Absolutely the best article I’ve ever read on the origins of our economic problems. Once again, Rolling Stone is responsible for great investigative journalism!
http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109
In the early 1980s, Ronald Reagans Budget Director, David Stockman, revived an old economic theory as the basis for the Reagan administrations economic policy. Reaganomics, aka Trickle-Down economics, aka Supply-Side economics was based on the Horse and Sparrow theory of the 1890s, which some believe was responsible for the Panic of 1896.
The basis of the theory is the notion, If you feed a horse enough oats, some will pass through to the road for the sparrows.
Of course, Reagan and Stockman stated the benefits of their plan somewhat differently. Their belief was that if you cut taxes for the wealthy, particularly those on capital gains from investments, the wealthy would spend the extra money on additional goods and services thereby creating more jobs for the middle and lower classes. Despite its many critics, the theory has been championed by Teapublicans ever since.
Has it worked? One might say that it has worked all too well for the rich.
According to a recent study by the non-partisan Congressional Budget Office (CBO), from 1979 to 2007 after-tax income for the top 1 percent of US households has nearly tripled, rising by 279 percent. Over the same time period, after-tax income for the middle class grew by just 40 percent. And those at the bottom saw their incomes increase by just 18 percent.
So, by every measure, Trickle-Down economics have reduced income to a mere trickle for all but the very wealthy. Or, if you relate the results to the Horse and Sparrow theory, the supposed benefits are just plain horse dung.
“Welfare moms are worse for our economy than welfare CEOs.”
For years, youve heard Teapublicans rail against freeloading welfare moms. They portray them as lazy, drug-addled minority women who turn themselves into baby factories to scam the system and live in relative luxury. Right?
In fact, a Teapublican candidate for the Nebraska Unicameral recently compared them to racoons saying, Theyre going to do it the easy way if we make it easy for them. And Florida Governor Rick Scott recently signed into law a bill that requires Floridians to submit urine, blood and hair samples before they can receive cash aid from the state.
However, according to the statistics, the majority of those who receive Aid For Dependent Children are white and receive benefits for 2 years or less. Half of all welfare recipients leave the program in the first two years. Most have only one or 2 children. And the majority are over 20 years old.
Many succumbed to the if you really love me, youll line. But many are divorced and a few are widowed. Contrary to Gov. Scotts expectations, very few are chemically dependent. And theyre hardly living in luxury.
For example, those who qualify for W-2 Transition (W-2 T) funds reserved for participants who have limited ability to work receive payments of $628 per month with a lifetime eligibility limit of 60 months. Not exactly what Teapublicans want you to believe about so-called welfare queens is it?
Now, lets examine the welfare kings of corporate America.
We have given millions of acres to mining companies while requiring no royalties in return. We gave railroads millions of acres and millions of dollars in subsidies for construction. We built and maintain 340,000 miles of logging roads for the timber industry in addition to giving them subsidies of more than $111 million annually. Subsidies to oil and gas companies total more than $40 billion per year.
We provide billions to corporations for the research and development of new drugs and new weapons systems, even providing foreign aid to other nations to help them buy our weapons. We offer corporations insurance at below market rates to encourage overseas investments in high-risk nations. We provide farm subsidies to corporate farmers. State and city governments provide incentives to attract large corporations. They also provide millions to help billionaire owners of sports franchises to build new stadiums and sports arenas.
And, lest you think the Troubled Asset Relief Program was the first time we bailed out financial institutions, dont forget that we forked over $500 billion to the savings and loan industry in the 1980s.
In short, we allow large corporations to privatize their profits and socialize their risks. Is it any wonder that in previous generations their owners were called “Robber Barons?”
Despite the fact that our $14 trillion debt was largely created by Teapublican presidents, now that we have a Democratic president, the Teapublican-controlled Congress is dead set on forcing enormous budget cuts at any cost.
Set aside for a moment that their primary agenda is to end regulations for their corporate masters and to starve only those departments that are contrary to their ideology (primarily the EPA and the Dept. of Education). The real concern is what such draconian cuts will do to our economy.
If you want to see a preview of the consequences, you need only to look to Greece.
As you likely know, the Greek government is in danger of default. To cure its ills, Germany along with the other nations that are part of the European Union, agreed to bail out Greece. But only if Greece would enact drastic spending cuts and large tax hikes.
The result? It would seem that the cure is in danger of killing the patient. Indeed, the cuts have put the entire European Union in recession. And the symptoms have spread to the US. Every time the European Union sneezes, our markets react.
The problem is that the new austerity measures have resulted in more Greeks losing their jobs. And without jobs, the Greeks are unable to pay the increased taxes. Many have been forced to pay taxes out of their savings (if they have savings). Many cant pay their taxes at all. That only results in more deficits, more spending cuts, more tax increases, and so on.
Although Greece is the most extreme example of an economy in trouble, its not alone.
Irelands economy is also particularly weak. You may remember that before the global recession, Ireland was called the “Celtic Tiger” having built its reputation by luring foreign corporations (many from the US) through some of the lowest corporate taxes in the world. Indeed, Teapublicans have repeatedly cited Ireland as a model for reforming our own corporate tax structure.
One would hope that our nation could learn from these examples of what not to do. But, since Teapublicans mostly ignore anything beyond our borders (except for oil deposits), Im not hopeful.
The wealthiest Americans pay a disproportionate share of federal taxes.
Seriously? Thats the crapola they want us to believe?
To counter President Obamas plan to pay for his Jobs Act by raising taxes on the wealthiest Americans, Teapublicans have gone on the offensive (Yeah, I know, they were already offensive enough) to protect the wealth of their political puppeteers. Through a series of appearances on Sunday morning talk shows, they point to data from the Tax Policy Center showing that the top 1 percent of Americans pays 38 percent of federal income taxes.
Assuming that data is correct, it actually disproves the Teapublicans point. After all, by most estimates, the top 1 percent controls more than 39 percent of the nations financial wealth (excluding their multi-million dollar homes, high-priced cars, etc.). Therefore, the top 1 percent is actually paying less than its share of federal taxes. And, thanks to Teapublicans, the share of income paid in taxes by the 400 richest Americans has fallen by nearly 40 percent, even as their incomes have approximately quadrupled!
Its good to be rich. Especially in Teapublican America.
If the heroes of WWII were the Greatest Generation, how would you describe those who have followed in their footsteps? I’d have to say the reviews are mixed.
Take my generation of so-called Baby Boomers. We started out by fighting for Civil Rights. When confronted with a lame and unjustified war in Vietnam, many of our generation fought despite reservations while the rest of us fought to end wars against those who never attacked our shores. A few years later, we fought to win equal rights for women. And many of us took up other noble causes such as fighting for a cleaner, safer environment.
All of that was admirable. But what have we done lately? Moreover, what has the post-boomer generation (those who are now in their 40s and 50s) done? Let’s just say they may be remembered as the Least Generation.
While the Greatest Generation believed in shared sacrifice in order to obtain lofty goals, such as overcoming the Great Depression and overthrowing despotic dictators such as Adolph Hitler, the Least Generation voted to give themselves tax cuts. While the Greatest Generation built our nations infrastructure with hard work and tax dollars, the Least Generation has stood idly by and watched that infrastructure crumble.
While the Greatest Generation toiled and sweat to earn a better future for their children, the Least Generation has mostly reserved its sweat for the athletic club. While the Greatest Generation fought for labor unions and workers rights, the Least Generation has fought to destroy them.
While the Greatest Generation scrimped and sacrificed to maintain the war effort, the Least Generation has mostly patted soldiers on the back with a very public thank you for your service and privately told themselves thank God thats not my son or daughter.
In recent years, politicians from the Least Generation such as Michelle Bachmann and Eric Cantor have shown theyd rather play partisan politics than do whats best for our country. They have voted to end welfare. They have cut Medicaid, public education, Early Family Childhood Education and social services while cutting taxes for millionaires and billionaires. They have fought to maintain subsidies and tax loopholes for the worlds largest and most profitable corporations while refusing to extend benefits for the unemployed.
They have voted to cut Social Security rather than raise the cap on FICA contributions for those making more than $106,800. Theyve voted to end Medicare rather than root out the causes of inflated medical costs or negotiate the cost of pharmaceuticals with manufacturers. And they were willing to risk government default rather than risk alienating their wealthy contributors by raising taxes.
Lets hope the next generation does better. But I’m not optimistic.
The federal government paid $16 each for muffins.
Last week, Teapublican megaphone, Fox News Channel, reverberated with charges that the Department of Justice purchased muffins at $16 apiece at law enforcement conferences in Denver, Colorado.
It was a sensational story.
Teapublican bully and buffoon, Bill OReilly used the story to excuse the fact that he and other millionaires pay lower taxes than the middle class. In his interview on The Daily Show, he said he wouldnt mind paying a little more taxes. But only when the federal government gets spending under control and stops wasting his money on things like $16 muffins. The only problem is that, as usual, OReilly is wrong.
According to Hilton Hotels where the law enforcement conferences were held, the $16 charge was actually for a full continental breakfast plus tax. Hardly the extravagant waste of taxpayer money that Fox claimed. And, of course, the alleged transgressions occurred during both the Bush and Obama administrations. (But Teapublicans conveniently ignored that fact.)
And before you make the claim that the cost is still unjustified, consider this. A large part of business and government work consists of meetings, and employees need to eat – even government employees. Additionally, $16 is hardly an outrageous sum for a meal. Have you ever ordered breakfast in a New York, Los Angeles, San Francisco or Washington, DC hotel? Compared to those prices, $16 for breakfast is a steal.
Of course, youre not likely to hear the truth about Muffingate on Fox News Channel. But that should come as no surprise. Fox News Channel seldom tells the truth about anything.
“Cutting Medicaid and Medicare will save money.”
Anyone who would say this is either lying or doesnt understand how the healthcare industry works.
If you kick millions of people off of Medicaid and raise the cost to seniors for Medicare, they will put off going to the doctor as long as they can. Minor ailments then become major ailments. When theyre finally forced to seek help, they have no place to go except the Emergency Room where the costs of treatment can be as much as 100 times that of a doctors office or clinic. Since most hospitals are mandated by law to accept all patients, regardless of their ability to pay, the costs are passed along to patients who have health insurance.
So the Teapublicans who dont want to help pay for someone elses healthcare treatments through an efficient, well-managed government program will actually wind up paying much more through the rise in premiums for their health insurance policies, through increased taxes, or both.
Our nations healthcare costs are already four times the cost of healthcare in other advanced nations. Cutting Medicaid and Medicare will only make things worse.
“Obamacare” (more precisely, Nixoncare, Dolecare or Romneycare, since they proposed the program first) will definitely help. It will offer healthcare insurance to 55 million people who are currently uninsured, and it will institute some cost containment measures to an industry that has seen costs rise at a rate more than ten times the rate of inflation.
But it doesnt go far enough.
According to a hospital CEO whose opinion I respect, this nation needs to return to a form of managed care (Health Maintenance Organizations). Under the system, the healthcare providers would be charged with keeping us healthy. The providers would also be charged with following best practices, which have been shown to produce the best outcomes, and limiting unnecessary or unproven care. (Or, in Teapublican terms, “death panels” with the responsibility to review extreme procedures that are proposed for patients with terminal diseases.)
This is one of the most important steps in solving our healthcare crisis as noted in a 1990s study by the MIT Sloan School of Management. That study showed that, in the US, more than 70 percent of all healthcare expenditures occur in the last six months of a patient’s life. In other words, we tend to ignore our health until something goes drastically wrong. Then we spare no expense to prove that the diagnosis of a fatal condition is essentially correct.
It’s clear that we need an entirely new approach to healthcare and “Obamacare” is an important first step. Repealing the Patient Protection and Affordable Care Act will only make things worse. So will the other Teapublican proposals. We cant throw the poor off of Medicaid, cut Medicare for the elderly, maintain our out-of-control health insurance system and cut the deficit.
The healthcare industry and the economy are like a large, overinflated balloon. If you push one place, it expands somewhere else. To make improvements, you have to change the entire entity at once.
Immigrants steal our jobs.
Thats been a common accusation since the very beginnings of our nation. Previous generations despised the Irish, Italians, Germans, Scandinavians, Eastern Europeans, etc. for simply trying to eke out a living. Nothing has changed in the present day, except that now the charge is leveled against Latinos.
In discussing her book, They Take Our Jobs! and 20 other myths about immigrants, Avi Chomsky, historian, teacher, and coordinator of Latin American studies at Salem State College says, “When people claim that immigrants take our jobs, underlying the statement are some flawed ideas of how our economy works. They dont understand that the world economy is extremely integrated.”
“In the US, there is a dual labor market,” she says. “One category consists of good jobs that offer security, benefits, decent pay and safe working conditions. The second category consists of jobs that are dangerous and unpleasant with no security and low wages. The jobs in the second category have always been done by those who are politically excluded, such as undocumented workers. By politically excluding workers, employers are able to exploit them. And others in our society rely on people doing these jobs.”
In reality, the number of jobs taken by immigrants is a very small percentage of the jobs shipped overseas by our corporations. Moreover, immigrants actually create jobs because they purchase food and automobiles, and they rent or buy homes. They also pay sales taxes, property taxes, income taxes, even Social Security and Medicare payroll taxes. (In 2010, its estimated that illegals paid $12 billion into Social Security. Yet they are not eligible for any of the government services provided by those taxes.)
As Chomsky states, “The debate on immigration is a way of creating a scapegoat for very real problems, like the economy, even the environment.”
Social Security is a Ponzi scheme.
Governor Rick Perry must have scraped this BS off the bottom of his cowboy boots, because it smells a lot like Texas fertilizer.
You see, far from being a Ponzi scheme, Social Security is insurance – insurance that guarantees a dignified retirement for hard-working Americans in our old age. Without it, we would likely be treated to scenes of the elderly living in cardboard boxes and digging through dumpsters for their meals.
The premiums for this insurance are paid by withholding less than six percent of an individuals annual income up to $106,000 per year.
Currently, Social Security has a $2.5 trillion surplus, but given the impending retirement of Baby Boomers, its estimated that the program will not be able to make full benefit payments in 25 or 30 years. However, contrary to what Teapublicans would have you believe, Social Security can be easily fixed with relatively minor tweaking. (As with all insurance plans, the premiums for Social Security need to be increased from time to time.)
One option is to raise the income cap to include income above $106,000. (This hasn’t been done since the Reagan administration in the 1980s.) Another option is to remove the cap altogether, which would assure the solvency of Social Security far into the future. Yet another is to limit benefits to only those who actually need them retirees with annual household incomes of less than $30,000, for example.
Social Security can be fixed. But not if the media and voters keep listening to Teapublican lies.