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Sunday, March 14, 2010

Bad moon rising

Here's a scary report from a Washington, D.C. think tank. Congress is spending so much money that it doesn't have, that to eliminate the deficit, you'd have to raise the top federal income tax rate to 84.9%!

And the report includes a dire warning from an economist not noted for hysteria:

"Mind boggling" is the term Martin Sullivan of Tax Analysts uses to describe the tax and spending changes that would have to occur just to get the deficit down to 3 percent of GDP.

"Our gridlocked, dysfunctional Congress simply cannot bring itself to absorb these types of painful shocks," says Sullivan. "Given these unprecedented pressures I believe that within the next decade there is more than a 50-50 chance there will be an upheaval either of the political system or the economy."

Better keep one's powder dry, I suppose.

Comments (32)

Don't worry Jack, I'm sure if congress keeps working at it they can get that 84.9% to be the bottom rate. :)

And this just became noticed? What about the past 10 years when we had an administration that ran two (how many $ trillion) wars off the books, gave big pharma a gift with Medicare Part D's inability to get bulk pricing discounts and at the same time made huge tax cuts. And what about all those supposed oversight agencies that had cronies put in place who's only goal was to support business ensuring oversight of good accounting and business principles was only for the little guys? The past administration came into power with one big goal, to bankrupt this nation and then say-- see, govt is bad...

Obama's not doing anything that Mccain wouldnt have done... its a mess and theres no clean cut way out of it..

I hear people say let the (1)banks amd (2)car mfr's fail. Well, wouldnt that mean that people who had over $250,000 deposited would lose it? Then what about all those business's that have deposits over those amounts, wouldnt they fail to? And that means they wouldnt be able to make payrolls, then they have to lay off people.. and what about their vendors that they owed money to that they couldnt pay? The vendors would have to lay off people too as their customers werent able to pay them, so we would have had even worse unemployment numbers.

(2).. should Obama have let the car mfrsm fail placing how many more millions of direct and indirect employees into the unemployment rolls?

Obama has disappointed me, but not by his bailouts.. they were necessary.. and where's the contrition from the republican party and their corporate constituents that got us to where we are now? I'll tell you where they are, theyre pointing fingers at the black guy...

At this rate we are spending our way into becoming a Chinese colony because who is going to hold all that debt? Now that should scare the hell out of everyone.

Robert is right. And spending is not the whole issue: tax revenues are down for both fed and state govts. Why? Because of the $8 trillion housing bubble that has burst. Next up: commercial real estate.
Someone needs to focus on how big the govt deficit would be if the federal govt were not pursuing stimulus spending.

Funny how much agitation over government spending (except for military spending and bank bailouts, of course) ignores how much out and out stealing there is among the corporate anti-tax set


Another way to look at this is to try and imagine a scenario where America bounces back economically. There aren't too many options left, are there? Strong-arming the world by threatening them with war? Aren't we sort of doing that now?

It would take a new energy system - or at least new to the public. Something we can build and the rest of the world has to buy or license from us.

What is truly distressing for me is the idea that all this is being done deliberately. The terrorists are dangled out there as the big threat, while we are losing the dream of America to the central bankers. Some would argue we already have.

That would make Woodrow Wilson the worst president ever for allowing the Federal Reserve, because that is when the slow death grip was first applied.

Maybe our only hope is that the American People will correct the situation.
I know that sounds tea-baggish, but I agree with Jesse Ventura: I'm not impressed with the tea-baggers one bit. If they really felt that way about freedom and the Constitution they would have protested during W's nightmarish reign.

But I do approve of the growing demand that something be done. President Obama? They either got to him or he was with the Wall Street crowd from the start.
By now, he may as well close the White House and get a condo on Wall Street. That way his bosses won't have to commute down from New York to tell him what to do.

All you have to do is look to downtown Portland to see a massive financial crisis on the horizon, and Jack's left hand column summarizing the city's debt. We are circling the drain with Sam and Randy overlording our financial demise.The more the citizens oppose irresponsible spending for unnecessary projects, the more steadfast these two brain trusts dig in their heels. For those who watched (and objected) as Sam rewrote the sewer muni bonds for a higher overall cost, and Leonard ignored PWB deferred maintainence opting for a restaurant in Waterfront Park, this comes as no surprise. We are in city budget season, and it's time to speak up to these "public servants". Happy St. Patrick's Day, we'll need the luck of the Irish to get out of this one.

I said to my accountant, Im surprised nobody from Wall St has gone to prison for what they did to this economy.. his response was, theyre all friends and know each other... and people wonder why non-whites say there's no justice in America... and how's it going to get better when the Supreme Court just told corporate trans-america that cash = free speech.. just wait till this coming election season when the corporations through their sub-groups throw unlimited money at any politician that does what they tell them and demonizes any politician that tries to do the right thing.. and don't tell me they have the same rights as the unions because unions have no where near the money that trans-national corporations have... and besides that, the constitution says government of, for and by the people.. not the corporations... or doesnt the constitution matter anymore?

You want a plan on how to start getting things turned around here in America? Start with the corrupt mainstream media, you know the ones the cons keep telling us is the liberal media..liberal my ass... as long as news outlets can deliberately lie to the people, people like the teabaggers will continue to do the bidding for their corporate masters and never know the real culprits are the ones they are being lead by...

One sign that this was all deliberate is that President Obama ran with one economic team and then dumped them as President-Elect going with the Wall Street crew.
Maybe if he got in and found out a bunch of stuff in the first year, and then took that route, you could argue that he was compromised or worn down.
What it looks like is that President Obama was a marketing campaign. Now we hear nothing but how we were duped by a messiah-complex. But that's not what happened.
America was at the point where we needed a major course correction or we would not get out of the tailspin. Hoping Obama could pull that off was not naive as much as logical. When you're down to your last few outs you might as well hope for a homerun.
Still, when I see those old videos or think back to the campaign I admit I was very hopeful that we could still save this.
One sign that wasn't going to happen was when the people who did the crimes not only avoided prosecution - they felt confident enough to brag about them.

The first sign I saw of who Obama was really going to error in favor of was when Rahm became his chief of staff...one of the biggest names in the DLC outside of the Clintons... then I heard about those backroom deals with the hospitals and insurance companies, and the failure of the WH to make any firm stand in support of real reform with a public option or some way to control costs, and my suspicions were confirmed...

Now we have healthcare reform that's going to force people to pay the very companies that take advantage of their customers to pay for their products and with no cost controls in place... what wrath is that going to bring about? Not only were we suckered at the voting booths, were going to be milked by mandate with the threat of fines, to give our cash to the very corporations the politicians from both sides of the spectrum reap financial gain from... this is not reform.. its extortion..

'They voted for somebody they'd never heard of in Barack Obama because he ran on the platform of a very devoted centrist."
- Marco Rubio

Yet within an amazingly short period of time upon winning office, it became clear to most people that the man who had run as a post-partisan is actually neo-partisan; the man whom Americans thought would unite is instead dividing. As was the case with "mayor" Sam Adams, the individual that people thought they were electing to office turned out to be entirely different than the packaging advised.

Using CBO's estimate and Census' population projections the 2020 debt is $57,072 per capita which sums to more than a quarter million bucks for my family of five. For the school-age children who will be servicing this debt their entire working lives, the 2020 debt load amounts to $248,291 per kid. My calculations are for debt held by the public only, which means the actual burden is much greater with unfunded social security, medicare and soon to be accrued health care obligations included.

The creeping realization of how deep is the hole is will result in most of our federal representatives, rightfully, being voted out of office or finding good reasons to spend more time with their families during the next several years. One of the great joys of being a politician is the power to spend money that is not one's own. But ultimately, the problem is not so much with the politicians as it is with the people who empowered them to do it. Look in the mirrors folks, look in the mirror.

Wow, that sounds just about like the early 1950s, when the lowest rate was 22% and the top rate was 92%. Or pretty much any time between 1940 and 1963 when the top rate was more than 80%. Or the pre-Reagan years when the top rate was still over 70%.

Damn commies. Cut the taxes, blow the spending out the roof, and deregulate! Thirty years of Republican administrations (and I'm looking at you, too, Bill Clinton) and underfunded government with huge deficits is what you get.

Grady Foster Look in the mirrors folks, look in the mirror.

Yes, I have people say to me they don't want anything to do with politics or even look at it. They depend on others to do it all for them. That is why we are in trouble. It takes some responsibility to be a citizen in our country, too many took what was fought for us for granted. I don't see how with this crisis they can continue this avoidance.

Can't depend on our elected officials, almost all sold out to corporations. Now a corporation has signed on to run for Congress!

So sorry, what next???

I suppose we can try to put enormous pressure on our local "gang" with their "make pretend democracy", and try to put the brakes on their agenda before they bankrupt us.

Wow, that sounds just about like the early 1950s

Did you forget a few details, like FICA of 1 percent then vs. 15.2 percent today? Or state and local income taxes were virually non-existent then vs. maxing at better than 10 percent in states like Oregon today? Then there was all those untaxed company cars, country club memberships, free lunches, and countless untaxed in-kind exchanges back in the day.

That's funny Clinaman. If we were elect Murray Hill, we have ourselves to blame -- I wouldn't lay blame at the feet of the Supreme Court.

Governmental financial malfeasance has been going on for decades.

Not only did feds borrow money from the social security trust fund (when they should have been investing it and earning interest) now they are going to have to borrow to actually start paying those who paid in.


I was listening to a radio show this am..it was out of Chicago.. they were talking about the failing school system and how unsafe just getting to school is for many kids....

I heard on that radio show that over 50% of the students in the Chicago school system recieve free lunches and some get 3 free meals a day.. why is that? I don't remember any kid in my school getting free meals...Whatever happened to be a good parent and being responsible for the babies you make? Hell, I see very vibrant mothers in Winco paying for baby food with WIC vouchers.. Why are they having kids if they can't afford them.. there was a time when having children out of wedlock that you couldnt afford was shameful.. now its rewarded..

I came from a lower middle class family.. there were many things I wanted, but couldnt have because we didnt have the money. But one thing we did have was good meals and a warm bed. I'd like to see what many of these families whose kids have to get free meals have in terms of # of TV's in their households, # of pairs of designer shoes and jeans, # of cell phones and if those kids have cell phones, how many cars they have, how old those cars are and how many names are on their mail boxes..

When I lived in So Cal, I attempted to manage an apt building that had people who were living on welfare.. That's where I found out why some of the mailboxes had multiple names on them. Because they were drawing benefits from those multiple names and I knew for a fact that only one or two people lived in those same apts..

After about 3 months, I moved from the bldg.. Why? My apt was robbed while I was showing another apt, my mail was stolen or ripped up and left for me to see, my car wipers were broken off and I was assaulted by one of the tenants who didnt pay his rent ever on time...

I heard on that radio show that over 50% of the students in the Chicago school system recieve free lunches and some get 3 free meals a day.. why is that?

Yeah, there is a parental responsibility issue there, but the schools are partially to blame for gaming the system too. See, they have figured out that the more kids they have in the program, the more federal money they get. They do it for the ESL program too.

One of the many complaints against the Conservatives is that while they rant and rave heavily against government spending, they never, ever cite a single dollar of actual reduction that they would propose. This is something I like to call “Profiles in Cowardice”.

Well I am happy to report I have an exception. In the Friday WSJ Senator Imhofe has proposed a 5 year plan to reduce non-security, non-discretionary spending to 2008 levels. He correctly by my computations states this will save $600 billion. I was disappointed, however when he did not list the actual reductions in programs, and so as a civic duty I have made the computations for you. Notes these percentage reductions are in actual dollars, adjusted for inflation the percentage reductions are much higher.

1. International Affairs (which is primarily foreign aid, foreign military assistance and operations of foreign affairs) 58%. Goodbye foreign aid, we will let the Chinese and others replace our influence.
2. Space 20%. Actually this is a good thing.
3. Energy Programs 78%. No benefits to the economy here.
4. Natural Resources 14%. Maybe we need more environmental destruction to pass on to our kids along with the higher national debt.
5. Agriculture 10%. Take that Oklahoma, Iowa and Nebraska
6. Transportation 19%. Think flying and driving is tough now?
7. Community Development, Increase of 13%!!. Obama that far left liberal has proposed cutting spending here from 2008 levels.
8. Education 30%. From No Child Left Behind to Lets Leave a Bunch Behind
9. Health (Does not include Medicare) 35%. If God didn’t want them sick he would not have made them poor, and forget heath research.
10. Unemployment Comp 35%. Sen. Kyl is already on record about people not working just to collect; this will teach em.
11. Food and Nutrition 38%. Let them eat cake. Besides studies have shown there is no hunger in America.
12. Housing Assistance 19%. This will help get the housing industry back on track.
13. Veterans Benefits 42%. Hey vets, don’t get sick or injured.
14. Law Enforcement19%. Get ready for early release of violent felons. Wait, that’s already happening.
15. Government Operations 37%. Gee Sen. Imhofe, why not start with a 37% reduction in your pay and benefits?

I suggest that all of those Conservatives run on this platform. That will show us you mean business.

The problem of course is that in the name of lower taxes and greater benefits we have allowed government at all levels to promise more than we are willing to pay for.

"Yet within an amazingly short period of time upon winning office, it became clear to most people that the man who had run as a post-partisan is actually neo-partisan; the man whom Americans thought would unite is instead dividing."

It appears that the rubes are finding out who the naive ones really were... (looked in a mirror lately?)

Kansas is not the only place where rubes reside. Check the coastal elite cities and see if you can find the Village Rubes.

Let's default. Put the losses on the Chinese govt. Better that than become debt slaves to a totalitarian state. Those are the choices.

"where's the contrition from the republican party and their corporate constituents that got us to where we are now?"

They're out of office. Weren't you here in 2006 and 2008? That's when irate Republican voters threw out the Congresspeople who had betrayed them either by not voting or by voting No to Republicans. And that was only after major screaming, complaining calling Congresspeople and asking them to stop the stupid spending. But the arrogant SOBs didn't listen. They had drunk the Kool-Aid that said to get re-elected you have to bring home the bacon to your district.

That's why there's a Dem majority. The Dem majority won't last long though. They're doing the same things the Repubs did - not listening to their irate constituents. Instead they listen to the unions as well as the big corporations. That's right. The elected Dems are just as in bed with the corps as the Repubs ever were.

BTW, don't blame me. I'm a registered Libertarian and always vote that way, when there's a candidate. We Libs have a saying, "Beware of the attacks of the Bipartisans!" Or something like that.

Well, it's good to see Reagan's imaginary horror stories about welfare queens driving Cadillacs to the grocery store to buy filet mignon with their food stamps is still alive and well, huh Robert?

Yeah, never mind the billions used to bail out Wall Street - or those whopping bonuses paid even now to the crooks who gamed the system. Let's focus on single mothers using WIC to buy baby food for their kids. THAT'S definitely what got us into this mess. Damn those hungry brats and their mac-n-cheese, they're bankrupting us!

Yes, yes! Let's follow the sainted Reagan's ideology: deregulate, privatize, trickle-down economics, it all worked so well!

Oh and BTW, women can't make babies on their own. Funny how you rail against those who stick around and try to care for their progeny, while ignoring the absent - and financially irresponsible - fathers who don't.

Not all single parents are those who choose to have a baby out of wedlock either. Marriages dissolve and partners die too, pal. Welcome to the real world.

I guess you haven't known anyone on welfare within the last 10 years or so either. You have to work for that money - 35 hours per week for a pittance of about $550/per month for a family of three here in Oregon. That's about $3.70 per hour. I double dog dare you to support yourself and two kids on that each month plus about $350/month in food stamps.

...the schools are partially to blame for gaming the system too. See, they have figured out that the more kids they have in the program, the more federal money they get. They do it for the ESL program too.

Hmmm. More participants in the program means it's gonna cost more money. Which comes from the feds. Brilliant deduction.

And how, pray tell, do they "game" the system? There are income and other financial qualifications that must be met to be eligible for the free or reduced price food programs at school. Are you saying that the schools lie? Or that they encourage parents to lie? Please elaborate.

The fact that you said that schools are gaming the system TOO, implies that parents are, as well. Like I said to Robert, it's pretty obvious you have no real direct knowledge of any of these social programs if you think it's easy to commit fraud. Or that fraud is a big problem. It isn't. And how is using the programs in place for the purpose for which they are intended, "gaming" anything anyway?

It turns my stomach to listen to people bitching about kids eating a decent meal, while billions are being squirreled away by a select few liars and thieves.

Let them eat cake!

For context:

The basic TANF block grant has been set at $16.6 billion since it was established in 1996. As a result, the real value of the block grant has already fallen by about 27 percent.


Only 30.2% of that is used for cash benefits. That's, what, a little more than 5 billion split between every TANF recipient in the entire country?


Richard Fuld, the CEO of Lehman-Brothers paid himself half a billion dollars over 15 years, all the while perpetrating one of the biggest frauds against the US people in history.



When caught, the person committing fraud in the food stamp or TANF program will be prosecuted... Obama gave Geithner a promotion. Pukes like Fuld are allowed to slink away into anonymity on their gold-plated yachts.

Repubs are no better. It's cronyism and CYA at it's finest from both parties, and they just love it when we distract and obfuscate with tales of welfare cheats and irresponsible "baby factories" being the fall of our economy.

Wise up. While we're tearing each other to pieces down here in serfdom, they're whistling all the way to the bank.

I know it's easier and maybe more satisfactory to nit-pick those less well-off than ourselves. And I know there are plenty of people who do abuse our social services. But don't throw the baby out with the bathwater. There are people using these services - who genuinely need them and will suffer greatly even die - without them.

What's going to happen to all the movers and shakers on Wall Street if we investigate and regulate their activities and compensation (which, after all, comes courtesy of us taxpayers)? Golly, maybe Paulson et al will have to settle for a silver plated commode instead of gold. Bummer.

From Dave Lindorff (in a blog post about how Obama will "crack down" on $100 billion in annual "waste and fraud" in the Medicare and Medicaid systems): http://www.smirkingchimp.com/thread/27302/dave_lindorff/slick_barry_and_the_100_billion_medicaid_medicare_fraud_claim

Back in 1977, when I was county government bureau chief for the Los Angeles Daily News, I got an urgent call from my editor, telling me to hop on a story based upon a release by the L.A. County Department of Social Services claiming to have discovered that 5.83 percent of welfare recipients were being overpaid because off errors and fraud, and that a campaign was being implemented to attack the problem, which was costing the county millions of dollars a year. Naturally, the editor saw this as a page one piece, perhaps a banner headline, for the next day's edition. I called the head of the Department of Social Services and asked a simple question: What is the error rate in the other direction? What percent of welfare applicants and recipients were being undercompensated because of errors? After a little investigation, she returned and informed me that the underpayment error rate was exactly the same: 5.83%! When I reported this back to the City Desk, there was an audible groan on the phone. The story had lost all importance to the editor. And yet, I thought, wasn't an underpayment of welfare benefits to a poor family of far greater consequence than an overpayment is to the taxpayers? Getting shorted $100, or even $20, for a family living on, or below, the edge, would be catastrophic.

Pretty much describes what I've been trying to say.

Sorry, I'm done now.


Robert wrote - "I said to my accountant, Im surprised nobody from Wall St has gone to prison for what they did to this economy.."

Bartender wrote - "Yeah, never mind the billions used to bail out Wall Street - or those whopping bonuses paid even now to the crooks who gamed the system."


Bartender, youre right.. its main st against wall st...

"Wise up. While we're tearing each other to pieces down here in serfdom, they're whistling all the way to the bank.""

I hope Ive inferred that in my post..but I will admit that I tend to be more critical of the republican party just because they are the party of the corporations.. unfortunately, the democratic party has also entered into that relationship as the unions are no longer as powerful.. Im also concerned that the new mega churches will replace the unions as a voting block and they have bought into the republican corporatists ideology...

It doesnt mean I think that abuse in the welfare system is anymore acceptable though. When 50%+ of school children qualify for free meals, something is terribly wrong.. I wonder how many of their homes have cable TV?

I think conservatives do have a point when they talk about personal responsibility (by the way I dont call myself liberal, conservative, republican or democrat, Im somewhere in the middle like most of the people in America)..

And the military industrial complex is also a huge problem as the contractors want constant business, which means they need wars even if it means creating them... something has gone terribly wrong with our value system in America..

Did you forget a few details, like FICA of 1 percent then vs. 15.2 percent today? Or state and local income taxes were virually non-existent then...

These are a couple of pretty specious arguments.

FICA's based on employment compensation, which is not the primary source of earnings for households in the top tax brackets. Moreover, no FICA taxes are paid on compensation over about $106,000 in earnings, which essentially gives the bulk of earned income in the country a pass so far as FICA goes.

Oregon's had an income tax since 1929. It's had property taxes since 1844. Wisconsin: 1911. Massachusetts and New York both implemented income taxes just after World War I. Most states had income taxes by the end of the Great Depression. Sure, some states relied on regressive sales tax systems more than income taxes (Washington, for instance) but the people of the state are still taxed.

It really makes little difference if you're paying 30% of your income in taxes if it's all income tax or split equally between income, property, and sales and excise.

I apologize Robert. I don't usually read who wrote a comment unless I vehemently agree or disagree with them or it strikes me for some other reason. I pretty much agree with most your comments here - until the one to which I replied re: welfare, etc. I did not go back through the whole thread and attribute all your posts to you.

I don't think that abuse in the welfare system is acceptable either. I'm not excusing or condoning it at all. Fraud is theft. But I do have to admit, I'm a bit more lenient on the guy stealing a loaf of bread to feed his family, then the guy stealing a billion to buy himself yet another multi-million home. The latter is far more morally objectionable in my opinion.

You wrote: "When 50%+ of school children qualify for free meals, something is terribly wrong.."


But - and this is the part that really gets to me, sorry - you then ask in an oh-so-republican and elitist way: "I wonder how many of their homes have cable TV?"

Really Robert? Is that the only explanation you can fathom? Fully half the children in Chicago have irresponsible parents who buy designer shoes, cell phones, and - gasp - multiple TVs rather than food? C'mon.

We're in the midst of a deep recession. Check this out: http://www.alternet.org/economy/145950/our_dirty_little_secret%3A_who%27s_really_poor_in_america/

At least 50 million people are ill-fed -- up from 37 million just a year ago -- including 17 million children. Hunger in America is now at an all-time high, and there are currently entire national geographic regions -- the very large 15-state 'South' being one of them -- where more than half of all public school students are poor and ill-fed.

[F]or every earned income level except the top 10%, average household income hasn't changed a bit for 10 years, and that for the bottom 60% of wage earners it hasn't changed for more than 20 years. Through economic expansions and recessions -- and bull and bear markets -- alike, 90% of workers in America have been standing still earnings-wise.

100 million people, fully one-third of the entire U.S. population, are at or below "200% of the federal poverty line of $21,834 for a family of four", which is a needs-measure made lame by the fact that no family of four can actually comfortably live on such a low annual income.

You get the point. There are all sorts of horrifying stats out there to explain why there are so many in the school lunch program. Most are way more compelling than that old regurgitated welfare queen crap.

You do know that you have to provide umpteen million pieces of proof and income verification every six months to be eligible for food stamps (and therefore, the school lunch program), don't you? They go over your finances with a fine tooth comb, and while that alone won't necessarily stop fraud, they have many other ways to combat it. And they do. Vehemently.

And, as the clip I posted from Lindorff above demonstrated, the mistakes go just as often against the recipient, as for them. It's often, quite literally, a wash.

I know, I was surprised when I went to the DHS office for the first time to apply for food stamps when I was in financial straits a few years back. There were all sorts of people with cell phones and stylish clothes while I was in Goodwill stuff and trying to find a pay phone that worked anywhere in the city.

But then, my father bought me a cell phone and some minutes each month just so I could look for a job and keep tabs on my kids. My girlfriend took me shopping and bought me some decent clothes so I could look presentable at job interviews. I found a great deal on a used TV at a garage sale. And I realized how a lot of these folks get the seemingly non-essential things they do.

My ridiculous ex-inlaws even sent my 3 yr old son a Game Boy - at the time about $200 I think. I remember thinking how many bottles of vitamins and other useful stuff I could afford to buy with that $200, but what are you gonna do?

More comforting thoughts:


US/UK to lose their AAA debt rating.

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