In spite of all the lies about “government takeover” and “death panels” which now seem silly, and the $400 million dollars spent on lobbying Republican legislators in 2009 alone by the health care industry, the American people have succeeded in creating a new, better, fairer and more efficient health care system. No repeals can stop it now.

The Republicans, to their credit, have remained loyal to their Masters…the health care industry…insurance companies, the conservative doctor organizations, hospital chains, pharmaceutical companies, the Koch Brothers and the Chamber of Commerce. They have voted against every single one of their constituents to be faithful to the almighty dollar of the American health care industry…to keep them looting the American people and cheating them out of health care…while pretending to do the opposite.

But all that is at an end. With the 37th Republican and Tea Party attempt to repeal affordable health care for Americans, and with 29 Republican governors still out there, trying to make implementation of universal health care as difficult as possible–the American people have spoken.

Forget all the other issues–gay marriage, abortion rights, wars, economic conditions—the American people had the opportunity to turn down something very valuable to them and their children and grandchildren—something that was lobbied against by the most powerful political forces in the country–yet the People did not reject it. They saw that an American President had fought against difficult, almost insurmountable, odds to win a better life for everyone. And they said: “Yes we can and yes we will!” And they voted Democrats into office and into control, so that no repeal could take place.

So with the assurance that life is going to change, it is time to revisit the Patient Accountability and Affordable Care Act, often known as “Obamacare.” The world of health care for American citizens has changed already but the biggest changes begin this fall.

Despite the actions of the billionaire-pandering Republicans in the House and Senate, despite the Republican legislatures and Republican governors in 29 states being under the thumb of the Neo-Fascist ALEC organization health insurance exchanges will be set up, either by the states or by government.

The giant corporations who make up ALEC and the cynical Right Wing billionaire Koch Brothers numerous foundations cannot stop implementation. You will be able to sign up for health care insurance and not be turned down for any reason, beginning on October 1, 2013. You will simply be able to go online and select from a variety of options that most closely match your health conditions, your family needs or your budget…or all three.

No one will be denied. The poor will have the ability to buy health care at an affordable rate through subsidies and those unable to pay will have and expanded Medicaid system. Costs will be bid down by the free-competition rules built into the legislation.

The health insurance industry will try to continue its free ride, gorging themselves on any extra pennies they can steal from Americans, but the heyday of big health insurance is over. This will now become a declining industry, and like any other phony scheme, once it begins to fall, it will collapse with a huge thud.

No one knows the exact outcome. Some countries have a private insurance system, non-profit and others have a public system run like Medicare or the VA system. But the bottom line is that, if you are sick and if you have been a responsible citizen, you will not need to worry about being taken care of in either illness or accident.
The Republicans have made Obamacare a target of hundreds of billions of dollars, perhaps a billion, of promotion in attacking it that health care costs have become prominent in our minds again. They continue to waste money on fruitless campaigns against health care reform. We know why they do it.

It is one set of crooks stealing from another set of crooks. The Republicans have sold out to major industrial interests and the people know it. The Tea Party, in the recent IRS scandal was shown to be nothing but a money laundering operation for the sinister (or why would they hide their names) actions of the Koch Brothers and other billionaire supporters.

The People get it. The Republicans, having sold out their constituents, need to con the billionaires into continuing to spend money in a lost cause. Because, without billionaire money, the truth will come out more and more…like the facts about Obamacare. If the billionaires give up on the Tea Party, the entire Republican Party will cease to exist for as far as anyone can project into the future.

The Republicans only survive because of propaganda. Rush Limbaugh’s lies and recent commentary that those who do not agree with his totally absurd propaganda are “low knowledge” citizens is not selling any longer. Over 160 sponsors, even the dregs of the national advertising community, have left him. Only the “ditto heads” the lunatic fringe listen to his pedophilic, drug addled rants.

So, without the money to create propaganda…television commercials, direct mail, newsletters…all designed to explain why they are supporting billionaires instead of the half-million people who voted them into office—Republicans and Tea Party kooks alike would disappear. This is the only reason they continue to support the impossible repeal of the Affordable Care Act, which they, not the rest of us, named, and we now (proudly) call Obamacare.

Things will start to happen fast on Obamacare, starting this October and they are all good. We’ll go into them but before that, here is what has happened already that you should know about.

These are things available to you already from your current health care provider, because of Obamacare.

1. Expanded, no-cost (except perhaps increased premium costs, if your plan was grandfathered) preventive care…cancer screenings, diabetes screenings, immunizations.

2. No lifetime limits on your policy.

3. Working young men and women or those unemployed or post-college can all stay on a family health insurance policy until age 26, even if they have access to another policy. (On grandfathered plans (see below) they can stay on only if no other policy is available to them.)

4. Children with pre-existing conditions must be covered.

Some of these things do not apply to certain “grandfathered” health care plans. What is a grandfathered plan? Some plans that have been around for a long time and have not raised their rates a higher percentage than is allowed under new regulations. That would be about 48% of all plans, so it is not an unsubstantial amount. But this was necessary to get the plan through Congress. The idea was that giant corporations who have been getting deals from health insurance providers and some who deal directly with hospitals and doctors can continue to rake in a few more chips before the People eventually get fair treatment. It is the way the American system now works, folks, so get used to it.

A couple of other things have happened. Small businesses have been able to take advantage of some health insurance subsidies already.

Small businesses with fewer than 25 employees can currently get a 35% tax credit for covering employees. So if an employee has a plan that costs $10,000, the employer can get credit for 35% of what it costs the employer. So, if the employer decides to share $6,000 of the cost and the employee pays $4,000, the employer gets $2,100 off his tax bill. So the cost to the employer is $3,900, or a little less than $350 a month and the employee gets good health care for about $350 a month. However this sounds to you, for small businesses who want to do the right thing, who want to cover employees, this is a huge savings. And the credit will go from 35% to 50% in 2014.

Furthermore, in some states, people are already signing up for health care under the new law. Some states have waivers to start enrolling people prior to October 1, 2013. In January of 2014, those individuals will be able to get individual policies in the health care exchanges by going on line and evaluating different policies. The information on subsidies based on income will be available, so individual insurance purchasers will know exactly what their costs will be. Each plan’s benefits will also be listed and comparisons can be made on line.

But, for small business, there will be a 50% tax credit. Remember what a tax credit is. If you buy a $1500 fuel-efficient heater for your house and the tax credit is $1,500, you simply subtract $1500 from your tax bill. Simple as that. Money you paid for he heater, goes right into your pocket. A deduction is something else. A tax credit is for the full amount, subtracted from your tax bill.

Companies with fewer than 50 employees comprise about 98% of all companies in the U.S. and some of those currently cover their employees. But if a company has 20, 30 or 40 workers or fewer, it does not have to provide health care for employees. There are, however, currently over 100,000 companies taking advantage of the 35% tax credit for small businesses to provide health care.

Why aren’t there more companies involved at this point? It only takes a quick glance at the first ten items on any Google search of almost any variable of “Obamacare and Small Business” and you will see that pro-Right Wing, pro-health industry forces like those of Newt Gingrich’s anti-healthcare group, or the Cato Insitute or Galen or the Chamber of Commerce has spent hugely to take the top spots.

To find something truthful and positive about health care, you sometimes have to go to the second page on Google. That is how hard the health care industry is lobbying against you.

Remember, employer-provided health insurance is big, big business….the lion’s share of the health insurance business. Employers overwhelmingly provide most of the health insurance for working families in this country. If the health insurance industry starts losing that business, their glory days are (and will be) behind them.
There will be a new Medicare tax on business but it will be less than 1% of profits and only on companies that make profits in excess of $250,000. There will be some other taxes on businesses in the health care field, but not enough to affect the health care to individuals.

So…small businesses will be able to go into exchanges and find lower cost (than current costs) plans to assist their employees. They will be assisted by something called SHOP, which is a small business insurance exchange which will offer other benefits to employers in addition to lower rates through competitive bidding and through the 35% tax break (then 50%) and through administrative simplification of health care billing.

So, while the health insurance industry would have you think that things are rosy now and will only get worse if Obamacare is adopted, actually the reverse is true. Right now, half of all uninsured individuals are small business owners and workers (fewer than 50 employees.) Because small businesses account for 96% of all companies, that is a lot of workers. So think of it this way. Who benefits from lower health insurance premiums and better health care insurance at the same time, and whom does it cost? Pretty quickly you’ll understand why the Republicans have called for “repeal” –not adjustment or improvement—37 times.

We currently have about 12 million unemployed and something like 6 million still looking for jobs not counted in the unemployment numbers. So we are pretty close to ten percent of the entire population that is either unemployed, or working for minimum, sub-living wages or simply accepting status as a permanent underclass.

Today, with unemployment, welfare and many entering Social Security sooner simply to have an income, this means that about one out of three people is in this condition. You don’t need to starve people to make them subservient. You merely need to keep them living from paycheck to paycheck and they have no way to resist or break out of either welfare or poverty.

But let’s summarize what is going to happen for individuals on Obamacare.

1. The ACA (Obamacare) ends several abuses beginning in 2014. Insurance companies can no longer deny coverage based on prior conditions. No insurance plan, whether employer-sponsored or private health insurance, whether grandfathered or not—no health insurance can be withheld because of any prior condition. Second, there are no more lifetime caps. Whatever problem you might have, whatever it costs, you will be covered. Young people up to 26 years of age will be covered on their parent’s plan if they have no other reasonable health insurance option. And finally, they can’t cancel your coverage, unless you stop paying premiums.

2. The law will save you money. In addition to the 107 million people helped by the difficulties encountered with health insurance companies from the problems mentioned above, and the 17 million people helped by having the pre-existing conditions removed from health insurance stipulations, health care will now be more affordable. For example, preventive screenings for cancer and other potential diseases will be free. This will enable millions of Americans to discover problems before they are serious, painful and expensive and, more importantly, before they are life threatening.

To make premiums more effective and less costly, health insurance firms are now required to spend 80% of your premium dollar on health care services, not on overhead like expensive CEO and executive suite salaries. Over 12 million Americans have already received average rebates of $151 from health insurance companies.
And finally on individual premium costs, the new law prevents any rate increases of 10% or more in a given year without a government review. This has caused rate increases to go down. Some rates have not increased at all in the last two years.

3. Small businesses have traditionally paid 18% more than large companies for health insurance. While no small business owner is required to pay for health insurance for their employees, over 360,000 small businesses who do have already received the tax benefits already mentioned.

4. Despite the shouting and, frankly, the lies from the health industry sponsored Republicans, Medicare will be improved, through free cancer and other tests…no copays…and the prescription drug donut hole where Senior are required to kick in a substantial amount for drugs will be totally eliminated over several years. Thus far, Seniors on Medicare have seen an average savings of about $650 per year over what they would have paid. Some costs associated with Medicare Advantage were removed from the system, amounting to about $700 billion dollars. This has been applied to Medicare funds and has resulted and will result in better basic Medicare for all citizens and has guranteed the solvency of Medicare over a longer period.

5. Finally, the government has instituted new procedures and programs to uncover Medicare fraud. And while Republicans cry “See? See what we told you…government programs corrupt!” the fact is that over $6 billion has been recovered and that–plus some other savings–have already extended the life of Medicare by 8 years from what it had been.

Who gains and who loses?

In reality, after the shouting and the lies and the fear-mongering are done, there are only two losers, and losers for whom we have a difficult time creating any sympathy. The very rich will pay ever so slightly more taxes. The health insurance companies, who have looted and cheated Americans, treating them like objects and statistics instead of feeling, caring, living human beings will eventually disappear. In the meantime they will be made to act as if the rest of Americans exist and have real health needs that must be met. All of us.

What will health care cost under Obamacare? Well, it will cost each individual less, but it will cost the wealthy more. Here’s why: because of income inequality. Taxes, though low as a percentage of income, are more highly paid in actual dollars by the very wealthy. The 4% paid on $1,000,00 is simply more than 4% paid on $10,000. This has always been the case, but since Ronald Reagan, the top 1% of Americans pay about 37% of the taxes.

Before you start weeping for the rich, however, you should know that someone like Mit Romney paid 14% on an income of $20,000,000. That’s right, he paid $2.8 million in taxes on annual income…he made $20 mil last year, this year and he’ll make 20 mil again next year. So that while will have paid a whopping $5.4 million in taxes. He made after taxes, a total of about $54.6 million over that same period. Would you take that deal?

Costs for health insurance premiums are said to average about $9,000 per person here right now, with only two thirds of the population enrolled in private health care. In Europe, the cost is something like $3,500 per person and is, generally speaking, public and is available to everyone. Not only will the cost of private health insurance go down, but there will be subsidies for those who cannot afford even the lower premium costs.

Why will costs go down? Although there is no guarantee, we do know that in any situation in which there are completely free markets (which we do not have at present) the price of most things goes down. In order to succeed in a competitive situation, companies become more efficient, reduce costs and prices and pass those savings along to the customer. And, in any insurance situation, the costs are better when spread over a larger universe. By adding 50 million people and by making the health insurance industry more competitive, we will finally have enough Americans enrolled to insure that costs finally go down.

While universal health care is not free, it is not completely an added cost. The cost to the government will be about $1.1 trillion dollars over the period 2012-2021 period or about $100 billion per year. But that is not the entire cost of what Americans pay for health care. Americans pay 18% of GDP or about $3.2 trillion…per year…on health care today. Much of that cost will come down, balancing the government expense. Some costs will shift to government, but those costs to all of us will be offset by much lower costs in the private sector. And remember, no one will be bankrupted or denied health care in the future who wants or needs it.

Some of the costs will be borne by higher taxes on those making over about $200, 000 per year, less than 1%, and a tax on capital gains of about 4%…again only on those above $250,000. Most of those people…probably 95% of them, will not notice much hardship. But the value that their small sacrifice will bring to tens and perhaps eventually hundreds of millions will be invaluable.

Will you be asked to buy insurance? Yes. Everyone will be asked to buy insurance although anyone under a certain level of income will receive a subsidy.
So here is what you can expect.

If you have an income of $15,300 or under or are a family of 4 with income under $31, 155, you qualify for Medicaid. If you have an income of between $11,000 and $46,000 and you wish to buy insurance or a family of 4 with an income of between $23,400 and $93,000 you are eligible for subsidies.

Subsidies will cut rates in half, in fact will lower rates by an average of 60%. Many states have rate review boards that save families substantial amounts. States that do not have rate review boards include: Wyoming, Montana, Arizona, Missouri, Louisiana, Alabama and Virginia.

The problem with lowering health insurance premiums thus far is that many people have stayed on their old plan thus far and grandfathered plans must not always follow the new rules. Second, rate setting is now state-by-state, so that the rules that allow states to make insurance companies either spend 80% on your health care or rebate money to you is not handled the same in every state. In some states, with strong insurance lobbies, there are no savings at all.

Even though your premium may have gone up, many Americans’ premiums did not go up and some only slightly. This was because of the new provisions of Obamacare. Here is an example of the savings.

In Alabama and Alaska…no savings to any taxpayer whatsoever. (Basically Republican states)

In Connecticut, 32,233 people saved a total of $2,369,000. (Basically Democratic state)

In Georgia, Idaho, Hawaii and Illinois, a mixed bag of Democratic and Republican states…no savings.

In Indiana, however, a state with a Republican governor and legislature…5,937 people saved $2,028,000 on premiums because the state had a strong rate review plan for its citizens and used Obamacare provisions to obtain rebates for its citizens.

So costs will go down. We spend three times as much as Europeans do on health care. Even if we cut our costs only in half, that would be a total of $9,000 for a married couple, rather than $18,000. But it will be better than that because premium rates will be bid down and there will be subsidies for many years until we have costs under control.

In 1963, Dr. Kenneth Arrow, Ph.d., Nobel Laureate in economics, described the problem with health care. And it is not difficult to understand. The reason it is not more often quoted is that, if widely known and accepted, it would end private health care immediately.

Dr. Arrow points out that when you pay premiums, they become revenue to the company. When you get sick that is a cost to the company. But the objective is maximum health. So by focusing on profit, which companies must do to survive, health insurance companies try to maximize revenues (premiums) and eliminate costs (paying for your medical care.) The more successful they are at taking care of you, the less profit they make. And the less well they take care of you, while continuing to increase premiums, the more profit they make.

Private health insurance is an unsustainable business model. It does not work as a business corporations became the health insurance provider of choice. They simply continued to pay higher and higher premiums, or they cut back on health care or they presented workers with a higher and higher share of the costs. Labor unions also maintained large numbers of members on health insurance for obvious reasons….taking care of workers, income and benefits, which of course is their job.

Now, with Obamacare, the equation changes. Companies can provide health care or make a default payment, a sort of donation to the national health care. When they make that decision, workers then go into the local exchanges, and, depending on their economic situation will receive assistance in buying private health insurance.

There is a major difference in what happened when employers laid off workers in the past. In previous years, employees were able to get health insurance, but at expensive COBRA prices, paying virtually the entire health care premium (after having been just laid off) and that was only good for 18 months and then they might be without health care at all.

There will be no more COBRA. You won’t need COBRA. In the world of world-class health care, you simply pay for it and you get it. And either government pays for it, included in your taxes, or you pay for it, as you do now, only government makes it more affordable. Which, of course is what they should have been doing for the last 40 years. That is how far behind the rest of the advanced world we are.

You may notice, by the way, that we are not the most advanced country in numerous categories. It is mostly in the social and cultural areas, although Iceland has proved that we are far behind in handling white-collar, financial crime as well.

So, on October 1, 2013, you will register for the first national universal health care program. No death panels. No government takeover. Just good health care at an affordable price. Hey…that sounds like a commercial!

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For example, with 15 million people out of work and Europe on its back, many conservative economists were publicly worried about inflation. Inflation? They were worried….or said they were….(which brings up that other problem, loss of integrity)…about prices rising at a time when interest rates could not be raised with a crane.

No one….no one…wanted to borrow money. There was no demand. There was no reason to borrow money and everyone on the planet wanted cash in the bank. But the brilliant economists were crying inflation.

Next came the hue and cry about the great international debts. Of course, during the previous decade when every semblance of regulation was being stripped from the financial community and men who should have gone to jail, including Bernie Madoff who finally did, were selling worthless stock to pension funds and sovereign state funds no one was doing anything about the national debt.

And why were we having current deficits of over a trillion dollars a year? Because we were (and are) paying huge amounts for welfare, at the height of unemployment and closed businesses of about $700 billion a year more than we took in.

The national debt is a problem of course. But it isn’t going to go away. It will not go away because we have 15 to 20 million people out of work and we are doing nothing to restore an economy that can support jobs for those people.

If you have a business that makes one million widgets, 20,000 widgets per person and 50 people making them, then cutting your workforce by 10 people and buying fewer materials will not increase your revenues. If it would, then every company would contract when they want to grow and add more people when they want to reduce their income. It is a silly syllogism because it is silly, or more appropriately…illogical.

George W. Bush and Dick Cheney, two crooks in the opinion of many millions of people, cut taxes, started wars, gave huge subsidies to highly profitable drug companies, enriched military contractors and looted the treasury of American taxpayers by $12 trillion. But no one was talking about reducing the debt in the early 2000s.

The Bush-Cheney Administration and their Republican-controlled Congress rammed through two wars and two tax cuts. The Republican Congress spent money as if there were a bottomless supply. And each year, as the bills mounted (plus even more expensive bills that were hidden) the deficits piled up.

We were giving our country’s treasure to individual millionaires and billionaires in huge amounts, even shrink wrapping American dollars, attaching them to pallets like cartons of toilet paper and shipping them to Iraq where they were basically tossed out onto the desert floor, never to be seen again.

This is what Bush and Cheney did. It is not conjecture. There are photographs. They were so brazenly secure in their political power that they simply did not care. And why should they? They are still alive and not in jail to this day. Perhaps the two greatest criminals in this country’s history are still walking around…and they have Secret Service protection!

So we are in the Bush Second Great Depression. Economists say that they don’t know what to do about it. But they do. It is merely their pride that keeps them from admitting that what we need to do is the opposite of everything that they have been taught. In 1935, John Maynard Keynes gave us the solution. When private investors keep their money, pull investment from the economics equation, when savings overwhelm investment and aggregate demand slows to a halt…government becomes the investor of last resort.

Presidential economists have sent numerous bills to Congress for job creation. But they are unencumbered by the carrots and sticks of multi-millionaires and billionaires who control Congress. The Republicans work, not for the People, but for the very rich who now see, at least for a time, a solid market in the 90% of Americans still working and a cheap labor market for everyone else.

The goal of the rich, led by their weak-eyed but Gestapo-like pilot fish, Grover Norquist, is to indenture American workers. Once you are desperate, they feel, you will work for any wage. Perhaps they are merely trying to make an economic equivalence between all American workers, not merely the minorities and Native Americans. But why not raise all wages rather than lower all wages?

Senator Mitch McConnell and his Neo-Fascist Senate storm troopers voted over 280 times to filibuster jobs bills and thus kept us and keep us in Depression. And as they do so, they create even large deficits than they created under Bush. Now 12 million Americans are unemployed month-after-month, and with another 8 million working at jobs for which they were not educated, which pay far less than their normal occupations and others working in what are called non-contract jobs, meaning that they can be hired or fired at any time like part-time workers.

And so, do economists suggest that we get the economy moving again? Do they have any valuable ideas? Not really. They decide that, as McConnell and his Brown Shirts are restraining the economy and thereby reducing government revenues on the one hand, that they should recommend cutting government on the other hand. It is called “austerity.” It is the latest hobgoblin of tiny minds.

Here is how “austerity” works. You cut government spending because you have acquired large debts from the Bush Depression. Revenues have fallen by $350 billion and increased welfare costs have cost government another $350 billion. But, because you are not creating anything new, you simply continue to go into debt. You can’t cut fast enough to balance lost revenues.

So it is a downward spiral, cut government, take on more debt, cut some more and take on more debt. There is no way out. While you are dragging 15 million people along on a sagging economy, no investment will come into a market with no demand and there will be no demand because investors will not come in.

So, how do economists look at this? Let’s just take one little bit of econo-speak from a recent blog on which economists talk with other economists.

“large parts of macro-economics are insufficiently empirical; assumptions are not tested against facts. Otherwise, how could economists have gone on believing that central banks set H [the monetary base] and not i? In so far as the relevant empirical underpinnings of macro-economics are ignored, undervalued or relatively costly to study, it leaves theory too much at the grasp of fashion, with mathematical elegance and intellectual cleverness being prized above practical relevance.”

This is how economists speak to one another. They are so tangled in theory, much of which is totally untested…simply theory being tossed back and forth like a Frisbee…that they can’t deal with the reality of day-to-day economics. And they certainly have no idea how to treat the resolution of serious economic questions like Depression.

Even the best economists become trapped in discussions about things like monetary theory. Here is monetary theory, disentangled from econo-speak. When the economy falls into recession or Depression, there is no aggregate demand. In order to bring investors back into the economy, monetary theorists say, simply, make money cheaper.

When I offer you money at a certain very low rate, you need to make much less on it to make the interest payments. So you can sell a hamburger for a buck twenty-five instead of a buck fifty and still make a small profit and still pay back the interest.

But when investors will not budge at any rate…and current rates are basically at zero…then economists throw up their hands, begin blogging more unintelligible claptrap among themselves and have no idea what to do except…act like the Chief Financial Officer, the dreaded CFO, whose only idea is to cut wages, costs, bonuses, travel and reduce breathing if possible.

Cutting does not grow a company and cutting government does not grow a government. It may be necessary. That is not the issue. For the thinking executive, for the responsible government official…in fact…for anyone with a brain, the goal is to get back to where we were…to grow the economy again. To raise revenues, to restore profitability or in this case…government surpluses.

Who is the model? Certainly not George W. Bush. The model is William Jefferson Clinton. In a severe recession, left over from another Bush, Clinton said that we are going to raise taxes and trim government. The Republicans, only too eager to trim government under a Democratic President, helped.

First of all they gave Clinton credibility when Newt Gingrich humiliated the entire Republican Congress by shutting down government over petty issues. When Congress came back, they got down to business and, while they didn’t cut government drastically, they somewhat rationally trimmed it.

Many Democratic politicians who voted with some Republicans to get the economy back in balance lost their seats. But they were brave and they were right and the budget was balanced. Employment was at its highest in history and Clinton handed Bush a government that was in balance, with a future of surpluses and no debt at all within ten years, by 2011.

But the hero of the Conservative economists, the master of double talk, Alan Greenspan, was still head of the Federal Reserve. Clinton had made his job virtually irrelevant. There were no serious problems for Greenspan to address under Clinton. But under Bush…?

Greenspan used his genius at economics to not only create a huge economic real estate bubble, but to condone and encourage more debt. His policies led to speculation and his personal political beliefs, that government should keep its hands off the financial markets led to the great Stock Market Crash of 2008 and the Bush Depression.

So we were left with a Depression. And these economists, by and large, do not know how to handle a Depression because their economic theory says that we will simply come out of a Depression, “in the long run.” Well, as Keynes said, “In the long run, we are all dead.”

So it is time to leave off with the economists. It is time to simply do what makes sense. Create 5 million jobs. That will create another 5 million jobs from something called the employment multiplier. That means that a man working needs to get his suits cleaned, buy more gas for his car, get his hair cut more often, and may decide to paint his house.

We will spend $300 billion to do this the first year and another $300 billion the second year. But…and this is important…it will not cost us $300 billion a year. We have pent up demand for many things and we have a whole new crisis…we are running out of fossil fuel.

The oil and natural gas companies, who own our natural resources, the natural resources that should be owned by the People, tell us that is not happening. But it is. The rest of the world, including the Saudis with all their oil, is preparing for it. Germany will soon be self-sufficient in solar energy. The Chinese are already the largest manufacturers of solar panels in the world.

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Should we cut government which will supposedly make us leaner and meaner and more ready to expand our economy? Or should we create more jobs, try to jump start the economy, create public jobs and revenues that can then be transitioned into private industry once investors see that aggregate demand is once again at a point that gives them confidence to invest?

There is a suspect study by two economists by the name of Carmen Rinehart and Kenneth Rogoff, both Ph.ds, both pretty bright, who said in a book called “This Time Is Different” that any country that allows its national debt to get over 90% of its GDP is headed down and will fail to grow, and that country will suffer serious long-term growth problems. Things like diminished education, social services and in particular…economic development.

The question is whether this report, if accurate, and there is some debate on that, has relevance to the United States and to our current economic condition. We have 90% debt to GDP and so the study talks about countries like us. But the issue has been clouded by the response of the Right Wing, the Republican Party. Rather than studying the issue using the information in the book, they simply used the general implications of the book to forecast the ruin of our economy out of hand. They used it to intimate that America’s economy is in grave peril.

The problem of course is that, even if the book’s predictions were accurate, the United States is far from the kind of country described in the book. The United States is the largest economy in the world. The world’s currency is our currency. We have personal assets worth four times what it would take to make us virtually debt free immediately. Not five years. Not twenty years. Immediately. We are in the unusual position of being both the world’s largest debtor nation (since Ronald Reagan) and the world’s richest nation.

Our national debt is $16.7 trillion dollars. The Republican Neo-Fascists will tell you that we have “unfunded’ liabilities of more than that. For example, we have unfunded liabilities in Social Security. If they are “unfunded” when will they be funded? The same time that the current Social Security recipients’s funds were funded…by the time they need them. In other words the prophecy of our dire circumstances is closer to a hoax than to reality. But the Neo-Fascists don’t end there.

Only the U.S. Post Office…and even then only because of legislation to try to privatize it…has a pension fund that is currently funded 75 years in advance. And only then because a lame duck Republican House of Representatives, a Republican Senate and a Republican President, the dunce President George W. Bush, inspired by FEDEX and UPS with campaign contributions pushed it through. It is the reason that the Post Office is having current financial problems.

So we don’t have an huge unfunded liabilities, something looming out there in the future that is going to one day suddenly do us in. What we need to do is balance the budget by making those rich members of society who had their taxes cut in 1981, 1983, 2001, and 2003, plus lowered inheritance taxes and huge numbers of tax loopholes created so that they often pay no taxes at all….pay their fair share of taxes again.

No one wants to hear about cutting Social Security colas on little old ladies who somehow survive on less than $1,000 per month while EXXON pays ZERO TAXES on $40 billion in profits a year. Don’t be fooled about stocks being important to pensions. Stocks will go to pension funds even if EXXON and others pay their 10% in taxes. But the owners of EXXON are not little old ladies. Remember that fewer than 5,000 people control the major corporations.

Of the Fortune 500, fewer than 2,000 people own about 30% of the stock. Do you have any idea how much money that is? Tens of trillions of dollars. The top 1% of Americans own $45 trillion in capital assets. Furthermore, many studies of the top 1% show that most of that wealth is actually in the hands of the top 10% of the top 1%. So don’t lose any sleep if Mit Romney should suddenly have to pay another 5% and move all the way up to a 19% tax rate on his $20 million a year income.

So the bru-ha-ha over the Rinehart-Rogoff study has been beneficial in one respect. The huge corporations and the super-rich who have attached themselves to this study, using their home-grown economists, have been made to question the subject. They can no longer automatically cry austerity at every discussion of the current economy.

The book questions the ability of a nation to grow with that kind of debt. The politicians took this, particularly the Right Wing politicians, whom we know now for certain work for the super-rich and big corporations. (See ALECEXPOSED.org) and they used it as an excuse to say…cut the government. Used it here and around the world to create an “austerity” movement. The idea of austerity is that if we trim back our expenses, cut back the amount of debt we incurred, then leaner governments will be more efficient and get out of the way of industry. It sounds good, but cutting governments, it turned out, just made them smaller and weaker.

The problem is that we have a gap between income, that is government revenues, and expenditures. Part of the reason the gap is so huge is that we have about 15 million people either unemployed or making so little that they pay no taxes. That adds about $700 billion annually to our costs and with no jobs added does drag down our ability to grow the economy.

So we need to do two things. We need to raise taxes on those who now have so much money that the wife of a businessman, not even the man himself, just his wife, could take $90 million out of her petty cash to run for the Senate. And her platform? Cut more taxes for the rich! So, let’s take the obvious first. Those who created the Depression, profited from it and are still profiting from it should be the ones to bear the brunt of solving it. The world problems were caused by the fraud of Wall Street. Wall Street firms like Goldman, Sachs told the government pension funds and private investment funds both here in the U.S. and abroad that they had new investments that were totally reliable because they were backed by U.S. mortgages. The problem is that they weren’t. They lied. The world crumbled.

These Wall Street hucksters knew that Americans knew that The U.S. housing market had been solid since the end of World War II, with only one glitch, during the Reagan era recession. So the securities sounded pretty good. But everyone in Wall Street was on the take and the deal was rigged. The rating agencies said the mortgage backed securities was was triple A. Insurance companies were supposed to have backstopped the securities. But it was all a huge scam.

The American people alone lost $7.5 trillion in personal wealth. Only a few people ever went to jail and Wall Street is booming…at an all-time high. The Wall Street boys were making billions, literally billions…some of them…in bonuses while the U.S. citizens and the Spanish citizens and the Greek citizens were losing everything.

The stock market went from 6900 at the bottom in 2009 to over 14,000 today and is on the verge of crashing again, only this time we have no idea why. Wall Street has become so isolated from the rest of society, yet provides over 20% of the GDP, that they have the power to make the economy go any direction they want to point it. And because of the Right Wing propaganda, all the hicks keep voting in Republicans who keep supporting them.

People lost money. They had bank accounts that said one million one day and half a million the next day. Because the value of securities that said one buck on Monday said fifty cents on Tuesday. The result was that people lost money, banks lost money, pension funds lost money and even some rich people lost lots of money…but they have lots of money to lose and still have plenty left over.

When this kind of crash happens, people pull in all the cash they can get. No loans. No investments. Just hold on to the money. “Show me the money!” So the world went into crisis and our brilliant economists tried to “figure things out.” The results, plus the fact that George W. Bush graduated from Harvard Business School and Ted Cruz graduated from Harvard Law School, should tell you something about how corrupted our educational system and thus our economics profession has become.

Our economic terrorists are those people who somehow pass through these difficult institutions and are abroad in the land with no particular knowledge or qualifications, only with a certificate. If they were pilots we would have a crash every day. If they were surgeons, people would be dying like flies. They infest politics and work for the rich, using educational backgrounds that they should not have, as authority for ridiculous proposals.

So the result is that when we ask the simple question…if we were a little bit in debt with 7 million people out of work and now we are in huge debt with with 15 million people out of work what changed? Hmmm. Let’s see….7 million: things ok; 15 million: a country in deep doo-doo. And what is the solution? The answer comes back…and is that answer “more jobs?” No. Not bloody likely from this GOP Senate. That would be too logical and simple…and it would not help the rich.

The answer given by the Right Wing Neo-Fascists is to cut more jobs. This time, let’s cut government jobs, because, thanks to the Republicans, there are no new private sector jobs. Republican Senators filibustered any investment programs to create private jobs over 200 times. So Wall Street is still riding high. The stock market is flirting with 15,000, certainly in speculative range–many multi-billion-dollar investors pulling out–and we all know that they have not changed.

So the problem is that the banks are still speculating with your bank deposits. They could fail again, and with six big banks both speculating and controlling half of all assets, we could have a worse Depression, one where 25 percent to 30 percent of people could be out of work.

So that is the first problem. Control of the economy by the banks, creating dangerous situations and still doing it in spite of what the people want and people who should know better, from schools that should know better, graduating them them and unleashing them on society.

The second problem may be perhaps generalized by saying that our current government is controlled by Neo-Fascists. It may be a broad characterization, and somewhat sinister-sounding, but the reason is that–it is sinister. Not “potentially” sinister but evil in its intent…right now. And here’s the part that relates to our economy and our government.

The Neo-Fascists, which refers to an alignment politically of one Party with heavy industry, the military, the super-rich Right Wing (there is a Left-Wing super-rich meaning some old money…think Roosevelt and Rockefeller…and some new money…think Buffett, Spielberg, Theresa Heinz and the Kennedys) Right-Wing Fundamentalist religions and the giant global corporations. In the days of Mussolini and Hitler and Franco…these were called reactionary forces, people who trusted the dictators to keep things as they were. In those days, in Italy and Spain, the Roman Catholic religion was the religion. Today it is people like Pat Robertson who preach a different kind of nonsense and the hyper-political segregationist preachers, plus the hierarchy of the Catholic Church, not the Catholic parishioners, who are the backers of the Right Wing.

Let’s define the Right Wing even further. The Right Wing is the top income group in the country who seeks political power to maintain their status indefinitely through political means. Much of their wealth is inherited. Other wealth on the Right is often from industrial consolidation enabled through politics. People like Grover Norquist have been hired to intimidate Republican politicians to vote for tax breaks for this super-wealthy segment, which then uses its newly found extra cash to elect Neo-Fascist governors, House members and Senators.

That same group has used funds from rich, anonymous sources to defeat more moderate candidates and replace them with less astute, certainly less rational and more obsequious candidates who will follow the instructions of the leaders on the Right. That would be Senators like McConnell, McCain, Cornyn, Sessions, Shelby, Vitter and others who vote 100% to obstruct any legislation that will hurt the rich.

So this second group, which is not mutually exclusive of the first–many Right Wingers are Wall Street bankers and “investors”–spends its time working for a small group of special interests. It is this group that has no qualms about voting to put guns in the hands of madmen who kill little children on behalf of the gun manufacturers.

All of the Republicans and several Democrats in states where they are politically vulnerable (though now they are almost certainly vulnerable from the Left, which is finally angry) voted against a law to make it more difficult for crazy people or criminals or Right Wing white supremacy lunatics to get guns. In the meantime, children are being killed every day by crazy people with guns.

This group, those who sponsor Right Wing Republicans and Tea Party Republicans–the vicious and radical Anti-Middle-Class corporations and economic aristocracy have organized themselves into a funding organization for Neo-Fascists. These number among themselves House members like former physician Michael Burgess who relentlessly fights against health care reform while spouting speeches on the floor of the House about how much he cares…as a doctor…for those who have pre-existing conditions.

What Michael Burgess doesn’t tell his constituents is that he voted against every bill that has now at least, even with the sequester, allowed hundreds of thousands to get health insurance. In 2014, despite his efforts and the votes of every other Republican…every single Republican in the House of Representatives…the Affordable Care Act will usher in a new era of health care in this country. The health insurance companies have been defeated so long as we continue to elect good Democrats, who unlike Burgess to not work for the health insurance companies.

Always remember this. Health insurance is not a good business if it is working properly. The reason it works now is that the health insurance companies can pick and choose customers, and…at one time…could simply drop you if you cost them too much money. Second it is only good because they simply keep marking up the prices every year and corporations who pay the bills for health insurance keep adding health insurance to the price of business and also making workers pay a higher and higher share of the premiums.

Starbucks is one of the largest corporations in the United States. After labor itself, their second greatest cost is health insurance. In Canada, it is not. Canadians already have health insurance. And despite the lies about accessibility told by every pandering Republican Congressman and Senator, 95% of Canadians say that they are happy with their health care and would never change their system of health care delivery. It is not the lowest cost in the world, but is is almost half the cost of U.S. health care. And unlike the U.S., where 50 million Americans use the emergency room for health care…in Canada everyone has health care automatically.

So, the point is that our economy is not going to be restored by those who claim that they will make things better in the ways that they have claimed since 1981. And what are these Right Wing Republican claims?

1. Cutting taxes on the rich, while it will temporarily cost the government revenues, will eventually allow the economy to expand and the additional revenues will more than pay for the tax cuts and will expand the economy much faster and to a much larger size than without the tax cuts.

This is patently false and can be proved in a dozen ways but here are two that are sufficient. The CBO says that not only does that not work, but that income tax cuts done for this purpose, including those from 2001 and 2003, not only do not pay for themselves but cost the government somewhere between 80% and 100% of the tax cuts. In other words, the CBO says, tax cuts like these would produce something between a low of 1% of the costs of the cuts to 20% of the costs. That is why, under Reagan, we spent $2.68 trillion more than we took in, and under George W. Bush, the Second Bush, we literally spent $12 trillion more than we took in and created a Second Great Depression. This economic policy, cut taxes for the rich, then cut government services for the poor to pay for it, is what has happened. Republicans know it. They are behind it.

The second evidence is that Bill Clinton raised taxes by about 5% in 1993. As a result he was not only able to balance the budget and create surpluses but those tax increases ushered in the longest sustained period of economic prosperity this country has ever seen, and that includes the post-war period up to the late 1970s. Unemployment, by the way, under Clinton fell to below 5% and in some areas below 4% and at some times in some areas, below 2%! In certain areas, even unskilled but experienced workers were jumping from job to job as wages increased.

2. Cutting government services in order to bring down the national debt is not only wrong, it is the exact opposite of what has worked in the past.

In 1933, 1934, 1935 and 1936, Franklin Roosevelt infused the economy with more direct job programs than had been done before. It took unemployment down from 25% (and growing) to 14% (and falling.) But confident that the economy was coming back, the Congress insisted that the FDR balance the budget. In 1937, he did. And it was a mistake. The economy was not ready and unemployment grew rapidly to 19%. Once again, they returned to direct jobs and continued to do so, with unemployment falling eventually to 9% before the war mobilization took hold and unemployment literally was under 2% in 1945. (Of course millions of men were at war, but we were also at maximum industrial capacity.)

So what is the answer?

Many people now realize that when Americans are out of work or have no health insurance, other Americans will eventually pay the bill. Europeans have known this for a long time. Consequently, we have done to some extent what Europeans have done, but half of our population has done it grudgingly. A new selfish, me-first poliical party, funded by some of the Right Wing super-rich have hired the Republican Party to avoid helping other Americans.

But it happens anyway. Good people eventually prevail and government eventually steps in to help those temporarily disconnected from an income. And that is costly. Because it is something called unemployment insurance. And that is a palliative and one that is very expensive. So what the Germans do is to keep people employed. They modify hours and adjust programs that reduce unemployment as much as possible because even a worker making less is still employed and still advancing that small part of the economy for which he or she is responsible.

So how does this relate to aggregate demand? What it does is to spread the costs of lower demand across a large number of industries and creates shared responsibility. People are not dropped like a bag of potatoes as they are here, almost exactly the way they were treated nearly 100 years ago. Europe has made progress in worker-corporate relations. We have regressed since Reagan.

The proper solution is to maintain employment as long as possible and as widely as possible. Yes, this does require government intervention. It requires planning. and yes, this is against everything to which these regressive, 19th Century industrialists want to return. They want high unemployment with fewer social welfare programs. In short and in regular parlance, that means they want lots of people out of work, desperate for a job so that wages will be low and so that their taxes will be low. This is the goal of this segment of the population who have incomes of $83,333–per month–and up!

So the Neo-Fascists (Neoconservatives, Republicans, Tea Baggers–whatever you want to call them) have rooted themselves firmly in the reactionary policies of the early 1900s. And why have they done so? Very simply because the Republican politicians have been filtered through the vetting process by these huge industrialists and the Super-rich. If the do not adhere to anti-labor, pro-NRA, anti-abortion, anti-gay, anti-government policies, they do not become candidates in the new, Neo-Fascist, Republican Party. This is a political party owned and operated by very wealthy, multi-billionaire individuals who will stop at nothing to destroy the Middle Class.

The anti-MIddle Class policies of the Right Wing super-rich have caused something like 47 million Americans to fall below the poverty line with no hope of rejoining the Middle Class. The Super-rich have created manufacturing outside the U.S. They control the financial sector, the banks and the flow of money. They contributed over $2 billion in the last election to see to it that Right Wing Neo-Fascists were elected.

The immediate goal is simple for any thinking American. The rich have more than they have ever had. They have the lowest taxes and the highest share of total income by a ratio so far beyond anything that has ever happened that it literally will not fit on a chart that compares it to previous periods. On the part that shows current income compared to other citizens, it goes up and out of the chart. Once again, 1% of the people of this country own 50% of all assets and earn 80% of current income. Think of how much you make and then try to understand how much that means for that Super-rich individual.

So we need to toss out all politicians who have created this situation. Right now that is easy. Anyone who does not think like one of the Super-rich is not a Repubican and anyone who is a Republican votes in a bloc, as anyone who looks at Congressional votes can clearly see. The idea that “both sides are at fault” is a lie. Every single Republican voted against health care for American Citizens. Then, even after it had been voted in, a program that was not very radical but a start towards reducing health care costs and towards incorporating the 50 million Americans without health care and without Medicare or Medicaid, the Republicans simply tired to repeal it. “Repeal, repeal, repeal” was their only call and that was because they knew that any serious proposal would eventually eliminate the high-profit health insurance gangsters making obscene profits over the bodies of American men, women and children.

We have seen recently a clear indication of how serious this matter has become. In recent surveys, after the massacres of children by crazy people with automatic weapons, the American People, when polled, were 90% in favor of tighter controls on guns, especially automatic weapons of war. But the Senate, under the control of the rich and powerful who are aligned with the National Rifle Association–gun manufacturers–voted down such legislation. We stopped being a Democracy that day.

We must end complacency. Every single person must become involved. Rich individuals and corporations, people like Donald Trump, casino owner and Sheldon Adelson, casino owner and the Koch Brothers, the worst chemical polluters in the history of the country…worse than the robber barons of the early 1900s…have more money than you and are spending it in the billions to control your life. ALEC, the secretive consortium of companies that Americans support every day, like Coca-Cola and Kraft Foods, have spent billions buying up local politicians. Governors like Scott Walker of Wisconsin, lie to the people that they can’t afford schools with smaller class sizes while giving $168 million in tax breaks to Wisconsin businessmen…not the people. The people lose firemen, teachers and nurses in “austerity” programs while businesses get tax cuts that we have seen the CBO say…do not work. They are a scam.

Is the solution a partisan message? Of course it is. When there are people out to get you, holding down the economy, voting against jobs, against replacing our ever-increasing costs of fossil fuel with the new energies being developed in China and Europe already, and causing the failure of U. S. start-up companies in wind and solar, then you need to vote Democratic. When 80% of all new income is going to the top 1%, and they have bought up 100% of the Republican Party, then you need to vote Democratic. When they are talking about a war with Iran…which would be a disaster…but can control politics so completely that we cannot prevent the massacres of 20 of our own small pre-school children, we need to vote Democratic.

This is the solution. It is not economic. It is political. Vote out the Neo-Fascists working for the Super-rich. Vote in Democrats who will work for the People. And, if they do not work for the People, throw them out and find people who will.

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They’d better be good. The Bush Administration left us with an enormous mess.

In January of 2009, the first month of the Obama Administration, 779,000 people lost their jobs. The average number of jobs lost in the first quarter of 2009, was 753,000….per month. The American workforce was coming apart.

Banks and Financial institutions were failing and those that weren’t were coming to the government, palms outstretched. Lehman Brothers, a financial institution for over a century, failed, after Bear, Stearns a seeming stalwart, gone a’gambling with OPM, (other people’s money) barely survived.

Banks like Wachovia and Washington Mutual and First City Corporation, some of which had been in business since the mid-19th Century, were merged. Tens of billions of dollars were involved.

And it could have been worse except for the financial safety net put into place by the “Liberals” after the last Conservative mess in 1929. The Federal Deposit Insurance Corporation limited damages to personal bank accounts. This meant that there would be no 1930s-style run on banks to remove savings. They were safe, but no thanks to the “Conservatives.”

Unemployment insurance softened the landing for many people who were laid off, at least initially. Food stamps were available to those who also saw their home equity disappear and had to look for both a job and a home. By January of 2009 a full-fledged Depression had arrived, not a Recession.

January 2009 was was the worst month for job losses ever. Conservative economists like Alan Greenspan, Chairman of the Federal Reserves, had no answers. His answer was that he did not believe that the Wall Street crowd would act other than in their own self interest. Greenspan had been not only a long-term leader among Conservative economists, but a Conservative follower at one time of the erratic prophet of free living and loving…Ayn Rand.

Ayn Rand was no more an economist than Greenspan was a point guard for the Knicks…she was a novelist and theorist on all things about which she knew little. Her novel,”Atlas Shrugged” was as strange a mixture of fantasy and dilettantish economic theory as ever written.

Enough has been said about the immediate causes of the Great Bush-Cheney Second Depression. The housing bubble…speculation in mortgage-backed securities…inflated securities backed by worthless mortgages…deliberately lax regulation in exchange for campaign contributions and finally bank, industrial and commercial business failures. But there is a history.

Since 1981, when the Republican Party rode the charismatic coat tails of Ronald Reagan into office, the Big Lie was that we needed a return to “Classic Liberal” economics. In other words, for a happy life we only needed lower taxes, smaller government and privatization of everything that moved and had a government name attached to it.

The leader of the economic revolution for the new “Conservative” forces was Dr. Milton Friedman, who wrote the book “Free to Choose” which basically said that Americans would be better off with their own money in their own pockets.

It is a delightful thought…no taxes…lots more money in our pockets and we can all choose to spend it however we choose. It was a fool’s errand for government. Fools voted in the fools who ran it, and those fools ran our government into the ground.

Now we must fix it. We must elect officials who will change policies and do so quickly before the damage is so great that it cannot be repaired.

Our real problems began in the post Viet Nam era when we failed to address the costs of the war that still lingered. These were inherited by President Ford. Inflation was becoming a real problem.

Ford did his best to combat inflation but the solution would prove more difficult than the WIN buttons (Whip Inflation Now) and the jawboning recommended by his two chief aides, Donald Rumsfeld and Dick Cheney.

Postponing it and pushing it forward lead to both inflation and unemployment. The Phillips curve, an economic concept, had said that high unemployment and high inflation are incompatible, but that is just what happened. In the late 1970s we had high inflation, high unemployment and low economic growth. That wasn’t supposed to happen.

There were a number of extraneous factors. High oil prices coming very suddenly and moving throughout the economy was one. Another was too much money in the economy which had not been controlled, because, if it had, it would have caused a recession.

That is what happened, a very severe but relatively short recession in the early days of the Reagan Presidency. Businesses living on credit, like auto dealers, went bankrupt and unemployment temporarily grew to as high as 10.8%. But inflation ended and prices and interest rates began to recede.

In 1981, the Reagan Administration cut taxes far below the amount necessary for revenues to balance the budget. Between 1981 and 1988, we went from $900 billion in debt to $2.8 trillion. Our excess debt prior to President Reagan, had mostly been incurred from the Viet Nam War.

The deficits continued for 16 years until President Clinton brought them under control and balanced the budget and capped the debt at that time at $5.6 trillion. The second President Bush promptly spent all the surplus that Clinton had created and then cut taxes again twice to the point that we now have a $16.7 trillion dollar debt.

Even though Reagan and Bush the First had high ratios of debt compared to GDP, most of the debt literally comes from the last ten years, the disastrous result of the Bush-Cheney policies. It also comes from their legacy to us of 15 million people unemployed.

Unemployment costs the taxpayers about $700 billion. The costs of unemployment are two-fold. First is the loss of tax revenues from workers and companies. Second is the cost of unemployment, and a situation of Depression…i.e. long-term recession…welfare costs. In addition, there is low growth. Rather than 4% to 6% growth, we have 1.5% to 2% growth. Everything slows down.

We need solutions. These are some practical solutions, not necessarily the best, but workable, especially with some adjustments.

1. Revenue

The first challenge is to stop the bleeding. We have the lowest government revenues as a percentage of GDP since 1950. There is now about a 5% gap between the normal government revenue and what we currently take in. And that amounts to about half a billion dollars or a little more. We need to get to 20% of GDP and reduce our unemployment to at least 6% or lower. At that point we would be in balance. No deficit.

To do this we need to add 5 million direct government jobs. There are many ways to do that and it can be done very quickly. In 1933, hardly a high-efficiency era, with no computers, Emails, cell phones, Fedex, or faxes…Harry Hopkins created 4 million jobs in less than six months. We can create 5 million in six months.

People say that we are in debt and we can’t afford it. But look at the facts. This could be done for about $300 billion dollars, two years in a row. Each of the $300 billion investments (about 1.5% of our national debt) would be offset by several factors. The first is tax revenue from people now working, not collecting unemployment or welfare.

Second is the tax income from additional jobs from the employment multiplier. That means that, with sufficient economic growth from the first jobs, private service jobs are created from the higher demand.

This process will cut our Depression welfare costs…food stamps, unemployment and Medicaid in half…about, yes, $300 billion a year. And what would we get in return? About $140 billion in tax revenues and about 4% additional GDP growth. Of course almost every economist admits that the huge need for infrastructure repair and improvement will be done at the lowest cost in about 70 years!

Because our problem is lack of demand, this solution will really pay for itself in added revenues, unlike the promises of the Neocon economists with their tax cuts that never materialized into greater revenues. The theory that lower taxes would eventually raise more revenues never materialized. After this failed so-called theory…which some simply called fraud…the only result was a $16.7 trillion national debt.

This idea of “trickle-down” economics is no longer merely a foolish theory. Once it was debunked, it became merely a tool for the super-rich and the Republican members of Congress and Senate who support the rich to use with the uneducated to continue to maintain low taxes. Organizations like Americans for Prosperity, the Cato Institute and the so-called “Tea Party” Republicans—just a group of radical political opportunists—continue the charade.

In actual numbers, 5 million jobs can be created on this kind of budget and another 5 million from the multiplier. These will be direct jobs in energy, construction, training and transportation among other classifications. If we had a strong manufacturing sector, that multiplier would be two jobs for every one created.
This is Depression era economics. It worked in the Great Depression of the 1930s, even though there are now some minor economists and economic writers being paid by people like the Hudson Institute, a Koch Brothers funded organization, to try to prove the contrary.

Those same people say that the Reagan idea, which eventually cost us $2.68 trillion in debt is what we should do now. In other words, Neocons want us to believe that we should once again cut taxes and expect that somehow things will turn out differently from what has happened every time we have done it…added more national debt.

With Clinton we put that genie back in the bottle and balanced the debt with slightly higher taxes and full employment policies. Only to have Bush the Second come along and make our financial problems literally ten times worse.

We must do what Clinton did. We must bite the bullet and raise taxes. The current tax rates do not support the government, even as it has been trimmed back over the last several years. Top earners pay 35%, which after deductions actually provides the Treasury with something like 23% of that income. Consequently, more high income earners…those at the top rate, have more incentive than at any time since the 1920s to keep their tax refund and put it in the bank.

When tax rates are 60-70% at the top level, and taxpayer keep only 30 to 35%…all the numbskull commentary notwithstanding (“People know how to spend their money better than the government”—George W. Bush)…not only do tax revenues go up, but investment in business skyrockets. In the 1950s and 1960s, when the top rate was 91%, investment was at an all-time high until the Clinton era.

When President Clinton raised taxes in the early 1990s, the economy which had been in the doldrums under the first President Bush…took off. But the most effective top rate is even higher on very high earners, probably around 65%-75% on gross income.

At very high rates of taxation, people become motivated to invest money before it gets to the point of taxation. Private investment is crucial to a growing economy. Financial paper trading, which is what we have today, leads only to eventual speculation. Real investment creates whole new industries. People are motivated by capital gains rates, 50% lower.

The top tax rate when Reagan came to office was around 75%. He dropped it to 50%. But it was on a much lower annual income, less than $100,000. If we were to reschedule tax rates at the first Reagan level, 50% on all income over, say $250,000, we could then put a top rate of 60-70% on incomes over $1 million.

The overall tax rates could look something like this: 65% over $1,000,000; 50% $350,000 to $1,000,000; 35% $175,000 to $349,999; 25% $100,000 to $174,999; 15% $35,000 to $99,000; and 5% under $35,000.

The point of raising taxes is not simply to pay down the national debt. It is to change behavior so that the rich do not become a moribund, static rentier aristocracy but an integral part of the growth of this country.

While someone who may have inherited a hotel chain may feel that they are involved, they are not involved unless they are actively adding more to the economy. A country does not stay static, with thirteen colonies or with 48 states and 125 million people but grows…in our case to over 300 million people with an economy that has worldwide influence.

Capital gains taxes probably do not need to be raised. They should be designed to offer returns for income from investment for individuals of all income levels. Capital gains should accrue to the affluent for their individual incomes and for pensioners for their 401K plans, which should be both insured and portable.

Until everyone has a portable 401K from day one and until investments can be handled by an agency of the federal government, or a secure private organization, there is no great social benefit in keeping capital gains taxes exceptionally low. At present, certainly no more than 1% of Americans own the majority of stock in major U.S. corporations.

We need to eliminate all tax breaks and incentives to locate off shore. Because of tax laws put into effect during the Bush-Cheney era, we now have corporate tax incentives for companies to locate manufacturing abroad or manufacture abroad with foreign contract labor.

We need to lower the corporate tax rate to 20% and remove almost all deductions. Corporations should pay a minimum tax rate equivalent to at least 5% of sales. There is no reason that a corporation in the United States should not offer up at least 5% of sales for the privilege of operating in the greatest market the world has ever known. If a company has $100 billion in sales, their tax bite should not be less than $5 billion, with no exclusions.

What are the motivations for levying taxes? Do we try to punish the rich for having more money and not sharing it? If they are huge philanthropists, should we not then lower their taxes? What about people who make money from gambling or alcohol or pornography? Should they not be taxed more?

Shouldn’t people who work hard every day, go to school, get two degrees, work 55-60 hours a week, have student loans and kids and need two incomes…to make their lives better…shouldn’t they get some kind of a tax break?

Even if we could figure out which kindly old billionaires have lived like paupers and distributed their money like Rockefeller, tossing out dimes to children, we can’t make individual decisions based on merit or goodness or kindness—or reprehensible behavior. Taxes are not about reward and punishment. Criminal laws are for reward and punishment.

Tax laws must first, as fairly as possible, generate enough revenue to pay for the essentials of government, not only in good times, not only in bad times, not only in war times, not only in peacetime, but, on the whole, on the average, for the most part….all the time. Ability to pay, needs of society, incentives to improve our quality of life…as for example in anti-pollution tax incentives or penalties…all these are factors.

In using taxes as a motivator, we need to be very careful that our goal is economic and social but never moral. If a high tax will end smoking…that is a good thing. If a high tax on ammunition would cut the rate of murders and violent incidents with guns, that would be a good thing. If fewer people die from smoking, our collective health care bill goes down.

If we can cut our police forces and our homeland security forces and our courts by reducing gun violence and accidents our domestic law enforcement costs go down. Those kinds of outcomes are the kinds of motivators that we should seek…within reason, and within the other parameters, such as ability to pay, etc.

If a tax will bring businesses back to the United States from foreign lands, restore industries and create jobs…that would be good for the economy and for workers. If it damages our relationships with a foreign country…then consideration must be given to that alternative outcome. Taxes can help us shape our society.

Taxes are seldom the ultimate resolution of anything. They don’t make a company successful or kill it off. But we must always be cognizant of unintended consequences. We must use tax revenues to create and maintain services for all members of society. We should continue to do so as often as necessary and whenever possible.

2. Employment

Someone once said….everybody has to be someplace. Usually that someplace for the most part is at work. We need to focus on work. Not on industries. Not on incomes. Not on profits. Not on goals of society.

We need to focus on those 8 hours a day that each man or woman spends making a living. We have to make it dependable, some kind of job for everyone. We might even try to make work satisfying.

We must insure that workers provide enough value to employers that they will pay a wage that sustains at least a minimal lifestyle. If a person cannot survive on minimum wages, then what is the purpose of work?

Only when we focus on individuals in the workplace instead of the workplace or the broader implications of employment on society will we begin to create an atmosphere where people will go to work with vigor and dedication.

Workers must have the opportunity to learn and grow and have satisfaction. This is not mere generosity or altruism. We know now that good working conditions make an enormous contribution to productivity.

Before workplace stability comes education. We need to begin to tailor our educational system to the needs of society. We sometimes see education as a business in which we generate enough income or a large enough endowment to build more buildings or labs or athletic facilities.

We need to tailor our universities to become learning laboratories, bringing forth graduates with at least the minimum level of scholarship needed to match that of the rest of the world. The backbone of a trained workforce is a good educational system. And a well-functioning workforce is the backbone of industry.

Education provides the groundwork, the understanding of words, meanings, mathematics, equations, and the subtleties of complex situations. We must begin to think of the day when we will turn out the appropriate number of architects, computer analysts, doctors, physicists and engineers to anticipate the needs of society.

This means that many universities must create study programs that they do not now have. They must find ways to increase mathematics and science courses. If we need 100,000 engineers, for example, then we need to collect the number of chairs in engineering of all types and determine how to produce the number we need.

This is where employment policies, full-employment legislation, such as parts of Europe has had for years, stabilizes the number of jobs and provides internships, early retirements and stepped improvements in position to coincide with greater experience and accomplishment. We need to offer positions to those who graduate with the right kind of education. Apprenticing in a skill is equally as important as learning the discipline itself.

We need to reduce the costs of education. To get the best people, we must find a way that they can afford the education. Education and health care are not areas that can or should be done for profit. Health care, if it provides necessary service is, at best, a non-profit industry.

Eventually, some key job functions may be subsidized by government, such as general physicians and teachers. Like health care, jobs in education are not done for a high income or wealth accumulation. They run counter to the normal profit motive and must be handled that way in the educational process.

We need to do away with the need for unions–not unions–but the need for unions. A single worker cannot negotiate with a corporation. Workers must have arbitrators who are honest brokers. Until that happens, however, and we seriously tackle the problem of workers’ rights we are forced to encourage more unions. If we do not, individual workers will have only two choices, slave wages or anarchy.

Strong labor unions ended a century of strife, confrontation and violent disputes. We cannot return to an era of violence and worker suppression. Every worker who has a particular skill has a great deal of pride of accomplishment. Craft guilds should be encouraged, with apprentice, journeyman and master levels so that American workers in specific fields will become the best skilled workers in the world.

With modern computers almost every worker could have an identity that would provide his or her experience which would automatically carry with it a general wage rate. Wage and hour laws must be set at the minimal amount legislators agree is a living wage.

Current laws on assistance to the working poor, like the earned income tax credit, could be expanded as part of a new and larger negative income tax.

One thing that we have learned is that top-down economics is not good for anyone. The rich become lazy and isolated. The Middle Class focuses on earning wealth to the exclusion of personal satisfaction. And the poor, a growing number as a result of the misguided goals of the former two, becomes desolate and indigent. On the other hand, a benevolent Capitalist society can raise all boats.

If an American corporation decides to use Asian workers to make a product but sell it here in the U.S.A., then that product must pay an import duty or a market surcharge of some kind that compensates American workers for lost opportunities. These funds can be channeled into trust accounts to be used for domestic industry development and re-training.

While estimates vary, but actual imports and Asian products imported by major U.S. corporations indicate that a 5% surcharge could raise $20 billion a year. In five years this could restore a major segment of American industry and make it competitive for decades to come.

3. Trade Policy

As already discussed, we cannot compete with China or other parts of Asia or India with unskilled labor. More and more, even the highly skilled labor jobs are being done in Asia simply because we have retarded our educational system with foolish, useless agendas and endless political-religious arguments while our children fell behind in world education standards.

We cannot compete with slave wages or third world wages of less than $2 per day. And so we must compete with skill. Yet our next generation does not, according to worldwide standards, have those skills.

Young people in America are behind approximately 25 to 30 other countries in mathematics. You run out of advanced countries quickly after France, Germany, Great Britain, Switzerland, Spain, Italy and the Scandinavian countries. And our numbers in places like Alabama and Mississippi or the South Side of Chicago are much worse obviously than our average.

Some kinds of protectionism are necessary. For example, a company like Sensata, which has a profit of a billion dollars and is owned by another company, Bain Capital, should not be able to send 200 jobs to China while they are making huge profits here with domestic workers.

We must create legislation to keep profitable manufacturing here. Greed should not be the only motive for sending jobs abroad. If already profitable companies like Sensata want to make products in China but sell them here, they should be treated to tariffs on their products like any foreign competitor.

American companies who sell products here that they make abroad, should pay a “market surcharge” of approximately 5% (or more.) The revenues from this surcharge would be used to retrain laid off workers, joint venture small startups in potential new industries, and to create a large pool of funds to introduce and train people in hi-tech manufacturing techniques.

U.S. Imports in 2012 were $2.7 trillion. Much of that is made up of U.S. products made elsewhere in the world and shipped here for sale to Americans in the U.S. market. For example, Walmart alone, if taxed at 5% of all imported products made by U.S. manufacturers abroad, but sold here, would kick in literally billions each year. This could be the way to re-establish the United States as a major manufacturing country.

Yes, it is true that Walmart products would probably go up by 5 cents per dollar. But the total amount of money, across all corporations could produce more than $30 billion into a manufacturing trust fund that would educate and train workers for better jobs.

Education and employment are intricately connected these days. If we fail to provide the kind of education that our students need, we always face the risk of the loss of Democracy, which depends on a good basic education for all. No one can make an intelligent decision or the right vote without a good education.

We see those results in some of the politicians elected with mindless Tea Party support. We have seen it in those senior citizens with signs saying “Hands off my Medicare” while supporting privatization of health care.

Communism or Fascism can only take over in democracies where the people are fooled by propaganda. Americans are beset with propaganda by certain groups hoping that they will not understand the truth. We must educate our young people so that they do know the truth and can recognize lies when they see them.

4. Natural Resources.

Soon, oil will run out. The term “peak oil,” the time when new oil field discoveries only slows the point of total exhaustion rather than builds more is already upon us. We are using up available oil right now.

Since the advent of oil exploration in the United States, oil companies have paid the U.S. government, plus or minus a little, about $100 billion in royalties for oil extracted from U.S. public lands or Native American lands. Oil taken from U.S. Federal lands amounts to approximately 35% of all U.S. oil production.

In 1995, in an effort to stimulate oil production, the Clinton Administration decided to forego royalties on oil drilled in the Gulf of Mexico until a barrel of oil on the world market reached a price of $34 a barrel. When the Bush Administration came into office in 2001, Gale Norton, Secretary of Interior, an oil-industry lobbyist, simple ignored the collection of royalties, even though prices of oil had climbed above $80 a barrel.

When some of the long-term government employees of the Interior Department, whose job it was to collect these royalties, began to object they were either fired or reassigned. The amount that we know categorically has been lost from 1996 to 2000 is over $1 billion.

The individuals in the Interior responsible for collections say that the amount is actually over $80 billion. To give one example, in 2007, the oil and gas industry earned $77 billion from government leases and paid no royalties.

This is the kind of money that is going into the pockets of some people who own huge stock positions in companies like EXXON/Mobil, BP and other major oil companies, the profits from which are in the billions…often even without paying any taxes, on top of not paying their fair share of royalties!

So we need to stop giving away the wealth from our natural resources, charge higher royalties, insure that they are paid, and do the same for minerals and timber and any other resources that belong rightfully to all American taxpayers.

5. The Budget and National Debt

What we must all realize is that our national debt is a scandal and almost certainly a crime that has gone unindicted and unpunished. And it continues. Since 1981, the Republican Party has acted as sponsor for a group of Americans, a segment of America, who have discovered that dedication to greed and political corruption can accomplish more in our current society than hard work and imagination.

The Republican Party and some Democrats have aligned themselves with certain powerful forces in the United States, not merely as supporters of policy but as usurpers of government. For the last 20 of 34 years, the government has been taken over by tyrants. These corporatist swindlers have spent or caused to be spent, approximately $14 trillion of the $16.7 trillion of current national debt.

About $900 billion was owed before Ronald Reagan came into office, incurred for a variety of reasons…World War II, the Viet Nam War and as the result of sudden economic crises, like the oil embargos from the Middle East.

The rest was incurred by Reagan and the first President Bush before President Clinton could balance the budget in his second term. It was so bad under Reagan and the first Bush, that the Clinton Administration incurred more than a trillion dollars of debt and four years before the budget could be balanced.

For some time now, our federal government, specifically Congress, has been dominated by the money and influence of lobbyists. The 12,633 lobbyists in Washington, D.C., spend over $3.3 billion dollars a year to influence Congress. For the 535 members of Congress– House and Senate—that amounts to $6,128,000 each. And how much do you contribute to each of these? Not even close. And so whom do you think gets more attention?

In January of 2010, the Supreme Court handed down the Citizens United decision which basically says that any corporation or any individual can contribute as much money as they wish to any candidate. As a result, in the November 2010 mid-term elections, money flowed like wine.

Just one organization, Karl Rove and Ed Gillespie’s Crossroads (Republican) organization spent $39 million to elect Republicans. The Chamber of Commerce spent $33 million almost exclusively on Republican and Republican Tea Party candidates. Overall, in the 2010 election, over $3.7 billion was spent altogether by all special interest groups and campaigns at all levels.

The complete removal of rational restrictions has opened the floodgates for the rich and powerful Right Wing, anti-middle class forces, the Republican forces of greed, who subsequently elected an entire spectrum of narrow, often fanatically religious, highly militarist or simply anti-government Tea Party candidates.

It has seen the disastrous support of the gun lobby and the health insurance industry’s attempt to stop the Affordable Care Act. In the meanwhile a majority of Americans in poll after poll say that they favor control of guns and an affordable health care system in which all are able to have at least basic health care services.

The best way to understand the debt is to look into how we got here. When George W. Bush came into office, the country had a $5.6 trillion national debt and a budget that was in balance.

Moreover, not only was the budget in balance but the Congressional Budget Office projected surpluses as follows: in 2001, $281 billion; 2002, $313 billion; 2003, $359 billion; 2004, $396 billion; 2005, $433 billion; 2006, $504 billion; 2007, $572 billion; 2008, $635 billion; 2009, $710 billion; 2010, $795 billion; 2011, $888 billion.

That is a total of $5.6 trillion, which would have meant that, had it been accurate or even close, we would have nearly balanced the budget by 2011. No national debt at all.

But we didn’t. George W. Bush and Dick Cheney had other ideas. Two tax cuts and two wars and a huge giveaway to the pharmaceutical companies made the budgets look a little different. We went in the opposite direction.

In 2001, we actually lost $143 billion. In 2002, we lost $382 billion (but still did not forgo tax cuts). In 2003, we went into debt by $560 billion, 2004, $572 billion, 2005, $416 billion; 2006, $281 billion; 2007, $247 billion, 2008, $431 billion, 2009, $1 trillion, 2010, $1.1 trillion; 2011, $1.2 trillion.

Instead of a country with almost no debt and a budget that was churning out hundreds of billions of dollars a year in surplus, the Bush-Cheney legacy was a total of $6.2 trillion additional debt through 2011, and a grand total of $11.8 trillion in debt by 2008.

The Bush Administration left us the legacy of two wars and the Second Great Depression. This added another $4 trillion, with no end in sight. We are now a total of $16.7 trillion in debt, and with Republican obstruction of job creation, we continue to add about $1 trillion a year.

6. The Solutions

The way out is pretty clear. When we had near full employment (which, with transfers, moves, layoffs, company closings and consolidations is about 5%) we were losing about $250 billion a year. The reason for our budget deficit was basically a dual problem. The Bush-Cheney regime had cut taxes twice. And they had two very expensive wars.

Then in 2008, because of Wall Street speculation and careless regulation, the entire economy crashed. Almost overnight we had 15 million unemployed. The budget shortfall, from lack of tax revenues from the unemployed, lack of revenues from failed corporations, lack of revenues from corporations and from individuals up and down the income scale who had lost much of their personal wealth caused a huge drop in government revenues.

On the spending side, the government under Bush’s Treasury Secretary Hank Paulson, bailed out banks with a $700 billion fund and then the new President initiated a $787 billion stimulus program that stopped the falling unemployment (which took 8 months) and began to pay out unemployment and welfare for 15 million Americans.

All these things led to a $700 billion dollar shortfall each year, on top of the deficits that Bush had already been running (which you saw above)…and now we had $1 trillion deficits every year. But before the crash, Bush II was running deficits of about $250 billion to $400 billion.

It is worth reminding ourselves that the country does not remain static. The $5.6 trillion in debt that comprised 57% of GDP when it was stopped under Clinton would be about 37% of GDP today. So the key is clearly: Don’t do what Bush did.

The key difference between the two sets of budgets—before the crash and after the crash is clearly unemployment. Before the crash in 2008 we had roughly 5% unemployment (which crept up to 7% as things were falling off the table in October 2008.) After the crash we were looking at 10% unemployment or 15 million people unemployed.

So the key is to restore full employment. Private industry will not invest because the economy is in the doldrums and there is no demand. And Republicans in the House and Senate have voted over 240 times to kill any job creating bills.

This means we much change minds. Government must step in and create the demand. There are hundreds of different job categories in which there are enormous needs.

Alternate energy in its many forms, including renewable energy, long life batteries, solar, wind and the electric grid itself need to be addressed. Communications taken to rural areas could open up whole new areas of the country, beautiful, vibrant areas for business development.

Education could use tutors for our most challenged young people. This could easily become part-time jobs for many of the highly educated people who are out of work and have been for some time. Roads and bridges, sewers and water systems, public buildings and entire areas of communities could use skilled construction workers. We also need more people to work in many areas of health care as we ramp up to handle care for 40 million more Americans.

Five million jobs will create at least 5 million more. This is a very low estimate of the employment multiplier. And those 10 million jobs mean we would be out of the Bush Depression. We know that some jobs will fall away after a time. We also know that once demand reaches a certain point, private investment will return. The jobs created by private industry will begin to turn the economy completely around.

How long will this take and what will it cost? The costs for the first year will be something like $300 billion. The good news is that the jobs created will help eliminate about $300 billion in unemployment and welfare costs.

Unlike unemployment, the 5 million direct government jobs created will pay the government back something like $40 billion in taxes. And the growth in the economy will create another $10 billion in revenues. The new jobs from the economic multiplier will create another $30 billion in revenues.

So by merely taking the money from welfare and creating jobs, we have added a net $80 billion buy switching from unemployment and welfare to jobs. The additional jobs from the economic multiplier will erase the remaining welfare costs, and so we now have a budget that has a deficit of something like half of the previous budget deficit and going down as the economy grows.

The Obama administration, through a variety of methods, has already trimmed the federal government back to 2008 levels. A slight jiggling of the Defense budget, a couple of points increase in the GDP, and a little luck with private investment and we could be in surplus again.

Now let’s talk about surpluses. We hear a lot about problems with Social Security. Social Security has always been in surplus. The problem is that the Bush Administration had us in so much debt that we had to borrow Social Security funds to pay for things like wars.

What the American People do not seem to understand is that we have been in surplus with Social Security since it began. We tweaked it, raised the payroll deduction in 1984, but we have always been in surplus and have a current bank account that is $2.5 trillion in surplus.

Every year Social Security takes in about $900 billion. And it pays out about the same amount. For many years the surplus has been there to account for the time when baby boomers will retire. Actuarial accountants at CBO and SSI have known this and planned for it for 30 years. What they didn’t plan on was Bush and Cheney stealing Social Security.

So Social Security was borrowed, some say stolen. But it is there in IOUs from other departments of government, so to speak, like Defense, and must be repaid when the budget is in surplus. This is not like taxes. We dedicated those funds to our post-work years, to help with our retirement. It is a trust fund. All American citizens are owed their share of Social Security funds.

To extend the life of Social Security even farther into the future, we need to raise the cap on Social Security payroll deductions from those who make $113,000 per year up to a new total of $250,000 per year. This will automatically give us enough revenues for 50 years or so. We have known for a long time that we would, just as in 1984, make a little adjustment to the system to make sure that we are covered as the population grows.

Many “Conservatives” (people who used budget deficits now to try to restrain spending for the poor and elderly and sick rather than wars) say that the bigger problem is Medicare. But the fact is that Medicare is simply one part of a bigger problem still…health care costs.

In the rest of the advanced world, the average health care cost is about 6% of GDP. That is the cost of all medical services, hospitals, surgeries, visits, drugs and doctors. In the United States that cost is 18% of GDP.

The reasons are pretty simple. We have a health care system run for profit. Because health insurance companies make huge profits, they cannot restrain others from making profits and so the cost-carousel goes round and round. But Medicare and the VA, two government systems are different.

While the private health care systems, according to the impartial and careful Congressional Budget office, have an overhead of around 12%, the Medicare system has an overhead of only 2%. So that is six times greater. The number is even higher when one considers that some health insurance plans, those for small business and for individuals often have administrative costs that run to 20% or even 30%.

Medicare is one standard we might look to for lower health costs. Six times lower than current costs mathematically says that we could have health care costs under the Affordable Care Act as low as 3% of GDP. That would mean costs lower than Europe.

For example, average health insurance premiums for a family in the U.S. are about $14,000 a year, with the employer paying about $10,000 and the worker about $4,000. So let’s scale that cost to a new reality…public management of health insurance. Theoretically, Medicare would cut the total to $2,400 and the shares would be, approximately $1,600 for the employer and $800 for the worker.

Of course, given current costs, this kind of drop is not realistic. Here is what is realistic. The realistic costs are these. Instead of $14,000 per year, with a Medicare overhead, we can safely say premiums will amount to no more than $4,800 and the shares would be $3,200 for the employer and $1,600 for the employee. Sounds pretty dramatic but that is where Europe is right now.

How do we know this? We know the overhead costs for both private health insurance and for Medicare. We know European percentages of GDP and U.S. percentages of GDP. So we can make accurate projections that U.S. costs, while the numbers tell us that the drop could be below European costs, will be at least that low…6%.

How can we be so sure? We can for a little known reason. It is because the Veterans’ Administration runs its own very efficient (at least over the last 20 years) health care system. In every comparison, health care economics researchers say that the VA is actually lower in cost than Medicare by a wide margin. So we know for certain that Medicare and Medicaid are not even the lowest we can go.

This would solve our health care problems. Current costs of approximately one out of five earned dollars for health care is outrageous. Whatever adjustments we might make in health insurance premiums will lower to the taxpayer in the long run, and, if we adopt Medicare as payer…until it reaches 6% of GDP. This will close the budget gap completely.

7. The Sum of Our Solutions

Here is the economic solution. Private industry drives the economy. Government can become so big, if it grows in the wrong way that revenues needed to run it can clog up the economy and slow it down.

Corporations spend too much on taxes and too much time on regulations. These must be minimized. But unrestricted, unrestrained business is what has landed us in this disaster.

We need to definitely and totally end lobbying as we now know it. That is the first and most important action that must be taken before anything else. Otherwise nothing can be achieved.

We need more revenues coming from a changed tax structure. Different incentives, not necessarily wholesale reduction in tax legislation. Revenues should balance the budget.

We need to create jobs here in the U.S. and create disincentives for sending jobs abroad.

We need to move to Medicare-type administration of health care as quickly as possible.

We need to fix Social Security slightly so that we can forget about it and know that it is there without problems.

We need to create huge alternative energy programs, not merely for jobs, but to begin the long process of changing over from fossil fuel to renewable energy. Oil companies who attempt to inhibit that process should be legally barred from participating in any new energy programs.

We need to evaluate our military posture to investigate new forms of defense, new assessment of potential enemies, risks and better coordination of security within the United States. We need to streamline our military response and increase our diplomatic activity.

We need to decide on an immigration plan and then shut the southern border down tight until illegal immigration stops. Only then can we sign off on an immigration policy that will have long range benefits for everyone.

We need end homelessness and hunger in the United States. We need to see if we can create a minimum wage that pays for a minimal standard of living without causing inflation that would defeat the purpose or damage those on fixed incomes.

The old arguments were between a planned economy, with a high-degree of public involvement versus an almost completely private-industry based economy, with a tiny government. Neither is the right course.

We cannot revisit industry without regulation and we cannot have government extending itself so far into the private sector that it cuts off profitable, highly-competitive businesses. Private industry is paramount. It provides the jobs. Government must be there to observe industry in the public interest. The word “public interest” is the key, regulation in the public interest.

So there can be a new paradigm. It is a government that works efficiently to provide individual services, social context, such as standards for industry, and protection at home and abroad.

It is a government that for the most part keeps its hands off industry so long as industry does not damage lives or restrict competition. And in the latter, if we have free competition that allows larger companies to continue to absorb smaller ones, to the largest size possible, then industry must accept much stronger regulations to insure the protection of citizens and society.

It may turn out, after decades of conflicting theory and inadequate response to changing economic conditions that economics is one of the lesser sciences or perhaps no science at all.

Basic economics…how we make our living and how we create a rational society…these things are important. Perhaps they are too important to leave to the economists.

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Perhaps, the great economic Quisling of the 21st Century so far has been the slightly foppish but somehow academically certified Douglass Holtz-Eakin. He has latched on to the Republican Party as his personal fiscal lifeboat and spends his life trying to give academic credence to the false hope of a Conservative-sponsored balanced budget…which never comes.

The Neo-Conservative theory was that, if we just cut taxes, that money will flow into the private sector and create investment. That, in turn, will create jobs and taxes, increasing government revenues far beyond the cost of the tax cuts. Supply-side economics at work. It didn’t work. We cut taxes and all we got was more debt.

While Holtz-Eakin was head of the Congressional Budget Office under President George W Bush (Dubya) the CBO published a strong report stating that lower taxes did not create more revenue. It only reduced government income. Tax cuts, the CBO said, do not cause an eventual increase in revenues in an amount that even pays back the loss in tax revenues. In fact, the study said, and Holtz-Eakin and other Neo-Conservative economists know, only between 1% and 20% of the lost revenues are ever recovered.

Is it any surprise then, that since 1981, when Ronald Reagan cut the top marginal income tax rate from 74% to 50% and then later from 50% to 28%…we have steadily increased our debt to the point that it is now $16.7 trillion.

In other words, Quisling Holtz-Eakin and the other pandering Right Wing economists, know that they are lying but they lie anyway because that is where the money is. Tax cuts temporarily help those whose taxes are cut. They help no one else.

Under President Reagan, six million new jobs were created. But under President Reagan, there was also $2.14 trillion of debt at the end of his tenure and an average of 7.5% unemployment over those 8 years. Average…7.5% which is only .2% lower than it is right now in the worst economic era since the Great Depression. Top marginal tax rates were lowered to 50%, and then 28% on the top earners.

So that while 6 million jobs were created, after a huge downturn in the economy, those jobs did not decrease the national debt. Revenues did not increase over the amounts spent by the Reagan Administration nor did they increase enough from this added employment to even maintain the same budget levels. While supposedly creating these jobs, the Reagan Administration spent us into huge debt.

Compare that to Bill Clinton’s two terms, where he raised taxes at the beginning of his term, “the largest tax increase in the history of the country” according to Republicans. Not one Republican voted for those tax increases. Yet even with tax increases of 4.6% on the top earners, and quite naturally commensurate tax increases on all Americans, the Clinton Administration created 22 million jobs and balanced the budget in four years.

In addition, the Clinton Administration saw the longest sustained period of prosperity in our country’s history, even better than the post-WWII period up to the mid-seventies. Employment fell below 5% and in some places below 2%.

All of this is a prelude to saying that our current problem is two-fold and it can be solved easily. But it cannot be solved at all while people like Holtz-Eakin have any standing and while the Republicans in the House and Senate working for the Right Wing, block any legislation to create jobs and return the economy to balance.

We have two major economic problems. Problem one is the national debt. Republicans—alone and without any question—have built into 90% of our GDP. Problem number two is the deliberate theft of our national aggregate wealth. This was stolen by Wall Street as were the jobs of 15 million former workers. The solution to the latter problem is also about 75% of the solution to the former.

Supply side economics, which could also be termed Neo-Classical economics, basically says…make it and they will come. In other words, economic cycles come and go. We are in a down cycle and it is gradually turning upward. Production creates its own market. In a free and openly competitive society. Say’s Law says that supply creates its own demand. Production creates income which creates purchasing power which is enough to purchase the goods produced.

Well, Say can’t answer for himself these days as he has been dead for over 200 years. But let’s make some assumptions so that we can take on the current economy and its solutions. Even if we were to call ourselves “supply siders” and simply say that we produce goods and people will buy them, we don’t have perfectly competitive markets, so it won’t work.

In other words, profits are not saved and returned to the economy in the form of investment. In order for free and competitive Conservative economics to work…whether or not they work…the first thing you need is totally free markets. Our principal industries are not free markets. They are oligopolies…just a handful of firms controlling each industry.

So, Hayakian economics or Friedman economics could never work. We don’t have the right environment for them to work. There may be some true Conservative theoreticians who are still working on this problem, but most Conservative economists have long-since abandoned the truth.

They look at the deficits and the controlled economy in the same was as other people, but their jobs depend on their theories, which appeal to giant corporations and billionaires who do not want to pay more taxes and thus want smaller government. So, sadly, candidly, what they do is…lie.

Now, since this economic theory begins with production…something must be produced. To produce something, either profits or savings must be invested. When investment does not occur, from hoarding or from simple fear of a downturn in business cycles, supply side economics breaks down.

Neo-Conservative economics has no trigger mechanism to initiate demand. What we know now is that simple production does not create demand, except, possibly, in perfect market conditions. It is not only logical but it is economically tested. At very large numbers of depressed demand, the private sector economy will not risk capital investment. They will follow only sure things. And there are not enough sure things that, once begun, will guarantee enough demand to assure profitability. And money—investment–follows profits.

In the 1930s, and again in the early 2000s, monetary supply was eventually eased, putting more money into the marketplace, making money cheaper and easier to get for use in starting businesses or merchandising products. The fear of investment comes when large numbers of people are out of work and consumer products, and consumer products leading to industrial products, have no ostensible market. With no demand, Conservatives simply do not act and the economy becomes stagnant.

And Conservatives feel justified in doing nothing because it is perfectly justifiable from the personal self-interest point of view. Who will be the first to test the water in an economy that demonstrates no demand? That is where supply side economics bogs down.

Conservatives would argue that in a competitive market situation…and they propose that this is what we currently have…that the “virtuous circle” will allow the economy to return on its own. But it will not. The cycle has been broken.

Let’s test the “virtuous circle.” Let’s start at the point in October 2008 when the market crashed. At that point, businesses closed, many people were unemployed. As a result, wages diminished, prices fell, and, in a variety of industries and businesses, the buyer was dominant and the seller became subordinate.

So the cycle, we could say would begin with lower business profits and lower wages leading to lower prices, which should lead to more sales which would lead to higher prices which would lead to higher wages and greater sales leading to higher profits leading to more investment and a climbing economy.

But this didn’t happen. Only slight government intervention moved the needle at all, reducing unemployment gradually, over several years down from 10% to around 8% with no particular industry activity. So the “virtuous” circle, or cycle, did not perform. Supply did not create demand.

What about the “vicious circle” or cycle? Once again, the markets crashed, businesses failed. Demand was low. Then prices and wages fell, but nothing happened. No new businesses were created. Unemployment stayed high. Even dramatic infusions of cash into the system by the Federal Reserve did nothing of any significance to move things forward. The vicious cycle was overcoming the virtuous cycle. The classic virtuous cycle was not engaging. The Neo-Conservative theory failed.

The reasons are actually pretty simple. You see, the Neo-Conservative (“new” Conservative) system is no economic philosophy at all. It merely uses some Conservative platitudes as an excuse to hide a policy of what one could call looting the government. In other words, a cycle in which taxes are low, an economy is in trouble and many people are unemployed.

This drives down wages which drives down prices. It does offer opportunity for new companies to form and for old companies to diversify and expand. This would result in hiring and eventually to expanded production which would result in profits and more investment. Thus with companies investing profits and savings in more production, the cycle would have been complete.

But our situation is different from what we expected and what we were told would happen. We have low levels of employment, which, while it has driven down wages, has not resulted in a resumption of the business cycle. The simple reason is that we do not have a competitive economy any longer.

The few, large, minimally competing industries that control very high market shares pay their people well but leave a large segment of the workforce without jobs. They do not create more jobs because they do not grow. They do not grow because they–being one among only a handful of companies in that industry—their “cartel”–control the entire market. Cartel economics does not call for highly competitive actions.

The result is very slow recovery, if at all and very slow advancement of the economy resulting in much slower capitalization based on low prices and wages. What could take only months in a highly competitive economy becomes years in an oligopolist or cartel-like environment across all major industrial and commercial categories. Markets are sated. Big firms control all aspects of competition.

In addition, today, because much of excess labor capacity has been created by jobs having been sent abroad, lower employment levels and lower consumer demand becomes a drag on the economy. And low taxes on the wealthy mean that large corporations and rich individuals are much more likely to keep their after tax income rather than invest it.

Consequently, the vicious cycle continues with insufficient domestic investment, heavy public debt and diminished consumer expectations. The virtuous cycle has been broken. Only extraneous actions—by the investor of last resort—the government—will set the virtuous cycle back in motion.

The effects of oligopoly

Oligopoly causes slack in the labor market. Foreign manufacture of U.S. products accelerates it. The excess labor supply reduces consumer demand. And low taxes on corporations and wealthy investors reduces their incentive to invest. So the virtuous cycle can never get started.

As a result of this stagnation, a massive amount of potential economic activity is frozen in the assets of five or six banks and the wealth of the top .1% of the country (estimated at between $45 and $80 trillion dollars) is held in the hands of literally less than 10,000 corporate owners and families.

This means that what would normally happen, namely progress in the economy…i.e., production efficiency and output…is not happening. Money is not flowing back into the system. And here is why.

In earlier generations, old companies and new companies competed for top positions in the marketplace. Even in the days when there were huge monopolies like U.S. Steel and Standard Oil, the domestic productivity of the country was directed at domestic needs. So, while we expanded as a nation, we created the products that we needed for expansion right here in the U.S. Monopoly break-up was done to allow more companies into the field, because a growing U.S. economy needed fierce competition to grow rapidly to meet domestic needs.

As the major companies, thousands of them, grew in the 1960s and 1970s, many small companies grew into very good sized firms, employing thousands of employees each. But in the 1980s and 1990s, consolidation of these companies was allowed to take place. The Reagan Administration, with their newly discovered “Conservative” principles, despite economic history that said monopolies not good for competition, pushed for consolidation. It was good for the corporations and large stockolders, but, in the long run, bad for society.

Consequently, from the 1980s, government reduced competitiveness by allowing mergers to leave only a handful of major corporations in every industry. With that as the government pattern, owners of the smaller corporations sold out to larger companies and became major stockholders in the larger companies.

Now, instead of ten corporations with 80% of the market, there were 4 corporations with 90% of the market. The dozen or so smaller corporate heads, now were part of what became only 4 or 5 decisions being made on the marketplace. And those decisions, you can be sure, are far less competitive and much, much safer. U.S. industry became far less dynamic.

This continuous consolidation meant something else. The largest 500 corporations are owned enough by literally a couple of thousand people, the owners of the smaller corporations who sold out to the larger ones. A smaller number of people, as few as perhaps 2,500 make decisions on virtually the entire domestic economy. This is because only a few people control the stock of each major corporation, and there are only half a dozen major corporations in each major industrial category.

With only a few corporations in each business, the personal self interest of the owners is to act like a cartel, not to engage in price wars but maintain collaborative relationships within a legal framework. As long as they can control prices and market shares do not fluctuate, they remain very profitable. There is no more incentive to compete.

But then we have the problem of manufacturing abroad. This increases profits for the handful of companies comprising each cartel. Sooner or later the progression will lay off more and more U.S. workers and reduce prices and therefore wages. At some point, the marginal utility of wages abroad will cross with the line beyond which the U.S. consumer market has become less attractive.

Eventually, should the restriction of competition continue and the outsourcing of U.S. manufacture to foreign countries continue, the powerful U.S. domestic market will decline. There simply will not be enough domestic employment to create demand, even at much lower prices.

It is clear that most Neo-Conservative economists see that these cycles are broken. They understand that the lack of competitive action restricts the growth of the economy. But corporations in an oligopoly do not want to return to full competition.

As a result of restricted competition, money goes up the chain, but does not return to the market as investment. This is partially the result of already diminished U.S. buying power. What seems to be temporary Depression is merely a lower standard of living that will stay in place as long as supply-side Neo-Conservative economics continues to mask the real problems.

Despite what classical economics says, personal self interest does not lead one into self-sacrifice. In business, personal self interest tells us to go where the money is. Investment flows to profits. So supply does not create demand.

So, what do we do? We make an adjustment. In the 1920s and 1930s. John Maynard Keynes put forth the idea that, if supply side economics does not allow for positive action to create markets. If it is unreasonable for one man or one company to be the ones to take the first step, then government, as the financier of last resort, has the obligation to step up and make investments.

Why would government do such a thing, if supply side economics is correct, and production is not working to create demand? The reason is the old principle of hoarding. You may think of hoarding as some old man in a brownstone piling up dollars in closets. But hoarding can be more loosely interpreted. Hoarding is actually preventing action in the marketplace by people who have the profits or savings to do so.

There is no implied motivation to hoarding. It could be fear of failure and ruin. It could be greed. It could be a misunderstanding of what may happen. Or it may be a legitimate understanding that this product has no market at this time because it is too expensive, or out of date or some other reason.

But whatever the reason, hoarding is one of the triggers of classical economics. Hoarding mis-aligns the economic equilibrium. When a company makes something, sells it, and takes revenues, the next step is for money to flow back into the cycle. When it does not—for whatever reason—the system gets out of sequence. Remember, in classical economics and supply side economics all income from profits becomes savings and investment.

So in the days of the First Great Depression, Keynes basically said…no one is investing. The system is broken. In order to make it easier for the “hoarders” to come back into the market, we make a market. We do so by creating worthwhile jobs, government projects that require materials and manpower. As these jobs start and as consumption, demand, begins to show itself, we can phase out government work and channel production into consumer and industrial goods.

There is nothing that says that the government has to stay in the market. In fact, the government should get out of the marketplace as much as possible. We need a post office, an army, a group to fix the roads, public schools, a public health care system and a legislative body to make laws, perhaps a few other things, and the rest should be as small as possible for the number of citizens that government must serve.

Social Security must be a government program, but under the right circumstances—which is mostly proper funding–it could eventually be run as a private, non-profit organization. But since the Social Security system runs on about 3% costs with government administration, why would you want to change it?

Keynes said that if the private economy will not see to the establishment of markets, then the government must step in. If you follow the alternative to its ultimate conclusion, the private economy would grow smaller and smaller.

So what can we do to restore the private economy? That is the next and last section of this report.

Next—The Real Solutions.

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That was when Ronald Reagan’s charismatic personality took over the country. Reagan was the all-time, All-American, schoolboy President. The gosh-golly-gee whiz President came to power overwhelmed by the more sophisticated long-range plans of the Corporatists. They saw his gullibility and his charm as an opening to turn the clock back 70 years. And they did.

Since 1981, the steady assault on the Middle Class American has been led by the propaganda machine of the Right Wing. Led by the oil-patch Texas billionaires, Corporatists always one careful step from Fascism, they used Reagan’s name and the fanaticism of Fundamentalist Christianity to promote “God, Guns, and Smaller Government.” The Right used Reagan’s popularity to introduce the big lie.

That lie, so popular among the American ignorati, is the foolish, “Emperor Has No Clothes” notion that we can have it all…low taxes and a Great Society. The fact is that low taxes and high spending never has, and never will build the economy. Successive Republican governments have simply borrowed more and more money.

The American people are ourselves to blame. The majority of Americans never have caught on, never understood the practical joke played on them by the Republicans. Half of us continue to vote to reduce our wages while CEOs earn an astonishing 380 times the income of the average worker.

We as a people have less and less savings and more debt because we buy into the divide-and-conquer idea of the Right that our neighbor may have a greater pension or a higher wage than we. The Republican governors of 30 states understand this. They know that if they can make Americans believe that “right-to-work” is somehow synonymous with more and better jobs, they can eliminate unions and deal with workers one at a time. And that, my friends, is and will always be an unfair fight.

Karl Rove and the Right Wing of the Republican Party want you to fight against that school teacher or highway patrol officer who may get a publicly known pension. These Republicans, sponsored by ALEC, the political arm of Fortune 500 corporations, know that if they can make average Americans fight against each other, they can reduce everyone’s wages. Wages are the biggest cost a corporation has. Why do you think so many jobs, millions of jobs, went to Asia? Cheap labor means greater corporate profits.

How We Got to 2013.

What is our biggest problem as an economy? There is no question that it is our national debt. Since 1980, when Ronald Reagan was elected, our economy has grown as our population has grown…sometimes rapidly and sometimes not at all. But one thing that has continued to grow rapidly over all Republican Administrations since 1981 is the national debt. And that is the crux of our current economic problem in 2013. The national debt is serious and if left to grow, will ruin the country. But we can fix it.

We have always had debt. We had debt after the War of 1812 and the Civil War. After World War I, our national debt was about 35% of GDP. After the Stock Market crash of 1929 and subsequent early years of the Great Depression, it was 44% of GDP.

World War II really created a huge economic hole, 122% of GDP, but the American People bought Savings Bonds and taxes were raised and an expanding economy grew us out of it. By 1965, when we were in the Viet Nam War, it was 47% of GDP and by 1979 we had brought our national debt down to 33% of GDP, or approximately $909 billion. Still a lot of money, but manageable.

If we had been able to contain the debt in 1980, we would have been able to have paid it off completely by 2010 at $30 billion a year, hardly a blip on a country with 2012 GDP of about $15 trillion. But that did not happen.

In 1981, Ronald Reagan’s economic advisors introduced “supply side” economics. One of the ideas that they brought with them was that the government could simply reduce taxes and the government could be reduced in size to commensurately stay in balance. Reagan cut the top rate to 50% from 74% and everyone’s taxes were scaled down from there. (Taxes are never reduced on the rich alone, or they would never pass.) Then he dropped the top rate to 28%. But that was too much of a disaster, so the top rate was finally set—after big revenue losses–at 35%. Deficits went through the roof and through the first layer of clouds.

The debt tripled from $900 billion in 1980 to $2.6 trillion by 1988. Under the first Bush it continued to rise dramatically, to $4 trillion or 64% of GDP. The deficit was finally getting some people’s attention. Ross Perot ran in 1992 as a third party candidate for President to point out that if we did not change our ways, both in debt and in international trade, we would be in grave economic peril within only a few short years.

Bill Clinton listened. And his first act was to raise taxes back to a modestly sensible rate, 39.6% over the votes of every single Republican in Congress. Higher taxes and the prospect of lower deficits helped to put the economy back on track. The result was that, after his first term, he was able to start cutting into the deficits and the last three years of his presidency, the budget was balanced…with the aid of an antagonistic Republican Congress. They were most agreeable to cutting programs under the Clinton Administration.

By the time Clinton left office, the national debt, while it had grown in the first four years before Clinton could bring it down, was now 57% of GDP and $5.6 trillion. With a government in balance and surpluses ahead as far as the eye could see. The national debt was under control.

The Disastrous Legacy of Bush and Cheney

When George W. Bush signed on, from the very first day he was inserted into the presidency by the Supreme Court, his idea was to cut taxes. But not everyone in his administration agreed. The Secretary of the Treasury and Federal Reserve Chairman Alan Greenspan talked of using the surplus to make Social Security solvent for 75 years at least.

But that was not the plan of Bush-Cheney. Their plan, it is now known, was war on Iraq. It was a grand military strategy for oil and enrichment of their friends. The rich, or the elites were their constituents—those whom George W. Bush referred to as “the ‘haves and the have-mores.’ Some people call you the elites, I call you my base.” But he wasn’t really joking.

So, from Bush’s own mouth we heard the Neo-Conservative message that has continued to this day. Never raise taxes. No matter what happens—floods, wars, prescription drug plans for pharmaceutical companies—spend money wildly but do not raise taxes.

In July of 2000, the famous National Debt Clock in Manhattan was shut down. After three years of surpluses under President Clinton, those running the clock felt that we had won our battle over deficits.

The national debt was $5.6 trillion.

Then George W. Bush and Dick Cheney decided to cut taxes. The first tax cuts came within 6 months of their taking office. Then, in September 2001, the terrorists attacked. But that did not deter Bush-Cheney. They absorbed the huge costs to the country of the reaction in daily life, in transportation security, in homeland security and a war Afghanistan. And then wanted—more tax cuts for the rich.

But Secretary of the Treasury, Paul O’Neill, former head of industrial giant, ALCOA Corporation said that we could not afford another tax cut, especially knowing…as he did…that Bush-Cheney were planning a war on Iraq. But when he was firm in his intention not to cut taxes further at that time, he was fired. And so taxes were cut again in 2003, as we began another war, the disastrous Iraq War. At this point the debt really began to take off, reaching $6.5 trillion by mid-2003.

Then the Bush-Cheney Right Wing economics, the so-called “Neo-Con” economics really began to take hold. Fed Chairman Greenspan, under pressure, cut the interest rate 12 times between 2001-2004. The dollar began a serious decline against other world currencies.

At about this time, American seniors began to complain that they simply could not afford the high cost of prescription drugs. They were traveling by the busload to Canada and Mexico to buy reasonably priced drugs to stay alive. To solve the problem without losing his support among the pharmaceutical industry, Bush created the Medicare Part-D plan for prescription drugs. It did nothing to lower prices. It simply subsidized some of the cost, which was passed on to the public. The price: $60 billion annually passed on, added to the debt of the American People.

Then there was the Iraq War, and the debt rose to $7.4 trillion (66% of GDP) and by the end of their term, December of 2008, it was $8.8 trillion. Over $3 trillion had been added since 2001. But that wasn’t the end of it.

Using anti-regulatory Republicans at the SEC to allow their Wall Street friends to run wild, they crashed the economy—coincidentally perhaps at exactly the time President Barack Obama took over. The final Bush budget, left for President Obama to cope with not only 20 million people out of work in the 9 previous months but a deficit in 2009 of $1.4 trillion!

Then the Repulican Senate began its four-year filibuster of any jobs programs which assured a deficit of over $1 trillion a year in 2010, 2011 and 2012 and raised the national debt from $11 trillion by the end of 2009 to over $15 trillion by the end of 2012. By the end of four years, Americans looking back universally said in polls that George W. Bush and Richard Cheney were the worst President and Vice Presidents in the history of the United States. Herbert Hoover, the brand-name for economic disaster for a generation, had been surpassed and finally raised several points in the country’s estimation.

In addition, a large segment of the world’s population now saw Bush and Cheney and Donald Rumsfeld as clearly defined war criminals and would ask for their extradition to the Hague for crimes against humanity, particularly their torture of innocent Iraqis and a preemptive war which had clearly come about by exaggerated claims that were later proved to be false.

The years 2009-2012 saw four years of Republican obstruction, with the Repulican minority in the Senate holding up any restorative economic programs with over 380 filibusters, an all-time record for obstruction. As a result, the national debt, now greater than $15 trillion is variously interpreted to be between 80% and 90% of GDP. This is clearly the real danger zone based on previous experience and studies of other countries.

There is very clear evidence that a large number, perhaps as many as 150,000 very wealthy Americans are intent upon crashing the government, bringing it down, bankrupting it and making it unable to perform for the vast number of citizens. Large industrialists, like the Koch Brothers, the largest private oil company in the world and owners of chemical and paper and other interests, multi-billionaires, have given huge amounts of money in an effort to dismantle Social Security, Medicare, Medicaid and other social services.

The language used is, of course, the opposite. These billionaires are not concerned about paying too much in taxes, they say, despite the fact that their biggest supporters are the Republicans in Congress who are the most adamant about no new taxes, no tax loopholes closed, and are those who push the strongest for cutting taxes and government.

Candidate Mitt Romney, in an unguarded moment, spoke to this group in terms that they understand. He spoke of the 47% of Americans who are just lazy and do not want to work. He never mentioned the tens o millions of homes foreclosed on by fraud or the 15 million laid off by Wall Street speculation.

Then there is Governor Scott Walker, who told multi-billionaire campaign donor Diane Hendricks on videotape, seen everywhere, that he would do his best to “divide and conquer” the workforce in Wisconsin in pursuit of Hendricks’ request for a Right-to-Work law to drive down wages.

Money and Power

When people have accumulated so much money that they cannot spend it in several lifetimes, life ceases to be about money, about making a living. For some of those people, life becomes a quest to do good for others. Charitable enterprises. Feed the hungry. Clothe the naked. House the homeless. Educate the masses. Or cure disease.

For others, wealth turns life into a quest for power–total political control of others’ lives. If one is afraid of the return of Communism, then it becomes a battle to eliminate even the appearance of Socialists in society. And since Socialism is an idea, a political philosophy, it is a small step—with political power—to try to stifle it.

The same can be true of fear of Liberalism, or Populism, or even a religious belief that does not coincide with the beliefs of those in power. Political power is about control of society. And when you are a billionaire, it is difficult not to see life from a great height, not across the kitchen table or on the street corner. One person’s Democracy, the average person’s Democracy, can be seen by one whose entire life and family and staff is devoted to his or her whims and wants…as chaos. The Middle Class is not in chaos. It is not Socialist to want the retirement annuity that you paid for over a lifetime of work.

While many people still feel that George W Bush was actually appointed President by the Supreme Court, he was not. He was elected by having one more vote than his opponent. In a close election, it was Karl Rove’s idea of “50 plus 1″ that proved the margin of victory. In this case, it was not one vote more than his opposition. It was one Supreme Court vote more. All he needed, and got, was a Republican interpretation of the law by one Supreme Court justice more than his opponent. This political scheme won the Presidency for George W. Bush.

So what is that plan? In Rove’s society, each political party would create a list of those from whom it wants support. In the case of the Republicans it is the oil companies, tobacco companies, health insurance companies, pharmaceutical companies and others who want more profits and less taxes. The top half a dozen corporations, like EXXON, and GE, make tens of billions of dollars a year, and using their lobbyists to relentlessly advocate for lower taxes, actually pay no taxes at all.

What does that mean? It means that the biggest stockholders of these corporations make billions of dollars every year and spend it to make more for themselves. They don’t make it and use it to make life better for Americans. They use it to elect Republicans who will support them in their quest for no taxes.

They do this by spending huge amounts of money, hundreds of millions of dollars a year persuading certain voters that the huge spending of George W. Bush and Dick Cheney was really not that much at all, and that the huge deficits that they left President Obama, and the 15 million unemployed…are somehow his fault…not theirs. And now, suddenly, the people who spent like drunks at a convention, want to cut government, and in particular, cut services that people not only need, but have paid for already.

The method of choice is to hire people like Rush Limbaugh to tell the “Big Lie” to the masses of under-educated Americans, especially in areas where hatreds can easily be stirred up. The idea is to use the natural anti-government, racist, insecurities of the poorly educated to vote against their own best interests.

Often, when you ask a Southerner why they would vote for someone who would try to remove their only source of income after they retire, Social Security, they will say that they do not “trust’ the President. They will accuse him of being a “foreigner,” not born in this country, or of being a “Muslim.” None of those things are true, but even if they were…have no bearing on whether or not they should vote for him (really for their best intrests) over his opponent.

Propaganda in these areas is very strong because the ownership of media outlets and the delivery of messages is controlled by the Right Wing. When people like the mluti-billionaire Koch Brothers control the message no truth can get through. Their father Fred Koch started the huge, wasteful, propaganda campaign of Joe McCarthy and the “Red Scare” of the 1950s, with his John Birch Society. Now his sons are trying to destroy the entire Middle Class.

The list of organizations that they fund is legion. Here is a representative sample. The Cato Institute, the Heritage Foundation, the Manhattan Institute, the Hudson Institute, FreedomWorks, Americans for Prosperity, Competitive Enterprise Institute, the Reason Foundation, the Federalist Society, the Mercatus Center, National Center for Policy Analysis, the American Enterprise Institute and the George C Marshall Institute…as well as the original money behind the American Legislative Exchange Council (ALEC) a Right Wing organization designed to promote corporate causes in the state legislatures of all 50 states.

The Citizens United ruling by the Supreme Court, which many people feel is one of the worst decisions handed down by the Supreme Court, perhaps only exceeded by the Dred Scott decision, has allowed people like the Koch Brothers to spend unlimited amounts of money to elect their own personal legislators into many districts. Using the Tea Party, which they also fund, they have carried out primary campaigns against even Republican legislators whom they felt were not Conservative enough.

The rich Right Wing and the giant corporations that they own…all U.S. global corporations are owned by fewer than 5,000 individuals, trusts or financial groups. Even if you take the top .1%, which–if you consider wage earners only–is about 8,000 people, the average income is over $1,000,000 per year. And more astounding, their assets are an aggregate $45 trillion dollars. It is also estimated by the Tax Policy Foundation that their assets in 2020 will be over $80 trillion, everything else being equal.

In a study done of Fortune 500 corporations some years ago, over 450 had at least one stockholder who held more than 5% of stock and fewer than 5 stockholders who held at least 28% of the stock. That means that control of those corporations is in the hands of…at most…2500 people. Of the next 500 major corporations, the numbers…because those smaller companies have more founders still in management…are even higher, more concentrated wealth.

That is economic power. A relative handful of powerful families that have wealth three times that of the entire national debt. Remember, these people pay, on average, less than 19% in personal income taxes. With $45 trillion accumulated assets, they could pay down the entire national debt tomorrow and still have $30 trillion in assets—and growing.

Holding power is expensive.

When rules on ownership were relaxed in 1997, the Right Wing bought up most of AM radio. Although radio network ownership is deliberately obscure, it is known that Clear Channel at one time had over 1200 stations on which Rush Limbaugh was on the air for 3 hours each day. He was the main attraction in over 150 markets. Not because he was universally popular but because Clear Channel made small stations an offer they couldn’t refuse.

Basically Rush was free programming for 3 hours a day. (Later Clear Channel would do the same thing with Dr. Laura Schlesinger, long thought to be a psychologist, but as it turned out, she was a physiologist and a certified marriage counselor.

So, the technique worked. The Texas-based Right Wing management of Clear Channel could send out its propaganda, using Limbaugh, who was only too happy to participate for an estimated $200 million dollars over ten years and then a renewal for $40 million dollars a year to spew lies about anything the Republican Party wanted him to say.

At one point, in the late 1900s and early 2000s that you could not drive from Kansas to the Coast or Pittsburg to Houston without hearing Rush Limbaugh several hours a day en route. At first, he was paid to deliver Right Wing propaganda for the Conservatives. Later, after the hick towns had made him nationally known, he became a staple for the Right Wing loonies in any metro area of less than half a million population. And some with more.

The next segment of the 50-plus-1 was the old Confederacy. What better group than the Union-hating, African-American hating remnants of the former Democratic Segregationists, like Strom Thurmond and Jesse Helms to lead the Republicans back to victory. It is sad that there are so many racists in the South, but there you are. And an African-American President…what could have been better for those who wanted to use racism against the Democrats?

With a solid South, the Republicans were able to almost literally put up a puppet President. They were able to squeeze into the Presidency, one George W. Bush, a failed businessman with a genial personality and a pseudo-Texas attitude, a carefully adopted good-old-boy persona (right out of Andover, Yale, and the Harvard Business School—(although Harvard would like to bury that embarrassing fact.)

Bush embarrassed the country in multiple ways, but worse, his stupidity now affected all Americans. The result of his ineptitude was a social and economic catastrophe. Using his father’s name and Presidency, he became titular head of a new baseball team, sold his stock for a reputed $21 million and let political backers buy him the governorship of Texas. There he continued to take the state to the bottom in almost every category, income, employment, health care and education. Still, with the propaganda machine and $60 million in a campaign fund even before he said yes, he went on to run for President.

With Dick Cheney appointed Vice President by the oilmen, Bush followed instructions. He pushed for war with Iraq. He cut taxes twice. He created a government so lax in financial controls that Donald Rumsfeld, in a moment of amazing candor—actually said to reporters that the Defense Department had “lost’ $2.3 trillion—trillion—dollars that could not be accounted for.

The tens of millions of words about the Iraq war have done it justice. No need to discuss it except to say that all the young men and women who went to Iraq, once there, did their duty, followed orders and did their best to protect the soldier next to them, as soldiers have done from time immemorial.

Meanwhile, at home, the quest for power continued. In his second campaign. In 2004, Bush and Cheney’s people hired a bunch of Right Wing, all-war-all-the-time ex-military called the Swift Boaters to smear John Kerry’s incredible Viet Nam war record.

Kerry, after serving 16 months on a destroyer in the Philippines, volunteered for one of the most dangerous jobs of the Viet Nam War. Patrol Craft Fasts (PCFs) or “Swift Boats” were 50-foot, lightly armed aluminum boats whose job was to interdict and engage with the Viet Cong up the rivers of Viet Nam. Their job was also to insert and eject SEAL teams from combat actions against enemy insurgents.

Then Lt. John Kerry participated in 48 such mission along the Mekong River under constant enemy fire. Kerry, remember, could have simply stayed in San Diego, gone home and said that he had served his country well in the Pacific…even before risking his life acting as a target for North Vietnamese machine guns 48 times.

Power is all important to Neocon Republicans. Look at the value of politics to Donald Rumsfeld. He left politics and, using his contacts at the FDA, negotiated a government deal for Baxter Laboratories with the regulators. His reward—reportedly $100 million dollars.

Dick Cheney left the government after having been Secretary of Defense under the first President Bush. He joined Halliburton Corporation and his contacts with government netted Halliburton over $350 million in government contracts before he became Vice President, earning him a reported $44 million for his efforts. His personal war against Iraq later netted Halliburton another $12.5 billion.

The Bush-Cheney years were about political power. The new Conservatives or Neo-Conservatives or “Neocons” for short were a more militant form of Conservatism. Cut taxes for the rich, and to hell with the people, because…the people have lost their political power. The Neocon Republicans owned the media and the message.

In an interview with famous war correspondent, Martha Raddatz, Vice President, Cheney was asked what he thought of the American people’s recent majority feeling that the Iraq War was not worth it. And Cheney replied with one word, “…So?” In other words, it no longer matters what the American people think. We Republicans finally control government and the media and the message. We own America.

So this was the outcome. Republicans gerrymandered into House seats that they cannot lose. Senators of Right Wing states with huge campaign funds provided by corporations and billionaires. They demean the opposition. They lie to the hicks, using their media ownership.

And if a foreign leader displeases you, start a war. Lie about their intentions and your motives and invade. What can the mass of the people do. Just like the Germans of the 1930s, no truth ever reaches their ears. Shock and awe. Legislate from crisis to crisis. It is an old Fascist trick.

After the first small bombing of the World Trade Towers that happened in 1993, almost simultaneously with his taking office, President Clinton hired Richard Clarke, a Republican, to be the focal point of all information on terrorist activity. Clarke, by 2000, was worried about attacks on U.S. soil by followers of Osama Bin Laden and said so.

Clarke was dismissed by the Bush White House as overly cautious. This was a group of military “experts” who, on the very evening of 9/11, had been scheduled to hold a defense policy speech not on the perils of terrorism, but, of all things, on the urgency of the repeatedly failed “star wars” anti-missile defense system. Apparently, no one told them that the Cold War was over.

And so what happened? Who was actually behind 9/11? We know for sure that Bin Laden was behind it. But much remains obscure. All we know is that eight years later and an additional $7 trillion in debt, the Bush-Cheney Administration used its leverage from an attack on U.S. soil to launch two wars and create a diversion—deliberate or not—from their creation of $12 trillion in new debt.

The Cheney Neocons used the excuse of potential terrorist attacks to consolidate political power, and to abuse it. They pushed through legislation that would eventually see Americans spied upon by government and even some—as incredible as it seems–arrested and tortured without due process. Even our library records and video store rentals were open to scrutiny without our knowledge.

The jamming through of the Patriot Act, using the pressure of security threats was the worst abuse of American civil rights since the McCarthy era or perhaps even since World War II. Not only did we suffer these losses of our civil rights but we were billed for them. Bush and Cheney started two wars and not only did not raise taxes or sell bonds to pay for them. We American citizens essentially borrowed the money for the wars from China.

Then came the economic meltdown. In October of 2008, the market began to fall and the unemployment numbers reached over 700,000 per month by January of 2009. In coming years, the unemployment numbers would cost the government over $350 billion annually in lost revenue from both unemployed workers and closed businesses.

Another $350 billion per year would be added as a result of welfare, unemployment, Medicaid and food stamp costs as more people lost incomes, savings, homes and slipped further into poverty.

When you ask yourself…how could our government have been so stupid, you must ask the other question…were they stupid or are they very, very smart? If they are not stupid men Cheney and his cohorts, then the only conclusion is that they are very greedy, very evil men. The only conclusion other than stupidity is illegality, theft, fraud of the worst possible kind on the American people.

Wall Street, with no regulators to stop them took $7.5 trillion of wealth from the average American and left them in growing poverty and joblessness. Now they demand that the elderly, the poor, the disabled, the impoverished and the unemployed should pay the bill, reduce the debt for the borrowing of the Bush-Cheney administration that went to their friends in the oil industry and military contractors—and to the bankers on Wall Street.

The Neo-conservatives have now morphed into what we could call Neo-Fascists. In other words, Republicans are now a political party, not beholden to the people but to huge industrial and financial interests– and the military. This is a group that wishes to take complete control, to align themselves with the total power of the state over the People.

Already, they have taken over 30 states, governorships, state legislatures, using the financial power of ALEC, the political arm of major corporations. They have used the economic crisis that they created to persuade the average working man and woman that they do not deserve better pay. They would have us believe that we should be happy to have the “right-to-work” for any pay at all.

Republican governors and legislatures are restricting the vote from those who might protest. They are redistricting House of Representative territories so that only Republicans can be elected to the House. They are changing laws in favor of Fundamentalist Christians (American Taliban, they are called) against abortion and contraception, and in favor of the gun manufacturers in proliferating guns in schools and churches and automatic weapons everywhere. They are trying to stamp out the environmental movement completely…seeking to let American taxpayers clean up their toxic messes, while they collect huge salaries and profits.

The governor of Michigan took over the control of the city of St. Joseph, throwing out the elected representatives. The new city manager then took away part of a public park fronting on Lake Michigan and gave it to a private group, including their elected local member of the House of Representatives, Fred Upton, the heir to the Whirlpool fortune. Having taken the land from the people, the group then used it to create an upscale golf course community.

Governor Snyder of Michigan has since taken over the management of the city of Detroit. Only one vote was necessary. The one vote he received that was more than his opponent. That is Karl Rove politics. And the eventual result is this form of Neo-Fascism. Total political control that brooks no opposition, no dissent, no concern for anyone but their hand-picked political allies. It is about power and privilege.

Our current society is not a benign one. The Democratic Party has been attacked repeatedly, even in the House and Senate, with the childish and deliberately abusive game of calling them “Democrat” Senators rather than “Democratic” Senators.

That is nothing. The real problem is far more dangerous. The commentary of people like Rush Limbaugh and Michael Savage, Michele Malkin, Ann Coulter and Glenn Beck do their best to stir up violent reactions and outright civil unrest. It has gone from insults to outright calls for violent action.

After Bill O’Reilly called a doctor in Kansas a “baby killer” for legally performing abortions, the doctor was murdered by a Right Wing madman. When Representative Gabby Giffords tried to bring Democratic and Republican voters together, a Right Wing madman shot her and killed a popular Republican judge and several other people who were mere bystanders.

But by far the most obvious and reckless of the Right Wing attacks was by a crazed gunman who walked into the headquarters of the Democratic Party in Arkansas in August of 2008 and shot the Chairman of the Democratic Party dead.

The number of Right Wing hate groups, who literally call themselves “Patriot” groups has grown from 149 in 2008, the last year of the Bush Presidency, to 1360 in 2012 and probably a little more already in 2013, according to the Southern Poverty Law Center. “Patriot” groups are another name for racist, KKK-style, armed insurgents. They are no more patriots than any other mob or mafia. These “Patriot” groups are clearly racist thugs and should be treated that way by the law.

These are the kinds of groups that spawn attacks on children and bombings of federal buildings. If the Republicans were truly interested in security, they would stop calling President Obama a Communist, a Socialist and then, incongruously—a Nazi. They would encourage Homeland Security, FBI, and ATW to go out and hunt down these dangerous, armed extremist groups.

But they don’t. They encourage automatic weapons in the hands of crazy people. Wars in Iraq and Afghanistan and a much wished-for war against Iran. And crazy people murdering innocent citizens.

Economics plays a part in all this. Campaign contributions from organizations that want to foment unrest so that they can continue to make huge profits while leaving the cleanup of many toxic sites to the average citizen.

Encouragement from far Right Wing Congressmen like Louie Gohmert, Steve King, Virginia Foxx and Eric Cantor, plus Right Wing nut-job Senators like Marco Rubio and Ted Cruz.

Remember that these people, no matter how lunatic their statements, are not stupid. They are very bright and are committed to the Republican goals of corporate America, where they see their future and their enrichment, following the examples of Bush and Cheney.

You see it in people like Senator Jim DeMint who left the Senate suddenly to head up the ultra-right-wing Heritage Foundation. Or another example, Billy Tauzin who, by leading the fight for the $600 billion giveaway to the pharmaceutical industry was given a contract for two million dollars a year upon leaving Congress as head lobbyist for the pharmaceutical industry.

The Right Wing is about political power and the energy for their campaign to elevate the rich to the kinds of powerful positions we have mentioned is money. The Republicans help with tax breaks for the rich and in turn the rich contribute to the Republican campaigns. The system works and the rich are becoming richer and more powerful.

Over the last four years, those at the very top of the income scale, the so-called top 1%, those with income of roughly $350,000 or more have continued to make economic advances while those in the rest of the income brackets have actually experienced lower incomes.

From 2009 to 2011, for example, the top 1% earned 121% of the income gains. The reason is that the bottom 99% actually had a reduced income of less than 1%, in other words, minus growth in income of about .4%. Top one percent incomes grew by 11.2%, so they gained all of the increases and then some.

And now the talk is of austerity. The Bush-Cheney Administration drove us into deep, deep debt. Now the giant corporations and their billionaire owners want us to pay the bill. But we won’t. There are better alternative in which those who got the wealth can now begin to pay the bill. And that is what we will discuss next.

Next—The Failure of Conservative Economics—Part VI –The Real Solutions

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We need to examine the premises here and debunk the stuff that is simply wrong. Paul Ryan announced the Republican Budget on March 12, 2013 and it fell with a clank on the floor of the House. We will take it, point-by-point, but it is very clear at the outset that this is less of a budget than it is a political statement to the rich, Right-Wing backers of the Republican Party. It is a budget designed to be a failure. It is merely a political statement to its financial supporters.

First Ryan point:
- A balanced budget achieved in a decade by not allowing the government to spend more than it collects in revenue, which Republicans set at 19.1% of gross domestic product. By their measure, the federal government will spend $4.6 trillion less over the next decade.

Response:
Two strong revenue sources are missing in this budget to balance any budget in the next decade. The first is higher taxes on everyone…to achieve a 20.5 or higher revenue base. We need to virtually double income tax revenues. That’s just the way it is. It is the result of electing a President (Bush) who was an irresponsible idiot and a Vice President who was a world-class criminal.

The second is that we need full employment (5% or less unemployment.) Only those two things will start to balance the budget. The next thing we need to do is get our trade policies and our policies on natural resources under control. Billionaires who are trying to destroy the American Middle Class now have control of our vital resources. We need to take our natural resources away from billionaires and return them to all the people.

Second Ryan point:
- Authorizes construction of the Keystone XL pipeline.

Response:
This is somewhat laughable. Why this would even be in the Ryan-Republican budget shows how shallow and political a statement it is. Why not developing oil in ANWAR? Whatever happened to that? Well, it is simply not a current political argument. The Keystone Pipeline, whether it is developed or not, will never be a major factor in our economy unless it ruptures and somehow seeps into our water system in the West. Only then will it be a major factor. It creates only temporary jobs. It creates jobs in an industry which ten years from now will be on its way out or we will all be too busy with the effects of climate change to notice.

Third Ryan point:
- A full repeal of Obama’s health care law.

Response:
First, this is not going to happen. So it is irrelevant. Second, the Affordable Care Act has already begun to bring health care costs down. While the implementation has new costs, startup costs, the actual cost of health care, partially because of some of the already initiated provisions of the ACA (which does not start until next year, 2014) has come down. Some estimates are that insurance costs dropped this year to something like a 5% increase over 2012, which would be the lowest rate of increase in at least ten years, maybe more. Remember that Medicare and VA administrative costs are at the very least 10% lower than private industry.

That means that once health insurance exchanges are fully in operation, your health insurance costs will drop by something like 15% wherever there is a public option available. In other words, if you now pay $5,000 as your share of health insurance annually, it should drop to something like $3,750 relatively quickly, if not immediately. Free market competition will also be a factor in dropping prices.
Eventually, as is happening in Vermont, waivers for the implementation of single-payer health care delivery will demolish the for-profit business. Why would anyone pay $8,000 a year for the same doctors, same hospitals, same treatments and same prescription drugs that they can get for $4,000 which—based on experience of every other country—will be the case.

Next Paul Ryan point:
- Support for new laws to limit medical malpractice liabilities.

Response:
Again, a point so laughable that it begs the question…is this a serious proposal? In malpractice suits, which comprise only .4% of all medical transactions, only 42% of the cases are won by the plaintiff and the average settlement is less than $500,000. Once the Affordable Care Act is fully in place, there will quite likely be an amendment that will take care of all medical disputes.

This is what has happened in all other countries with universal health care. When the financial considerations have changed, that part of tort law will change also. Tort law is about compensation. Once compensation begins to ameliorate, so will the tortious aspects.

Finally, it should be pointed out that, in a report by all state insurance commissioners, malpractice awards were determined to have no relation whatsoever to insurance rates for doctors. So, apparently, this is a battle between doctors and lawyers that lawyers are winning and doctors seem more interested in trying to beat the wrong enemy than actually lowering their malpractice insurance costs.

Next Paul Ryan point:
- A fundamental overhaul of the Medicare system for future retirees. Starting in 2024, seniors would be given a federal subsidy to purchase health care from the
private market, instead of the guaranteed benefit system that currently exists. It also calls for wealthy seniors to pay more for premiums.

Response:
Ryan’s plan would shift 68% of the costs of Medicare to patients from the current cost, which is about 25%. (Medicare is not only a payroll item; it is a cost to seniors after they retire as well.) So, even if there were some plan to change Medicare into a private health care delivery system again…dropping the Affordable Care Act and dissolving Medicare…it won’t happen either.

Medicare privatization is not going to happen. What is going to happen is this: Medicare, Medicaid and VA health care will eventually be drawn into the Affordable Care Act over a longer period of time and we will have national, non-profit health care for everyone. The problem with health care costs is very simple.
CEOs of health insurance companies are making an average of $14 million a year, and their senior executives are making similar wages. Other similar wages are being paid to hospital CEOs, pharmaceutical CEOs and others in what is a business that, to be successful, depends on your being ill. This, as Nobel Prize winning economist Kenneth Apple said many years ago, is not a good recipe for an ongoing business…that when your customers do well, you make less profit.

Elevated wages in the health insurance industry amounts to about 40% of health insurance costs which are 30% of your bill. Sooner or later there will be a Democratic House and Senate and President. When that happens, health care costs will drop by about one-third and health care will cease to be a profitable business.

Health insurance is a profitable business now only because they pick and choose custormers. It is profitable now because of lobbyists and huge campaign expenditures. Once Republicans in Alabama and South Carolina realize that they are being treated like peasants or simply like a statistic on a spread sheet, things will change. No health care proposal from any Republican will ever see the light of day again.

Next Ryan point:
- A transfer of power to states to determine how Medicaid and other funds should be spent on programs, including food stamps.

Response:
We already have fundamental federal-state relationships that work very well. The changes that might be needed in some cases from a fiscal standpoint are done through waivers in rules. The only time they are not done is when some ideological Governor wants to prove a point by depriving his citizens of their rights to something like a vote or a medical procedure or an educational opportunity.

This is a purely political point again, designed to placate the now 30 Right Wing governors and their desire to help the corporations, who through ALEC, have helped them hoodwink the hicks and gain political power. This point is not even worth discussing. It is purely a political Neo-Fascist attempt at more political power for Republican state legislatures. If Democrats take back more state legislatures, Ryan will disavow this point immediately if not sooner.

Next Ryan point:
- An increase in defense spending over current law.

Response:
Another reason to wonder if this is a budget or a “non-budget” political gesture.

We already spend more than the combined military budgets of all other countries in the world…all of them…combined! By a wide margin. This point is so idiotic that it doesn’t bear any further discussion. We have over 70 different military locations around the world. We cannot even get rid of a military fighter aircraft—that the military does not want–because the manufacturer deliberately put the manufacture of its components in every single Congressional district or state.

Next Ryan point:
- A plan to transform the tax code to simplify it from seven individual tax brackets to two, as well as a repeal of the Alternative Minimum Tax and a 25% corporate tax rate.

Response:
We do need tax reform. And here it is. Tax any personal income over $500,000 at 50% on the next dollar and up. That is the first Reagan tax cut only on incomes starting at a much higher level than under Reagan. That is where things should stay. It makes the effective tax rate for millionaires and billionaires about a third of income over half a million.

If you have a billion dollars in income, you will pay about 300 million dollars in taxes. But you’ll keep 700 million. That should be enough for you to live on until next year. And we’ll protect you from the Arabs and the North Koreans, by creating a civilized society so that you can make even more money and buy even more things without being kidnapped or murdered.

Next, U.S. corporations should pay one dollar for every ten dollars they make as American corporations from money that they earn here in the U.S. Market. In addition, they should pay at least a 5% import tax on any product they make abroad and import back into this country for sale. Capital gains should be at 25% and inheritance tax should be a standard 25% on everything over $5 million for singles and $10 million for couples. No deductions.

Those tax changes plus just the current pending budget cuts, no more, will move the U.S. back into surplus. If we do not hire another bumpkin like Bush, we should be good to go for another 50 years without budget cuts.

Next Ryan point:
- A requirement that the president and Congress offer respective proposals for the long-term solvency of Social Security.

Response:
We do not need to make complicated changes to Social Security. Social Security can be made solvent by simply raising the payroll deduction limit to those making $200,000. That will fix Social Security for 75 years. What we need to do is take a small tax on investments or a small tax on natural gas and use it to fill the gap in Social Security to convert it to a retirement program. That tax, which could be expired when the Social Security fund is full and paying forward, would allow individuals to actually pay into their own retirement account, a annuity on retirement, but one that would not be passed on as part of their estate.

As a result, within 30 years, not only would Americans have annuities that would pay at least 50% more than current Social Security adjusted for inflation, but the United States would have the strongest bond market ever known, would be the richest and fiscally strongest government in the world, more than China, Europe or any other country per capita, oil rich or not, in the rest of the world.

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After the Bush Stock Market Crash of 2008 and the resultant Bush-Cheney Depression of 2009-2012 several theories on recovery were put forth.

The Democratic proposal, put forth by the President, was a traditional stimulus. In other words there would be a government infusion of capital and other asset development directly into the economy to replace what was thought to be a bare cupboard of private investment capital, and hiding in that cupboard also the shriveled egos of formerly strident American bankers and “investment” brokers, basically…we discovered to our remorse and anger…con men.

So these “brilliant” men who knew the price of everything and the value of nothing turned out to be worth…nothing. They were and still are no help to anyone but their own bank accounts. They were too weak and frail from having lost a few bucks to be able to regenerate business activity.

The Republican Party was on their side. When the President did pass a stimulus bill through Congress in March of 2009, most Republicans said that it would never work, that we would be doomed. By threatening and complaining and refusing to vote to help Americans, they picked up about one-third of the bill in cash, tax cuts, for their rich pals and corporations. More political contributions. But the remaining 500 billion dollars that did go into projects over about 2 years, resulted in 3 million jobs and that meant another 3 million jobs saved in the private sector. It took unemployment from almost 11% down to 8%.

But that didn’t solve the problem. And of course the Republicans knew that it wouldn’t. (Just as it is still not clear why a perfectly sound 7-story building near…but not next to the World Trade Center on 9/11…would suddenly collapse while having only two small fires on a couple of floors and not having been hit by enough debris to even mar its exterior.)

By the way, lest you think us mad….just to finish this point, building 7′s collapse has still not been satisfactorily explained. But we do know that all records in that building of the SEC, the CIA the Department of Defense, the INS and the IRS who occupied space were destroyed. As were those of the Secret Service, which until that time had it’s largest field office anywhere, in that building. All we know is….all the records are gone…destroyed in the collapse.

Oh, by the way, no other building of even much larger size has ever collapsed from fire, let alone the two relatively small fires supposedly in the building that day. But, there are many, many witnesses who say that they heard several explosions on floors other than the ones where there were said to have been fires.

Back to sequester–similarly, it is still not clear why, in the early days of the worst bubble and speculative raid on Wall Street since 1929, Bush and Cheney would not only send to run the Securities and Exchange Commission a man with no experience, Christopher Cox, but one whose antipathy for regulations and regulatory activity was the most visible and often publicly stated of almost anyone on earth. And he proved to be exactly so. He caused a Stock Market Crash. He thwarted investigations, fired the toughest and most experienced and most dedicated attorneys and literally tossed important files into the wastebasket.

So, against the context of suspicion, duplicity and potentially criminal fraud, we discuss why we arrived at a sequester and who is doing what to whom and why.

This all started about a year and a half ago with the debt ceiling increase. The Tea Baggers decided that they would hold up the debt ceiling increase, which, yes, is stupid but they could do it, unless President Obama agreed to their deficit reduction demands. Which were: some immediate cuts in programs and also a “trigger” mechanism attached to a longer-term discussion on cuts. The Tea Baggers, working as we now know for the Koch Family, naturally wanted cuts to your Social Security and to Medicare and Medicaid. None of it happened except the “trigger” on long-term cuts.

The “trigger” became what we now call the sequester. it is not new. It had happened before in our history. But it was demanded by the Tea Baggers and so the President said, at the time…fine, but if you demand it and do not come up with cuts in the meantime, plus some substantial revenue additions, we will let it go through. And that is what has happened. The top end of the Bush Tax Cuts were allowed to retire, raising those taxes again. But the Republicans would not agree to any of the cuts discussed in tax loopholes, which almost every commission on solving the national debt has seen as necessary to solving the problem.

But the Koch Family Tea Baggers are still demanding cuts to Social Security and Medicare and Medicaid. It still will not happen. The reason is that we all have paid into those programs and they are not suddenly running wild with benefits. They have all been curtailed already. Social Security did not have any cost of living increase for two or three years which was essentially a cut. Medicare premiums went up, not down, and that came out of Social Security…which we… not the Koch Family paid for.

The simple solution to the problem is to give all government departments a target…across the board…and let them decide where and how to make the cuts. But then…and this is extremely important…we need to cut all major loopholes for corporations, put a minimum tax on a corporation of ten percent of sales in order to do business here in the U.S. and finally invest in the creation of at least 2.5 million direct government jobs to kick-start the economy. This would require a separate borrowing of about $400 billion from the Treasury, but that could be isolated as an account and paid back over 5 years in taxes across that spectrum of the populace who benefit from the jobs.

While we would generate 2.5 million jobs, the multiplier of at least one (economics would say at least 2) would create another 2.5 million jobs. That would employ 5 million people (over 2 years) both in public jobs that would eventually become private or public-private ventures and take us out of Depression. Tax revenues on this specific group plus taxes on that general income group in the entire population, many of whom pay no taxes now, would repay the loan and give everyone more security.

Finally, the boost of 5 million jobs would mean that the GDP would grow. Certainly it would grow at least again as much as it is during this Bush-Cheney Depression, or another 2%. That economic growth is equivalent to about $340 billion a year, or additional government revenues of about $68 billion.

So let’s go back now to the Boehner and the Republican Tea Bagger proposals. They have no plans to create any revenue. So–think about it–no more money coming into the government. No growth. No new jobs. No infrastructure development. Nothing forward.

But their plan calls for cuts exclusively. And only cuts in things like Social Security and Medicare. So the people who now have some income and who have paid into Social Security will have more of it stolen and given to pay tax loopholes for multi-billion dollar corporations…whose owners comprise about 500-1000 of the richest people in the world. And remember, we paid into Social Security last year and every year about $850 billion…everyone contributed. The costs are now about equal to what is being paid in.

But…and this is extremely important….from 1987 to 2013, we have consistently paid in much, much more–trillions–than was needed. We are far and away in surplus, not in debt in our Social Security account. In fact, if we do nothing, Social Security will go on just as it is until something like 2027 and then payments would drop down to about 78% of what they are now, adjusted for inflation. So we are basically talking about theft of something that belongs to us. It is like someone looting our insurance company, or embezzling funds and saying that this is the way insurance works. It doesn’t work that way. That way is illegal, even criminal.

What about cuts to the military and to other departments of government? Well, we could still make cuts and give each department the ability to make the same cuts but give them two years to do it and the right to do it in their own way. But we should never do it without revenue enhancements to the plan so that they are not simply cutting and then later on asked to do it again. We need to balance government not simply continue deficit government forever.

Despite what people like John Boehner says, government is already smaller per capita that it was in the Bush era. We continue to grow as a country. Boehner knows this. We have about 85 million more people than in Reagan’s day and about 55 million more than in Clinton’s presidency. So…the largest government expenditures? Sure. Also the largest population.

But here is what we don’t have that has cut costs. We don’t have two wars. One is done and one is winding down. We don’t have high drug costs that were passed on to the people in the prescription drug plan “donut hole.” We don’t have as many people excluded from health insurance or as high a percentage of health insurance premiums going to CEO salaries. And we simply don’t have government costs as high as they were, per capita, under President George W. Bush.

The problem is, however, that there are other things we don’t have. We don’t have the money that was shrink-wrapped during the Iraq War and sent on pallets to Iraq where friends of Dick Cheney’s “lost” about $20 billion. We don’t have the estimated $60 billion in private contracts with Halliburton and others for jobs never completed or construction done so shabbily that some buildings are unusable or must be literally torn down. We don’t have the estimated $7 trillion the Bush Administration spent more than they took in during their 8-year term of office. We don’t have the $4 trillion that we spent after the Bush Administration crashed the economy and put 15 million people out of work. Naturally, the Tea Baggers refuse any options that might put them back to work…but keep them as welfare slaves…yet complain about the cost…and complain about their being “lazy.”

Someone said, half seriously, half joking….that “life is hard, and then you die.” But we do not need to make life as hard as it is becoming for some. Nor do we need to make it as luxurious and as elitist and as aristocratic and as self-serving as we have made it for the rich. Almost all income now goes to the top 1%, as astonishing as that seems. Since George W Bush walked through the door of the Whilte House, average American incomes have declined by a whopping 25%. Four hundred people own as much as approximately 155 million people. And five banks control approximately half of all assets. Fifty million people have dropped into the poverty rolls since 2008.

And now we have $85 billion of government cuts coming up this year. It will cost everyone something. The poor will suffer. The military will suffer. Airlines, ports, schools, hospitals, universities and the border patrols. The cuts were severe. They were meant to be. Both sides meant them to be…so that people would come to their senses. But we don’t have sensible people any longer.

Doesn’t it make sense that when a corporation makes $40 billion and when it has 5 major stockholders who own 30% of the company…in other words…each one or each family will get a little over $1.4 billion, each year and has been getting that for years…that it is time to stop. You do not need $1.4 billion,year after year, when 15 million Americans are out of work and that $1.4 billion could be cut in half and used to create jobs that would create more economic activity…that would eventually come back to help billionaires make more money!

We have lost rationality and the people who have lost it are not the billionaires. It is the Tea Baggers who have bought into the idea that, somehow, if they help the billionaires everything will improve, despite the fact that things have been getting worse for ten or twelve years or perhaps even 30 years. We need to let people know that this sequester is not about some kind of redistribution of tax income. It is about restoring American values so that we can put people to work so that they can buy food, clothing, homes, cars and some amount of recreation without depending on the government. The rich are happy. They take their 80% of what they make and put it in the bank and spend it. The rest of us struggle.

Sooner or later, whether the sequester works or not, people will become dissatisfied. They will revolt. This is what happens at some point as it has throughout history when people feel that…for their time and place…they are oppressed and can no longer live as they have been forced to. We do not need a heavy demand to cut services to most people at a time when they have less and less. We need reform. At this time, in this place, reform means tax reform, corporate reform and realignment of our national priorities.

And it had better come soon.

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This is the essential argument between the two political parties in the United States today. One pretends to be the party of Conservatives, whom they define as people like Milton Friedman.

The other, the Democratic Party does not object to being called the Party of (big) government because they see government doing good works for the People. When it is allowed to do so.

Both political parties are deeply involved in every activity of government. Both political parties know how much is earned in revenues and how much is spent. There are no stupid people asleep at the switch, or not many, as they would have you believe.

Your representatives in Congress are not stupid. But some are liars.

Friedman was wrong. Government does not create problems. Government is the recipient of problems. For example, the Wall Street crash was not the fault of government. It was inaction of government. If there was any fault of government, it was in deliberately ignoring the fraudulent activity of the private sector. The private sector crashed the economy. Government should have done more, not less, to prevent it.

The government became the recipient of the resulting catastrophe–the unemployment, the bankrupt companies, the financial bailouts. Private bankers, left to their own greed and fraud, either needed government or our entire economy, or so we were told, would collapse. So government once again stepped in to rescue the greedy and the foolish in the business world.

Even then, it was bad enough, with 15 million people out of work and another 5 million hanging on with part time jobs. And now the Republicans, beholden to Wall Street and the great corporations and fortunes, have stopped any recovery in its tracks with over 380 Senate filibusters.

The American economic problem is not government action. It is government inaction. A group of vain, arrogant and ambitious Senators from the old Confederate states, still not happy that segregation is in the past, cannot stand the idea that African Americans are allowed to live as equals in a free society Their clear goal is to remove every possible attempt to provide education, safety and the possibility of growth for American citizens.

Furthermore, with half a dozen corporations controlling each industry, many headquartered abroad with workers in Asia, Hayek’s and Friedman’s perfect competition simply does not exist in the United States, except in the minds of Conservatives.

Our Capitalist system is a slanted, corporate directed, influence peddling, lobbying, scheming, materialist economy of exactly the kind that Milton Friedman said he abhorred. Of course, while he was alive, while his entreaties at every juncture, every speaking opportunity, claimed that he was a true Classical Liberal economist…he joined with the Republican Party at every opportunity.

There is a good case that he talked Conservative (today’s term for Classic Liberal from the 19th Century) but that he was instead less than honest. After all, he was a supporter of George W. Bush and Dick Cheney, who in addition to clearly being unindicted and untried war criminals, stole more from the American People in an 8-year span than any other government. They were big government personified, in the worst possible ways.

As merely one small example, Cheney, unlike any Vice President in history before him, continued to draw income from Halliburton Corporation, a company to which he directed over $12.5 billion in war contracts during his administration. That alone, at any time when the government was not completely controlled by Republicans, would have been enough for his impeachment or a demand that he leave office.

Even worse than that for the American People, Cheney and Bush appointed a known anti-regulatory activist, Congressman Christopher Cox into the Chairmanship of the SEC. They then encouraged him…during the most dangerous time in our economy…a period of obvious speculation…to look the other way. That was all Cox needed.

According to many ex-SEC attorneys and regulators, Cox not only ignored the signals of a pending financial disaster, he supported those in Wall Street who were bringing it about. He promoted lax review of unsafe securities, fired attorneys who became too eager to prosecute swindlers and crooks, and literally threw the files of serious investigations of fraudulent securities sales into his own wastebasket. .

No one did more to aggressively ruin the lives of Middle Class Americans than Christopher Cox. He presided over the loss of more than $7.5 trillion of assets belonging to the American People just as surely as if he had stolen their money and burned it. If the crash and Depression had resulted in a revolution like that of 1789, Cox should have been in the top five to lose his head.

Milton Friedman’s Neo-Classical economics played directly into the 8-year Republican economic and political scam. He would have said that government should stay out of financial markets. But he would also have said that investors should not have been so ignorant of the securities they were buying that they would lose large amounts of money. In other words, “caveat emptor;” it is a free society. Blame the victims.

And that is exactly what Bush and Cheney did. Using the cover of phony Neo-Classical economics, “hands off the private sector,” hands off the giant corporations. Let the free markets decide. End regulations that hold back progress. Things are moving ahead spectacularly. Until they hit the wall. And who suffered? Not Bush or Cheney. Not Cox. The American People lost at least half of their wealth and they are still losing it.

Meanwhile, in 8 years they spent $12 trillion more than the country took in. You cannot say, “Well, but we had two wars and two tax cuts and a prescription drug plan that cost $600 billion.” That is true…because of their policies. Bush was the “decider,” remember? Those were his own words. He and Cheney decided to take this country into near-bankruptcy.

Of course, their putative economic guru, Milton Friedman, would say that government cannot spend beyond its budgets, with larger and larger debt each year. Nor would Hayek sign off on that. In Friedman’s theoretical world, one year’s deficit would be enough. But they had not one year but 8 years. Then they left us a Depression with 4 more years of catastrophic consequences.

Hayek and Friedman, no matter their personal allegiances, would be forced to call Bush and Cheney…not Conservatives…but…Socialists! But of course in the real world, they didn’t.

Instead of making drug companies compete on a fair playing field to lower prices, Bush-Cheney gave pharmaceutical companies over $600 billion in subsidies over 10 years, some to be borne by taxpayers, the rest by retired citizens on Medicare. There is no other way to see it than big government giveaways. This is redistribution of income. Your taxes went to subsidize big pharmaceutical companies. You continue to pay high prices, but now you, the taxpayer, give you, the person on Medicare a small discount on some drugs by capping your costs at around $3000 to $4000.

Was there more Hayek-like competition and fairer pricing in the Bush Administration? No. There was more concentration of economic power in the hands of a few corporations. When the stock market crashed, the Republican Secretary of the Treasury, Hank Paulson, went to Congress, asking for a $750-billion-dollar bail out of Wall Street banks and investment companies.

Does this sound like Classic Liberal economics, Austrian free-market economics? Do they think we are completely stupid and cannot read, write, add or subtract? Free market economics? On the contrary this is almost exactly Heyek’s definition of Socialism.

We bailed out wealthy stockholders of the largest banks in the world. Government was forced to bail out the richest men in America because they were in a position to ruin the economy even worse than it is now…if you can wrap your head around that concept. The average income of people working on Wall Street is $300,000 per year. The average American family makes maybe $45,000 per year in a very good year and it is going down.

So this was worse than centrally planned Socialism. This was unplanned simple Socialist redistribution of income…from the average taxpayer to the rich banker.

Hayek and Friedmen, it is pretty clear would not only be against government regulating stocks and bonds. But…they would be equally as adamant about not bailing out the big banks. They would be against the huge Bush-Cheney deficits. They would call the subsidy of huge pharmaceutical companies by government worse than Socialism. It would be Socialism for the rich and powerful…exactly what these two theoretical purists would expect to avoid with perfect competition.

So why would Conservatives in the Republican Party continue to maintain that they have austere policies that call for reduced government size when, in practice, they do the opposite? Why would a political party in power spend $12 trillion more than revenues it took in and then call themselves “conservative?”

It is a lie of course. It is a lie and further propaganda perpetuating the lie so that they can fool enough of the People to stay in political power. And why is that? It is because a new political agenda called Neo-Fascism that aligns corporate interests, superstitious religious views, the military and some of the super-wealthy now has a stronghold in Washington, D.C.

It could be called monopolist, oligarchic, plutocratic or corporatist…but not Neo-Classical Conservatism. These people are big government spenders. But now, with a Democratic President, someone working for the People, they want to cut government to save their hugely wealthy patrons from higher taxes to pay for the $16 trillion in debt that they almost exclusively caused.

Bush and Cheney were big government, big spenders, but with a twist. All the excess spending went to giant corporations, to the military-industrial complex and very often to large political contributors, including the very Wall Street firms that crashed our economy.

The other twist was that Bush-Cheney decided that not only could we afford giveaways to giant corporations but we could also cut taxes, reducing government income. Corporations earned tax cuts in the form of tax deductions for manufacturing abroad, or taking their corporate headquarters to Bimini. All the while, their paid flack economists, like those at the Cato Institute or the Heritage Founation supported greater and greater national deficits with continued deficits.

We cannot separate politics from economics any more than Hayek could. He feared totalitarianism. He thought that well-meaning Socialists were following a path leading to totalitarian government. What he misunderstood was that those governments were Socialist in name only. They had already transferred their allegiance to huge industrial corporations and the military. In Russia, Socialists did transform into a different kind of totalitarian government, but not because of Socialism. The government was taken over by Stalinists, totalitarian rulers who did not adopt the true ideas of either Socialism or Communism.

Over the last several decades, the Republican Party has replaced the Democratic Party as the party of the old Confederate states. They have deliberately pandered to a certain amount of racism, a certain amount of Fundamenalist Ecumenism, a certain false patriotism and an enormous amount of anti-humanist sentiment…against equality, against secular education, against gays, against climate change, against women’s rights and against “big government.”

In other words, Republicans turned against those who were in favor of a progressive society, of ending Segregation. It is no coincidence that the leaders of the Republican Party all refer to their roles models as people like the hyper-racists Jesse Helms and Strom Thurmond who left the Democratic Party on the issue of de-segregating the South.

It is very clear from the record that the Republicans who supported Bush-Cheney were not traditional Conservatives. All who did not agree with them, by the way, are now gone from the new Republican (Neo-Fascist) party. They spent big and cut taxes big so that government would fail. They did it and are still doing it deliberately. Whatever the current Republican economic formula, it is clearly not Neo-Classical Hayekian-Friedman Conservatism.

But how do you win by appealing to the bigoted and the racists and the intolerant and the homophobes? As bad as human nature can often be, you can’t count on racists alone to your political base. There are normally more decent people than slugs.

You do it by simultaneously capturing the media, pandering to rich and large corporations who advertise on that media, and creating enough daily propaganda to at least confuse the People at at best persuade them to vote against their own best interests. campaign donors who will help you lie to a vulnerable population. The confederate states are almost all among the least well educated, statistically, and among the most superstitiously religious.

Large campaign donations from oil companies and Wall Street help Southern politicians spread propaganda so thoroughly that they are able to continue the myths that have often plagued the south through Reconstruction and Segregation. In a society still bound to a great degree by racism and poverty and lack of education (statistically the old Confederate states all rank highest in those attributes) it is not difficult. Especially where people still think that the earth was created 6,000 years ago, including several medical doctors representing various districts of that kind in Congress.

Corporations and the rich, because they are the natural allies of the Republicans—do not want Southerners to have higher wages—they can always move South if they want more profit—spend enormous sums on syndicated radio programs popular in the South. Radio talk show hosts like Rush Limbaugh, under current laws, have no obligation to allow competing points of view.

At one time, anyone traveling in a rural area of the United States by automobile would only be able to get one AM radio station and that one station invariably carried Rush Limbaugh. He was on 1600 radio stations on one network and syndicated on others. He was kept on the air by Right Wing syndicators, paid by the wealthiest corporations. Even at the peak of Clinon’s popularit and the pinnacle of our country’s economic prosperity, Limbaugh attacked the Clintons mercilessly, supporting the obstruction of the Republicans in the Senate, which did not succeed.

Limbaugh did so despite the fact that we had the highest GDP growth and longest period of continued prosperity in our country’s history, including the one immediately after World War II up to the end middle of the 1970s. The Clinton era was the beginning of the relentless Right Wing propaganda attack on Americans that we see continuing today, trying to divide us by political party, by religious views and by false economic choices.

And that is where we are today.

Part V — The Failure of Conservative Economics — Transition

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Milton Friedman, who was a colleague of Hayek’s when he moved to the United States to teach economics at the University of Chicago, expanded on Hayek’s theories. Friedman also popularized Hayek’s conservative economic theories. The Conservative, “Chicago School” was so named because of the many Conservative economists from the University of Chicago influenced by Friedman, Hayek and others in that faculty.

There are some economists today who think that the strict adherence to what many feel are outdated and disproved theories of the Chicago School, the “supply side” borders on the inane. The New Keynesian economists look at the Bush Depression and the national debt and the lack of investment and wonder what ever happened to all the policies that took us out of the Depression and served us well through the Second World War and the dynamic post-war period all the way up to Reagan. Where are any policies that will lift the economy for the many Americans who sit on the sidelines, unemployed? In the meantime, so-called Conservatives do nothing, waiting for good times to somehow magically return.

As with so many things, the world of economics has changed. The 20th Century showed that the world of Adam Smith, the elementary economic world of laissez faire and the world of waiting for things to happen is long gone. Yet the Conservatives continue to live in the previous age, where Hayek’s theories might have made some sense, at least in the context in which they were written.

Where to start? Hayek said that in the current crisis of the era about which he wrote, 1900-1944, democratic Socialism, or so he called it, was an illusion.

“that great utopia of the last few generations, is not only unachievable, but that to strive for it—produces something so utterly different that few of those men who now wish it would be prepared to accept the consequences, many will not believe until the connection has been laid bare in all its aspects.”

The “consequences” of what, writing from 1930s Great Britain, he called democratic Socialism was totalitarian government. His logic told him that central government and central “planning” would lead only to greater consolidation of power and less individual choice. And he was right about that. Hayek, the lawyer and doctor of political science, was right. Those governments, however, that Hayek called Socialist, were already turning Fascist. They had long since left off Socialism.

So, Hayek the economist was wrong. He looked at Spain, Italy and Germany, including his native Austria and saw supposedly free societies, that he saw as Socialist, trending towards dictatorships. But he read them incorrectly. These countries were exactly the opposite of Socialist countries. They were already Fascist.

The leading political parties may have called themselves Socialist. Political parties commonly used the term Socialist in those days, when popular support was necessary in a time of wildly fluctuating economic periods of inflation and depression. Concealed from the public, these governments were not seeking Socialistic equilibrium but dictatorial control.

These countries that Hayek saw as Socialist heading in the wrong direction were in fact colluding with the military and the large industrialists to their own political advantage and using propaganda to create the illusion of Socialism. One of the hallmarks of Fascism is to lie to the people about your allegiances and intentions. Hayek was fooled. There was no Socialist motive in any of the programs of the Nazis or the Fascists or the Falangists. It was about raw power.

And the same was true of Communist Russia, certainly post-Lenin and Trotsky. The organizing principle of Communism was socialist, and did follow many Socialist rules of distribution, but it was quickly abandoned under Stalin and motives became militaristic and secretive and totalitarian. But the reasons were no different from those of the Fascist countries. One sinister party took control and ended democratic systems.

It may have been difficult for Hayek to understand this. It was difficult for anyone to understand what was a dynamic, new—if extremely deceptive—political system that would forsake all truth and honor for political power. Hayek was not alone in misunderstanding the Fascist states. Needless to say, few in the British and American governments understood it either.

Hayek’s problem was that he mistook economics for politics. In other words, his very logical mind clung to the idea that if free enterprise rather than government control were allowed to work, the idea of total control would dissipate amidst the natural inclination of people to seek their own personal interests.

In that, Hayek completely misunderstood the nature of Fascism. No competitive economics, nor any egalitarian social compact would deter these political fanatics from their goals. This was something new, never seen before in international relations or in sovereign domestic politics.

These were brutal, ruthless men. Economics was handled with personal alliances and personal relationships that had to do with an allegiance to a political philosophy, a distorted idea of society. It is therefore easier from our perspective to see why Hayek, an Austrian, was so concerned with freedom and so worried that the “good intentions” of Socialism would lead (as was happening all over Europe in the 1930s) to dictatorship.

Here’s how Hayek describes his feelings on the best way to organize society from a 1930s perspective.

“The question is whether for this purpose it is better that the holder of coercive power should confine himself in general to creating conditions under which the knowledge and initiative of individuals are given the best scope so that they can plan most successfully; or whether a rational utilization of our resources requires central direction and organization of all our activities according to some consciously constructed ‘blueprint.’”

You see the terms “coercive power” and whether society requires “central direction.” These were all references to the organization of states into dictatorships, where a handful of men consolidated power. He was speaking of countries like Germany, Italy and Spain, not to mention, the “centralized direction and organization” and “blueprint” which was certainly a reference to Communist Russia recently centered power in Moscow under Stalin

And that brings us to the point that Hayek, in the days when he was contributing heavily to international thought on economics, was basically talking about continental Europe, from England. At that point he had far less knowledge of the American economy. His entire life to that point had been lived in Austria and (rapidly becoming Socialist) Great Britain.

So his ideas were formed when Socialism took hold after World War I through the Second World War in Great Britain. He was worried about the concentration of power under a central planning system, as was in full flower peacefully, except for strikes and adjustments among the gentry, in Great Britain and not so peacefully in what was eventually the Soviet Union.

He was looking East, not West.

Hayek was a brilliant man. His ideas on centralized price control quickly proved that market conditions were the most efficient way to determine prices, particularly commodity prices, something that we all accept today.

But, just as the conservative method of the 1980s, with its flawed premises as they related their version of “Classical Liberalism,” became an exaggeration, indeed a caricature of conservative thought, for personal privilege and selfish enrichment, so did Hayek’s notion of society in the 1930s not capture what would become the future of Europe and America in the 1950s, 60s, and 70s.

Despite what the latter day Neocons will tell you, the conservatives of today have given little new impetus to the ideas of Hayek or his chief disciple, Milton Friedman. The fact is that the trend that Hayek foresaw never took place. Both sides of the Atlantic grew into strong Capitalist nations, rejecting Communism and Socialism but maintaining a humanist form of Capitalist government.

Reagan came along in the 1980s, with a smile and a wave and a naïve and fanciful “Morning in America” where that very morning people were tossed out of institutions that sheltered them and literally onto the street. During the latter years of Reagan, one could not walk down any street in midtown Manhattan without what can only be described as a beggar sitting up against a building in a cardboard box.

Suddenly, in America, Ronald Reagan’s facade of confidence and certainty led a troop of con-men to power by telling the tale to Americans that we could cut taxes in half for those paying the most and triple our military expenses and all would be well.

This was most prominently discussed in terms of the “Laffer Curve” a concept that became associated with Dr. Arthur Laffer who was a consultant to the Reagan Administration. The principle of the Laffer Curve is that there is a point between zero taxes and 100% of income in taxes that revenues will be maximized. Too low and not enough. Too high and taxes will choke off private revenue streams and drop.

The problem with the Reagan tax policy and all tax policies since then, except under Bill Clinton, is that they were set too low. Revenues did not meet costs of government. In Clinton’s case, over the objections of the Conservatives, he raised taxes until they created more revenues than costs but at the same time private industry soared.

Three Republican administrations and $16 trillion in debt after the misused “Laffer Curve,” we have nothing to show for it but the debt and a country rapidly breaking down. And the consolidation of power into the hands of Neo-Fascists like the Koch Family and the Murdochs who control the political parties and the media is the first large step into the substrata dustbin of history.

Reagan did not spread Hayek’s ideas himself. He merely gave cover and visibility and concordance to those in the intellectual community who wished to become noticed. But whereas anyone reading Hayek today understands that his arguments were based on a false and temporary economic reality, the prominence of post-Reagan economics was based on some pretty shaky assumptions as it would turn out.

By the time Hayek’s theories gained prominence through people like Dr. Friedman in the 1980s, those ideas, based on 1930s economic conditions, were outdated by the successes of modern European society. With hugely better, if not always perfect, universal services for workers the modern European economies maintained successfully competitive capitalist systems that favored manufacturing, trade and targeted education over central planning and control of production.

Not only did Capitalist countries after World War II encompass the same kinds of social programs that Bismarck had established for Germany by the end of the 19th Century, but they flourished with free enterprise, including a geometrically greater number of millionaires and eventually billionaires from the merchant class than had existed at any time in history.

The problem with Hayek, Friedman and the current crop of their disciples is that they must twist and compress their evidence into knots of nonsense to try to make it fit current society.

For example, the latest mantra is “austerity.” Austerity is a name for simply cutting government in those areas where these economists and their masters believe there is the least amount of opposition. In other words, the millionaire/billionaire class espouses cuts in social services as the solution to fiscal problems. They maintain that this is what you do in business and what you do if you are someone dedicated to decentralized control. It is more efficient.

Both ideas are wrong on and can be proved so from simple evidence. Austerity in Europe after the crash of 2009 has failed miserably to restore economic growth. The crash, let us not forget, was caused by the worldwide sale of fraudulent securities by U.S. financial companies to governments around the world.

So we set up countries for failure. Initiated the crash that caused the failure and then proposed and supported exactly the wrong kind of restorative remedies. Some economists we are!!

So who were these economists who led the way into backward-looking economics? They were the cocksure economists. Those who rose up under the shelter of the big corporations who saw that this was very, very good for them. These big corporate giants founded organizations like the Cato Institute, the Heritage Foundation, and the Manhattan Institute and dozens of others.

On every issue, from Social Security to Medicare, even on guns and abortion, they took a position. It was always and invariably the Right Wing position. And it was often justified by economics that belonged in the waste basket, not in serious public discussion. And when they fell back, besieged by facts and statistics, they dropped the “H” word: Hayek. “Hayek said…”

Well Hayek was right in his day. But his day was so different from 2013 that Hayek is totally wrong today. Small, diverse entities at the turn of the 20th Century are huge, monopolistic industries at the beginning of the 21st Century. Agriculture is an integrated, corporate industry. Communications, energy, even medicine are highly concentrated industries with monopolistic pricing systems.

Whatever the national service today in the U.S., if the price is $100 per month, no matter what the introductory price of competitors, no matter what company it is, you will eventually end up paying $100 per month. There are only a handful of corporations controlling every industry. Figure it out for yourself. The pricing is locked. They don’t need to collude. All they need to do is read the newspapers.

You see, Hayek thought that competition would lead to diversity and innovation. He thought that economics could overturn the greed and myopia of political systems. He did not know or even in later life understand that weak political systems would allow unequal competition, leading to concentrated power and the eventual oligarchic corporate society.

Our society bears no resemblance to the societies that Hayek knew and it is antithetical to the principles that say free and open competition will create the most efficient society. We do not have free and open competition in the United States in 2013. Products and services for the largest categories…food, energy, communications, transportation, others….all controlled by a handful of giant corporations.

In political or economic terms, Hayek could never recognize his principles in this country today. Friedman said that neither he nor Hayek were Conservatives but Liberals in the classical sense. Friedman believed that he and Hayek would be considered radicals, libertarians…not today’s conservatives.

Hayek’s his ideas were created in a time of concern for huge, totalitarian governments, bent on doing good for the masses, but co-opted by evil men, bent on realizing only the unintended consequences that led to dominating central governments.

The irony is that today, American Conservatives, actually Neo-Conservatives (Neocons) apply his name to their pronouncements that merely rubber stamp the kind of large corporate and government spending that Hayek disputed, while at the same time applying his name to their mistaken judgments.

Milton Friedman was a colleague of Hayek’s at the University of Chicago in the 1950s when Hayek came to America to teach. One of the arguments that Friedman wrote about consistently outside of technical economics was the issue of redistribution of income.

In Hayek’s and Friedman’s world, any tax that one person pays that is then used in some way to increase the income of another is redistribution. The basic (implied) argument is that the rich and successful should not be taxed to give money to the poor and unsuccessful. In simply economic terms–they would say–this is inefficient. It is counter-motivating to both parties.

But let us suppose that the former’s money goes into the Treasury and then goes out to a military contractor who employs someone. Money would have been redistributed. The employee of the military contractor would have been given an income. Bombs are hardly economically efficient. You make them. They blow up. You have to make more. They did not earn anything of value for the taxpayer while they were being used and the result was simply that more were needed.

Friedman and Hayek would argue that military is necessary to their minimalist ideas of government, as is a police force. In distribution, they keep their argument simple. One person has money taken away, reducing his incentive to work, while another person gets some of that money, reducing his incentive to work. It is a simplistic argument, an equation. One gives and the other takes. If it were that simple, then it would be easy and we could all sleep easier, except perhaps for those sleeping on the streets.

Another big issue is that of central government planning. In the Hayek/Friedman theory central government equates roughly with Socialism. And in their system of thought, Socialism, because it intends good works but results in equal distribution of unequal effort, is bad. Pure capitalistic competition is what drives the economy and “socialist” attempts to level the playing field only result in bad outcomes for all.

But once again, that is not true. We tamper around the edges of capitalism every day. Tariffs, guaranteed contracts, residual payments after the work has long been done, health care traded for income….numerous adjustments to income and distribution of the results of income. Oil depletion allowances. Business expense deductions. Many things.

Friedman himself said that he would do away with welfare and provide a minimum wage, a negative income tax. This is the same thing that Senator George McGovern, a popular Left Wing Liberal suggested in his Presidential campaign of 1972.

In general, Friedman called anyone a Socialist, like the economist John Galbraith, a Socialist if they believed in even the most innocuous ways that government had an important place in dealing with issues that involve the welfare, that is, the well being, of the common man.

Friedman said, “Everyone agrees that Socialism has been a failure but we keep moving down that road.” Now, that depends on your definition of Socialism and as we have seen, Friedman called anyone who believes in Social Security or Medicaid or food stamps….a Socialist.

But let’s say that I am the President of AT&T. I pay my workers well, and I compensate them with health insurance. I am competitive (if that were true) with other communications companies. But I believe that those who are out of work, have for one reason or another no skills, are low intelligence or are disabled, should have some form of government assistance. Am I a Socialist?

Friedman would probably say that this person is not working at maximum efficiency for his corporate stockholders in that he should be lobbying to reduce government costs and thereby corporate taxes. It is unfair to take money from stockholders unless absolutely necessary. They need that money. It is owed to them.

The mistake Friedman makes is that large organizations, both public and private, do have the potential for greater efficiencies. You cannot say that government would be more efficient if smaller, yet large corporations would be more efficient if merged. The justification for mergers in anti-trust terms is efficiency, better service.

So centralized government is no more Socialistic than is AT&T. If it does not work efficiently, it simple needs to be re-managed as we do any large corporation that becomes less efficient. What the followers of Friedman/Hayek have proved since 2001 is that they do not really believe in those principles. George W. Bush and Dick Cheney spent more and borrowed more money than any federal government in history.

On the other hand, Bill Clinton, a believer in government, trimmed offices, merged departments, cut waste and at the same time, raised taxes modestly on those who could afford it. The result was a balanced budget and a surplus which could have gone on indefinitely. But the Republicans not only squandered it, they created a disastrous economy, a nightmare of debt, which we are still living through.

Friedman was against regulation and licensing for creating “limitations” on growth. But in his example of licensing, he says that we limit cab drivers, for example, by licensing them. Now that sounds good. But the fact is that society does not license occupations to create fees.

Society charges fees to pay for the administration of some occupations that need to be licensed for safety or for control of potentially dangerous issues. Nurses and doctors are licensed. But we had a shortage of nurses because they are both underpaid and overworked not because they need a license. We have a shortage of doctors not because they need to be registered but because the American Medical Association, a non-governmental organization, controls the number of doctors who can be educated every year to assure that doctors’ incomes stay high. As a result, we import half of all our resident requirements every year from countries like India and China.

Here is how convoluted Friedman’s arguments can be…and consequently the even more confused arguments of his “followers.” He argues against tenure for professors. He argues that the reason professors do not speak out on certain issues (mostly anti-socialist issues) is that they fear being fired. Tenure helps to prevent this.

So Friedman, who is implying that teachers should speak out, i.e., should have more freedom of movement within academia as a result but is against the very thing…tenure…that would protect them when and if they do speak out!

An example of the problem with Hayek/Friedman principles is the idea of increased national income and quality of life. Friedman maintained that life was better in 1928, when government took only about 10-15% of national income to run government. We were, he was fond of saying, “safer, more secure and freer than in current times (1993-1994.) But is that true?

Disregarding things like monopolistic capitalism and unregulated finance and even things like Segregation, was life better? Friedman admits that we have more material things but says that our lives were better when government took less from our paychecks.

Not so. In 1941 we were attacked by the Japanese. We spent several times our GDP to save this country from despotic tyranny from Fascists and then spent large amounts of money in a stand-off internationally with the Russians that lasted 40 years.

In addition, by 1993, our food was safer, highways better, education better and more available, corporations less likely to damage the environment resulting in better air and water. So, despite things like faster and safer air travel, television, the Internet, much longer life expectancy…our lives are safer, more secure (now that Bush and Cheney are gone from government) and freer than we ever were.

At the very time that Friedman was talking about our lives being worse because of regulations that “limited” our growth, companies like Microsoft, Yahoo, Google, Amazon, Ebay and thousands of smaller start-up corporations were finding their way into the marketplace, with good, high-paying long-term jobs for employees. Neither regulations nor taxes nor big government in any phase of operations impeded these companies.

Friedman was wrong. His disciples are wrong. And they are not even his disciples if you sort out the truth. Friedman and Hayek would have been the last to agree, if pressed without any affiliations or obligations to Republians, to deficit spending as a result of cutting taxes while spending more. First Bush cut taxes. Then he spent more. Then he cut taxes again. Then his Treasury secretary, arguably the most successful businessman in the country, resigned in protest. Then he started another war. Then we went $12 trillion into debt.

It has to be said at this point that any economist who was still a Republican by 2006 or 2007 was a shill and a phony. The likelihood is that they are all biased for one reason or another. This has nothing to do with economics. It has to do with intellectual honesty and integrity. It has to do with what even educated people will do for personal bias, sometimes for pure bigotry, for arrogance, for greed or simply for a paycheck.

Ask yourself why someone who is supposedly fiscally concerned, as these Conservative economists now say that they are, would tolerate $12 trillion in excess spending, annual deficits, unpaid wars, and a $600 billion giveaway to pharmaceutical companies? Is it likely, or even possible that a true fiscally conservative economist…one who, like Friedman and Hayek, would not tolerate budget deficits at all…could legitimately be a Republican?

They are Republicans. Which means that they are not legitimate. Let’s put it more matter-of-factly. They are liars, either to us or to themselves. There is no Republican conservative agenda. There is only the agenda for the rich. In other words, talk about cutting the national budget and use the excuse of Conservative principles.

The Republican economists are paid to look the other way, to justify obviously erroneous data. Why? It is not more complicated than this: the rich do not want to pay their taxes. The real economic solutions are not austere measures. Those measures are touted merely to save the incomes of the rich and the incomes of giant corporations.

The Republican Party spent like drunken sailors during the 2001-2008 period. Now the remedy is not—as these Neo-Fascists would have us do—cut Social Security and Medicare…which belong to the People, because the People paid for them….but to raise taxes on the rich and their corporations and find other readily available revenue solutions.

Next….Part IV– Real Solutions to America’s Economic Disaster

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