 to live on for the year, this amount keeps him at or just above the poverty line.  If he/she were married or taking care of one other child or adult the individual would then be below the poverty line.

At nine dollars and hour, the new minimum wage President Barack Obama recommended, the yearly earning for a fifty-week year would be $18,000, before any deductions.  Fifteen percent of that is $2,700, leaving $15,200 to live on.  That amount is just above the poverty line for a family of two.  If the two are married and there are any children the family will sink deeper and deeper into poverty with every additional child.

At ten dollars an hour the yearly income is $29,000.  After 15% withholding, which incidentally is more than Mitt Romney pays in his yearly income tax, the family will be below the poverty line if they have three members; that is married with one child.

We are considering here a goodly percent of the population, individuals working full time and yet not being able to earn enough to properly support his family.  These are married and responsible men fighting a losing economic battle or single responsible parents fully employed with one or more children and limited economic skills.

Henry Ford sold his Model T automobile from 1908 through 1927.  He was one of the first innovators to realize and put into practice the idea that if you paid your workers a high enough salary they could afford to buy the product they produced.  The Model T swept America.  By the year 1915 the car cost 440 dollars.  Five years later in 1920 the price had dropped to $260.  A Ford factory worker earned enough in four months to purchase a Model T.  Ford understood the principle of paying his employees enough so that they could purchase what they produced.  This allowed him to up his production and profitability multitudinously.   Incidentally I don’t think the average person earns enough to pay for a vehicle today with four months labor.

Aren’t our values today a little twisted?  Aren’t the entrepreneurs, by squeezing every ounce of labor for a poverty level of pay, limiting their own markets and their level of profits?  They could certainly take a lesson from the practices of Henry Ford

In addition the United States is the richest nation that has ever existed and yet we keep a percentage of our population at the barest level of subsistence while others live in unbelievable opulence.  What are our values?  Beliefs?   Are we that uncaring?  There has to be something dreadfully wrong with our entire system of distribution of the goods and services produced in the nation.

Can this system be rectified?  Obviously, by a fairer method of taxation and a greater provision of resources to the lower echelons in the nation the GDP will be increased and everyone could receive a greater share of the productivity.  .

There is an interesting element or irony here.  Today we seem to have gone back to the time before Henry Ford’s Model T.  By the entrepreneurs limiting what they pay their employees they also limit the amounts of goods and services these employees can buy or the amounts of goods and services they can afford to consume.  By being more generous to their workers the employers are actually being more generous to themselves.  More wealth being produced would give them an opportunity to gain more wealth for themselves.  More generous wages here would result in the potential for far greater profits for themselves.  They are by their tenuous acts actually decreasing their potential profits.

After all consumption equals production.  The more consumption the greater the production of all goods and services and, thus, the greater the amount of wealth produced within the nation.  As the scale of production goes up so does the potential for the levels of profit.  The upper elements of the society by limiting the distribution of the money supply limit their own potential for profits.

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The Weiner Component #24 – One Vote Per Person

English: Original cartoon of "The Gerry-M...

The basic concept of a Democracy is one vote per person, with every vote counting equally.  According to the Constitution, “We The People,” and not the states, created this nation.  Yet in the 2012 Election the states by the electoral vote determined the President and the states through gerrymandering determined the representation in the House of Representatives.  The Republicans got the majority of representatives even though the Democrats received one million one hundred thousand more Congressional votes.  Somehow the intent of the Constitution seems to have been subverted.

The government is the servant of the people carrying out the majority will with protections for the minorities.  This is how this country is supposed to function.  If it does not then the system has been corrupted and must be cleansed.  In the 2012 Election the majority will was compromised and to a certain extent thwarted.

Even though the Democratic Party received over a million more votes in the House Election the Republicans got the majority of Representatives there.  How was this possible?

In England during the 18th and 19th Centuries, as the voting franchise was gradually extended to all males, there were, with the Enclosure Movement and the Industrial Revolution, a mass movement of people from the rural areas to the urban centers.  No adjustments were made to balance the votes and what developed were “rotten boroughs;” areas where the number of voters necessary to elect a member of the House of Commons was well under one hundred voters, in some cases under twenty, while in the urban factory towns it could be in the multi-thousands.  And anyone could run in any district in the country.  There was also open voting; the secret ballot did not exist until 1872.  The “rotten boroughs” were not done away with until the middle of the 19th Century.

In the United States the system that developed was called  “Gerrymandering.”  The term Gerrymander was used for the first time in the Boston Gazette on March 26, 1812.  It came from the name of the then-Governor, Elbridge Gerry who had signed a bill that redistricted Massachusetts to benefit his Democratic Party.  One of the contorted districts in the Boston area was said to resemble the shape of a salamander.  The term was a combination of the governor’s last name and the word salamander.  In 1812 the Massachusetts Senate remained firmly in Democratic hands while the House and Governorship went to the Federalist Party.

Besides achieving desired electoral result for a particular party, gerrymandering has been used to help or hinder a particular demographic, such as a political, ethnic, racial, linguistic, religious, or class group.

In the 2012 Election a number of states elected Republican majorities on all levels of their government.  In the United States there is a census every ten years for the purpose of redistricting the voting districts on both the state and Federal level.  The political party in power usually draws the new districting map.  By carefully drawing the lines they can break up ethnic or racial groups, set up districts with definite party majorities, or emphasis any group they want.  There are no rules in drawing the shape of these districts and they can take any shape possible, hence gerrymandering.  In addition many of these states made voting much more difficult, if not almost impossible, in districts that favored the opposition party.

In 2012 the district lines drawn up allowed the Republican controlled states to win control of the House of Representatives with far less than fifty percent of the votes cast for members of the House.  It took a lot of maneuvering and strange shaped voting districts to do this.

Isn’t it time for the Federal Government or the courts to set up a system that creates these districts on a non-partisan basis with simple shapes strictly according to the population?  If the government cannot do this then it may take a Constitutional Amendment to achieve this goal.

A Democracy is supposed to be a government representing the will of the majority.

Our goal should be to make this in the best way possible.  The British eventually got rid of their “rotten boroughs.”  Are we ever going to get rid of gerrymandering?

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The Weiner Component #22-Vulture Capitalism

Mitt Romney surrounded by supporters during th...

While Mitt Romney was running for the presidency in 2012 his former company, Bain Capital, bought a steel company by gaining control of its stock.  Romney, from what I understand, had several million dollars invested in the acquisition.  In its last operating year in the United States the company made a profit of three hundred and something million dollars.  This meant that after paying all the compensation expenses from the executives to the janitors, that included 6.2 percent for social security, 1.4 percent for Medicare, medical insurance, retirement, plus any other costs associated with each employee, the company still made that profit.  There were about 169 employees involved in operating the company.

The executives at Bain Capital decided that it was more profitable to move the entire operation to China.  They would move the factory machinery there, reset up the plant, and use local labor to operate it, replacing all the American employees.  They brought Chinese workers to the United States to be trained by their American counterparts who they would be replacing when the factory was moved overseas.

Apparently the cost of a Chinese worker would be a fraction of what it cost to employ an American.  Even with the greater shipping distance the cost of the finished product would be one tenth or less of the cost of producing the item in America.  The yearly profit would be over three billion dollars a year, allowing for a massive return to the stockholders.  Mitt Romney’s few million dollars investment would be worth about ten times the amount he spent.

The people at the plant had appealed to Romney for help.  He had ignored them.  Obviously business is profit; the more profit the better the business.  The people employed are just a disposable tool when it comes to profit.

Bain Capital acted in a modern capitalistic manner, searching to maximize its profit.  They could earn much more using Chinese workers in China, where there is no social security, Medicare, or retirement, than by using American employees in the United States.

I’m not sure what happened to the steel company’s retirement fund.  Bain Capital could have looted it to pay for the transfer of the company to China and left the Federal Government with the responsibility to make good on it for their former employees.  They had done that type of thing before, more than once.

Bain Capital calls itself a Venture Capitalist Company, but they are actually Vulture Capitalists; like the bird they pick and devour the flesh and sinews off a living or dying creature, leaving only the lifeless bones behind.  They will take a successfully functioning company, sell off the parts, making millions in the process and leave unemployed workers and an empty structure behind or move a successfully functioning factory outside of the United States where there are far cheaper labor markets.

Is this all legal?  I would suspect it, more or less, is.  There may be some gray or very grey areas where the legality is highly questionable.  For example, some of these companies have looted long existing retirement funds leaving the Federal Government to pick up and fund the mess.  Bain Capital has, over the years, bought a number of companies and then added what it spent for the purchase to the company’s debt, turning a successfully operating business into a bankrupt concern.  There are probably a number of other ways to turn a quick profit employed by Bain and similar companies.

I would suspect there needs to be a thorough examination of the existing business laws leading to a thorough revision of the these statutes   Their purpose should not be to allow for many of the practices that now exist.

In the 1930s then Senator Harry S. Truman called these people “the wrecking crew.”  They existed then and pulled these practices during the Great Depression and they certainly exist today.

Mitt Romney during his presidential campaign called those people, part of whose employment he had done away with, part of “the 47% who expect a free economic ride.”  I see Romney and his like as the true economic leaches in this country.  They are the ones who have taken a free economic ride by exploiting a large percentage of the public and, in many cases, left the taxpayer, by way of the Federal Government, to pay to pay the bill.

 
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The Weiner Component #21 – Regressive Taxation

Tax

ALL TAXES PAID IN THE UNITED STATES ARE REGRESSIVE; THE MORE A PERSON EARNS THE SMALLER THE PERCENTAGE OF HIS/HER INCOME IS PAID IN TAXES.

 Mitt Romney released his income taxes for 2011 during the Presidential campaign in 2012.  He paid 14% of his total earnings, after deductions, in income taxes for that year.  He chose not to take one particular charity deduction of several million dollars so that his taxes would be as high as 14%.  After losing the election he probably filed an amended tax return and was able to lower his 2011 taxes to 12% or better.

 The official United States Government level of poverty, as issued by the Census Bureau in 2012, is $11,170 for one person.  $3,960 is added on for each additional individual above in number. The poverty level for a family of four would be $23,050.  The rate is somewhat higher in Alaska and Hawaii.  Do these people pay the graduated income tax?  I think not.  No one pays any income taxes on the first $10,000 they earn; but everyone does pay a goodly percentage of their incomes in all other taxes.  Of course, the more one earns the smaller a percentage of their income is paid on all taxes.

 No one in the middle or lower class pays as little as Mitt Romney does in income taxes.  The total taxes they pay would be between 25 and 35% of their gross incomes; and that is after all the deductions they can take.  For example, out of all earning up to $110,100 every employee has 10.4% taken out for Social Security.  That amount will rise to 12.4% in 2013 when the payroll tax will return to its original level.  Medicare, with no maximum limit, takes out 2.9%.  While it can be argued that these are government insurance programs they are still part of what every employer has to pay for each worker he hires.  Together these constitute 15.3% of every employee’s total compensation.

 It would be much fairer and far less regressive if the social security maximum were raised to include everyone’s total compensation package.  However it has been argued by a group of high earners that the $110,000 maximum income for social security should not be raised because it will create havoc in the society; but they say the retirement age for social security recipients should be raised to 75 years of age.  Self-interest seems to go far.  The economically privileged group would like to stay privileged. 

 In California the gasoline taxes are 69 cents per gallon.  In Wyoming they are 34.4 cents per gallon and in Alaska the cost is 24.4 cents.  All the other forty-seven states range between California and Wyoming, with Hawaii coming in as the second most expensive at 68 cents per gallon.  These amounts do mot include all Federal, state, city and local sales taxes.  Is the use of gasoline more extensive with the wealthy or is it a generally fixed amount for everyone?  Actually everyone pays about the same amount, either directly or indirectly, for gasoline usage and the greater the income the smaller a percentage of the income that is.

 The above is one example where the tax is included within the price of the item.  Another example would be cigarettes.  In 2009 the Children’s Health Insurance Program Reauthorization Act was signed into law.  It raised the Federal tax on cigarettes from 39 cents per pack of twenty to $1.81 cents.  In addition the individual states have taxes going from 17 cents per pack to $4.32.  There are also sales taxes in each of the states that tax not only the cost of the cigarettes but also the cost of the hidden taxes placed on them.  Granted that cigarettes have been proved harmful to the people using them but the taxes here are put on other taxes.  Do the well to do smoke more or is this both a sin and regressive tax?

 If we take a look at all the taxes paid in the United States on all levels of government they are all regressive; the more you earn the smaller a percentage of your income is paid in taxes.  There are no exceptions to this be it income, sales, excise taxes, tariffs or licensing. 

 While there are assorted rationales for many of these taxes there still should be a rationale for a fairer system of taxation.  Mitt Romney, if I remember correctly, earned eight million dollars in 2011.  He paid 35% of his income after deductions on his income over $379,150.  A person earning a half million dollars, $500,000 paid the same on his income over $379,150.  Who paid a lower rate of taxes?  Obviously Mr. Romney did.  Yet even Romney’s income is low next to many CEOs of major corporations.  The major irony here is that about 98 percent of the U.S. population earns well under $110,000, the cut-off point for social security.  They all pay a far larger percentage of their more limited incomes in taxes.  And these people are the consuming base of the country.  It is their expenditures that determine the Gross Domestic Product, the amount of money spent for goods and services in the United States. 

 The taxing system in the country is absurd.  In 2013 the top income tax level was raised to 39.6% for those earning more than $400,000.  For basic fairness it should be raised again at one million dollars, and again at two million dollars, and again at three million dollars.  It should be continuously raised until it reaches ninety five to ninety nine percent.  After all, how many millions does one need to provide for themselves and their children into future generations?

 Isn’t it time we had a fair system of taxation, one that stopped exploiting the lower end of the population for the benefit of the upper few percent.

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The Weiner Component #20 – Taxation, Money & The Distribution of Incomes

taxes

 

 

 

Taxation, Money, & the Distributions of Incomes

 

 

 

The general concept of taxation is that (A) the government needs a certain amount of money to function and (B) everyone within the nation by being a member of that society deserves a certain minimum standard of living to function comfortably.  Taxation, then, is a system that allows the country to exist and serves as a means of redistributing part of the National Income to all the people within the society in order to allow for a level of economic fairness for everybody.

 

The government of every nation also controls the money supply within its borders.  In a manner of speaking, the National Government owns the printing press and can issue as much currency as it wishes.  There is nothing behind any national currency today other than the word of the government of that nation.

 

Countries are limited as to the amount of currency they produce because an endless amount would lead to rabid inflation.  The amount of money available would exceed the level of goods and services that could be produced.  Therefore the prices of all goods and services would be continually bid upward making the currency decrease in value to a point where eventually it would be valueless.

 

National Governments are restricted as to the amount of currency they can release.  Too little in circulation causes a waste of human resources such as we currently have in the United States and Europe.  This kind of economic behavior brings about massive unemployment and very slows, if any, economic growth.  Too much money in circulation causes prices to hit the clouds and brings eventual depression.  Each government must steer a course between these two extremes to maintain a healthy economy and continued economic growth.

 

There are various types of taxation that all the government agencies use to collect money.  Some examples would be usage taxes, such as licenses for driving and for your automobile or for your property, like your house and land.  There are excise taxes that are placed upon such items as gasoline or tobacco.  These are internal taxes placed upon the value of the product; the amount is included in the cost of the item by being added on to the original commodity.  In addition there are tariffs placed on goods brought into the country that are supposed to keep them competitive with similar goods produced within the nation; these are also included in the price of the product.

 

But the two essential taxes or tax concepts are the flat or fixed tax rate and the graduated income tax.  The flat or fixed tax is one in which all income, regardless of its level, is taxed at the same rate.  Consequently if one earned $15,000 a year the Federal Government would tax him at, say, 15% of that amount, $225.  If one earned $100,000 it would be $15,000, for a million a year it would be $150,000.  Each would be paying the same percentage of their income.

 

This, it has been argued is a reasonable way to tax because everyone pays the same percentage.  But is it really reasonable?  The less one earns the smaller his income; the less he has to survive.  The person earning $15,000, if he/she is supporting a family, is living well below the poverty level, probably not being able to afford adequate food or heat in the winter, or, for that matter, even adequate housing.  How is it fair for them to pay the same tax rate as someone earning many thousands of dollars or a million or more?  The concept is advantageous to the wealthy but anathema to the poor.

 

Yet this is the principle under which the state sales taxes work.  Everyone pays a goodly sales tax on such items as toilet paper, tissues, and all non-edible items like clothing, shoes, and napkins.  The states and cities tend to use this method as a major means of raising revenue.  It has been suggested that the Federal Government could have a national sales tax as an additional way to raise money.

 

The progressive or graduated income tax is a personal income tax imposed upon income by the federal, most state, and some local governments.  The amount of the tax is determined by applying a tax rate that increases as income increases.  Beyond a certain minimum amount the percentage paid in taxes grows as income goes up.

 

It has been argued at different times over the years that the flat tax is a fairer form of taxation.  But many economists and others see this tax as a regressive one, where the tax rate or burden increases as an individual’s ability to pay it decreases.

 

Toward the mid 1930s during the Great Depression and again in the early 1940s, while World War II was occurring, President Franklin Delano Roosevelt wanted taxes to be raised significantly among high-income earners.  He stated, in both instances, that a person needed only so much money in order to live comfortably; that earning much beyond that amount was ridiculous.  During the 1930s he felt $100,000 was a princely sum; he raised that amount in the 1940s.  In both instances in Congress the Democrats and Republicans refused to go along with him.  He would have raised the tax rate upon amounts over $100,000 to 95% or more initially.

 

In 1932 the top rate was 63 percent.  By 1936 it reached 79 percent, with an inheritance tax, estate tax, gift tax, dividend tax and a progressive corporate tax being added.  During World War II the bottom tax rate went from 4 to 19 percent and the top income tax rate climbed to 88% by 1943.  In 1945 it had risen to 91%.  It remained there until 1964 when it dropped to 77%.  By 1965 the top rate was 70%.  The Economic Recovery Tax Act o f 1981, otherwise known as the Reagan’s supply-side tax cuts, lowered the top rate from 70% to 50%.  By 1990 the top income tax rate was reduced to 31%.  In 1993 the top Income tax rate was increased to 39.6% and the corporate rate to 35%.

 

By 2012 there were six steps in which Income taxes were paid according to amounts earned.  Using the Married Filing Jointly category: the tax rate went from 10% to 35%.  On an income of $17,000 10% is paid.  From $17,001 to $69,000 the percentage rises to 15%.  $69,001 to $139.350 it goes up to 25%; $135,351 to $212,300 requires a 28% payment; $212,301 to $379,150 requires a 33% level, and $379,151 up is 35%.  The increase, in all cases, is only paid on the amount above the prior level of income.  For single people or married filing separately the amounts were at about half of the above.

 

For 2013 on the 10%rate is joined with the 15% one, the 25% rate becomes 28%, 28% is increased to the 31% rate, the 33% rate becomes 36%, and the 35% rate is increased to 39.6%.  It should be noted that there is no income tax on the first $10,000 everyone earns.  That would be ten dollars an hour, which would place that person solidly below the poverty line.  It is also well below the poverty line.

 

Of course there are all sorts of deductibles.  One deducts for oneself, one’s mate, for each of ones children, for charitable and religious contributions, for medical expenses and for a myriad of other things.  In 1974, when President Gerald Ford appointed Nelson Rockefeller as his Vice President, Rockefeller released his income tax return for the preceding year and I discovered that we both paid approximately the same amount of income tax in 1973.  There was no way that both of us had earned the same amount of money in that year.  I was amazed at the thought of what his write-offs must have been.

 

If we go back to President Roosevelt’s comments on how high the graduated income tax should, in his opinion, be and tie that to what has happened in the 2012 Election on all levels of government then we come up with some very interesting considerations.  On State, Congressional, and the Presidential Election well over two billion dollars was spent.  In fact that much was spent just on the Presidential Election.  The total bill, which to my understanding, was never even calculated, must have been well over five billion dollars.  All that money was contributed, either directly or indirectly, to the campaigns.  Most of it went to the Republican campaigns.  For example twelve million was spent to get Michelle Bachmann reelected to her Congressional seat in the House of Representatives.

 

Why do individuals or corporations contribute this level of money to the political campaigns and do so in many cases secretly.  Is it because they believe in what the political party stands for or is it because they expect to get a return on their investment?  A Las Vegas billionaire, who is currently under investigation by the Justice Department, had invested hundreds of millions in the Republican Presidential Campaign.  The Koch brothers have spent far more, apparently mostly funding secret or semi-secret pacts that support “far right” causes.  Many of the contributors are making donations in the millions of dollars.

 

Where is all this money coming from?  Apparently, the income tax system as it is currently set up allows them to pay minuscule amounts of their incomes in taxes and leaves them with multimillions if not billions to buy influence in the government.  There has to be something wrong with a system that does this.  We have people living out on the streets today, going hungry on one side of the scale and, on the other, opulence beyond that of the wealthiest rulers of the past.  The economic system has to be completely out of kilter to allow for this vast difference in standards of living.  We not only need tax reform; we need tax reform that brings about a fairer distribution of the national wealth and does away with poverty in the United States.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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