Poor v. Rich

Published on Tuesday, August 14, 2012 by OtherWords

The 64-Gazillion-Dollar Question

A top authority on poverty has changed his mind about the urgency of fighting inequality.

by Sam Pizzigati

Peter Edelman has battled poverty for nearly half a century — first as a top aide to Senator Robert Kennedy, later as a state and federal official, and currently as a key figure at a widely respected law and public policy center in Washington.(Neil Moralee/Flickr)
Over his years in and out of government, Edelman has probably earned as much respect as anyone in our nation's public policy community. Back in 1996, he did something few high-ranking federal officials ever do. He resigned in protest when President Bill Clinton signed a law that Edelman could not support in good conscience.
Edelman, then an assistant secretary at the U.S. Department of Health and Human Services, publicly warned that the "welfare reform" that Clinton signed into law would be devastating for the nation's most vulnerable children. He turned out to be right. The number of children living in deep poverty — kids in families making under half the official poverty threshold — rose 70 percent from 1995 to 2005, and 30 percent more by 2010.
America's elected leaders didn't listen to Edelman in 1996. Now they have another chance. Edelman, currently a co-director at the Georgetown University Law Center, has just released a new book — So Rich, So Poor — that aims "to look anew at why it is so hard to end American poverty."
You get the feeling from this candid new book that Edelman would be astonished if our elected leaders actually paid attention to his poverty-fighting prescriptions. So Rich, So Poor seems to address a different audience: the millions of decent Americans, from across the political spectrum, who share his outrage about our continuing deep poverty.
These Americans have a special reason for paying close attention to Edelman's new book. The author, one of the nation's most committed experts on poverty, has changed his mind — not about poverty and the poor, but about wealth and the rich.
"I used to believe," Edelman writes in his new book, "that the debate over wealth distribution should be conducted separately from the poverty debate, in order to minimize the attacks on antipoverty advocates for engaging in 'class warfare.' But now we literally cannot afford to separate the two issues."
Why? The "economic and political power of those at the top," Edelman explains, is "making it virtually impossible to find the resources to do more at the bottom."
Figuring out how we can achieve a more equal distribution of income and wealth has become, Edelman advises, "the 64-gazillion-dollar question."
"The only way we will improve the lot of the poor, stabilize the middle class, and protect our democracy," he notes, "is by requiring the rich to pay more of the cost of governing the country that enables their huge accretion of wealth."
What about those antipoverty activists and analysts who still yearn to keep poverty — the absence of wealth — separate from the concentration of wealth? Many of these folks, Edelman notes, argue that the rich as a group have no reason to oppose efforts to help end poverty.
Edelman's response? "More than anything else," he observes, the wealthy "want low taxes," and they know the taxes on their sky-high incomes will rise if government ever starts spending money to really help people in need.
"The wealth and income of the top 1 percent grows at the expense of everyone else," Edelman sums up in So Rich, So Poor. "Money breeds power, and power breeds more money. It is a truly vicious cycle."
Only average Americans have the wherewithal to end this cycle. Middle- and low-income Americans need to join in common cause. If they don't, Edelman bluntly adds, "we are cooked."

This work is licensed under a Creative Commons License

Sam Pizzigati edits Too Much, the Institute for Policy Study's online weekly newsletter on excess and inequality.

Modern Martha and Harold

HOUSTON, WE HAVE A PROBLEM!

                                              

   Holy crap, Martha, the damn well’s going dry! But, Martha knew that History repeats itself, especially when it comes to the weather. Seems like Martha and Harold are back in the old dust bowl, again. Some of us still remember the author John Steinbeck who wrote The Grapes of Wrath, which won the Pulitzer Prize, and Of Mice and Men, about folks like Martha and Harold. (That was back in the old days when you had to read stuff to find out what was going on in the World.)

   Well, back then Martha and Harold bundled up the kids and some of their belongings and headed for California, and a better life. Now, we seem to have a similar weather pattern in our abundant Midwest and Southwest. This modern day drought has some eerie similarities to the Dust Bowl of the 1930’s. It stretches from the high plains of Central Canada all the way South to Gulf of Mexico.

   Does anyone remember what was going on here in the 1930’s. Ah, yes, we were trying to resurrect ourselves from “The Great Depression”.  Sound a little familiar? Now, Modern Martha and Harold can’t just bundle up the kids and some of their belongings and headed for California. California is totally bankrupt, way too overcrowded, and Modern Martha and Harold don’t have the money to move, because Harold has been unemployed for a year and a half. MM & H are also close to defaulting on their mortgage, maxed out on their credit cards, one car already repossessed, and the second one in arrears.

   Tell me; what are Modern Martha and Harold supposed to do? In our style of democracy, this is where the Federal Government comes riding in on the white horse, just in time to save the day. Here’s where we run into a major snafu. The Federal Government doesn’t own a white horse anymore. The Chinese bought the last one we had, and, believe me, they aren’t riding in to save our day anytime soon. I guess there is a small chance that we can keep our feet out of the fire. Maybe, just maybe, if we stop fighting  these wars that are destined to failure, we can avoid running over the $3.4 trillion outlay that I suggested three years ago. Maybe then, we will have some money left over to help Modern Martha and Harold through this rough period. I really thought that helping them at their hour of need was “The American Way”. I hope I can still feel truth in that when I wake up tomorrow morning.

Just a little history from: http://en.wikipedia.org/wiki/Dust_Bowl                    

Geographic characteristics

{A dust storm approaches Stratford, Texas, in 1935.}

The Dust Bowl area lies principally west of the 100th meridian on the High Plains, characterized by plains which vary from rolling in the north to flat in the Llano Estacado. Elevation ranges from 2,500 feet (760 m) in the east to 6,000 feet (1,800 m) at the base of the Rocky Mountains. The area is semiarid, receiving less than 20 inches (510 mm) of rain annually; this rainfall supports the shortgrass prairie biome originally present in the area. The region is also prone to extended drought, alternating with unusual wetness of equivalent duration. During wet years, the rich soil provides bountiful agricultural output, but crops fail during dry years. The region is also subject to high winds.

Offshore Tax Deferral

    I was looking for an explanation of why our manufacturing sector is taking such a dive. I had a feeling I knew what it was, but couldn’t find anyone who would just come out an say it. I stumbled on this web-site courtesy of Google Search, and wound up finding exactly what I was looking for. I have done no research on this group and, as such, cannot attest to their accuracy. If there are inaccuracies, I am certain they are not many in number. [June 22^nd, 2012]

“CENTER FOR AMERICAN PROGRESS”

http://www.americanprogress.org/issues/2011/03/te_031611.html

Tax Expenditure of the Week: Offshore Tax Deferral Counting Down the Country’s Biggest Tax Breaks, Week by Week

SOURCE: iStockphoto

Offshore deferral encourages companies to use accounting techniques to record profits offshore, even if they keep actual investment and jobs in the United States. This explains why U.S. corporations report their largest profits in low-tax countries like Luxembourg, pictured above, though clearly that is not where most real economic activity occurs.

By Seth Hanlon |March 16, 2011

This is part of a new CAP series called the “Tax Expenditure of the Week.” The series aims to explain the often-confusing constellation of tax breaks in a way the average citizen can understand. Every Wednesday we will focus on one tax expenditure, explaining what it is, what purpose it is intended to serve, and whether it is effective toward that purpose. We will also review relevant reform proposals.

Subjecting these dozens of tax breaks to greater scrutiny is part of our broader focus on making government work better and achieving better results for the American people, which is the goal of CAP’s “Doing What Works” project.

This week we’re looking at the feature of the tax code that allows U.S. corporations to defer paying taxes on their offshore profits.

What is offshore “deferral”?

The United States has a worldwide tax system. That means U.S. citizens and companies generally must pay federal income taxes on all their income, wherever in the world they earn it. The feature of the tax system known as “deferral” allows U.S. multinational companies to delay paying U.S. taxes on overseas profits as long as they keep those profits offshore.

U.S. corporations take advantage of this tax deferral by forming subsidiaries in the countries where they do business. Foreign subsidiaries are not considered U.S. corporations even if wholly owned by a U.S. parent, so their overseas profits aren’t subject to U.S. taxes.

The key feature of deferral is that the U.S. parent need not pay taxes on a subsidiary’s offshore profits unless and until the profits are returned to the United States—for example, when the subsidiary pays dividends to the parent. At that point, the U.S. parent gets a tax credit for foreign taxes paid but it still has to pay the difference between the U.S. tax and the foreign tax.

Deferral provides tax incentives for overseas investments. In fact, it encourages U.S. companies to make job-creating investments off shore even if similar investments in the United States (absent tax considerations) would be more profitable. “U.S. tax law provides a large tax advantage for building and moving factories to low-tax countries,” according to economist Martin Sullivan.

How much does it cost?

The Treasury Department estimates the federal government will forfeit $42 billion in revenue in fiscal year 2012, and $213 billion over the next five years, because of this deferral.

Why is it a tax expenditure?

Tax expenditures are special rules or exceptions in the tax code that benefit certain taxpayers and cost the government revenue. The ability to defer taxes—to pay them in a later year or not at all—is one of the most common types of tax expenditures.

Who benefits from offshore deferral?

Deferral is valuable to U.S. corporations with global operations because they can delay paying taxes on their overseas earnings for many years, even indefinitely. The rule is particularly lucrative for corporations with income in low-tax countries.

This tax rule is one of the main reasons American corporations pay low taxes by historical and international standards, despite our having a marginal corporate tax rate of 35 percent. There are vast disparities across industries, with some industries paying exceedingly low average tax rates while others pay rates that are closer to (but still less than) the 35 percent marginal tax rate.

Some of the largest and most profitable U.S. corporations pay exceedingly low tax rates through their use of subsidiaries in so-called tax haven countries. Eighty-three of the United States’ 100 biggest public companies have subsidiaries in countries that are listed as tax havens or financial privacy jurisdictions, according to the Government Accountability Office. One study found that the United States loses about $60 billion in revenue each year because of tax-motivated “income shifting.”

What’s the argument for allowing U.S. multinationals to defer their taxes?

U.S. multinationals maintain that deferral of taxes on foreign earnings keeps them competitive in world markets with rivals whose home countries do not tax foreign profits. Most developed countries have so-called territorial systems that exempt their multinationals’ foreign profits even when brought home (which is what many U.S. multinationals would prefer).

U.S. corporations often argue foreign investment is good for domestic job creation because American workers are needed to produce the goods and services that are sold in foreign markets. In recent years, however, U.S. multinationals have reduced domestic employment while increasing foreign employment.

Companies also argue the current system deters them from bringing back and investing their foreign profits in the United States because doing so subjects those profits to U.S. taxes. Of course, that complaint is also a good argument for eliminating deferral. If income were taxed overseas as it was earned, then so-called “repatriation” wouldn’t have any tax consequences.

Deferral also encourages companies to use accounting techniques to record profits offshore, even if they keep actual investment and jobs in the United States. This explains why U.S. corporations report their largest profits in low-tax countries like

the Netherlands, Luxembourg, and Bermuda, though clearly that is not where most real economic activity occurs.

What is the role of deferral in corporate tax reform?

In his State of the Union address in January, President Obama called for overall corporate tax reform, and both houses of Congress have begun hearings.

As policymakers consider the issues involved, they should keep in mind that U.S. companies’ global competitiveness is important, but not the only concern. Taxing foreign and domestic investments differently distorts companies’ incentives and impacts economic growth and job creation in the United States.

Moreover, declining corporate tax revenue has worsened deficits, which also threaten economic growth if not brought under control over the long term.

In the debate over whether to exempt overseas profits, it’s critical to recognize that U.S. multinationals often receive an even better deal from our current system than they would under a well-functioning territorial system. That’s because our current system allows companies to combine tax deferral with a wide selection of other loopholes. Corporate tax reform is an opportunity to close some of these loopholes.

For example, one of the most illogical aspects of our current system is that companies can take immediate deductions against U.S. taxes for expenses that support tax-deferred overseas profits. In other words, they can take the write-off now but pay taxes on the resulting income later, if at all.

President Obama has proposed fixing this mismatch. Under his proposal, if the income is deferred, then related deductions must be deferred as well. But Congress has not acted on this proposal or most of his other ideas to close international loopholes.

Bottom line: Deferral of overseas profits is a substantial tax expenditure, representing a $42 billion subsidy for overseas investment. Deferral deserves greater scrutiny, and the many other loopholes corporations use to take advantage of deferral should be considered in any discussion of corporate tax reform.

Seth Hanlon is Director of Fiscal Reform for CAP's “Doing What Works” project. We hope you’ll find this series useful, and we encourage your feedback. Please write to Seth directly with any questions, comments, or suggestions. This series continues next week with a closer look at accelerated depreciation.

Endnotes

[1]. To protect taxpayers from double taxation, they can claim a credit for taxes imposed by foreign governments.

[2]. This treatment is in general restricted to profits from active business operations. A part of the tax code known as Subpart F requires U.S. corporations to pay taxes on their subsidiaries’ “passive” income, such as interest or dividends, in the year when it is earned.

[3]. Martin A. Sullivan, Testimony before the House Ways and Means Committee, Hearing on the Current Federal Income Tax and the Need for Reform, January 20, 2011.

[4]. Some of the revenue loss, in theory, is paid back in later years. The Treasury Department estimates the “present value” of the tax expenditure in fiscal year 2010 was $23 billion.

[5]. A recent report by the Center on Budget and Policy Priorities finds that corporate tax revenues as a share of gross domestic product have plummeted to historical lows; meanwhile, U.S. corporations paid an average effective rate of 13.4 percent over 2000–2005, nearly three points below the OECD average. See: Chuck Marr and Brian Highsmith, “Six Tests for Corporate Tax Reform” (Washington: Center on Budget and Policy Priorities, 2011).

[6]. Kimberly A. Clausing, “Multinational Firm Tax Avoidance and Tax Policy,” National Tax Journal 62 (4) (2009): 703–725.

[7]. Of the 10 jurisdictions where U.S. corporations reported the largest shares of their overall income, eight have effective tax rates under 10 percent: the Netherlands, Luxembourg, Bermuda, Ireland, Switzerland, Singapore, the U.K. Islands, and Belgium. See: Clausing, "Multinational Firm Tax Avoidance and Tax Policy." When the United States declared a dividend “repatriation” holiday in 2004, fully 70 percent of the repatriated profits came from the Netherlands, Switzerland, Bermuda, Ireland, Luxembourg, and the Cayman Islands.

[8]. J. Clifton Fleming Jr., Robert J. Peroni, and Stephen E. Shay, “Worse Than Exemption,” Emory Law Journal 59 (1) (2009).

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This week’s fireside chat with your Uncle Hutch

As I will be stuffing someone’s turkey, cooking someone’s goose, or generally creating a nuisance of myself on Wednesday, I will offer my “fireside chat with your Uncle Hutch” a little early this week………..

 This week’s  subject:   General Strikes

NATIONAL STRIKES:   TIME DURATION, APPROXIMATE DATES, PRODUCTS AND/OR MARKETS, SPECIFIC ITEMS BOYCOTTS, ITEMS BY REGION, STRIKES IN COINCIDENCE WITH POLITICAL ACTIVITY

Why even entertain the thought of a general strike? Because, they tend to work. Most general strikes bring about political changes, and as is their intended mission. To add targeted, or rolling, general strikes to the ongoing “OWS” (Occupy Wall Street) movement would bring beneficial results to both. The general strike can broaden the reach and consequences intended by “Occupy Wall Street”, and conversely, “Occupy Wall Street” allows for a ready platform from which any general strike may be launched.  As intended for use in this context, a general strike is inherently non-violent. The “Authorities” ( i.e. Law Enforcement ) have no dog in this fight, and thus need not react either positively, or negatively. By taking Law Enforcement out of the loop, the 1%, Owners of the Country, have no public means of combating the effects of the general strike.

The common thread that would bind “General Striking” with “Occupy Wall Street” is that this Nation needs to redraw the lines between politics and the big money that makes our economy work. With that line of demarcation drawn boldly and clearly, once again, we will see to it that our blend of democracy and a strong economy is reinstated as our “way of life”

MISSION STATEMENT:

THESE STRIKES ARE TO ACT AGAINST THE BLATANT MISUSE OF OUR TAX DOLLARS TO FUND FOREIGN, IMPORTED PRODUCTS AND SERVICES. THE ITEMS AND AREAS TARGETED WILL BE OF THE NATURE OF ONCE HAVING BEEN PRODUCED AND/OR OFFERED BY UNITED STATES MANUFACTURERS AND SERVICE PROVIDERS INSIDE THE BORDERS OF THE UNITED STATES OF AMERICA.; BUILT BY AMERICANS, FOR AMERICANS. IT WILL BE NECESSARY FOR THE DURATION OF SAID STRIKES TO BE OF SUFFICIENT LENGTH AS TO Influence THE NET PROFITS OF THE TARGETS.

General strikes have been a tried and true course of action in other Nations, and has led to both minor and major reforms.

examples:

Great Britain: Biggest strike for 100 years – union chief - Pensions revolt won't be like the miners – because we'll win, says Unison general secretary Dave Prentis The leader of the largest public sector union promises to mount the most sustained campaign of industrial action the country has seen since the general strike of 1926, vowing not to back down until the government has dropped its controversial pension changes.

          {Polly Curtis, Whitehall correspondent

          The Guardian, Friday 17 June 2011

          http://www.guardian.co.uk/politics/2011/jun/18/

          biggest-strike-100-years-union}

Japan: At any given moment, there may be general strikes in numerous nations around the world. Government leaders may seek to ban general strikes, and in some cases, they are successful. In February, 1947, General Douglas MacArthur, as Supreme Commander of the Allied Powers in Japan, banned a planned general strike of 2,400,000 government workers, stating that "so deadly a social weapon" as the general strike should not be used in the impoverished and emaciated condition of Japan so soon after World War II. Japan's labor leaders complied with his ban.

           {http://www.facebook.com/pages/General-strike/110663942295810}

India:  by Ravi Velloor, The Straits Times - Singapore, Tuesday 6 July 2010

Large parts of India shut down Monday during an opposition-called general strike to protest against inflation and a rolling back of subsidies on oil and cooking gas. With the leftist groups holding their own protests independently of the mainstream opposition, commuters and office workers across the country had a hard day as air; rail and road transport was disrupted across several states. Opposition-ruled states such as Orissa, Bihar and West Bengal reported massive work stoppages as the administration made little effort to force people to work. Television footage from the technology hub of Bangalore, which is in opposition-ruled Karnataka state, also showed unusually thin traffic at midday, with many shops and offices shuttered.

             {http://www.mysinchew.com/node/41293}

And, yes, even here!

U.S. In 1927 the IWW called for a three-day nationwide walkout — in essence, a demonstration general strike — to protest the execution of anarchists Ferdinando Nicola Sacco and Bartolomeo Vanzetti.  The most notable response to the call was in the Walsenburg coal district of Colorado, where 1,132 miners stayed off the job, and only 35 went to work a participation rate which led directly to the Colorado coal strike of 1927.

On March 18, 2011, the Industrial Workers of the World website (www.iww.org) supported an endorsement of a general strike as a follow-up to protests against Governor Scott Walker's proposed labor legislation in Wisconsin, following a motion passed by the South Central Federation of Labor (SCFL) of Wisconsin endorsing a statewide general strike as a response to those legislative proposals.

                {http://www.mysinchew.com/node/41293}

The alternative to product and service boycotts would this form of “general” strike, which could follow a regional, or National, blueprint. Unlike specific item boycotting, a general strike targets every aspect of daily living. This, by its very nature, takes less organization, but a lot more motivation. The increased motivation is needed, because the general strike will, to some extent, hit everyone’s pocket book. It will also require a higher level of motivation for the populace to take to the streets in lawful assembly and make the message heard.

The highest priority should be granted against those companies that are simply taking the same items made here, duplicating them off shore, and selling back here at lower prices. One obvious example is the consumer entertainment market. If the potential consumer can defer a current purchase, this would be one instance of a longer-term type of boycott. If the potential consumer had to make a purchase now, the choice of “Buy American”, instead of buying that import, would have the same desired effect; as long as you do the research as to what percentage of your “American” electronic gadget actually comes from America.

These actions may have greater impact by closely coinciding in time and space  with the political primary dates and physical locations of the political primary calendars in the upcoming General Election year.

          example: During the New Hampshire primary voting week,

          or month, products that were normally manufactured in and

          services that normally originated from New Hampshire, before

          being “off shored”, will be targeted as boycott Items of Interest.

          A day, or two, of general striking in specific locations may offer

          a message harder to ignore.

In keeping with our love of choices, a participant can simply choose to not do something for a specific time period. “Made in America” does not apply in this instance. However, this, in conjunction with the “in your face” public display of an “OWS” type movement over a decent period of time will make a difference.

As dictated by weather conditions, a movement that would aim to start sometime in January, to coincide with political agenda, might need to kick off in the southern most States and work its way to the north, as the weather becomes more conducive to the act of public assembly and protest. This does not rule out the opportunity to act in the northern sections of the Country, but would most probably cut way down on the visibility of any action.

These actions may be better served they were to occur after the December Holidays, as to lessen any negative effect they would have on the little amount of manufacturing and retail business that still employs some of our bottom 99%.

Of course, the ultimate general strike would be if someone threw a Presidential Election and nobody came!


What if.......?



The Protest of Wall St.

Questions:   What is the purpose of the “Wall St.” protests?

                   What is the message of the “Wall St.” protestors?

                   What do the “Wall St.” protests stand for?

                   Does the “Wall St.” protest have a leader?

                   Is the “Wall St.” protest a new left-wing Tea Party?

                   What did the “Wall St.” protest know and when did it know it?

                   Is this movement a destination, or a journey?

How about we start at the beginning, and have a serious discussion about just what is possible?

Assume, for the sake of this argument, that the “99%” are experiencing an economic depression. Something like this was foreseeable, predictable, and inevitable. The major dynamic here is class warfare. The owners of the Nation’s wealth have made it known that they no longer want to entertain a middle class. The owners of this wealth want to have and control everything they can get their hands on, and a middle class that has some education and means simply stands in their way. Let us call this “Neo-Feudalism”.

What is happening now is the middle class’ last-ditch effort to stem the tide. The “99%” are not going down without a fight. The message is not very clear, yet, but I think it will go something like this: We want our government back. We want our Country back. We want our lives back. Stop stealing our money. Stop stealing our jobs. Stop stealing our Liberty.

How do the “99%” do this? First comes the relatively peaceful protesting in the streets of our cities. Then there will be isolated incidents of active civil disobedience. This will be followed by outright rioting in the streets; massive general strikes; and violent occupation of financial institutions. At any time time during this process, the Federal Government can choose to wake up and fix that which is currently broken (a pretty tall order, at this point).

There will soon be leaders who emerge. The Independence Party, led by Bernie Sanders, will get a third party involved as a political driving force. He seems to be an obvious choice right now. The Party platform must be crafted to reflect our need for the return of the “citizen” politician. Being a politician is not meant to be a career. The “99%” must demand that their choices of representatives deny corporations, big business interests, special interest groups, and the like. They must demand that their representatives actually represent their constituency; otherwise, no votes come their way.

Our current economic situation makes this all a possibility. A simple look back at History will lead you to that conclusion. That same “look” back also indicates the the normal way out of a depression is war. We are already doing that, and it does not seem to be working too well. Perhaps the direction I am going in seems left wing and radical. Perhaps it is simply a knee-jerk reaction to being driven down into the ground for the last twenty-five years. I look at it as a desire to regain a certain sense of dignity, individualism, and purpose. One picture from the protest on Wall St. has etched itself in my mind. The placard of what appears to be a “Viet Nam Era” protestor reading;  “I have fought for my Country twice. This time I know my enemy.”

‘Nough said?

THE POVERTY CRISIS

I read an article in Time Magazine (9/26/2011) by Rana Foroohar, “The Truth About the Poverty Crisis”, that almost hit the nail on the head about the current state of poverty in this Country. Contrary to the editors’ beliefs, this is not an article that their “elite” readers are going stop and read. The subject material is of no value to them. This article is relevant and of remarkably high value to the rest of us. It seems like the “rest of us” are headed in the subject matter’s direction, or we are already there. To wit, in my neighborhood, if your household income is not $60,000.00, you are considered to be in the ranks of the working poor. If your household income is at the $40,000.00 level, you are already at the poverty level.

Ms. Foroohar still relies on the “en’vogue” numbers that Washingtonians love to banter about. Numbers such as unemployment being 9.1%, $22,000.00 being the National poverty level of income, 15% of American families living at, or below, that level, and a mere 6.5 million jobs lost to this “recession”. Her argument is right on; her numbers are misleading, to say the least.

Let’s start with the unemployment rate. This number is accurately defined by doubling it, and breaking it down by race and location. Indeed, it is hovering around 18%, overall, and when you consider that Black Youth have an unemployment rate close to 40%, you can then understand that we are not in a “recession”, but rather, a “depression”. Of course, you will never get a pollster, or politician, to admit to numbers like this. They all have good paying jobs, with benefits, and really don’t care too much what the real numbers are.

Take a quick look at this $22,000.00 number that our government claims to be the poverty level. $22,000.00 per annum equals $10.58 per hour in wages. Ask yourself if, and where, you could possibly live on that amount. The minimum wage is $8.25 per hour, and that grosses you a whopping $17,160.00 per year. Perhaps you could live on that amount if you lived with your parents, still. I doubt seriously if a family anywhere in the U.S. could live at that level. If you are in the category of the unemployed, you may be receiving government assistance at a rate of $400.00 per week. This works out to be $10.00 per hour, and grosses you $20,800.00 per year. You would have to at least triple these base numbers to have even a fighting chance of surviving. The one thing that is a guaranteed constant in these figures is that all of these monies go directly back into the economy; there is no personal saving of money at these levels.

That covers items one through three. Now let’s look at the fourth, and final, item in this article; job loss. I’m afraid our memories are short on this issue. Does anyone remember “NAFTA”, the North American Free Trade Agreement? Remember all those “nattering nabobs of negativism” saying they heard a giant sucking sound from the South? It turns out that they were right. Our government swore up and down that we were not going to loose jobs because of this “treaty”. To set the record straight, that’s exactly when this Country started hemorrhaging jobs. Moreover, it wasn’t just to the South; it was going global at that very point. The 6.5 million, or more, jobs lost recently is a drop in the bucket compared to what we’ve lost over the last thirty years. Over that period, we are talking 10’s of millions in the job loss category.      

In conclusion, I feel it is safe to say that, “Yes, Dorothy, we are in an economic depression.”  The systematic pace of job loss ensures the obliteration of our middle class, as we no longer manufacture much of what we consume. As the rich get richer and the poor get poorer, those of us who comprised that middle class will sink into poverty, and a two-class society will be upon us. Our captains of industry will be doing happy dances all the way to the bank, and they will truly own the government. It would have been political suicide for any elected official to speak the truth about any of this over the past thirty years. They are simply not going to bite the hand that feeds them. Do you remember the phrase, “no taxation, without representation”? The second American Revolution may be the result.

Capitalism can be good!

I keep running across this gentleman in e-mails and on Facebook & Twitter. For those of you who are dead set against four more years of a Democrat in the White House, this guy may just be someone the majority of the GOP can wrap their heads around. Of course, don’t agree with a lot of what he has to say, but I can understand his positions on issues of the day. He may be GOP’s great white hope for 1012, and he is on the GOP Presidential running list.

The Objective Standard

a quarterly journal on Ayn Rand’s philosophy of reason, egoism, and laissez-faire capitalism

Monday, September 19, 2011

Gary Johnson on Republican Capitulation and His Presidential Bid

Posted by TOS Admin at 10:50 am

Here is a Q&A from Gary Johnson that was not included in his exclusive interview with TOS (which will be released tomorrow). Enjoy!

David Baucom: Although Republicans allegedly stand for lower taxes and greater freedom, for over half a century they’ve defined and conducted themselves in relation to Democrats—who have grown progressively socialistic. Republicans were once against an income tax, but then accepted it, and we got higher and higher rates. They were against Social Security, but then accepted and expanded that. They were against Medicare, but then embraced it. And they were against welfare, but accepted most of that. How much of a role has this Republican slide played in causing the current fiscal crisis? How much are they to blame?

Gary Johnson: I really believe both parties are to blame. I just go back to a few short years ago when Republicans controlled both houses of Congress and the presidency, and passed a prescription health care benefit—which at that time was the largest entitlement program ever passed—and ran up record deficits. So I see Republicans as part of the cause. I have not seen them as the solution here.

Basically, I am a Republican because I’ve always felt that Republicans do a better job when it comes to the checkbook, but, of late, I just see it as status-quo on both sides. What America needs is a radical departure from business-as-usual, and that’s what my candidacy for president is all about.

I realize I’m practically in last place, but if you look at my resume, it suggests that I’m the guy who would actually stick to my guns when it comes to the radical change that needs to take place. That radical change starts with not spending more money than you take in. I am promising to submit a balanced budget in the year 2013 and to veto any expenditures that exceed what I consider to be “balanced.”

You could argue that they’ll just override that veto, and they probably will. But I would have been elected President promising to submit that balanced budget, and I think that budget, those expenditures, will come a lot closer to being balanced with a president who’s not going to accept any expenses or expenditures that aren’t balanced, as opposed to a president who’s going to do this over a fifteen to twenty year period, because “that’s the only prudent way to go about this.” To me, that’s just the end. I think the day of reckoning is here—I really believe that—and that it has to be addressed, and that we can do it.

Now I’m back to my own resume: I found good government easy—I didn’t find it difficult. I found it easy to stick by your principles, and that, by sticking by your principles you can really make a difference. That’s why I’m in this.

 source:

http://www.theobjectivestandard.com/blog/index.php/2011/09/gary-johnson-  on-republican-capitulation-and-his-presidential-bid/