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A Better Way to Balance Budgets

April 13th, 2011 · No Comments · Health Care, Lobbying, Politics, taxes, Wall Street

The Republicans are not interested in balancing the budget. They are interested in cutting taxes. Does anyone deny that? We have a $14 trillion national debt and yet they cut taxes on the wealthy and added $800 billion to the national debt over the next two years. Only after that did they start talking about cutting budgets.

How can you say that you want to cut Medicaid for the poor and change Medicare from a public program to a private program? What kind of country would do anything like that? And we know that a political party that would do such a thing, would waste no time in completely eliminating Medicare.

What makes one segment of society less vulnerable than another? Nothing. If they will do it to the poor, they’ll make you poor and do it to you.

Let’s stay on this a second. Let’s say that the people become outraged at this kind of callous program cutting after Ryan’s plan, should it go into effect, starts to take away their Medicare, and puts them on more expensive–if they can even get it—private health care insurance.

Remember, the Tea Party and the Neocons want to do away with Obamacare which would guarantee Americans that they cannot be turned down for health insurance. If that is repealed, then Seniors could literally be priced out but also legally kept out of the health insurance market all together. At that point, you have to start all over. Once they kill the Affordable Health Care Act, you need to go back to square one. That is what the health insurance industry wants them to do. That is why AHIP spent $400 million in 2009 buying up Republican and a few Democratic votes.

Another reason that we know the Republicans are not interested in balancing the budget is that they put a dozen or so social issues into these recent budget cuts that they negotiated. Somewhere around $40 billion was cut…maybe more. But some of the cuts, although small were very carefully targeted.

One was targeted at women’s health care. Hundreds of millions were cut from programs that provide birth control information and services, health services, and cancer screenings. The National Institutes of Health was cut …research on cancer and other diseases…probably having to do with embryonic stem cell research. Further cuts were directed at keeping clean water and having enough staff to regulate, minimally, Wall Street.

Remember that these are the same Republicans who cried crocodile tears at having to bail out Wall Street, having already been told that if they did not, the economy would fall into a huge Depression. So now they want to cut back on regulation for Wall Street again, the very lack of which took us into this long, deep Recession. Yet, rather than debating how to establish non interventionary regulations and regular checkups on Wall Street to monitor progress…the Republicans flatly and illogically deny that it is necessary and lie about its destroying the financial sector.

Let’s ask the question: who was more likely to have destroyed the financial stability needed by our citizens (who lost big in the Bush Wall Street Crash) and by our small businesses ($3 trillion still sits on the sidelines while businesses are failing or failing to grow from lack of operating capital.

So, if Ryan’s plan will add another $3 trillion to the deficit and not cut anything in the long run, which is what will happen, and if our Middle Class will be destroyed from all the unnecessary cuts to vital programs…what is the answer.

It is simple and easy. Here is a budget with some balance and some shared sacrifice for the first time:

We will have some cuts. We will cut $250 billion out of the $700 billion military budget. This is only the part that we know about. The CIA has black-ops funds that could be cut but we need to get all the Republivan-Neocons off the committees involved with the CIA.

Just having Neocons on those committees, given the fact that their allegiance is to big international corporations and not the People, is nerve wracking. They are dangerous.

You saw what they did to the people whom Valerie Plame was handling. They are probably all dead or in prison thanks to guys like Cheney, Karl Rove, Robert Novak and Dick Armitage and Scooter Libby.

The next group we could cut would be domestic non discretionary spending, that is, everything but the interest on the debt, the military, and Medicare, Medicaid and Social Security. We could cut ten percent right across the board. That would be about $15 billion.

Then we would generate a full 10% more in taxes from Corporations. We would reduce the top corporate rate to $25%, make only one other rate of 15%, and then put a minimum of ten percent of sales on all corporate profits, big or small. If you make $40,000,000,000, as EXXON did, then you would pay the new lower rate of 15% (I would assume we would go up the scale, like regular income taxes, to encourage growth.) In EXXON’s case that would be $6,000,000,000. Or, if they made nothing at all, they would only pay the default amount of 10%, or, in other words, $4,000.000.000.

We would begin to tax all products that enter this country from a foreign country, manufactured abroad by an American company and then reimported for the U.S. Domestic market. A tax of 5% would be plenty. We do something like $2.5 trillion a year in imports.

If we figure that, these days, something like one-third are products that are made in China by American companies, that would be $800 billion. If we taxed those companies at a 5% rate, we would have about $40 billion each year to pay directly to companies to create jobs here in the U.S. Loans for small businesses in that amount would mean about a three times greater job creation than one-to-one direct jobs.

That means instead of one-million jobs at $40,000 a year, we could create about 3 million jobs each year. Even if some of these small businesses failed, the outcome would be something like a 4% growth in GDP and we would be down to 6% unemployment in about 3 years. In addition, the income taxes would begin to turn the deficits around immediately.

The top one percent of Americans pay 90% of the taxes, but they only pay about $1.7 trillion of the $2.2 trillion we need to support the country. This means that if we raised their taxes by 20%, i.e., another 20 cents on every dollar they make, they would still be paying practically nothing, and our government’s income would go up by $340 billion. With higher employment, better collections of corporate taxes and cuts to the military, we would balance the budget in less than five years or less and begin to pay down the deficit in substantial amounts.

Medicare will eventually take care of itself so long as we don’t repeal the cost cutting measures in the Affordable Health Care Act (Obamacare). Social Security is not a problem. So here are the numbers.

Deficit is $1.5 trillion. Create 3 million jobs with taxes on corporate imports from China. That is a positive, at a minimum, $40 billion in new tax revenues and a drop of the same $40 billion in benefits. So, a positive roughly $100 billion. Then add the $300 billion from the Pentagon. Then add the $340 billion from taxes the top 5%. Then add one percent GDP growth, which is another $400 billion (assuming we are collecting taxes) and another two points in lowered unemployment.

Add in the minimum 10% for corporate taxes, assuming they will find a way to pay only the minimum, and you have another $22 billion. So now, instead of a $1.5 trillion deficit, you have about $1.15 trillion or less than $340 billion. You will have other cuts in non-mandated items, the so called “entititlements” meaning things we have already paid for and don’t want to be given away to billionaires, and you are there…zero, zero.

It is not easy. But the pain goes to those who have spent 30 years accumulating lobbyist-generated benefits that make Social Security look like parking attendant tips.

Tax the rich. They have had it so good for so long that they don’t understand what is going on in this country or around the world. They think that revolution in the Middle East is merely a reality program on television. One in six families, nearly 20% of Americans visit a food bank because they can’t get food any other way. We’re talking about survival…here in a land where other families spend as much on an annual Disneyworld vacation as it would cost to feed one of these families for a year.

We should not…definitively should NOT…be discussing cuts to entitlement programs at all. None. Not acceptable. Final answer. Period. And we should not be talking about cuts to social programs at all until the rich have paid back the country for some of those TARP multi-million dollar bonuses we gave or the tax breaks that enable EXXON to make $40 billion with no taxes, or GE with tens of billions in profit and no taxes and most employees elsewhere in the world.

No more sacrifice by the Middle Class and the poor until the rich pony up their share. From 1918 to 1920 the government raised rates from 7% to 25% to 97% (the top rate only over a million or so ) to let the multi millionaires pay for World War I.

Don’t feel sorry for the Mellons or the Rockefellers or the Morgans.They were paying it on the one side and making it on the other. The same thing happened in 1941 to 1945, even through the 1950s when the country had its most prosperous period. And when union membership was 32% of the workforce.

It is time to return to those Liberal and Populist ideals. You see what the extreme on the other side is like. When the Right Wing propaganda machine is able to persuade simple people, the Right Wing gets their “mafia” into full swing. Crooked deals between the governor of Wisconsin and the Koch family and between other industrialists and the Republican Governor of Wisconsin, in return for his trying to kill unions.

The first thing you learn in Business 101 as a naïve man-child being introduced into the slick world of business is that labor is your biggest cost. It is the biggest cost in 90% or more of businesses, even hi-tech, highly automated industries.

Once the Republican moguls had destroyed the economy in 1893 and zapped it briefly again in 1920 and clobbered it in 1930, this time for ten years of destitution on the part of working Americans, the country said…enough. FDR introduced legislation that made this country prosperous for 50 years…the envy of the rest of the world.

But then Europe caught up. Europe realized that it is better to have a few rich people, a lot of very-well-off people, and the great mass of humanity working and living a secure and enjoyable life. America got Reagan. And Reagan gutted the Federal Treasury. Only Bill Clinton and Al Gore’s monumental effort, and the sacrifices of their careers by many brave Democratic Congressmen and women brought things back into balance.

We can easily balance the budget. Remember this one thing. $700 billion every year now is the result of the Bush Recession. We have to pay about $350 billion out to the unemployed and those on welfare when the unemployment runs out. Then we lose another $350 billion in taxes that these people used to pay.

So, instead of a $1.5 trillion deficit, we actually have a $700 billion deficit. Half of that is because of a reduced GDP. While the GDP is now something like $12.9 trillion, it should be about $17 trillion by now. That is the amount we need to have to keep up with a population that has grown by 50 million people or so since the Clinton era.

Remember the 240 pieces of legislation that the Republicans filibustered? There were about 5 million jobs in all those bills for things like wind and solar energy, conversions of vehicles to electric and flex fuels, construction on roads and a more efficient electrical grid….on and on and on. One program of $150 billion of loans from community banks to small businesses. Job killer actions by the Republican Neocon Senators.

Don’t let anyone tell you this is a legitimate cost-cutting venture on the part of Republicans. It is not. It is a well-considered plan by Republicans to gut the Middle Class, to decimate the union movement and to destroy the educational system so that they can continure their lies without being discovered by an educated public for what they are.

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