Why The Fiscal Cliff Is Utterly Meaningless
Partisan bickering over roughly a trillion dollars in tax revenue (over the next ten years) is a farce, laughable. It means nothing. Chris Cox and David Archer did a nice job summing up the math in this WSJ piece:
When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit.
Nothing like that $8 trillion amount is available for the IRS to target. According to the most recent tax data, all individuals filing tax returns in America and earning more than $66,193 per year have a total adjusted gross income of $5.1 trillion. In 2006, when corporate taxable income peaked before the recession, all corporations in the U.S. had total income for tax purposes of $1.6 trillion. That comes to $6.7 trillion available to tax from these individuals and corporations under existing tax laws.
The money isn’t there. 100% tax rates would leave a deficit. There’s an $86 trillion hole in America’s balance sheet, and I strongly suspect almost all of it will be monetized by the Fed. This is what some would call the hyper-stagflation scenario. QEfinity on steroids. Inflation north of the 20%/y we saw in the 70′s, for an extended period (10 years?) would not surprise me.
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Interesting how you step over how a reduction of government spending could cause the economy to stall.
Bagmen Not Statesmen
What has been going on in Washington, D.C., since the financial meltdown of 2008 has been a disaster for the country. Taxpayers bailed out crooked, incompetent bankers while tens of millions lost their homes and jobs. The bailouts have cost trillions of dollars, and they’re not finished. The Federal Reserve has set a key interest rate to near zero percent until 2015, and it is printing $85 billion a month to prop up the banks and our own government. The Fed calls this little operation “open-ended.” No one has gone to jail for causing this enormous hardship on ordinary Americans, and not a word is spoken in the halls of Congress about stopping the bailouts or bringing criminals to justice. This is immoral, disgusting, repugnant, nonexistent leadership.
This could have been handled in 2008 with the debt wiped clean. We should have only protected depositors. Bankers, bondholders and shareholders be damned—that’s capitalism. It would have cost about $6 trillion back then, and we’d be on our way to a real recovery by now.
Our own elected leaders turn a blind eye and a deaf ear to fraud and crime year after year. The government also allows the banks to value assets at whatever they think they will be worth in the future. This government sanctioned accounting fraud has been allowed since April of 2009. Meaning, the Fed can’t print money fast enough to fix the gigantic mess. Meanwhile, the Federal Reserve continues buying $40 billion a month in “toxic” mortgage debt created by the bankers. This stuff was supposed to be “Triple A” rated debt, equal to the “risk free return” of Treasury bonds. Imagine the government selling you Treasury bonds and later tell you they are “toxic.” Wouldn’t that be outright fraud? You bet it would, and yet not a word from our leaders about the Fed buying this junk at a rate of $40 billion a month to infinity.
http://usawatchdog.com/bagmen-not-statesmen/
GOP and Feinstein join to fulfill Obama’s demand for renewed warrantless eavesdropping
The California Democrat’s disgusting rhetoric recalls the worst of Dick Cheney while advancing Obama’s agenda
Just four or five years ago, objections to warrantless eavesdropping were a prime grievance of Democrats against Bush. The controversies that arose from it were protracted, intense, and often ugly. Progressives loved to depict themselves as stalwartly opposing right-wing radicalism in defense of Our Values and the Constitution.
Fast forward to 2012 and all of that, literally, has changed. Now it’s a Democratic President demanding reform-free renewal of his warrantless eavesdropping powers. He joins with the Republican Party to codify them. A beloved Democratic Senator from a solidly blue state leads the fear-mongering campaign and Terrorist-enabling slurs against anyone who opposes it. And it now all happens with virtually no media attention or controversy because the two parties collaborate so harmoniously to make it happen. And thus does a core guarantee of the founding – the search warrant requirement of the Fourth Amendment – blissfully disappear into nothingness.
Here we find yet again a defining attribute of the Obama legacy: the transformation of what was until recently a symbol of right-wing radicalism – warrantless eavesdropping – into meekly accepted bipartisan consensus. But it’s not just the policies that are so transformed but the mentality and rhetoric that accompanies them: anyone who stands in the way of the US Government’s demands for unaccountable, secret power is helping the Terrorists. “The administration has decided the program should be classified”, decreed Feinstein, and that is that.
http://www.guardian.co.uk/commentisfree/2012/dec/28/fisa-feinstein-obama-democrats-eavesdropping
Revealed: how the FBI coordinated the crackdown on Occupy
New documents prove what was once dismissed as paranoid fantasy: totally integrated corporate-state repression of dissent
It was more sophisticated than we had imagined: new documents show that the violent crackdown on Occupy last fall – so mystifying at the time – was not just coordinated at the level of the FBI, the Department of Homeland Security, and local police. The crackdown, which involved, as you may recall, violent arrests, group disruption, canister missiles to the skulls of protesters, people held in handcuffs so tight they were injured, people held in bondage till they were forced to wet or soil themselves –was coordinated with the big banks themselves.
The Partnership for Civil Justice Fund, in a groundbreaking scoop that should once more shame major US media outlets (why are nonprofits now some of the only entities in America left breaking major civil liberties news?), filed this request. The document – reproduced here in an easily searchable format – shows a terrifying network of coordinated DHS, FBI, police, regional fusion center, and private-sector activity so completely merged into one another that the monstrous whole is, in fact, one entity: in some cases, bearing a single name, the Domestic Security Alliance Council. And it reveals this merged entity to have one centrally planned, locally executed mission. The documents, in short, show the cops and DHS working for and with banks to target, arrest, and politically disable peaceful American citizens.
Verheyden-Hilliard points out the close partnering of banks, the New York Stock Exchange and at least one local Federal Reserve with the FBI and DHS, and calls it “police-statism”:
“This production [of documents], which we believe is just the tip of the iceberg, is a window into the nationwide scope of the FBI’s surveillance, monitoring, and reporting on peaceful protestors organizing with the Occupy movement … These documents also show these federal agencies functioning as a de facto intelligence arm of Wall Street and Corporate America.”
The documents show stunning range: in Denver, Colorado, that branch of the FBI and a “Bank Fraud Working Group” met in November 2011 – during the Occupy protests – to surveil the group. The Federal Reserve of Richmond, Virginia had its own private security surveilling Occupy Tampa and Tampa Veterans for Peace and passing privately-collected information on activists back to the Richmond FBI, which, in turn, categorized OWS activities under its “domestic terrorism” unit.
http://www.guardian.co.uk/commentisfree/2012/dec/29/fbi-coordinated-crackdown-occupy
Inflation was never 20% annually in the U.S. The highest was about 14%.
The US could still cut a few annual trillion of spending to lessen the impact. There are consequences to spending more than private income, no matter what childish liberals say.
Big Banks Are “Black Boxes,” Disclosure is “Woeful”
The second is the heart of the article: How opaque, misleading, non-disclosing and — WTF, let’s just say it — fraudulent bank balance sheets are.
http://www.ritholtz.com/blog/2013/01/big-banks-are-black-boxes-disclosure-is-woeful/
Professor Polleit explains why fiat currency systems produce ‘collective corruption’
“The problem with central banking has been mainly the old problem of power — it corrupts.
“Central bankers are supposed to be more capable of restraint than ordinary politicians, and maybe some are, but they are not always or even often capable of the necessary restraint. One market intervention encourages another and another and increases the political pressure to keep intervening to benefit special interests rather than the general interest — to benefit especially the financial interests, the banking and investment banking industries. These interventions, subsidies to special interests, increasingly are needed to prevent the previous imbalances from imploding.
http://www.gata.org/node/12095
Secret and Lies of the Bailout
By Matt Taibbi
January 4, 2013
It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?
Wrong.
http://jessescrossroadscafe.blogspot.com/2013/01/taibbi-secret-and-lies-of-bailout.html
Eric Sprott ~ Sprott Market Insights
http://www.johnbudden.com/the-latest/audio/eric-sprott-sprott-market-insights.html