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Right click to open full image… Pictograph Courtesy of Viral..

So, can someone tell me again, why we shouldn’t tax the rich, and instead, balance the budget on the backs of everyone else?…….

I seem to be missing that little detail where that all makes sense……

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When your mom gets cancer. You don’t hate your mom. You hate the cancer.

Likewise, it was hard not to like the German people during WWII. It was easy to hate the fact that they were trying to kill you.

And so it is with Republicans… 99% of them are just like us. They too love their country; they too want it fixed; they too are angry, frustrated that events are not moving at fast-forward..

They are wonderful people; who also, happen to be Americans. We can never forget that if we were together in a bar with beer, wine, and spirits flowing like milk and honey, we’d all have a “gay ole time” (Flintstones’ reference) …

We want the same things, and we should be working together on fixing America… but we can’t….

Because of the Cancer…..

That cancer is not necessarily the Republican Party, but it is, the force that IS currently manipulating the Republican Party. That cancer is not a single person in the Republican hierarchy… It is instead that revision of the old cancer, that originally was against recognizing new states into the Federal Union. It is that old cancer that kept slavery legal for thirty years beyond when it should have been eliminated. It is the revision of that old cancer that kept blacks as second class citizens across the South. It is the cancer that fought against giving the Negro their Civil Rights. It is that cancer that denied Tobacco caused cancer. It was the same cancer that encouraged the killing of 4 students at Kent State, to teach those dirty hippies who listened to the Doors, a lesson they wouldn’t forget. It is the same cancer that denied the process of evolution, denied birth control, denied NPR, and ran rampant against all evidence of global warming…… Each time; they were wrong.

It is the same cancer that blew up a building in Oklahoma City.

It is the same cancer that fired bullets into working men and women who were refusing to work, until they got a raise…

It is the same cancer that took out Gabby Gifford……

With all these offenses, it is easy to point your finger and say, “Damn you Republicans..” It is in fact, way too easy.

But is not the people voting Republican who are to blame… They, like the German people, are bystanders. often gaping wide eyed when shown the truth, of what their support for the force of evil did to innocent men and women.

It is easy to turn all Republicans into demons if you don’t talk to them. But listening to them talk, (and we’re talking real people here, not their David Korsch’s) it is very easy to find common ground.

That common ground is this: sure, you tax the wealthy, and we’ll cut spending and together we’ll have high revenue with less expense, and be out of this mess in no time….

This is what every card carrying Republican is telling me, that is of course, if they don’t subscribe to the “cult-like” Republican meetings…. They say: “tax the fuckin’ wealthy; it won’t affect me; Just make sure that extra money is not wasted but is used to pay down the waste we already spent!”

Democrats have already offered to cut Medicare, Social Security, Defense Spending, all those things dear to their heart… So the problem isn’t them.

The problem is with the Republicans, who have balked on the tax issue, especially when it comes to raising taxes on millionaires… yet they have no qualms raising taxes on the middle class and poor. Republicans have shut down the Federal Government four times this year. Four times! They did so each time because the obvious was about to happen. WE were about to get a consensus among the rational members of both parties on how we were going to raise taxes and cut expenses (at the same time) which would bring us into line.

They pulled out of negotiations and said: we will not raise taxes one penny… and also, we will not do any business either in the House or Senate, until the Bush Tax Cuts are permanent.

And that,in one sentence, is why nothing gets done.

It’s as if a terrorist broke into your workplace. Under gunpoint he straps C4 to several of your firm’s employees, and starts firing his gun out the window to get everyone’s attention….

Rule Number 1: You don’t negotiate with terrorists.

That is the problem Obama and the rest of America is faced with, raising this question:

Do we attack (shut down government) and later clean up, or do we negotiate something we can both live with?

What do you do with cancer… Leave it? live with it?

There’s your answer to today’s political gridlock.

Removing all Democrats will be like having the Brits flee France across the channel, leaving the Nazi’s to run France without contention….

Removing all Republicans will be like marching triumphantly into Berlin.

It is pretty obvious who is the cancer and who is not. WE, THE PEOPLE, can’t let it linger any longer. The cancer must go, preferably without killing its host in the process…

There are two choices before us:

One, we tax the top 1% and live the quality of life we deserve…..

Two, we continue the tax cuts, allowing the top 1% to not pay their fair share in taxes, and continue the quality of life we’ve suffered since 2001..

Simple microcosmic view: find a pothole in today’s state road system… You can’t, it’s covered up with stimulus funded new pavement… Nice, crisp, sharply painted blacktop, as far as the eye can see….

Compare that to the Bush Era… Potholes galore and getting them fixed was like pulling teeth…

Now pull back and look at your entire lifestyle with all it’s moving parts…. first see one where everything outside your control is operating smoothly like clockwork ( a Visa commercial comes to mind), and the other where it is all cacophonous and catastrophic…..

So, in which type of lifestyle do you prefer to live?

Decide and vote.

The World Cup for Women is not the only thing escaping the grasp of America… Private investment money is fleeing our nation as if the party is over and the last one left in the room, will be presented with the check. Each time a Republican insists that default on US obligations is a valid price to pay to enforce a “no tax pledge” on the wealthiest one percent, billions more flow out of our country.

Those billions, not millions, are our future jobs, going elsewhere….

It’s happening each time a Republican opens his mouth and insists that taxes on the wealthy, will NOT be part of the deficit reduction act.

In April, $67 billion flowed into our country from overseas. After all, we were recovering from the Bush Depression. Then, as the debt ceiling crises made clear that Republicans were insane in their insistence that only cuts would balance our deficit, the net outflow flipped to 67.5 Billion…

In one month, Republicans caused a $134 billion flip in the amount of money available in the US for future investment.

That investment is now being done overseas. Those people are getting the jobs that should have, would have been here if Republicans had acted responsibly. Ironically that is exactly the same amount $134 billion, that the Congressional Budget Office, estimated the American Recovery and Reinvestment Act would increase the deficit in 2011.

The stimulus we pumped into the economy for the entire year of 2011, was wiped out in one month, by Republicans whose scare tactics chased that much money out of our country.

Small people all know this. Democrats reward investing in the USA… Republicans reward getting your money out, and keeping your money the hell out of the USA.

It is crystal clear; there is absolutely, unequivocally no other way to see it.

If you had lived back in 1776, and decided to take up your gun, and fight back those anarchistic rabble rousers who wanted to overthrow your king and his stable system of government, you may have thought you were doing the right thing at the time. Maintaining God’s order in the universe. As each one of your musket balls found its home in an American Continental soldier’s body, you may have rejoiced that you were doing your part to bring order and decorum back into society. But…… History proved you wrong. You may have felt you were right; but you weren’t.

You weren’t.

Today, July 2011, Republicans are doing far more damage to our nation’s future, than one or two musket balls could ever cause… the loss of $134 billion in future investment. Can we afford to sit ideally by and let this self inflicted bleeding continue?

Anyone supporting the Republican party, is simply a Royalist traitor transported to today’s world.

That is fact. That is truth. That is reality. That is getting pounded in the face.

They could be nice people; they could believe in what they do; they may mean well; I certainly don’t mean to imply that they ARE bad people… But, whether they are good, bad, or indifferent, the results of their actions are hurtful. For example, I’m sure termites are fascinating creatures, amazing to study, and in their own way, admirable examples of God’s creation. But, …. we don’t allow them to take over our houses….

America: Republican just cost you $134 billion dollars… They’re not saving you money: they are bleeding you dry, dry of every penny you’ve ever earned…

But, whatever…. It’s your country and I’m just one person… You guys vote and support whoever you want; it’s no sweat off my brow. Whatever happens, I’ll survive either way.

But America needs to look at the bigger picture occasionally and realize that the only thing we got going for us is our unique, talented, and gifted people. Those same people who give hope to the world over, that their nations can, one day, be like us.

You burn that up as fuel, and all this nation’s got leftover, is ashes…….

We were round tabling this discussion when one person said… “What if the US just gave up after Pearl Harbor?”

Valid point.

Now I’m all for people speaking their mind. I’m all for supporting the majority. And like the founding fathers, I have implicit faith in the ability of the people to sort out our problems and separate wheat from the chaff… if not the first time, then definitely over time.

Most ordinary people I know have far more wisdom than any leader I’ve had the privilege to share conversation with. Therefore I believe in the sanctity of the people’s choice. If the people voted him in, he’s there for a reason.

But that’s only if the election was fair. If someone padded the ballot box, or switched vote totals, than obviously this premise wouldn’t apply for the very reason that the choice of the people was not the person who was actually representing them.

Mike was bushwhacked, sort of like the US was at Pearl Harbor or on 09/11…Reading his interview yesterday in the News Journal, one gets a sense that perhaps this was not a fair fight…. By election laws it was, and we all have to accept the primary results. However, if Mike doesn’t run as a write-in, he is putting himself in the same position as if the United States did nothing after Pearl Harbor or 9/11….

And with Mike, it is not about winning, although winning would be nice. It would be about whether good or evil triumphed. Polls say it’s Mike’s race to lose. He actually has enough money to send every voter a personal card telling them exactly how much he’s done for them, how that will soon change for the worse, and explain how to write in his name and send the evil perpetrators back to their cardboard boxes.

If Mike doesn’t do this…. exactly then, what is he saying to future generations of Americans? ? That we should just give up when hit from behind with a baseball bat? That it’s the American way to lay down and bend over? That being a man, is knowing when to run away and hide? That brutality and tastelessness are the new American Way? That perhaps Christine was right? Castle has no man pants on? That the wishes of Delawareans don’t matter; we’ll stop immediately and do what Californians tell us? That how we brush off defeat is a better mark of character, than coming back strong and punishing the evil that befell us?

And sentences keep coming one after another… the list keeps going on…

But if I were in Mike Castles shoes, and if it were me looking over the entire scene before me… I would have no choice but to say I’m in… Oh yes, I would wait till the last minute of September 30th to do so… and I would create a smoke cloud beforehand by pretending to roll over and let bygones be bygones… …. …. and from somewhere out of the fog, then overwhelmingly, I’d strike.

I wouldn’t hold back.. It’d be my last race, it would be the one I pulled all my stops for. Every person I’d ever helped would get a personal appeal from me. Unconditional Surrender would be our rallying cry, just like for the troops of WWII… Our goal would be not just to win, but destroy the O’Tea Party forever.

Ok, Hannity O’Tea Partiers: so you were secretly prepared and yes, you overran Poland, and yes, you then went on to incorporate the Low Countries, Denmark and Norway, and even surprised France pushing their ally Britain into the water… But this time, you went too far.. You’ve taken on the United States. You’ve pissed off someone five times your size. We will Normandize you, Elbetize you, Dresdenize you, give you a Kolnectomy, Rhineantipuovertize you, Remagenisque you, and even liposuctionize your Battle of the Bulge. We will Pattontize you, Bradleydice you, and Marshall you into a corner from where you can’t maneuver.. We will take average civilians and turn them into a fighting force the world has never seen…

We will do so for the honor of America.

What kind of an America? An America where truth wins out, where decency prevails, where honesty and hard work eventually win out over trickery, skulduggery, and political assassination. You wanted to play dirty? We’ll show you how it’s done… In doing so we will show the world that modernism prevails, that decent people still run America. that the “Boehner Bullshit” is just that. It’s time to show the world what we’ve known all along.. That in America, it’s the people who run politics..Not the Politics who run the people…..

I’d tell every Delawarean… Do yourself a favor… Turn off your TV’s.. You got a question? Call me or my staff directly! We’ll talk to you… try talking back to their commercials! Where will that get you?

That stuff they’re airing? That’s not Delaware talking, That’s California money talking… That’s rich bitch snitch drug money being laundried to throw a Senate seat into supporting their snatching up of all your money… You want to keep some of your money? Call me. Call my staff… That’s Delaware talking.

Do you want reason to take on ins’hannity?

Well, it’s on. Support me. You can’t let the devil win… ”

Well anyway, if I were Castle, that’s exactly what I’d do. And I would do it selflessly, not to win, but to give Delawarean another alternative between a Democrat and our equivalent of the brown shirts of the Nazi Party.

Yes, if there is still good left in America, then Castle needs to run.
If the doesn’t, then the America that came back after Pearl Harbor……. is gone.

This goes on every Democratic paid for billboard October 1st

Reading a recent old copy of the News Journal, I saw an article where some Republican buffoon, said something like: “yeah, we’re gonna stick it to Chris Coons that he’s a tax and spend Democrat.”

I laughed out loud…

Go ahead … Make us draw attention to you..

I’m calling on all readers to step up to the plate.

I have begun boycotting all Happy Harry’s. I’m using Rite- Aid.

I don’t see how anyone who loves Delaware, can stomach walking into any Happy Harry’s right now.

We are asking all to sacrifice. Many out there lost jobs and have no choice but to sacrifice. And we have a company that will not take a 2% reduction in the payment of medicaid benefits?

Well, FUCK THEM. FUCK THEM WHERE IT HURTS. They are getting 0 dollars of my money, and my money is going directly to their competitor…

Any legislator who dares walk in to a Happy Harry’s had better pray no one inside has a camera phone. Because their picture will be posted on this site for eternity.

Any political officials who dare do the same, had better think twice before venturing through those doors. We cannot afford to let some spineless or forgetful official represent our constituent’s interests.

I am calling on Jack Markell and Matt Denn to step up to the plate and issue a directive that NO STATE BUSINESS will be conducted through any Happy Harry’s establishment. All of that must now go to Rite Aid.

I’m calling upon John Kowalko and House Speaker Gilligan to demand that no business and request that no citizen of this great state, the first state of this nation to ratify the Constitution that made this awesome nation possible, walk through those doors.

I’m calling upon hero Karen Peterson, to demand that Walgreens rescind their order or that punitive legislation directed solely towards that one company, will be passed by both houses before this July 1st deadline…

I’m calling on Delaware’s Insurance Commissioner to show her critics that she indeed has spunk. I’m calling on KWS to prove her balls, to stand up to, organise, and carry this boycott forward from her bully pulpit, and not sit back and allow her critics to justify their accusations…

I’m calling on the Progressives of Delaware (PDD), to stand solidly behind those supporting this boycott. They have led on everything good for Delaware so far. They need to support this as well.

I’m calling on the mouthpieces of all three of Delaware’s political parties, to support the statewide boycott of Walgreen’s Happy Harry’s. For one, it needs to be effective, and two, the results need to be devastatingly severe to prevent any other uppity out of state corporation, from attempting similar processes.

(and as a personal FYI, if you own stock in Walgreen’s, dump it immediately, for it’s value will only go down, down, down, as word of this boycott leaks…. this is damned serious: kavips says: get out now).

Send Walgreen’s this message. You want to be petty. WELL FUCK YOU. We’re not wishy-washy Washington state. We’re far too serious and just to busy to play childish games. We have an 800 million deficit to take care of…

To step up the pressure, I am asking every citizen to consider picketing in front of every Walgreen’s owned Happy Harry’s to demand that they rescind their order.

I’m calling on all labor unions to likewise organise and set up pickets outside every Happy Harry’s in this state to demand that Walgreen’s rescind their policy which is unfair to all working people. Any company these days that is willing to blackball American citizens over a piddly 2%, deserves to go bankrupt as fast as possible. They deserve to go bankrupt. Deserve.

I ask Darlene Battle to organise all of ACORN and rapidly hand out petitions asking all of Delaware’s citizens to boycott every Happy Harry’s in this state and take their business elsewhere, Rite Aid is willing to work with this state. Give them your business!

So that’s what I’m asking. I want every Delawarean who still has some love for this state, to take their business elsewhere… Show them we will not back down. Rite Aid can take care of all our pharmaceutical and beauty needs. Screw Walgreen’s Happy Harry’s.

For every dollar spent in a Happy Harry’s from this point forward, funds the coffers of an enemy of the state of Delaware.. Every penny given to them, is a hundred dollars taken from us over time in our future…

So look Walgreens! If you want to play games, go ahead and play them. You are about to enter the marketing nightmare Delmarva Power lived in last year and about to suffer very similar consequences…

But you obviously didn’t research this state well before you came to your decision. For you left yourselves are far more open and vulnerable. Delmarva Power suffered severly even though most Delawareans did not have a choice; but with you, it’s two blocks down the road. We don’t have to give you money.

You should reconsider and fire the person accountable for the idea. Hell, it’s only 2%.. You’re paying more than twice that on the interest covering the financing you used to buy and expand the Happy Harry’s franchise… Let’s see how well you do with NO money coming in…

Delaware deserves better than anything Walgreen’s Happy Harry’s can offer. It’s time we stand together and prove it once again, that we are not called the “fighting Blue Hens” for nothing….

You have a Herculean task before you… Essentially to clean up what Republicans have left behind.

However, it would be fair to warn you that my support for the Constitution of the United States of America, and my sworn duty to obey it to the best of my abilities, has me fearful of some the changes you propose for public safety. As an American, I have the right to live unsafely if I wish…

My ancestors had the same right.. They chose to come to America… and because of that… here we are today.. Our ancestors chose to travel west for opportunity, and because of it, here we are today.. Our ancestors chose to sign up and wear blue, to keep the grays from splitting us apart.. and because of that, here we are today…

I want that same right to maximise any opportunity that may present itself before me..

So, with fair warning, any criteria you propose to tame the Internet, which limits the right I hold so dear, the right to express my opinion with impunity, will cause you to lose the battle of public opinion… because I will fight you there..

The rules for engagement are as follows… YOUR PROPOSALS MUST FIT WITHIN THESE GUIDELINES… Once offered in high prose, but for everyone’s benefit today, I have put them in street language… For after all, that is where these values need to be upheld… on the streets of this great nation…

The ten basic rules are as follows…

1) You can’t tell me what to believe, or make me go home and shut up.

2) I’ll go armed and defend myself, thank you.

3) You can’t make me let someone else live in my house.

4) This is MY house; if you can’t demonstrate a compelling need to
snoop, stay the f*** out.

5) This is MY sh**; keep your greedy hands off it. And don’t go
accusing me of Evil without evidence.

6) If you’ve got evidence, lay it on the table. And no fair getting
a confession by pitchforking me in the ass.

7) I ain’t guilty just on YOUR say-so.

8) You can’t keep me in jail just because you want to.

9) As to the rest of my life, you can’t tell me what to do or not
do.

10) And neither can your big fat uncle in Washington.

Keep these in mind.. As long as you remain within the parameter of what I have sworn to cherish and uphold, you will continue to have my support… especially the fourth, since it’s misuse directly applies to us bloggers….

My bills are too high to expect me to help out the economy.….– kavips

One Trillion shy of all domestic Household debt (14T) , is the debt imposed upon us by “the borrowing of our governments”… local, state, and Federal (13T). The majority (10.4T) is our Federal debt. It should come as no surprise that tackling this task should be our first priority to insure that any short term economic gains we create, are not wiped out months or years later.

We were on a successful track to achieve this goal just 8 years ago… Budget surpluses were projected far into the future, and before our eyes, the whittling down of our national debt actually happened . Today, Generation X’rs and Y’rs simply accept that as fact, that balancing the budget is possible. Very few recognize how much of a miraculous achievement that thing is: a budget surplus… For until Clinton-Gore arrived, no one ever expected our national debt to decrease. But decrease it did and not only did it actually drop within our lifetimes, but a credible path was tracked showing it decreasing year by year to negligible amounts. And then … with one election… things drastically changed. We stopped our Treasury from taking in enough money to cover its known expenses and instead, borrowed the amount to fund what was necessary.

In eight years we went from a projected $5 trillion dollar surplus to an actual $10.4 trillion dollar deficit; a flip flop of $15 trillion dollars! Political afficiendos will be quick to blame Republican philosophy and their elected president: George W. Bush. Unfortunately they are way off the mark. (I say unfortunately for if one party and one president were truly the problem.. the fix would be much easier to amend…)

The problem is a systemic one. The entire financing system of the Federal government is now broken; almost to a point where returning to the glory days of before 2000, is barely considered a laughable alternative. The problem can be best ascribed to a head on collision between a poorly timed demographic shift, and unreal expectations. Put simply in one word, entitlements; put in four words, Social Security, Medicaid, Medicare.

Here’s how paying off our nation’s trillion dollar debt benefits us.

2007 Federal Budget Expenditures
Courtesy of Federal Budget 2009 (Right click for full image)

Looking at the image and being asked what can be cut under current law, one sees that only two areas of the above pie chart cover discretionary spending. The other four cover mandatory, non-discretionary items. That means that they get paid, … irregardless. We have no choice but to pay them fully. We have to pay interest. We have to pay Social Security. We have to pay Medicare and Medicaid, as well as all other mandatory payments such as Treasury obligations.

The only two areas where we can slice, dice, and cut back on expenses, are between that of national defense, and everything else we think of as being “our government”; both together amount to a paltry 38% our our entire expenditures. 62% of our Budget is locked down, and commitments have already been determined where it will be spent…. long before the fiscal year even begins.

So one sees that if we were to pay down the National debt, we free up the interest payments ( 9% of our current budget) which can then be applied to other things we might need ten years from now.

Obviously our entitlement programs will have to be changed. One can see that ridding ourselves of Medicare and Medicaid as a governmental expense would go a long way to reducing our deficit, and ultimately be a big push bringing our interest payment closer to zero…. But doing so… brings up the ugly social issue of what to do with those Americans lacking health care….

Contrary to popular belief getting rid of these programs is not completely impossible. Except for the time-frame covering the past 40 years, mankind has survived OK without Medicare and Medicaid. Rome lasted a thousand years without it. We all know that if we suddenly became faced with an all-out-war against some type of alien invader (Independence Day),what money was currently designated as a mandatory expense to cover health costs, would instantly be moved to supplement our planet’s defense with nary a whimper. Our sick would make due the best they could… perhaps even do better than they do now… (at least for those 2 million Americans a year who pick up a nosocomial infection!)

The writing is on the wall. One entitlement will have to fall in order to save this country. As America’s retirees get older, the medicare problem is one costly extravagance that must be looked at closely to determine whether it helps or hurts our nations viability.

When compounded with Social Security’s insolvency, the Medicare situation takes on an additional albatross around its neck. For as one thinks about it, we are using federal funds to extend the lives of those who are receiving Social Security. Using all and any expense available to keep someone resuscitated long enough to earn one more Social Security check, does not make practical or financial sense. We must rethink our commitment on how we will provide long term health care, based on today’s prices… not those prices existing back when the Great Society was envisioned….. the 1960s.

Ultimately for governmental medical assistance to survive, we will have to suck the profits out of health care. There will be a few who protest. But if Medicare were suddenly to cease to exist, and health care became a cash only commodity, somehow we would survive. Who knows? When faced with no free blood pressure medicine, we might try other methods to keep alive… such as eating right and exercise.

The amount of people dying will never change. Everyone born will die at some point. All we are doing, is removing the unlimited amount of taxpayer money used to support the unreasonable assertion,that we have the right to use lots of other people’s money to live as long as we selfishly can.

Think about this. Very few of us would purposefully bankrupt our own flesh and blood children by forcing them to pay out of pocket for our over-the-hill medical needs… With Medicare being fully funded by taxpayers….. it is doing just that…

Of course there is another method we can use to fund our budget and keep Medicaid and Medicare: bring in double the revenue…

But, because of the demographics of our aging population and the sparsity of those working young who are paying for the old people’s expenses, keeping this cancerous expense on-board, and paying for it by saddling those still working with double taxes, is not a viable option…. One could argue that it is morally wrong. It would be saying to our children that “yes, we had the American Dream freely given to us by our parents; now you will have to work much harder, and earn even less, just to continue that dream for us.”

The writing is on the wall… Sometime, somewhere in our future, it will have to go… Not disappear, mind you, but in its form now, funded as it is currently… it cannot last… The pie chart tells all. Tweaking 3 or 4 percent in any one category makes no dent upon our unfunded problem.. We must begin preparing ourselves for this uncompromising reality; one entitlement will have to go. Looking above we see the absence of Medicare and Medicaid in the Federal Budget, is more plausible than the loss of any other category.

If we were to wean ourselves away from that entitlement, and apply that amount in bulk towards our national debt as a payment of one half of one trillion per year, within 20 years…. our debt will be gone.

For when it comes down to discretionary spending… we are as low… as we can go… The cut has to come from Medicare/ Medicaid. What replaces it is a whole different discussion…..

So how high do taxes need to rise, (using today’s figures without cutting out one entitlement), if we truly wish to decrease our national debt? Since the economy grew significantly during the Clinton years when all taxes were higher, those rates we can be assured do not stifle economic growth. As a first step, that would be the smartest move; let the Bush tax cuts expire. …To those who argue that increased taxes constrain our economy, try and get a solid answer from them as to why the economy grew like magic when they were previously in place.

Since it has already once been done, it should not be hard to do it again. Right? Need more detail?

Let’s look at the twentieth century as a whole.. This chart simply shows the highest marginal tax rate per year. It ranges from 7% in 1913 up to 94% in 1944-45. Graphically displayed it looks like this….

Graph of Top Marginal Tax Rates 20th Century
Graph Courtesy of Truth and Politics.org

Although the graph stops at 2003, this evidence shows the ending level extends at 35% through to 2008.

If one couples one’s knowledge of history with numbers portrayed upon the graph, a correlating factor of 40% seems to be the ideal marginal tax rate.. When rates dip below that amount….they may last for a few years at that level, then they soar sky high for many years thereafter… It appears that languishing below 40% puts too much stress on the private sector. Something goes wrong, it buckles, and great governmental expense is taken to bring it back under control.

But if one uses the same evidence portrayed on the graph, and this time couples it with one’s knowledge of economics, they notice that lower rates produced boom economies, and the higher rates stifled economic growth.

Recent knowledge ( ie. today’s events) coming off of the experimenting and tinkering between 40 and 35 percent, leads one to believe that 35% is too low to sustain the economic viability of this country. As a nation we have socialized ourselves a bit too far to survive upon those lower rates…. 40% seems to be the optimum low that we can go….

Unfortunately because we played around with cutting underneath that magic number, we will be paying steep rates throughout the near future, very much like those which occurred between 1933 through 1963. Those who lived their full lives listening to Republican partisans constantly complaining about today’s high taxes… well, thanks to them (Republican partisans), America’s wealthy is about to find out just what “high taxes” really are…. As one can see from the chart, and can estimate from the amounts of the bailouts being currently given out…. the highest marginal tax rates for the wealthy, will climb higher than most of our wealthy has seen in their lifetime…

And because of that increase… our economy will slow.

The beauty within this chart is that it provides to all a sense of where the line needs to be drawn.. When we talk of raising taxes… we are speaking of returning to 40%, a level only 5% different from where we are now… What that means is … instead of someone making a full billion dollars now, after future taxes are deducted that person would be still sitting on $950,000,000 dollars… Who wants $950,000,000 dollars? I do. I certainly would not fold my business just because I had to give an additional 50 million over to my government, a scare tactic some may make us try to believe. Especially since I already know that our economy functions more consistently with that additional 5% amount financing the support structure on which all businesses depend on.

So how much revenue does that paltry 5% increase raise? Try $390 billion dollars per year, based on current data provided for this year’s third quarter.

True, that five percent does suck a little spending out of the economy, but if applied to the deficit, it reduces the amount borrowed which in turn lowers government’s cost. Eventually when interest payments reach zero, we can again fund our government on a pay as you go plan, thereby balancing taxes with costs in a fine equilibrium….

So if we hold costs the same. How long and how high do we raise taxes to bring our deficit to nothing in 11 years… 2020.

Debt —–Yr Expenses—Yr income—-Yearly incremental amount
10.4T——— 2.7T ————-2.6T ———————– 204 B

(The extra 100 Billion comes from above: it’s the yearly difference between current expenses and income multiplied by 10 for each year.)

So how much does that cost us? 204 Billion is what percentage of 2.6 Trillion? 7.8%

We need a yearly increase of just 7.8 percent to pull us out of debt in ten years, assuming we continue to spend as much as we do now, and that we continue to receive as much national income as we do now……..

That would make the highest marginal rate (35% + 7.8%) equal to 42.8%: just 2.8% higher than it was during the booming Clinton Presidency. Really…. is that not a lot of hardship to undertake?… Especially when one compares it what our predecessors, “the Greatest Generation” had to pay in order to give us the prosperous America which we inherited?……

And if that increase amount is spread across the entire spectrum of our sources of income.

Preliminary Estimated Receipts for US Federal Budget 2009
Courtesy Federal Budget 2009 (Right Click for Full Image)

The actual cost to the top ranked taxpayers, could be less…. One would be well advised to realize that the stimulus packages perhaps costing up to 3 Trillion by the time politicians finish robbing our future, will extend these estimates considerably.

But seeing the numbers makes one realize that we are not at the end of financial stability…. The United States has vast resources at its disposal to throw towards the global economic meltdown, slowing and then stopping its progress. We need just a moderate revenue increase to make it happen as well as begin making plans for shedding responsibility for one of our hitherto guaranteed…. Federal entitlements.

The question is what is in it for us… Bottom line… a job.

Although distant and remote, the National Debt plays a huge role in our economy, just as do charges and credit card payments play a similar role in everyone’s household finance. Think of all the spending you personally would be free to do, if you owed no one any money and could pocket what you earned…. That same principal holds for our government as well.

Those of us who still have jobs today are worried. Those of us without… are worried even more. Our jobs and long term security, depend upon our Federal Government getting costs in line and living within their means as well…. As with any investment, paying out an additional 7.8 percent is affordable if one gets a payback of a higher return…

Those living in the 90’s saw it with their own eyes… Dropping the debt creates long term stability and that…. creates jobs.

How Higher Tax Rates Benefit Household Net Worth

All that I am giving you…. is the gift of time…. — kavips

What is a silver bullet? According to folklore it is the only thing that brings down a werewolf. Other bullets, indiscriminate of what weaponry they’re fired from, are ineffective against that monster who possesses an aura of impenetrable magic. Our collective wisdom of doing what we always done, of trying what has always worked before, bounces off the charging entity… As our ineffectiveness becomes apparent in face of our own annihilation, we find ourselves wishing for any magic item that could neutralize the evil about to devour us; something that could slip past, disable and kill it… To everyone’s surprise some unknown face steps out from the soon-to-be-annihilated crowd and fires one single silver bullet into the beast… The day is saved.

Today our global economy needs that silver bullet.

Appropriate measures must be taken to match the challenges set against us.

When one visits a physician to request his help against fighting a severe infection such as strep, staph, or even meningitis, one does not expect their doctor to limit the medicine’s dosage to a level that just barely keeps one from dying; one goes to get cured…

Here is an example of a conversation that one hopes never to hear in a hospital room:

Physician: “Your tests show us that your infection has now reached 99% of the lethal level… Untreated you cross the hundredth percentile in three days and die… We have determined that all you need is 2 micrograms of this antibiotic, which should just kill off 1% of the infection and keep it from growing any further.. As it grows a little, we will kill off a little, and thereby keep your total rate of infection from growing further and holding your lethal level at the mark of 99%. We are worried that if your body gets too much of this antibiotic, some of it may be wasted and pass through your system, and entering into your urine stream without being used effectively. Your insurance company, who I remind you is paying for your medicine, insists that we follow this procedure so they do not flush any of their future profits down your plumbing, if I may put it delicately.

Patient: “Nice meeting you. I’ll find a new doctor now.”

For those not clued in, the Physician represents those Republicans and conservative democrats more focused on waste than on survival. The patient is the global economy.

Survival makes mincemeat out of old priorities. Any paramedic who has pulled out a human being from a burning car, knows full well that there is a time and place to worry about a potential back injury. Burning the victim alive for fear one might damage his spinal cord, is a misappropriation of priorities. Any top gun pilot knows that when entering a dogfight with two boogies on one’s tail, it is not the appropriate time to worry about the taxpayer’s investment lying in each missile underneath his plane’s wings. Exiting the dogfight in order to save millions of dollars is a misappropriation of priorities. Every citizen should know a little about the Heimlich maneuver. When a guest sitting next to you is obviously chocking, and because of your indecision has begun to turn blue,… to not attempt to save him because your inexperienced pressure might break one of his ribs… is a misappropriation of priorities.

The global economy is in a desperate situation.. To not do what is necessary to fix it, because it may cause taxes to rise in our future, is likewise a misappropriation of priorities….

Here is a quick review of those points previously mentioned. 1) We need to appreciate the scale of our sickness: our economy from top to bottom is about stop working. 2) We need to understand that we, the American people as well as those scattered across the planet looking towards us for leadership, don’t care how; we just want the infection to go away… 3) If we don’t die, once healed we can deal with the costs down the road….

Just heal us.

It is no secret that our crises was aggregated by mortgages. Nor is it a secret that the American large banks are the ones responsible for leveraging-out our global economy on the junk of unpaid mortgages. The collapsing housing market itself is a small bump in the road. But basing our entire economic structure upon the marketability of those collapsed mortgages, with the premise that their value would always rise, is the real scam perpetuated by our domestic securities brokers.

What our securities industry did, today defies belief, logic, and common sense. What they did was market unpayable mortgages as being worth lots of money. Despite it’s insanity, those unpayable mortgages were further leveraged at rates 40 to 1 in some cases. As the “one” collapsed; so did the “40” loans which were collateralized with it…

Today people are out of work, because of the securities executive’s lapse of judgment. Today our automobile industry is expiring because of what these people did. Today most of Europe’s banks have been nationalized, because of what these people did… Tomorrow, our taxes are going to be out the roof…. because of what these people did…

As one looks at the facts of how we got here, one gets angry. As one gets angry one looks towards quick justice to punish those responsible. As one looks towards quick justice, lynchings of greedy financiers begin to look rather promising…. Make them pay with blood….

It wouldn’t be the first time. Heaven knows they deserve it.

But we can learn something from those societies who repaid years of poverty with the actual blood of those who financially raped them… Long after the bloodletting was accomplished, they were still in poverty… In fact, leaving no one left who was competent enough to run the finances of their nation, their poverty extended down to absolutely every one living within those borders, for generations after generations…

Recent memory of the Soviet and Chinese blood lettings are examples how such unfettered justice can bring any nation to its economic knees, forcing it into some form of totalitarianism just to maintain any sense of order. North Korea is another example of what happens when a nation is run on anger; as a result, living conditions there are deplorable.

Perhaps a better tack would be to take a conquered population, and use them to help ourselves from out from our quagmire.. To do so would require forgiveness, a trait often associated with America by others living on this planet…. Proof of the effectiveness of forgiveness can today be seen in the rebuilt economies of both Germany and Japan, and to some extent… South Korea. As we saw from our earlier chapter, helping these nations achieve and regain their former prosperity, was one of the best investments and execution of policy ever made by this nation.

Today, we now apply that same tact and wisdom to our own financial internal problem.. It is to our mortgage brokers who we must now turn to bail out our nation; forget our congressional delegations.

It starts with this simple question. What would it take to cause a household to spend again?

Basically it would take a breather… a collective sigh of relief by everyone out there who is behind on their payments. What if ….. they were allowed to skip maybe a payment or two? Just to get some utility bills paid down, some credit card debt back under their cut-off lines, perhaps pay off the new heater, or new stove they were forced to buy. What if….. they were given 3 months with no mortgage payment and could then use that amount to catch up on their personal finances?

Then after three months, with their entire debt portfolio restructured, they could begin resuming payments and finally with sufficient money at their disposal, continue to pay off the entire loan including the added interest which accrued over those three months perhaps tacked on to one last payment at the loan’s end….

There is a surreal beauty in this arrangement. The homeowner who has fallen behind three months, can now catch up.. The homeowner who is out of work, can survive hand to mouth for at least three months without worrying about his mortgage. The homeowner who is still current on his payments, can take care of other financial matters, and pay off his unsecured (credit card) debt currently robbing him blind with its high interest rates. Those doing rather well, suddenly have an opportunity equivalent to a tax refund they weren’t expecting.. They can spend it pumping much needed money into the economy. Those investors (banks or mortgage brokers) who put up the money, actually turn out to make more off of the original loan than was ever anticipated due to the compounding of the three month’s interest,… giving them a much higher margin on their return… The economy of the United States of America, after 90 days, has completely emerged out of its recession.

More details…. please.

The idea was simple. Instead of solving the economic crises by looking at the macro scale, we went to the other end and asked this simple question to a number of families… What do you need to get back on track? Our moment of truth came when one family head said: ” Really, as long as my job holds out, all I need is to skip a couple of mortgage payments… After two months, I’ll be caught up” Naturally everyone in the room looked at each other and thought, “Damn, that would work for me too.” The more we thought about it and explored it from different angles, the better it looked from every perspective.

1) It frees up a large chunk of monthly family income.

2) It does not add to the national deficit.

3) It does not require any new investment.

4) It actually makes more money for those holding on to the titles.

5) It increases spending where we need it… on the household level

6) That spending can begin immediately, in most cases on the first day of each month.

7) It rewards those who have kept up on their payments; and brings back to neutral those who are behind; and freezes foreclosures.

8 ) Once put in place, it immediately reinstates confidence in America’s banking system.

This is almost too good to be true. In fact it took a lot of probing to find any negatives that might arise from this action.. The only negative impact which we could discover was that some small mortgage companies rely on monthly payments to meet their payroll.. If that action was counteracted by part of the $900 billion dollar stimulus package, there would be …. no negatives.

So we began to estimate the impact… to see whether its glowing results would hold up….

We should remind ourselves just how important the US economy is to the economic function of the global economy. To put it into perspective, the Federal government guarantees roughly half of the $12 trillion dollar US mortgage market through Fannie and Freddy: roughly $6 trillion. For comparison purposes only, the entire 27 member states of the European Union in 2006 had an annual GDP of slightly more than $12 trillion, so the $6 trillion already guaranteed by the Fed, would be half the GDP of the combined European Union economies, and almost three times the GDP of the Federal Republic of Germany.

So if our nation’s total mortgage amount is $12 trillion, the Federal Reserve reports roughly $500 billion per month is listed in this nation as a receivable from real estate…. Percentage wise, that is only 1/4th the consumer debt of this country which is almost $2 trillion dollars per month…

So let’s play: “what if” just as an intellectual exercise and see how a one month mortgage holiday pans out….

As of last summer, 11.46% percent of our personal income was tied up feeding our mortgages. If we were to establish a mortgage holiday, what we are discussing is the release of ten percent of our personal income, or roughly half a trillion dollars into the economy each month. There is no way the US Government with its annual intake of $2 trillion, could finance something so massive. But, just by extending everyone’s mortgage for just one month, presto, we suddenly have it in our financial system. Since the monthly GDP jumps between four and five trillion, we are speaking of a substantial jolt to our economy, sort of like an economic Heimlich maneuver with no serious side effects. And if we do this three month in a row, …. 1, 2, 3,…. the recession is gone.

How does this affect the mortgage industry? For one, they lose $500 billion each month for three, for a dip of 1.5 trillion… But, under this plan, all we did was just postpone the payments, not…eliminate them… That same 1.5 trillion WILL BE PAID at the end of the loan as well as the interest that accrued upon it.. Which means that an extra payment will probably be added… Instead of catching up on three payments, we will at the end of our loan’s original expiration date , probably pay four.. an affordable sacrifice to be sure… At a .5% monthly rate (6% annually), the interest on that 1.5 trillion amounts to $7.5 billion a month.

How does this impact financial brokers?

As we saw above each month the mortgage payments make up one fourth of financial brokers income.. The other three fourths are represented by loans to consumers and business. Therefore this action will put them 25% down for just three months… Too high of a cost, perhaps?

Perhaps not. All across this country most businesses are down between 25% and 40% percent as a result of the derivative scam perpetuated by these financial institutions. And now that we have an option to pull ourselves out of the recession in as little as three months, with a $1.5 trillion boost to our economy that affects no one really and actually makes money over the long term of those loans still outstanding, and we fail to exercise that option because the whiners who brought us here, don’t want to suffer their share of the 25% of pain felt across this country?

Well? No pity from this quarter.

Today we are misguided in how we are dealing with the toxic mortgage crises… The U.S. Census chart 1152 shows us the problem, its cause and its solution.

Home Mortgage Holders of Outstanding Debt
Courtesy of US Dept of Census pub.1152 (Right click for full image)

Notice only a $2 billion dollar difference in the household sector between 1990 and 2007….Next look at commercial banks and the jump in their mortgage income from 2002 to 2007.. Notice how the heavily regulated savings institution sector was much more conservative. Next notice the GSE’s ( Fannie and Freddie) jumped 186% in one year between 02 and 03 and since have been cutting back.. Notice how the private pools and security issuers have swelled the market.. All the while the household sector remained constant.

This chart shows that the debt held by these pools is not real debt but was arbitrarily bid up by financial institutions over the past four years… In other words if I have $10 dollars of bad debt that I’m stuck with, that at maturation might be worth $20 someday, and I sell it to you for $15 dollars, after which you then bundle ten separate $20 dollars bundles of debt together that will be worth $200 dollars someday, and sell them for $175 to someone who buys ten $200 bundles and conglomerates them into a bundle worth $2000 but sells them for $1850….. well, you get the idea… and the product being sold is worthless by itself. We discover that fact rapidly when we finally reach the point where no one wants it…

So we are now at the point of discussing whether to bail out banks that bought much more then $1850 of that bad debt…and now that they know it is worthless, they want to sell it to the government (future taxpayers) at their costs….$1850…. Originally the number of $10 debts we used should have fetched $1000, but the bidding war has them now priced at $1850… Which means that: the $850 has already been pocketed as profit by those along the process.. So in the large perspective of things financial, all that this bank bailout amounts to is: …. taxpayers borrowing money at interest, to pay for the previous profits made by financiers…

Bottom line… since we need those financiers, we may have no choice… The alternative scenario, that of “The Great(est) Depression”, scares us even more….. For when 57.6% percent of home mortgages suddenly go into default, that creates a massive shock for our economic system to handle… No civilization ever studied, has remained intact after suffering an aftershock of that magnitude….

The problem and causes of this crises are now hardwired into those financial institutions. But embedded in this chart is not only the magnitude of the problem…. but a clue towards its solution as well. As one sees in this chart, the outstanding debt up to now has climbed… But getting an extension-of-three-months does nothing to alleviate or increase that amount of outstanding debt… For if no payments are forthcoming, and no additional loans are written across that time frame, the aggregate amount remains constant over the entire span of the three month holiday. The level of outstanding debt is not impacted by the policy of “not-paying-of-one’s-mortgage”, except of course by the interest that accrues over that additional amount of time… If you owe me $500 dollars and don’t make a scheduled payment, you still owe me $500 dollars, plus the interest. At the loan’s end, after all the principal is paid off and the additional interest is pocketed by the lender….. There is no overall negative impact.

So let’s review. If we give ourselves a mortgage holiday for three months, we put a stimulus amounting to $500 billion dollars per month into the hands of households. In three months, $1.5 trillion will have flowed though the consumer side of our economy. Jobs will need to be quickly added to accommodate that large influx of money into our system… Those earning money with these new jobs will of course be able to buy more, and the economy begins growing… This stimulus begins instantly on the first day of the month.. Everyone’s checking account is not deducted by their usual mortgage amount, and that money is instantly available to be spent towards other things.

Why three months? If two are necessary?

Again based on interviews with families, the data was presented in this fashion. During the first month, the most pressing bills, including utilities and collection agencies’ unpaid medical and credit card bills would be paid. As per the Bush tax stimulus check, the first month would show little spending. The second month would allow further catching up of other bills, and provide a little excess left over which could then be spent…. The third month, that entire extra amount would be available for spending… By the end of that third month, the economy would be roaring again…

I’m curious as to whether or not you the reader feel the same… In our interviews we came across no one who was not excited by this prospect… Further controlled studies can be done by others who want to compare the enthusiasm between receiving a stimulus check for $500 to that of not paying one’s mortgage for three months. Our results showed skepticism towards the tax check, and popular enthusiasm towards skipping one’s mortgage….

Would not paying your mortgage for three months get you back on your feet? And would you mind tacking on one more month’s payment at the end of your loan, for the privilege of getting your head above the financial flood swirling around us all?

As we looked at all the data and perused all of the options we could anticipate, this model became the closest thing in recent memory to that metaphor commonly used by today’s politicians: a win, win, win situation… And it pulls the economy out of its doldrums without that tremendous amount of government borrowing that percentage-wise, rivals our nation’s indebtedness during and after WWII…..

The concept is new when used on this scale, but it is really based on ancient tried and true principals found at the heart of our financial markets. It’s simple.. If one is bankrupt, it is better to get a little breather, than lose everything… Our global economy is bankrupt. Getting a loan extension on the U. S. Home Mortgage debt for everyone at the same time is unheard of, but can, if chosen, be accomplished rather easily. Extensions are processed daily for individual loans around the country. Even Donald Trump’s empire would not be here if this type of extension had been forbidden during the late 80’s. We are just extending the loan for three months, and making every financial institution more money by doing so…

So who is out there who might oppose this?

Our best guess? Moralists, idiots, and bigots. The rest will see this opportunity as being beneficial to themselves, to their unemployed neighbors, to the stability of our financial institutions, to the country of the United States of America and eventually to the global economy as this nation pulls its head out from under the cloud of recession far faster than anyone ever imagined was possible…

All by just postponing three months of everyone’s mortgage.

How do we do this then?

We came up with three ways, each dominated by a branch of the Federal Government.

Congress could briefly debate and vote overwhelmingly to postpone all single family mortgages for three months. But there may be some bogging down on some of the details.

Or the President could sign an Executive order and issue a directive that his Justice Department would not pursue and would overturn any lower court case punishing non payment of mortgages that occurred during the three month holiday… Effectively no one could collect from an unpaid mortgage, because under US Commerce laws any state ruling contrary against the three month mortgage holiday, could be overturned by Federal Court…

Finally the courts themselves could take it upon themselves, case by case, through either a judge’s or juries’ decision, that not paying one’s mortgage payment during the declared mortgage holiday was not only legal, but one’s patriotic duty.

In any of the three scenarios anyone attempting to collect upon a holiday mortgage payment, would be guaranteed to ultimately wind up paying all court costs, making the attempt to collect, pragmatically fruitless.

Secondly, there is precedent for closing financial down financial institutions and stock markets, whenever the market is spiraling out of control… Upon his inauguration, FDR promptly closed all banks until further notice. Surprisingly none of those closed banks lost money while they were closed… Only open banks facing runs, lost money.. Likewise, we remember the closing for several days of the New York Stock Exchange after 9/11…. While the market was closed, no stocks lost value… The same principal holds forth in putting mortgage lenders on holiday… Ultimately, as it did with banks and the markets, it restores confidence in the entire financial sector.

The moratorium placed on three months of home mortgage payments will get the attention of every financial markets. Coupled with other parts of the stimulus package, and with forecasts that in three months the entire American economy will be back to normal, as well as knowledge that financial institutions stand to make an additional month’s income on all outstanding mortgages, our lending institutions will appear well positioned to reap any future profits… People will certainly be less skittish about dealing with commercial banks, as the money begins to cycle around and around… once again…. If you had the choice of investing either in the US or China, after that $1.5 trillion began flowing….. the United States, would certainly appear the safer bet…..

One additional benefit from arising from a three month mortgage holiday, is that it forces banks into more lending to both businesses and automobile purchases… If no income is incoming from mortgage payments for three months, then all new loans default to becoming the primary method of generating income. Every bank would be forced to scramble in order to find those new customers who were trustworthy, willing and able to borrow its money…. Those who simply sat on their assets for three months while doing nothing, would fail.

So even though the description itself has become a cliche, if there ever was a “silver bullet” developed that would kill a recession dead, it would be this one… : a three month holiday on paying one’s mortgage….. Just try thinking of what you could do if you didn’t have three months of mortgage, and you can plainly see… it would boot up the economy without swamping our children with governmental debt.