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Romney, Taxes, Deficits and Disaster

October 18th, 2012 · No Comments · Politics, Populism, Taxes, The Budget

Mitt Romney wants to be President. In order to become President, he must persuade the American people that he has a better plan for America to grow its economy. The focal point of that plan has become a promise to create jobs. His plan to create jobs…disappointinly…turns out to be lower tax rates for millionaires and billionaires.

Where oh where have we heard that argument before? Reagan, Bush the First, and the disastrous Presidency of George W. Bush and Richard Cheney. According to the Tax Policy Center, part of the Brookings Institution, here is an analysis of Romney’s proposed tax plan.

He would extend all the Bush tax cuts that are supposed to expire next year. If elected he could and says he would repeal the Affordable Care Act and that would eliminate some additional taxes. He would eliminate the AMT, which says that if you make a lot of money but have no tax, you must pay some, and finally he would then…on top of that…cut taxes by 20 percent.

His rationale…more money in the hands of citizens will create more consumer demand. More money for business owners particularly will help them decide to start more businesses or create more jobs. It is basically “trickle down” or “Reaganomics” or Conservative economics. It has not worked for the last 30 years.

But the Tax Foundation, a Right Wing organization, stood up for Mitt Romney’s mathematically impossible tax plan. And they tried to pass an unfavorable analysis on to the Congress’s Joint Committee on Taxation. (Both Democrats and Republicans, both Senators and House members.) Apparently they thought no one would take the time to look it up. Well, the Joint Committee said exactly that…it does not add up. It would allow for a 4% cut in taxes, assuming mortgatge interest rate deductions and all…all.. of the basic deductions for business and consumers…but not the 20% that Romney claims.

So the point is this. Romney’s campaign proposal for cutting taxes without increasing the debt is impossible based on any information that anyone has at this time. If it is more…and everyone says that it is…by at least 16%…that 16% will amount to trillions of dollars in added debt to American citizens. Not so bad for billionaires who will relish the idea of the country going broke…as they only pay for the country and think that they use it hardly at all.

So here are the facts about tax cuts in general. In 2003, after years of cutting taxes and saying that growth would follow, the Congressional Budget Office, then run by one Dr. Douglass Holtz-Eakin, a Republican working for George W. Bush, produced a study on this matter. Do tax cuts eventually generate more revenues than they cost?

The answer is no. In the study of all tax cuts prior to that time, not one had produced even the amount of revenue that it removed from government coffers when taxes were cut. In fact, here is the result. Revenues following a tax cut amount to between 1% up to a maximum of 20% of the cost of the tax cuts over even an extended period of time.

In other words, for every “job creating and economy expanding” tax cut, you get back between $10,000 and $200,000 (at best) from every $1,000,000.00 you lose. And that my friends is why we are in a situation where we owe $16,000,000,000,000 more than we have taken in.

The only part of that not accounted for by Republicans was the part of Clinton’s administration, after he had raised taxes and cut government but before the economy could kick in…resulting in eventual surpluses. The other part is the Obama administration where, from day one, President Obama faced 15 million unemployed, a banking system that had no money, two wars, and an annual structural deficit…that is, one he could not change because of a.) so many people out of work and b.) over 300 filibusters by the Republican Senate against the government creating jobs.

So, Romney will not help you, my friends. He will help his friends, the very wealthy. He will not create jobs here. He will create them overseas. He will not end the deficits…he will create more and worse deficits. He is George W. Bush on steroids.

The Republicans are not kinder, gentler versions of the old Republican party. They are Neo-Fascists. By that we mean that they are a political party that wants total control and have sold out to major industrial corporations to get it. As, for example, with the secret ALEC organization, they will get it by any means. ALEC pays 50 state representatives in 50 state legislatures to introduce their legislation to defeat your legislation.

In our current iteration of Fascsim, the Neo-Fascists (i.e. “new” Fascists) they are aligned with major oil companies, the pharmaceutical companies, he health are industry, big coal and the utilities industries and most of all, with Wall Street. When Romney decried the 47%, he was in a meeting with those folks.

Do you think that a Party that is working in all 50 states to subvert your state representative’s vote, get him to vote with Consolidated Coal or BP Oil against you, is going to reduce your gas prices, your utility bills, your health care insurance, your prescription drugs? Or help you to good, affordable health care or public pensions, like Social Security, that we have paid into all our lives? The answer is no.

When are you going to wake up? We all get sick. We all get old. If your only value is as a cog in a business machine, then when your value runs out, your chances of ending up without anything…the pension you worked for, the value of your 401K, your health care…can all be taken away or greatly reduced. You think it is “them” and not you. That is how “they” felt before they lost their jobs, their homes and, for many of them, the insurance that kept them from severe illness. Once it is gone it is too late to get it back.

Even if you are doing well now, remember this. Sooner or later it will be your turn in the barrel. So you’d better learn how to duck. Sooner or later you will have to stop working. Do you want to be at the mercy of health insurance companies with no Medicare? Do you want to have no Social Security and rely on the tender mercies of Wall Street for a 401K or for the value of the equity in your home? Get real.

This isn’t about left or right, rich or poor. It is about the average American family. For about 60 years we all agreed that what we needed to do was work hard (of course HAVE JOBS to work at) and then retire with a reasonable amount of money, depending on how much we had saved and so on. But in the 1980s, the Republicans began to cut taxes so that governments began to take in less revenue and while average earners found it harder to save money and maintain a job or a standard of living, the wealthy prospered beyond all imagining. Why?

Take the first Reagan tax cuts. Just in those first tax cuts the average millionaire made an additional $43,000 the first year. That is, $43,000 per million. That was about twice the average annual income at that time. The first Bush tax cuts gave the person in the top one percent an additional average of a million dollars over ten years, actually $1.2 million over ten years. Can you see what that did to the economy? Ruined it. Put us trillions in debt.

Now…here’s the truth. Are we in serious trouble financially? No. We are not. Are there 15 million people unemployed (not the 23 million that Romney somehow invents)? Yes. So for them, the economy could not be worse. And you have to decide. Is having 15 million people on welfare good for the economy? And is it good for these individual families to be out of work, poor…which is what you become when you have no income? Of course not.

So if we are not in serious trouble…why not? We are not for not just one or two reasons but for several reasons. First, our debt, while large….about 90% or slightly more of GDP is not only NOT the worst of advanced countries, but it is about 20th among advanced countries. Germany, for example, which is held up as a model of solvency, has about 170% of its GDP in national debt. France is several times worse.

So, what we need to do is get out of this bind. There are several easy…easy…easy ways to do it that Romney and the Republicans will fight to the death to keep from happening.

1. Raise royalties on oil, gas, natural gas and coal. If the companies do not want to pay the royalties, let them sell the companies. If they sell the companies, the government should buy them and put people to work. Use the profits to grow new companies which might not be as profitable at first, as we have seen, but can grow rapidly with government help…like solar, wind and thermal. We would create huge numbers of jobs, better jobs, a cleaner environment, a stronger middle class and, for the first time, intelligent use of our natural resources. Other countries completely control natural resources.

2. Raise taxes up to the level they were under the first Reagan tax cuts. If you make, say, over $500,000 per year, every dollar over $500,000 per year is taxed at 50%. You keep 50 the state gets 50. That will balance our budget, create surpluses, make both Social Security and health care (ACA, Obamacare) solvent for the next century. It will bring this country back, and do so while the people who will pay the most will notice it least…(or not at all in some cases.)

3. Cut the military budget…not just the increase…by 25% over time. Let recruiting fall to pre-Iraq levels over time. Focus on key military systems. (We already know what they are.) Let the officer corps retire but not go into military hardware or software. Just retire and phase down to the levels we want. Make sure that they continue to have good health care and their earned retirement. Career military do all right. But they also take on the responsibility…the most important responsibility…of defending this country. They should be honored and never, ever, lied to but supported. Especially those who need some special help as a result of their service. But we need a smaller force, active force level, over time.

4. Put people back to work right away. Once the election is over and the Neo-Fascists are thrown out, we should organize to push…hard…for national infrastructure programs, highway and bridge programs, school improvement programs, and technical school programs like the G.I. bill to allow the unemployed to apply for training to match skills now in the workplace. All these things will tighten up the workplace and bring more private companies who have closed down many many locations (my God…so many businesses have closed over the last 4 years because of Republican obstruction) back into the commercial arena again.

5. Finally, we need to stop spending money in China and start spending it here. What does that mean? It’s complicated. Let’s say a company in the U.S. makes a toy in China. They bring it here (technically speaking they import it) and then sell it to an American. The profit goes to the corporation. The CEO, the VPs, the head of Marketing, Sales, Human Resources and Advertising all get bonuses and the stockholders get, lets say, $1.50 a share. Good? Yes. But not good enough. You only get to pay for it. Not enough American jobs result from it.

What we need is something better. When that toy comes back here from China, we add a 5% tax on it. So now the toy costs a little more, maybe $5.25 rather than $5.00. But when fifty million of those toys are sold…and they will be…the government gets $12.5 million to invest in new businesses that will create jobs here, not in China or India. In this way, we can grow American businesses and at the same time build American Industry. We would only add this tax on American products made for American companies, but not made in the U.S.

We can turn this country around. But we need to elect Democrats. They are the best hope we have of changing our country back to a Democracy. They need to be pushed. But if pushed they will bring back the fairness doctrine so that no one can lie to you on radio or television. They will bring back a stronger financial regulatory agenda so that banks will be banks and wild speculation will be left to Wall Street.

They will make elections fair and make them public, so that no one can remove a really good legislator because they don’t have the money. Votes, not money, will be the only determinant. To get into the campaign, you need signatures and to get to the next level and the next and the next…you will only need a great idea, the confidence of the people or a great record of accomplishment.

These are things we can easily accomplish. But we are in the grip right now of huge corporations. Romney is the clear representative of those corporations. They are clearly looking for obedient, hungry, in some cases….desperate….workers. You can be free of these tyrants and life a good life. Vote Democratic. Maybe in the future you will be able to vote for Republicans. But not this time. Save your life first, and your children’s lives and then think about politics. This time is not about politics. It is about survival.

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