Tag Archive for national debt

Agenda: wreck the train to narrow the tracks

Wreck the train to narrow the tracks.

Wreck the train to narrow the tracks.

In Latin “agenda” means things [to be, or being] done. So some of our elected representatives in Washington have an “agenda?” I don’t think so.

First, the zeal on the part of some extremists, especially on the House side of Capitol Hill, for shrinking government is said to constitute (oh, THAT word!) an agenda. It certainly does appear they would wreck the train in order to narrow the tracks. Imagine, no FAA to ground the new plastic airliner. Note: the biggest customer for the Boeing 787 is the Japanese, who will soon and again be the country’s biggest creditor. Maybe we can get them to bomb us again, or threaten to. Say, a small island in the Aleutians as a shot across the bow? Don’t miss a payment, and don’t mess with Mrs. Watanabe.

How about no FCC to make sure television commercials are no louder than the programming? I’m not the first to point out that hasn’t worked. Neither does the “no call” list, but that’s a story for another day. In either case, what’s the difference?

These legislators SAY they hate debt. How many of them have a mortgage? Ah, ah, ah, ah; you freaks can’t use a credit card, either. If you’re gonna talk the talk, then walk the walk. All that “debt” verbiage is just garbage designed to strike fear into you and me. I’ll show you fear, when the Social Security checks stop arriving. These “lawgivers” would blackmail and bankrupt us all to prove their point. And if the USA goes down, we’ll take the rest of the world with us. But don’t worry. Your congressperson or US senator will set up food lines, man the electric plants, run the water and sewage treatment facilities, fix the roads, protect our borders, in short fill in everywhere. They have our backs. So what’s the worry? After all, we elected them; didn’t we?

‘Seems Pogo must have been right after all.

Road to … a Banana Republic

Dead set on doing damage

Trampling the republic into a Banana Republic

I wouldn’t be breathing a sigh of relief over apparent agreement over the national debt and deficit. Getting a runner to first base isn’t much, and we haven’t yet got him there (the “fat lady” – the Tea Baggers – will have to commit to the mixed bill at least once more). If there are words in it having more than one syllable, well . . . It’s easy to see why I’m not very confident yet. We have been here before. Remember the Newt Gingrich “Contract With [On] America?” The government shut down in 1995. And what happened? That flareup cost the USA plenty. And U. S. companies slammed on the hiring brakes. Markets HATE uncertainty, and companies, while not fearing the shareholders, tend to take a wait-and-see approach. Why do you suppose we’ve had a “soft patch” in the economy so far this year? When did the Tea-Baggers go to Washington? With all the continuing instability we still look like a banana republic, and interest rates could still rise, perhaps a lot. That would really help the economy, like throwing a drowning man an anvil.

The wealthiest among us drew a pass – again. So, too, have the “job creators,” or corporate titans. McDonald’s created 60,000 jobs or so via a nationwide job fair of sorts over a month ago. Over one million people applied. Bravo for Ronald, but those jobs pay what? $10 an hour? Wow. Pardon me if I’m underwhelmed. Those workers won’t be buying much, beyond toilet paper, gasoline, and beans.

Workers have never claimed a lower share of national income growth than now, after inflation. Total employment remains lower than in late 2008, when corporate profits troughed. Not much sign of a trough now. But there’s no more tailwind from federal spending, and there won’t be any, now that the GOP has arm-wrestled the rest of Washington to no worse than a draw. And it’s all one way with the “Inc.” crowd, which still has more than $1 trillion stashed overseas. The firms intend to either hold their breaths until they turn blue, or secure yet another exemption or sweetheart deal allowing them to repatriate those funds with few or no worries about their disposition. Can you say, it’s third Lexus time? No, the very rich will peel that largesse out of the coffers and invest it. Wasn’t it overinvestment that got us into such a mess in 2007-09? Same verse, different tune in 2000 (Internet bubble).

Numerous banks are repaying TARP funds by – you guessed it – borrowing from the U. S. Treasury. The financial industry spent almost $half a billion last year lobbying in Washington. That’s a lot of champagne, sister. Private-equity fund operators have shown they are willing to repudiate debt at the drop of a hat. Meanwhile, they continue to pay themselves enormous management fees. Banks or bonds, it hasn’t mattered. But stop the (federal) borrowing, they say. I submit these nefarious practices need to stop long before federal “spending” does. And know this: there are no data suggesting that deficit spending in inflationary, either (Federal Reserve Bank of Chicago, 2010).

Those who advocate “austerity” should look around to see how well it’s working elsewhere. In the United Kingdom, austerity has become a dirty word. Retail sales languish, tax revenues are stuck in low gear, and home sales are lousy. A lot to like there. The tea haulers should tell us whether they are aware that in 2007 the average income tax rate for the 400 largest tax returns in the USA was 17%, down from 26% in 1992. Fair share, my butt.

Businesses may claim that regulation or uncertainty or banks’ reluctance to lend lie behind their slow sales, but it’s easy to find the villain here. People out of work don’t buy. Larger firms have made a conscious decision to avoid adding labor. These same firms are taking business away from smaller concerns. No wonder corporate profits are through the roof.

I find it interesting and amusing that the American people have suddenly had it up to here with debt. These are the same people who couldn’t borrow enough. Maxing out three, four, even eight credit cards was pretty common four years ago. So now they’re ticked off at their national government for apparently behaving in similar fashion? I have long advocated higher wages for the “rank and file;” had many of us had higher incomes in 2005 or so, would we have just borrowed more? There’s a bet.

What a fragile, perilous state we find ourselves in. It’s like sailing through an iceberg field while the captain and helmsman are drunk. But don’t be complaining about federal spending if you are benefiting from same. And items as remote as federal prisons, water quality standards, the operation of the federal judiciary, and border patrolling benefit us all. Yup; federal spending. You’d think Uncle Sam was throwing hundred-dollar bills out of helicopters. No, that was said to be Fed Chairman Bernanke’s strategy. No, the only thing we have to fear is (guess what?) Fear itself.

Thanks, Franklin.

Class warfare unabated

By Ron Forthofer
Longmont Times-Call, November 23, 2010

During the recent financial crisis, the privately controlled Federal Reserve led an effort that provided $13 trillion of taxpayer money to bail out the financial sector, which, through crimes and speculation, had almost caused the collapse the world’s financial system. Yet many of these wealthy gamblers were bailed out while the needs of the public were mostly ignored.

Warren Buffett stated it well in a Nov. 26, 2006, New York Times article : “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

During the Wall Street bailout, there was nary a word about the consequences for the deficit or long-term debt. Since then, there has been a steady drumbeat about the debt, with particular concern raised about Social Security and Medicare, two programs that greatly benefit the public.

On Feb. 18, President Obama created a commission to make recommendations on reducing the deficit and long-term debt. The co-chairmen recently presented their proposals, a few weeks before the full commission’s results are due. As expected, they laid out a proposal that mostly, but not completely, targeted programs benefiting the public. I am all for being fiscally responsible, but It needs to be done in a way that protects the public’s interest. The co-chairmen could have presented these Ideas:

• Reinstate the progressive tax levels from the Eisenhower era thus requiring that those who ‘greatly profited from the financial crimes and speculations of this decade share in the sacrifices demanded of “we the people.”
• Place fees on speculative financial activities that would raise large sums and decrease the risk of another financial disaster.
• End corporate welfare.
• Eliminate fraud and waste in military contracting.
• Reverse the wasteful privatization of the military effort and other public work.
• Greatly reduce the military budget. We need a military for defense, not for running an empire.
• End our occupations of Iraq and Afghanistan and pay reparations for the devastation we caused.
• Enact single-payer health care reform.

The co-chairmen could have taken on the greed, fraud and waste inherent in our corporate dominated system that benefits the few at the top, but they didn’t. Unfortunately, their proposals were not surprising. In “Wealth of Nations,” Adam Smith warned that “The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.”

How much longer will we tolerate the transfer of wealth to the top while we are made poorer and poorer? Almost a century ago, Supreme Court Justice Louis Brandeis warned: “We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both.” Which do you want: democracy or oligarchy? ‘To get involved, call Carolyn at the Rocky Mountain Peace and Justice Center, 303-444-6981.

Ron Forthofer, a retired professor of biostatistics has been a Longmont resident for 19 years.