“I’ll go anywhere and do whatever it takes to get this done.” That frightening declaration was made Wednesday by early second-term President Barack Obama in response to the nonsensical “Fiscal Cliff” crisis manufactured out of whole cloth by the actions of far right Republican legislators. And, at this point at least, he seems bent on honoring his words so get ready to duck.
House Democratic leader Nancy Pelosi seems to think an 18-month- ago discussion between Obama and Republican Speaker of the House John Boehner, might be updated to the present time and a ‘deal’ could include $250 billion in cuts to Medicare over the next 10 years plus an increase in fees and a raise in the eligibility age to 67 plus an additional $100 billion from Medicaid and other federal health programs. That’s not what I voted for Mr. President. Obama is apparently holding fast to his pledge to restore tax cuts on the rich. I’d like to see a bump in taxes on dividend, capital gains and interest income as well. And reform the tiny tax on hedge fund manager profits by switching the booty to personal income.
Make no mistake something has to be done. But it’s a relatively easy fix. The most obvious in the near term is to do something that, according to the Congressional Research Service, Congress has done 62 times in the last 50 years, including 11 times in the last 11 years; raise the debt ceiling. Then start shaving that debt by putting money in the pockets of American workers that they’ll return in fair amounts to Uncle Sam. Breaking down the numbers; about 40% of federal revenue comes from individual income tax, a number that has remained stable since the 50’s. On the other hand Corporations have seen a huge decline in their tax burden. It’s gone down by about 27% or so in the same time period. A meager 9% of the revenue pie comes from the corporate sector. Another 40% comes from the payroll tax. Please note that every Democratic job initiative has been thwarted by the Republicans during the Obama administration. The American Jobs Act would have been great to kick-start the economy. Writing in the New Yorker, James Surowieki points out a 2009 American Society of Civil Engineer’s estimate that it would take $2.2 trillion to gussy up the nation’s infrastructure. That’s a whole lot of jobs here in America. I don’t think you could send all our roads and bridges overseas for upgrade and repair.
Right-wing legislative illiterates have taken their cues from 2 special interest sources for the entirety of Obama’s presidency, neither of which benefits the general population in the least. I’m talking about the absurd Tea Party and the greedy, essentially anti-American gargantuan multinationals. The latter and Wall Street run the country.
It should be pointed out that George W. Bush increased the debt by 86% while Obama is responsible for a much more modest 35-36%. Republican God, Ronald Reagan, saw debt soar 189% under his leadership. GW’s papa gifted the country with a 55% increase.
Here’s all you need to know about “your” representatives approach to the problem. Last Wednesday a passel of big shot CEO’s met at different times in different smoke-filled back rooms with Democratic and Republican leaders. Erskine Bowles, co-chairman of the basically silly Obama deficit commission was lurking as well.
As worrisome was Thursday’s totally unnecessary and politically gratuitous meeting between the vanquished Mitt Romney, tax evader extraordinaire, and the President. Obama supposedly wants to hear Romney’s ideas for streamlining government. Hell, is that all the meeting is about? Here are Mitt’s ideas in one breath. No taxes for huge corporations and the filthy rich and elimination of the Education Department all agencies involved in protecting the environment and regulating anything the moneyed class doesn’t want regulated. Also privatize social security, dismantle all entitlements and keep killing Muslims. There! No need for a meeting.
And let’s not forget John Boehner’s revelation that the American public prefers rewriting the tax code to eliminate loopholes and deductions rather than raising taxes on those poor put-upon millionaires and billionaires. John knows this based on the outcome of a poll by the Winston Group where 65% of respondents agreed that was the best solution to the ‘fiscal cliff’. The Winston Group is a Republican Research Firm headed by Boehner BFF, David Winston. About as much credibility as Fox News I would say. Balance this pure bullshittery with the indisputable fact that virtually every legitimate poll on the planet shows the American people, by a large margin, favor higher taxes on the rich, but as a Romney Pollster once said, “We won’t let our campaign be dictated by fact-checkers.”
Please absorb this inalienable fact: the world’s governments, corporations and investors love and trust the American economy more than any other. That remains a truism that’s not been challenged even in this economic rough patch. Any money invested in U.S. ‘debt’ (treasury securities in the form of bonds, notes, bills and TIPS or Treasury Inflation Protected Securities) is considered to be well spent and secure. For all their bitching, red states buy U.S. debt. Sometimes a lot of it, other times not so much, but such debt purchases are an unbroken historical string of entrusting that state’s money to Uncle Sam with the government’s promise to pay it back with interest.
American corporations, again, for all their bitching, buy U.S. debt. The U.S. government buys U.S. debt. The Federal Reserve gets in on the act as well in purchasing short-term securities to diddle with short-term interest rates. The Fed also plays the longer-term treasuries game to grow the economy. I wouldn’t be surprised if Chairman Ben Bernanke is about to play that card. How can you not trust a chairman with the middle name “Shalom?” Governments of other lands keep buying our debt. China is usually at the top of the treasuries buyer pool followed by Japan and, oh yes, the volatile Middle-east oil exporter types, who purchase tons of T’s. The exporters include Iraq and Iran, 2 of the 3 axis of evil enemies cited by oilman G.W. Bush. Libya, under the separate heading of African Oil Exporters also taps into the T-market.
Caribbean Banking Centers, otherwise known as money launderers for U.S. tax evaders, ironically return the homies money back to the U.S. in sucking up billions in treasuries. Interestingly enough other well-known tax havens like Luxembourg, Ireland and Switzerland are quite active buyers as well.
So while Republicans keep clucking, “the sky is falling” or at the very least, boulders from the fiscal cliff, the rest of the world keeps buying large chunks of U.S. debt and has done so in roughly equal volume for the last 12 months of recorded purchases.
Hopefully Obama is playing liar’s poker in potentially putting entitlements on the table. Once the Republicans get their foot in that door, they’re kicking it down.