By David Stack
The United States of America is under a severe political, social and spiritual crisis; and I’m very concerned about the future because we are better than this! While Washington is in ideological gridlock, the U.S. now has the worst income inequality of any industrialized nation. There’s a strong relationship between inequality and social ills and health issues such as homicides, imprisonment, teenage pregnancy, obesity, and mental illness, etc.
Thirty years of research comparing each U.S. state, and various countries shows that the greater the inequality, the worse the societal ills.
We have a government system that works hard for the big money transnational corporations and the very richest Americans, but not for the rest of us. One of the many ways in which this is evident is in the corporate loopholes which allow the most profitable companies like Exxon to get away without paying any Federal taxes whatsoever! Rather than fixing this, the Republicans want to privatize Social Security and do away with Medicare! The Republicans would rather balance the budget on the backs of the elderly, the sick, the vulnerable, the struggling middle class, etc. This is WRONG and simply immoral!
The Republicans hope you don’t know the history of the U.S. tax structure from the beginning of the 20th Century, and how it corresponds to the Great Depression and this Great Recession.
The majority of the GOP House (235 as of July, 2011) has signed the Grover Norquist Tax Pledge in which they vow not to increase taxes. Yet, polls show that the American people overwhelmingly support raising taxes on the wealthy. It’s bad for democracy for our elected officials who are supposed to represent all of us to make such a restrictive pledge—unless, of course, you’re among the wealthiest Americans!
You may recall that the Republicans used a hostage situation to coerce President Obama into a compromise that extended the Bush tax cuts for the rich. Why not take the $700 billion that the Republicans want to give in tax cuts to the top 2% of richest Americans, and instead of giving those tax cuts, put it into our crumbling infrastructure? That would guarantee an effective economic stimulus by creating much needed jobs. China is way ahead of us in high speed railway systems while our bridges are collapsing in this country!
Republicans call the rich ‘job creators,’ but with the Bush tax cuts still in place, I ask: WHERE ARE THE JOBS? It doesn’t make any sense to me to give the richest Americans this tax break at a time when our income inequality is the worst that it’s been since the Great Depression!
Most people forget that the TARP stimulus for the bank bailouts was initiated by former President Bush. Regarding Obama’s stimulus, I agree with economists who say that the stimulus would have had to be twice as big to have had a more noticeable effect on the economy. However, it’s clear that things would have been worse without this stimulus at all. Another way it could have been more effective is if the Republicans hadn’t stripped it of its “buy American only” provision. So instead, we are stimulating China!
Meanwhile China also had a stimulus plan, but that country had more sense to keep its “buy China only” provision in its plan.
It’s one of my biggest pet peeves that we’ve sent all our call centers and manufacturing jobs to India and China in the name of being “competitive in the global marketplace.” I understand that corporations are just doing what they have to do to stay competitive, but our politicians, both Democratic and Republican, have opened the door for outsourcing. They have abandoned the road map given to us by Alexander Hamilton’s 11-point Plan in his “1791 Report on Manufactures to Congress” that protected American industries. Our insane trade policies only benefit other countries and the transnational corporations. The losers here are mostly middle-class Americans as unemployment increases. We will never have a full recovery until we change the fundamentals!
And it’s plain to me how and why our policies have changed: The lobbyists, corruption, bribery… our politicians on both sides of the political spectrum have been seduced by the corporations to abandon some of our most basic principles. And we wonder where the jobs have gone in this country. Protectionism — It’s a word unfairly subjected to demagoguery, and yet I strongly believe this country is worth protecting!
The Democratic Party isn’t innocent here either. Ross Perot was absolutely right when he said that if Clinton’s NAFTA passes we’ll hear a “giant sucking sound” of our jobs leaving the country, and that’s exactly what happened! Unfortunately it didn’t just stop at NAFTA.
In his book, “Rebootint the American Dream, “ Thom Hartmann wrote, “After Reagan blew out our tariffs in the 1980s and Clinton kicked the door off the hinges with the General Agreement on Tariffs and Trade (GATT), North American Free Trade Agreement (NAFTA), and World Trade Organization (WTO), our average tariffs are now around two percent. The predictable result has been the hemorrhaging of American manufacturing capacity to those countries that do protect their industries through high import tariffs but allow exports on the cheap—particularly China and South Korea.
“The irony is that we have abandoned Hamilton’s advice—and our own history—while China, South Korea, Japan, and other nations are following his prescriptions and turning into muscular and prosperous economic entities.”
Even though both parties have had their share in laws with incentives for corporations to outsource jobs, the 2010 Democratic House passed a bill that would have used both the carrot and the stick approach to stop the insane trade policies, and bring those jobs back to the U.S. But this bill was blocked by a Republican filibuster in the Senate! Who’s working for the American people?
The power of corruption and money in politics was given a massive boost by our conservative U.S. Supreme Court in January of 2010 when deciding the Citizens United v. Federal Election Commission, 558 U.S. 08-205 (2010) case in which they declared corporations as “persons.” Under the guise of “freedom of speech,” Citizens United opened the floodgates for corporate money to influence political campaigns. Not only that, but there’s nothing that prevents foreign corporations from influencing our elections! There are three ways to undo a poor decision by the Supreme Court.
1. Wait for the composition of the Court to change
2. For the American people, the president, and Congress to break with the court
3. Amend the Constitution
(see www.MoveToAmend.org)
The first on the list is the best reason to make sure Barack Obama wins a second term. It is very likely that we will have a chance to change that composition in the next presidential term.
The Right Wing has waged war against regulations on banks and corporations. Would anyone want to watch a football game if there were no rules, no goal posts, and no boundaries? Of course not!
Remember the BP oil catastrophe in the Gulf? It was the worst ecological disaster in our nation’s history, and eleven men died due to lack of regulations. The Wall Street financial collapse in the fall of 2008, which went hand in hand with the housing crisis, was due to lack of regulations on Wall Street and the big banks.
I’m not so much for big government as I am for whatever government is necessary for worker safety, protecting children, protecting our environment, as well as consumer protections to keep our nation’s economy strong. While the Democrats aren’t absolved from supporting deregulation, once again, the Republicans have sold out! They’re desperately trying to bring back these same policies that played a major role in the fall of our economy, and THAT’S INSANE!
Sen. Bernie Sanders (I-VT) suggests a five-point plan to balance the national budget without hurting the working middle class:
1) End Bush tax breaks to wealthiest Americans. (It’s time for SHARED SACRIFICE!) This would bring in $700 billion
dollars per year.
2) Establish a millionaire surplus tax of 5.4%. This would bring in $380 billion dollars in the next ten years.
3) End tax breaks for the oil/gas companies. This would bring in $35 billion dollars over the next ten years.
4) Prohibit abusive and illegal tax shelters (i.e. bogus address corporations in the Cayman Islands so they don’t have to pay US Federal taxes.) This would bring in $100 billion dollars per year.
5) End tax breaks to companies that outsource their jobs overseas. This would bring in $400 billion dollars in the next ten years.
The Republicans are more interested in sabotaging our economy so that the low information voters will think Obama is to blame.
What is priority number one for the Republicans? Jobs? The economy? According to the Senate minority leader Mitch McConnell (R-KY), “The single most important thing we want to achieve is for President Obama to be a one-term president.”
The sad thing is, none of what Sen. Sanders proposes will get accomplished if Obama isn’t re-elected and if the Democratic Party doesn’t win the House back. Until then, the economy won’t see a recovery for a very long time! Once again, the Republicans would rather balance the budget on the backs of the elderly, the sick, the vulnerable, and the struggling middle class; and this is WRONG and simply immoral!
WHAT CAN WE DO?
Due to the corporate person-hood law of Citizens United, in 2012 we’re about to see an unprecedented amount of money pouring into this presidential campaign. The big oil industry and any corporation with enough money to crush any candidate standing in the way of their profits are ready. What can we do? Besides your vote, you can get involved. I would be glad to help get you started, or you can simply click on the link below to get started. There are many ways you can help, but just let me know if you need help getting started.
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I read the opinion piece by David Stack, “Why Give Obama a Second Term? And he is right on. I hope it is read carefully and will stimulate as many people as possible. His analysis was careful and factually correct and it really needs to sink in. So many of my friends are quite disillusioned with the President and their natural impulse is to “throw the baby out with the bathwater” or worse, to simply disengage. Stack’s piece paints the broader picture that it is not just about our disappointment but about what will happen if he loses this election to Romney or Perry. To let the Republicans back in would be disastrous on so many levels. Future SCOTUS appointments are only the beginning of how the right-wing power shift would manifest itself in a democracy. My greatest fear is that the Democrats, Independents, moderate Republicans and all those who got behind Obama in 2008 will not be energized enough to make the same thrust for 2012 where it will be needed even more. Regardless of their rationale, they ask themselves “Why should I, Obama has not delivered or fought as hard as I had hoped?” What they don’t realize is that it’s not as much about Obama as it is about YOU and ME and the future of this country. It hasn’t hit home yet that the consequences of Obama losing are dire. We must get folks energized again and I don’t see it happening yet.
David, I just finished reading your piece. It was honestly awesome to read. It was well thought out and very well stated. I agree with 99.99% of it. We do need to get back to fundamentals and to me that means first, foremost and # 1 – getting rid of the Federal Reserve (we can print and fund our own money – we don’t need to borrow from them only to have to pay them back double for it!!), we need to make corporate lobbying illegal and to any politician that takes that money – punishable by death!!! We need all our regulations back and then some. We truly need to get lawyers out of politics and all laws need to be applicable to all or no one and easily understood by all!!! I agree there isn’t a republican out there that will get this job done for us, but I just don’t believe Barack Obama will either, I just don’t. The guy that can get that done for us is the guy I want to elect in!!! I hate having to elect “the lesser of two evils”!!!!!!!! (isn’t that right Paul! … ? because that’s what you stated ” Stack’s piece paints the broader picture that it is not just about our disappointment but about what will happen if he loses this election to Romney or Perry.” Barack Obama will only be the lesser of two evils!
THE TAX SYSTEM EXPLAINED IN BEER
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this…
The first four men (the poorest) would pay nothing
The fifth would pay $1
The sixth would pay $3
The seventh would pay $7
The eighth would pay $12
The ninth would pay $18
The tenth man (the richest) would pay $59
So, that’s what they decided to do.
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20″. Drinks for the ten men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?
They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.
And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man, “but he got $10!”
“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!”
“That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”
“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
David R. Kamerschen, Ph.D.
Professor of Economics.
Barack Obama is going on vacation.
Hold the presses. Obama is taking a vacation!
For millions of Americans, the reaction is, “Must be nice.”
Obama is heading to Hawaii from December 17 to January 2. He is spending his days at a beachfront house that costs $3500 a day to rent. Obama is allegedly paying that out of his own pocket.
Unfortunately, the rest of the trip is costing Americans millions. There is the cost of Air Force One to carry him out there. There are the costs for protecting Obama. There are the costs of moving the huge number of staffers out to Hawaii and to house them at hotels that often run hundreds of dollars a night, per room.
When we conservatives mention Obama and his frequent vacations, liberals will pipe up with, “Well you didn’t complain when George Bush took vacations.
You know, we did not complain when George Bush took vacations. When he took his vacations, he generally returned to his ranch in Crawford Texas.
But the real issue is, when George Bush was taking his vacations down to Crawford, unemployment was below 5%. When George Bush was taking his vacations, the economy was growing new jobs at a record pace. When George Bush took his vacations the country was prospering.
All Barack Obama wants to do is complain. The economic policies of Obama, Pelosi and Reid have wrecked the economy. Of course, that was their goal to begin with.
Today, millions are out of work. Millions more are underemployed. The unemployment figures for last month went down. They did not go down because more people were working. They went down because more people have given up on finding work. The economy is in what can only be called the Great Obama Depression.
Obama feels entitled to take vacations on our dime. He took an 11-day vacation to Martha’s Vineyard earlier this year. Because it was inconvenient, he and Michelle took separate planes to their vacation hotspot. The cost, picked up by the taxpayers. Then there was the African safari Michelle and her daughters went on, with the tab picked up by the taxpayer. Don’t forget their high end, girls’ getaway to Spain last year.
Thanks to the Obama economy, not only are millions of Americans out of work, millions more can only dream of a vacation.
Obama is not a leader. Leaders lead by example.
If Obama had any sympathy for real Americans, he would not go to Hawaii for his vacation. He would get on TV and announce in this time of a terrible economy, in order to save the country money, he would stay at the White House for Christmas. That move would save Americans millions of dollars.
But Obama does not care about Americans. He is your typical arrogant liberal politician who believes Americans exist only to pay taxes so he cannot only be reelected but so he can do what he wants.
The good news here is that a year from now, Obama will be taking his final vacation from the White House.
Seriously Lea? You really think the economy was prospering under Bush? Under Bush wages for most people went down. Under Bush the housing bubble was being blown up bigger and bigger. Under Bush, the financial industry – using products it made up out of thin air and then sold and insured – accounted for almost half of our economy. So it seemed like the economy was doing well to uninformed voters. Sadly, as you have proven, there are many in the U.S.
Thanks for the analysis David. You obviously took a long look at the facts and lined them up in your blog.
While the piece was well-written and had me going, the anti-NAFTA and anti-Citizens United stuff really turned me off. Sorry, not going to go back on those two things.
Sanders’ five points seem pretty reasonable though.
OMG!David R. Kamerschen, Ph.D.
Professor of Economics.
Don’t you suppose maybe beer should be taxed higher/ the richest ones will drink the most . The poorest won’t have any money to drink one.The analogy of THE TAX SYSTEM EXPLAINED IN BEER seems intoxicating.I don’t drink so I would be classified as the poor,although my income is enough whereas;I pay a chunk of taxes. I am a smoker ,My taxes goes towards providing the assistance of (SCHIP). On February 4, 2009, the Children’s Health Insurance Program Reauthorization Act of 2009 was signed into law, which raised the federal tax rate for cigarettes on April 1, 2009 from $0.39 per pack to $1.01 per pack.[6][7] The purpose of the State Children’s Health Insurance Program (SCHIP) is to provide aid for impoverished children. With the increased revenue from tobacco taxes SCHIP can now afford to include families with up to three times the federal poverty level as well as children from high-income families in New York and New Jersey. SCHIP will also be able to cover dental benefits and treatment of mental illnesses where it previously could not. In addition to providing these services for U.S. citizens, SCHIP is also expanded to cover immigrant children and immigrant pregnant women.
Even though this bill taxed smokers in order to fund a children’s health program, President Barack Obama received both criticism and support for signing this act.
Now figure a tax rate for smoker’s.