What Caused The Debt?

July 12, 2011

in Economics,Politics

What caused the debt? That sounds like an easy question. Could that be the problem?

One would hope that our “leaders” could get their arms around a simple question. Well, apparently we never learn.

The short-bus riders on The Hill are pretending to deal with what to do about the debt. It seems logical to ask the question in the title of this article before addressing any possible solutions. Knowing how you got here might be helpful in finding your way back.

Back to the initial debt question.

Even conservative economists acknowledge the role the tax cuts of the early aughts played in eliminating the surplus and creating a major portion of the debt. No rocket science required. No dispute, except among those who prefer playing politics and maintaining “Their” seat in Congress.

Rule of thumb: If a politician considers his career more important than the well-being of the people or the country, he/she does not belong in any public office.

Should American corporations enjoy loopholes that let them snub their noses at our country? Other countries aren’t so considerate. They use our government’s protection, services, infrastructure, airports, ports, education of their employees and enjoy other benefits of being and operating in our country.

Over two-thirds of the largest paid no corporate tax. They are freeloaders. They are parasites. And, many still get subsidies. Even some foreign corporations have discovered how to do the same. That means that you are paying their way. It means you are subsidizing them to send our jobs overseas and pay taxes to other countries. It’s difficult to fully appreciate your generosity.

Our glorious new Secretary of Wars is visiting our money in Iraq and Afghanistan. He tells us that we are close to defeating al-Qaeda. After only 10 years and we are close to defeating them? All 24 of them? Why not throw in another couple of hundred thousand and finish them within this decade?

They tell us they are drawing down a couple of squads this year from the 100,000-plus US troops over there. Why didn’t they mention our mercenary forces? They actually outnumber our troops. Whatever, I have been told in the utmost of secrecy that those military operations added somewhat to our present debt.

The oil industry needs subsidies? Enough said.

There have been various other expenses. We average consuming 170 pounds of sugar every year for every man, woman, child in this country. Aren’t we sweet? But, that just isn’t enough. Somehow, that industry just can’t survive without my pocket change. Ooops! They do survive without it. They get some of that Chinese money that puts us in debt.

If it were only the sweet guys. But, no. You either don’t have enough fingers and toes to count those struggling to get by on corporate welfare, or you belong in Ripley’s Believe It Or Not Museum.

Luckily, I already had 3 years of Chinese language courses in grad school. I can beg in their native tongue.

Cargill, Archer-Daniels-Midland (ADM), Land O’Lakes, Monsanto, Dole, Chiquita, Perdue Farms. These are needy family farmers that can’t afford to increase their fleets of corporate jets as much as they would like unless you go deeper into debt. Please, consider helping your neighborhood agricorp.

One more biggie; the drug lords. Medicare Part D. That needn’t cost the government any money, except they agreed to refrain from negotiating with the pushers and pay whatever their asking price is. Medicare is much larger than the Veterans’ Administration. They could have a lot more bargaining weight than the VA, which pays half as much as Medicare.

So, where do we cut?

That’s easy. First you cut Medicare and Social Security. Why? Because old geezers don’t need no stinking private jets, or sufficient and decent food (cat food is cheap and convenient), or full doses of their meds. They can move in with their kids. If those kids are unemployed they can squeeze out a little to help with the mortgage.

Neither Medicare (except Part D) nor Social Security has added a single nickel (or yuán 元) to the national debt. They are paid completely from taxpayer contributions via the payroll tax. Both are, and have been, running large surpluses. Those surpluses are projected to disappear in the future; Medicare, in about 12 years, or so. Social Security in several decades. Whatever, neither has contributed to our present debt problem.

We can save a few farthings by cutting the funding to such frills as air traffic control, highway maintenance, matching funds to states and local governments for practically everything they do (cops on the beat, firemen on pumpers, education, etc.), courts, passports, parks, prisons, paychecks for the troops we claim to support, the FBI, airport security, medical research, subsidies to hospitals and too many more to list.

The President says the Social Security checks may not go out on time next month. I might get upset if they decide not to send my Social Security checks. The IRS charges penalties if my taxes are late. Does anyone have any ideas about what size of a penalty I should impose?

Are our “leaders” serious? Are they planning and preparing for any of those doomsday scenarios that  are no longer unthinkable? Since it has never happened before, we really can only guess at what we will face. No. They are not planning and preparing. No. They are not serious.

Pay Up.

That first item I mentioned as playing a major role in creating our present mess needs revisiting. We have the lowest income tax rates in more than 60 years. Low taxes means the creation of jobs, so we are told. Then why are we creating the fewest jobs of the last 6 decades in the decade since the latest tax cuts? Because that old saw is a lie. With all of the misinformation, ideological nonsense and other lies getting the attention of the media, it’s time to cut through the BS and look at the realities.

For real? That’s the top marginal rates for the wealthiest taxpayers? Actually, not. That fails to take into consideration two fairly important factors. The wealthy have more deductions than those seniors without a private jet (by the way, those jets are deductible). They have so many it pays them to compensate CPAs and tax attorneys very well to make sure they don’t miss any.

The other factor is that most of the wealthiest don’t work for most of their income. They let their money work for them. That’s called capital gains. That little scam is taxed at less than working for a living. The capital gains tax rate is only 15%. Money gets a nice little benefit when it works. You don’t when you work.

You might be interested in a couple of further points about the other countries listed on these graphs. First, surveys have shown that the citizens of each of those countries are significantly happier with their lives than are Americans. Second, the overwhelming majority in each of those countries prefer their health care system to the American system. Are we missing something?

But, Mitch McConnell just repeated on the tube, with 9.2% unemployment, it isn’t the time to raise taxes, particularly on those poor benighted job creators. Well, have I got news for you. All of those other countries in the graph above that have much higher taxes, are all also doing better with employment. Look for yourself.

Note: Since this graph was constructed US unemployment has increased .5%. The others are the same or lower.

Social Security and Medicare are entitlements. We are entitled because we pay for them and were promised, by law, that we would receive them.

So, our “leaders” decide to make those who are entitled to be paid bear the burden while those who are not entitled cavort in their private jets and enjoy unconscionable incomes and subsidies. The 400 wealthiest are worth as much as 150,000,000 Americans on the other end. Yet, many pay no income tax.

We partied on a credit card for the past 30 years and the loudest voices scream for more tax cuts. I’m getting just a mite upset with some of my fellow Americans for wanting more tax cuts so we can consume our way out of debt, while damning everyone but themselves for the debt and proclaiming their patriotism. The new American motto seems to be, “No pain, just gain.”

I was not totally into the celebrations of this 4th of July. I am not quite in the mood to lead everyone in a chorus of, I’m Proud to Be an American.

Will our honorable representatives treat us fairly? Surely, you jest. I’m inclined to agree with Jay Leno, “If God had wanted us to vote, he would have given us candidates.”

. .

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Ed

“I’m inclined to agree with Jay Leno, “If God had wanted us to vote, he would have given us candidates.” One of my favorites is that if God wanted us to all run around naked, we would have been born that way. Okay, time to get serious. Of course, you’re right. The Republicans are simply wrong on this one. I would never vote for another Republican again, except that the alternatives are Democrats. And, of course, you’re right to say, “If a politician considers his career more important than the well-being of the people or the country, he/she does not… Read more »

Ed

I would be in favor of term limits set at one!

Rich Fortenberry

Hello my family member! I want to say that this article is awesome, nice written and include almost all significant infos.
I’d like to peer extra posts like this .

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