Ok, Obama, Let’s Soak the Rich. In Fact, Let’s Take Every Penny They Have. What Will We End Up With?


Think about this. Europe is attempting to solve this problem now and you can see one of the consequences of it in my last post. My only question is how will the people react when the time comes that Congress gets serious enough to deal with the Debt crisis in this nation?

A h/t to The Libertarian Patriot

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Categories: Economics | Tags: , , , , | 18 Comments

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18 thoughts on “Ok, Obama, Let’s Soak the Rich. In Fact, Let’s Take Every Penny They Have. What Will We End Up With?

  1. Spending obviously needs to be curtailed. But, stopping social programs will not lead to a thriving nation, as a people. You haven’t said that we should end social programs, I’m just stating my own opinion here.

    Cutting expenses sounds great as Tony Robbins referred to. Military spending takes up 53% of our budget, let’s start there and not on the poor who need far less to have the minimum one needs to live a decent life.

    Also, to talk about ending social security we must talk about fairness and justice. Is it fair to someone who was forcefully giving his tax dollars to a program for years and years that he was told would help him pay for his life costs once he was unable to work? Before we cut programs that people are expecting something in return maybe we should start cutting where most Americans (after all the tax money is THEIRS) disagree. Most Americans disagree that we should be stationed all over the world. That is the brunt of the military budget. Let’s get out of other countries and focus on building our infrastructure without leaving poor people to die on the side of the road or leaving old people (who have paid taxes for years!) high and dry.

    Just my humble opinion.

  2. The Griper

    your opinion is welcomed, Justin. a solution to a problem cannot be found without discussion of it.
    most people will agree that military affairs is the responsibility of the national government. it is explicitly written into the Constitution.
    where they disagree on is domestic affairs and where that responsibility belongs.
    and whether we like it or not it is the domestic programs that is the cause of the debt crisis. it is the domestic programs that is the common thread of every nation suffering through this debt crisis. it also is the cause of the debt crisis in every State and local governments too.

  3. The Griper

    i thought it played well too, Gorges. and i thought it went well with my previous post and what will possibly occur here also.

  4. I must respectfully disagree. Domestic programs are not “the cause” of the debt crisis, they play a part, sure, but they are only a fraction of the budget, less than half.

    While I agree it is the job of the national government to provide us with an ample military I must heed caution to the amount being spent. Far too much! It’s written in the constitution that national gov’t fund the military, but nowhere is it written that 53% of the budget be spent on it. If we cut that figure in half (or more) we would still be biding by the constitution while providing programs for those who have payed taxes there entire lives (elderly, some of the poor).

    What makes the military spending even more egregious is the fact that ex-politicians, who had a hand in starting or “defending” us overseas are making billions of dollars in profits on gov’t contracts to continue “protecting” us. Can anyone say “conflict of interest”? Who stands to make billions if we don’t cut many of the federal domestic programs? No one. The only people who benefit are those that are in need. Seems like a no-brainer to me where the cuts should take place.

  5. The Griper

    take a good look at history, Justin. up until Roosevelt introduced all of these programs the national debt was minimum. sure there were spikes in the debt as a result of wars but those spikes came down in time. with domestic programs the debt has done nothing but spiral upwards.

    and even if you did cut the military budget in half it still wouldn’t be enough to balance the budget and you’d only deepen the domestic problem with the added military personell thrown into the domestic mix.

    • BB-Idaho

      Lets take a look at history…
      First, top marginal tax rate vs national public debt
      in terms of percent GDP:
      1925-28 25% and 26% (great depression follows)
      1944-45 94% and 100% WWII
      1952-53 92% and 60%
      1960-75 70% and 29%
      1988 28% amd 40% Reagan tax cuts
      currently 35% and 50%
      Note the correlation between taxes and debt.
      As for recent debt, NY Times analysis: (I hope these paste OK)
      Recessions or the business cycle (37%);
      Policies enacted by President Bush (33%);
      Policies enacted by President Bush and supported or extended by President Obama (20%); and
      New policies from President Obama (10%).
      The Pew Center reported in April 2011 the cause of a $12.7 trillion shift in the debt situation, from a 2001 CBO forecast of a cumulative $2.3 trillion surplus by 2011 versus the estimated $10.4 trillion public debt we actually face in 2011. The major drivers were:
      Revenue declines due to the recession, separate from the Bush tax cuts of 2001 and 2003: 28%
      Defense spending increases: 15%
      Bush tax cuts of 2001 and 2003: 13%
      Increases in net interest: 11%
      Other non-defense spending: 10%
      Other tax cuts: 8%
      Obama Stimulus: 6%
      Medicare Part D: 2%
      Other reasons: 7%
      Since Social Security and Medicare are additional taxes, they (thus far) have
      occurred no debt at all. Bush2’s Medicare Part D accounts for 2%
      …history places little blame on ‘domestic programs’

  6. The Griper

    very nice list of correlations, BB and i have no argument with them. i’ll even grant them as valid correlations. but unfortunately studies of correlations are not the same as studies of cause and effect.

    the cause of debt is spending more than you have revenues. that is true on any level of economics.

    and recessions are a part of any economic cycle thus need to be taken into consideration when dealing with long term commitments which government does not do. politicians always paint a very rosy picture of economics for very obvious political reasons.

    the bottom line is that politicians have no control over spending because they made long term commitments that require greater spending each year. and the economy is not compassionate enough to remain stable in order for the government to receive the revenues it needs to cover those commitments. recessions come and they go. the only thing we do not know is the duration.

    so, while there is a correlation between recessions and its effects you cannot place blame on recessions. you can only place blame on those politicians who enacted programs without taking recessions into consideration when it is time to consider how to pay for those programs.

    and unfortunately for the people, there will be a time when an austerity budget will be needed and as we see in Europe it won’t be the military budget that will see the biggest cuts. it will be domestic programs.

    what i say is true regardless of whether we talk of governments, businesses or personal economics.

    • BB-Idaho

      I would hope that in times of austerity (or great times) that all would share the burden (or largess). That generally doesn’t happen, for Orwell’s ‘all animals are equal, but some animals
      are more equal than others’ applies to human nature as well
      as totalitarian communism. Political obligations to social programs could arguably be similar to political obligations to
      military spending. Europeans spend little on military: I’m sure you know that we spend far more . Ike’s ‘military-industrial complex’
      is a business unto itself; a fact recognized by many, including
      classic libertarians. Thus we get into the ‘neocon’ arguments
      about spreading democracy with US arms, etc. My original
      thought was that we began the popular tax cutting almost 40 years ago an during that time, no corresponding reductions were made; hence the accumulated debt. I would argue that serious
      debt reduction should include all spending sectors, and if really serious, should include tax increases in all sectors. Politicians by their nature cannot do that…..

  7. The Griper

    politicians. by their nature, may not be able to do that, BB, but if Europe is any example of things to come, time will “force” it to happen.

    damn, BB, we are in total agreement here. people are going to be on the hurting side regardless and as members of the older sector we need to prepare ourselves for it in ways the younger sector need not.

    and whether some like it or not that means that everyone is going to have to wean themselves off of government dependency.

    • BB-Idaho

      Griper, IMO you hit on another economic factor with “we older people’. Demographically, we are living longer, we tend to
      require more healthcare and our working contributions are
      diminished. In a way, ‘we older people’, by being numerous,
      have added to the imbalance. (who am I to say: I looked up
      my birthdate and find I am part of the Silent Generation..sshh.)

  8. The Griper

    yup, and that imbalance cannot be economically sustained without consequences especially in a society with a negative growth rate. and as we see, those consequences hits the most vulnerable the hardest.

    and when you have a society as diverse as ours those vulnerabilities show up in many areas, race, age, education, etc.

    i guess what it comes down to, the inequalities that are a natural part of life reveals itself no matter how many laws are written in an attempt to eliminate them.

    life itself forces independence upon the individual and life is never very compassionate in how it teaches that lesson.

    and whether we like it or not man’s laws are not more powerful than the laws of life. as science teaches us, the laws of life should be learned and abided by if we are to survive.

    • BB-Idaho

      On a somewhat more positive note, some of the outsourcing
      is returning to our shores. For years, I have worried about the
      decline of the mfg. sector- one of the main reasons our economy tanked while China’s grew. Again, this is a law of economics that is independent of politics. But a healthy manufacturing sector provides lots of good jobs, provides
      lots of paying customers, improves the balance of trade and
      drives the stock market. All good, no?

  9. The Griper

    yes, it be good. now the question be, why are they coming back? there is a lesson to be learned and we better be darn sure we learn the right lesson or it will happen again.

    why is it their self-interest to return? there is that phrase again, self-interest. we know full well it isn’t for altruistic reasons.

    what is the lesson the employee must learn whose job was out-sourced? what is the lesson the employee must learn whose job was outsourced and has not returned?

    what is the lesson that an employee must learn when he loses his job due to a recession?

    what is the lesson an employee must learn when he loses his job due to a bankruptcy of a business?

    what is the lesson to be pass on to the young when they see the old timers lose their jobs due to age or any of the above?

    • BB-Idaho

      The returning jobs seem to be a bottom-line thing. Overseas
      shipping is a huge expense, so if third world cheap labor costs go up (and they have) it makes sense. A few years back in
      our area we were shipping logs to Japan and buying Japanese plywood. The wood was a material of fairly fixed price, but the value-add was labor & transport (two ways, yet). An interesting thing to watch is the China/Walmart trade. They have purchased huge ships which carry merchandize from China
      to the US and return empty. That is a significant transportation investment and Walmart has a reputation among its suppliers
      of squeezing hard. Dunno, Griper interesting stuff….
      ..anectdotal tale. I used to routinely purchase rare chemicals by the ton from Europe and the orient. The lead time was months, so it was an on-hand inventory control balance. Several tons
      of a Belgian-made oxidizer burned upon loading, and their
      plant was short material. It was clear we would run out;
      production would cease. The cost trade-off? The CEO
      said “fly the damn stuff” It was not a cheap chemical, but
      the airplanes more than tripled the bill. Still, cheaper than
      shutting down an operation.

  10. The Griper

    ok, profits or the self-interest of the business is the why.businesses acting independently of the community they were in and independently of the employee in that community.

    are they now once again among the unemployed in that nation?

    but what lesson must the employee learn?
    is this a cyclical trend of businesses?

    • BB-Idaho

      From a utilitarian business standpoint, employees are one of the costs; raw material, labor, overhead. Quite often, you see a
      large company that lays off staff has its stocks go up; the savings
      translates to profit. The tradeoff is reduced capacity, so it is a
      short term thing, because in general the idea is growth. IMO,
      employees should understand that the relation between business is one of competition: employees compete for jobs:
      businesses compete for employees. This gets complicated a bit, for an employee that excels at retail sales might make a
      terrible over the road trucker, etc. (turnover among long distance truckers runs 90% BTW). Yes, those countries who loose
      jobs back to the US are prone to unemployment; China is
      currently trying to figure out what to do with their ramped up
      6 million college graduates per year. The relationship between business and gov’t can be positive/negative: China is notorious
      for bankrolling business, but as of late public pressure there has resulted in more environmental regulation. Like most things,
      it is a question of balance. Just my opinion, Griper- seems nothing is simple or straighforward anymore.

  11. The Griper

    yes the employee is looked upon as an expense item and the reason for this is taxes. by placing the employee in the expenses column he becomes a tax deduction for that business. as such the employee is always looked upon as being a liability to that business in an accountant’s viewpoint. this way, both the employer and employee can be taxed on their incomes without the accusation of double taxation.

    eliminate taxes and that employee will be placed in the same place as the employer, in the profits column. he will be looked upon as being either as an asset or a liability to that business just as that employer is.and you’ll get a far more efficient running business.

    but the point i was trying to get to is that the employee is always a “dependent”. first he is dependent upon that business when he is working then he becomes a dependent of the State when he is not working for some reason or another as we described in our previous comments. and when this happens the employee becomes one of those “vulnerables” that we discussed earlier.

    in other words, the words vulnerables and liabilities become synonymous in the world of Economics. its not a pretty thought, i grant you, but it is a fact of life.

    the employer, on the other hand, is dependent only on himself, thus has the freedom to do whatever is necessary for his own self-interest. and that is because his eye is always on that bottom line and that bottom line is what “effects” his life (self-interest).

Be respecful or your comment will be deleted. Also know that Alinsky tactics do not phase me

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