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Fri Dec 14, 2012, 10:54 AM

 

Why isn't Barack Obama proposing this to resolve the Fiscal Cliff?

Business confidence needs to be increased by the Federal government demonstrating that it is serious about getting Federal spending and sheer government WASTE under control.
Neither Party has any plans whatsoever to do that.

Both Barack Obama and the GOP have sought to distract from the REAL ISSUE which is astronomical levels of government waste and Corporate largesse and sought instead to create a sham argument over trivial amounts on personal tax increases ($80bn a year) and then sought to try and get cuts made to social welfare programs, neocon Boehner is talking about $240bn of welfare cuts - which in the current situation would actively harm the economy.

But it is VERY easy to see how to cut $1tn+ from Federal spending, just by cutting the WASTE - here's how.

Cut $500bn from military spending from the current $1,219bn in 2012.
By :-
Cut the $105bn p.a. budget for keeping 7,000 "contractors" in Iraq.

Cut the size of the worlds largest embassy in Baghdad - swap for smaller premises with someone else in the green zone and rent the rest out.

Bring back the 138,000 military that are currently stationed in Germany, Japan, South Korea, Italy & UK. Let them pay for their own defense.

Update 12/11 $170 bn spent every year on building/supplying foreign military bases
http://www.huffingtonpost.com/tom-engelhardt/military-spending-cuts_b_2277360.html?utm_hp_ref=politics&ir=Politics

http://www.alternet.org/world/us-taxpayers-are-shelling-out-170-billion-year-pentagon-occupy-planet

Stop buying reaper and predator drones at $36m a pop - they are counter productive.
Stop spending money on hellfire missiles that serve only to recruit more jihadists and radicalize the local and general Middle East populations because of the extremely high number of innocent civilians killed.

Stop the $1.45 TRILLION development of the next generation of stealth aircraft.
The US hasn't had a plane shot down since the 1st Gulf War.

Cut the size of the NSA and DHS, they are not cost effective.
A new $2bn datacentre is being built in Utah to store EVERY email sent in America.
The budgets of NSA and DHS have been massively increased over the last few years.

Withdraw immediately from Afghanistan - saving about $100bn on current war costs.

Update 11/25 The latest examples of Pentagon waste.
Did Jesus die for Klingon's too?
http://www.motherjones.com/mojo/2012/11/did-jesus-die-klingons-too-and-other-pentagon-projects


Cut the $100bn+ medicare fraud.

Cut the price of FDA drugs or go generic earlier.

Fine the big banks for the mortgage (and other) frauds they have committed that should bring in circa $100bn (one off).
HSBC has just settled for a slap on the wrist fine of $1.9bn (equivalent to 5 weeks of revenues) for massive Mexican drug money laundering. No execs are to be criminally charged.
http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213

Stop the phoney war on drugs and save $200bn p.a. and have a MASSIVE reduction in crime and corruption.
http://ian56.blogspot.co.uk/2012/04/how-to-save-200bn-pa-from-federal-and.html

Stop the $200bn of new Pork issued each year.

Stop ALL foreign aid.

Stop ALL corporate welfare and subsidies.


Stop buying drones for border patrol.
They are VERY expensive, very inefficient, very easy to hijack their GPS systems and positively DANGEROUS to US citizens.
If a bunch of Texas University students can hijack a drone with less than $1,000 of equipment - you can be sure a Mexican drug gang can.
http://ian56.blogspot.co.uk/2012/10/us-drones-are-threat-to-us-citizens-in.html



I just saved $1tn+ without even trying and I hardly cut any jobs at all.



Then we can start talking about cutting the next $500bn of government spending.
This would mean a reduction in the number of government bureaucrats.
This would be done in conjunction with tax cuts for the POOREST which would be an economic stimulus and create more jobs.

We can also talk about closing tax loopholes whereby multinationals siphon off profits to tax havens abroad and pay very little or no corporation tax.
That money can then be used to reduce corporation tax on small and medium sized businesses who are the real job and wealth creators. This would also be an economic stimulus.
This has just been proposed to the G20 by the UK and Germany.

Google has just admitted saving $2bn in taxes by siphoning off US profits to Bermuda.

At a time of record Corporate profits, it is very unusual for a multinational to pay more than 10% in Corporation Tax and often it is next to nothing, due to the widespread and numerous tax avoidance schemes.
Why is nobody talking about this as a means of raising substantial revenues?

Update 11/25
The tax increases proposed under the so called "Fiscal Cliff".
EVERYBODY's taxes are about to go up.
http://www.mondaq.com/unitedstates/x/178778/Income+Tax/2013+Federal+Income+Tax+Update
When you add in state/city taxes, income taxes are TOO HIGH for EVERYBODY.
The Payroll tax cut of 2% is also due to expire at the end of the year.
Increasing taxes on medium / low income workers will kill the economy and MUST be stopped.

The increase in taxes for the top 2% is equivalent to 8 days of government spending.
This is just fiddling around with the deckchairs on the titanic.


CUT the wasteful spending.

If you want to tax something - tax donations to churches.
Churches are a business like any other business.
They are a business selling faith.
Most of church spending is not charity - it is spent on employee wages (priests/pastors) and the upkeep of their buildings (churches).

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Replies to this discussion thread
Arrow 19 replies Author Time Post
Reply Why isn't Barack Obama proposing this to resolve the Fiscal Cliff? (Original post)
Ian62 Dec 2012 OP
Scuba Dec 2012 #1
Ian62 Dec 2012 #10
sabrina 1 Dec 2012 #13
Ian62 Dec 2012 #14
JDPriestly Dec 2012 #15
Laelth Dec 2012 #2
Ian62 Dec 2012 #5
Laelth Dec 2012 #9
MrYikes Dec 2012 #3
bhikkhu Dec 2012 #4
randome Dec 2012 #7
Ian62 Dec 2012 #8
JDPriestly Dec 2012 #18
bhikkhu Dec 2012 #19
Motown_Johnny Dec 2012 #6
Ian62 Dec 2012 #11
Motown_Johnny Dec 2012 #16
dkf Dec 2012 #12
JDPriestly Dec 2012 #17

Response to Ian62 (Original post)

Fri Dec 14, 2012, 11:07 AM

1. You're right. We need to levy a much larger tax increase on the wealthiest.

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Response to Scuba (Reply #1)

Fri Dec 14, 2012, 12:06 PM

10. You mean like France has just done?

 

Have you seen where that is getting France?
The rich are moving to Belgium!

When the UK raised the top rate of tax from 40 to 50% - tax revenues didn't increase.

People found more ways to hide income offshore, tax avoid by paying more in dividends, higher earners didn't see the point of working so hard etc.

You have to have COMPETITIVE tax rates at all income levels.

Preferably better than competitive.

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Response to Ian62 (Reply #10)

Fri Dec 14, 2012, 12:20 PM

13. The rich COST us money, let them leave. France was right. Now let all the other countries do the

same. Where are they going to go if there is nowhere that wants to carry the burden of having them?

I would nationalize all the Big Banks. After reading Matt Taibbi's article on the latest crimes committed by Banks, and how prosecutions are now 'deferred' it is simply outrageous. They were charged with violating several laws that would have put an ordinary person in jail for life.

Laundering money for Drug Cartels, allowing money to get into the hands of Al Queda?? These banks are a blight on this country. They created the deficit, then we had to bail them out. How many crimes are they going to commit before it becomes clear that they are costing this country more than just money?

Break up these huge Corporations. Consorting with the enemy should be enough to get full support for that since their massive corruption which brought down the economy wasn't enough.

Iceland did it, then arrested their crooked bankers and are now on the way to recovery.

Enough with these crooks. If they want to leave, buy them a ticket.

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Response to sabrina 1 (Reply #13)

Fri Dec 14, 2012, 12:32 PM

14. I am all for jailing the criminal bankers

 

Putting the CEO's of JP Morgan and Goldman Sachs away for 20 years+ hard jail time would do wonders to clean up Wall St.

Re-instate Glass Steagall - so taxpayers are not on the hook for speculative excess.

Break up the too big to jail banks.

Go after American banks for money laundering. I won't hold my breath.

I am all for learning some lessons from Iceland.
Iceland bailed out the people and imprisoned the bankers - the opposite of what America and the rest of Europe has done and is doing.
After about 18 months of extreme hardship Iceland is now recovering nicely.
They have put their ex President on trial.

QE3 is another large bank bail out.
The Federal Reserve is buying up impaired mortgage loans for more than they are worth from the big banks at the rate of $40bn a month.

Forbes on cleansing dirty bank assets, money laundering and QE3.
http://www.forbes.com/sites/lawrencehunter/2012/10/29/are-federal-reserve-regulated-banks-laundering-dirty-money/




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Response to Ian62 (Reply #10)

Fri Dec 14, 2012, 12:35 PM

15. If the rich don't want to live in the US because of the high tax rates,

let them go someplace where the tax rates are low.

The Caribbean islands will get very crowded very quickly.

Most desirable places charge higher tax rates than the US.

At least when I lived overseas, Americans with incomes derived from the US that were over a certain amount were required by law to file tax returns in the US and pay American taxes.

I don't know if that is still the law but I suspect that it is.

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Response to Ian62 (Original post)

Fri Dec 14, 2012, 11:20 AM

2. You lost me with your very first sentence.

Business confidence does not need to be "increased by the Federal government demonstrating that it is serious about getting Federal spending and sheer government WASTE under control."

That's a right-wing talking point if I have ever heard one. Right now, federal spending needs to increase, not decrease. The time to worry about federal spending is when the private sector is booming, not when it is stagnant or contracting. I am not worried about federal debt at this time. Sadly, it appears the President does not agree with me, nor do a majority of elected Democrats. We really need a liberal party in this country. I am sick to death of the two conservative ones we have now.

-Laelth

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Response to Laelth (Reply #2)

Fri Dec 14, 2012, 11:35 AM

5. So you must be in favor of large Corporations over ordinary working people

 

Because that is what has been happening for the last 10 years at least.

Corporate profits are at record levels.

Whilst poverty continues to rise and real wages continue to fall.

If you want higher gas and food prices you should be advocating more government waste, higher government deficits and more printing.

Higher government borrowings translate into more free money for large banks. The speculative banks then use some of this money to bet on things like food and energy going up - which exacerbates the effect.

America today. 10% REAL inflation (using the method to calculate CPI that was used in 1980).

Trivial things like gas and food are underweighted in official CPI numbers.
They disproportionately affect poorer people.
The way that CPI is officially calculated was significantly changed in the early 1980's and then again in the early/mid 1990's.
If you use the 1990 CPI model, real inflation is currently at 6%.

http://ian56.blogspot.co.uk/2012/11/unemployment.html

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Response to Ian62 (Reply #5)

Fri Dec 14, 2012, 11:52 AM

9. I am not following your logic.

My belief in the basic tenets of Keynesian economics does not make me any of the things you list above.

Good bye.

-Laelth

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Response to Ian62 (Original post)

Fri Dec 14, 2012, 11:21 AM

3. good work ian62.

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Response to Ian62 (Original post)

Fri Dec 14, 2012, 11:33 AM

4. Federal spending growth is under control

http://factcheck.org/Images/image/2010/Wire%20Items/Spending_GDP(3).png

Note the trends, both short-term and long-term.

Waste is an issue, of course, but its been an issue in every single election I can recall since I was a child, back in the Nixon era. At some point, if we keep electing people based on their promises to cut waste, I have to wonder if we're not just being played for stupid. In any case, I'd very much rather support "good governance" than any other promise or effort, and the Democrats and Obama are currently doing a very good job.

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Response to bhikkhu (Reply #4)

Fri Dec 14, 2012, 11:41 AM

7. Waste is an issue every time large amounts of money are involved.

Whether it's from the private sector or the public.

Republicans whine about waste and about people on welfare who don't spend money the way Republicans want them to but they conveniently overlook the fact that the vast majority of recipients of public aid do what they can to improve their lives and the money we spend on them is well worth it.

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Response to bhikkhu (Reply #4)

Fri Dec 14, 2012, 11:41 AM

8. So you think the government wasting $1 trillion plus a year and

 

maintaining record company profits whilst 47.7. million people are on Food Stamps is doing a good job?

I detailed most of the things that added up to the trillion plus of waste.

Most of them were all around excess government largesse to large Corporations.

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Response to Ian62 (Reply #8)

Fri Dec 14, 2012, 01:43 PM

18. No. Most of them are about falling demand for labor and lower wages.

When working people make good wages in a fair market in which they can compete with other workers on an even playing field, workers pay taxes that keep the economy going.

The problem now is that only the very rich have any money.

As for the numbers of people on food stamps. People have to qualify to go on food stamps. That means that they have to prove that they have very low incomes, so low that they can't buy enough food without assistance. That so many people, especially working people, are on food stamps is an indication of a big structural problem in our economy: low wages due to low demand for workers and too few jobs that pay livable wages.

The government is doing a good job keeping hungry people fed. Thanks to the know-nothing, understand-nothing, deaf Republicans in the House, the government cannot make the structural changes to our labor market (and import/export market) that need to be made.

If the government did not provide food stamps and feed people, farmers would be throwing their rotting food on the streets. My very elderly mother remembers what it was like in farm communities in certain years of the Great Depression. They really did dump rotting wheat in the middle of the street in some communities. No one had the money to buy it. There was not enough demand for basic food stuffs. We brought in farm supports and food distribution programs like school lunches after WWII TO HELP FARMERS have reliable markets for their products.

Cutting spending to solve our economic problems would be like ripping the bandages off a huge sore in our economy. The sore is due to excessive wealth disparity -- the rich too much richer than the poor -- and too many cheap imports with the resulting closing of factories and joblessness. The best way to bring more equilibrium into the wage/wealth differential would be to build factories and hire Americans to work in them. But, American work has to compete with the work and wage levels of countries like China where people live in horrible conditions. Reducing our standard of living is one way to get down to the level at which our goods are competitive in international markets. I guess cutting government spending would be a good start toward that solution. But I think a lot of Americans would object to that. Maybe even you, Ian62. Maybe you like your flushing toilet. Maybe you prefer living in a house with a back yard to living in a tiny apartment in a high rise building with your mother-in-law sleeping in the bed next to yours. I don't know.

The mantra "cut spending" is just a distraction. It lulls those who cannot think logically, those with attention spans too short to unravel the thread of deception in our society, into feeling smugly that there is a simple, painless answer to our economic problems if only those "damn liberals" would listen up.

Not that simple, not that painless. Sorry.

Life is complicated, and if you don't understand the complexity, develop some patience. Try to understand it.

Business is about taking risks. Businessmen do not hesitate to invest because of uncertainty. Uncertainty is where the opportunities are. Uncertainty is not the problem now.

"Uncertainty" as used by Republicans is a euphemism for "unlikely to generate enough profits. Who cares about America? I'm going to invest in Timbuktu."

The problem is that, unless we make some big changes that are going to hurt a lot of very rich people, and make them pretty quickly, our economy is certain to tank again as working people become poorer and poorer.

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Response to Ian62 (Reply #8)

Fri Dec 14, 2012, 09:46 PM

19. Raising the minimum wage would be "doing a good job"

as it would allow much more of the working population to earn enough money to afford food. For whatever reason, this has no chance of happening. The next best approach is to support the food stamp program, which there has been enough support for to do address real problems and do real good. One can get all ideological about how its a shame and a travesty, or one can see it as the best working solution, given the divisions in congress.

Nearly all of your suggestions are cutting defence spending. Which totals less than 1 trillion a year itself - so I think you have a problem with the way you are doing the figures there. But, while I agree with you in principle, I'd also have to say that the odds of a libertarian ever being elected to office are slim to none. I believe the president's proposal had $600 billion or so in defence spending cuts, and its pretty well realistic about what is possible to get done. If you've followed military spending for long and can put that in perspective...well, a cut of that size, if it actually happens, would make me pretty satisfied!

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Response to Ian62 (Original post)

Fri Dec 14, 2012, 11:40 AM

6. Screw Business Confidence!

Some people will make the right decisions and deserve to profit from those choices.

Others will make the wrong decisions and will be hurt by those choices.


Removing uncertainty is stupid. It just lets the less competent compete with the more competent.
Economic Darwinism is bypassed by doing this and it hurts us in the long run. Let the strong companies survive and let the weak perish.

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Response to Motown_Johnny (Reply #6)

Fri Dec 14, 2012, 12:12 PM

11. So you would like to continue to see Corporations sit on their $2 trillion

 

(mostly offshore) cash pile and not invest it in America to create jobs?

You would not like to encourage small business start ups to take the risk of starting up or expanding?

You would not like to see a switch from favoring certain large Corporations to an even playing field with small and medium sized businesses?

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Response to Ian62 (Reply #11)

Fri Dec 14, 2012, 01:01 PM

16. Compared to your "Remove Uncertainty" policy which created that $2 Trillion

pile?


I would like to see people who are smart enough to win at the game win and people who are not smart enough to win the game lose.

That money will find it's way to the winners and you can't win if you don't play.

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Response to Ian62 (Original post)

Fri Dec 14, 2012, 12:18 PM

12. Why don't you get rid of the entire defense department while you are at it?

 

Of course that leaves you with a whole lot of unemployed men and you know how great that is for a nation.

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Response to Ian62 (Original post)

Fri Dec 14, 2012, 01:20 PM

17. Business is about taking risks, calculated risks.

The problem isn't that the future is too uncertain due to changing tax policies, etc. The problem is that there is too little demand for American-made products.

As long as American workers paying American prices for food, clothing, housing, medical care, etc. can only survive on wages that are higher than the wages of people in the third world making comparable products and as long as we permit goods produced at third-world wages to be sold in the US at current prices, demand for American products will remain low. And if demand for American products remains low, wages and demand will continue to decline.

An American kid wakes up in the morning to pour a breakfast of processed, sugared corn flakes from a box. The box has a picture of some animal or toy or cartoon character on it, and inside, the sugared corn flakes are protected from pests and dampness by a plastic bag.

A kid in China does not wake up to that kind of breakfast -- at least you can be pretty sure most of them don't. Nor do most kids in Guatemala, Indonesia or places in Africa. That is why their parents can work for such low wages. Many kids in the countries that produce our consumer goods wake up to the smell of open sewer drains, don't have flushing toilets or clean water at their tap. Some of the workers live in crowded dormitories. (Don't take my word for it. Listen to Romney who described the sordid conditions in a Chinese factory dormitory with great delight to potential campaign funders.)

Gradually, until we take care of this basic problem -- that the overpackaged, sanitary and safe lifestyle we live makes our cost of living higher than that in the countries from which we import a lot of consumer goods -- we will not be able to live on the wages paid in some of these other countries. Demand for labor will decline as will our wages and consumer demand in our country. Businesses will find our business climate more and more "uncertain." Here, "uncertain" means most likely unfavorable.

Business is about taking risks. No amount of tax restructuring or tax reduction or spending cuts will make taking risks worth it for calculating businessmen in an economy in which the money available to consumers, that is wages paid middle and low-income people, is steadily decreasing. Sure. Businesses can squeeze workers overseas, move to even cheaper labor markets and produce even cheaper goods. But they cannot make the profits they used to make here if our demand continues to decline. And our demand will decline if wages continue to decline.

I think that temporarily, this year, we may see an upswing in the economy. A lot of people managed to satisfy their credit card companies and are chalking up debt once again. This could last for a few years even.

But the upswing won't last. The squeeze on wages is underway. Passage of Michigan's right-to-work law, and the trend it reflects make it very likely that the economic upswing of the past months will end sooner rather than later. Wages will not rise if unions are not strong. And demand will falter again if wages do not rise.

Not until we become realistic about the reasons for the wage differentials, not until we demand that all products that enter the US be manufactured in conditions that would satisfy our EPA, not until we impose some tariffs on goods made overseas with next-to-slave labor will business regain its confidence.

The fact that our money is overvalued plays a role in this, but changing the value of our money won't change the underlying problem which is that we are allowing our living standard to be eroded by the influx of cheap goods from countries with living standards much lower than our own.

Cutting government spending will mean a decline in our living standard. That won't do anything other than make Americans even more miserable than we already are.

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