Tag: Deficit Solutions

The Cut, Cap And Balance Two-Step (Part 2)

Usually I take the weekend for some Zen….but the debt thing is keeping me from clearing my mind of the numbing effect of American politics…….

With the “CUT” section behind us….I will turn to the “CAP” portion of the evening……once again I will let FleetAdmiralJ of Blue Wave News explain this section…..in case you have the patience of a oversexed rabbit you can go to blogroll and get the whole thing at one time…..and if that is too difficult then try this……http://bit.ly/mRYhLS

Title II: “Cap”

Section 201(a), as far as I can tell, removes section (c)(4) from this piece of the US Code, which eliminates certain discretionary budget categories, including “highway category,” “mass transit category,” “conservation spending category,” “Federal and State Land and Water Conservation Fund sub-category,” among others. I don’t think this prohibits funds from being spent for these things, but it appears to eliminate them as distinct budget categories. It then adds to the US Code, this:

“The term ‘GDP’, for any fiscal year, means the gross domestic product during such fiscal year consistent with Department of Commerce definitions.”

Section 201(b) then limits total outlays (both on and off budget) to:

  • 21.7% of GDP in 2013
  • 20.8% of GDP in 2014
  • 20.2% of GDP in 2015
  • 20.1% of GDP in 2016
  • 19.9% of GDP in 2017
  • 19.7% of GDP in 2018
  • 19.9% of GDP in 2019, 2020, and 2021

Just as comparison, federal outlays for the past 40 years have averaged at about 20.6% of GDP, though FY 2009 and FY 2010 averaged at 24.4% of GDP.

Finally 201(b) says that if outlays are over, sequestration measures should be taken, though Medicare, Social Security, military pay, military retirement, veterans benefits, and national debt interest are exempt.

Read the last paragraph!  And then tell me what is left to cap?  Oh, let me guess….such non-essentials as education?  There are only so many programs left and the ones that are will do little to balance anything……

Another Plan From Washington

Ok, we have heard from the GOP with the Ryan plan…..we heard from the gang of 6……we have heard from damn near every politician that can sprint to a mic after a negotiation session….here a plan and there a plan….plans are everywhere…..and with all that planning…there is NOT a damn solution in the bunch…..SNAFU….or maybe a better description would be….FUBAR!

But wait there is time for one more deficit plan…..yes….one more….this one comes from the Senate and it comes from the majority leader, Harry Reid……his is very simple……

$2.7 trillion package, including $1.2 trillion in discretionary spending cuts, $100 billion in mandatory savings, $1 trillion savings from winding down the wars in Iraq and Afghanistan, $400 billion in interest savings, while establishing ‘Joint Congressional Committee to Find Future Savings’.

Can anyone say……”VAGUE”?

But it does include one of my favorite things about Washington……..establish a “Commission”…….now that is what is needed…for sure…….look how well the Simpson-Bowles Commission worked (all that is sarcasm, in case you missed it)…..you know how every politician, yes those same politicians, that sprint to a mic to get the first talking point in, likes to use the analogy of….”kick the can down the road”…..a term that is almost as popular as “boots on the ground” or “24/7″……..well sports fans…..a commission is nothing more than kicking that damn can down the road…….a commission is something used to make it appear that progress is being made…….but all we get is that can rolling into traffic…..

Oh goody…the Prez has signed on…..and what would you think the GOP response will be?  You got it!  To the Repubs it is a non-starter….go figure!

Sorry people….but this plan is no damn better than nay of the others….the middle class is still pulling everybody’s weight in the deficit debate…….now that is fair….we would not want all those jobs that the corporations are creating to be effected b y an increase in taxes…….(yep!  Sarcasm again!)

The cowards in Washington have 7 days………

And just when you thought it was safe from another plan…..you were WRONG!  It seems that House Speaker, John Boehner has a two step plan….oh goody….more fun……

In the first phase, there would be $1.1 trillion in non-defense cuts with an increase in the nation’s debt ceiling by $1 trillion which should last until April.

In the second phase, there would be a vote on a balanced budget amendment, which is designed to secure the votes of 59 House Republicans who have already pledged not to vote to raise the debt ceiling under any circumstances.  And he also wants a commission….cool, huh?

I see Boehner has the same vision as everyone in Washington…..F*ck the Middle Class and collect your dividends from the special interests………business as usual…….not much new!  All this is just so damn silly that it begs to be ridiculed!

There is an election in 2012….maybe we as voters should look elsewhere for representatives….the ones we keep electing are cowards and as worthless as tits on a boar…….period!

7 days and counting……tick….tick!

Cracks In The Nordquist Wall?

In case there are still those who do not know who Grover Nordquist is let me assist……he is the guy that has the Tax Pledge that almost all Repubs sign promising to NEVER raise taxes….and there is where the rub is in the debt debate…..Repubs want nothing but cuts and Dems are calling for cuts and revenue sections to any bill…..up until about a year ago…cracks are starting to form in his wall of tax cuts only…….

One of the leaders of the hammer brigade is Sen. Coburn, a Repub, but it is more in the form of a technicality than an outright dismissal of the Pledge he signed when he came to Washington……

This from the Fiscal Times……

The Wall Street Journal reportedthat Coburn was among the members of a small bipartisan group of senators who are willing to consider taxes as part of a deficit reduction package. Norquist immediately went after the three Republicans named in the article: Coburn, Saxby Chambliss of Georgia, and Mike Crapo of Idaho. (The Democrats are Kent Conrad of North Dakota, Richard Durbin of Illinois, and Mark Warner of Virginia.)The same day the Journal article appeared, Norquist fired off a letter to Chambliss, Coburn and Crapo, threatening them with retaliation for their apostasy:

I was disappointed this morning to read an article … in which you were implicated as parties to a bipartisan budget deal containing a net tax increase…. Needless to say, support for such a deal would most likely be a violation of your Taxpayer Protection Pledge. That pledge which you made to your constituents and the American people obligates you to “…oppose any net reduction or elimination of deductions and credits, unless matched dollar-for-dollar by further reducing tax rates.”

I urge you to reject this so-called “deal” which is little more than a transparent attempt to hike taxes and put off the spending restraint the country clearly called for in the 2010 elections.

Chambliss, Coburn and Crapo immediately wrote back to Norquist, rejecting his threat and the logic of his argument. They said there is a huge difference between a legislated tax increase and the natural rise in revenue that would accompany faster growth resulting from tax reform.

To Nordquist, the deficit is NOT important at all…….

Norquist is backed into a corner and forced to admit that he doesn’t really care about the deficit. He told the Washington Post’s Ezra Klein on March 9, “The goal is to reduce the size and scope of government spending, not to focus on the deficit.”When asked to explain how the size and scope of government is reduced by the tax pledge, Norquist fell back on a discredited doctrine called “starve the beast,” which says that tax cuts somehow or other automatically reduce spending and that the only thing to talk about is spending.

There must be revenue increases if there is to be a true recovery……cuts alone will do little to nothing….hopefully there are those that can do the math…….it is basic math not some exaggerated formula…….

So I ask again, is there cracks appearing in the Nordquist wall?

But wait!  There is an addendum……..this from yesterday’s Think Progress……

The Washington Post editorial board reported this morning that Norquist himself stated that allowing the Bush tax cuts to expire in 2012 would not technically violate his pledgeas “not continuing a tax cut is not technically a tax increase”:

Would allowing the Bush tax cuts to expire as scheduled in 2012 violate this vow? We posed this question to Grover Norquist, its author and enforcer, and his answer was both surprising and encouraging: No.

In other words, according to Mr. Norquist’s interpretation of the Americans for Tax Reform pledge, lawmakers have the technical leeway to bring in as much as $4 trillion in new tax revenue — the cost of extending President George W. Bush’s tax cuts for another decade — without being accused of breaking their promise. “Not continuing a tax cut is not technically a tax increase,” Mr. Norquist told us. So it doesn’t violate the pledge? “We wouldn’t hold it that way,” he said.

Norquist is quickly trying to walk back that statement, declaring that “any failure to extend or make permanent the tax cuts of 2001 and 2003, in whole or in part, would clearly increase taxes on the American people.” However, even while reaffirming this principle on MSNBC this morning, Norquist stated again that there are technical ways to allow the tax cuts to expire that “and not violate the pledge.”

Cracks are forming……’Mr. Nordquist…tear down this wall’………(sorry could not resist)………

Everybody Has A Plan

Daily we hear of the plans for the correcting of the economic problems we have here in the US….there are tax cuts…..there stims….there are infrastructure….there are …..on and on……everybody has a plan….Repubs, Dems, Greens, Libertarians, etc etc….and now the Fed chief has a plan for deficit reduction….

Bernanke speaks and his plan is…….

“Clear metrics are important, together with triggers or other mechanisms to establish the credibility of the plan. For example, policymakers could commit to enacting in the near term a clear and specific plan for stabilizing the ratio of debt to GDP within the next few years and then subsequently setting that ratio on a downward path. Indeed, such a trajectory for the ratio of debt to GDP is comparable to the one proposed by the National Commission on Fiscal Responsibility and Reform.To make the framework more explicit, the President and congressional leadership could agree on a definite timetable for reaching decisions about both shorter-term budget adjustments and longer-term changes. Fiscal policymakers could look now to find substantial savings in the 10-year budget window, enforced by well-designed budget rules, while simultaneously undertaking additional reforms to address the long-term sustainability of entitlement programs. Such a framework could include a commitment to make a down payment on fiscal consolidation by enacting legislation to reduce the structural deficit over the next several years.”

Spoken like a true intellectual……..all that geek speak means…..the debt ceiling should be raised…..a bi-partisan approach to spending and a long term plan…period.

Let The Bovine Fecal Matter Fly

From the VOMITORIUM

I know damn well you have heard all the rumblings about the deficit and the national debt ceiling….you have heard the back and forth….the blame game….the political rhetoric….well the debt ceiling is the fecal matter to which I refer…..

The GOP has drawn their line imaginary line in the sand….the Dems have peed on it and refused to cross it….and in the end it will all be just one big Kabuki….political theater and not even at its best……

In the end, we ALL know these dipsticks will raise the ceiling and move on to something else…..but before that happens our politicians just have to play this silly little political game….a game to appear as if they are actually earning their money…..

The game is a foot!  They recently postponed the date to August, the 2nd, I believe and as the deadline approaches the media will be sucked into this infantile game….they will start making the ceiling the lead story and will parade expert after expert and analyst after analyst out and then as it draws really close they will install a countdown clock that will flash continuously to let us know just how soon the country will fail and become just another Greece….as the clock counts down the minutes and hours and just before the final tick….the Congress will come to an agreement and raise the ceiling and thus preventing any damage to Wall Street from the ceiling…and all of it could have been done months ago….but then there could not be this massive drama, a pretend drama, to keep the people mesmerized by their, our Reps, truly amazing acting job.

Yes,m they raised the ceiling limit and we will have been saved by our “hard” working Reps….they raised it and without ever addressing the problems that it carries…..like the massive health care costs or the oil monopolies and their subsidies or the financial scams that have been plaguing the economy or banks gambling with taxpayer money or endless wars or…….it is a sizable list of problems and NONE will be addressed….and all can be considered the root causes of the problems we have with the deficit….

And in the end of the soap opera…the country will be NO better off than the day they started playing the game…..but the national debt ceiling will have been raised……..hope you sleep better knowing this……

How Many Corporations Pay Their Taxes?

Riddle me that…….

(sorry this is a bit longer than most of my posts….but it needs to be said….)

I know that some of my more conservative readers will not want to hear these proposals…..I believe that if the middle class must suffer and sacrifice then so should the others……I believe in shared sacrifice…..in action not in the idle words of politicians…….

For years conservs have been rattling on about the high corporate taxes in the US…..but they seemingly leave out the part that they get enormous tax breaks and tax cuts almost yearly….and in some states, mine to be exact, the conserv legislature is trying to eliminate corporate income tax, even though they pay very little as compared to what the working stiffs pay……

Think not?  This from Politifact Ohio……..

To back up her assertion, Fudge’s office cites media reports about particular companies – like General Electric and Bank of America — that did not pay 2009 taxes as well as a July 2008 report from Congress’ Government Accountability Office that showed it’s relatively common for big companies to pay no taxes.

Between 1998 to 2005, GAO found that about 72 percent of large foreign controlled companies and 55 percent of large U.S. controlled companies reported zero tax liability for at least one year. About 57 percent of foreign controlled large companies and 42 percent of U.S. large companies paid no taxes in two or more years, and a third of the foreign companies and one quarter of their U.S. counterparts paid no taxes for at least four of those years. Just 45 percent of large U.S. companies and 28 percent of foreign companies reported a tax liability for each of the eight years. The report defined large companies as those with at least $250 million in assets, or at least $50 million in receipts

I say if I pay a 30% tax then corporations pay the same….a shared sacrifice….that they all keep going on about……and there are other ways that corporations can be more socially involved…….I read a piece in the UK’s Guardian by Nicholas Shaxson and I say it is worth considering…..

1) Corporate profits depend on tax-financed public goods: healthy and educated workforces; good infrastructure; publicly enforced respect for contracts and property rights, and so on. When corporations avoid or evade tax, legally or illegally, they free ride on the backs of the rest of us. Stop taxing them, and you savagely undermine political community.

2) Corporation taxes are an essential backstop to personal income tax. Cut them to zero, and wealthy individuals will increasingly reclassify their earnings as corporate income, typically using offshore corporate structures, and escape tax. Gauke’s arguments about employees footing the corporate tax bill are irrelevant.

3) Gauke’s claim of a “consensus among economists” that the burden of corporation taxes falls on employees and not on capital owners, is false. The US Congressional Budget Office said last week that it was “unclear” how much of the corporation tax burden fell on employees; earlier, it said that capital bore most or all of the corporate tax burden. The Institute for Taxation and Economic Policy (ITEP) in Washington said this month that the incidence of corporate tax fell mostly on capital owners, not employees. It added that corporate income tax was among the most progressive taxes, because stock ownership was heavily concentrated among the wealthiest taxpayers. This is an especially precious tax.

4) When Gauke talks about “employees”, who does he mean? Goldman Sachs employees earned $430,700 on average last year. To the extent that the burden falls on them, taxing such firms makes the tax system more progressive. It would also cut into excessive bank remuneration, which has been a big factor in the recent financial crisis. Taxing financial corporations also curbs the “too big to fail” problem where large banks can hold governments hostage and shift losses on to taxpayers.

5) If corporation taxes didn’t fall on the owners of capital, as Gauke claims, then corporations, responding to shareholders’ wishes, shouldn’t mind being taxed. So why do they spend so much time and money designing tax avoidance strategies?

6) Limited liability companies are separate legal persons, greater than the sum of their parts. So they should be taxed separately: this is not “double taxation”. Limited liability lets shareholders dump costs on to society when things go wrong. Corporations must pay for this privilege.

7) Many corporations earn what economists call rents. These – like oil money that flows effortlessly into Saudi or Kuwaiti coffers – are earnings that arise not from hard work and real innovation but from accidents of nature or good fortune. Adair Turner recently explained how banks in the City of London are particularly adept at earning rents, such as from exploiting insider knowledge and expertise; from natural oligopolies in market-making and other activities; and from “valueless” trading activity. Economists since Adam Smith – including Turner – have advocated taxing rents especially hard.

8) Corporate tax avoidance, despite hiding behind weasel words such as “tax efficiency”, is unproductive and inefficient. When corporate managers pursue tax avoidance they take their eye off what they do best – producing better or cheaper goods or services – and focus instead on engineering transfers of wealth from taxpayers to corporations. Clamp down on it, hard, to make markets more efficient.

9) It matters where company owners and business activities are. Take a US mining company digging gold in Zambia. If Zambia raises corporation taxes, wealth will flow from wealthy US stockholders to ordinary African taxpayers. The investor will stay, because that’s where the gold is – and even if it goes, another will take its place. That basic formula works for profitable opportunities in general. Tax corporations, within reason, and they may bluff and bluster – but they will stay.

10) The “Laffer argument” that corporation tax cuts pay for themselves has been thoroughly debunked. Even Greg Mankiw, formerly chairman of George W Bush’s Council of Economic Advisers, calls Laffer’s adherents “charlatans and cranks”.

Good stuff and excellent proposal……it will NEVER come about……special interests are in control….they have almost always been in control…….but what about shared sacrifice?

So, There Is No Class War?

Tax cuts!  Spending cuts!  Who gets what?  Who will smile?  And who gets depression?

I found this graphic when I visited the blog of one of my newest readers,  a good blog that deserves a look. runawaylawyer.wordpress.com…….

I have heard a lot of conserv commentators say that there is NO class war being waged in the US……..I know people do NOT want to hear it…..but I am sorry….but I cannot think of another term to use to describe what is being done to the working majority of this country……..how about the fight in Wisconsin?  How about the labor wars in other “rust belt” states?…..check out the graphic….and then tell me what it is called!

runawaylawyer.wordpress.com/2011/03/13/whe…

There are story after story of how the working class is being manipulated at every turn….I cannot completely blame the conservs….after all the American people are dumb enough to fall for the rhetoric of the politicians……no matter how you cut it the working majority is getting the shaft and the corporations and the CEOs are getting the gold….if that is NOT class warfare….then you tell me what it is!

Stick To Your Guns And Screw Up Everything!

The GOP majority in the House of Representatives is sticking to their guns…they are demanding big spending cuts or they will shut down the government….I normally like politicians that stick to their guns whether I agree with them or not ….but there are times in the life of a country that sticking to one’s guns could be more disastrous than compromise and the whole row over spending cuts could be one of those times when the country, especially a weak economy, may NOT benefit from stubbornly standing on owns beliefs….

This may well be one of those times…..a report issued by Goldman-Sachs (who is NOT one of Obama’s biggest supporters) that show something different than the picture painted by the GOP over spending cuts…..the GOP is pushing this myth that if we cut spending we will grow the economy……the HuffPost is reporting on the Goldman report:

A Goldman Sachs economist has warned that the $60 billion package of spending cuts proposed by the Republicans to counter President Obama’s proposal could slow economic growth.Goldman’s warning follows Treasury secretary Timothy Geithner’s recent claims that the Republican plan would cost jobs.

In the confidential report, obtained by ABC News, among other news outlets, Goldman Sachs economic forecaster Alec Phillips said the GOP plan could slow economic growth by up to 2 percent. Even a compromise deal, with $25 billion in cuts could slow growth by 1 percent.

In its latest spending plan, the White House predicted GDP growth of 2.7 percent this year.

(click on the links and read the reports for yourself)

And then there is the idea of a governmental shutdown and the Goldman report had this to say about it:

…….if budget wrangling between the Obama administration and the Republican-dominated House of Representatives led to a shutdown? That, according to Goldman, could cost $8 billion a week, the Financial Times reported.

It appears that the debate on spending cuts has NOTHING to do with growing this economy and definitely does NOT having anything to do with the promise of jobs…then why are we having this debate?  Is it the typical political game?  Where is this debate good for the economy and the country?

Nothing the GOP is doing is good for the working majority or what is best for the country…instead we get theater and not very good theater, at that…….by sticking to their guns they may be dooming the economy with the possibility of a double dip recession….something for thought!

The GOP’s Man Crush

By now we ALL have heard about the doings in states like Wisconsin, Indiana, Ohio, to mention a few……if not then there is a rush by GOP governors to attack public employees and their unions….it seems to these types all the budget problems and shortfalls are ALL the fault of public employees and the unions……It seems that the GOP is still trying to negate ALL progress of workers that started back in the 1940’s………..conservs make it sound as if the public employees have somehow stolen their benefits….utter and total BS!

I am still waiting for these governors to focus on one of their major points that helped them win a large percentage of the vote….that point is…the creation of jobs…..somehow lower corporate taxes will create jobs….it has NOT in my state, which has some of the lowest in the country, and have been promised great prosperity will come with lower taxes….not so in the last 50 years…..nowhere have these elected officials created a job and their points they are pushing like furloughs, dismissals, etc….will create NO jobs  but will create a rise in unemployment….keep in mind you mental midgets voted for these people….are you pleased with your choices?

Anyway back to the man crush thing…….The darling of ALL conservs, Gov. Cristie of New Jersey today on MSNBC (which has a major man crush on this guy)…..Christie talked about the stuff he is doing in New Jersey he said that….”the unions were destroying thew Middle Class and that by pursuing them he was going to strengthen the Middle Class….(this is a paraphrase)……and of course Morning Joe was so9 pleased to hear that the public employees would be attacked that he could barely contain himself (after all he is a conserv and as such sees the evils behind unions)…….but after hearing his little mindless diatribe I have to ask……..

Just how are unions destroying the middle class, governor?  How would weakening or eliminating unions strengthen the middle class?

Since thanx to the work of unions, the middle class prospered and gave working people the opportunity to advance their standing in society…Thanx to the work of unions Americans were given the chance to live the American dream…Just how would Christie and his comrades strengthen the middle class?

These GOP governors are pursuing an agenda that they kept from the voter during the campaign….this is NOT unusual….but you would think that the American voter would be smarter by now……(pause here for raucous laughter)…….

Why Not Tax And Spend?

I hate to break it to all you conservs and TPers….that is what governments do…they tax and then spend their revenues to benefit society….well that is the plan, but unfortunately does not always work out that way….the politicians find creative ways to waste the revenue….like un-winnable wars, for one….

But there needs to be a better way of tax and spend…and it could possibly be a shot to the arm of the deficit….

This a proposal from the Center For American Progress……

  • Thus the need for revenue. In this report we offer revenue-generating plans that will hit four deficit-reduction targets: 33 percent of the way to primary balance in 2015, then 50 percent, 67 percent, and 100 percent. The most far-reaching of the revenue plans, the 100 percent tax revenue option, relies on seven distinct tax increases. This plan would generate $255 billion in new revenue by: Implementing a graduated surtax on adjusted gross income for households making more than half a million dollars per year
  • Imposing a $10 per barrel fee on imported oil
  • Returning the estate tax to pre-Bush tax cut levels—a $1 million exemption and a 55-percent rate
  • Removing the cap on the employer side of the Social Security payroll tax
  • Indexing the entire tax code to a better measure of inflation
  • Increasing the top rate on capital gains and dividends
  • Increasing the ordinary income tax rates on tax brackets between $140,000 and $380,000

Any deficit reduction plan is a balancing act between spending cuts, tax increases, the needs of the nation, and the wide range of views on which of these are most important. This report offers five different balances for getting to the 2015 target of primary balance. We believe the 50-50 plan, accompanied by a crusade to deliver government services more efficiently and effectively, offers the best option.

So tax and spend may be dirty words to conservs, but it is the way of government…like it or not…..

Okay, let us look at the states…..conserv commentators say that the reason industry left this area was because taxes are too high…..places like New York, Connecticut, etc….if that is the case why is not the South more industrial…you cannot find lower business taxes than in Mississippi and Alabama?  Answer us this!

We all want and need services provided by the government, like police, fire, education, homeland security, etc, but in this atmosphere of “smaller” government how do we find the cash to fund these services?  The answer!  VAT!

A VAT is like a sales tax in that ultimately only the end consumer is taxed. It differs from the sales tax in that, with the latter, the tax is collected and remitted to the government only once, at the point of purchase by the end consumer. With the VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products from another business.

This could be sold to the corporations and businesses…..why?  They could recoup some of their taxes while the ultimate consumer, you and me, are screwed on getting any of the taxes back…this should make the conservs happy…this is a better plan than some of the others offered out there…..why not try….we might find the cash to actually have a country that lives within its means…….