The Great American Fiscal
Rape (aka The Looting of the U.S. credit line)
When people find that
they can vote themselves money that will herald the end of the republic.
- Unknown
Come then, tell me, dear
friend, how tyranny arises. That it is an outgrowth of democracy is fairly plain.
Yes, plain.
Is it, then, in a sense,
in the same way in which democracy arises out of oligarchy that tyranny arises
from democracy?
How is
that?
The good that they
proposed to themselves and that was the cause of the establishment of oligarchy
- it was wealth, was it not?
Yes.
Well, then, the insatiate
lust for wealth and the neglect of everything else for the sake of
money-making were the cause of its undoing.
True, he
said.
By J.M. Hamilton
(12-25-2017)
Holiday Greetings &
Salutations from San Antonio, Texas.
As a student of
economics, history, and politics - one of the great concerns expressed about
democracies and republics - that I have encountered - is that they are
prone to collapse, when the public learns that they can vote themselves
government money. That is to say, the 99% learn they can reach into the
government till and take out far more than the government receives in tax
revenue.
Republicans
have often proclaimed themselves to be the guardians of fiscal virtue, and
advocates of fiscal sanity. It is Republicans who often claim that that it was
FDR's New Deal policies, and the Great Society policies of the 60s and 70s,
that would bankrupt this nation.
How ironic then that
it is not the Dems and liberals who threaten the nation's fiscal health,
nor the 99%, but the Republican Party - and the Oligarchy that owns the
Republican Party - that threatens: the nation; our Republic; and United States'
national security.
How is the United States
threatened?
The Republican Party has
done this by trashing the fiscal health of the nation, via tax cuts for the exceptionally wealthy; launching wars w/out end; and by providing unpaid for welfare for U.S.
multinationals. In other words, it is not the 99% that we have to worry
about looting the nation, but the Republican Party and their owners, the
Oligarchy.
The most recent example
is Trump's tax cuts, which he signed into law last week.
These tax cuts are unpaid
for - and mostly accrue to an elite few (more than 82% of the GOP tax cuts will be directed to the top 1% by 2027, once middle class cuts are phased out) - and are expected to add anywhere
between a trillion to two trillion to the annual deficit. In short, the
Republican Party is borrowing from the nation's credit line - and against this
nation's exorbitant privilege, our global fiat currency - to pay for tax cuts
that will disproportionately accrue to multinationals and the wealthy.
Note: Dems used to
get a bad rap, per Republicans, for being tax and spend liberals; but
far more insidious than tax and spend liberals are borrow and spend
Republicans.
(And Republican tax
policy is little more than Keynesian policy in reverse. Lord Keynes,
during a recession, would advocate government expenditure to spur the economy
and close the economic gap, so as to make up for the temporary deficiency in
private sector spending.
What the Republicans have
done is reverse engineer fiscal stimulus by looting the nation's credit
line, and handing out fiscal stimulus - in the form of unsustainable tax
cuts - for: heirs & heiresses; multinationals; and the exceptionally
wealthy. The result is a highly ineffective form of government stimulus -
it is a bastardized form of Keynesian stimulus called trickle down economics.
Instead of tapping into the government credit line and providing jobs for the
99% and spurring aggregate demand; the GOP has tapped into the government
credit line to provide tax cuts for the billionaires, in the hopes that a few crumbs
will trickle down to the 99% and spur demand.)
How do we know that
Republican tax stimulus will break the bank, that is rape the nation's credit line (and it's not entitlements that are causing the fiscal problem)?
Consider the following:
The period of massive tax
reductions, particularly for the wealthy, started w/ President Reagan in the
80s to the present day;
During the last 37 years,
from Reagan forward, every single year has produced a fiscal deficit, but
for three to four years, late in the Clinton presidency;
During the last 37 years,
the national debt has exploded, so that the debt to GDP ratio has climbed from under 50% to over 100%, in the present day;
To further emphasize the
point, when POTUS Clinton handed POTUS Bush a legacy of unheard of fiscal
surpluses, it wasn't so-called welfare spending or entitlements that caused the
deficits to reappear, but Bush's (W) tax cuts for the rich and the initiation
of two wars, post 9-11.
President Donald Trump reportedly told friends at
his swanky Mar-a-Lago resort "You all just got a lot richer," hours
after signing the GOP's massive tax bill.
– Business Insider
Republican like to say
high taxes are a threat to the economy, but the GOP also likes to cite the
Eisenhower years as the halcyon days of GOP achievement, and the great American
economy. It was under Eisenhower, however, that the top tax rate
was approximately 90%, and the capital gains rate was higher than it is today.
And yet the economy produced annual GDP growth that often exceeded 3
to 4% annually. Today's GDP is bogged down and constrained by an unsustainable
national debt (caused, in no small amount, by GOP fiscal mismanagement).
In short, higher tax rates
in the 50s were not deleterious to the U.S. economy; nor is entitlement
spending a threat to the U.S economy today (albeit it certainly would have been helpful had FICA revenue been allowed to accrue in a trust fund and collect interest income or investment revenue, instead of being spent by politicians to meet current Federal expenditures and pork-barrel projects).
To quote POTUS Reagan:
"Social Security has nothing to do with the deficit."
But rather, it is borrow and spend Republicans that threaten the fiscal heath of the nation, the
nation's credit line, and our national security. Their irresponsible
borrow and spend tax policies line an elite few's pockets, while threatening
the nation's fiat currency, the dollar.
For how long will nation
states want to hold dollars, or purchase the nation's debt, when they figure
out America will never have the means of repaying its national debt, except by
printing money in a glorified Ponzi scheme?
After 37 years, one would
think the GOP would know better, and they probably do. One would either
have to be fatuous or nescient, or insane, to believe that tax cuts for the
rich will spur the economy in the face of ever mounting hard evidence and facts.
Today's GOP doesn't even
attempt to use logic anymore. Instead, they rely upon the apathy and
nescience of their aging voter base, and have stated this latest round of
unsustainable tax cuts is direct payback to their plutocratic donors/owners. Which is obvious, because not only are the GOP tax cuts unsustainable, they
are unfair. Multinationals see more than a dozen points shaved off there
corporate tax rates, permanently, while most Americans will be lucky to see a
couple of points removed from their bracket, temporarily.
Moreover, what little relief the middle class did receive is likely to evaporate before a wall of GOP imposed: austerity; entitlement cuts; and higher health insurance premiums (as a result of Republican efforts to gut the ACA).
Moreover, what little relief the middle class did receive is likely to evaporate before a wall of GOP imposed: austerity; entitlement cuts; and higher health insurance premiums (as a result of Republican efforts to gut the ACA).
Today's GOP is no longer
the party of Lincoln; but rather, Republicans more closely resemble organized crime, & private equity, who bust out victims and corporations
by maxing out their credit lines and liquidating businesses for personal gain.
Except
instead of busting out individuals, sole proprietors, and corporations - like
organized crime & private equity - the GOP is raping the nation, by maxing
out the U.S.' credit line.
Did I call the ruling class an Oligarchy? Kleptocracy is more like it.
Did I call the ruling class an Oligarchy? Kleptocracy is more like it.
Copyright JM Hamilton
Publishing 2017
Remember: A fool and their credit line are often parted.