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Spending Daily January 10, 2013

For years, leaders have been all talk and no action when it comes to tackling our overspending problem, and now Bankrupting America, a project of Public Notice, is calling them out for the empty promises with a new video as part of our “Talk is Cheap, Overspending is Not” campaign that launched in early January. The video, which features former President Ronald Reagan, former Vice President Al Gore and President Barack Obama, highlights past speeches promising to address the federal government’s overspending.

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Bankrupting America’s New Video: Talk is Cheap, Overspending is Not
For years, leaders have been all talk and no action when it comes to tackling our overspending problem, and now Bankrupting America, a project of Public Notice, is calling them out for the empty promises with a new video as part of our “Talk is Cheap, Overspending is Not” campaign that launched in early January. The video, which features former President Ronald Reagan, former Vice President Al Gore and President Barack Obama, highlights past speeches promising to address the federal government’s overspending.

Click here to watch the video.

Check out the whole #TalkIsCheap conversation on Twitter or view some of the top tweets on the BankruptingAmerica.org homepage.

White House Won’t Rule Out Minting A $1 Trillion Coin
POLITICO reports, “The White House on Wednesday didn’t outright deny the possibility of minting a $1 trillion coin, an idea that’s been floated as a way for the Obama administration to pay its debts if Congress were to fail to raise the debt ceiling in the coming weeks. ‘There is no plan B, there is no backup plan. There is Congress’s responsibility to pay the bills of the United States,’ White House press secretary Jay Carney said during his daily briefing. But when asked whether the administration would rule out minting a coin, Carney didn’t utright deny the option. “You can speculate a lot of things, [but] nothing needs to come to these speculative notions” so long as Congress does its job, he said.”

Lew Nomination Sets Stage For White House Debt Fight
The Hill reports, “Jack Lew’s confirmation as Treasury secretary would place a longtime Washington insider at the crux of the bruising fight over entitlements, government spending and the national debt. It is a battle expected to dominate Obama’s second term, and the president signaled he realizes this by nominating Lew — a hardened veteran of budget fights with congressional Republicans. … Until recently, Lew had a reputation as budgetary expert with a history of deal-making. But his reputation took a hit in recent years as he butted heads with congressional Republicans during several failed efforts to break through on a broad deficit-reduction deal.”

“The Latest Debt-Ceiling Proposal: Issue IOUs”
The National Journal reports, “The  $1 trillion platinum coin seems too wacky; the 14th Amendment too risky. But could IOU’s be the solution to an impasse on raising the nation’s borrowing limit? Yes, and President Obama should publicly adopt the idea, Edward Kleinbard, a University of Southern California law professor and former chief of staff to Congress’s Joint Committee on Taxation, argues in a Thursday New York Times OpEd. If lawmakers can’t reach an agreement before the nation hits its debt ceiling–which could happen as soon as next month–then Obama should have a backup plan of issuing IOU’s in place, Kleinbard argues.”

“Obama’s Default Drama Is No Way to Run a Country”
Caroline Baum editorializes in Bloomberg, “The United States of America isn’t going to default on its debt, even if Congress doesn’t increase the statutory borrowing authority in the next couple of months. … [T]he income taxes withheld from most of our paychecks each month exceed the interest the Treasury owes on its debt outstanding. In November, for example, the Treasury’s interest expense totaled $25 billion. That compares with tax receipts of $161.7 billion. … The sad part is that the debt ceiling has nothing to do with the debt problem. It merely allows Treasury to borrow what Congress has already spent. It does not authorize new spending commitments.”

“Time for a balanced-budget amendment”
George Will editorializes in The Washington Post, “Democrats not allergic to arithmetic must know the cost of their ‘fiscal cliff’ victory. … No numerate person thinks that today’s entitlement state, let alone the steady expansion of it that is liberalism’s aspiration, can be funded by taxing the income of the 0.7 percent of taxpayers whose rates were just raised. Or the 2 percent whose rates would have been raised had liberals and their president simply allowed the automatic increase of rates for individuals earning more than $200,000 and couples earning more than $250,000. Because 82 percent of American earners pay more in payroll taxes than income taxes, no politically conceivable or economically feasible middle-class tax rate can fund the entitlement state. By rescuing almost everyone from the restoration of Clinton-era rates, liberals abandoned any pretense of paying for their program of ever- expanding entitlements. Instead, they made trillion-dollar deficits their program.”

Ryan Jabs White House For Expected Budget Delay
Roll Call reports, “The deadline has not yet been missed, but Republicans are already jabbing at the White House in anticipation that President Barack Obama’s fiscal 2014 budget proposal is likely to be several weeks late. In a letter Wednesday to the Office of Management and Budget, House Budget Chairman Paul D. Ryan asked when the spending plan will be released. ‘Given the critical importance of addressing our nation’s fiscal problems, I am writing to ask whether the President will submit his budget request this year on or before February 4 as required by law,’ the Wisconsin Republican wrote to Acting OMB Director Jeffrey Zients. ‘If the Administration does not plan to meet the statutory deadline, when do you anticipate the request being made?’”

Failed Solar Companies Continue To Be Taxpayer Burden
The Washington Free Beacon reports, “A bankrupt Massachusetts solar company that received more than $30 million in state funds continues to cost taxpayers money in the form of special unemployment assistance from the Department of Labor, according to a Wednesday press release. Labor announced a $408,403 National Emergency Grant increment for continued assistance to roughly 320 workers affected by the 2011 closure of Evergreen Solar Inc. This latest block of aid brings the total funds awarded for the project to $738,179. … Evergreen Solar received an estimated $31 million in state funding from the administration of Democratic Massachusetts Gov. Deval Patrick. Massachusetts taxpayers were left on the hook for nearly $10 million of that aid when the company went bankrupt and laid off roughly 800 employees.”

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Wealth is not Created at the Top: It is Only Devoured There

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The UK has left the EU and we can argue about the minutiae of Wealth until we’re blue in the face. But the overriding factors are apparent and in one of the richest countries in the world it is shocking that so many people can’t even be sure if they are going to be able to eat enough today or provide for their loved ones.

These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have “made it”. By the go-getters oozing talent and entrepreneurial-ism that are helping to advance the whole world – Opinion by 

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… across the spectrum virtually all agree that wealth is created primarily at the top and so entrenched is this assumption that it’s even embedded in our language. When economists talk about “productivity”, what they really mean is the size of your paycheck. And when we use terms like “welfare state”, “redistribution” and “solidarity”, we’re implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens – and everybody else.

Bankers, pharmaceutical giants, Google, Facebook … a new breed of  rentiers are at the very top of the pyramid and they’re sucking the rest of us dry

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In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as “successful” and “innovative” are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it’s a non-issue.

To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our “human capital” in economic terms) to create something new, whether that’s a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

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But there is also a second way to make money. That’s the rentier way: by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others’ expense, using his power to claim economic benefit.

But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely that makes us overlook their massive rent-seeking…

CONTINUE READING HERE:

The problems we face are that the politicians are firmly in the hands (pockets) of the uber wealthy. We live in a corporate plutocracy and those holding all the wealth and therefore power have no intention of changing the status quo, even if it isn’t sustainable. They remind me of bacteria (or cancer) devouring the host body more and more even though eventually it will kill them too.

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Donald Trump Forgets Important Lesson From Grandad:

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Harper’s Magazine reprints an interesting letter from US President Donald J. Trump’s own grandfather that may get you thinking. Here is it then:

The Emigrants – By Friedrich Trump – From a letter written in 1905 by Friedrich Trump, Donald Trump’s grandfather, to Luitpold, prince regent of Bavaria. Trump had been ordered to leave Bavaria for failing to complete mandatory military service and to register his initial emigration to the United States twenty years earlier.

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Prince Luitpold rejected Trump’s request for repatriation; the family later settled in New York. Translated from the German by Austen Hinkley.

Most Serene, Most Powerful Prince Regent! Most Gracious Regent and Lord!

I was born in Kallstadt on March 14, 1869. My parents were honest, plain, pious vineyard workers. They strictly held me to everything good — to diligence and piety, to regular attendance in school and church, to absolute obedience toward the high authority.

After my confirmation, in 1882, I apprenticed to become a barber. I emigrated in 1885, in my sixteenth year. In America I carried on my business with diligence, discretion, and prudence. God’s blessing was with me, and I became rich. I obtained American citizenship in 1892. In 1902 I met my current wife. Sadly, she could not tolerate the climate in New York, and I went with my dear family back to Kallstadt.

The town was glad to have received a capable and productive citizen. My old mother was happy to see her son, her dear daughter-in-law, and her granddaughter around her; she knows now that I will take care of her in her old age.

But we were confronted all at once, as if by a lightning strike from fair skies, with the news that the High Royal State Ministry had decided that we must leave our residence in the Kingdom of Bavaria. We were paralyzed with fright; our happy family life was tarnished. My wife has been overcome by anxiety, and my lovely child has become sick.

Why should we be deported? This is very, very hard for a family. What will our fellow citizens think if honest subjects are faced with such a decree — not to mention the great material losses it would incur. I would like to become a Bavarian citizen again.

In this urgent situation I have no other recourse than to turn to our adored, noble, wise, and just sovereign lord, our exalted ruler His Royal Highness, highest of all, who has already dried so many tears, who has ruled so beneficially and justly and wisely and softly and is warmly and deeply loved, with the most humble request that the highest of all will himself in mercy deign to allow the applicant to stay in the most gracious Kingdom of Bavaria.

Your most humble and obedient,

Friedrich Trump

… Well then. Long ago, yes.. Still applies? You tell me.

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