Sent: Saturday, July 28, 2012 8:05 AM
Subject: Federal Budget Fiasco explained
Hi Rob, It's been too long since we've been in touch. I hope all is going well with you and your family. – I was wondering if you could shed a little light as to whether or not this one is true? – Thanks, Jimmy
This puts it all in perspective by an accountant.
Click here: United States Budget Dilemma.wmv - YouTube
Jimmy: I am sorry that we haven't gotten together over the last year. A lot has happened that I would like to discuss with you...I was just on my way out the door to go to participate in a phone bank...for voters in Ohio...But I will gladly take the time to answer your question. Some of the answers you will hear about in the coming debate, some you will not.
The guy does a beautiful job of illustrating the obvious...This was obvious the minute George W. Bush signed in the tax breaks -which were supposed to be temporary- back in 2001 and 2003. http://en.wikipedia.org/wiki/Bush_tax_cuts It became even more evident when we went into Iraq in 2003. Every attempt to do away with those tax breaks has been met with the variation of job killing doom and gloom rhetoric you see implied here. The rhetoric was led by our beloved Senator Mitch McConnell and his cronies. What he doesn't mention is that this budget is meant to scare the hell out of people and illustrate the effects of continued inaction regarding the inequality of the present tax laws.
In my opinion, there was some political message in the Obama Administrations publishing this budget in the first place. That's the thing I like about the Obama Administration...They think about 2 to 3 steps ahead of their opponents...err...Republicans. The message is what's it's been since this administration started. We have to increase government revenues. The opportunity to solve this problem through budget cuts ended about 2006. Look at the same data that he's showing you during the Bush Administration's same amount of time in office. That's what you heard me BITCHING AT THE TOP OF MY LUNGS ABOUT back in 2004.
At any rate, The Affordable Care Act, was the first step in the solution to resolving the nation's debt problem. Yeah...It's got taxes in it. But more importantly, it goes to the lion's share of the debt problem, which is out of control spending for health care. I suggest you do some research on that. Healthcare was - before the act was passed- growing in an exponential fashion as the various insurance companies were externalizing - yes that's an important word many people need to understand - the costs of healthcare for anyone it deemed to be 'too risky' off onto the governments dole. IE once you could not and cannot pay and the results send you below the poverty limit....Guess what happens...? You get a Medicare card. This was happening throughout the Bush Administration. THAT's how healthcare became a problem in this country.
What the Affordable Care Act does in essence is shifts the costs back to those same insurance companies and holds them accountable for spending 80 percent of receipts on something innovative - ACTUAL MEDICAL CARE FOR THE PATIENTS - Thus the reason you will most likely be getting a letter or check in the mail here in the next couple of weeks. That check is one of the first results of the Affordable Healthcare Act, and represents the tax for any provider that spent more money on administrative costs (read that executive bonuses) than it's 20 percent limit.
I could go on ad nausea about what Obama and the Democrats have been doing to resolve this problem over the last 3.5 years but to sum it up:
-We are no longer in Iraq - Cost savings: About 4 Trillion dollars and counting - yep, the Bush Administration estimated that the whole thing would cost no more than 80 billion dollars - For the entire war...That was about the time he was flying onto Air Craft Carriers and blathering "Mission Accomplished". http://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War The following quote illustrates the pernicious effect of Bush's decision to finance this war:
"It's really the decision of how to pay for it that has had such a negative effect on the U.S. economy. Because unlike any previous war in U.S. history, this was paid for entirely by debt at the same time that we cut taxes," says Bilmes. While entitlements and other mandatory spending make up a majority of annual federal budgets and contribute heavily to deficits and debt, the Iraq War also contributed significantly. The Center for Budget and Policy Priorities has estimated that the wars in Iraq and Afghanistan, together with the Bush tax cuts, will account for almost half of the projected $20 trillion debt in 2019. http://www.usnews.com/news/articles/2011/12/15/what-did-the-iraq-war-cost-more-than-you-think
Yeah the last line of that quote somehow escaped our friend in the video...HALF OF THE 20 TRILLION DOLLAR DEFICIT IN 2019 WILL BE ATTRIBUTABLE TO IRAQ, AFGHANISTAN AND THE BUSH ERA TAX CUTS....
-We are getting out of Afghanistan - Why? Oh yeah, Obama authorized the mission that took out Osama Bin Laden and decimated his infrastructure with Drone Attacks - Remember the rhetoric by John McCain about Obama's lack of experience on Foreign Policy...Gee what happened to that talk? Cost savings: Read above.
-We are getting more efficient in our energy use as a result of the new CAFE standards introduced by Mr. Obama's administration in its first year.
But most importantly - We are having a discussion on the middle class...The people the author mentions when he talks about tax receipts...Funny he didn't mention off shoring of jobs and how we got to the point that we are in now. And where is that magic fairy god of the Republicans with the Invisible hand?...Well I guess that myth's been put to rest...God help Mr. Greenspan with his delusions...
Appearing before the House Committee on Oversight and Government Reform, the man once dubbed "The Maestro" said he had found a flaw in the "critical functioning structure that defines how the world works". "I don't know how significant or permanent it is but I have been very distressed by that fact," Mr Greenspan said.
"I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms."
Asked by committee chairman Henry Waxman if he was saying his world view was "not working", Mr Greenspan said: "Absolutely, precisely. You know, that's precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well."
The above quote is in my opinion the perfect illustration of what I deem to be willful ignorance....right up there with Mr. Cheney's quote:
Former Treasury Secretary Paul O'Neill was told "deficits don't matter" when he warned of a looming fiscal crisis.
O'Neill, fired in a shakeup of Bush's economic team in December 2002, raised objections to a new round of tax cuts and said the president balked at his more aggressive plan to combat corporate crime after a string of accounting scandals because of opposition from "the corporate crowd," a key constituency.
O'Neill said he tried to warn Vice President Dick Cheney that growing budget deficits-expected to top $500 billion this fiscal year alone-posed a threat to the economy. Cheney cut him off. "You know, Paul, Reagan proved deficits don't matter," he said, according to excerpts. Cheney continued: "We won the midterms (congressional elections). This is our due." A month later, Cheney told the Treasury secretary he was fired.
The vice president's office had no immediate comment, but John Snow, who replaced O'Neill, insisted that deficits "do matter" to the administration.
Source: [X-ref O'Neill] Adam Entous, Reuters, on AOL News Jan 11, 2004
At any rate, to answer your question: It's true that we are running a deficit that continues to grow. As we have been since...2001. The untold truth is that we are already paying taxes in the form of higher food and petroleum prices as the dollar continues to suffer...It will get worse as the Chinese realize that the dollars they agreed to loan us back in 2001 and up through today are not worth what they were when the deal was struck. Look forward to those cheap Chinese nick nacks to increase in price in the coming years. Inflation will really start to show it's head the minute this economy starts to mend. It's gonna hurt and the only way we can resolve the problem is through cutting our foreign energy consumption and applying that to both deficits: The Trade Deficit and the US Budget Deficit.
That's the bright side to this and the only solution that I can see out of this. ALTERNATIVE ENERGY...It's not about saving the earth...It's about saving our asses....Solar is going into an exponential curve...thank God...Likewise with wind...I see us continuing to export our coal...One Mountain at a time to China, as well as our natural gas and replacing that with Wind and Solar. As we get more into using electricity to reduce our dependence on Oil, that will go a long way to reducing the structural deficits in place...But don't look for the payoffs on this front to occur anytime in the next 5 years....It takes a while for these things to pay off...IE the payoff of cheap gas in the nineties when the effects of Nixon/Carter's creation of the CAFE standards in the seventies.
Thus the reason you will hear themes from Mr. Obama about the importance of creating a new economy based upon innovative technologies...Read that: Energy Independence.
To illustrate my point I will attach the following articles:
The last article will help you to divine the immediate future of whether we will be building that pipeline extension to the gulf from out in Oklahoma...It's not all about Canadian tar sands entirely...The results of the Bakken oil field development along with the new Fracking technologies being implemented around that area as well as in Oklahoma and the rest of the economy will be doing the lions share of paying our way out of this...which brings me back to the important question on the middle class...Will we continue to give tax breaks to Mobil and the other seven sisters, or will we be using these reserves -which represent our childrens and grand children's future - to get ourselves out of this debt...As for Kentucky...Well that hasn't changed since Mr. Twains quote back in the late 1800's. But understand the future by reading the article below.
The question that I have from this discussion is simple: Will we continue to live the vision that the Republicans created nearly thirty years ago of a land of uneducated workers paid minimal wages producing exports of commodity level value or will we go the way that Mr. Clinton envisioned in the nineties where we led the world in the export of high tech products made in the USA? That will depend on the successful education of voters this year, and the re-election of President Obama.