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$1.6 Trillion was put on the table and the Republicans nixed it. They probably did it for the wrong reasons. Because truth is, that amount should be raised. $1.6 Trillion in new revenue is too low!
First when one sees a figure like this, one must understand that this figure is spread over 10 years. (The nice part of choosing ten years as the time frame, is that it makes the math easier for most American’s to understand.) Therefore we are talking about acquiring a measly $160 billion per year. That may seem like a lot to someone who won that much in a powerball drawing, but, in the global economy, that is a drop in the bucket.
Here are some facts to put this much into perspective…
$160 Billion is the amount Federal Revenue dropped when the Bush Tax Cuts were inaugurated. It is also the amount of these , revenue increases from 2004-2005, 2005-2006. 2006-2007…… So such gains obviously don’t dent the economy.
2003-2004; this amount was was the sum of three supplemental bills for the Iraq War that passed Congress. Republicans had no problem borrowing $160 billion then.
2005-2006: same thing, supplemental bills passed to fund Iraq War. $204 Billion, borrowed.
2007 Supplemental bills passed totaling $170 Billion.
2008 Proposed budget for Mideast wars $190 billion.
2009 Proposed budget for Mideast wars: $130 billion.
2011 Proposed budget for Mideast wars: $160 billion.
One can see that we’ve indulged ourselves of thie $160 billion for ten years… All we are doing is simply taking the same amount of time to quietly pay it back.
It won’t hurt anybody.
How does this stack up to our GDP? Current estimates rank our GDP at number one with $17 Trillion dollars… So how much does $160 billion dollars suck out as a percentage of our GDP? That is the surest method to determine if any economic effect derives from those top earners paying more.
$160 Billion divided by $17 trillion … equals a percentage of…. 9 tenths of a single percent… That would be the equivalent of a sealing and coating charge of $282 added to your $30,000 brand new vehicle you bought… Does that little bit, cause YOU NOT TO switch out your clunker for a fine set of wheels? Don’t expect the wealthy to feel the hit either.
Remember again, we are not taking this from poor people. We are taking it only from those who have so much money, they loose hair follicles trying to figure where to invest it… Furthermore, each of those billionaires, will most likely make double that amount in new profits as the economy takes off and profits soar. Simply put, arguing over this paltry amount is silly. The only reason it is getting done at all, is because they (Republicans) think you are too dumb to know better…..
That is the only reason it is in the news today at all. Let’s try to make that number bigger. We know that the effect of siphoning 160 Billion a year is minimal, let us see how that affects only the wealthy?
The top 1% owns 40% of the wealth… 1/40. Total net worth of America was $55 Trillion in 2009. That was a sharp reduction from the all time high in 2007 at $66 Trillion. But at $55 trillion the amount of that being owned by the top 1% as we saw at the rate of 40%….. is…. $21.6 trillion. (the 99% own the other $34 Trillion)… So as a yearly assessment off their wealth, this $160 billion is one third of one penny on the dollar… In layman’s terms that mean one penny on every $3 dollars earned…. That is not going to kill anybody….
Granted, when you own $21 Trillion, writing a check for an extra $160 billion dollars is a shock, but to pay only a penny increase on every three dollars earned? Wow, if only the rest of us could be so lucky….
This is why we should not wait. We can make greater improvement and set our financial house in order by tripling that amount, quadrupling that amount, quintupling that amount…. or even times it by a power of ten….
When someone has a surplus of money they can never spend, 3 cents on every additional dollar owned is nothing. Especially, when the lower 80% is being asked to pay ten cents more of every dollar to their pensions, their insurance funds, and bank fees, just so those at the top can make even MORE money…..
Our nation’s economy can even afford a $10 trillion tax hike, (3 cents on the dollar)and do so with all the burden coming from only the top 1% of wealth holders… This tiny amount is nothing to them…
For Republicans to gnash their teeth over our President’s paltry $1.6 Trillion revenue jump, is demeaning, cowardly, and actually makes them look like silly, pompous old men, when a $10 Trillion tax increase is so easily doable.
And if anyone were to ever believe them, and back down from the $160 billion a year, their simply saying such,… may cause irreparable damage to our country…
This is post number 2000.
The only real significance is it is 150 posts more than where Tommywonk stopped exactly one year and fifteen days ago…
If some future historian looks back, I can only guess they may kindly make some note of the quality of thought that underlies these efforts, but my guess, is no one will ever notice…
Irregardless, as long as the urge to put thoughts down for others continues, we will go on. As usual, with no goal, no direction, and no ulterior motive. Probably upon reflection, my biggest surprise, right here, right now … is that I still enjoy it so much, and can’t wait to jot my thoughts down, click the button, and send them off to where ever cyberspace and the vast internet ocean, lets them drift….
For each of you who have become regular over the years, … thank you friend…
The recession has popped a lot of dreams… It has forced a re-evaluation of priorities. It has put reality in the forefront.
So wiping off the table of everything, everything, and sitting down to a blank space, and asking myself, … what do I want, by the time I die.
A country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement,”
After watching “It’s a Wonderful Life” you can be sure it can’t happen on a Republican’s watch….. For that dream to happen, we need protection from corporations and Big Money; not giving them more and more of what we make.
We need more money funneled away from big business, to be reinvested into the Middle Class… Since they haven’t done it voluntarily, we’ll have to force it.
Republicans can’t force anyone to do anything. They are putz’s. It will take a government of all Democrats to make Americans who die, at least die happy that they were able to secure:
“A country where working people can earn enough to raise a family, build a modest savings, own a home and secure their retirement”.
Duffy is God’s answer to a prayer.. I miss the old days of blogging when we were debating principals instead of people… Duffy has stuck to the old line of debating principals with facts, and that is what makes him special in the eyes of bloggers everywhere…
Since the passing of Steve Newton, he has been the only one to challenge me in any argument, and usually some pretty good stuff comes out of both sides during the exchange… I have respected that.. Cause once again, opinions mean dick. Facts are what we steer by.. It is my hope that in responding to his challenge that an answer may make itself apparent.. Who knows? It may not come from me… But if I’m the catalyst for bringing it out in the open, then… none of this was in vain..
Why I like to debate Duffy is simple.. Neither side, he or I, is concretely set in their opinions… We accept it when the other side makes sense… I usually go into such debates having no idea where they’ll end up… I hope the rest of you enjoy the ride as welI….
Duffy leads: Wall Street’s problems were caused by Fannie and Freddie loaning money to people they knew couldn’t pay and moreover, forcing banks to lend money to people who couldn’t pay. That was not deregulation but misregulation
kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate.
First off, the Community Reinvestment Act of 1977 was developed for, and locked in on, urban developmental areas and had no part of the subprime boom, which primarily occurred out in western desert regions where owning 4 to 5 investment homes was normal… Those homes were overwhelmingly funded by loan originators NOT SUBJECT to the act… We all know the crises was not because people couldn’t afford a payment on their house. It came about, because with no occupants, people could not afford the payments of 4 to 5 houses….. Instead of one loan per borrower turning up in default; four to five were.
Second off, The housing bubble reached its point of maximum inflation in 2005.
Courtesy of NYT
Third off, During those exact same years, Fannie and Freddie were sidelined by Congressional pressure, and saw a sharp drop in their share of loans secured by the Feds… Follow the dotted line on the very bottom of the graph…
Courtesy of NYT
Fourth off; During those exact same years, private secures, like Delaware’s own AIG, grabbed the lions share of the market.
Courtesy of NYT
Remember these graphs for later on when I discuss the results of deregulation, versus regulation… But like it or not, these graphs conclusively show that private insurers, who thanks to Marie Evans, we now know were deregulated by Phil Gramm in the 2000 Omnibus Bill, were the primary cause of the worlds financial collapse.. Probably put best by these words of AIG’s spokesperson, who when asked why they didn’t have sufficient funds to cover losses, said point blank, “We were deregulated. We were no laws requiring us to keep any funds, ..so we spent it…”
Duffy leads: The loosely regulated hedge funds escaped this mess largely unscathed. Why? They can’t count on a bailout like the big banks. The Too Big To Fail banks were counting on a bailout (not unlike the S&L bailouts which started on the Republican’s watch) and they got them.
kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. I agree that the hedge funds did survive better than the banks. Not because of bailouts, but because they sold short during the crises and made billions while firms closed and people got thrown out of work. There is nothing wrong with that; I did the same. In fact close readers may remember my warnings that the crises was impending almost a year earlier. Very close readers may remember my telling them exactly when to sell, and at what point the stock market would rebound… I must say: I called it rather well.
“Hedge funds were not in my understanding, at fault in the credit crisis,” said David Ruder, former chairman of the Securities and Exchange Commission. “At the most what they did was to sell securities when some of their investments were declining and they needed to have liquid funds. They were not the architects of these problems.”
De regulated hedge funds are not the issue… De-regulated, excessively leveraged, mortgage securities, are a different story however… They, not the banks that held them, are the cause of the crises…Years from now, when academics search for causes of the stock market crash of 2008, they will focus on the pivotal role of mortgage-backed securities. These exotic financial instruments allowed a downturn in U.S. home prices to morph into a contagion that brought down Bear Stearns a year ago this month – and more recently have brought the global banking system to its knees.
Where you err is when you state that banks too big to fail, assumed they would be bailed out… By implication, you say imply they failed from squandering money, and wanted the bailouts.. But your tax dollars didn’t flow directly to the bottom line.
The roughly $200 billion the Treasury Department has handed out to battered banks was swapped for a special class of stock that pays a 5 percent dividend (rising to 9 percent after five years.) As of April 15, the Treasury had collected about $2.5 billion in dividend payments on its investment.
So in that sense, the bailout money represents an expense for banks. That’s one reason a number of banks have said they want to give the money back as soon as possible.
You say big banks were counting on a bailout, and they got them? That didn’t happen to these banks. New Mexico, Georgia, and Florida each lost a bank just last Friday. That brings to 8, the number of banks failed in June. Unfortunately if a bank is failing, it can’t bet on itself to fail, as can a hedge fund.
Duffy leads: Banks have successfully lobbied to get their losses absorbed by taxpayers and gains are kept private. How nice for them. They felt comfortable making insane gambles because they knew they’d be bailed out. Most of them were right. Also remember that it was Bill Clinton who tore down the wall between retail and investment banking. The idea was to give banks more stability as they typically perform as exact opposites in bull and bear markets. (FWIW, I think that was a good idea and I can tell you first hand that two of the Fortune 100 banks I worked for were carried by retail banking in bear years. They may not have had bonuses those years but they didn’t have layoffs either)
kavips rebutt’s:Uh… Mr. President. That’s not entirely accurate. The idea is that the banks made bad decisions knowing taxpayers would bail them out is the issue that is inaccurate. For the record, I have no qualms that it was the Clinton legacy who tore down the wall between banks and investment banking. Like you, I feel it was a good idea to do so… Again the problem was not primarily with banks making loans to people who could not pay.. Although, it was as late as October 2009, when I was made aware of one private Bank in Denver still exaggerating income to make loans look good enough on paper to get approval of securitization. What caused the collapse was the leveraging of those loans as securities, so that as the housing market became overextended, and the ARM jumped past the low cost opening years, the damage was 100 times worse because of leveraging. What made the collapse criminal, was that the insurance most financial institutions had bought from AIG, to cover such an improbable event, had already spent by that companies executives, out on bonuses to themselves. What made it doubly criminal, was that when they received government dollars through a taxpayer bailout, those same executives assumed it was to first go towards paying their bonuses again. However, very recent events may give some cover to the argument that some collusion was implicit in the bailing out of Goldman Sacs and AIG… Basically, once bailed out, AIG paid Goldman Sacs for shares twice as much as they were worth. The documents also indicate that regulators ignored recommendations from their own advisers to force the banks to accept losses on their A.I.G. deals and instead paid the banks in full for the contracts.
In Clayton Hall, the heads of two campaigns shared a pitcher of truth serum as well as conversation covering the campaign of last season… David Plouffe, who ran the Obama campaign, sat down in a tan easy chair next to Steve Schmidt, the man who salvaged John McCain’s faltering campaign and made at least a viable run for the office of president of the United States…
There were two surprises… The first was that David, the Democrat, was actually a detailed, district by district, target by target, meticulous type of planner.. Those of us privy to his emails did not seem him as such.. But starting from Iowa through the general campaign, he remained intently focused on how to eventually pull 270 electoral votes out on November 4th.. His real battle was the primary against Hillary Clinton: “We thought that nine times out of ten Hillary Clinton would probably win the primary,” he said. “If we made one big mistake we’d be out of the race.”
The second was the candidness of Steve Schmidt, the Republican, who acknowledged the Republican Party was a long shot from winning. “We were running a campaign under extra difficult circumstances — the state of the Republican Party, the president’s unpopularity, the economy — a lot of issues that were not John McCain’s fault, but were John McCain’s problem in this race,” He used this analogy that will become the historian’s caricature, as they look back over this past campaign…“It was the strategic equivalent of throwing a football through a tire at 50 yards”
The two campaign chairs were joined by two Delaware Students, who write for the Review. Josh Shannon, and Stephanie Krause… The moderator’s position was held by by professor and former CNN world affairs correspondent, Ralph Begleiter, who recognizing the significance of the opportunity, did away with introductions ( “we all know how to use Google“) and jumped directly in with the first question… : “Was there a time when you wanted to say to the opposite teams chairman… what were you thinking?” David responded with “yeah, when they picked Sarah Palin”… a choice that later Steve defended when he said….”
“Sen. John McCain passed over his first choice for vice president — Democrat-turned-Independent Joe Lieberman — in favor of Alaska Gov. Sarah Palin to avoid an all-out GOP civil war. It was communicated back to us very clearly from within the party that not only was Senator Lieberman not acceptable, but any pro-choice nominee was not acceptable, [and] it would lead to a floor fight at the convention with an alternate nominee for vice president put into play. Blowing up the party wasn’t one of the menu items of things that were going to improve our situation,” he said.
When asked if there was a moment when the outcome was known before the actual election, Steven Schmidt say “Yeah, when Lehman Brothers collapsed in the fall I knew pretty much right away that … from an electoral strategy perspective, the campaign was finished. We were posting 5% in the right direction…. that is when asked if they felt the country was going in either the right or wrong direction, only 5% of the public was saying the right one, a historically low number by the way, no one ever gets negatives that low on that question, but shows the uphill battle that we fought...”
Steve said the Palin plan was to excite the base…”The first night of our convention was President Bush and Vice President Cheney. I literally thought by the second night of our convention we could be down 25 points.” Her pick excited the base, drove up the scores of women, showed McCain to be a maverick. The Republican’s grand plan was to focus on National Security during the month of September, and then drive home their tax policies during the month of October… The Lehman Brothers collapse, and the subsequent collapse of the stock market, immediately shifted the electorate’s focus towards the economy and as we all know, their candidate was on record as admitting he knew very little about the economy….
Steve when describing the impact of the Katie Couric interview, said it was the “most devastating political interview ever “since Roger Mudd interviewed Ted Kennedy who could not answer the question as to why he wanted to become the president…
When asked about the current president’s first hundred days, both chairs dismissed the title as a line drawn in the sand and as nothing to worry over… Steve characterized Obama’s first 100 days as being successful… He called out the Republican counter strategy, by saying the only thing that ever matters is where the mind of the electorate is on election day.. David reiterated by saying the “”I think the scoreboard of how many House Republicans voted for a certain bill is a flawed measure, because the truth is there’s very few House Republicans that worry about the middle of the electorate anymore,” the current president’s campaign manager said: .”We’ve won all there is to win in the House, so these folks are worried about their primaries, and Newt Gingrich is calling all their shots and pulling out the dusty playbook from 1994 and saying, ‘Just oppose the president, and maybe if things don’t go well you’ll profit. The world needs to understand. Republicans in Washington, are different from…. Republicans. ”
On the Republican Party, Steve went further.. “It is near-extinct in many ways in the Northeast, it is extinct in many ways on the West Coast, and it is endangered in the Mountain West, increasingly endangered in the Southwest . . . and if you look at the state of the party, it is a shrinking entity.”
When asked about the irony that Steve was central to the anti gay-marriage bashing by Bush- Cheney 04, which gave them just enough of an edge to hang on to Ohio and Florida, and this year had recently given an address to the Log Cabin group of gay Republicans, thanking them for what they do, and encouraging them not to give up hope, but to work harder to change the party for the better… Steve spoke with kavipsian wisdom….
“People who are born into their sexuality, should not be disallowed for that, and have one of the basic tenants of the Declaration of Independence withheld from them: their right to pursue happiness. Steve said. “These dividing singular issues are what have hurt the Republicans.. Achieving the concept of the Big Tent theory, is the way to winning…
Steve got a big laugh to this line describing the current climate of his party… “Republican’s abhor a vacuum of leadership… Currently we are in our “Lord of the Flies” period, when there is no leader, and now is the time when the next generation rises… The party is a shrinking entity.. No longer can your winning philosophy be to hold the South, and every 4 years spend 80 million dollars to win Ohio….. Republicans need to be competitive in all races, in all 50 states…
The Democrat David Plouffe acknowledge that the choice of Sarah Palin motivated a lot of new money and volunteers towards the campaign.. When questioned how he was able to mastermind the ground game of volunteers across 50 states, David had surprising information… Due today’s technology, and social networking, many states organized themselves. In fact, paramount to the decision of whether to send paid staffers into various states, was the reality that having a state with a network structure already in place, made adding money and staffers relatively easily… They didn’t have to search out “now who do I talk to”; “who might volunteer”; it was in place before they arrived.
Outside during the reception, he pulled out his mauve colored blackberry and said the whole world has changed because of” this”.. The next campaign has changed, because of “this”. Video, news casts, placed right in your hand, almost the instant that they happen. Picking up on a theme expressed inside, he asked who do we trust? In today’s world we don’t trust the media, or political operatives, talk-show hosts, or the medical profession.. We trust our family members and our neighbors… even if our neighbor is crazy, we trust where he is coming from.. When he steps up and says “You know, I’ve always hated Democrats, maybe voted for a few, certainly would never send them any money, but i like what I’m hearing from this Obama guy” it resonates….So when a family member sends you an email with a video attachment, you tend to accept that piece of information as valid… Our social networks are less face to face and more and more electronic. It matters not that a familiar newscasters face is on TV. What matters is who sent that piece of information, whether that someone was someone we liked or didn’t like, that becomes the emotional seed or basis of how we form an opinion… In four years, the campaign will all be different again.
But the current president’s key to his success, was utilizing this social networking. It’s an organic movement, he said. “The Obama campaign has 4 million donors and the average was 85 dollars per person. Young people played a huge role.. In Iowa, usually the over 60 crowd is twice as large as the under thirty crowd. This time the under 30 crowd was doubled, equalizing or beating out the over 60 crowd. That is unheard of..”.
“We changed the electorate” said David. Steve also acknowledged the youth vote completely changed the playing field. With unblemished admiration for the opposing candidate, Steve linked the campaign run by Obama to that of unfinished one run by Bobby Kennedy, calling him a once in a lifetime candidate…”This was, in my view, the unfinished Bobby Kennedy campaign — the idealism, the passion, the inspiration he gave to people, it was organic and it was real and it wasn’t manufactured at a tactical level in the campaign,”
Those of us who study strategy, live for the post battle scenarios when two warriors sit down and discuss for history, the importance of what they did… For those who study politics, this is as good as it gets… Just the nature of the Obama campaign, with its insurgent candidate who took on its preordained appointee in a long primary, then went on to beat the best human being the Republicans could have offered, (if you don’t believe me, revisit his concession speech) is a once in a lifetime event for politicos…. I may never see such in my lifetime…
Surprisingly both went to the University of Delaware… where equally surprising, neither of them graduated. Yesterday before the public session, arrangements were quietly made to take care of that small part of their impressive resumes….
I hope history will realize that despite coming from this tiny state, just how big these guys really are……