Bush is a flat out liar. Borrowing from his father's lie, "read my lips, no new taxes" you can, at any time, read George W's lips and he's probably lying.
The biggest lie is that he cut taxes. And a big joke is that it will hit the rich people who are supposed to be benefiting from it too.
While it is a partial truth that the tax cuts allowed the wealthy to keep more money, the truth is that there are a lot of ways they and the rest of us are paying more money than before. It's a tax cut that will actually end up costing most of much more.
Perhaps one of the biggest categories is education. States are being creamed by the budget shortfalls and they are making up for it by raising local school and real estate taxes. They are raising college tuitions. So, you got your $400 rebate for your kid under 14, well you'll pay $500-1000 or more extra for your 19 year old in college. But that's not all. About 84,000 students will lose federal Pell grants. That's because Bush cut these financial need based scholarships funding by $270 million.
Then, take a look at what you are paying at the pump. This is not a direct result of the tax cut. But it was set off by the massive electrical blackout. The gasoline companies used the blackout as an excuse to raise prices. The blackout happened because energy companies are not spending enough to modernize their equipment. Why not? Because that kind of spending hurts the short-term bottom line for businesses. And more and more of the nation's energy generators and transmitters are businesses rather than public utilities because of the rampant drive to privatize that the political right has been pushing. We know what it did to California. Of course, with the country struggling to pay its Iraq bills, and with government intentionally being starved, it's no wonder that the republicans have bottled up funds to upgrade the energy grid, tying the legislation in with the Bush favorite bill to drill in the arctic refuge of Alaska.
Then there's health care. Rates for insurance are going through the roof-- whether you are individually insured or an employer paying for employees. Either way, if you are an employee, you are probably paying more, since a recent report says that employees are paying 48% more for their share of the health insurance than they were three years ago. One reason is the Bush administration is allowing the health insurers and pharmaceutical companies run wild. OF course, the republican mantra is deregulate. But with deregulation, you have a huge percentage of health care costs going to drug company profits and obscenely inflated health industry top management salaries--even when the companies are tanking.
Of course, one thing about the Tax cut is true. Along with cutting taxes, the Bushies want to do away with government, to weaken, to decrease it's regulatory influence on corporations. If municipal, state and federal government agencies are underfunded, they can't check out what corporations are doing and what they shouldn't be doing. We end up with a castrated form of government that is unable to protect the public, unable to keep rogue corporations like Enron and MCI in line. . Now, when I think of government, I think of a few things:
protection: like military, police and judicial-- protecting us from crime, law-breaking, threats to the nation, to our freedoms-- cut these budgets and we'll end up spending more fixing problems and abuses that could have been prevented.
Services: education, health. Get cheap here and we end up with under-educated workers with lower salaries. Cut health care and you end up with more emergencies rather than preventing illness. Public transportation rates go up. Police give out more parking tickets.
Maintenance of the commons: roads, infrastructure, laws, natural resources, lands, air, water
standards: food, ecology. The short term solutions may save money, but long term, this is bad husbandry and leadership that will cost us in the end.
fairness: taking care of those who need help. Compassionate conservatism is, perhaps Bush lie number two.
leadership; I put leadership last because it is clear that the Bush administration has not budgeted for leadership. As history looks back on these times, George W. Bush will undoubtedly be held up as an example of the most extreme buffoonish incompetency. His combination of stupidity, ignorance, lack of both education and willingness to learn and his egomaniacal fundamentalist beliefs in God's intentions for him have added up to much worse than incompetence. He blunders and fails at just about everything he touches, unless you are counting his gifts to corporations and friends.
So we have a situation in which there's a big tax cut that for most of Americans and most of America is really a deep gouge in the pocketbook. Already, with a half trillion dollar deficit, the nation is experiencing the adverse affects of this tax monstrosity.
As the cities, states and the federal government run out of money, they'll need to borrow more. This will eventually have to be paid for later on. Someone will have to pay the taxes to pay the interest. Another way the states are looking to pay is they are allowing more "sin" services and products-- sunday liquor sales that can be taxed, gambling, slot machines... these all add income without income taxes. But they also come at a price-- many people who are addicted to alcohol or gambling will ruin their lives and hurt their families. This is not exactly consistent with the fundamentalist Christian perspectives Bush is supposed to reflect.
The polls are now showing that a majority of Americans are unhappy with the way Bush does business. It is time that the elected Republicans who hold the majority in both houses of congress stop doing the lock-step march with the administration. It is time that they did something about the debt, about the bleeding state budgets, about kids not getting college tuition money.
Come November 2004 there will be another blood letting. This time it will be the bleeding of the republicans who have intentionally starved the states, intentionally strangled the US government-- for who-- for the wealthiest one percent and for corporations-- the "terminator" human invention that has come back to assault humanity. It is time that we face the fact that the people of the US are under assault by the super wealthy and the mega corporations. They've declared war and they are winning.
But we can take back America. Former Democratic Party Chair Ed Rendell says we need a more aggressive media. Well, you're reading it right now, in whatever website or print publication you see this OpEd. Support it. Tell your local daily you want more balance-- more liberal, left wing editorials. Write them yourself. We can change things. Like Ghandi said, "Be the change you wish to see." Take action every day. Send your favorite democratic candidates money before the end of this month, since they'll get matching funds. And let people know what a liar George is.
a good source of information on taxation is fairtaxesforall.org
posted on September 14, 2003 08:10:31 AM new
HOW THE GOVERNMENT IS USING A SHELL GAME TO FOOL YOU
By JOHN CRUDELE
September 9, 2003 -- WAS the nation's productivity miracle a hoax?
The supposed rise in productivity was the silver lining in the economic cloud of the last three years. Fed chief Alan Greenspan has spoken proudly of it, saying the United States was becoming a more efficient producer of goods.
But the slip of a tongue may call the whole productivity miracle into question.
Here's part of what Sen. Robert Bennett, chairman of the Joint Economics Committee, had to say on CNBC on Friday.
Bennett, a Republican, was discussing how he didn't believe the U.S. was bleeding jobs and that it was simply a calculation mistake, then he got off the topic.
"If you go back into the '90s and Alan Greenspan's examination of where the economy was, the productivity numbers that he was getting through traditional means all indicated productivity was down. And Greenspan gathered the economists . . . and the Fed together and said this cannot be right."
"They said, 'We are doing it the way we've always done it, so the numbers have to be right.' And [Greenspan] challenged them and said if you look at the other data they make it very clear that productivity has got to be going up.
"They went back and recalculated and discovered that their productivity numbers had been wrong for months if not years," Bennett concluded.
So, let me get this straight.
The Fed chairman doesn't like an economic statistic, so he tells some lowly economists to take a mulligan and do the calculations over. Amazingly, they discover exactly what the Fed wants them to discover - the politically important productivity miracle.
The Soviets had a habit of calculating their wheat crops in such a sloppy manner until the starving citizens wouldn't take it anymore.
*
As Wall Street continues to re-inflate the bubble, this one troubling question lingers for the those who are blowing air into stocks: Why aren't any jobs being created if the economy is improving as much as it is?
You already know what I think about the government's employment figures - they aren't trustworthy. Let me put it more bluntly: They stink.
But when you have a seventh straight month of job losses - including the 93,000 positions eliminated in August - you have to figure that, at the very least, the trend is accurate.
Washington says the economy is growing at better than 3 percent a quarter, as measured by the gross domestic product. Expectations are that the figure will improve during the period that ends Sept. 30.
Growth like that should be producing 200,000 to 300,000 new jobs each and every month. So, not only are we not adding to payrolls but we are still declining.
Perplexed big thinkers like the folks down at the New York Federal Reserve are publicly wondering if there is something new (and wrong) happening to the economy. I suggested in a column a few weeks back that the economy is "broken," because of a lot of historical actions and reactions that I don't want to repeat here.
But here's an even better answer to the missing jobs question: Maybe the economy really isn't growing as fast as Washington would have you believe. (I know you don't want to hear this, but it's better than believing a lie.)
I've written about this before. The subterfuge is quite simple.
The government comes up with the GDP number by taking the amount it thinks the economy is expanding and then subtracting the rate of inflation. In the first quarter of 2003, for instance, the growth rate was 1.4 percent after an annualized inflation of 2.4 percent was subtracted.
If the inflation rate had been zero, then growth would have been 3.8 percent.
You got that?
The 3.1 percent growth that was reported in the quarter ended in June assumes annualized inflation of only 0.8 percent.
Has inflation actually dropped that much - from 2.4 percent in the first quarter to just 0.8 percent? Where? Home prices? Gasoline? Heating oil? Insurance? College costs?
You get the point: Most big-ticket items are still rising steadily in cost.
Yet Washington thinks inflation fell from an already unbelievably low annualized rate of 2.4 percent earlier this year to an incomprehensibly low 0.8 percent.
If the government had used the same inflation rate that it did in the first quarter, the last three month's annual economic growth would have been just 1.5 percent (compared with 1.4 percent in the first quarter).
Maybe there are no jobs being created because economic growth is still dismal.
posted on September 14, 2003 08:29:41 AM new
Bond Crash Is Sign of System
Bound for Financial Catastrophe
by Lothar Komp
The drive to force Vice President Dick Cheney out of office, aims to end the strategic crisis and put serious actions for economic recovery on the agenda. George W. Bush's strategy for re-election in 2004 is based on the illusion of an economic recovery, supposedly materializing at some point in the second half of this year. But financial insiders point out that already by early Autumn these illusions will most likely be torn apart. And as soon as economic reality sets in, a re-activation of the three-year stock market crash is inevitable.
But precisely because Dick Cheney's neo-conservative gang in Washington, and its banking and multinational backers, are under such political, strategic, and economic pressure, they are a threat to strike out, if they remain in power, in a "flight forward" mode—either in new military confrontations, as with North Korea or Iran; or, with the launching of a "financial Sept. 11." As the global financial system is anyway hopelessly bankrupt, these forces might accelerate the disintegration process in order to control its outcome.
A sudden sharp rise of interest rates—already indicated during July as Fed Chairman Alan Greenspan's three-year rate-cutting policy "hit the wall"—would probably be enough to cause a meltdown of the U.S. bond and housing bubbles, driving millions of private households into bankruptcy. At that point, with calls for a public bailout of financial markets by governments already running huge deficits, "Schachtian"-style emergency measures, including the dismantling of traditional social programs, could easily be implemented by the frontmen of high finance.
A historic reference point for such a development is the collapse of the post-World War I Versailles monetary-financial system, which was based on using the German war debt to prop up creditors worldwide. As LaRouche noted on July 26: "Then, when the financial system was threatened with a blowout, you had two ways to go: One way was typified by Franklin Roosevelt's recovery program, the other way was Adolf Hitler. And for a time, Adolf Hitler won. He was put into power by key financial interests, which were afraid that, under conditions of financial collapse, governments would intervene to save the economy, at the expense of the financiers' interest-control over the economy."
Greenspan and Co. Laid Interest-Rate Trap
In the second half of the 1990s, central banks in the United States, Japan, and Europe opened their monetary floodgates in a attempt to sustain, by financial "bubbles," a bankrupt global system. Products of this liquidity pumping were a worldwide stock market bubble and, in particular in the United States, the most excessive credit generation in centuries. After March 2000, crashing stock market bubbles eliminated $16 trillion of financial asset value worldwide within three years. The central banks responded with even more liquidity pumping. While the accelerated flooding of markets wasn't too successful in boosting the stock markets or the economies, the central bankers' efforts created some new financial asset bubbles.
The U.S. Federal Reserve pushed down short-term interest rates from 6.0% to 1.0% within 30 months and thereby helped create a giant bubble on the bond market. The scheme worked in two ways. First, commercial banks could borrow short-term funds from the Fed at low interest rates and then invest the borrowed money into bonds offering higher interest, a special kind of "carry trade." Second, the Fed rate cuts immediately pushed up the market prices of bonds. Bonds are debt titles issued by governments or large corporations. The bond issuers promise a fixed interest rate, usually being paid at a specific date once a year, and of course the repayment of the bond's nominal value after a specific number of years, ranging between 2 and 30 years.
Take as an example a 10-year U.S. government bond with a $10,000 nominal value and a fixed interest rate of 4%. If an investor keeps such a security until its maturity, he knows the income stream exactly: In each of the next 10 years he will receive $400, plus $10,000 in 10 years, all in all $14,000—of course under the premise that the bond issuer doesn't go bankrupt in the meantime.
Most bonds are not held by investors until maturity, but constantly traded on the bond market. The market price of such a bond is determined by discounting all the remaining future income streams, by a comparison of the bond's fixed interest rate to the momentary short-term interest rate. As an example, that 4% bond's promised $10,000 payment in 10 years has a discounted cash value of only $5,580, if short-term interest rates are at 6%, as they were in the United States at the beginning of 2001. But with short-term interest rates pushed down to 1%, as they are now, the present cash value of a $10,000 payment in 10 years amounts to $9,050, that is 62% more than in the previous case. The Fed's policy automatically pushed up the market prices of all outstanding bonds, and by signalling further rate cuts, it invited millions of investors to join the ongoing bond market frenzy.
Furthermore, Greenspan and Fed governor Ben Bernanke publicized their commitment to buy up, if needed, an unlimited amount of U.S. Treasury debt from commercial banks in order to fight the so-called threat of deflation. In conclusion, a giant bubble was created, which itself helped to build up an extreme expansion of mortgage credit, as interest rates for mortgage loans are priced in reference to Treasuries of similar maturities. Millions of private households were lured by record-low mortgage rates and rising home prices to sharply increase their mortgage debt. The refinancing of old mortgages, often including a "cash-out" component. at the same time helped to prevent private household consumption in the U.S. from collapsing. But now the party is over.
Bond Bubble Is Bursting
Still in early May 2003, Greenspan and other Fed governors were making public speeches on the possible outbreak of deflation, promising extraordinary measures of liquidity pumping to fight it, including direct purchases of long-term government bonds by the Fed. In its official release following the May 6 Federal Open Market Committee (FOMC) meeting, the Fed said that over the next quarters, "the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level." The foreseeable reaction was yet another frenzy on the bond market, pushing down Treasury yields in mid-June to the lowest levels in half a century.
But suddenly, probably under pressure by the White House to present an upbeat economic outlook, Greenspan changed his line. The first indication for this was the decision by the Fed on June 25 to lower its key interest rates by just 0.25%, not the .50% investors had expected. Bond markets worldwide started to go down. As bond prices fell, bond issuers were forced to promise higher interest rates. Already by July 2, yields for 10-year U.S. Treasuries shot up to 3.64%, compared to the 45-year low of 3.07% reached on June 16.
The repercussions were felt worldwide. Japanese government bonds (JGB) on June 30 suffered their biggest slump in two years. On July 3, a bond auction by the Japanese Finance Ministry drew just half as many bids as the previous sale in June, leading on the same day to the biggest JGB plunge since September 1999. Japanese 10-year bond yields reached a record low of 0.435% on June 12, but by July 3 had shot up to 1.125%. On July 4, the JGB crash continued, driving 10-year yields at one point to 1.40%. Japan has the largest government bond market in the world, with $4.7 trillion in outstanding debt, compared to $3.3 trillion U.S. government bonds. Both the German and the British government bond auctions on July 2 drew the lowest demand in several years.
The bond market decline accelerated when Greenspan testified to Congress on July 15, presenting an inexplicably rosy outlook for the U.S. economy. He enthused about the stimulating effects of the Bush Administration's tax cuts on top of the Fed's rate cuts. In sharp contrast to previous statements, he now downplayed the threat of deflation: "The FOMC devoted considerable attention to this subject at its June meeting, examining potentially feasible policy alternatives. However, given the now highly stimulative stance of monetary and fiscal policy and well-anchored inflation expectations, the Committee concluded that economic fundamentals are such that situations requiring special policy actions are most unlikely to arise." Within hours, Greenspan's comments triggered the biggest massacre on the bond market since the Long-Term Capital Management collapse in Autumn 1998. The yields on 10-year U.S. Treasuries rose by 0.26% in a single day, to 3.98%. German government bonds on July 15-16 suffered their biggest two-day sell-off since June 1995.
The potential effects on the mortgage market reached such an alarming dimension, that on July 23, the Fed was forced to deploy its most outspoken "deflation fighter," governor Ben "Bubbles" Bernanke, to say exactly the opposite of Greenspan's claim eight days before: that there is a real threat posed by deflation, which indeed could require unconventional liquidity creation actions by the Fed. In his address to the Economics Roundtable of the University of California at San Diego, Bernanke said the Fed "should be willing to cut the funds rate to zero, should that prove necessary." Should still more monetary stimulus be needed, the Fed could use "non-traditional" methods, such as buying long-term bonds.
However, indicating the complete loss of confidence in the Federal Reserve, Bernanke's intervention failed; The bond market sell-off continued. On July 29, the yields for 10-year U.S. Treasuries climbed up by 0.16% in one day to 4.45%, making a shocking 1.38% rise in six weeks.
Contributing to the selling of U.S. Treasuries were the recent announcements by the government on its record-high budget deficits. In February this year, the Office of Management and Budget (OMB) was still forecasting deficits of $304 billion for Fiscal Year 2003 and $307 billion for FY 2004. But now, the OMB is forecasting budget deficits of $455 billion and $475 billion, respectively; both figures would cross the $600 billion mark if counted according to law, without looting from the surpluses of the Social Security Trust Funds.
Apocalyptic Consequences?
The bond market turmoil is immediately affecting the U.S. mortgage bubble; applications for mortgage refinancing credit by households suddenly dropped by one-third in the second half of July. Rates for 15-year and 30-year U.S. mortgages reached historic lows in June, but now have climbed back to levels of December 2002. Just in the week ending July 25, rates for 30-year mortgages rose from 5.72% to 5.87%. By July 30, rates already hit 5.94%, compared to 5.21% in early June. Day by day, the debt-service burden on millions of U.S. private households is thereby rising. Already now, the insolvency rate on mortgage debt is at a record high. If mortgage interest rates go higher while the economy and employment stay depressed, an avalanche of private bankruptcies could push down house prices and burst the $7 trillion mortgage bubble.
According to the Mortgage Bankers Association of America, demand for refinancings of mortgages, of crucial importance in the last three years in keeping up the façade of the U.S. economy, crashed by 32.9% in the week ended July 25.
The events on the mortgage market are also turning the two giant mortgage finance corporations, Fannie Mae and Freddie Mac, into financial time-bombs. These two government-sponsored private "agencies" have bought up 44% of the entire mortgage debt of America from commercial banks, most of which they have then sold, in the form of mortgage-backed securities, to other banks, insurance companies, and investment funds. Fannie Mae and Freddie Mac further issue bonds in order to refinance their operations. Finally, the two "agencies" are engaged in multi-trillion-dollar high-risk derivatives contracts, to "protect" them from rapid changes in interest rates.
Since June 9, the bonds of both Freddie Mac and Fannie Mae have come under tremendous pressure. Selling by European and Asian investors accelerated after rumors spread on markets in the second half of July that the European Central Bank (ECB) is liquidating its holdings of "agency" debt—which lacks an explicit guarantee by the U.S. government—and has recommended the same to all the Euro-zone national central banks. On July 30, Fannie Mae chairman and chief executive Franklin Raines described the recent events on the bond and mortgage market, in particular the rise of long-term interest rates, as a "100-year storm" for the financial sector.
In his Richebächer Letter for July, former Dresdner Bank chief economist Kurt Richebächer wrote: "During the late 1990s, Mr. Greenspan was keen to foster the stock market bubble.... Now, he is keen to foster the three new bubbles that he has kindled in fighting the burst of the stock market bubble—the house price bubble, the mortgage refinancing bubble and the bond bubble.... Greenspan signalled to the marketplace his determination to accommodate unlimited leveraged bond purchases [and that] endless liquidity is available for the taking by the speculative financial community. The obvious result is a credit and bond bubble that vastly outpaces the excesses of the equity bubble.... Our greatest fear is now the bond bubble. Its influences are pervading the whole economy and the whole financial system, and its bursting may have apocalyptic consequences."
The stage is set for a deliberately triggered financial/economic disruption of unprecedented dimensions. Today, as in the 1930s, the fight is over what kind of policy changes will meet it. Will it be a global "bankruptcy reorganization" aimed at re-starting productive investments to boost employment and living standards; or a "Schachtian" solution to maintain the power of "high finance," presently running the U.S. Administration through its frontmen around Vice President Dick Cheney?
posted on September 14, 2003 09:12:29 PM new
That's ok sky, we understand. <ayne someday some one will take you seriously, HA HA HA HA HA HA HA
Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own." Matthew 6:34
[ edited by Twelvepole on Sep 14, 2003 06:03 AM ]
good one