A Tax Tale

It’s been a while since I posted anything on this blog. I have been trying to be more actively involved in politics in the meantime but the candidate I was trying to help was soundly defeated in the recent congressional elections so maybe I should stick with writing in a blog.


There is an old wives tale that has been circulated by conservatives for some time now concerning the tax structure and federal deficits. There are many versions of this tale but the gist of the story is that it is impossible to fix the deficit problem by taxing the rich. Neil Boortz is very fond of this particular tale and likes to quote numbers that profess to prove that raising taxes on those that make $250,000 will make a very minimal difference as far as the deficit is concerned. I have often heard him and others say that if we took all the money that these people earned in taxes it would not fix the deficit. The tactic they usually undertake to prove this point is by breaking down what the government spends per day and applying this increase to this figure. This involves a classic bait and switch analogy in that they start out discussing the deficit and then either devolve into discussing debt or government total expenditures.


It is worth pointing out at this point the difference between the deficit and the debt. The deficit is the annual amount of money that our government spends over and above the amount of revenue it takes in. The debt is the total amount of money our government has spent over and above the amount of revenue it has taken in. It is important to note that most of the government debt is financed by treasury bills that US companies and individuals purchase but there is also a small percentage owned by foreign governments with China holding the largest percentage of this (about 7% as of June 2012).


The tale I am discussing usually winds up comparing the total debt with the amount of revenue a higher tax rate for the wealthy will raise. The first problem with this argument is that it suggests that nothing can be done to solve the debt issue which is of course a bad place to start any discussion. After all, if nothing can be done about it we may as well not discuss it. The reality is that we must first solve the deficit issue before we can solve the debt issue. In other words, we must find a way to spend less annually than we take in as revenue before we can ever begin to pay down the total debt. As Will Rogers once said, if you find yourself in a hole, the first thing you must do is quit digging. The truth of the matter is that a certain amount of deficit in a country with a central bank is a healthy thing but I will save that argument for later. The point is that we have to find a way to limit deficits if we are going to have a successful economy in the long term.


Perhaps we should start with some real numbers and a brief explanation of why we are currently running deficits. In a national government such as ours with a central bank the deficit is the cushion for economic instability. Since we are currently trying to pull out of the worst recession since the Great Depression it is not surprising that our deficits have been very high since 2008. What conservatives don’t like to talk about is when we starting running deficits again after the Clinton years.


When Clinton left office we were actually running a surplus on government spending. In other words, we were taking in more revenue than we were spending which is the only way we can possibly begin to pay down the debt. During the last three years of the Clinton era we ran a 583 billion dollar surplus. CBO projections suggested that a continuation of these policies would have seen us virtually eliminate the federal debt by 2012.


Then Bush was elected and we started down the path of tax cuts for the wealthiest Americans and immediately turned surpluses into deficits. It is important to understand that we were not dealing with recessions or economic collapse in those years; we were simply giving money away to those who least needed it but were most able to pay for elections. We averaged a 440 billion dollar deficit for the eight years of Bush’s presidency. Crazily enough, we did this by fighting two wars while at the same time lowering taxes. It turns out that Cheney’s comment that deficits don’t matter was an accurate portrayal of Bush’s fiscal acumen.


Obama took office during the worst economic collapse in almost eighty years and we are just now beginning to crawl out of the hole that put us into. What you won’t hear conservatives talking about is the fact that the deficit has actually decreased every years since 2009, even in the midst of this collapse. As a matter of fact the 2013 deficit is projected to be 58% of the 2009 deficit. No one should mistake this as something to celebrate but we are making process.


The recent discussions about tax increases have once again brought conservatives to a fever pitch as they trot this same old wives tale out for our consumption. I heard Marco Rubio, the conservative darling, on Sean Hannity yesterday using a variant on this same tale to describe why he refused to vote yes on the compromise measure just passed. He suggested that there was absolutely no way to raise taxes enough so that we could get the debt under control. Let’s take a look at the numbers and see if he is right.


Another tidbit that the old wives tale tends to look over is the fact that there is another tax bracket above the 250,000 dollar bracket, one that some very wealthy people happen to reside in so by just looking at this one bracket it is much easier to skew the numbers to suit conservative’s fancy. The CBO has a distribution chart available for 2007 that details the number of people in each bracket along with their average income within that bracket. This is interesting information because it is notoriously hard to come up with numbers and dollar figures for the upper tax bracket.


According to the CBO chart, the top 10% for reported earnings averaged 394,500 dollars a year in income. There were 116.9 million of these people in 2007. If we were to raise the tax 15% on just these people to a 50% rate we can do the math and see that we would have increased federal revenue 704 billion dollars that year. This is interesting because in 2007 we actually had a 178 billion dollar deficit. In other words, if we had raised taxes on the upper 10% of income earners 15% in 2007 we would have had a 526 billion dollar surplus that year to pay towards the debt.


According to the same CBO chart, the top 5% of earners that same year averaged 611,200 dollars a year in income. There were 5.9 million of these people in 2007. Using the same increase of 15% on this 5% of the wealthiest Americans we can do the math and see that we would have increased federal revenue 540 billion dollars that year. Subtract the 178 billion dollar deficit that we actually had and you can see that this would have resulted in a 362 billion dollar surplus.


Let’s look at the top 1% of wealthiest Americans. According to the same CBO chart this group averaged 1,873,000 dollars that year in income. There were 1.2 million of these people in 2007. Applying the same 15% increase to this bracket we can do the math and see that we would have increased federal revenue 337 billion dollars that year. This would have resulted in a 159 billion dollar surplus.


This still isn’t the whole story as most of these people make their money from investment and pay at the most the 15% tax rate that capital gains requires (think Mitt Romney and his 13% tax rate). Let’s assume these people actually had to simply pay the 35% rate they are supposed to pay according to the federal tax brackets. This would be a 20% increase in the amount of taxes they actually pay. This would have resulted in a 449 billion dollar increase in revenue and resulted in a 271 billion dollar surplus.


If we actually raised this income group to a 50% tax rate as I have suggested for all the other groups in the top 10% that amounts to a 35% increase in revenue. If we do that math for this we get a 786 billion dollar increase in revenue. This amounts to a 608 billion dollar surplus for that year alone. This is actually almost 5% of our current national debt that can be eliminated by raising taxes on the top 1% of wealthiest Americans for that one year. If we had done this in 2007, the year all these numbers are taken from and every year since we would have eliminated 25% of our national debt by 2012 in principle alone. This does not take into account the interest on the debt that is accrued annually as well which usually hovers between 2 and 3%.


It seems like the multiplying large numbers by small percentages makes for surplus instead of deficit; even if we just do this with the wealthiest Americans. This is not something that you will hear conservatives talk about because many of the talking heads of their movement are in this bracket. However, the numbers speak for themselves and they are even more surprising the further you refine them.


In 2009 a pair of young economists, Thomas Piketty and Emmanuel Saez, did a study concerning the distribution of wealth in this country. Unsurprisingly, they came up with some interesting numbers. They based their numbers on reported tax income instead of random surveys so there is plenty of room to suppose that even the numbers they came up with were underestimated but they paint an interesting picture of how the wealth in this country is actually distributed. Their study gives a clearer picture of a group that has largely been in the shadows of other studies; the top 1%.


For instance the top 1% earners took in 8% or all reported income in 1974. In 2007 they took in 18% of all income. If you include capital gains in these figures the numbers skew even further. Their take jumped from 9% to 23.5% of all income; the highest percentage recorded since 1928.


Piketty and Saez then went further and found that the top .01% earners income went from less than 1 million a year in 1974 to 7.1 million in 2007. This is an average and both numbers are adjusted for inflation to 2007 dollar values. If you dig even further into the data the top .001% now average some 35 million dollars a year in income.


These are quite astounding numbers. Put another way in 1974 the top .01% earners took in 1 of every 100 dollars of income in the country. In 2007 they took in one of every 17, or 6% or our whole national income.


Taking the CBO number and applying them to these smaller categories we can get even more interesting results. If there were 1.2 million in the top 1% then there were 120,000 earners in the top .01%, each making an average of 7.1 million dollars in that year. Applying the same 35% increase it we would have gotten a 298 billion dollar increase in revenue by simply raising the tax rate on the wealthiest .01%. This alone would have given us a 120 billion dollar surplus that year.


Think about this the next time you hear a conservative talking about tax increases. The restructuring of our tax system from 1980 on has all been aimed at increasing both the number of the wealthiest among us and the size of their wealth. They have done an admirable job of sequestering over 40% of the wealth of this country into their pockets. They also have done an admirable job of convincing those whose pockets they stole the money from to vote for their candidates in elections. The old wives tale about the futility of raising taxes on the wealthy is just one example of the logic they like to use. The perception that raising taxes on the wealthy will not help us control the national debt simply doesn't hold up to math but that seems to be a common denominator when you analyze the bedrock principles of conservatism through the prism of reality.

A Convenient Loophole

Alabama the Beautiful the sign at the state line says. There are probably some that would argue with that description but I think for the most part it fits. Alabama has recently gotten a lot of national attention for the passage of what many term is the strictest immigration bill passed in any state. While most everyone agrees that it is the province of the Federal Government to set immigration law there is a growing consensus in this country that the Federal Government is not doing very well at enforcing the existing regulations. State governments squeezed by rising health care and unemployment costs are having troubles making ends meet. A lot of people believe one of the reasons for these problems is the growing influx of illegal alien workers and their families.

The thinking is that these workers who often don’t contribute to the tax base are a double whammy when it comes to social services as their children attend public schools at the same time their families often take advantage of health care services that the state ends up paying for when people without insurance require medical care. On top of this loss is the simple fact that illegal workers take up jobs that US citizens would otherwise be able to do. I won’t bother to go into the merits of these arguments at this time because it seems to me that the illegal immigration problem is really fairly simple to solve. All we really have to do is enforce existing laws. If employers in this country were faced with the real prospect of paying the high fines such infractions are supposed to bring upon them, they would quit hiring illegal workers. Without jobs I can assure you that illegal workers would not be pouring into this country. It is really a simple matter to control the supply of workers by eliminating the demand for their services.

However, since the reality is that we are not likely to do something as sensible as enforce the existing laws in this country we have seen several states in the recent past pass legislation attempting to protect state interests from illegal workers; Alabama’s House Bill 56 being probably the most severe law passed so far.

Currently, there are ongoing attempts to overturn the law or have it declared unconstitutional and as late as last week a federal judge in Birmingham did set aside certain features of the law as being unconstitutional. Again, this is outside the scope of what this particular post is about so I won’t bother to go into this in any detail; just remind the reader that it is an ongoing process. The point of this particular post is to point out a convenient loophole in this law. HB 56 has been widely disparaged and supported from many different sides but I have yet to hear or read of a conversation concerning this loophole.

In order to explain just how far the drafters of this bill went to combat the influx of illegal workers into this state I would like to point to the following sections which many find the most ludicrous and uncharitable:

Section 13. (a) It shall be unlawful for a person to do any of the following:
(1) Conceal, harbor, or shield or attempt to conceal, harbor, or shield or conspire to conceal, harbor, or shield an alien from detection in any place in this state, including any building or any means of transportation, if the person knows or recklessly disregards the fact that the alien has come to, has entered, or remains in the United States in violation of federal law.
(2) Encourage or induce an alien to come to or reside in this state if the person knows or recklessly disregards the fact that such coming to, entering, or residing in the United States is or will be in violation of federal law.
(3) Transport, or attempt to transport, or conspire to transport in this state an alien in furtherance of the unlawful presence of the alien in the United States, knowingly, or in reckless disregard of the fact, that the alien has come to, entered, or remained in the United States in violation of federal law. Conspiracy to be so transported shall be a violation of this subdivision.
(4) Harbor an alien unlawfully present in the United States by entering into a rental agreement, as defined by Section 35-9A-141 of the Code of Alabama 1975, with an alien to provide accommodations, if the person knows or recklessly disregards the fact that the alien is unlawfully present in the United States.
(b) Any person violating the provisions of this section is guilty of a Class A misdemeanor for each unlawfully present alien, the illegal presence of which in the United States and the State of Alabama, he or she is facilitating or is attempting to facilitate.
(c) A person violating the provisions of this section is guilty of a Class C felony when the violation involves 10 or more aliens, the illegal presence of which in the United States and the State of Alabama, he or she is facilitating or is attempting to facilitate.

Basically it is no longer legal, according to this law, to conceal, harbor, transport, or even encourage the visitation of illegal workers under penalties up to and including conviction of a Class C felony. While this is the section of the law that has many people up in arms as being uncharitable or even worse in this state, unchristian; it is a fair idea of the seriousness with which the Alabama Legislature has taken it upon itself to do away with the issue. Our legislature means business. We want no more illegal workers in this state. Unless…

I know what you are thinking. Unless what? If we are willing to lock up Alabama citizens for simply giving a ride to illegal workers under what exception are we willing to overlook hiring them? There is a saying about how a chicken and a hog feel about breakfast; the chicken is involved when she gives her egg, but the hog is committed when he gives his ham. In this case it seems that some legislators are likely a little more committed in some areas of employing illegal workers than others.

In the opening part of HB 56 there is a long list of situations that the bill sets out to address not the least of which follows:

to prohibit a business entity, employer, or public employer from knowingly employing an unauthorized alien and to provide penalties;

This seems simple enough. After all, to control or eliminate employment of illegal workers is largely the main impetus for drafting the bill in the first place. Unfortunately, this is only partly true in this case. Tucked down in Section 15 you will find this loophole:

(l) This section does not apply to the relationship between a party and the employees of an independent contractor performing work for the party and does not apply to casual domestic labor performed within a household.

Ok… I know what you are thinking now; we can’t hold people responsible for hiring a contractor who might hire an illegal worker. Fair enough. However, it is the second part that contains the disgraceful loophole:

and does not apply to casual domestic labor performed within a household.

Why would we put this exception in? Maybe a person or persons who drafted this legislation have some reason for putting such a loophole into HB 56. Could it be that some of the legislators in Montgomery employ illegal workers for domestic labor within their own household? I mean after all, you can’t really blame the wealthy lawyers and business owners that populate our legislature if they don’t want to pay decent wages to have their house cleaned or their grass cut. They probably can’t afford to hire a maid service or a grass cutting service that might be forced to provide minimal benefits and wages to their employees. Maybe the whole domestic labor loophole is an oversight. After all, the whole purpose of the act is to make it illegal to employ illegal workers and anyone who hires someone to do anything is by definition an employer according to any reasonable definition of the term.
Unless… you happen to read the definitions in HB 56 Section 3:

(5) EMPLOYER. Any person, firm, corporation, partnership, joint stock association, agent, manager, representative, foreman, or other person having control or custody of any employment, place of employment, or of any employee, including any person or entity employing any person for hire within the State of Alabama, including a public employer. This term shall not include the occupant of a household contracting with another person to perform casual domestic labor within the household.

So… an occupant of a household contracting with another person to perform casual domestic labor within the household is NOT an employer according to this act. Well… surely anyone who hires an illegal worker is in fact offering them employment. Unless you happen to read 6) as well:

(6) EMPLOYMENT. The act of employing or state of being employed, engaged, or hired to perform work or service of any kind or character within the State of Alabama, including any job, task, work, labor, personal services, or any other activity for which compensation is provided, expected, or due, including, but not limited to, all activities conducted by a business entity or employer. This term shall not include casual domestic labor performed in a household on behalf of the occupant of the household or the relationship between a contractor and the employees of a subcontractor performing work for the contractor.

What a strange coincidence. It is not considered employment at all under HB 56 to do domestic labor on behalf of the occupant of the household. I am struggling to come up with a proper term to describe this type of arrangement whereby one person utilizes the labor of another if it is not employment; servitude? Slavery? Chattel ownership?

In any case, the drafters of this legislation were so determined to do away with employment of illegal workers that they even attempted to stop the practice of making tax deductions based upon employment of illegal workers:

Section 16. (a) No wage, compensation, whether in money or in kind or in services, or remuneration of any kind for the performance of services paid to an unauthorized alien shall be allowed as a deductible business expense for any state income or business tax purposes in this state. This subsection shall apply whether or not an Internal Revenue Service Form 1099 is issued in conjunction with the wages or remuneration.
(b) Any business entity or employer who knowingly fails to comply with the requirements of this section shall be liable for a penalty equal to 10 times the business expense deduction claimed in violation of subsection (a). The penalty provided in this subsection shall be payable to the Alabama Department of Revenue.

Not only is it illegal to make the deductions; you will henceforth be subject to fines up to 10 times the deduction if you are caught doing so. What about our little loophole about domestic labor? Forget it. This applies to “Any business entity or employer”. But wait a minute, we have already seen that you can’t be an employer under HB 56 just for employing someone to do domestic labor in your home. Maybe you can be a business entity? Let’s see how Section 3 defines a business entity:

(2) BUSINESS ENTITY. Any person or group of persons performing or engaging in any activity, enterprise, profession, or occupation for gain, benefit, advantage, or livelihood, whether for profit or not for profit. “Business entity” shall include, but not be limited to the following:
a. Self-employed individuals, business entities filing articles of incorporation, partnerships, limited partnerships, limited liability companies, foreign corporations, foreign limited partnerships, foreign limited liability companies authorized to transact business in this state, business trusts, and any business entity that registers with the Secretary of State.
b. Any business entity that possesses a business license, permit, certificate, approval, registration, charter, or similar form of authorization issued by the state, any business entity that is exempt by law from obtaining such a business license and any business entity that is operating unlawfully without a business license.

No….. I guess not. In other words the carefully crafted loophole for hiring domestic labor in your home also allows you to be exempted from paying a fine if you get caught illegally taking a tax deduction for it as well. It almost makes you proud to be an Alabamian. Either that, or it makes you long to be a legislator. It reminds me of the story about Ulysses S. Grant and his response to the first suggestion that he go into politics:

“I don’t think I belong in politics…. But… I could use a new sidewalk in front of my house…”

Thus launching the career of what many considered to be the leader of the most corrupt presidential administration our country has yet seen.

A True Conservative (the Republican Party's worst nightmare)

Recently Republicans met in Iowa to start the process of deciding who their candidate for the upcoming presidential candidate should be. As is usual in all recent Republican conventions on the subject, it was a contest to see which candidate could prove themself to be the most conservative, the most fundamentalist Christian leaning, and the most fiscally confused. Unsurprisingly, Michelle Bachmann wound up winning the straw poll. Her victory was probably aided by the fact that Mitt Romney didn’t officially participate and Rick Perry of Texas waited until immediately after to announce his official candidacy. However, the whole process was probably an accurate microcosm of what is to come. Republicans believe that best path to the office in the coming election is one of showing just how different from our current sitting president they are; a kind of contest to see who differs the most from the policies of Barrack Obama.


There was something very interesting that happened in Iowa last week but it isn’t something that Republicans like talking about. Unsurprisingly, none of the candidates are making many statements that might in any way be seen to be unpopular with anyone remotely thinking of voting Republican in the next election so we are in effect getting a lot of coded answers to questions meant to reassure the far right without actually upsetting the moderates within the party. In other words, we are now and will be for the foreseeable future getting a lot of fluff and not much in the way of actual plan or position from all the candidates with one notable exception. Ron Paul has been a member of Congress for many years and has run as a straight libertarian for much of his political career. He is seen by many as the true philosophical leader of the Tea Party movement as he was espousing and standing by many of the convictions they hold dear since the early 1970’s; long before there was a Tea Party. In truth, Ron Paul has voted his conviction and his conscience for many years when it was not remotely popular to do so.


The debt ceiling debate was probably the first proof that the Republican Party could not actually control the Tea Party faithful that recently were elected to Congress. One doesn’t have to watch too closely to surmise that this is a problem for mainstream Republicans. Republicans were perfectly willing to ride the Tea Party wave of enthusiasm into office but they were unprepared for the tenacity that the Tea Party congressmen have displayed in refusing to compromise once elected. There is currently a movement afoot within the Republican upper tier of financial control in the party to bring these people under their influence and I expect this will continue for quite a while but Ron Paul is a problem that even the Tea Partiers themselves don’t exactly know how the deal with. The fact that he finished number two in the recent straw poll in Iowa is deeply disturbing for the Republican Party leaders as the one thing they are absolutely certain of is that they cannot control Ron Paul.


In short Ron Paul is more conservative than the Tea Party. He did not come to the Tea Party like so many of their also ran suitors such as Bachmann, Palin, Pawlenty, Perry, Cain, and Santorum. Ron Paul was exactly what he is today when he first stepped into the halls of Congress 40 years ago; a libertarian constitutionalist self educated politician who believes in what he preaches and votes his conscience whether it is popular or not. In other words, the difference between Ron Paul and the candidates listed above is that he didn’t come to the Tea Party; they came to him. He is the rarest of politicians, an idealist who has no fear of losing an election. He is honest and forthcoming with his beliefs whether they are popular or not and he always has been.


Ron Paul is a self educated economist who fervently believes in the Austrian School of economic thought. While this school of thought is relatively complex, probably the best way of describing it is to say that proponents of this school of thought reject mathematical modeling or laboratory type projections in favor of logic based upon direct deduction of the human reasons for people’s actions. They are extremely critical of artificial or governmental influence in markets as inefficient and inevitably damaging and believe that only an absolutely free market is efficient. This puts them in direct conflict with at least 90% of the world economies as they currently operate. Ron Paul himself is no accidental proponent of the Austrian School of Economic thought; he has studied it intently for many years and written several books on the subject. While much of the conservative media gives lip service to the idea of non interference in markets, Ron Paul and proponents of the this school of thought are averse to any sort of interference with the market; no matter who is to profit from such interference. In other words, Ron Paul doesn’t just favor non-interference where it most profits Corporations and the wealthiest Americans, he favors non-interference in all stages of the economy no matter who is profiting.


On the surface this might seem ideal to the far right and the talking heads of conservative radio, but in truth since they are simply paid propagandists to corporate interests who are profiting obscenely from the current economic system in this country they are running a little scared right now. This puts them in direct opposition to Ron Paul’s election which is exactly why Rush Limbaugh, Sean Hannity, and Mark Levine are so determined to paint Ron Paul with the brush of lunacy. In effect, he has stolen their thunder by not only giving lip service to economic theories they propose to hold dear but acting upon them at every opportunity during his whole political career. If they actually believed in what they are saying one would think they would be overjoyed at Ron Paul’s recent success. In truth, they are terrified that he might actually get elected and are actively doing everything possible to attack every position Ron Paul has ever taken that doesn’t jive with the Republican ruling party and there are many of these.


To list a few, Ron Paul voted against the invasion of Iraq despite the fact that he was the only Republican to do so. It seems he believes we have no business telling other countries how to run theirs no matter what their ideology happens to be. According to the American Journal of Political Science he owns the most conservative record of any of the 3320 congressmen who have held office from 1937 to 2002 in an active political career in Congress that spans over 20 years. As a practicing obstetrician Ron Paul has delivered literally thousands of babies and is a lifetime opponent of abortion. He has publicly stated that he believes life begins at conception. As a congressman for a largely agricultural district he has repeatedly voted against farm subsidies that would enrich his constituents because he believes they are unconstitutional. He has continually voted against legislation that is not strictly supported by direct Constitutional authority. He has proposed term limits for congress on numerous occasions and drafted legislation that effect with no success whatsoever in getting it through congress. He has consistently refused to sign up for congressional health care or pension plans because he says he doesn’t need them.


Ron Paul has also been a frequent and constant critic of US foreign policy that involves us in military conflicts anywhere outside of the territorial US; whether they are put forward by Republicans or Democrats. He has offered legislation to repeal the War Powers Resolution and force Congress to declare wars which is in his view the only constitutionally correct process by which the US can declare war.


It should be interesting to watch the pseudo conservatives attack Ron Paul in the coming months. Granted, Ron Paul has given them plenty of ammunition over his years of public service but he is undeniably the most conservative candidate to actually have a following in recent history and they will have to be very careful how they deal with him without making obvious the hypocrisy of their own positions. We are already seeing the first stages of the effort to derail his campaign by the news media at large that has chosen to largely ignore his accomplishments so far. What makes this so interesting is that Ron Paul is actually who most of the far right claim to be, a true conservative. Beyond that he is that most rare of commodities in politics these days; a man of principle. Of course that puts him on a direct collision course with most of the Republican party financial supporters whose only principle of note is personal greed.

Leadership Needed

Recently, I have made an effort to get more involved in political activities. This is a hard thing for me to do for a couple of reasons. First off, I am not an overtly social person in that I enjoy good conversation and the free exchange of ideas but have no interest in being bombarded with media minute facts from people who have already decided what they want to believe and are simply trying to find facts to justify it. Experience has shown me that it takes a great deal of patience to talk to someone like this and slowly but surely point out that they are missing some of the key points necessary to make informed decisions. In the instances where an actual discussion takes place I find this is almost always the outcome. In instances where someone is more interested in talking than listening it is not. As my dad used to say, some people are permanently stuck on Transmit and have no receiving function.

Second, what I value more than anything else is an open mind. In other words, every ideological bent that is deeply ingrained is more of a hindrance to understanding than a help. For this reason I believe that political parties are universally populated by people with less than an open mind to start with. I would also suggest that the more entrenched or active one becomes in a political party the more narrow and set in stone their views tend to become. While I realize this is not a universal truism it is a good gage with which to start basically knowing what to expect.
As anyone who has read my blog probably already knows, I am not a conservative by any stretch of anyone’s imagination. The readily apparent Republican bias for large corporate interests and right wing social issues is enough to make me sure I am not a Republican. My dilemma seems to be that I am equally unsure that I am a Democrat. The adage that you are “either with us, or against us” make work well when describing sporting events but it is a remarkably useless tool when trying to convince someone that they should adapt your views. Through my recent blogs and contacts that I have made in local political circles I have started to receive more and more email from Democratic Party sources. I suppose that anyone who reads my views on my blog or in fact talks to me in person can soon realize that I am opposed to most of the Republican Party platform as it exists now. However, it does not necessarily follow that I am in favor of that of the Democratic Party.


As a student of American history I am well aware of the vagaries of political parties and the platforms they have periodically put forth to support their position. The problem as I see it right now is that there is only one party in power. I would describe that party as the Corporate Interest party and from what I can tell it is holding all the cards right now which is exactly why we have swung so far to the right in this country. This party, which I believe started with Ronald Reagan, has steadily gained control over most of our political institutions in the last 30 years. It is rather ingenious that this party which actually only represents the wealthiest Americans in this country has also managed to convince much of the voting populace for the last 30 years that they have THEIR best interests in mind when they actually have done everything possible adopt legislation that effectively destroys the middle class. It is a classic bait and switch operation whereby they bring out the old standards of social programs that are perceived as thorns in the side of the working class every election without actually even addressing these programs once they are elected. A good example is the Tea Party which in my view is a bunch of well meaning middle class Americans who are mislead, misinformed, citizens who equate their home budget with the budget of the largest and most complicated economic system the world has ever seen. They are also absolutely convinced of their correctness; to the point of being zealously opposed to hearing facts that tend to point out their error. These people are actually being used by some of the wealthiest people in this country to get in office so that they can further advance their own narrow economic goals which can best be defined as “give me more money”.

Unfortunately, this Corporate Interest Party is also heavily invested in the Democratic Party as well. After all it was a Clinton led program that de-regulated the banking interests in this country and opened the floodgates to the recent economic disaster. Many of the top Democrats in Congress right now were a party to that particularly unfortunate piece of legislation, both in its formulation and adoption. It also seems that this is the most effective branch of the Democratic Party if one looks at the actual programs that get through Congress even in recent years when the Democratic Party has controlled Congress.


I believe there is a good reason for this. Outside of the Corporate Interest branch of the Democratic Party there presently is no core constituency that supports anything. A large segment of the Democratic Party today is composed of lots of special interest groups that have one main agenda that necessarily conflicts with those of the Republican Party. The problem is that all of these fringe groups have no common ground that they can agree amongst themselves to support. Effectively the Democratic Party has devolved into a combination of the same Corporate Interest groups that dominate the Republican Party and an array of special interest groups who only have in common their dislike of the Republican Party’s platform. This makes it impossible for them to govern effectively if they do happen to get into office because they immediately start arguing amongst themselves about issues that they didn’t agree on to start with. This leaves the only really effective arm of the Democratic Party the Corporate Interest branch of the party. In essence Corporate Interest wins no matter which party wins an election in this country.


In recent discussions with people within the Democratic Party it seems that the matter of raising money for the party is the main focus of much of their activity. While I realize this is one key to effectively combating Republican efforts along the same vein I am unconvinced that this is the issue Democrats should be focusing on. In my view, the Democratic Party needs new leadership. Running in opposition to Republican actions is not enough. Reacting to Republican actions is not enough. The Democratic Party needs a plan of action that is both detailed and comprehensive as to how to address the problems we have in this country. Unemployment, a stagnant economy, rising health care costs, and the deficit issue are all interrelated and we need to figure out how to deal with these issues. Effective leadership would propose solutions. The American public is starting to realize we have problems but they do not have leadership as to how to deal with them because most of these problems have been caused by a government that is bought and paid for by the Corporate Interests that are causing the problems and that group is deeply imbedded in both parties.


We need to restructure the tax codes to incentivize investment in industries that create jobs. As long as financial markets are the most lucrative way to make money that is where the wealth of this country will be invested whether it creates jobs or not. Republicans like to talk about “job creators” as a euphemism for the wealthiest Americans when the present reality is that profit maximization is most effective in markets that do not create jobs. Why not make them put their money where their mouth is and base the tax rate on employment opportunity? In other words, if you create jobs you get a break on your taxes. If you ship jobs overseas you pay a higher tax rate. The reality of the situation we find ourselves in is that most of America’s large corporations are making record profits while at the same time reducing jobs. The reason is simple. Under present conditions and existing tax codes investment in financial markets that do not create jobs is the most effective means of making more money. Until we change that fact the economy is not going to get better because we need to put people to work to get the economy going.


Instead of falling back on the idea of simply taxing the rich to increase revenue why aren’t Democrats explaining what they are going to do with the revenue. Americans know we need to change the way we do business in this country; they are simply waiting on someone to explain a viable way to do it. The basic flaw in the Reagan revolution was the destruction of our manufacturing base in favor of a service economy. Without the support of a good base of manufacturing jobs service industries are impossible to operate because they depend on people having money to spend to be profitable.


The next thing we have to do is to balance our trade deficit situation with China. China has been subsidizing their manufacturing industry for years by manipulating and artificially holding the value of their currency down and constructing trade barriers to our products. The source of our inability to effectively counter these policies can be traced to the fact that the same Corporate Interests who are controlling all facets of our government depend on money from China to invest in the same financial markets that caused the latest collapse to begin with. Not only do these interests refuse to allow government regulation of these markets they do not want to in any way upset the people who are helping finance the whole thing; the Chinese. If the main goal of American business is to maximize profits then we should just continue along the path we are on. However, we must take note of where that path leads; to ever higher unemployment in this country which means more widespread suffering amongst the middle class AND the inevitable increase of our deficit. Let no one fool you, the only way to cut social programs in this country presently is to quit paying the medical costs of the unemployed and cut back on programs that presently allow them to survive on the lower rungs of subsistence.


These are the kind of ideas that are needed to get us out of the situation we find ourselves in presently. Electing more representatives of the Corporate Interests in this country will not do anything to solve the problems and I am unwilling to invest time or money in ANY party that is devoid of actual solutions to the problem. We cannot logically expect the portion of the population who are profiting the most from the present situation to be the ones to change it. The fact is that it is not in business leader’s interest to change a situation wherein they are seeing record profits every year. There is a very disturbing tendency in both parties to insist upon electing business leaders as our government representatives. Conventional wisdom suggests these are the people best suited to bring us out of our current situation. I can think of no more erroneous and fundamentally flawed assumption than this. Business leaders who run Corporate Interests have been controlling our government since Reagan and we are now seeing the fruits of their labor; an ever growing destruction of the middle class combined with the redistribution of wealth into the pockets of these same leaders and their allies who are the wealthiest 1% of the nation. This is a truism that we once understood in this country. After the Great Depression there was a backlash against these same people for the destruction they had caused by their greed. This backlash led directly to policies that saw the great economic boom that put our country in the lead in the world economy. Allow me to quote from Adam Smith and his “Wealth of Nations” that is widely considered the first complete description of Capitalist theory as he describes this same Corporate Interest:


Merchants and master manufacturers are, in this order, the two classes of people who commonly employ the largest capitals, and who by their wealth draw to themselves the greatest share of public consideration. As during their whole lives they are engaged in plans and projects, they have frequently more acuteness of understanding than the greater part of country gentlemen. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business, than about that of society, their judgment, even when given the greatest candor (which it has not been upon every occasion) is much more to be depended upon with regard to the former of those two objects than with regard to the latter. Their superiority over the country gentlemen is not so much in the knowledge of the public interest, as in their better knowledge of their own interest than he has of his. It is by superior knowledge of their own interest that they have frequently imposed upon his generosity, and persuaded him to give up both his own interest of that of the public, from a very simple but honest conviction that their interest, and not his, was the interest of the public. The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow citizens. The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.


Try and keep that in mind the next time you hear a Republican or a Democrat describing their fitness for public office by boasting about their business background.

A Dose of Reality

It’s time for a little dose of reality. We are daily bombarded with rants from both sides of the political spectrum as we try to sift through the information concerning how the deficit in this country got out of control. To have any sort of perspective on the problem we need to go back to 2001 when Bill Clinton was leaving office. At that time the Congressional Budget Office estimated that the US budget would actually run a surplus of some 800 billion dollars a year for the years 2009-2011. What has actually happened is that we are now running an annual deficit of some 1.2 Trillion dollars a year for those years. This difference in these two amounts is a 2 trillion dollar headache for the United States and one that the current crop of politicians on both sides are steadily proving themselves incapable of understanding, much less rectifying the situation. What happened? How could the Congressional Budget Office have been so far off in their estimate?


Republicans would have us believe that the Obama administration with its socialist tendencies and out of control spending habits has destroyed our economy. Democrats would have us believe that tax cuts for the richest Americans and lobbying efforts by the largest American corporations have decimated the ability of the US to raise revenue needed to pay our bills. As is usually the truth in politics, there is a grain of truth in both explanations but neither of them addresses the real problem, which is that our economy is suffering from of one of the worst economic disasters in the history of financial disasters. I have already addressed these issues on several posts (What Really Happened, Magic Beans, A Swing to the Right, Tax Philosophy ) so I won’t bother to go into them in a great deal of detail again but we have to understand the problem before we can come up with a solution and the soapbox prima donnas on both sides of the aisle are either incapable of understanding the issue or unwilling to deal with the reality that we are in serious trouble here and it is not going to be easy to put the pin back in the grenade.


Let’s take a look at where the deficit numbers come from, the discrepancy between what the CBO predicted and what we actually have taking place right now. The largest part of the difference came from two unexpected economic downturns. The first happened in 2001 and was a small recession compared to the second one but it was a downturn and it affected projections of both spending and revenue. When the economy goes down and unemployment goes up two things happen at the same time. The money the government takes in from tax revenues drops and the money it pays out in social programs goes up. Unemployment payments, welfare payments, Medicaid payments, and all forms of social services bear the brunt of the fact that people who aren’t working become dependent on social programs to survive. At the same time, tax revenue that isn’t being generated from these same people goes down. It is a double edged sword; one made worse by the fact that most Americans health insurance is through their employer so when they lose their job they lose their health insurance as well and the government then gets to foot the bill for their medical expenses. The second economic downturn which started in 2007 right before the election that put Obama in office was much more severe and much more damaging to both the US economy and the budget deficits because of both the longevity of the downturn and the universal severity of the problem.


Clearly, Obama can hardly be blamed for the economy he inherited no matter what the conservative right would have us to believe. It happened before he was elected and he is still trying to deal with the effects of this problem. We can argue whether he has dealt effectively with the problem but it is incontrovertible fact that the problem itself is one that he inherited from George W. Bush and the Congress in place while he was in office. How much of the current deficit problem is directly attributable to this economic downturn is a matter of some disagreement but most economists agree that it is by far the largest part of the current deficit issue; in the range of some 37% of the 2 trillion dollar deficit miscalculation of the CBO. This means that some 740 billion of the difference between the CBO’s estimates and reality is a direct result of the economic downturns that occurred before Obama’s election.


Another large chunk of the problem came from two programs that George W. Bush pushed through Congress. You remember him and his buddy Cheney who confidently boasted that Reagan had already proved that deficits don’t matter. While this is obviously a remark made in total ignorance of economic reality, it is part of the the same fable that Republicans have been telling since Reagan was in office. According to the Republican mantra that has been around since Reagan the answer is cutting taxes no matter what the question might be. Cutting taxes stimulates the economy which allows it to produce more revenue according to Reagan’s idea of economics which the first Bush president accurately described in a debate as “Voodoo Economics”. Unfortunately, he neglected to explain this fact to his son who believes to this day that what we need are more tax cuts for the wealthiest Americans. The truth is that the Reagan years doubled the deficit which is something that was deemed impossible previously without a major war like WWII. I have trouble understanding how even the most ardent Reagan worshipers gloss over the fact that he doubled the deficit in peacetime the first time we tried tax cuts for the wealthiest Americans. As a matter of fact, cutting taxes didn’t stimulate anything but the second phase of Reagan improvements which involved spending massive amounts of government money paying large corporations to develop military hardware did. This is exactly why the economy took off, it was the largest influx of government money into the economy we had seen and it worked like a charm as long as you ignore the fact that it doubled the deficit.


Getting back to the present situation, George W. Bush pushed through two major programs that had devastating effects on the deficit. The first was the Reagan mantra of cutting taxes on the wealthiest Americans. This of course had the same effect that it had in Reagan’s years; it caused a loss of tax revenue that led to significant deficit increases. Interestingly enough, Republican believers in the tax cut mantra still believe it is the answer today even though we have a lot of statistical data that proves it takes increases in revenue along with decreases in spending to lower deficits. All one has to do is compare the Clinton and Bush Sr. years to the Bush Jr. and Reagan years to see this in action but it really is as simple as addition and subtraction. Any child knows you don’t increase the amount of water in a bucket by punching a hole in the bottom of it. The second program that Bush pushed through was the Medicare Prescription Drug Act which basically increased the amount the government program would provide for paying for drugs for Medicare participants. While this is a much more noble cause than tax cuts for the wealthy it was implemented without a hint of how it was to be financed so naturally it just added to the deficit. The net effect of the Bush Tax cuts and the Prescription Drug Act changed the CBO’s predictions by some 33% (660 billion dollars of the 2 trillion) by the time the increases in interest payments on the debt it created are added.


If you add the 33% to the 37% you come up with some 1.43 trillion of the difference between the CBO’s prediction and what we are actually seeing. Try to keep in mind that this number is composed strictly of policy mistakes that were put in place before Obama’s election. It is interesting that the harshest critics of the deficit issue today are some of the same people who actually caused both of these problems to happen through de-regulation of the financial industry and tax cuts for the wealthiest Americans along with a Prescription Drug Act that was passed without any hint of how it would be financed.


Does this mean that Obama has no blame in the current fiasco? I would say that there is enough blame to go around for everyone but we will continue to look at actual numbers to see where the 2 trillion dollars difference between the CBO’s estimate and today’s reality was created. Another 20% of the difference can be found in Obama’s support for the continuation of the wars in Iraq and Afghanistan combined with the continuation of the Bush tax cuts along with the Wall Street Bailout that Bush signed and Obama supported. In other words another 400 billion of the 2 trillion dollar difference can be traced directly to these three policies that Bush put in place and Obama continued to support after his election. Many of Obama’s supporters were disappointed with his continuation of the wars in Afghanistan and Iraq. Without knowing the security information that Obama became privy to upon arriving in the White House it is hard to make judgments about his decisions along these lines. We can further question his support of the Wall Street bailout but most reputable economists believe that it was necessary to keep the international economy from a devastating collapse; one that we are still not completely sure won’t happen in the near future I might add. Extending the Bush tax cuts was unmistakably a bargaining tool that Obama used to get support for some of his other programs but I personally believe it was a bad deal and one that can be shown mathematically to have increased the deficit problem when we need to go the other direction. In any case, if you add the 400 billion to the 1.43 trillion above you come to a 1.83 trillion dollar figure or some 90% of the current deficit problem and we still have not gotten to any of the Obama programs that conservatives want to convince us are the root cause of the deficit.


Obama is not without blame in the current crisis. The stimulus bill that he helped push through Congress to get the economy going added another 7% to the difference between the original CBO estimate and the 2 trillion dollar deficit we have. Obama’s health care bill that he pushed through has also added to the problem, along with his initiatives on education, energy, and other social programs added another 3%. In other words, Obama’s programs which conservatives see as the socialist part of his agenda have added a total of 10% (200 billion) to the deficit problem.


To recap; policies and economic problems that occurred during the 8 year term of George Bush are the direct cause of 70% of the deficit problem we are faced with. Obama’s support for/ and extension of Bush policies added another 20%. Obama’s programs that he has personally pushed through add another 10%. The end result is that we have a 2 trillion dollar difference between what we should have in our deficit and what we are actually faced with and we are now faced with the reality that we have to deal with this issue before it gets any larger. There are only two ways to decrease the deficit, increase revenue and decrease spending. Unfortunately, we are now faced with such a severe problem that we will probably have to do both in large and painful increments to see our way clear of this issue. There is always the possibility that the economy will turn around and start to grow at a fast rate which will necessarily narrow the difference between what we take in and what we spend. Unfortunately, the deficit issue has grown to such proportions that growth is probably not possible without first cutting into the deficit. It still remains to be seen whether we can change our economic policies to actually deal with the issues that caused the economic collapse that triggered the biggest part of the deficit.

The Family Leader Pledge

It’s getting close to election time again. Unfortunately, this means that all the fringe lunatics from both sides of the political spectrum will start pushing hard for their own particular agendas. It is interesting to watch closely how such throwing around of political weight actually affects the candidates. Naturally, the far religious right is right in the middle of the fray already. A group in Iowa calling itself “The Family Leader” has already managed to get caught making hash of historic fact and getting at least two of the Republican candidates to sign a pledge that is chocked full of misinformation and factual errors. It always amazes me what the perceived promise of large groups of voters will entice candidates to adapt as policies.

The Family Leader is actually a splinter group of the much larger “Focus on the Family” group run by James Dobson that has a long history of trying to set the agenda for conservative candidates on a right wing religious footing (See earlier post, Focus on the Family? ) Both groups like leading with the idea of being centered around “family” values but are actually only interested in pushing right wing Christian values as is evidenced by information on both of their websites if one takes the time to actually read their propaganda at its source. This is neither surprising nor new for anyone who has taken the time to look into exactly who is funding the Tea Party groups in the country today (See earlier post Tea Party of the Religious Right? ).

Beliefs
The FAMiLY LEADER champions the principle that God is the ultimate leader of the family. Our goal at The FAMiLY LEADER is to honor and glorify God – not a political party, not a candidate, and not a program. The FAMiLY LEADER is a Christ-centered organization that will lead with humility and service to strengthen and protect the family.

Hardly a broad based family organization if you take them at their word here. Obviously, unless you believe that God is the ultimate leader of your family you aren’t welcome in their “family”. In case you want to interpret their use of the term God in some generic way they further define this is a Christian organization with the bit about being Christ-centered. Jews, Bhuddists, Islamics, nor any other widely held views about who or what God is are incontrovertibly disowned in the second paragraph on the website. It is not a family organization at all, it is a Protestant Christian organization specifically aimed at influencing political elections and processes. This becomes even more obvious when one looks into the PAC mission statement on the same webpage which states that they seek to elect conservatives with a biblical world view. While I don’t begrudge them the opportunity to influence elections there is a widespread epidemic in this country of organizations working under the guise of religious organizations according to their tax structure and political organizations in actuality but I will leave that be for the moment.

Recently the Family Leader made headlines for a pledge it was trying to get candidates to sign in order to receive their support in Iowa. Two of the leading Republican candidates signed the pledge immediately after it came out as they were obviously anxious to garner whatever votes this organization could swing their way as a result. Michelle Bachmann and Rick Santorum both signed the pledge immediately upon being presented with it. While it isn’t surprising to see two Republican frontrunners anxious to be more conservative than anyone else running it doesn’t say much for their level of understanding when they both signed something that is so plainly discriminatory and controversial without bothering to read it first.
The very first tenant of the document gives away the intention of the document and the mentality of those who wrote it:

Slavery had a disastrous impact on African-American families, yet sadly a child born into slavery in 1860 was more likely to be raised by his mother and father in a two-parent household than was an African-American baby born after the election of the USA‟s first African-American President

Obviously, it is a backhanded slap at our current president which is only to be expected from any conservative group as most view him as something between the anti-Christ and a socialist intent upon destroying the very fabric of our culture. Anyone who couldn’t smell something wrong after reading this salvo isn’t very astute to begin with. In the first place, slavery in the United States did not recognize the right to have a family so there was technically no such thing as an African-American slave family in 1860. The institution of marriage was not recognized as something that slaves in the United States had a right to participate in. Recognition of slave families would preclude the right of slave owners to sell them separately and we should make no mistake in understanding this was a routine practice for slave owners. Beyond that, in ALL cases slaves had no right of ownership of their own children as it was a routine business practice to separate slave children from their parents at birth. Ownership of slave children was legally bound to the ownership of the parents. In other words, the slaves not only had no right of marriage they also had no right of ownership of their own children who could and often were sold outright with the parents having no say in the matter. In other words, there was absolutely no family unit recognizable to children born into slavery in 1860 and almost no possibility that they would be raised in a two parent household. It would be hard to make a statement more patently and irrefutably false than this one so I wondered where such an idea could come from.

There is a footnote in the pledge with reference to where this particular nugget of information came from. It is a report written to study the effects of marriage on African American families titled “The Consequences of Marriage for African Americans”. This report studies the effects of marriage on socio-economic status amongst African Americans and is an interesting read. However, it is NOT a source that covers anything to do with children born into slavery in 1860. As a matter of fact, the earliest data referenced in this report was taken in 1880 and 1910, fifteen and forty five years after the elimination of slavery in the United States. According to the report only minor changes in the basic numbers of two parent households in the African American occurred before 1950. Much the same can be said for white two parent households in this country as well but I am getting off the subject.

Not only is the original statement in the pledge factually incorrect, the report that was supposedly the source of the statement contains no information whatsoever that relates to it. The Family Leader website has this quote in bold letters on its mission statement page:

“…we do not use deception, nor do we distort the word of God. On the contrary, by setting forth the truth plainly we commend ourselves to every man’s conscience in the sight of God.”
-2 Corinthians 4:2

Obviously, to the people at The Family Leader deception has a different meaning from that the rest of us understand as there is not even a grain of truth in their original statement concerning children born into slavery. Whoever wrote the statement plainly does not understand very much about slavery, nor have they bothered to read the information they use as source material to support the statement. In any case, after the media noticed that two of our leading candidates for president had signed a pledge containing such idiocy the good people at The Family Leader took this section out of the pledge and issued the following statement:

“After careful deliberation and wise insight and input from valued colleagues we deeply respect, we agree that the statement referencing children born into slavery can be misconstrued, and such misconstruction can detract from the core message of the Marriage Vow: that ALL of us must work to strengthen and support families and marriages between one woman and one man." The Family Leader added, "We sincerely apologize for any negative feelings this has caused, and have removed the language from the vow.”

This is a good example of the right wing’s idea of an apology. Obviously, there are some people at The Family Leader who have trouble understanding the English language. The statement is not one that can be misconstrued; it is a statement that is totally and completely without factual basis. Not only is it a flat out lie, it has nothing whatsoever to do with the material it purports to use as source information. None of this is surprising or new but we should start to be aware of the propaganda efforts that are currently underway in this country to convince the American public that this country was based upon some biblical worldview when the truth of the matter is that most of the founding fathers were secular humanists who were no less terrified of the involvement of religious institutions in our government than they were of monarchy and dictatorships. The far right and the religious fundamentalism is no less dangerous in this country than it has been in any other part of the world and groups like the Family Leader and Focus on the Family who are providing much of the financial muscle behind the Tea Party can only easily be defeated by dispersion of the truth. After all, propaganda can only be effective if its antithesis, factual information, is forcibly silenced.

Why I Don't Buy Magic Beans

I often listen to conservative talk radio in my car for a couple of reasons. First, I like to keep informed of all sides of political arguments and even though most of conservative talk radio is more akin to propaganda than information one can still get an idea of the right wing viewpoint by listening to Rush Limbaugh or Sean Hannity. The good news is that you don’t have to listen for very long in that they endlessly repeat the same talking points ad nauseum (see the definition of propaganda). Second, since I live in an area that is heavily right wing in its general political leanings there is virtually no left wing or progressive radio available without having satellite radio which I don’t happen to have in my car.

I don’t normally have much of a reaction to what I hear on these shows beyond the amusement that comes from realizing how childishly simple and devoid of actual study most of these points are in reality. It is interesting to follow the careful application of facts and editing that Limbaugh employs in trying to make his points. He really is quite masterful at avoiding telling the whole story about anything while at the same time emphasizing and carefully stacking the half truths of his narrative to build his positions. On average I would say that he rarely goes over a sentence or two without badly distorting the truth or taking a half truth and expounding it as irrefutable fact. There is an old maxim that says “a little knowledge is a dangerous thing”; in Limbaugh’s case I would expand this to “a little knowledge combined with a lot of half truths endlessly represented as the whole truth is a dangerous thing” (again, see the definition of propaganda).

As I was listening today I heard Limbaugh launch into his normal ridicule of Democratic positions by one of his favorite tactics of sarcasm combined with satire. The specific issue he was talking around today was the upcoming budget battles and the attempt by Republican’s to cut further into discretionary spending and Medicare programs. What is interesting is that both parties agree that rising health care concerns are an issue that is to a large extent driving much of our national debt problems. Unfortunately, this is about the only thing that both parties agree upon when it comes to health care. Typical of Limbaugh and his tactics he was not discussing the issue today or offering solutions to the problem but rather ridiculing the idea that Obama put forward in his speech yesterday that he was not willing to stand by and let the Republican party do away with Medicare programs that are the only means many Americans have of receiving the health care they need to survive. Limbaugh launched into an insulted tirade describing how Democrats are trying to paint the Republican party as the party that would have these people put out in the street without healthcare.

This is typical of the way Limbaugh operates, avoiding the substance of the issue by concentrating on the satirical implication that Democrats are only interested in demonizing Republicans. He went on to describe how offensive and silly it is to suggest that Republicans don’t care about people, that they are somehow immune to feeling of empathy for the needy. I doubt there are very many people who believe that Republicans want people to suffer or that they desire to somehow punish the poor and needy by denying them health care. The point that Limbaugh purposefully avoids and goes to great lengths to disguise is that this WILL be the result of doing away with Medicare programs and privatizing them with a public voucher system that everyone recognizes will lock people into set benefits at a time when actual health care costs are skyrocketing. Intentions count less than results when it comes to basic necessities of life. The fact that no one intends for people to suffer does not change that fact that people do in fact suffer and die when they can’t get the basic health care they need to survive. While it might be worthwhile in Limbaugh’s opinion to point out this was not the intention of such measures this is actually of no consolation to the people who will be suffering and dying as an inevitable result of the measures themselves. It is neither wrong nor imprudent to point out inevitable results of cutting such programs; it is in fact criminally irresponsible to avoid doing so.

There are two possible ways to interpret this behavior. The first and most obvious possibility is that Limbaugh simply doesn’t know what he is talking about. While it is easy to dismiss this out of hand there is perhaps a grain of truth to it. I would submit that it is hard to understand the concerns of those of us whose families are often at the mercy of such systems when you are as far removed from the cold hard realities of having to make hard choices as Limbaugh currently happens to be. Limbaugh makes some 28 million dollars a year in direct income without including endorsement contracts. This amounts to some 116 thousand dollars a day which probably does make it hard for him to have any understanding of the world that most of listeners deal with every day. It stretches the imagination to believe that someone who makes that much money could have any understanding of what it is like to do without basic needs. I would suggest that it has probably been quite some time since Limbaugh was even directly personally exposed to anyone who is struggling in today’s economy. While this also explains his undying and ridiculously nonsensical ideas about taxation and Reaganomics which preaches that lowering taxes is the best way to stimulate the economy, it doesn’t say much for his ability to be objective when he twists fact and figures so relentlessly to prove such a theory makes any sense economically while pocketing the results of the tax cuts so directly.

The second possibility is that Limbaugh actually is what he appears to be, a willing shill for corporate America who has as little use for truth and factual information as his hero Ronald Reagan. Reagan, who made a living many years being a direct employee of corporate interests as a spokesman in their campaigns to increase profit margins at any cost later graduated to a position in government where he could be even more effective in this pursuit; the President of the United States. It is impossible to know which possibility is correct or even if it is the combination of the two is what drives Limbaugh in his daily rants but it is easy to know the practical results of his choices; a show unmatched in its propaganda value if you are a wealthy American or a large corporation in its ability to influence voter opinions of the very people that such interests routinely abuse to build their wealth and power.

It is hard to imagine a better methodology for enriching the wealthiest amongst us than the talking heads of conservative radio. If I were to suggest a scenario that involved the wealthiest Americans gaining control of the levers of power with the full aid and support at the ballot box of the working class they are pilfering their profits from you would suggest that such a scenario is at best unlikely. However, both Limbaugh and Hannity, who manage to portray themselves as protectors of the common man while collecting millions of dollars each year from the wealthiest corporate interests in this country, are in fact two of the most effective agents for making sure this is exactly what happens. Hannity makes some 22 million dollars a year in salary before endorsements in case you are wondering. Not surprisingly, he is just as adamant that any increase in taxes on the wealthiest Americans would be a disaster of the first order. One basic mantra that all conservative commentators constantly repeat is the idea that tax cuts lead to net increases in revenue.

Budgets as large as our national budget can be extraordinarily complicated instruments but the basic laws of addition and subtraction are not magically suspended when it comes to evaluating them. National budgets, just like personal budgets, are a balance between money coming in (revenue) and money going out (expenditure). While it is possible to increase relative revenue if you cut expenditures enough the net gain is simply a one to one ratio, every dollar saved equals a dollar available to pay against the debt. Common sense tells us that to decrease the deficit we must have a combination of reduced expenditure and increased revenue. Not surprisingly, history does as well. Contrary to the cherished magical myth that conservatives love to repeat about cutting taxes while simultaneously increasing government revenue it simply does not occur and we have proved that on four separate occasions since 1980. Reagan’s first tax cuts drastically reduced government revenue to the point that three later tax increases were necessary to keep us from breaking the government then. The difference is that the later tax cuts worked to shift the largest proportion of the burden from the rich to the middle class. Even with the later tax increases, the deficit doubled during Reagan’s tenure.

When Bush senior came into office with his “read my lips, no new taxes” pledge he soon found that it was necessary to renege on this promise because we were still sliding into a deeper deficit and the only way to begin to pull us out of it was to increase revenue by raising taxes. While this may or may not have cost him the next election, it did manage to begin to increase revenue. With Clinton, we got more of the same in the way of increased taxes along with expenditure cuts that were well on the way to balancing the budget. With Bush junior we got another round of tax cuts that led directly to higher deficits. It is hard to stress this fact enough; tax cuts do not increase revenue. It really is voodoo economics to suggest that it does and recent history has pointed this out repeatedly no matter what conservative commentators say to the contrary. As anyone who has passed third grade math knows you cannot get larger numbers by subtracting no matter how many times you do it.

Beyond the simple mathematics of why this doesn’t work there is also the basics of how capitalism works to explain this more clearly. Capitalism is largely based upon the idea that accumulations of wealth can be used for investment which will spur more economic growth. It is a repeating cycle of continuous growth based upon the idea that one must first have accumulations of capital before there can be investment. If our country was in a situation where there was not enough capital to spur growth temporary tax cuts as a stimulus might be a viable option but we would still have to realize that any tax cut must be offset by expenditure cuts to keep from bloating the deficit. However, everyone agrees that there is a huge surplus of capital in this country right now; although much of it has been hoarded into offshore tax havens so that its owners can avoid paying taxes on it. In other words, cutting taxes on the wealthiest is not only unnecessary , it is actually counterproductive to inducing investment because it has been proven to further reduce the likelihood of investment for the simple reason that there is no inducement to reinvest this capital. This is largely the reason why there was such huge investment in the unregulated financial markets that crashed the economy in the first place. Every time there is a tax cut on the wealthiest Americans along with deregulation of the financial industry there is a corresponding increase in unfeasible financial markets that inevitably crash. Radical tax cuts to the top level of income earners in the twenties (70%-24%) immediately preceeded the rampant speculation that fostered the Great Depression. After the initial Reagan tax cuts we had the Savings and Loan crash. After the Bush tax cuts we had the recent financial crash of the whole US banking system that we are still trying to claw our way out from under. Nothing stimulates the ingenuity of the confidence men amongst us as much as large piles of cash reserves that become available with such tax cuts. In case anyone hasn’t noticed, we as the taxpayers bailed out the wealthiest Americans in each case so we not only don’t get to participate in the party; we have to pay the bill after the party is over.

What is actually needed is not further reductions in capital gains taxes and the income taxes of the wealthiest Americans, but the increase of such taxes to induce them to reinvest the money in industries that produce jobs in this country instead of encouraging further tax havens for shifting jobs overseas. Tax incentives could easily be written to encourage investment in industries that create jobs by tying tax rates directly to the number of jobs created while increasing tax rates on financial markets that do not. In other words, we have plenty of capital for investment. Tax cuts to increase the capital available for investment aren’t what we need. Tax increases with incentives designed to induce investment from existing capital in industries that produce jobs are what we need.

Limbaugh, Hannity, and their ilk would be comical if they weren’t doing so much damage to our political structure by deliberately spreading corporate propaganda. Shills have been a component of the business world since the first halting steps of capitalism but they have rarely been as effective as this new crop of them happens to be. While Reagan himself is their patron saint, they are all cut from the same cloth. It is up to the American public to recognize they are being fleeced by the people who proclaim to protect their interests but I find it especially ludicrous that two men who make 48 million dollars a year between them are widely seen as the protectors of the working class public by a large portion of the voting populace. They remind me of the peddler of the magic beans in the fable Jack and the Beanstalk with the exception that they are peddling “magic tax cuts” instead of “magic beans”. Unfortunately, there is no such thing as “magic tax cuts” that will grow us out of the deficit situation we are in. There are only real numbers and the reality that it takes addition to make larger numbers and tax increases to create more revenue.