College of Political Knowledge

Subject:  Federal Deficit/Budget Spending/ Budget Cuts

There is a good game of political tennis going on in Washington and on the airways……we all agree we need cuts, but for some reason these cowards are NOT serious about them….why?  In a word….re-election!  They will propose…they will piss and moan….they will accuse and they will cry (not necessarily Boehner)…..and in the end…we have done what the ALL say we should stop doing…..we will have kicked the can down the road…..

But are there some cuts that could be done today that would put the country on the right path to solvency?

Yes, there are some very easy cuts that could be made….but NO one in Washington has the courage to even propose let alone try to implement….

OK Professor, what cuts would you suggest at this point in the debate……

• The extension of the Bush tax cuts for the wealthy, enacted by a Democratic-controlled Congress in December with the approval of the Obama administration, pumps $700 billion over the next ten years into the pockets of the rich. Reclaiming two years of that tax windfall would eliminate all the state budget deficits combined.
• Total compensation at Wall Street banks and securities firms last year hit a record $135 billion, according to an analysis by the Wall Street Journal, on all-time-high revenue of $417 billion. The recipients of the Wall Street bailout could bail out the states out of their own pockets.
• The 400 richest individuals in the United States dispose of a staggering $1.37 trillion in assets, an average of nearly $3.5 billion apiece. A levy of 10 percent on the resources of these billionaires would also erase the deficits of all 50 states.
• Combined profits for all American corporations rocketed upwards in 2010, hitting an annual rate of $1.66 trillion in the third quarter. A tax of eight percent on those profits—the same percentage as the cut Walker seeks to impose on schoolteachers and park rangers—would eliminate all state deficits.

• US corporations are currently sitting on $2 trillion in cash, refusing to hire workers despite collecting tax cuts that are supposed to be incentives to do so. A levy of 10 percent on that idle cash would provide enough money to eliminate not only the deficits of the states, but the deficits of all cities and local governments too, as well as preserving the jobs of hundreds of thousands of public employees.
• Hedge funds assets rose to $1.92 trillion in 2010, the highest ever, up from $1.18 trillion at the beginning of the year. Given a standard earnings formula of 2 percent of total assets plus 20 percent of the increase, hedge fund bosses stood to collect roughly $186 billion in personal income. An 80 percent tax on that income—less than the percentage rate on multimillionaires levied under the Eisenhower administration—would produce more than enough revenue to put all 50 states in the black. (It should be pointed out that the top hedge fund manager, John Paulson, had a personal net profit of more than $5 billion in 2010, while more than a dozen hedge fund bosses had personal incomes above $2 billion and many more took in over $1 billion).  (Thanx to Patrick Martin)

There you are….none of those will make the rich happy or for that matter any corporation, especially those that are sitting on their cash watching the country circle the drain……but I keep hearing from Washington that we all must make the sacrifice for the good of the country and would not that include those that are making a killing on the backs of the middle class?

Does anyone truly believe that cuts to NPR, WIC or any of the hundreds of nickle and dime programs will help balance the budget?  So far the only sacrifice that is being made is that of the middle class and those living in poverty…….nothing asked of the wealthy or the corporations…..so basically they are saying that it is up to the working class to balance the budget and cure the spending woes…..(I know you cannot see it…but trust me…I am smiling my “told you so” smile)…….