The Weiner Component V.2 #48 – Cycles of History

English: US derivatives and US wealth compared...

English: US derivatives and US wealth compared to total world wealth 1995-2007 (Photo credit: Wikipedia)

English: United States wealth compared to the ...

English: United States wealth compared to the rest of the world in the year 2000. (Photo credit: Wikipedia)

In certain respects cycles of history do at times, more or less, repeat themselves.  Following the Civil War massive changes in industrial production coupled with a great increase in immigration from Eastern Europe changed the country in a relatively short period of time from a rural society to an urban one.  In just a few decades the nation went through the Industrial Revolution and the Rise of Cities.

Real GDP for the United States 1920-1940 in 19...

Real GDP for the United States 1920-1940 in 1999 constant dollars, (Photo credit: Wikipedia)

Since there were no laws at this time the period pertaining to urban growth, building construction, or social conditions this period became one of unfettered corruption as the country worked its way through gradually developing labor laws, urbanization and integrating the new population.  As mentioned this was also a period of intense immigration which allowed for the construction of slum dwellings throughout many of the industrial urban centers.

 

The period was known for monopolies and oligopolies and for Boss Politics by both political parties.  New York City had Democratic Boss Tweed and Tammany Hall while upstate there were Republican bosses and political organizations.  This pattern existed throughout the United States.

 

In response, on a grass roots basis, a Progressive Movement began locally in state politics, reaching Congress and the Presidency around the turn of the century.  Reform would continue until the outbreak of World War I, which was called the Great War at that time.

 

Among the population, a very small percentage, probably less than 2% of the population was extremely wealthy, getting richer all the time and controlling upwards of 80 to 90% of the available wealth.  The bulk of the population: small middle class and lower class, lived upon the balance.

 

A similar situation developed from the 1980s on with the upper part of the richest 1% eventually controlling 90 or more percent of the wealth particularly toward the end of the first year of the presidency of Donald J. Trump when the Republican dominated Congress passed the so-called tax reform which was a giant tax give-away to the rich.

 

Among the various so-called reforms was one measure which attempted to radically limit Affordable Health Care (Obamacare) and another measure that did away with or radically reduced the amount of taxes that could be used for a property deduction.  The object of this measure when it was first introduced many years ago was to encourage people to buy their own home.  Without this measure it is easier to rent than to buy property.

 

Doing away with this right changes the complex of home ownership.  There are no longer any real advantages to owning one’s own home.  Instead renting becomes easier and creates a market for those that have excess cash.  This, of course, will be the upper small percentile that is acquiring 90% of the GDP.  It is a simple and safe investment.  And it adds to the money these people acquire, giving them, in time, well over the 90% of the GDP.  In fact it creates a super-rich, a very small middle class, and everyone else.  It is probably the most unproductive distribution of the wealth of the nation.

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Following different studies on and about 2017 the GDP (Gross Domestic Product) in the United States goes from 18,624,475 to 19.3 trillion dollars per fiscal year.  That is the amount of wealth produced in the nation in the period of a year translated into dollars; the value of all the goods and services utilized in a twelve month period.  It is the highest level of any nation on the planet.  Currently 90% of it is controlled by the upper part of the top 1% of the population.

 

This is still a strange distribution of the National Wealth, particularly since the current tax system focuses more and more of it in the hands of fewer and fewer people each year.  These people tend to keep most of this money dormant, simply stored away or put into safe investments like real-estate.  The money is not being used productively.  The society functions on the non-dormant ten percent plus the little this wealthy group is willing to spend.

 

For a society to be healthy there should be a wide distribution of its wealth.  Money that is distributed to the entire society is spent over a number of times, usually from three to twelve times.  It creates numerous times its basic amount of value.  While money going to the upper class generally does not create more than its face amount.  A wide distribution of income means a wide increase in wealth in which everyone benefits, including the very wealthy.  A narrow distribution of wealth does very little for the growth of the society or the living conditions for most of its population.

 

If we consider the GDP, taking the average projection 19 trillion dollars and divide what is probably the average population of the United States, 230 million according to the U.S. Census Bureau.  Thinking back to the errors made at the last Census in 2010 this is probably a conservative figure; 250 million would be more accurate.  With 230 million we get an equal distribution of 82.6 thousand dollars per person.  If the population is 250 million then the distribution is 76 thousand dollars per person.

 

With a narrow distribution of wealth, mostly going to the upper fraction of 1% the mean income is far below the amount stated above.  The current society includes a sizable homeless population which can barely afford to stay alive.  The United States today is anything but a healthy society.

 

While these amounts are approximate they do give an indication of what would be spent upon new productivity.  It would be overwhelming.  Everyone would benefit from the progress and no one, whether they worked or not, would suffer from any kind of want.  To my knowledge no society has ever functioned on this level.  There are always winners and losers within each society.  But do the losers have to be so poor that the depth of their standard of living is questioned by members of the United Nations?

 

Keep in mind that the Federal minimum hourly wage, which was set in 2009, is $7.25 an hour.  While many states have raised their minimum wage well above that figure there are still a large number of states where this is paid to a goodly percentage of their workers.

 

This is $290 a week before anything is taken out for Social Security or Medicare or anything else.  One well known Republican Senator, Orrin Hatch of Utah has stated that the poor are poor because they don’t want to work.  He stated this after serving 42 years in the Senate.  I doubt if he ever tried to live on $290 a week.

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As a rule governments tax their populations in order to raise money to meet their operating expenses.  The Trump tax reform is the first time a government has given a tax reduction based upon deficit spending.  The current tax bill presumably, if no changes occur, will in a decade increase the National Debt by 1 ½ trillion dollars.  The reductions to the wealthy and the large corporations are presumably permanent while the changes to the middle and lower classes are temporary, ending in 2025.

 

Obviously with the Republicans having a majority of one Senator in the Senate the probability is that the Democrats will gain leadership there in the Midterm Election of 2018.  Since the Tax Reform Bill is highly unpopular with the general public it is very possible that the Democrats could also gain control of the House of Representatives in 2018.  This could allow the Democrats to force Trump to allow changes in his current Tax Law in 2019.

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The concept of taxation goes back to the beginnings of civilization.  There is a cost factor to the existence of any form of governmental organization.  Historically there has always been a means established of raising funds, either in kind or financially to pay for this.  Usually the societal leaders figure the cost and tax the people accordingly.

 

Trump’s use of deficit spending is a new variant to taxation.  Here, presumably, a future generation will pay for the tax relief in the present or continue to pay interest upon the amount.

 

Another important use of taxation, which developed over the years, is to attempt to more or less equalize incomes so that everyone in that country can maximize the benefits of that particular society.  Today this would be many of the European nations where everyone has socialized medicine as well as a guaranteed minimum standard of living whether they are employed or not.  Here, unlike the United States, the wealthy pay a larger percentage of their incomes in taxes than those who earn far less.  It is a far more realistic approach than that of America.

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Currently the United States, with Donald J. Trump as President, has a government far more like the one that existed in the late 19th Century than the one that existed after World War II, when the Federal Government turned the country into a middle class nation. His Cabinet consists of millionaires and billionaires, many of whom seem more interested in their own welfare than that of the United States.

 

Lately President Trump has come out with strange statements like the Justice Department was his instrument to use as he saw fit rather than follow the Constitution and the laws.  Trump is attempting to emerge as an absolute autocrat running the United States.  He does not seem to understand the meaning or function of the Constitution.  This type of behavior could lead, even with the current Republican majority in the House of Representatives, to a possible future impeachment.

 

 

 

 

The Weiner Component V.2 #47 – Modernizing the Constitution of the United States

The Constitution of the United States was written during the period of May 25 through September 1787 at the Philadelphia Legislative Building. The State Legislature had taken their summer vacation and the building was available through the summer.

 

This was toward the end of the 18th Century, when ships moved in the oceans through the use of current, wind power blowing against sails, or muscle power being pulled in a becalmed sea by one or more large row boats.  Communication was very slow and most people spent their lives within a few miles from where they were born.  It was a time totally different from the 21st Century where national and world communication is almost instantaneous and people fly in jets across the oceans in hours.

 

The Constitution is the basic Document of Government in the United States from which all laws and powers are derived.  It consists of a statement of purpose or authorization by the then male, property owning population of the new country.  It consists of 7 Articles, the names of the founders, and, at present, 27 Amendments, the first 10 being the Bill of Rights, most of the rest made basic changes to the Constitution to meet the needs of the times.  This document was written in 1787 and was voted into existence shortly thereafter.  With  changes through the amendment process this Constitution is still the basis of the Federal Government of the United States.

 

It is past time to edit this document, to take out the remaining sections that still pertain to the preindustrial world of the 18th Century and those areas which limit the functioning of a true democracy.  In content the basic document is as pertinent today as it was then.  Those sections no longer pertinent today could be easily edited out making the document shorter and more precise.  Other issues such as the unfairness of the bicameral legislative body and gerrymandering which tend to make the document undemocratic could also be adjusted.

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Article 1 deals with the legislature:

It authorized that the laws be made by a bicameral Congress.  The legislative bodies meet regularly because the changing conditions within the country require a continuing flow of legislation to meet the ever-changing needs of the country.  The Congress’s major job is to meet the ever-changing needs of the nation with new needed legislation.

 

The reason for the bicameral houses of Congress was because there were both large and small states among the original 13.  In the Senate every states is equally represented by two Senators elected by each of the State Legislatures while in the House of Representatives each state is represented by legislators elected directly by the people; their number being based upon the population of the state.  In order to be elected to the Senate for a six year term one has to be 30 years of age or older while to be elected to the House for a two year term one has to be 25 or older.  People then generally did not live as long as they do today.

 

The Electoral College is a group of elected officials chosen every four year to elect the President of the United States.  The number of Electors for the Electoral College that each state has is based upon the number of their representatives in both Houses of Congress.  This measure is now out of date and can allow, as it did in Trump’s case, a candidate who does not have the majority vote of the people the ability to achieve the presidency.  As the independence of each state, large and small, is no longer dependent upon their independence the Electoral College by an Amendment to the Constitution should be done away with and the choice of the new President should be directly dependent upon the majority of votes by the voting population of the United States.  This would be much fairer than the current system.

 

In point of fact people in the actual election vote for their candidate.  The political parties choose the electors who will then vote for their candidate.  Doing away with the Electoral College will just allow the initial votes to count directly for the choice of the Presidential candidate.

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Originally the Founding Fathers never visualized political parties.  Instead they believed the “wisest,” best educated men would make up the two Houses of Congress.  The State Legislators chose the two most mature men in the State for their Senators and the male, property owning citizens chose from the best of the younger well educated men or man within the voting District or State for the House of Representatives..

 

In 1913 the 17th Amendment to the Constitution changed the Election of Senators, making the people within the states responsible for them, direct election of Senators by the citizens of each state.  The reason this came about was the rise of the corporations and monopolies from the post-Civil War on.  The new super-rich executives were able to bribe the state legislatures into appointing their lawyers to the Senate, which. In turn, became a body representing the monopolies rather than the states.  The 17th Amendment was a part of the Progressive Movement that was a reaction against the rise of the monopolies.

 

Even though a minimum number of people is needed for each Representative in the House at least one Representative is chosen from each state regardless of how small the population of that state is.  Eight states have so low a population that they have only one member in the House of Representatives while California has so large a population that it has 53 members there.  Originally and still the Senate gives each state equal representation in the Congress regardless of the population of that state while the House of Representatives is based upon population.  The representation in the House is adjusted every ten years when a census is taken of the entire population.

 

Is it reasonable for the states with very small populations to have the representation they have in the Congress?  As a group their votes count more than those in the larger states in the choice of the President.  It might make more sense at this time to limit them to one Senator.

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Alexander Hamilton organized the Federalist Party.  Hamilton saw the mercantile class, the businessmen, as the growing group and these people were the major beneficiaries of his policy. The first President was George Washington.  His Secretary of the Treasury was Alexander Hamilton while the second Secretary of State from 1790 to 1793 was Thomas Jefferson whose vision of the new United States was different from that of Hamilton. He favored the small yeoman farmer. While Washington was apolitical he did tend to favor Hamilton’s policy.

 

Washington served as president from 1789 to the beginning of 1797, two terms.  The second president was John Adams who served for one term.  By 1800 Thomas Jefferson had organized a second political party, the Democratic-Republican Party and, in a dramatic election, won the presidency in 1800.  His policy would change the focus of the new government.  In fact he believed that the purchase of the Louisiana Territory would supply land for the small farmers for the next one hundred years.  The Federalists were never able to mount a successful Presidential Election again.  They went out of existence after the War of 1812.

 

On April 40, 1789, the first inauguration of George Washington occurred.

On May 29, 1790, Rhode Island became the 13th state to join the Union.  It was voted in by only three percent of the population.

In 1791, the Bill of Rights, the first Ten Amendments to the Constitution was ratified.  James Madison wrote Twelve Amendments, of which ten were passed.

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In terms of editing the Constitution:

Article 1 pertains to the legislature, Section 2, Third paragraph: “counting slaves as 3/5s of a person for reasons of representation or taxation” can be excluded.

Section 9, Paragraph 1: Pertains to importation and taxation of slaves.

Article 2 deals with the Executive, Section 1, Second, Third, and Fourth paragraphs deal with the Electoral College.  If the Electoral College were to be done away with by having the people directly elect the President these paragraphs can be dropped.

Article 3 has to do with the Judicial System of the Country.

Article 4 details State rights.

Article 5 explains the process by which the Constitution can be amended.

Article 6 deals with prior debts, laws, and a required Oath or Affirmation to support the Constitution by all it officers.

Article 7 pertains to the ratification of the Constitution.

The second paragraph can be omitted.

This is followed by the names of the signers and the Amendments to the Constitution.

 

We are now in the 21st Century.  Do we really need the extraneous material that was included in a preindustrial document?

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While major changes to the Constitution are difficult to do at one time it is past time to do away with the Electoral College.  In 1876 the Republican, Rutherford B. Hayes, won the election with the majority of the popular vote going to the Democrat, Samuel J. Tilden.  In 2000 the Republican, George W. Bush, won the Presidential Election with the Democrat, Al Gore, getting the majority of the popular vote.  If Gore had won there would have been no unnecessary war against Iraq and the probability is that the Middle East would not have become as disrupted as it became and is still today.  In the Election of 2016 Hillary Clinton had three million more popular votes than Donald J. Trump but Trump won the Electoral College vote and became President.  So far his Presidency has been a disaster disrupting conditions in both the United States and the world.  For the first time since the Cold War and the Missile Crisis under John F. Kennedy the U.S. is facing the possibility of an atomic war with North Korea.  It seems that both countries have thin-skinned egomaniacs as leaders.

 

It is certainly time to get rid of the Electoral College.

 

The Weiner Component V.2 #46 – Results of the Trump Tax Bill

The red "GOP" logo used by the party...

The red “GOP” logo used by the party for its website (Photo credit: Wikipedia)

 

Everyone knows a bribe is illegal but a contribution to a political party is not.  The American political system requires a lot of contributions to successfully operate.  The House of Representatives has an election every two years; the President is elected every four years and the Senate every six years, one third of the body being elected every two years.  For a politician to get elected and stay in office he/she needs a massive and continuous campaign fund.  Consequently he/she and their party is always raising money.  Apparently the Republicans are today receiving very large contributions from very rich individuals and from large corporations.

 

The question remains: When does a contribution become a bribe?  Actually legally it never does; but large constitutions exert a lot of influence upon how a political party acts,

 

Individuals, companies and corporations directly or through lobbyists contribute money to both their favorite political party and to their favorite politicians.  If the contribution is large enough when does it affect the individual politician or the political party causing them to take on the political position of the contributor?  Apparently whatever that financial point is the Republican Party is strongly affected by it.

 

Most corporations meet with their shareholders once a year to have them vote on various issues.  Shareholders can raise questions at this time.  One of these tends to be: What is the amount being contributed to political parties?  The company always requests a no vote on this issue.  I have never seen the measure passed.  I suspect if it were passed it would be ignored.

 

When does a contribution become as big as a bribe?  Or is the Republican Party expecting to get a goodly percentage of the Trump tax reduction as contributions that the upper echelon and the corporations will be receiving?  It would seem that the Republicans are very good at integrating their beliefs with those of the money interests in the United States.

 

Actually it seems that the Republican Party is getting its share of the tax giveaways that are currently being applied to the wealthy.

**************************************

On Tuesday, December 19th the House of Representatives passed the final version of Trump’s Tax Reform Bill.  Paul Ryan and other House Republicans spoke with great enthusiasm about this 1,000 page Bill which essentially significantly lowered taxes for the economically upper few percent of the population and the large corporations.  This is a bill which no one really read in advance, was put together secretly, probably in the dead of night, had the majority of the population of the country strongly against it, and also had adjustments being made to it up until it was voted upon.  From what I understand a last minute addition was added which gave to real estate owners a tax pass through which would give these people millions of dollars in tax benefits.  Besides real estate owners throughout the country this positively affected Trump and a number of Senators.  The public and also most of the Republicans have yet to find out all the ramifications of this thousand page bill.

 

There was a minor technical glitch on the House version of the bill and they had to pass the Bill twice over a two day period.  Trump and his cohorts were congratulating one another over the wonderment of this bill, stating how it was for the middle class: how it would lower their taxes and create endless new jobs.  According to President Trump this was the greatest thing that has happened in this country in the last fifty years.

 

To the majority of Americans the Bill is vastly unpopular.  There were loud protests while the Bill came up on the Senate floor.  Some protestors were removed from the gallery.  There have been protests all over this country by millions of people against this Bill, many political offices throughout the nation have been invaded by individuals loudly protesting this Bill.

 

The Bill passed in the House of Representatives by a vote of 224 to 201 and in the Senate by a vote of 51 to 48.  The vote was along party lines; no Democrat voted for Trump’s so called Tax Reform.  In the House several Republicans voted against the Bill.  They came from states that had voted for Hillary Clinton in the Presidential Election.

 

The Bill drops the corporate tax rate from 35% to 21% and lowers the maximum rate paid by those earning over $418,000 from 39.6% to 37%.  It doubles the current rate charged on inheritances from 5.5 million dollars to 11 million dollars and repeals the inheritance tax after 2025. Apparently Trump expects to live for a long time.

 

It removes the requirement that requires everyone to either belong to a medical plan like Obamacare or pay a penalty.  This. In Trump’s opinion, kills the Affordable Care program.  Actually this allows many younger people to opt out of the program and subsequently forces the insurance companies to further raise their premiums.  Interestingly about 9 million new people have signed up for Obamacare.  The program is far from expiring.

 

At the last minute a measure was added for real estate owners to allow a portion of their profits to pass through their real estate investment.  The amount saved, by the one Republican Senator who was originally going to vote against the Bill from taxes, is over thirty thousand dollars.  It has been estimated that this will cost the government about 45 billion dollars in lost taxes.  This measure convinced this reluctant Republican Senator who is not running for reelection in 2018 to vote for the Bill.  It will profit him and the President.  In addition it will profit a number of Senators and real estate owners throughout the country.

 

The Bill allows oil drilling in the Arctic National Wildlife Refuge.  It is estimated that Trump’s Tax Reform will add 1.46 trillion dollars over the next decade to what is currently a National Debt of over 20 trillion dollars.  The Republicans do well at adding large amounts to the National Debt.

 

It should also be noted that as far as the Bill is concerned the tax cuts to the upper echelon and the corporations are permanent but those for the middle and lower class end in 2025.  Of course they can be made permanent by a subsequent Congress but that will grow the National Debt further.

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The question arises: How permanent are all these changes?  Keep in mind that the Bill was passed in the Congress only by the votes of the Republican majorities in both Houses of Congress.  The majority of the population opposed the bill, many loudly and vociferously.  A midterm election is coming up on the first Tuesday of November 2018 and in January 2019 there will be a new Congress in Washington.

 

In addition the Bill passed in the Senate by 51 Republican votes to 48 Democratic and Independent votes.  Senator John McCain was not present; he was in a hospital in Arizona getting chemotherapy.  In Alabama a Democrat was just elected to the Senate who has not yet taken his Senatorial seat.  Instead a temporary replacement appointed Republican voted for the change.  This Democratic Senator would have changed the balance to 50 Republicans to 49 Democrats.  We don’t know how John McCain would have voted.  We do know that the Bill was crafted at night and much of its contents kept secret.

 

The probability is that over the next year the Republicans will attempt to reduce government costs by significantly reducing their spending on entitlement programs, programs for the poor and the middle class.  They may attempt to do away completely with Affordable Health Care by making it a state program with fixed reduced Federal grants.  And they may attempt to privatize Social Security.  The interesting thing here is that when Social Security was fixed in the 1980s and also had Medicare separated from it under President Ronald Reagan a lot more was paid into it than was needed.  The excess has traditionally been put into the General Fund and Social Security has been given a paper credit for that amount.  The paper credits added up today equal well over two trillion dollars of the National Debt.  If Social Security were privatized would this amount be added to the amount transferred to private enterprise or would it just be forgotten?

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The blatant cynicism within this bill by the Congressmen who had all taken an oath to the Constitution is appalling. These men are serving themselves first and the country second.  Many openly voted for a bill that would give them tax advantages.  Others like Paul Ryan, the Speaker of the House of Representatives, are highly ambitious.  Even though Ryan comes from a safe Republican area, I understand, he has chosen not to run in 2018; He is temporarily retiring from the government.  Alabama was a safe Republican state that elected a Democratic Senator.  Wisconsin could do the same.  Ryan would like to be President of the United States.  He ran with Mitt Romney in 2012 as Vice Presidential candidate.  If he retires in 2018 he can run in 2024 as the Republican Presidential candidate.

 

It has been suggested by a Republican Congressman that 2018 could be a political blood bath.  The Republicans have forced through Congress strictly on a party basis an unpopular tax reduction bill.  In 2018 they may try and possibly succeed in passing other unpopular bills.  Comes the first Tuesday in November they could easily lose their small majority in the Senate.  They could also lose their larger majority in the House of Representatives.  A lot of people are very angry with Trump and the Republican Party.  They will probably vote accordingly.

 

Virtually all of Trump’s Bill could be eradicated before the end of 2019.  From what I understand Paul Ryan, running for the Presidency in 2024 may have a platform of lowering taxes for rich individuals and large corporations.  That would, of course, be determined by the Democrats.

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The majority of the country is highly dissatisfied with the Trump Tax Cut that was passed toward the end of December, 2017.  The Midterm Election will be held the first Tuesday in November 2018 and the new Congress will take office in January 2019.  Many current Republican members will not run for office in 2018.

 

The probability is that from January 21, 2019 either the Senate will achieve a Democratic majority or both Houses of Congress will do so.    If the Democrats gain control of the Senate they should be able to force the Republican House of Representatives to accept changes to the tax bills by adding amendments to all Republican bills.  Bills can deal with any number of subjects.

 

When these bills go to a Conference Committee the Democrats can refuse to allow the Republicans to remove these amendments from the original bills.  In this case the Republicans have a choice either to kill the bill or give in to the Democrats.  If the Democrats win both Houses of Congress then President Trump has the choice to approve Democratic bills in return for something Trump wants.  It seems also that the rules of the Senate have been changed limiting debate; there will be no filibustering to frustrate the Democrats.

The Weiner Component V.2 #46 – Results of the Trump Tax Bill

Everyone knows a bribe is illegal but a contribution to a political party is not.  The American political system requires a lot of contributions to successfully operate.  The House of Representatives has an election every two years; the President is elected every four years and the Senate every six years, one third of the body being elected every two years.  For a politician to get elected and stay in office he/she needs a massive and continuous campaign fund.  Consequently he/she and their party is always raising money.  Apparently the Republicans are today receiving very large contributions from very rich individuals and from large corporations.

 

The question remains: When does a contribution become a bribe?  Actually legally it never does; but large constitutions exert a lot of influence upon how a political party acts,

 

Individuals, companies and corporations directly or through lobbyists contribute money to both their favorite political party and to their favorite politicians.  If the contribution is large enough when does it affect the individual politician or the political party causing them to take on the political position of the contributor?  Apparently whatever that financial point is the Republican Party is strongly affected by it.

 

Most corporations meet with their shareholders once a year to have them vote on various issues.  Shareholders can raise questions at this time.  One of these tends to be: What is the amount being contributed to political parties?  The company always requests a no vote on this issue.  I have never seen the measure passed.  I suspect if it were passed it would be ignored.

 

When does a contribution become as big as a bribe?  Or is the Republican Party expecting to get a goodly percentage of the Trump tax reduction as contributions that the upper echelon and the corporations will be receiving?  It would seem that the Republicans are very good at integrating their beliefs with those of the money interests in the United States.

 

Actually it seems that the Republican Party is getting its share of the tax giveaways that are currently being applied to the wealthy.

**************************************

On Tuesday, December 19th the House of Representatives passed the final version of Trump’s Tax Reform Bill.  Paul Ryan and other House Republicans spoke with great enthusiasm about this 1,000 page Bill which essentially significantly lowered taxes for the economically upper few percent of the population and the large corporations.  This is a bill which no one really read in advance, was put together secretly, probably in the dead of night, had the majority of the population of the country strongly against it, and also had adjustments being made to it up until it was voted upon.  From what I understand a last minute addition was added which gave to real estate owners a tax pass through which would give these people millions of dollars in tax benefits.  Besides real estate owners throughout the country this positively affected Trump and a number of Senators.  The public and also most of the Republicans have yet to find out all the ramifications of this thousand page bill.

 

There was a minor technical glitch on the House version of the bill and they had to pass the Bill twice over a two day period.  Trump and his cohorts were congratulating one another over the wonderment of this bill, stating how it was for the middle class: how it would lower their taxes and create endless new jobs.  According to President Trump this was the greatest thing that has happened in this country in the last fifty years.

 

To the majority of Americans the Bill is vastly unpopular.  There were loud protests while the Bill came up on the Senate floor.  Some protestors were removed from the gallery.  There have been protests all over this country by millions of people against this Bill, many political offices throughout the nation have been invaded by individuals loudly protesting this Bill.

 

The Bill passed in the House of Representatives by a vote of 224 to 201 and in the Senate by a vote of 51 to 48.  The vote was along party lines; no Democrat voted for Trump’s so called Tax Reform.  In the House several Republicans voted against the Bill.  They came from states that had voted for Hillary Clinton in the Presidential Election.

 

The Bill drops the corporate tax rate from 35% to 21% and lowers the maximum rate paid by those earning over $418,000 from 39.6% to 37%.  It doubles the current rate charged on inheritances from 5.5 million dollars to 11 million dollars and repeals the inheritance tax after 2025. Apparently Trump expects to live for a long time.

 

It removes the requirement that requires everyone to either belong to a medical plan like Obamacare or pay a penalty.  This. In Trump’s opinion, kills the Affordable Care program.  Actually this allows many younger people to opt out of the program and subsequently forces the insurance companies to further raise their premiums.  Interestingly about 9 million new people have signed up for Obamacare.  The program is far from expiring.

 

At the last minute a measure was added for real estate owners to allow a portion of their profits to pass through their real estate investment.  The amount saved, by the one Republican Senator who was originally going to vote against the Bill from taxes, is over thirty thousand dollars.  It has been estimated that this will cost the government about 45 billion dollars in lost taxes.  This measure convinced this reluctant Republican Senator who is not running for reelection in 2018 to vote for the Bill.  It will profit him and the President.  In addition it will profit a number of Senators and real estate owners throughout the country.

 

The Bill allows oil drilling in the Arctic National Wildlife Refuge.  It is estimated that Trump’s Tax Reform will add 1.46 trillion dollars over the next decade to what is currently a National Debt of over 20 trillion dollars.  The Republicans do well at adding large amounts to the National Debt.

 

It should also be noted that as far as the Bill is concerned the tax cuts to the upper echelon and the corporations are permanent but those for the middle and lower class end in 2025.  Of course they can be made permanent by a subsequent Congress but that will grow the National Debt further.

************************************

The question arises: How permanent are all these changes?  Keep in mind that the Bill was passed in the Congress only by the votes of the Republican majorities in both Houses of Congress.  The majority of the population opposed the bill, many loudly and vociferously.  A midterm election is coming up on the first Tuesday of November 2018 and in January 2019 there will be a new Congress in Washington.

 

In addition the Bill passed in the Senate by 51 Republican votes to 48 Democratic and Independent votes.  Senator John McCain was not present; he was in a hospital in Arizona getting chemotherapy.  In Alabama a Democrat was just elected to the Senate who has not yet taken his Senatorial seat.  Instead a temporary replacement appointed Republican voted for the change.  This Democratic Senator would have changed the balance to 50 Republicans to 49 Democrats.  We don’t know how John McCain would have voted.  We do know that the Bill was crafted at night and much of its contents kept secret.

 

The probability is that over the next year the Republicans will attempt to reduce government costs by significantly reducing their spending on entitlement programs, programs for the poor and the middle class.  They may attempt to do away completely with Affordable Health Care by making it a state program with fixed reduced Federal grants.  And they may attempt to privatize Social Security.  The interesting thing here is that when Social Security was fixed in the 1980s and also had Medicare separated from it under President Ronald Reagan a lot more was paid into it than was needed.  The excess has traditionally been put into the General Fund and Social Security has been given a paper credit for that amount.  The paper credits added up today equal well over two trillion dollars of the National Debt.  If Social Security were privatized would this amount be added to the amount transferred to private enterprise or would it just be forgotten?

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The blatant cynicism within this bill by the Congressmen who had all taken an oath to the Constitution is appalling. These men are serving themselves first and the country second.  Many openly voted for a bill that would give them tax advantages.  Others like Paul Ryan, the Speaker of the House of Representatives, are highly ambitious.  Even though Ryan comes from a safe Republican area, I understand, he has chosen not to run in 2018; He is temporarily retiring from the government.  Alabama was a safe Republican state that elected a Democratic Senator.  Wisconsin could do the same.  Ryan would like to be President of the United States.  He ran with Mitt Romney in 2012 as Vice Presidential candidate.  If he retires in 2018 he can run in 2024 as the Republican Presidential candidate.

 

It has been suggested by a Republican Congressman that 2018 could be a political blood bath.  The Republicans have forced through Congress strictly on a party basis an unpopular tax reduction bill.  In 2018 they may try and possibly succeed in passing other unpopular bills.  Comes the first Tuesday in November they could easily lose their small majority in the Senate.  They could also lose their larger majority in the House of Representatives.  A lot of people are very angry with Trump and the Republican Party.  They will probably vote accordingly.

 

Virtually all of Trump’s Bill could be eradicated before the end of 2019.  From what I understand Paul Ryan, running for the Presidency in 2024 may have a platform of lowering taxes for rich individuals and large corporations.  That would, of course, be determined by the Democrats.

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The majority of the country is highly dissatisfied with the Trump Tax Cut that was passed toward the end of December, 2017.  The Midterm Election will be held the first Tuesday in November 2018 and the new Congress will take office in January 2019.  Many current Republican members will not run for office in 2018.

 

The probability is that from January 21, 2019 either the Senate will achieve a Democratic majority or both Houses of Congress will do so.    If the Democrats gain control of the Senate they should be able to force the Republican House of Representatives to accept changes to the tax bills by adding amendments to all Republican bills.  Bills can deal with any number of subjects.

 

When these bills go to a Conference Committee the Democrats can refuse to allow the Republicans to remove these amendments from the original bills.  In this case the Republicans have a choice either to kill the bill or give in to the Democrats.  If the Democrats win both Houses of Congress then President Trump has the choice to approve Democratic bills in return for something Trump wants.  It seems also that the rules of the Senate have been changed limiting debate; there will be no filibustering to frustrate the Democrats.

The Weiner Component V.2 #45 – Implications of the New Tax Bill

Official Portrait of President Ronald Reagan

Official Portrait of President Ronald Reagan (Photo credit: Wikipedia)

Official portrait of United States Senator (R-KY)

Official portrait of United States Senator (R-KY) (Photo credit: Wikipedia)

On Friday, 12/5/17, under Mitch McConnell’s leadership the Senate went to work on a final edition of the so-called 1,000 page Tax Reform Bill.  Apparently they were willing to work through the night of December 6; but finished the bill at about Two A.M.  McConnell

worked with individual Senators changing sections of the bill to meet their objections.  The final version contained multi crossed out sections and pages and innumerable changes written in in pencil, hand written in the margins.  In addition there were sections added by lobbyists, including one by McConnell benefiting distillers of alcoholic beverages.  Apparently Kentucky, where McConnell comes from, has a large number of distilleries.  It should be noted that no one in the Senate had read through the final version of the bill before it was voted on.

 

The Democrats requested that a vote not be taken on the bill until the following Monday so that they could read it before voting on the potential law.  This was refused.

 

With one exception McConnell just had the necessary votes to pass the bill.  It was passed strictly on a party bases.  Ninety-nine Senators were present.  Fifty Republican Senators voted for the bill.  One Republican Senator, Bob Corker of Tennessee, voted against it because it would add one trillion or more dollars to the National Debt.  All the forty-seven Democratic Senators plus the two Independents voted against the bill.

 

While the Republican Senators were very pleased with their accomplishment the Senate’s version of Trump’s idea of Tax Reform, while essentially similar in content to the House of Representatives bill, was still very different from their proposed law.  In order for this bill to become law both versions have to be identical.  They were far from that point.

 

What happened was that a Conference Committee, composed of members of both political parties from both Houses of Congress met, with the Republicans in the majority, and they worked out a compromise bill made up of the two versions which, in turn, went back to both Houses of Congress and be voted upon.  It was further worked upon and passed both Houses of Congress and the President several days later signed it and the bill will become law in January of 2018.

 

The problem here was that the House of Representatives is made up of a Republican majority which consists of very extreme conservatives like the Freedom Caucus to relatively moderate Republicans.  The Democrats are totally opposed to this bill.  The Bill continued getting modified until it gained support from all Republicans.

 

In the Senate the Republican majority currently is one Senator.  One Republican Senator, Bob Corker of Tennessee who is retiring from the Senate in 2018, was against the bill.  He was pacified and changed his vote when a section was added allowing him to keep more from his real estate holdings.  Republican Senator Susan Collins of Maine was having second thoughts about the bill   She also was pacified with promises.  The Bill passed.

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Prior to the above vote there was also a special Senate election in Alabama to replace Jeff Sessions, the Attorney General, on Tuesday, December 12th.  The Republicans ran Roy Moore, an accused pedophile who attempted a sexual encounter with a 14 year old high school student when he was a 32 year old Assistant District Attorney.  Several other women have accused him of similar actions when they were 16 or older.  In Alabama the age of consent is 16.  Moore initially admitted knowing some of these women and then denied having met any of them.

 

Alabama elected a relatively liberal Democrat?  The governor of the state has said that she considers Moore guilty but will still vote for him.  The state is mostly evangelical.  The majority of the population is very conservative.  The Republican candidate, Roy Moore lost by over 20,000 votes but has refused to concede the election.

 

This will give the Democrats 49 votes and the Republicans 51 votes in the Senate.  The Democrats requested that the vote be held off until the Democrat, Doug Jones, takes his seat.  The Republicans refused and had the temporary Republican appointee vote.

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On a broad basis the Tax Bill will present a giveaway to the large corporations and the upper stratum of society.  Trump, himself, will save multimillions of dollars after the bill is passed.  It will slash the top corporate tax rate from 35 percent to 20 percent.  In addition it will cut the upper income tax rate individuals pay from 39.6% for an income of $418,488 or more and for 39.6% for married couples earning $426,700 or more to $1,000,000 or more.  This one action will seriously reduce the amount of money collected in income taxes and massively reduce the percentage paid in taxes by the upper percentile of the population.

 

While most of the traditional deductions will be gone or seriously reduced there will be new ones that can be used by the upper echelon and the corporations.  For example a tuition deduction for private schools or for a future college education for children will probably be instituted.  Also companies will have their entire costs of automation deductible.  The tax bill will allow companies to deduct their entire expenditure on robots that replace workers.

 

The Secretary of the Treasury, Steven Mnuchin, had been promising to release an analysis of the Trump or Republican Tax Plan.  Instead he issued a one page memo upon the effects of the proposed new taxes.  Presumably in massive studies, which the Treasury people deny ever happened, the tax bill will generate enough new revenue to pay for the tax bill and add an additional 300 million over a decade.  Tax policy experts have called this into question.  “This is not a serious analysis effort,” stated Mark Mazur, director of the Tax Policy Center.

 

The governments of several European nations have also issued warnings that sections of the new tax bill interfere with international trade agreements and could disrupt it.  There has been no real analysis of the effects of this bill by any group, partisan or nonpartisan.

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The pattern of Supply Side Economics which the Bill uses as its basis was first espoused by President Ronald Reagan and his administration from 1981 through 1989.  Reagan took the United States, which in 1981 was the largest creditor nation in the world and in eight years turned it into the largest debtor nation on the planet.  During that period the National Debt grew from 997 billion dollars to 2.85 trillion dollars.  He was able to do this with what was then called Supply Side Economics.

 

His philosophy was to reduce government spending, reduce federal income and capital gain taxes, and reduce government regulation.  This would grow the economy.  When companies got more cash they would hire more workers and expand their businesses and produce additional products which would generate more taxes.  In essence if Supply were increased so would consumption grow.  It didn’t quite work that way.

 

People will expand their purchasing when they have more income.  Reagan gave the biggest income increases to large companies and the upper echelon of society.  The companies produced their goods based upon demand.  They didn’t increase production and assume they could sell as much as they produced.  Supply Side Economics was a myth; it never came about in the real world.  People whose incomes were increased put that money into old industry like the stock market.  There was no real expansion of new investment.

 

This was Reagonomics.  The next two Republican Presidents, George H.W. and George W. Bush both cut taxes mostly for the rich and greatly expanded the National Debt with their wars.  The Democratic President, who came between those two, President Bill Clinton, lowered taxes for everyone, expanded the economy, and began reducing the National Debt in the last years of his presidency.

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We now have Donald Trump as President of the United States and both Houses of Congress are controlled by Republican majorities.  If one looks at a political map of the United States the Republican controlled states and electoral regions with the states are all marked in red and the Democratic controlled states and regions within the states are marked in Blue.  The most populous state within the United States is California which is mostly a blue state.  Then come New York and Florida, both having the same number of Congressmen.  After that there is Texas.  The other states all have smaller populations.  The various individual deductions that the new tax bill has done away with mainly effect the larger Democratic states where people itemize their deductions.  This would be California and New York.  The Republicans have built into the bill a form of punishment for Democrats who are mainly members of the middle class.  Their taxes will actually rise with this so-called tax reform.

 

Florida is a purple state on a political map, containing large numbers from both political parties and Texas is a red state.  The group that will be most affected by the tax reform will be retired senior citizens.  The Senate bill does away with the requirement to belong to Affordable Health Care.  This will cause premiums to rise significantly as the younger generation will opt not to join.

 

In addition Congress will need to help pay for the tax cuts.  Paul Ryan, the Speaker of the House and Senator Marco Rubio have both indicated that money will have to come from entitlement programs.  It has long been a Republican goal to privatize Social Security and Medicare.  This may well be the chance the Republicans have been waiting for.

 

The Weiner Component V.2 #44 – Patterns of History: Part 4: The Trump Tax Reform

speaking at CPAC in Washington D.C. on Februar...

The western front of the United States Capitol...

It was the expenditure of money directly after the Second World War that brought about the prosperity that came about in the United States, Europe, and Asia.  In the earlier period of 1918 to 1919 at the end of the First World War there was an instant recession as the many veterans in the U.S. attempted to come back to civilian life directly after the war.  At that time no economic adjustments were made.  In 1945 to 1946 the Federal Government created and applied large amounts of money to the issue and there was no economic problem.

 

In addition the Federal Government added massive funds through the Marshall Plan and otherwise from 1948 to 1952 which also solved the reconstruction problems of Europe and Asia.

 

During and after 1945 the various economic problems were solved on many levels by the Federal Government using the free application of money.  The money was not an object of value but a source of exchange.  It allowed for a free exchange of goods and services for other needed or wanted goods and services.  By the United States freely giving money to nations in Europe and Asia in the Marshall Plan and the Asia Recovery Act they allowed these nations to rebuild and created jobs not only in those nations but also in the United States which supplied the materials and equipment needed for the reconstructions.  The actual wealth created at that time was the new cities in these countries and the multitude of jobs created in Europe and Asia and in the United States.

 

This wealth which the United States created by the simple act of increasing the money supply and distributing it to all these countries brought about a higher level of prosperity than had existed in any of the nations involved before the Second World War.  And this included the United States.  The money had been the tool that allowed each war-torn nation to harness its work forces and rapidly rebuild.

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Prior to 1933 money had been an object of wealth.  It was mainly gold and silver in the form of coins.  After that year, in the United States, the gold was collected, withdrawn from circulation, and replaced by printed paper currency.  Thereafter money became a means of exchange having no real value except what was assigned to it by the government that printed it.  It became a means of exchange allowing labor for different labor.  The new currency could be immediately used or kept for any period of time and then used.

 

From 1933 on the entire concept of money was changed, first within the United States and then throughout the entire world.  The use of money thereafter became the use of a tool to enhance productivity which then became the new form of wealth.

 

In 2009, after the Real Estate Bubble Burst and the United States was facing a possible depression greater than the Great Depression of 1929 President Barack Obama used money to turn that disaster into the Great Recession which he resolved during his turn in the Presidency.  Money was the tool that ended the Great Recession.

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Is there a difference between money as gold being the object of wealth and a paper means of exchange?  The answer is, of course, yes.

 

If money is the object of wealth which is required for any and all types of business to occur then the amount of gold in existence determines the amount of business that can be done.  The question that continually arises is: Is there enough gold in the form of money available to conduct all the necessary business?

 

The answer to that question is, No.  There has never been enough gold coinage (with the exception of the 16th Century, when Spain looted the New World) available to conduct the necessary amount of business in Europe or elsewhere.  In fact the mining and minting of gold is a totally different subject from the growth of business in the world.  The two have nothing to do with one another.  But up until 1933 the existence of the two were tied together.

 

If business is tied to the amount of gold coins available then it is extremely limited.  For business practices to be able to grow unfettered it has to have the potential to have an unlimited amount of money potential.  This is what exists when the amount of paper money in circulation is based upon legislative printing decisions within each country.

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Currently in the United States the seated President, Donald J. Trump, is attempting to bring about, what he calls, Tax Reform.  This is actually a massive tax cut for the wealthy like himself and for the large corporations within the country.  He is touting it as a tax cut for everyone but that is nonsense.  Trump is attempting to give himself and his group, the economically upper 1%, massive increased tax advantages which will be paid in part by those earning $10,000 to $75,000 a year and by deficit spending.

 

He and most of the Congressional Republicans are willing to say and promise anything to get enough support to get this bill through Congress and onto Trump’s desk where he will sign it into law.  Once it is accomplished Trump and his cohorts in Congress will continue to state how everyone is benefiting from this new law but the truth will be the opposite.

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There are two different categories of taxes: most are regressive, that means the lower your income the greater a percentage is paid in taxes.  These would include sales tax, excise tax, gasoline taxes, all licenses, etc.  Everyone pays, at least, some of these taxes.  Some of them are use taxes like automobile, liquor, or cigarette taxes.  These could be federal, state, county, and city taxes.

 

Then there are progressive taxes.  These are generally income taxes which some states and the Federal Government have.  These taxes are largely based upon ability to pay; that is, the more one earns the greater the percentage of their income is taxed.  The Federal Income Tax is progressive up to 39.6% or $470,700 for a married couple filing together.  For a single tax payer it would be half as much.

 

After this amount of earning the tax becomes regressive.  39.6% is paid no matter how much above the $470,701 amount is earned.  The percentage is frozen If the couple earns ½ million dollars or one million or ten million or more.  It remains at 39.6%.  Actually the more the couple earns the lower a percentage of their income is taxed.  In 2012, when Mitt Romney ran as the Republican candidate for the Presidency, he paid 12% of his earning in taxes while the average middle class family, who earned a lot less than he did, paid at least 20% of their income in taxes.  We don’t know how much Donald Trump pays since he has refused to release his tax form.

 

President Trump, in his new Tax Plan would lower the maximum category of these taxes.  The upper two percent would reach the maximum level at a lower point than the 39.6% level.

 

Today most members of the lower class pay no income tax because their incomes are too low, but in all other taxes they pay a larger percentage of their incomes than the middle class.

 

Trump’s assorted Cabinet, from Secretary of State on, are all millionaires or billionaires.  They would all directly benefit from Trump’s tax plan.

 

No one is arguing that the income and other taxes in this country don’t need reforming.  The laws are 7,000 pages long.  But the Trump tax plan is not reform, it is a reduction in taxes for the rich.  In the opinion of the experts it will be harmful for the country.  While the bill is still being worked upon by the House of Representatives and the Senate the Republicans are touting in TV adds that the bill will save the average citizen $2,100.  Where is reality?  And for how long?  The upper echelon’s taxes presumably go on forever but everyone else’s tax benefits expire in about five years.

 

The Republicans originally wanted to gut Obamacare by dumping it upon the states and using the money they saved to pay for the tax cut.  That didn’t work.  The plan is now to reduce their taxes by increasing the National Debt.  After all what is a trillion and a half more or less added to the National Debt!

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There is another extremely negative consequence that would come about if this bill became law.  It would help tremendously in the demise of the middle class.  Over the last twenty years or so incomes in the United States have followed a strange pattern.  For the executive class across the country compensation packages have risen significantly, generally in the millions.  But for members of the middle class wages have gone up very slowly, if at all.

 

With the exception of the Real Estate Bubble bursting in 2008 there has been little wage growth.  In 2008 there was a wage collapse.  Inflation during this period was very low, about 1 ½% a year.  But if you take 1 ½% for a period of two decades it equals a 30% increase in the price of living.  This means that the value of the wages and their purchasing power has shrunk considerably.

 

What has happened in the United States is that standards of living have dropped quite a bit and with it the number of people within the middle class.  The country is moving, once again, in the direction of a growing lower class.  Historically we seem to be going back to the 1880s or 1890s with all the corruption which existed at that time.

 

Trump’s Tax Plan would exacerbate the shrinking of the middle class.  It would bring about a massive worsening of conditions in the United States.  The country needs reform.  But this is not reform.  Instead it is an extension of the negative conditions of over a hundred years ago.  Hopefully Trump’s Tax Reform will die just like “Repeal and Replace” did several times over a nine month period.

 

If it does pass the probability is that in the 2018 Midterm Election the Democrats will become the majority in the Senate and even possibly in the House of Representatives.  If this happens there will be some fancy negotiating with Trump over the following two years and a strong possibility of a Democrat becoming President in 2020.  This could bring about a new era of tax reform.

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The difference between money as a means of exchange or goods and services and an object of wealth is subtle but of extreme importance to the welfare of the society.  As an object of wealth money tends to be dormant within the society.  It is essentially stored in dormant forms of wealth like stocks or other kinds of older investments by the well to do who possess most of it.  This limits the amount of currency available for spending, investment and growth within the society.  While money as a means of exchange continues to be present and is in constant circulation within the country allowing for maximum economic growth among the entire population.  Trump’s basic tax reform plan will make it an object of wealth within the society and actually limit economic growth and expansion.  It could eventually cause an economic recession or depression by bringing about a strong economic contraction.

 

In point of fact today, December 17, 2017, the eleven hundred page Tax Bill is still being worked upon.  Presumably on Monday, December 18 the bill will be finalized and probably voted upon.  We only know generally some of its features.

 

The Weiner Component V.2 #43 – Patterns of History: Part 3: Post World War II

Umezu signing the instrument of surrender to t...

Umezu signing the instrument of surrender to the United States (Photo credit: Wikipedia)

One of a number of posters created by the Econ...

One of a number of posters created by the Economic Cooperation Administration to promote the Marshall Plan in Europe (Photo credit: Wikipedia)

Map of Cold-War era Europe and the Near East s...

Map of Cold-War era Europe and the Near East showing countries that received Marshall Plan aid. The red columns show the relative amount of total aid per nation. (Photo credit: Wikipedia)

George C. Marshall, General of the Army.

George C. Marshall, General of the Army. (Photo credit: Wikipedia)

On September 2, 1945, Japan formally surrendered unconditionally and World War 2 was over.  Germany had surrendered unconditionally earlier, on May 8, 1945.  Italy had given up two years before on September 8, 1943.  The Axis Powers no longer existed after Japan surrendered.  The war was over.

 

Allowing for the massive bombing destruction and the millions killed during the war, many cities, both belonging to the Allies and the Axis had been bombed to almost complete rubble.  The world was then at peace but recovery from the destruction still had to come about.

 

Keep in mind that if economic conditions had been better in the period between the two wars World War II would never have occurred; the people who gained control of Italy, Japan, and Germany would never have been successful in taking over these countries without the dire economic conditions brought about by the depression.  The ultimate cause of the war was the Great Depression.

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The war, both in the United States and otherwise, had been a time of deprivation.  In order to win the war people had done without much of the goods and services needed for proper living.  Virtually all production for the duration of the conflict had been aimed at winning the war.  Countries could now begin recovery in Europe and Asia, while in the United States it was a time for a return to civilian goods.  There had been no actual fighting in America.

 

Before World War II most people in the United States were still coming out of the Great Depression; they were surviving more or less.  Conditions improved under President Roosevelt but the economic level that had existed before 1929 was never reached.  Then, for about five years, the country had been involved in fighting a major World War.  Production in most industries had been involved in fighting World War II.  Most of the goods and services produced went into the war effort.  Civilians did without.

 

Production in most industries had geared up to its maximum point.  The President was continually calling for higher production goals.  If an individual wasn’t in the military he or she was involved in some form of industry or they were farmers producing as much food as they could and receiving top dollar for their products.  People invested their new excess funds in war bonds or they had banked this money.  During the war there wasn’t much upon which to spend their earnings.  Most production, as we’ve seen, was for the war effort.

 

Now in 1945, with the war over, people wanted the luxuries they had never really had.  Industry in the United States turned from war production to civilian production.  Automobile plants retooled and began producing civilian cars.  It would take several years to just meet the demand for new automobiles.

 

A new industry that began at this time was television.  While the technology had been developed in the 1930s it was not practically applied until the mid-forties.  People bought large cabinets containing seven inch screens that initially broadcast in black and white for a few hours each evening.

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Basically what happened in the United States was a nation flush with money and flush with new or reconstituted older industries was raring to make up for what they had missed over the last five years.  The remnants and probably even the memory of the prewar depression were gone.

 

In addition the nation through Congress wanted the soldiers brought back home as quickly as possible now that the war was over.  The country felt extremely grateful to the G.I’s for what they had done and Congress, in addition to bringing the troops back home, came out with the G.I Bill.  Veterans, who had left school to join the military were offered an opportunity to go back to school and finish their education.  The Federal Government would fund them, living expenses, tuition, and books.

 

Some veterans returned to high school and finished up the last year or two there in a few months and then went on to college.  Even if they were married and had children the government would fund them.  For many, who had never thought of higher education, it was easier to go to school than immediately get a job.  This included those with families.

 

Consequently many came back to high school, finished in a short period of time and went on to college.  It didn’t matter what their responsibilities were the government funded them.  A whole generation of individuals who had originally never intended to go to college got higher education degrees and subsequently became members of the middle class with higher incomes than they had ever conceived. .

 

In addition for those who didn’t want to go to college the Federal Government funded them opening up their own business.  Many became, among other things, television technicians and store owners.

 

In essence the Federal Government through funding and education created and encouraged the existence of a large middle class.  It transformed the United States into something it had never been before, mainly a middle class nation.  This meant much higher expectations for the majority of Americans throughout the nation and a much higher standard of living for virtually everyone within the country.

 

The process of doing this, the spending of all this money by the Federal Government massively increased the National Cash Flow within the country, which, in turn, also worked toward raising everyone’s standard of living.

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Europe emerged from the war as a basket case.  A good part of the war had been largely fought there.  Its major cities were largely destroyed.  Many had to be rebuilt almost from scratch.  They had the labor but not the funding.

 

Secretary of State and former General George C. Marshall in a speech given in 1947 recommended foreign assistance by the U.S. to help rebuild Europe.  This became, what President Harry S. Truman called, The Marshall Plan or European Recovery Program.  It was passed in both Houses of Congress on a bipartisan basis in 1948 and signed by the President that year.  The United States spent over 13 billion dollars in 1948 dollars; that would equal 135.4 billion dollars in September 2017 dollars.  This was money given to the European nations.

 

The program lasted four years.  Eighteen European countries participated in it.  The Soviet Union and the Eastern Bloc Countries, which the Soviets controlled, refused any of this aid.  This actually made it easier for the bill to sail through a Republican dominated Congress.

 

The United States provided similar aid in Asia but they were not part of the Marshall Plan.

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The question that now arises is: Was the United States totally altruistic, helping both its allies and enemies in World War II?  Interestingly the answer to that question is both Yes and No.

 

We did help those eighteen countries and shortly thereafter the Asian nations also recover from the ravages of World War II.  In fact, their new infrastructures were far more modern than that of the United States.  But what we supplied was the money to buy the goods that allowed both the recovery and modernization.  The actual goods needed were purchased mostly from the United States.  The production of these goods also added to the overall prosperity of the country supplying them.  Simply stated, we gave these countries a checking account to be used essentially in the United States.

 

The question then arises: Where did all this money come from?  Taxes were certainly not raised in the United States to pay for all this productivity used by these nations for economic recovery.

 

To understand this we have to think back to what President Roosevelt did in the United States in 1933; he doubled the U.S. money supply by taking the country off the gold standard.  Money was no longer gold, instead paper currency became a means of exchange not really backed by anything of value.  It was created by having the government of the nation simply printing and issuing it.  As long as the supply of money in circulation did not exceed the amount of goods and services that the country could produce there was no real inflation and it retained its value as a means of exchange.

 

The major currency in the world in 1945 was the American dollar.  It was in demand throughout the globe.  There was no way inflation could occur then.  It stabilized all the other currencies, which were measured against it.  The United States printed the money as needed and spent it within the country and throughout the world.  From these dollars both in and out of the country massive human productivity occurred and recovery from the war came about historically in a relatively short period of time.  The results were prosperity for both the recipients of the funds and also for the suppliers of the money.

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It is vital to remember that money is now an object of exchange.  It itself has no real value except that which is arbitrarily assigned to it by the nation that prints it.  By making it the object of exchange the money then served to enhance the productivity needed to restore the different nations to a new level of economic productivity.  The different nations, after World War II, reached a new level of prosperity that was greater than what had existed before the Great Depression.

 

Keep in mind that that was just a starting point for each individual nation.  The economies were higher and more sophisticated than they had been earlier but they were still in flux.  The national economies could still go up or down bringing about continued grown, recession, or depression.  But by 1952 were at a higher economic point than they had ever been prior to that time.

 

Also the true key to the real wealth of a nation today is determined by the extent of its productivity.  This overall productivity is controlled by the distribution of the money throughout the society.  If everyone get a reasonable amount to spend over each period of a year then the nation’s potential can be reached.  But if the distribution is totally unequal then the productive potential becomes limited and the Gross Domestic product (All the goods produced in a twelve month period.) is limited.  This can occur by making money itself the object of wealth rather than just the means of exchange.

 

 

 

The Weiner Component V.2 #42 – Patterns of History: Part 2: Post World War II

English: United States President Franklin D. R...

English: United States President Franklin D. Roosevelt signing the declaration of war against Japan, in the wake of the attack on Pearl Harbor. (Photo credit: Wikipedia)

"YOUR MONEY IN WAR BONDS HELPS TO..."...

“YOUR MONEY IN WAR BONDS HELPS TO…” – NARA – 516270 (Photo credit: Wikipedia)

English: The "Big Three": From left ...

English: The “Big Three”: From left to right: Joseph Stalin, Franklin D. Roosevelt, and Winston Churchill on the portico of the Russian Embassy during the Tehran Conference to discuss the European Theatre in 1943. Churchill is shown in the uniform of a Royal Air Force air commodore. (Photo credit: Wikipedia)

Forgetting the horror caused by World War II, the Second World War economically changed the United States and the rest of the world positively.  The U.S. and other countries, including Germany and Japan, entered the war with the bulk of their populations being lower class, having a minimal standard of living.  Relatively shortly or at least within the first two decades after the end of the war the bulk of their populations had risen to a middle class status, having a comfortable standard of living for the majority of their populations.  What happened?

 

The Great Depression broke out early in 1929.  It brought about economic isolation with each nation attempting to survive by itself.  Germany, Japan, and Italy attempted to recover by imperialistic advances.  Italy expanded into North Africa, Japan into China and the rest of Asia.  Germany intended to expand both East and West in Europe.

 

In the United States, separated by thousands of miles from Europe and Asia, there was no immediate threat of war.  The country, under Republican President Herbert Hoover, just continued on essentially waiting for the capitalistic system to reassert itself.  It didn’t.

 

The majority of the population was lower class, just barely surviving on their limited incomes.  But at this point there was massive unemployment and no real jobs available.  Men deserted their families they could no longer support, rode the rail lines as hobos, following rumors of work in one or another part of the country.  The entire capitalistic system had broken down.  And no one understood why or how to fix it.

 

In 1933 Franklin Delano Roosevelt became the 32 President of the United States.  In his maiden speech on the new device, radio, he spoke of people having nothing to fear but fear itself.  Roosevelt used radio to talk the nation through its irrational apprehensions of the Great Depression.

 

Roosevelt changed the function of government.  Before he became President it provided a safe environment in which its population could function.  With the Roosevelt Administration it took on responsibility for those people within the country who could not properly provide for themselves.  What had been a matter handled by Church charities earlier would from then on be taken care of by the Federal Government.  The problem had grown too large for the religious institutions to take care of.

 

Roosevelt called his program the 3 R’s: Relief, Recovery, and Reform.  Under Relief, Roosevelt offered the New Deal, where the Federal Government would create jobs for the unemployed.  There was everything from manual labor to theater projects for writers and actors.  The New Deal even produced some films.  There were projects like Hoover Dam, electrification of sections of the United States, and community theaters, plus innumerable other projects.

 

With all this conditions improved in the United States but the depressed state continued.  There was still a high rate of unemployment.  While conditions improved total Recovery never came about for the United States until shortly after World War II in Europe broke out with an endless need for food and war materials.

 

Reform was legislation that was to keep causes of the depression from occurring again.  There were bank and other types of regulation.

 

On December 7, 1941 the United States entered War II after being attacked at Pearl Harbor, Hawaii.  The War would not end until the unconditional surrender of Japan in 1945, after the dropping of two atomic bombs.

 

It was from this point that recovery began, first within the United States and then with Europe and Asia.

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Once America entered the war the United States became the “Arsenal of Democracy,” involved in what was practically considered a holy war against the Axis Powers, the forces of evil.  The U.S. supplied Allied Nations with the materials to fight the war.  Initially the Allied nations stored their gold supplies in the United States for reasons of safety.  In order to fight the war they spent that gold buying food and war supplies.  After that when the gold was spent the United States developed a policy of “lend lease” which was actually a policy of giving to the Allies what they needed to continue their efforts against their enemies.

 

Where did all this money come from?  The United States Government printed it and used it to pay for the goods and services produced.  This money then was added to that already circulating in the National Cash Flow.  Because money added to the Cash Flow is spent several times this added several times the amount initially added to the Cash Flow.

 

The U.S. also sent armies overseas to fight in North Africa, Europe, and Asia.  Interestingly even with the casualties caused by the war its overall population still increased.

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The entire nation was involved in fighting the war.  People put in window boxes in their apartments or turned their lawns into “Victory Gardens,” growing vegetables.  Housewives saved the excess fat from their cooking and turned it in to their butchers who, in turn, turned it over to manufacturers who used the grease in their production of war materials.  Children collected old newspapers and tin cans that were reprocessed and reused.  Virtually the entire families were involved in the war effort.

 

The government sold War Bonds.  For $18.75 one could buy a War Bond that would return $25.00 in ten years.  Larger denominations were also sold.  Children in public schools bought and collected War Stamps which when the amounts were large enough were exchanged for War Bonds.  Adults also contributed their excess money buying these.  Largely everyone was putting money into the war effort.

 

In addition rationing was instituted shortly after the United States joined the war effort.  Items of food like meat and many vegetables were rationed in the country with the bulk being sent overseas for the war effort.  Gasoline and many other items were also rationed.  Families were issued rationing books with all kinds of stamps in them, the amount depended upon the number of the family.  Women went shopping with limits set by the rationing books.

 

All vehicles built during the latter part of 1942 until the end of the war in 1945 were military vehicles.  There were none built for civilians.  Virtually all the U.S. factories were converted to the war effort.

 

From 1940 on there were more jobs available than there were people to hold them.  Once America had entered the war in December of 1941 people could work double shifts at the factories.  In addition in 1942 many high school students worked after their school day.  Women were brought into the factories.  In 1943 for the first time in the general society Blacks in the Northern states also got jobs working alongside whites in the factories.  All this to meet the production needs of the war effort which President Roosevelt kept increasing.

 

The major problem that evolved was that the working public was now earning more money than it could spend.  Selling War Bonds was a device to take some of this money off the market.  For people who wanted more than rationing allowed there was the Black Market, illegally selling items of food and other products without the use of rationing stamps.  But even with this there was a tremendous buildup of money among the general public.  And at the end of the war all this money would be looking for products to purchase.

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It is worth considering briefly the question of where the money that the Federal Government spent came from.  The statement was made that the Government printed it as it was needed.  Keep in mind that under President Roosevelt the basis of money changed.  At the beginning of 1933 money was gold in the form of coins.  By the end of that year and thereafter the gold had been collected, melted down in blocks and stored in depositories.  New paper money had been issued in its place.  The new source of currency had no real value.  It was a means of exchange: the production of goods and services for the potential to eventually purchase new goods and services.  The wealth produced was the goods and services used during the latter part of the Great Depression and during World War II.  The potential that the United States had, with everybody working, for production was the real wealth produced.  And this principle remains true today.

English: US GDP from U.S. Department of Commer...

English: US GDP from U.S. Department of Commerce: Bureau of Economic Analysis (Photo credit: Wikipedia)

The Weiner Component V.2 #41 – Patterns of History: Part 1: Welfare for the Rich

English: Woodrow Wilson.

English: Woodrow Wilson. (Photo credit: Wikipedia)

The Presidency of Donald J. Trump seems to be taking the country historically backwards.  We, as a nation, are moving toward the past, going from being a middle class nation to a lower class one.  And the current major agent bringing this about is the President of the country, Donald J. Trump with the aid of the Republican dominated Congress.

 

In the post-Civil-War Period the United States underwent a rapid phase of industrialization.  The Industrial Revolution arrived.  We changed from a rural civilization to an urban one.  This was the period of the robber barons and monopolies.  Taxation was limited.  The XVI Amendment to the Constitution legalizing the income tax would not be passed until 1913.  Prior to that date a large group of industrialists made multimillions of dollars in their prospective industries, establishing, in many cases, family dynasties, like the Rockefellers or the Fords.

 

At that time there were no rules of regulations.  Cities rose rapidly.  The country was crisscrossed with railroads.  Unions were considered organizations in restraint of trade.  Child and women labor was ramped.  Most industries worked their way up to become monopolies controlled by one man or a small group of men.  Monopolies bribed their way into Congress.  By the late 19th Century monopolies and oligopolies con`trolled most production.

 

All this corrupt growth was partly halted by the development of the Progressive Movement which rose around the turn of the 20th Century.  The struggle to end the monopolies and oligopolies would continue to and end with World War I.  It would not resume again until the Great Depression.

 

There was a great influx of labor during this early industrial period.  People came from Eastern Europe and Asia.  They built the railroads, filled the factories, and lived in overcrowded slums in the rapidly developing urban centers.

 

The overall population of the United States at this time was lower class, people: men, women, children, working for wages, usually low and were barely living upon what they earned.  With the Progressive Movement laws were passed improving conditions in the cities and the factories.  The labor movement developed and wages gradually improved.  Working conditions got better as new labor laws were passed.  It was a slow process.

 

With the coming of World War I there were shortages of everything in Europe.  Food and war materials were imported from the United States.  There was actually a labor shortage there.

 

During 1917 the United States was drawn into the war on the side of the Allied Nations.  The U.S. President, Woodrow Wilson’s slogan was: This was the war to end all wars.  Unfortunately after the war ended Allied Nations wanted revenge.  Wilson was forced to settle for a League of Nations which later the United States refused to officially join.

 

Germany as the only nation left of the Central Powers at the end of the War had to pay reparations for the cost of the war.  The Allies used the German reparations to pay the United States the money they had borrowed from her to fight the War.  With the coming of the Great Depression all payments ended.  Each nation worked unsuccessfully to get itself out of the Great Depression.  For the United States the Great Depression ended with the coming of World War II in 1939.

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In 1933, when he became President of the United States, Franklin Delano Roosevelt doubled the money supply in the nation by collecting all the gold coins, legally doubling their value from $18 an ounce to $36 an ounce, and reissuing the money in paper currency.  Presumably everyone had their currency exchanged from gold to paper.  Gold non-circulated certificates were deposited with the Federal Reserve which were supposed to stand behind the paper currency.  The gold was melted into blocks which were then put into depositories like Fort Knox.

 

By this move Roosevelt not only doubled the money supply he also gave the Federal Government possession or control of 50% of the money supply without raising one dollar in taxes.  This money would be used to pay for the “New Deal” that would be given to all the people in need in the United States.  Apparently Roosevelt also liked poker, that where the name of his program came from.

 

The entire concept of money would change at this point, not only in the United States but throughout all the nations since they all would follow this pattern.  Money would no longer be an exchange of a good or service for a valuable metal worth that good or service.  Paper money henceforth would have no intrinsic value.  It would only be a means of exchange.  A good or service would be exchanged for a different good or service.  Money would be the instrument of exchange.  It would state the value of the good or service for the other good or service for which it was exchanged.

 

Money now also became a means of scoring what a job or item was worth.  It had no real value outside of the country.  It could not be used in other countries.

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As we’ve seen in the United States prior to 1933 money was actual gold and silver; paper money was a promissory note that could be redeemed at any time for gold or silver.  It extended the amount of money in circulation.

 

Promissory notes began at one dollar and went up to thousands of dollars.  Ones and fives were silver certificates.  Anything above that was a gold promissory note that could be exchanged for gold $20 pieces of gold.

 

The year 1933 was the low point of the Great Depression.  In that year the Democrat, Franklin Delano Roosevelt, became the 32d President of the United States.  Among his actions that year he had all the gold coins, with the exception of a small number held back as souvenirs, collected and melted down into gold blocks.  They were stored in depositories.  Roosevelt had the value of the gold changed from $18 an ounce to $36 an ounce.  In essence he doubled the money supply.  This enabled him to pay for the New Deal.

 

What Roosevelt did, knowingly or not knowingly, was to change the function of money.  Before 1933 gold coins were accepted anywhere on the planet.  Money, an object of value was exchanged for equally valued goods and/or services.  After 1933 money became an object of exchange.  It had no intrinsic value.  It became within each country strictly an object of exchange; exchanging a good or service for a good or service.  Thereafter it became a sort of scorecard, denoting the value of an object, service, or occupation but other than that having no value itself.

 

In 1933 as the gold coins were collected gold certificates were issued and retained by the Federal Reserve for the gold collected and these served as the basis for the paper money issued.  Did the gold certificates equal the amount of paper money issued by the Federal Government?  I don’t believe anyone ever checked.

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Alexander Hamilton, the first Secretary of the Treasury, began this country based upon debt.  During the Revolutionary War the Continental Congress freely issued paper Continentals with which to pay its debts.  After the War Hamilton, as Secretary of the Treasury, Hamilton collected this money and put out a new issue paying off the Continentals at full face value.  He believed that a certain amount of Federal Debt ensured the allegiance of the property owning class.

 

With a few short exceptions, like the early part of Jefferson’s tenure as President, there has been a National Debt.  The question that now arises is: Should there be a limit to this Debt?  After all when the Federal Government borrows money it has to pay interest on the Debt.  Currently, toward the end of 2017 the Debt has reached 20 trillion dollars.  The interest upon that amount is in the hundreds of millions of dollars.

 

During periods of Democratic Presidents, when the Republicans had a majority in one House of Congress they have been deficit hawks, being upset over each additional dollar of debt.  With Republican Presidents they have been willing to massively expand the debt.  Under President Reagan the National Debt rose, for the first time, over one trillion dollars.  It more than doubled under the first Bush President and it quadrupled under the second Bush President.  Currently, under President Donald J. Trump, in order to bring about what the Republicans call “Tax Reform,” but what is actually a massive tax decrease for the wealthy, the Republicans are willing to increase the National Debt by over 1 ½ trillion dollars a year.

 

Originally they were going to gut Affordable Health Care (Obamacare) and use that money for the tax cut.  But when that plan failed their tax bill plans changed to take money from the middle class and from deficit spending.  Will that bill pass in both Houses of Congress?  I doubt it.  As long as the Republicans have a majority of two in the Senate they are having trouble passing anything.  To date, one year into their current administration they have passed no significant legislation.

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There is another important consideration to keep in mind.  With the current massive National Debt and the propensity of Republican Presidents to spend money unnecessarily or foolishly.  President George W. Bush’s Iraqi War and President Donald J. Trump’s ridiculous twelve hundred mile Wall there is a distinct possibility that the National Debt could continue to rise rapidly.  The effect of this is a redistribution of money in the hands of the wealthy.  After all who can afford to buy the continuous flow of government bonds?  Tax dollars will be paid by the rapidly declining middle and lower classes which will, in turn, be distributed as interest to the wealthy upper class.  This process will continually push many of the remaining members of the middle class downward economically into the lower class while enhancing the upper few percentile of the upper class.  It will help to take America back to where it was before the turn of the 20th Century.  In point of fact this plan can generate welfare for the very rich.

Franklin Delano Roosevelt, 1933. Lietuvių: Fra...

Franklin Delano Roosevelt, 1933. Lietuvių: Franklinas Delanas Ruzveltas (Photo credit: Wikipedia)

The Weiner Component V.2 #40 – Money & the Presidents: Part 6: Donald J. Trump

The Presidential Election of 2016 was between Hillary Clinton and Donald J. Trump.  Clinton was the Democratic candidate and Trump was the Republican choice.

English: Hillary Clinton Speaks to College Dem...

English: Hillary Clinton Speaks to College Democrats (Photo credit: Wikipedia)

Hillary R. Clinton had been demonized by the Republicans since she was first lady of

speaking at CPAC in Washington D.C. on Februar...

speaking at CPAC in Washington D.C. on February 10, 2011. (Photo credit: Wikipedia)

Arkansas and her husband had been Governor of that state from January 11, 1983 on.  At that time she was called the Lady Macbeth of Arkansas by the Republicans because of her work for the poor and children.  As First Lady of the United States she chaired a committee on providing medical insurance for all American citizens which the Republicans strongly opposed.  It failed.  She has been heavily resented by Republicans over the years for being an advocate for those who need representation in the state legislature and in Congress and for being a Senator and Secretary of State.  The Republicans wanted her to be a stay-at-home First Lady rather than an advocate for causes they did not support.

 

Donald J. Trump has an odious reputation as a male chauvinist, a sexual predator, a dishonest businessman, a TV reality star, and as a prefabricator or liar.  He is a thin skinned narcissist and probable sociopath who sees everything in terms of himself.  In addition he is lazy, making-up what he doesn’t know or understand.  He verbally attacks anyone who in any way opposes him, calling those individuals derogatory names.  Today, as President, he is running a country whose functioning he doesn’t quite totally understand.

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What is Hillary Clinton’s great sin as far as the Republicans are concerned?  She is a liberal Democrat with a propensity to aid the poor and needy.  She sees the function of government as providing for those who can’t properly provide for themselves and having this paid for by those who can afford to pay higher taxes.  While Trump and the Republicans see less being spent upon the poor and needy and believe the rich, as the producers of the goods and services needed by the society, should be paying less of their incomes in taxes than the rest of the population.

 

In actuality Clinton specific crime was using a public email service rather than just a government email service.  On the basis of this numerous speakers at Trump rallies have yelled out, “Lock her up!!”  However prior Republican government officials like George W. Bush’s Secretary of State have done so in the past and Trump’s son-in-law, Jared Kushner, and Trump’s oldest daughter, Erika, have done so in the present; as have other Trump officials.  Somehow the Trump people can do anything but everyone else should be legally limited as to what they can do in government.  This is pure arrogance or cynicism.

 

From the evidence that seems to be emerging now it would seem that both the Trump people and the Russia conspired together and separately to flood the media with fake news and rumor and with stolen Clinton Emails aimed at making Hillary Clinton unacceptable to a percentage of the American public.  If Trump was personally involved in this the probability is that he will be impeached before his current term is up.

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The Republican Party, which lost its political majority in Congress in 2008, is very loud and complaining about anything the Democrats do or try to do.  During Barack Obama’s eight years as President the Republicans liked nothing that the Democrats did or attempted to do and they continually let the country and the world know it.  The Democrats, whose current minority leader is a lady, Nancy Pelosi, are a very quiet and polite.  Their philosophy is to let the general public make their own discoveries and vote for candidates accordingly.

 

A large group of people have become disgusted with both political parties and have become Independents.  They have left both political parties and vote as they see fit.  In addition many people vote against their own interests.  An example being those who voted for Trump who have had their medical insurance partly cut off.

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Donald Trump won the 2016 Presidential Election but Hillary Clinton had over three million more popular votes than he did.  This is the second time in the last 16 years that this has happened.  The first error, which put George W. Bush in the presidency in 2001, cost over 3,000 American military lives in an unnecessary war in Iraq.  This does not include all the Iraqis that were killed.  The current error placed Donald Trump, a man totally unfit to be President, in that office.  What harm he may do as President is anybody’s guess.

 

The President is elected not by the public directly but rather by the Electoral College which consists of State electors from 50 states being chosen in the exact same proportion in which they are represented in Congress.  Four hundred and thirty-five members of the House of Representatives, the number being determined by the population of each state and one hundred members of the Senate, two from each states regardless of the population of that state.

 

The Constitution was originally written during the summer of 1787 and completed on September 17 of that year.  It began operation on March 4, 1789.  This was about a decade before the Industrial Revolution began in England in the cotton industry; the United States at that time was mostly rural with some small cities.  At the end of the Revolutionary War the new United States was set up under the Articles of Confederation as 13 Independent States that had a largely powerless Congress.  The Constitution created a Union of the States, giving the new bicameral Congress the power to make laws for the nation.  Most people then still thought of themselves as belonging to the particular state in which they lived.

 

Communication tended to be very poor or slow.  The founding fathers who wrote the Constitution had to come up with a means of choosing an executive or president who would represent all 13 states.  Everyone knew at that time that the first President would be George Washington.  But after his term in office a new President would have to be chosen.  These founding fathers had no concept of political parties.  They wanted all the voters to choose the “wisest” man in their area and these electors would choose the best or “wisest” man in the country to be the new President.

 

Political Parties came into existence even before the new United States.  Alexander Hamilton created the Federalist Party.  The second national party came into existence in 1800 with the election of Thomas Jefferson, who created the Democratic-Republican Party, which is still with us as the Democratic Party.

 

Today eight states, within the United States, have 3 only electoral votes.  Twenty-seven of the fifty states, having from 3 to 8 electoral votes have a total of 132 electoral votes while the top four states in population: California, Texas, New York, and Florida, have a total of 151 electoral votes.  The remaining twenty states are between the two.  It takes 270 electoral votes to win the Presidential Election.  Trump received 304 Electoral votes.

 

As the population is not equal within each of the 50 states the Electoral votes in the larger states count less than those in the smaller populated states.  They are most heavily weighted in the eight states that have only one member in the House of Representatives.  In California the most populated state in the Union the Electoral vote counts the least.

 

What happens is that many smaller states have three Congressional votes: two in the Senate and one in the House of Representatives.  Eight states have 3 electoral votes.  Actually 33 of the 50 states have eight or less electoral votes.  Another 12 states go from nine electoral votes to eighteen electoral votes.  That means that 45 smaller states essentially control the election.

 

In terms of the popular vote in 2016 Trump received 46.2% or 62,984,825 popular votes; Clinton received 48.3% or 65,844,959 popular votes.  She should have won the election.  It is past time to have an amendment to the Constitution doing away with the Electoral College.  There is now almost instant communication throughout the United States.  Every single vote should count equally.  They do not under the Electoral College.  A true Democracy is supposed to express the will of the majority of the people.  This does not always happen with the Electoral College.  It is past time to get rid of it.

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Donald J. Trump, to quote one of his favorite words, is a “disaster” as a human being and as President of the United States.  For one thing he is incapable of showing empathy to Gold Star parents or wives whose son or husband died fighting for this country.  Everything with Trump is about himself.  All subjects seem to start and end with him.  He is the only President in the history of the United States who has held Election Rallies after he was elected to office.

 

The man is a total narcissist and he probably is also a sociopath.  He seems to believe that at the age of 71 he knows everything worth knowing.  He doesn’t like to read; consequently he gets all his news from watching TV; mostly, I suspect, Fox News.  Trump seems to see most people as either on his side or as enemies.  He never apologizes for anything he does or says, no matter how inept or stupid.  He also never accepts responsibility for anything he does that turns out negatively.  Everything bad is someone else’s fault.

 

Trump is also lazy.  He desperately wants legislative wins; but he doesn’t want to be responsible for defeats.  Consequently his Administration does not work directly with Congress.  What he gives to them is a very general outline of how he feels about the law at that moment.  He could easily change his mind by the next day.  When he was campaigning for office he promised to improve Affordable Health Care (Obamacare) his first day as President.  By the time he took office the concept had changed.  Trump’s major goal seems to be reducing taxes for himself and his fellow rich, as well as large corporations.  In order to bring this about initially the plan was to gut Obamacare, taking billions out of the program to pay for a massive tax cut for the rich and large corporations.

 

This was the “Repeal and Replace” plan.  The Federal Government would give fixed block grants to all the individual states.  The states would then run the medical care plan in each state, presumably making up the gradual increasing costs out of their own budgets.  This plan would have thrown millions of citizens gradually out of Affordable Health Care leaving it only for those few who could afford the premiums.

 

All the attempts the Republican dominated Congress made over a nine month period to pass this bill failed.  The only major bill that Congress passed over this period had to do with increasing sanctions on Russia for interfering in the 2016 Presidential Election and for limiting Trump’s power to individually deal with Russia.  It had over 90% bipartisan support in both Houses of Congress.  Since a veto would not have killed the bill Trump signed it.

 

Currently Congress, with Trump’s total support, is working on what it and the President call “a tax reform bill.”  This is a tax reduction bill for the rich and large corporations.  It actually increases taxes for the middle class particularly in the large Democratic states like California and New York and further separates incomes between the very rich and everyone else, further shrinking the middle class.  In point of fact those earning between $10,000 and $75,000 will have their tax bill increased while those in the millions will have their tax bills decreased considerably.

 

Since the Republicans were not able to take the funds needed out of Affordable Health Care they will largely pay for the tax reduction by deficit spending.  It seems that the Republicans are Deficit Hawks when the President is a Democrat but do not have a problem increasing the National Debt by an extra trillion and a half dollars or more when he is a Republican.  Massive principles apparently can change overnight!

 

The probability is that the Republican dominated Congress will have no better luck with this bill than they had with “Repeal and Replace.”  While the House of Representatives has a fairly large majority of Republicans there is only a majority of two Republican senators in the Senate.  There are 46 Democrats and 2 Independents who vote with the Democrats.  If the vote in the Senate is 50 for and 50 against then the Republican Vice President can break the tie with his vote.  But if three Republican Senators refuse to go along with their political party then the bill is defeated.  Every attempt at “Repeal and Replace” has been defeated by three votes.  Trump’s Tax Reform Bill could easily lose enough votes in both Houses of Congress to easily be defeated.  There is a Midterm Election coming up on the first Tuesday in November of 2018.  One third of the Senate and the entire House of Representatives will be coming up for reelection.

 

It seems that the majority of tax paying Americans are against this bill.  If it were to somehow pass the majority of Republicans could be swept out of Congress in 2018.  Even if it failed this could happen in 2018.  Trump would really be frustrated if he had to deal with a Democratic majority in the Senate or in both Houses of Congress.

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Apparently Trump wants a legislative victory regardless of its effects on the country.  He is perfectly willing to destroy the middle class or do whatever it takes to achieve this.  He may well not be successful in getting any new major laws passed for the rest of 2017 or even for 2018.  After the November 2018 Midterm Election there may be a Democratic majority elected to the Senate or even to the House.

 

From what I gather the European nations are waiting for Trump to go away in 2020.  The people in the United States may have to do the same thing if he is not impeached and hope he doesn’t do too much damage before that time comes.

A graph labeled "Figure 109," and fo...

A graph labeled “Figure 109,” and found on page 126. It shows the percentage of Democrats and Republicans who belong to labor unions. (Photo credit: Wikipedia)

The Weiner Component V.2 #39 – Money & the President: Part 5: Barack Obama

Official photographic portrait of US President...

With his family by his side, Barack Obama is s...

With his family by his side, Barack Obama is sworn in as the 44th president of the United States by Chief Justice of the United States John G. Roberts, Jr. in Washington, D.C., Jan. 20, 2009. More than 5,000 men and women in uniform are providing military ceremonial support to the presidential inauguration, a tradition dating back to George Washington’s 1789 inauguration. VIRIN: 090120-F-3961R-919 (Photo credit: Wikipedia)

President Barack H. Obama was elected in November of 2008.  He assumed the Presidency on January 20, 2009, inheriting a country on the verge of a massive depression whose economic downfall could also have brought down the rest of the Industrial nations of the world.

 

Most of the banking houses within the United States were close to if not at the point of bankruptcy.  They had been involved for the last 30 to 40 years in a process of increasing the amount of available currency in the overall economy by financing and continually refinancing a large percentage of American homes, and in doing this raising property values virtually to the clouds.  Their philosophy at that time was for homeowners to use their properties as bank accounts by continually refinancing them.  During the year 2008 this Real Estate Bubble burst with property values crashing in some cases 60 to 80 percent.  Initially in 2008 former President George W. Bush had partially bailed out some of the banks before he left office; but the bulk of this problem was left to the new incoming President, Barack Obama.

 

Among other things the country faced, with the sudden fall of values and the fact that the banks suddenly stopped refinancing homes, was a sudden massive level of unemployment.  On the one hand many people owed more on their homes than they were worth and on the other hand, because of the sudden massive unemployment, many people were no longer able to afford to make their monthly mortgage payments, even if the value of their homes was above their mortgage debt.

 

It should be noted that if a large percentage of the banks were allowed to fail then the movement of money within and across the country would slow to a trickle destroying the economy for a number of years until a new banking system could be set up, however long that took.  In 1929 with the Great Depression the disintegration lasted until the 1940s, the outbreak of World War II.  This one with its added complications could last 20 to 30 years, if not longer.

 

Another immediate problem was the fact that the numerous Hedge Funds that had bought the original mortgages, each of which had been divided up into a hundred or more pieces and sold piece by piece to different Hedge Funds, had very sloppy records of these transactions.  The banks sold the mortgages and/or set up their own Hedge Funds. Then they continued to administer them but no longer owned the mortgages.  At this point mortgage money was no longer coming in.  The banks stopped receiving their fees and the Hedge Funds no longer received their incomes.  What emerged was an impossible situation.

 

The problem here was that no one owned enough of a mortgage to foreclose legally on a property for nonpayment of the mortgage.  Ownership, however, did not bother the banks, many began foreclosing on properties they did not own but did service.  Initially the courts felt that the banks would do nothing illegal.  When it was proven that the banks were acting illegally the practice was stopped by the courts and those banks were heavily fined.  People who had been foreclosed illegally in some cases received some financial compensation from the banks.  Other than that no one from the banks was charged with criminal activity.

 

President Barack Obama made hugh government loans to the banks.  He also bailed out the American auto industry.  These were all interest bearing loans.  Former President George W. Bush had signed the 2009 Budget the prior year into law.  President Obama needed an additional amount over 300 billion dollars to fund all the loans.  A Democratic Congress authorized the amount needed and the Federal Government  was eventually mostly paid back with interest.  The companies that did not pay their loans back went bankrupt.

 

President Obama made a point that the near-bankrupt banks could no longer compensate their executive with million dollar salaries.  Their leaders had, after all, brought these financial institutions practically into bankruptcy.  The CEO of the Bank of America complained vigorously that his company would pay back their loans as soon as possible so they could get back to paying their executives proper compensations.

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Immediately upon assuming the presidency the Obama Administration faced two massive problems: one was a high rise in unemployment; and the other was the fact that most of those homes whose value had collapsed had mortgages that each had hundreds of owners.  Actually no one held enough of a mortgage to do anything with it.  In reality this meant that no one really owned the houses.  Functionally if nothing was done to alter the situation then it would take at the very least one or two decades for the problem to be resolved.

 

No one owned enough of a mortgage to do anything with it.  The people in these homes could go one living there without making payments, which in many cases was happening because of the unemployment, and no one could foreclose on them.  Of course no one knew which homes came under this and which did not.  But in time many homeowners figured it out.  They had made no mortgage payments and no one bothered them.  Many of these people were employed or became eventually employed and still made no mortgage payments.  Instead they ended up with more money than they ordinarily had when they were employed and so they spent this money in restaurants or other places essentially enjoying themselves and also helping economic growth.

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What the Obama Administration had been able to do was to turn a potential depression that would have been larger than the Great Depression of 1929 into what has been called the Great Recession.  By the use of money they made a potentially massive depression into a recession from which the country recovered while Obama was still President of the United States.

 

The mortgage dilemma which ordinarily should have taken a decade or more to resolve was solved by President Obama and the Chairman of the Federal Reserve, Ben Bernanke.  For a term of a little over two years, during President Obama’s second term in office, the Federal Reserve bought $50 billion worth of mortgage paper a month and then destroyed or discarded the mortgage pieces.  Fifty billion a month for a period of two years is one trillion, 200 million dollars’ worth of mortgage pieces.  In addition the government also added this same amount of money to the National Cash Flow.

 

In essence the Obama Administration bought the country out of a potential depression and recession.  Adding all this money to the economy did not cause any real inflation.  Instead it reduced unemployment to under 4% toward the end of President Obama second term in office and essentially brought about a return to a positive and healthy functional economy.  Interestingly neither Obama nor Bernanke flaunted this fact and not only did they get no credit for it, most people didn’t even know it happened.

 

In 1933 Franklin D. Roosevelt doubled the money supply in the U.S. but the Great Depression did not really end until World War II.  In 2015 Barack Obama more than quadrupled the money supply and ended the Great Recession.  The country learned a lot economically over the years.  Money was accepted by the Federal Government as a tool to end National economic disasters.  It was no longer an object of value.

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Shortly after Barack Obama assumed the Presidency the Republicans from both Houses of Congress met in caucus and concluded that they would make Obama a one term President.  Was this because he was Black or because he was a Democrat?  For whichever reason they would support nothing for which he could gain credit.

 

At this time, 2009, the Republicans were in a minority position in both Houses of Congress.  After the midterm election of 2010 the Republicans would gain the majority in the House of Representatives and keep it for the rest of President Obama’s term of office.  In 2014, for his last two years in office, the Republicans would also gain the majority in the Senate.  As a consequence after his first two years as President it would be impossible for President Obama to achieve any new legislation.  He would essentially run the country by executive orders.

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As a footnote included in the text of this essay we should consider what might have happened if the Republican candidate, John McCain had won the 2008 Election.  How would he have run the United States as President?  The probability is that he would have had the same problems that President Herbert Hoover had from 1929 to 1933.  The country would have fallen into and continued with a Grand Depression.  There is no way that McCain would have had the imagination to do what President Barack Obama did.

 

During his first two years in office President Barack Obama not only modified what might had been a massive depression he also got through Congress a great deal of positive legislation.  Obama signed the Patient Protection and Affordable Care Act, which was later known as the Affordable Care Act or Obamacare.  In order to avoid a repeat of the 2008 Property Bubble Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act that the President signed.  There was the American Recovery and Reinvestment Act of 2009.  In addition he signed Tax Relief, Unemployment Insurance Reauthorization, and the Job Creation Act of 2010.  For the military there was the Don’t Ask, Don’t Tell Repeal Act of 2010.  Sexual orientation was no longer to be considered in the military.

 

By 2011 the Republicans or GOP gained control of the House of Representatives.  After a lengthy debate the President signed the Budget Control and American Taxpayer Relief Act.  As the President and the House of Representatives could not come to any agreement of funding the government this bill was signed as a compromise.  The House wanted to cut entitlement programs and increase military spending while the Administration refused to support cutting entitlement programs.  What occurred was sequestration.  If the President and Congress could not work out any way to reduce government spending then beginning in 2013 the Sequester would come into being.  This would automatically reduce an equal percentage of all aspects of Federal spending.  It officially began on March 1, 2013.  Exceptions could be made but each required a separate bill from Congress signed by the President.  Sequestration is still with the Federal Government.

 

During his second term in office the President In addition to Sequestration increased U.S. troop levels in Afghanistan, reduced nuclear weapons with the United States-Russia New START Treaty, largely ended military involvement in the Iraq War and ordered military operations that brought about the death of Osama bin Laden.

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In 2012 President Barack Obama ran for a second term against the Republican, Mitt Romney.  What was fascinating in the election was the shortness of the Republican memory.  One of the things Romney promised was to do away with all the legislation that was passed to do away with the abuses that had caused the 2008 Real Estate Bubble.  All of that would wait another four years for when Donald Trump became President.

 

In this four year period President Obama promoted the LGBT Americans with his Administration filing briefs that urged the Supreme Court to strike down same-sex marriage bans as unconstitutional.  Obama also urged gun control after shootings.  He strongly supported climate change and immigration.  Militarily he ordered intervention in Iraq and continued operations in Afghanistan.  He supported the Paris Agreement on global climate change and initiated sanctions against Russia after the invasion in Ukraine and interference in the 2016 Presidential Election.  He also, after over one half a century, normalized U.S. relations with Cuba.  President Obama left office in January with a 60% approval rating.

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When President Barack Obama assumed the office of President of the United States the population of the country, according to the Census Bureau was 306.77 million people.  At the end of his eight year term it had grown to 325.34 million people.  An increase of 18.57 million persons.  People or whose antecedents’ had come from all over the planet changing the population so that Caucasians were no longer the majority of the population.  They continued as a large minority within the population.

 

It should also be noted that in 2009, at the end of the George W. Bush Administration, the National Debt was 10.6 trillion dollars, doubled from the end of the Clinton Era.  By January of 2017 it was 18 trillion dollars.  It had been extremely expensive keeping a Grand Depression from happening.  The alternative for the American people would have been total disaster.