You've Been “Shafted” (Again)
By Larry Dorshkind
18/09/08 "ICH"
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We have been “shafted” (again), but thank you very much (on
behalf of the United States) for the taxes you are now obligated
to pay for the $85 billion loan to AIG (American International
Group). Also, thank you for the bailout of Bear Stearns, Fannie
Mae, Freddie Mac, as well as future calamities that will
continue to surface (regional banks may be the next group to go
bankrupt, and the auto industry is expected to request loan
guarantees, on the order of $50 billion).
To give you some perspective as to your portion of the AIG loan
(leaving aside your obligations for the Bear Stearns, Fannie Mae
and Freddie Mac bailouts), let’s divide $85 billion by 250
million Americans (discarding 65 million Americans who will
never have the wherewithal to pay anything to the U.S.
Government). That comes to $340 per taxable American, or $2,040
for your 6-member family unit. Since, the US Government (read
“Republican administrations and Congresses”) engineers its
income to be less than its expenditures (by lowering corporate
taxes, giving permission for American corporations to
re-incorporate overseas and, thus, avoid paying U.S. corporate
taxes, giving tax cuts to the wealthy and super-wealthy,
lowering the capital gains tax, giving tax breaks to the oil
industry, giving tax breaks to companies that offshore their
facilities, etc.), the result has been to create an almost $9.5
trillion National Debt and a $800 billion Current Account
Deficit (both growing every second of every day).
Congratulations, America, you have voted for these Republican
economic policies (or permitted to have its elections stolen by
fraudulent Republican operative-controlled voting machine
companies (see
http://www.rollingstone.com/news/story/10432334/was_the_2004_election_stolen )
and Republican purging and caging operations (see
http://www.blogrunner.com/snapshot/D/7/5/obama_campaign_files_lawsuit_against_republicans_in_michigan/ );
and, on the other side, you have an intimidated and/or
wiretapped and blackmailed Democratic Congress – doing hardly
anything to fight back).
Since the U.S. does not have the income to pay for these loans
and bailouts, it will have to borrow the funds from the usual
suspects – China, Japan, Saudi Arabia, other OPEC countries,
etc. Given that the U.S. has to borrow funds to pay for even the
interest portion of the loans it is given by its creditors, it
is easy to project the $340 for each member of your family (to
cover the AIG loan) is really going to be $680 for your family
unit (because, given the current situation, such a loan may
never, if ever, paid off). Therefore, your 6-member family unit
(includes TC), has just been obligated to assume a $4,080 tax
obligation to save AIG. But, do not forget, since the U.S.
requires approximately $1 trillion in foreign capital each year
(approximately $4 billion each day) to pay its bills (and pay
for its imperial wars), your $4,080 tax obligation is just a
very, very small portion of your family’s total tax obligation.
Now, if we were to include the costs of bailing out Bear
Stearns, Fannie Mae and Freddie Mac, and including the
“off-the-balance sheet” costs of the Iraq and Afghanistan wars
(invasions) estimated by Noble economics laureate Joseph
Stiglitz at $3-5 trillion (probably should be revised to $4-6
trillion now), it would give me a worse headache. So, can we
agree that the ultimate tax obligation of your family figure is
humongous? Just to give you a little sense of the scale, though,
the present $9.5 trillion National Debt works out to be $38,000
per person (based on 250,000 Americans who can be expected to
pay taxes). Therefore, for your 6-member family unit, your
obligation for the current National Debt is $228,000 (and
growing each and every day), and until the day that the Chinese,
Japanese, Saudis, other OPEC countries, including the sovereign
wealth funds of those countries, come to the U.S. and demand
hard assets (i.e., buildings, highways, bridges, companies,
airports, planes, aircraft carriers, etc.) and have us sign off
on being willing colonies to each of these creditors, your
family is on the hook for a monstrous amount. (But, do not
forget that corporations, the wealthy and the super wealthy
should not be expected to pay their fair share – this is
America, don’t you understand?)
If you want to burden your head with the reasons as to how the
U.S. got itself into this predicament, you would have to start
with the Ronald Reagan economic policy that the U.S. does not
have to generate wealth by making “things”. That led to the
policy of off-shoring manufacturing facilities (and now includes
the off-shoring of “back room” and support functions), and that
led to the realization that the middle class was not required
anymore, and that led to the realization that the middle class
might as well be plundered (by the wealthy and super-wealthy)
until it (along with the working class) had been beaten into
working at a subsistence level (until there were no more middle
and working class assets to be plundered). But, oops, tertiary
businesses that served the manufacturing facilities also went
offshore along with the manufacturing facilities, and profit
went to the new owners of those manufacturing facilities (in
other countries) – thereby creating a spiral of economic
destruction for the U.S.
Even the neo-conservatives and the military-industrial complex
are not helping. In fact, their humongous expenses and the
blowback from their activities are making economic conditions
worse. And, let’s not dwell on the destruction of a nation, over
1.2 million people killed (see Lancet Medical Journal poll and
http://www.justforeignpolicy.org/iraq/iraqdeaths.html ), over
2.4 million people displaced, and over 4,158 U.S. military
killed (does not count those who died in Germany, right?).
For just a bit more, one has to realize who the person, next to
Ronald Reagan, is most responsible for the economic disaster
that has befallen America. And, that person’s name is Phil Gramm.
It was Senator Phil Gramm (R-TX) who, along with James Leach
(R-IA), authored the “Financial Services Modernization Act”
(1999), which repealed significant parts of the Glass-Steagall
Act (passed during the Depression to prevent Depression-era
conditions from being repeated in the future). This new Act was
designed to permit the combining of retail banks and S&Ls with
investment (gambling) and insurance companies. Voila,
institutions that for a long time made it absolutely safe for
Americans to save and borrow, were now a thing of the past, and
whatever the combined institutions wanted to do was fair game.
Yes, predatory capitalism was made the law of the land.
Next, a year later, Phil Gramm, as chairman of the Senate
Finance Committee, introduced legislation that completely
deregulated the stock market (allowed “dark markets”, as they
say). This legislation was called the “Commodity Futures
Modernization Act”, and to get it passed, Senator Gramm added it
as a 262-page rider to the 11,000-page omnibus appropriations
bill (and get this!) just as Congress was recessing for
Christmas break! Obviously, there were no committee reviews, and
no one knew what was in the rider. Pretty smooth!!! Its first
production was to make the “Enron Loophole” possible! So, the
Republicans got what they have dreamed of for years – a
deregulated financial market without oversight. Sweet, sweet,
sweet. Now, plunderers, under this new predatory capitalism
mode, could go about doing their dirty work and, as a “thank
you”, contribute over and over again to the Republican Party.
It’s a win-win for the plunderers and the Republican Party,
except they are now getting exposed destroying the U.S.
economically. (As smart people have said, “the U.S. will not be
destroyed from without; it will be destroyed from within”.) The
plunderers get millions and millions (if not billions) of
dollars, and the Republican Party gets humongous contributions.
As I said, it is a win-win. Except for the American people, of
course.
You know the rest of the story – the credit default swaps, OTC
derivatives, etc., all made possible by Phil Gramm and his
financial lobbyists (who wrote the rider). But don’t feel bad
for Phil Gramm; after he left the Senate, he became vice
chairman of UBS, the Swiss investment bank.
But, he’s back! Interestingly, Phil Gramm was senior economic
advisor to John McCain in his presidential campaign, just before
he recently resigned. As you may know, he resigned after he said
“Americans were in a mental recession” and “America has become a
nation of whiners”. But, don’t worry - Phil Gramm most likely
will be tapped to be Secretary of the Treasury if McCain wins
the election. So, predatory capitalism may be back again, this
time with more verve.
Now, for some good news. You must have noticed that gas prices
have recently fallen. The oil industry reduces gas prices every
time there is an election because they do not want to work
against the Republican Party. Hopefully, we will not have to
endure the yellow/orange alerts that were concocted prior to the
last election (you must have noticed they were terminated the
day after the election). So, expect gas prices to stay low until
the day after the election. But, in the meantime, happy driving
- except for the thought that you are contributing to the end of
mankind and all life on the planet – expected, I believe, by
climatologists, to occur during the lifetime of TC.
For instance, according to James Hanson, NASA climatologist, the
maximum carrying capacity of CO2 in the atmosphere is 350 parts
per million, we now have 385 parts per million, and the tipping
point, where global warming will be incredibly difficult to
stop, is staring us in the face (2016?). The tipping point, for
life on the planet to continue, will occur when so many
interdependent species are lost that the ecosystems collapse.
Time is short, and, instead of going “all out” to replace fossil
fuel with other sources for power, there is Republican empowered
plundering and Republican distraction (think lipstick, for
instance). What is more important – plundering and distraction
or saving mankind (including TC) and all other species from
extinction?
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