Enemies of the People

When will the voters of this country wake up and commit these people to mental institutions, prisons or kindergartens?

Some of our “leadership” are simply tools of their plutocratic owners. Others have not the intelligence to understand how ridiculous is the economic twattle that impresses them so much. They even gift us with a self-satisfied smile while exhibiting their ignorance – though some of those smiles might more accurately be described as smirks. To them we are cockroaches.

Ooops.

Now we are blessed with an update from the International Monetary Fund. These are the fun guys that told Greece, Spain, Portugal, Italy and the others that the proper medication for their economic ills was austerity.

They admitted that the belt tightening would be uncomfortable. But, that was acceptable since the minions of the IMF and their owners would just get richer. Now they tell us that they misunderestimated the level of pain. It turned out to be 3 to 4 times as burdensome as they had predicted. No harm. No foul.

Repeat.

Let me reiterate. The problem with the economies – of Greece, Spain, Portugal, Italy, and our own – is a less than sufficient amount of money passing through them.

The major corporations and banks are sitting on trillions of dollars. No, Virginia, they don’t create jobs by sitting on their money.

You and I don’t have a sufficient surplus to juice the economy. That leaves, uh . . . oh yeah, the government. The government can rectify the problem of too little money flowing through the economy. But that would mean a stimulus, perish the thought.

As did the IMF, the Germans and others with extremely dense but empty skulls, the ignorant right prescribes cutting government spending at the time it is the only medicine that can work. Well, as I stated, the IMF has admitted they were wrong. Treasure that thought, because the ignorant American right is incapable of learning anything beyond the simpleminded ideology of laissez-faire. For future reference, anytime you see laissez faire capitalism mentioned remember to translate that as ridiculous nonsense.

Cutting government spending means less money being pumped into the economy. The result? An economic downturn; sometimes called a recession. However, when the economy is already ailing, it likely would be worse than a recession. Let’s, for the sake of argument, just call it a depression.

The graph above tells the story as simply as it can be told.

A strange thing happens when people become unemployed: they don’t pay as much in taxes. Somehow, this works out to the government having less income. At the same time, many of these unemployed get unemployment payments. Some get welfare. Some get Aid to Families with Dependent Children. Some get MedicAid.

Some lose their home, becoming homeless. That helps depress the housing market, throwing construction workers out of work.

None of this helps. The government takes in less money and spends more. That’s what the graph is showing. If you get people employed, the deficit disappears.

During the stimulus the federal government subsidized lots of state and local government jobs. These were teachers and first responders. Still, the state and local governments laid off about 650,000 workers.

When little George took office we were paying down the debt. That had to be stopped. So, little George gave everyone a tax cut. Now the debt is not being paid down. It is growing. What gave us the biggest part of that $16 trillion debt? Those tax cuts.

Well, what caused the second biggest part of the debt? The recession. Then we had to shell out a bundle for a couple of wars. Then we had to give the drug pushers about $50 billion a year through Medicare Part D. Then there is the $11 billion a year subsidies to the health insurance companies. It adds up.

The Solution

So, our capitol prostitutes have the answers: cut spending; keep the tax cuts. If I recall, that means less money coming in and more going out.

I need to talk to my wife about changing our income and spending so we can be debt free like the government. It must be true – the right wingnuts said so.

Some of these bozos acknowledge that their proposals won’t eliminate the debt. But keep the faith. They do have the cure. Just cut Social Security. Those geezers have it too easy anyway. Those cans of cat food have a little scrap meat in them. And they don’t really need those medications every day.

There is a difference between income tax and payroll tax. They go into different government pockets. The income tax goes into the general revenue fund. That’s what we use to pay most of our bills. That’s where the deficit is.

The payroll tax is for cutting checks for Social Security and Medicare. It CANNOT contribute to the debt. It is not a part of the budget. The budget is where the debt shows up.

Social Security has generated a very large surplus. So has Medicare. With medical costs rising faster than the general economy, Medicare needs attention. It already has garnered enough attention to slow that inflation significantly; not enough but significantly.

Social Security was good until about 2058. For the past couple of years the payroll tax was reduced 2%. That ended the first of this month. However, it did reduce the surplus in the trust funds, so the viability dates for Social Security and Medicare crept closer.

The rabid right wants to destroy those two programs. Therefore, they want to begin reducing them. They want to do this in the name of the debt crisis. See. No matter what you do to those programs it will not impact the federal debt. The right lies in order to further their ideological agenda. But you knew that already.

Briefly, they want to raise the age of eligibility. Not everyone outside the wall of Congress has a desk job. Not everyone has a job that they will be able to perform well beyond age 65. Employers may increase their efforts to rid themselves of workers with declining ability to keep up.

As for raising the age for Medicare, that would mean trying to stay on existing health insurance plans longer. This at a time when a person’s medical costs are likely to be increasing. That will mean trying to remove these people form their health insurance coverage or drastically raising the premiums.

The solution is simple. Remove the limit for the payroll tax and subject all income to that tax. As it stands, people are not taxed on salaries and wages above $110,100 (for 2012). That means those better off pay a smaller percentage of their income than the poor and the bulk of the middle class. And, income not subject to the payroll tax, such as capital gains, contribute nothing.

Where Goest Thine Gelt?

Do you know who buys most of our national debt? Probably not. China? No. The Saudis? No. Bangladesh? No. Starbucks? No.

Well, who does? You and I are the suckers. China only holds about 10% of our debt. Most, by far, is held by the Social Security Trust Fund. Thank us for our generosity.

The kicker? While Congress will insist that they must honor those debts to China, The Saudis, et al., they have no intention of honoring the debt to the Social Security Trust Fund. You refuse to believe that at your peril, despite it being true and in the face of admissions by a handful of congressmen. They do want to delay it long enough for them to be successful for a few more election cycles but their ideology requires that it be destroyed.

Till later, fellow cockroaches,

If you found this educational, edifying, interesting or otherwise worth your time, this geezer would appreciate a little supplement to those Social Security checks, They forgot to factor in the cost of publishing a blog. I would like to continue being able to afford my daily cup of coffee and pound of caviar.

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Many thanks,
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Tagged as: austerity, bank, china, corporation, depression, economic, economy, enemy, government, greece, greed, imf, intaly, jobs, medicare, money, payroll, plutocrat, portugal, recession, social security, spain, stimulus, tax