Yoel Natan solves the mystery of the flood waters rising and receding

Currently, the main theory in creationism explaining the mechanism

behind the flood is runaway subduction of oceanic tectonic plates.

The new ocean floor formed this way would then have been higher

since warm crust is less dense, and that would force the water up to

cover the continents. The continents are theorized to have been flatter

with only low relief mountains, so even the mountains were covered,

as per Genesis.

That new crust at the Mid-Atlantic Ridge is mountainously

high is a point in the above theory's favor, but there are many

serious drawbacks. To name a few, even if the ocean bottoms

were higher and offloaded water onto the continents, it probably

wouldn't be enough to swamp the mountains on the continents.

Also, to have most of the world's oceans with fresh hot floors would

boil all the oceans, killing all life across the planet. Moreover, the

pitch on Noah's Ark would melt, leading to it sinking. It's also

inconceivable how the ocean floor would cool quickly enough so the

flood would only last a year, that is, without invoking a miracle.

Furthermore, the idea that the tectonic plates could subduct that

quickly is hard to believe. Finally, the ocean floors have apparent

age, which is to say, they were created that way 6,000 years ago,

but the flood would not put a patina on fresh ocean floors, that is,

short of another miracle.

The solution that seems most probable, indeed, the only

plausible theory offered to date, is as follows: The crust

of the earth sits on the layer called the lithosphere, and the

lithosphere sits on the layer called the asthenosphere:

The farther down in the earth a layer is, the hotter

it is, and usually it is more plastic (Rheid) and even molten.

The asthenosphere all around the earth heated up

due to a massive natural nuclear fission event in that layer.

Natural nuclear fission reactors have been found near the

surface of the earth, and some scientists theorize the earth

and other planets have georeactors at their core which account

for much of the planet's internal heat and magnetic fields.

When the asthenosphere heated up to the temperature

we find it today, it became less dense, and pushed the

layers above it upward. Since the asthenosphere is fifty

to several hundred miles thick, by some estimates, a density

change could easily up the radius of the earth by a few

kilometers.

The esthenosphere pushed up on the lithosphere

everywhere, and the ocean floor was lifted mostly intact

along with the lithosphere, and water flowed over the

continents. The cold basaltic ocean floors are denser

than the warm mantle beneath, but because of their

shape and size (very very wide but only several miles

deep) they don't sink except at the very edges. Thus, they

float like a ship, or perhaps more accurately, they act like

the skin of a bottle containing liquid.

By contrast to the flat ocean floor, the continents are massive

in a vertical fashion, and extend tens of miles into the earth.
They are less dense than the mantle (unlike the ocean floor),

and are held up only by buoyancy. The upsurging lithosphere

would have been shunted aside by the continents, and the force

directed toward lifting the oceans.

Inertia caused the continents to stay put when the asthenosphere

expanded, and the lithosphere rose. However, after a year

the continents rose enough for at least Mt. Ararat

to be exposed above water, and each year after that

the continents rebounded more until at some point they

reached an equilibrium with the ocean floors.

Noah and the ark, of course, were safe from all the radiation

from the natural fission reactor since the lithosphere, crust and

water protected them, same as the earth largely does now for us,

assuming the earth does have an active georeactor deep inside.

We know the earth in the arctic region is still rebounding

from being depressed by glaciers during the Ice Age, and the

rebound is only a centimeter per year, or per century.

However, the continents rebounding during and after

the flood would not be as slow. Why? The reason the glacial

rebound is slow is the earth's crust is un-flexing. Similarly,

mountain roots only rebound slowly as the mountain is

eroded for the same reason. However, the forces acting

to buoy the continents upward were in the lithosphere and

asthenosphere which is much more pliable and ductile than

rock nearer the surface, especially so soon after the natural

fission reactor event in that layer. Since then some of the heat

has likely dissipated and that layer is plastic, but so stiff

and viscous that plate tectonics can't occur today, as they

obviously do.

During this time of upheaval and settling is when all

the higher mountains of the earth formed. There was

also much volcanic activity, and that led to swift currents

that created what could be called sedimentary flood geology.

Natural Nuclear Fission Reactor:

http://en.wikipedia.org/wiki/Natural_nuclear_fission_reactor

Natural Planetary Nuclear Fission Reactors

http://knol.google.com/k/natural-planetary-nuclear-fission-reactors#

Radioactive potassium may be major heat source in Earth's core

By Robert Sanders, Media Relations | 10 December 2003

http://www.berkeley.edu/news/media/releases/2003/12/10_heat.shtml

12 Apr 2011 Update: A commenter, Octavio, said I should account

for the Zebra-stripes on the Atlantic floor. He is correct because

the advocates for runaway subduction think that's a trump card

for their theory. Meanwhile, evolutionists think it shows slow ocean

floor spreading. It very well may indicate fast ocean floor spreading

as the runaway subduction enthusiasts claim, but I would contend

that on Day One of Creation Week, God spread out the floor rapidly.

So the stripes fall under the general creationist principle that many

things not readily explainable by flood geology are relegated to the

creation week (since the runaway subduction theory is untenable).

If Zebra-stripes suggest the fast formation of the ocean floor, that's

just how God created them on day one. If the stripes suggest the

slow formation of the ocean floor as evolutionists contend, then it is

just "apparent age" or a "patina" God built in.

There are many so-called geological clocks, a few suggesting old ages,

but most by far suggesting a young earth. Now whether God put those

there to test men, or God just thought it unimportant to make

the earth look young by every conceivable clock, is a matter of debate.

Evolutionists, however, insist that if God existed, he would have

foreseen their desire to believe they evolved from a monkey, and then

preemptively stopped them by making everything look young:

A Catastrophic Breakup: A Scientific Look at Catastrophic

Plate Tectonics, by Andrew Snelling, Ph.D, 20 Mar 2007

excerpt: ...many observations are incompatible with the idea of slow-and-gradual plate tectonics. Drilling into the magnetized rock of the mid-ocean ridges shows that a matching “zebra-striped” pattern of the surface rocks does not exist at depth, as Figure 2 implies.

20 Apr 2011 Update: Some cite similar fossils on South America and

Africa as being proof that those continents once were conjoined. However,

it is just as likely that being about the same latitude and having the same

climate, God created similar sets of creatures to inhabit both places though

these places were separated by a narrow ocean. In addition, some creatures

found their way across the ocean before the Flood, same as some creatures

found their way to the same climes at similar latitudes on different continents

in the post-Flood era, e.g., mammoths, wolves, bears, elk, and other ice-age and

modern animals.

5 May 2011 Update: It came to my attention that some creationists
support the idea of plate tectonics and Pangaea because Gen 01:09 says
God gathered all the waters into one place and dry ground appeared.
They argue that since the water is in "one place," the land must be in one
place, too. Then they argue that during the flood Pangaea broke apart due
to runaway tectonic plate subduction.

In fact, Ken Ham said Pangaea "probably" existed based on Gen 01:09 in his
radio spot. However, Gen 01:10 indicates that one ocean and Pangaea
are not meant since God called the gathered water the "seas." The Hebrew
for seas, Yamim, is the plural form, and it is not a dual form, since Yam is
the oft-used singular form. Seas isn't one place literally, but they are
"one place" in the collective sense. Moreover, Solomon talks about the

dust of the earth being "one place" using the same Hebrew words for

"one place" used in Gen 01:09, even though by his we know that the

continents were split up (Ecc 03:20):

Apr 26, 2011 The continents—did they split up? by Radio Spot by Ken Ham

I talked above about apparent age. In a similar vein, Pangaea probably
existed, but only the hypothetical past, and that is why the continents seem to
have fit at one time. Likewise, Adam probably had a bellybutton due to hypothetical
parents. And hypothetically, little lead existed in proximity to Uranium in the
hypothetical past. The jury is still out, I think, on whether light coming from stars

has a true history or a hypothetical history. Anyway, many things were created

with apparent age, apparently.

----------------

related articles:

Radioactive decay fuels Earth's inner fires

Extraordinary amount of heat remains from primordial days, scientists say

By Charles Q. Choi

OurAmazingPlanet

updated 7/17/2011

excerpt: The researchers found the decay of radioactive isotopes uranium-238 and thorium-232 together contributed 20 trillion watts to the amount of heat Earth radiates into space, about six times as much power as the United States consumes. U.S. power consumption in 2005 averaged about 3.34 trillion watts.

As huge as this value is, it only represents about half of the total heat leaving the planet. The researchers suggest the remainder of the heat comes from the cooling of the Earth since its birth.

-----------------

Demographic data on the fertility-religiosity connection

In a new book a demographer studies the birth rates of the religious

and non-religious, and their group retention rate.

While moderate

and mainstream

church-members have higher birth rates than

seculars, they also have

lower retention rates than fundamentalist

churches. The Fundies have both high birth rates

and high retention rates.

Shall the Religious inherit the Earth? - New book by Eric Kaufmann

excerpt:

Secularization is taking place - but as seculars tend to have very few children, it is running into demographic dead ends. In fact, almost all secular populations are increasingly depending on immigration - which is in almost all cases bringing new religious identities into the field, i.e. growing Muslim groups to Europe.
* Moderate and mainstream religious tend to have somewhat higher birth rates than their secular neighbours. But then, they have low retention rates: Many of their children are abandoning the shallow faiths, most often secularizing.
* It's the fundamentalist movements that are combining high birth rates with high retention rates.

The tables here are especially interesting since they

include birthrates by religious/non-religious groups,

and transition/retentions rates of various churches.

Especially interesting is that the various churches,

temples and mosques and the non-religious sector

all have lower retention rates than one might expect.

Many religious and non-religious are church shopping.

One table shows that mosques in the US have only

a 71.4% retention rate: 3.2% of Muslims convert and

attend Black Protestant Churches, 5% Hindu/Buddhist

temples, 7.1% Other churches/religions, and 13.3%

claim no religious affiliation:

Religions and Fertility in the US - GSS-Data

TV programming in the US set to get less violent soon

People have wondered why movies and TV programs

have so many guns and gun shots. Also, they wonder why

the gun shots are so loud.

TV portrayal of gunfire has caused confusion in real life

since people confronting a real shooting most often

only hear "popping" sounds which they don't immediately

associate with guns, thanks to TV, and so they don't take

cover, or run, or stop driving toward the sounds until

someone yells that there's a gun. It's similar to how misleading

movie portrayals of heroes running through burning buildings

have cost many people their lives in real life.

Well, it turns out that ever since 1984 under President Reagan

(1981–1989), regulators swore they were unable to determine

what a "too loud" TV advertisement was. That's not surprising

since all regulatory agencies are de-fanged whenever a Republican

is president.

What happened after 1984 is the advertisement break was set

to be no louder than the loudest noises in a TV program or

TV movie. Sponsors wanted their adverts loud, so they chose

to sponsor programs with gunshots, while less violent and quiet

programs were left for PBS to air since PBS doesn't allow normal

advertisements. A gun that went pop wouldn't do since that

would make for quiet advertisements, so all the guns went bang,

and there were plenty of bombs besides.

In 2011 there's a federal law and a standard proscribing

loud ads, so perhaps sponsors will let advert revenues flow toward

quieter and less violent programming, since their advert won't

be able to be blasted anymore no matter what program they

choose.

The situation reminds me of large boxes of cereal at grocery

stores. For decades the cereal only filled up two-thirds of the

box at best. A small print note on the box said that contents

may have settled during shipment. That was just a convenient

lie since the real reason was so the boxes would act as billboards,

and if they were half empty, people would have to buy another

box sooner. Walmart put an end to much of that nonsense.

Hopefully TV programming will follow the same course.

--------------

MAY 29, 2008: 4:25 AM EDTEmail | Print Type Size

Wal-Mart puts the squeeze on food costs

The retailer is using its clout with vendors to hold onto its everyday low prices.

By Suzanne Kapner,

http://divisionoflabour.com/archives/004731.php

excerpt: Shrink the goods. Ever wonder why that cereal box is only two-thirds full? Foodmakers love big boxes because they serve as billboards on store shelves. Wal-Mart has been working to change that by promising suppliers that their shelf space won't shrink even if their boxes do. As a result, some of its vendors have reengineered their packaging. General Mills' (GIS, Fortune 500) Hamburger Helper is now made with denser pasta shapes, allowing the same amount of food to fit into a 20% smaller box at the same price. The change has saved 890,000 pounds of paper fiber and eliminated 500 trucks from the road, giving General Mills a cushion to absorb some of the rising costs.

------------------

Well, Hush My Mouth: Congress Is Moving Against LOUD Ads

After Decades of Complaints, Law Makers Are Yielding to Popular Demand

By DANIEL MICHAELS And ELIZABETH WILLIAMSON

http://www.bluegartr.com/threads/100997-US-Congress-Set-to-Fix-quot-Too-Loud-quot-TV-Ads

excerpt: For years, broadcasters' standard definition of "too loud" has simply been a level on volume meters that overloads electrical circuits and distorts soundtracks. Ads aren't supposed to exceed the peak loudness of the programs they interrupt.

Here's the catch: The "peak" is often merely a spike, such as a gunshot piercing the silence of a movie mystery. Ad producers, meanwhile, crank every bit of sound to just below that peak level. The result often drives viewers batty: A program ebbs into a commercial break with a bit of quiet dialogue, and then an ad explodes at volume just shy of a bomb blast.

Industry officials insist that this isn't done just so consumers can't ignore commercials. It's because sound mixers are simply trying to one-up the volume of adjacent ads. The result is an arms race for listening ears.

-------------

State-run economies fell, and now low-tax economies are next

13 Oct 2011 Update: Why the Rich ard Getting Richer: American
Politics and the Second Gilded Age, By Robert C. Lieberman, Jan/Feb 2011

excerpt: In some cases, these policy changes originated on Capitol Hill: the Ronald Reagan and George W. Bush tax cuts, for example, and the 1999 repeal of the Glass-Steagall Act, a repeal that dismantled the firewall between banks and investment companies and allowed the creation of powerful and reckless financial behemoths such as Citigroup, were approved by Congress, generally with bipartisan support. However, other policy shifts occurred gradually and imperceptibly.

11 Oct 2011 Update: Occupying Wall Street: The Start of a New American Movement, By Ullrich Fichtner, 10/11/2011

excerpts: But the country's chronic social problems have grown even worse during Obama's term. Left-wing magazine The Nation sums up the facts and figures in its current issue: The average American salary in some areas has dropped considerably in the last 40 years; more than 46 million citizens are officially categorized as poor, the highest figure since data collection began 52 years ago; one in four homeowners can no longer pay off loans; the cost of health care has risen drastically, a problem only exacerbated by the fact that 50 million Americans are still without health care; and half of all Americans don't have any kind of pension plan. On top of that, there are still 25 million unemployed -- in a country that lives in fear of entering a new recession with each new month....The blog has contributed significantly to spreading the protest movement beyond New York, because its messages are ones easily understood all across a country in which the wealthiest 1 percent of the population controls 40 percent of available assets. Such figures are no longer statistics bandied about only within left-wing circles. Even former Federal Reserve Chairman Alan Greenspan has said: "This is not the type of thing which a democratic society -- a capitalist democratic society -- can really accept without addressing." Social inequality also informed last week's cover story for Time Magazine, whose authors wrote that America had become a society "divided between rich and poor," in which "the poor and working classes are squeezed."

3 Oct 2011 Update: Conservative and libertarian assertions about how everyone would be better off if the govt didn't intervene in the economy and provide welfare are flatly contradicted by the facts. The entire world was run by these principles until a hundred years ago, and outside of the West it largely still is. From all this history and from looking outside the West, and from logic, one can see what radical conservatives and libertarians propose is just a prescription for the masses to live in dirt poor poverty, and for there to be a very small middle and upper class.


Conservatives and libertarians are constantly looking at govt from the bottom up, and from their own selfish individual existences. If one looks at the economy as a whole, however, and how the whole nation might prosper, one would think differently from that perspective.


Conservatives and libertarians are always asking how much a person ought to receive in salary and benefits if he or she is, say, a doctor or an executive. These people are already earning twice or four times as much, or better, than the common man. What Republicans have done is allowed the moneyed class to set their own salaries and those of the non-moneyed class, and also set the tax rate on themselves. In each case they over-remunerate themselves and short change the non-moneyed class and the govt. In doing so, twenty percent of Americans have accumulated 87% of the wealth in America, and this has ruined democracy, so now we have a plutocracy. It's also ruined American competitiveness, and it has made healthcare affordable for many, and more and more can't get a decent education without going into extreme debt.


Conservative and libertarian statements are often flatly contradicted by the facts. How could the American poor be living like the middle class in Europe when 25% of Americans having a net worth of zero or are in serious debt, and when 52 million Americans are without health insurance year after year? Then due to job change and such, another 30 or 40 million Americans are uninsured or under-insured for part of each year. The news now says that one out of three Americans under 65 is uninsured. In Europe, everyone is guaranteed a safe environment, good education, free medical care, and are otherwise free from many wants and worries and crime that plague the poor in the US.


With Google Streetview, we can actually pan around Europe and the US and actually see where and how people are living, and if there's an old run down house in western Europe, it's abandoned and people aren't living in it, but in the US they are living in shabby accommodations and slums. Also, the crime and incarceration rates are much lower in Europe.


The people who came up with the assertion about the American poor living as well as the middle class in Europe have it exactly backwards. Due to socialism, the "poor" there have a middle class education and healthcare and middle class manners, so the Americans should be saying that Europe has a much better class of "poor" than the US has. If the US were like Europe, we could go to the inner city and find a bunch of mild-mannered educated people, but without a lot means. Still they'd be well traveled and able to afford what they need. Instead when we go to the inner cities of America, we find grossly under-educated people in gross want, and we'd fear for our lives because of the crime rate.


What it all comes down to is the increasingly radical right and libertarians would rather live in luxury in gated communities and tote guns (concealed or not) to kill off people who are driven to acts of desperation by their being woefully under-educated, and for their crime of having grown up in the wrong neighborhood. The majority of the world is more circumspect though, and would rather pay The Price of Civilization so we don't have to live by the sword and gun, and so everyone can prosper and make a go at life. Besides, if we don't make this happen, there will be fewer and fewer middle and upper class in America because if the average Joe and Jane in America can't get a proper education and healthcare, America's competitiveness will suffer, so Americans as a whole will have less and less money and means to live on:

http://www.irle.berkeley.edu/cwed/wp/wealth_in_the_us.pdf
. For the first time on record, the percent of home value that homeowners own outright dropped below 50%—meaning that banks now own more of the nation’s housing stock than people do
• The divvying up of the total wealth pie, even as the pie shrank, was made more uneven due to larger drops in wealth
for those at the bottom. The share of wealth held by the richest fifth of American households increased by 2.2 percentage points to 87.2%, while the remaining four-fifths gave up those 2.2 percentage points and held onto just 12.8% of all wealth
The destruction of wealth that resulted from the Great Recession was widespread but not uniform. From 2007 to 2009, average annualized household declines in wealth were 16% for the richest fifth of Americans and 25% for the remaining four-fifths.
http://en.wikipedia.org/wiki/Wealth_in_the_United_States#Wealth_Inequality_and_Class
In 2004, the wealthiest 25% of US households owned 87% ($43.6 trillion) of the country’s wealth, while the bottom quartile held no net wealth at all.[3] The middle 50% of the country held 13% or $6.5 trillion of the total household net wealth.[3] The previous data are taken from analysis of the Survey of Consumer Finances (SCF) which over samples wealthy households. This over sampling more accurately represents the true wealth distribution [since most of the wealth is concentrated at the top]. This data shows that the top 25% of American society holds on average a net wealth of $1,556,801 which is 33 times more than those of the lower middle class, or the 25th-50th percentile.[3]
In addition to unequal wealth distribution, it can be difficult for individuals in the lower income distributions to gain economic mobility which inhibits their ability to accumulate wealth.[6] In 2006, children in the lowest 20% of the income distribution only had a 17% chance of making it to the upper 40% of the income distribution.[6] In 2004, children in the lowest 20% of the wealth distribution had only a 7% chance to make it to the top wealth distribution.[6]

15 Sep 2011 Update: Ron Paul says that hospitals ought to let the

uninsured and underinsured die if family, friends, and charities can't

cover the medical expenses. He'd rather have the hospital run up a medical

bill that the state and society must later pay indirectly when the costs are

passed on to them.

In 2008 Ron Paul's campaign manager, Kent Snyder, the one credited with starting

the Freedom Movement, died penniless and left a $400,000 hospital bill.

Ron Paul's campaign did not provide its 250 employees with health insurance.

His mother could raise only $50,000 through donations, even though Ron

Paul by himself is worth $5 million. Ron Paul said that medical bills ought

to be handled by personal insurance, families and charities. So ultimately the

hospital has to recover its losses by passing the cost onto consumers, and its

largest customer is the US government. Ironically, Ron Paul has been talking

about how the US govt is "insolvent," and that if its social security and medical arms

were private insurance companies, they would be in "big trouble" now. Well,

I guess he ought to know since he was personally responsible for not making

sure that his own employees had access to affordable health insurance. Thus

he had a large part in feeding the system uninsured, non-paying patients,

thereby making the govt unable to afford to take care of legitimate recipients

most of whom their whole lives did the responsible thing and had health insurance:

Dead at 49 because he couldn't afford insurance: Terrible fate of Ron Paul aide emerges hours after Republican said state shouldn't provide free health care, 14 Sep 2011

Dead Ron Paul Aide Fit Uninsured Scenario From Tea Party Debate, Sep 15, 2011

Ron Paul’s Campaign Manager Died of Pneumonia, Penniless and Uninsured, Sep 14, 2011

16 Aug 2011 Update: The GOP is Channelling the Old South

Intro: For decades, the Republican party has been channeling the Old South,

because that is their strongest demographic for decades. The South was solidly

Democratic until the Democratic party ran voter registration drives

in the South in the 1960s, and otherwise desegregated

society there in a sort of second Reconstruction period. Once Blacks were no

longer disenfranchised, they voted Democratic. In order to re-segregate and

effectively disenfranchise Blacks again, whites flocked to the Republican

party and took up a platform that no Black person could vote for. Now

one can't even be a dog catcher in the South without being Republican,

meaning Blacks are out of power except locally in their usually poor,

gerrymandered districts.

The 3/5th Rule: In 2011 Republicans tried to amend the US Constitution

so it would have a balanced budget amendment ("Cut, Cap and Balance") that

they wanted passed in exchange for a raised debt ceiling. Democrats wisely

refused since it would require a super-majority to raise taxes or create new

taxes, and everyone knows that tax increases are generally approved by

slim margins. For instance, in California, Republicans have been able to block most

tax increases since a super-majority is needed to pass tax increases after Prop 13 (1978),

and Republicans can usually cobble up the necessary one-third to block tax increases.

Thus, California quickly went from being a top-notch education state to having

dismal schools, and big debt due to too low taxation on the rich and corporations.

California now only spends per pupil about what Mississippi does!

The super-majority rule that Republicans yearn for can be compared to the

3/5th rule in effect up to the Civil War. Southern legislators in the US Congress

were over-represented since blacks were counted in the US Census even though

they could not vote and weren't free. So white Southerners were voting in place of

the Blacks whom they enslaved. By wanting to require a super-majority, well-to-do

Republicans are voting as though they represent the rich and a good portion of the

poor besides. Already Republicans coddle the rich and corporations when it comes to

taxes, so one wonders what more breaks the rich would receive under a Republican

balanced budget amendment!

Double-Predestination and It's Secular Equivalent:

The Old South and the South up to this day is thoroughly Calvinistic,

and double-predestinationist, as recounted by Peter J. Theusen in

his book Predestination (2009). Double-predestination says that

while God has determined who is going to heaven and hell, yet still

it is the fault of the damned that they are damned. This type of thinking

translates into real life, too. Theusen told how after Benjamin Franklin

invented lightning rods, many Calvinists thought it ungodly to own one

since it was thwarting God's will for a person or family to die in a lightning

strike. With slavery, many Calvinists thought that God chose the masters

and slaves, and to free slaves was ungodly, and also it was somehow their

fault that they were slaves, just as the damned are at fault for being damned.

Also, Lincoln's argument that one ought not eat the bread created by the

sweat of the brow of another was just water off a ducks back when it

came to the Southerners' captive farm hands.

It is the same today in the Republican attitude toward the gross inequities

of the US economic system (see the GINI Index), except now a secular version

of double-predestination is in vogue among many Republicans, especially those

who follow Ron Paul, and this philosophy augments the Calvinistic version. It is

libertarian-capitalism. A big tenet of this philosophy is that government has

the Sidam Touch, which is the opposite of the Midas Touch, in that everything

the government touches goes to ruin, and the government trying to help groups

out of poverty just makes them into people dependent on the government, or

criminals, or socialists.

Caption: Philosophers and thinkers influencing Ron Paul, who is influencing Republicans

(click for larger image)

Most students take out student loans to go to college, and universities are often

subsidized by the state. So according to the libertarian philosophy, college-educated people

who don't buy into libertarian-capitalism are said to be spoiled brats who expect more

government handouts and want nanny-state socialism. However, students

and farmers who decry the fact that the government is so heavily involved in

education and farming, and therefore ruined both, are not spoiled even though

they accepted loans, grants and subsidies from the govt, and would do so

again, and again, and again. So there you have it: welfare for the rich doesn't

spoil the rich or make them dependent on the government, but it spoils the poor,

and makes them into criminals, and it is the poor's fault for this unfortunate situation,

too. No well-off person can be blamed.

So one can see how libertarian-capitalism and double-predestination work

alike. God chose the masters and slaves, and God chose the winners and

losers when it came to government welfare. To free a slave or otherwise make

his or her life better would ruin him or her, but if the master received a windfall

profit, it wouldn't ruin him, and it would make society better, supposedly, because

it is all part of God's will. With libertarian-capitalism, if a capitalist receives more

money or tax breaks, that doesn't ruin him, but instead it helps everyone as he

supposedly invests it for the common good. If a worker or poor person or student

receives aid, it ruins him for society, and ruins society, since that person becomes

a socialist and votes socialist. Also, just as a person is at fault if he is damned though

God chose him to be damned, so also socialist is at fault for his being a socialist, since

it is a moral failing or weakness, according to the capitalist-libertarian philosophy.

Calvinists and capitalist-libertarians are going to be very

judgmental of the poor, and callous, selfish and greedy (e.g., Ron Paul and Kent Snyder).

All double-predestinationist creeds produce this attitude toward the "other" or the

unfortunate, from Calvinism, to Islam, to Bhuddism. In Bhuddism, giving a suffering

person aid is supposed to hurt him or her in the afterlife in that if he or she dooesn't

suffer enough in this life, the Samsara Wheel will spin them out into an

even worse life as a human or lower existence as an animal or insect.

Capitalist-libertarians think that if you ignore and neglect the poor, they

will just go away, or better yet, in their fantasies, they get tough and get a job:

http://www.cnn.com/2011/OPINION/09/07/rushkoff.jobs.obsolete/index.html?hpt=hp_c1

excerpt: The communist answer to this question was just to distribute everything evenly. But that sapped motivation and never quite worked as advertised. The opposite, libertarian answer (and the way we seem to be going right now) would be to let those who can't capitalize on the bounty simply suffer. Cut social services along with their jobs, and hope they fade into the distance.

A main tenet of capitalist-libertarianism is that if there is a resource available to be used,

libertarians ought to be able to exploit it to the full. There is no consideration of

moderation, or how others might have a stake in the resource, or future

generations. In the Old South they thought they'd get their way and keep

slavery because of the worldwide demand for cotton. Their pro-business slogan was

"Cotton is King!" Nowadays it is the same. Pro-business Republicans are rather flippant

about pollution since the non-capitalists are the ones downwind from the

smokestack, while the capitalists by the smokestack remain unaffected. When confronted,

they say that smoke from coal, natural gas, etc., is only plant food that doesn't

hurt anyone, even though smog never did any plant any good, and pollution

causes much disease and death each year in humans.

Another way the Republicans are callous is by moving

all the government taxes to consumption and away from

estate taxes, taxes on income, stocks and bank accounts,

property tax, gold, and other forms of stored wealth that

is recession-resistant. Thus, because consumption tanks

during a recession, government revenues shrink, and there is

no money for Food Stamps and otherwise helping the poor.

Meanwhile, the politically connected have the government

keep sending them money.

Finally, another main way Republicans are rather callous to the

poor is instead of dealing with inequality by giving the poor a good,

quality education, Republicans would rather pass concealed carry laws

in order to shoot down anyone who they made feel desperate enough

to rob them. They rather live and die by the sword than give people

a share chance in life. In Britain, if they don't give someone enough

training and education, at least they don't wish to shoot them,

and the poor return the favor by not shooting themselves and

others as much as they do in the US:

Riots in England

Britain's Society Broken by Greed

An Essay by Thomas Hüetlin, 08/16/2011

Part 2: "No One has Ever Given Me a Chance"

This miserable life of drugs, loitering and weapons in neighborhoods which were devastated by the policies of Margaret Thatcher in the 1980s and never fixed by Tony Blair or Gordon Brown, is the fate of those dubbed "NEETs" in the UK. It stands for "not in education, employment or training", and there are about 1.2 million people who fit the description. They rule their local areas under the law of the jungle, with a deep sense of uselessness in a world where almost every recreational activity costs money; money which they don't have.

Louis James is one of these "NEETs", and reporters from the New York Times spoke to him after he had stolen a pullover worth 120 pounds during the looting. James, 19, lives in North London. The state pays his rent, and he gets 77 pounds jobless benefit every two weeks. He has given up looking for work, he left school at 15 and has only been able to read for the past three years. His mother has barely enough money for herself and her other children, and his father, a heroin addict, is dead.

"No one has ever given me a chance; I am just angry at how the whole system works," James said. "They give me just enough money so that I can eat and watch TV all day."

The values that once made Britain an example for the rest of the world were never instilled in James: personal responsibility, individuality, common sense, stoicism, understatement, discipline. Who could have taught him them? His parents? His friends? The elites, who shut themselves off in expensive private schools, then get 70 percent of the well-paid jobs and would probably prefer to visit a leper colony than Tottenham?

The true public tone of the past 30 years has been set by one man: Rupert Murdoch, the Australian media mogul who has shaped modern Britain more than any British politician, businessman or intellectual. Murdoch and Margaret Thatcher together broke the power of the trade unions in the 1980s and forged ahead with the liberalization of the markets. Flanked by the resurgent financial sector in the City of London, Murdoch made greed socially acceptable and turned the Britons into a nation of shoppers in which only one thing counted: "Loads of Money."

21 Apr 2011 Update:

General Electric: tax avoidance at work, 4 Apr 2011

OUTRAGE and envy still ripple from a report in The New York Times that General Electric, the nation's largest corporation, paid no U.S. corporate taxes in 2010.

Zero. Zip. Nada. Indeed, the company, with $14.2 billion in worldwide profits, claimed a tax benefit of $3.2 billion from Uncle Sam.

GE did not break the law, but the bill it successfully avoided was picked up by the rest of us, or put on the national credit card.

The top U.S. corporate rate is 35 percent, but virtually no one pays that. GE's tax rate is about a third of what other companies pay, and that the company is vulnerable to pay any taxes is hypothetical. GE would have to return profits to these shores from places it set up to avoid taxes.

Policymakers in Washington, D.C., need to reassess rates to bring them into line with the financial realities of the nation and basic equity. Set lower, unavoidable rates that do not complicate job creation, and have a statutory imperative to collect them. As it is now, the higher the rate, the more creative the credits, shelters and loopholes to avoid compliance.

GE has a team of 975 gilded tax-avoidance professionals in a department working to ensure that the rest of America picks up its tab. Oh, and that default jobs-creation rationale? The Times report also noted that since 2002, GE has eliminated a fifth of its work force in the U.S.

Washington Post columnist Robert J. Samuelson, a veteran financial journalist, would cut corporate tax rates, not increase them, and make up the difference by increasing individual tax rates on corporate dividends and capital gains, which he sees as a giveaway to the rich.

U.S. corporate rates are chasing profits offshore, and the only jobs created are for tax lawyers. Set and collect realistic rates.

20 Apr 2011 Update:

True, there's waste in govt, but too effective use of such news items about waste, i.e., propaganda, has led to lower taxation than any industrialized nation can handle, and still remain healthy and educated and competitive in the world.

The credit agencies are warning the US, but Republicans want to continue to bust the budget with things the US can do without, like zillion dollar stealth fighter-bombers, and NASA moon shots. It seems that whatever the drunken-sailor Republicans want to spend a lot of money on is not ever considered waste, or a misguided allocation of funds.

Ever since WWII the national debt compared to GNP has risen ONLY under Republican presidents. Not even under Obama has the debt to GNP ratio risen significantly. Yet the damage has been done by Republican presidents, since issuing new bonds to cover old debts is set to become more costly soon:

US public debt, i.e., not gross debt, by president since 1950 compared to GNP

Shooting for the moon amid budget cuts, 20 Apr 2011

excerpt: Richard Shelby (R-Ala.) initially tucked a provision into a 2010 budget bill — even though President Barack Obama and Congress agreed last fall to end that Bush-era initiative. An internal NASA audit pegged the cost of that move at $215 million over five months.

16 Apr 2011 Update: Republicans use discredited examples to vie for continued

super-low taxation of the rich (and as a necessary consequence, unloading the tax burden

onto others

through higher sales tax, higher education and medical costs, etc.):

Krugman on Obama Deficit Plan: 'Not Perfect,' More Plausible Than GOP's, 14 Apr 2011

excerpt: DOUGLAS HOLTZ-EAKIN: We know from around -- the evidence around the globe that if you find a country that has two problems, a big budget problem and a growth problem -- and the United States has both of those problems -- that the best route forward is to keep taxes low, cut spending.

That produces the economic growth and the budgetary correction that is most effective. So, what you're seeing is Republicans echoing the evidence from places like Canada and others around the globe that have dealt with this successfully.

JEFFREY BROWN: Well, let me...

PAUL KRUGMAN: Could I just weigh in on that?

JEFFREY BROWN: Yes. OK.

PAUL KRUGMAN: That's -- one of the sort of -- as a professional economist, one of the things that was most nerve-racking or upsetting about that Republican report was rolling out discredited research, discredited examples.

I mean, Canada shows that you can cut spending and grow, as long as you also have a large devaluation of your currency and a big cut in interest rates, neither of which we can have. So, this is -- this is not -- the lessons of international experience, the way I read them, are not at all what Doug is saying.

The lessons of international experience say you have to pay for what you want to have. If you want to have a decent social safety net, you probably have to raise some taxes to pay for it. And the president is a lot closer, again, to realism than anything we have seen from the other side.

14 Apr 2011 Update:

Since the mid-1970s the national debt has grown

under Republican presidents, and shrunk under

Democratic presidents. It's a way of buying election, don't cha know:

Chart: National Debt by President

Federal Debt as a % of GDP

National debt by U.S. presidential terms

14 Apr 2011 Update: MSNBC Praises Obama's 'Soaring' Speech, Calling On 'Wealthiest Americans to Pay Their Way' 14 Apr 2011

CNN Regards Tax Hikes as Inevitable for Deficit Reduction, 14 Apr 2011

11 Apr 2011 Update: It's Republicans vs. the Public Unions

in California, similar to the Wisconsin, New Jersey, etc., situations:

Jerry Brown: California, Country Facing ‘Regime Crisis’ Similar To The Civil War, 10 Apr 2011

excerpt: DB: Many of the Republicans I talk to say that they’re not convinced that you’re serious about pension reform and about cutting the slack in government, cutting the bureaucracy down. They feel that you haven’t put forward, for example, a meaningful pension reform plan because of your connection to the unions.

JB: They have to say that to give cover to their position, which is ‘No’. Their position is ‘No, we’re not going to help you. We’re not going to do anything. Well, that’s unacceptable. I did propose 12 points of pension reform.

The governor tells Dave he believes the country hasn’t been this divided since the Civil War.

This week Brown has been using Civil War metaphors at his public events to describe the deep divisions in California, and the entire country for that matter, preaching with the passion of a born-again that the country is dangerously polarized.

“We are at a point of civil discord, and I would not minimize the risk to our country and to our state. It is not trivial. I’ve been around a long time, I’m a student of history, I’m a student of contemporary politics. We are facing what I would call a ‘regime crisis.’ The legitimacy of our very democratic institutions are in question,” he said.

10 Apr 2011 Update: The richest Americans are paying

only 15% tax, which is way below the rate they'd be charged

in other industrial countries:

Effective Tax Rates of the Richest 400 Americans

Corporations are barely paying any more than that, and

have an Effective Tax Rate of only 17%, or less according to some

sources:

Putting U.S. Corporate Taxes in Perspective

By Chye-Ching Huang and Chad Stone

October 27, 2008

excerpt: The U.S. corporate tax burden is smaller than average for developed countries.[1] Corporations in 19 of the member states of the Organization for Economic Co-operation and Development paid 16.1 percent of their profits in taxes between 2000 and 2005, on average, while corporations in the United States paid 13.4 percent.

A look at the world's new corporate tax havens, 25 Mar 2001

Super rich see federal taxes drop dramatically, 17 Apr 2011

excerpts: The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992....There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank....In all, the tax code is filled with a total of $1.1 trillion in credits, deductions and exemptions, an average of about $8,000 per taxpayer, according to an analysis by the National Taxpayer Advocate, an independent watchdog within the IRS.

Are U.S. companies drowning in taxes or artful dodgers?

35 percent tax rate is vastly overstated, many experts say, 17 Apr 2011

excerpts: Corporate America and Republicans often point to the United States as having among the highest tax rates in the world at about 35 percent, saying it makes the country less competitive and drives jobs overseas....

Looking at the Group of Seven industrialized countries, the U.S. rate is on par, according to the study. For example, Japan has about a 38.8 percent rate, Germany has a 27.9 percent rate and the United Kingdom has a 23.6 percent rate. McIntyre and a former Treasury official said the study included both current taxes and taxes on income that is deferred, which may never be subject to U.S. tax. "That makes the U.S. rate look higher than it actually is," McIntyre said.

6 Mar 2011 Update:

Are America's Best Days Behind Us?

By Fareed Zakaria, 3 Mar 2011

excerpt: And neither side will even talk about tax increases, though it is impossible to achieve long-term fiscal stability without them.

5 Mar 2011 Update:

Interview With US Economist Eichengreen

, 03/02/2011

excerpt:

Eichengreen: I'm not a very good psychoanalyst, especially when it comes to Wall Street bond traders. But I worry that they will begin to distrust the US soon too. History has shown us that financial crises always happen close to elections. We have an important election coming up in 2012. If we haven't tackled our debt problem by then -- and it looks unlikely that we will -- then we will face serious problems.

SPIEGEL: US debt is currently at 90 percent of GDP, which is slightly above the European average...

Eichengreen: …which unfortunately is not the case when it comes to federal tax revenues in the US. Whereas European governments receive taxes equating to 40 percent of GDP, the figure is just 19 percent in the US. This means that, without raising taxes, we will not be in a position to balance our budget and pay back debts with interest. But because you can't talk about raising taxes in this country, the US will gamble away investors' trust.

Click for larger image. Here is the source.

SPIEGEL: Is there any desire in US political circles to do something about this problem? Just last December, President Barack Obama extended the Bush administration's tax cuts to 2012, even though tax cuts for the super-rich do nothing to stimulate the economy.

Eichengreen: You've answered your own question. This tax stimulus is very ineffective because it tears another hole in the budget and rich people are not inclined to spend the money that they save with the cuts. But the government has to find a way to boost the US economy -- to lower unemployment, which is at 9 percent, if nothing else. Equally important would be a clear statement from Obama and Congress about how they plan to tackle the debt problem in the medium-term. But instead of doing that, the administration and Congress have just pushed the problem further into the future -- foolishly to 2012, of all years. Believe me, it will be impossible to talk about this problem in an election year.

SPIEGEL: Are people in the US willing to save at all?

Eichengreen: We'll soon find out -- here in California. Some surtaxes are about to expire and Governor Jerry Brown proposes extending them. There's going to be a referendum on it. Californians are facing a decision that the whole of the US will soon have to make: either more taxes flow into government coffers or there will be less money available for universities, the socially disadvantaged, defense and so on. In California, we firmly believe that we lead the way for the rest of the country. It was true with surfing, and we hope it will be true with getting the country out of debt. [snip]

26 Jan 2011 Update:

Recently several states have had their credit

worthiness downgraded, and people realize the

US govt might soon be in the same boat--a "fiscal

reckoning," some have called it. It's come to the

point where the federal govt cannot keep borrowing

so it can run a bare minimum of social programs,

while simultaneously not taxing the "haves" until

they can feel it. So now one Republican is saying

congress should cut funding to education, housing,

food stamps, and even scrap the Consumer Product

Safety Commission, which is a boon for the poor and

the bane of manufacturers and retailers. Since Reagan's

time people could see the Republicans were pro-business,

but it didn't matter since the govt still helped the poor

to a great extent through borrowing. So why not vote for

Republicans since their party platform is Pro-Life and it

doesn't hurt the poor. No longer can people have it both ways,

and in this new zero-sum game, a vote for one party will

hurt the constituents of the other, and vice versa.

Original entry from 9 Jan 2011:

It took 72 years before communism fell because

a centralized economy is unworkable, but it had to

reach a certain level of absurdity for some duration

before most everyone agreed the experiment had failed.

Little mention is made of another economic experiment

that's on the opposite end of the spectrum, that being

whether a modern society can thrive for long on low

personal and corporate income taxes.

The idea was first implemented in 1925 through 1931

when the top tax rate in the US was reduced to

25%: http://www.truthandpolitics.org/top-rates.php

With the new low rate of taxation, the well-off had plenty

of money to speculate in the stock market, and historians

note what led to the big crash:

http://eh.net/encyclopedia/article/Bierman.crash

From 1925 to the third quarter of 1929, common stocks increased in value by 120 percent in four years, a compound annual growth of 21.8%.

After giving the idea of low taxes more time to create

the promised prosperity during the first years Great

Depression, Congress finally lost faith and raised the

income tax rate in 1932.

The next period of low taxation came with the election

of Reagan, who predicted in 1981 that a tax rate reduction

of 69% to 50% on top earners would bring "signs of prosperity"

by the end of the year. What ensued though was the worst

recession since the Great Depression, the Early 1980s Recession.

Then came the Stock Market Crash of 1987--a 22.6-percent decline

in the market on Black Monday. That, along with the crashes of

1929 and 2007 cement the idea that slashing tax rates for the wealthy

leads an unstable economy and inevitable stock market crashes.

The philosophy behind the tax cuts, capitalist libertarianism (bordering

on minarchism), is that if people can make and keep easy money, they'll

work harder to earn even more, and that's good for government revenues.

The trouble is that the high earners sock it all away, retire early (at 40 even),

and move to Arizona or Florida. Often, a high earning man will

marry a high earning woman, concentrating wealth, and then they

both retire without even having any children to carry on the next

generation. Talk about social un-sustainability! So instead of

harnessing greed for the greater good, the US has created an

entire generation of late blooming trust fund kids (trustafarians), and

trust fund kids seldom are accused of having too much ambition, except

when it comes to having fun.

In 1987 the top tax rate was reduced to 38.5%, and from

1988 to 1990 28%. From 1991 to 92 it was 31%. That's when

the early 1990s recession ensued. Since then until 2010 and

beyond, the top tax rate has hovered between 35% and 40%.

There was a recession in the early 2000s, and the Great Recession

from 2007 to 2009 and beyond. These recessions were caused

either by speculation in the stock market, financial sectors, or

from the 'haves" "parking" large amounts of money in various

sectors--housing, building and construction, banking, hedge

funds, commodities like oil, etc. One gets the idea that there's a

direction connection between recessions and preceding years of

low taxation.

In 2011 the low tax rates are becoming absurd because the

first Baby Boomers are turning 65 and are eligible for Medicare

and Social Security and full pensions. Also, in 2010, the US govt spent

$414 billion just on debt maintenance for the $14 trillion dollar debt,

which is 64% of the GNP. By contrast, the entire Dept of Education

budget is only $93 billion.

The results of giving out tax breaks not tied to job creation

in the US (of US citizens) has been catastrophic not only for

the economy, but for society. The GINI Index keeps on rising

in the US, meaning that fewer people own a greater proportion

of anything that's worth owning in the US. Due in large part to

the economic squeeze put on the lower middle class, 41% of

children are born out of wedlock. Not only does financial stress

put a strain on couples so they either don't marry or divorce,

but the "solution" many poor opt for is for one man or men to

pay court-ordered child support while the woman works and

another live-in man steps in and also "brings home the bacon."

Private sector union labor has declined greatly as good jobs

went overseas. The lower class must also take any job they

can get, such as flipping burgers. Minimum wage job used to

be $10 per hour (in 2009 dollars), but for the longest time

it headed toward $5. Lately there's been a small boost. Staying

on welfare means going to the unemployment office and

fulfilling their requirements, which has turned into a sort

of slave auction.

In the battle to keep taxes low, the next group to be laid low

will be the public sector unions, which includes teachers unions.

What forced the showdown between the "haves" and the

US public sector unions is the debt has grown so large

that the costs of servicing that debt may grow out of

hand, to the point that investors avoid buying US Treasury

bonds, similar to how Greece and Ireland reached junk bond

status. Also, it's come to this: either raise taxes, or humble

the one last group that can be humbled.

Public sector union members make at least a third more

than their counterparts in the private sector, according to

most studies, and have marvelous benefit and pension plans.

Also, the workload is light, they retire early, and it's next to

impossible to fire union members for performance reasons.

The reason is the politicians receive generous campaign

contributions from these unions, and would rather

put the country in greater debt than go head-to-head

with these unions and their lobbyists.

After the public service unions are humbled, it will become

apparent that US will continue to run up deficits and the debt

trying to educate its populace and keep it healthy enough

to remain competitive with other industrialized nations, since

other nations are doing an increasingly better job at that, and

at a lower cost.

The idea that low taxes causes longterm prosperity will go the

way of the idea of privatizing social security after so many

bank and stock market fiascoes. Thus, while it took 72 years

for the idea of communism to be largely discredited, it will

take 100 years or so for the idea to die that low taxes leads to

sustainable and longterm prosperity.

--------------

related:

SPIEGEL Interview with Economist Nouriel Roubini

'Europe Needs Growth to Prevent a Collapse of the Euro', 11 Jan 2011

excerpts:

SPIEGEL: And the bad news [about the American economy]?

Roubini: The persisting housing crisis, the implications of this on the financial condition of banks and, above all, the high public debt and deficit, both at the federal and state levels. The US is in a dilemma. In the medium term, there is no getting around budget consolidation, otherwise the country will be threatened by a debt crisis such as Europe is currently experiencing. However, given the weak recovery so far, the US must do all it can to boost economic growth.

SPIEGEL: Tax cuts for the super rich, which are part of President Barack Obama's tax package, are hardly going to create additional growth.

Roubini: And that's the heart of the problem. The plan is a complete waste of money. It's going to increase the deficit without doing anything to kick-start the economy. And, unfortunately, I don't see any chance of this fiscal stalemate changing significantly before the presidential elections in 2012. The White House and the Republican majority in Congress block each other's proposals, and there is no such thing as bipartisan crisis management in the US. I'm sure that the public debt of the US will eventually make the markets very nervous in the next few years.

SPIEGEL: Although the situation is actually better in the euro area, the euro is the target of attacks and not the dollar.

Roubini: The condition of the over-indebted states on the periphery of the euro area is similar to that of the US federal states, from California to Illinois.[snip]

(From the above Spiegel story):

(Click for larger image)

-------------

US Recessions

http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

related:

http://www.pbs.org/wgbh/amex/reagan/timeline/index_3.html

1981

July 29: Congress passes Reagan’s tax bill. Instead of a 30% tax cut, Reagan accepts 25%. Reagan predicts the nation will be "seeing some signs" of prosperity by end of the year.

Another one of Reagan's more callous statements (below), as though

people weren't found guilty and go to jail before Reagan came to office.

Reagan was also the man who popularized the urban myth of welfare queens

getting rich using many assumed names and ID theft to double

and triple dip into the dole. It was reverse class warfare from the

presidential bully pulpit:

http://www.msnbc.msn.com/id/41036993/ns/politics-more_politics/

Palin quoted former President Ronald Reagan as saying that "we must reject the idea that every time a law is broken, society is guilty rather than the lawbreaker." "It's time to restore the American precept that each individual is accountable for his actions," Palin continued, still quoting Reagan.

http://www.pslgroup.com/dg/448d6.htm

between 1990 and 1995 the United States fell to position 23 out of the 29 leading industrialized nations in terms of infant mortality. This country was ranked twentieth out of 29 in 1995 in terms of life expectancy for women and twenty-first in terms of life expectancy for men.”

http://en.wikipedia.org/wiki/United_States_public_debt

http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States

http://www.worldwide-tax.com/germany/germany_tax.asp

Economists foretell of U.S. decline, China's ascension

http://www.reuters.com/assets/print?aid=USTRE7082BL20110109

(Government) workers of the world unite!

Public-sector unions have had a good few decades. Has their luck run out?

Public-sector workers Jan 6th 2011

http://www.economist.com/node/17849199/print

The widening fight against public-sector unions

by Jeff Jacoby, The Boston Globe, 9 Jan 2011

http://www.jeffjacoby.com/8596/the-widening-fight-against-public-sector-unions

----------

U.S. Teens Lag as China Soars on International Test,

By John Hechinger - Dec 7, 2010

excerpt: Fifteen-year-olds in the U.S. ranked 25th among peers from 34 countries on a math test and scored in the middle in science and reading...The U.S. government considers the test one of the most comprehensive measures of international achievement. The results show that U.S. students must improve to compete in a global economy, Education Secretary Arne Duncan said yesterday in a telephone interview. President Barack Obama’s administration is promoting national curriculum standards and a revamping of teacher pay that stresses performance rather than credentials and seniority. “The brutal fact here is there are many countries that are far ahead of us and improving more rapidly than we are,” Duncan said. “This should be a massive wake-up call to the entire country.”

-------

The Financial Times article spares us the worst. It only includes public debt, but not gross debt. Gross debt means all the money that the govt owes in entitlements such as Medicare and Social Security. A lot of that money was paid into the system, but was used for other purposes. The FT article says debt was 62% of GDP in 2010, so that must be public debt. Gross debt was 83% in 2009. I read it's up to 88% of GDP in 2010:

http://www.ft.com/cms/s/0/dd3ff74c-2272-11e0-b6a2-00144feab49a.html#axzz1BF8a3kqt

Our Absolutely Horrible Fiscal Situation (Now With Pictures!)

by PEJMAN YOUSEFZADEH on JANUARY 16, 2011

http://www.chequerboard.org/2011/01/our-absolutely-horrible-fiscal-situation-now-with-pictures/

http://www.economywatch.com/economic-statistics/economic-indicators/General_Government_Gross_Debt_Percentage_GDP/

excerpt: Total Government Gross Debt (% of GDP) for United States in year 2009 is 83.214 %. See notes for: General government gross debt (National currency).

http://en.wikipedia.org/wiki/United_States_public_debt

-------------------

States warned of $2,500bn pensions shortfall,

By Nicole Bullock in New York

Published: January 17 2011

----------------

More discussion on low tax economies:

Empirical evidence shows that Reaganism's low taxation approach will lead to fiscal disaster for the US and all the states that try it. The Republicans can fool enough voters, but we've now come to the point where they'll have to convince investors in treasury bonds that their low taxation approach works, and the investors will have a good laugh when they try. The US will have to raise taxation rates just like Greece and Ireland did. Even the German govt had to shelve its campaign promises of lowering taxes to keep down borrowing costs and debt maintenance costs. Then the Republicans inter-generational theft will be complete when we have to pay for the baby boomers low taxation rates allowing them to build six- seven and eight-figure bank accounts (see links and excerpt below).

The Terminator (Gov of CA Arnold Schwarzenegger) was instrumental in lowering the amount of money CA spends on students because education is not a priority for Republicans. CA is 44th in the nation in funding schools on a per student basis! Naturally, it would head toward 44th position in achievement scores. One reason is that due to Republicans driving down taxes, CA has run up a large debt, and now $6 billion dollars per year go toward servicing debt, money that could have been spent on education. It's the same for the US debt where $500 billion per year go toward debt maintenance, as much as the entire defense budget! So even though CA has higher taxes, they weren't being spent in the right places. No wonder people were moving out of CA--so their kids could get a decent education, a situation brought to you by Republicans.http://www.reuters.com/article/idUSN1423724020091214
General fund debt service on outstanding bonds, authorized but unissued bonds and proposed water bonds is set to peak in fiscal 2020 at $10.45 billion, compared with a current level around $6 billion,http://online.wsj.com/article/SB10001424052748704415104576065662426023264.html

Mr. Westerwelle, who serves as foreign minister and vice chancellor under Ms. Merkel, has drawn harsh criticism from within the pro-business Free Democratic Party and increasingly dire approval ratings after failing to follow through on a tax-cut pledge and other campaign promises.http://californiawatch.org/dailyreport/school-spending-falls-further-behind-rest-nation-2977
California now ranks 44th in how much it spends on its students – or $2,546 less than the average spent in the rest of the United States.
In fact, if Gov. Arnold Schwarzenegger has his way, California will fall even further behind the rest of the nation during the coming fiscal year.
Schwarzenegger is proposing to cut the basic amount school districts get for every student in attendance to $7,417, an 11 percent drop from $8,423 just two years ago (2008-09), according to a report by the legislative analyst's office.

-----------------------------

Eve more discussion on low tax economies:

The highest spending state, Vermont, is rated 30th in SAT scores nationwide. The lowest spending state, Utah, gets higher SAT scores from their students and is ranked 20th above Vermont. Far less money, higher score. The Best State (highest) SAT score comes from Iowa yet their spending of $9,977 per student is right in the middle at 25th and right at the national average of spending. The Worst State Sat score comes from Maine yet it spends the 5th most money in the nation.

Yet, raw SAT scores are not a valid indicator of educational value per buck just by itself because some states have high test participation rates, and some low. As soon as a state gets more students taking SATs, the lower that state's average SAT score is, even though high participation rates suggest a state is doing well at educating its kids. In states that don't educate well, fewer take the SATs or dream of going to college, but yet have a higher average SAT since fewer students take the test. That would handily explain Utah's high score despite low spending on education:

http://xenophilius.wordpress.com/2009/11/02/how-per-student-spending-on-education-compares-to-state-sat-score-rankings/

excerpt: Some states have low participation rates and arguably can tilt the field.

Utah spends the least on students, but gets a decent average SAT only because it has one of the lowest SAT participation rates--only 6% of students there take it, and most of those are the best and brightest. Some states have 85% or more of their students take the test, and naturally their SAT average is much lower even though they spend more per student. One study says these quirky statistics have led lawmakers to try to cut funding to schools saying more money doesn't help, and may even hurt:

http://blog.bestandworststates.com/2009/08/25/state-sat-scores-2009.aspx

http://findarticles.com/p/articles/mi_m1272/is_2679_130/ai_81110769/

Differences in parent income and parent education of the test takers accounted for 92% of the difference among states' average SAT scores. The 10 bottom-scoring states had more than 41 times as many test takers from families with incomes less than $10,000... This confusion can lead to erroneous policy decisions and false perceptions."

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Global Debt Crisis

Interactive: Is Your State A Debt Disaster?

Jon Bruner, 20 Jan 2010

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JANUARY 25, 2011

How a small town's bond bust led to a model state debt policy

By Stephen C. Fehr

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Beating the Crisis

Germany and Europe Must Defy Political Trends

A commentary by Christoph Schwennicke, 18 Jan 2011

excerpts: Germany's economy is in good shape because it resisted the fashion of neoliberalism.

Like Kohl, the idea of secure government pensions -- defended most notably by Norbert Blüm and Rudolf Dressler, was likewise ridiculed as being too old-fashioned. The criticism was justified, but Germans forgot to take a critical view of the alternative. No one questioned the magic formulas of Schröder disciples Hans Martin Bury and others, with their momentous talk of "capital cover" and privatization. It was très chic, it promised to offer a solution, and anyone who questioned it was decidedly démodé.

Capital cover has since proven to be one of the most misleading terms of the last 20 years -- it is often the case that absolutely nothing is being covered at all. Germans were led to believe that all of the problems of the social security systems could be solved by eliminating the government's stranglehold on them. In return, policy holders would have to allow financial service providers to invest their money in the capital market.

The term "capital cover" was misleading in three ways. First, it covered up the fact that contributors must contribute fresh money of their own. Second, there was the risk inherent in the capital market. Finally, there was the question of who consistently benefits from this new system.

The risks have since caught up with the new system and, in the course of the financial crisis, brought down its apologists along with the economy. Hans Martin Bury, after serving as Schröder's right-hand man at the Chancellery, worked as an investment banker at Lehman Brothers, the firm whose bankruptcy triggered the financial crisis. Private health insurance companies face precisely the same problems -- obsolescence and financial difficulties -- as their competitors in the statutory health insurance system because, on the one hand, their hand-picked, young, healthy and dynamic clientele has become older and more susceptible to illness and, on the other hand, the return on their reserves is stagnating.

The capital cover system is consuming its own children, which anyone who has been caught up in the current trend of offsetting a private loan with the supposed panacea of life insurance can appreciate. Nowadays, financial advisors are embarrassed when asked about their past recommendations.

The government cannot safeguard your pensions; that's something only private financial service providers can do, Gerhard Schröder insinuated, and too few citizens sufficiently questioned this assertion. Although it wasn't the intention, the outcome was that financial entrepreneurs like Schröder's old friend, AWD founder Carsten Maschmeyer, profited handsomely from the policy while the problems of the social security system remained unsolved. Politicians and the public had succumbed to the promises of a financial industry that benefited from these innovations. A critical look at the annual statements of the new fangled pensions, known as Riester pensions in Germany, and the pension insurance system reveals that the government pension system is clearly a sad affair with a deplorable rate of return on investment. But the Riester pension also falls well short of promises. Its introduction 10 years ago constituted an admission of the complete failure of the government system. A decade later, the capital-covered Riester pension itself has also proven to be a failure.

Common sense has since taken over. Many people are dissolving their Riester contracts prematurely, preferring to take a loss than to continue filling up a barrel that could also spring a leak. The Riester pension has proven to be just as precarious as government pensions. Nevertheless, when it comes to insurance policies designed to cover old age care, capital cover is once again being considered as an option. Insurance agents are already salivating at the prospect.

Siren Songs

The capital cover trend went hand-in-hand with the privatization trend. "Privatize it!" was the rallying cry of the reformers, who stigmatized the state as a money-gobbling Moloch and led us to believe that we would be better off allowing free market forces to do their magic. Municipalities and cities succumbed to this siren song when it came time to fund public projects like streetcars and waste incineration plants. In the end, there was only one winner in this dodgy scenario known as "cross-border leasing," and it wasn't the municipalities.

Financial desperation prompted cities like Berlin to pursue the seemingly sexy idea of privatizing many municipal services, including the water supply. It had less to do with the free market economy than with the idea of a planned economy, because it became known that Berlin's agreement with the private purchaser included a clause that allowed it to raise water prices and guaranteed it high returns.

The fact that the German rail company Deutsche Bahn is currently capitulating in the face of winter is a result of the delusional notion of its former chairman that he could privatize the government-run operation and become the head of one of the top companies listed on the German stock exchange, the DAX. In pursuing this goal, Hartmut Mehdorn cut operating costs to such an extent as to render it partially inoperable. Anyone who still believes that a private railway is more effective than a government-owned one should take a train in England and then in Switzerland. The railroad, local public transportation and the water supply are better left in government hands. In this area, a government monopoly is always the lesser evil.

It was the in thing, and there were many who made a pile of money putting this particular bug into politicians' ears. Now none of this can be reversed, but a new year is the perfect time to make resolutions. One resolution would be to learn a lesson from this experience and not to succumb so readily to the nonsense of political fashions, which are all too often controlled by business interests. These days, Germany is not proving to be the fallen superstar, as it was described in bestsellers. And the new superpower, China, does not derive its strength from an unleashed neoliberalism, but from a rigorous, post-socialist neo-statism, which justifiably runs up against democratic constraints in Europe.

Because it has maintained a more resilient industrial mix and prepared itself more effectively for the future than the Anglo-Saxon model, which had established the fashion trends of the last 30 years and had looked down on Germany with a mixture of pity and arrogance. Because smokestacks continue to belch smoke and assembly lines continue to run in Germany, and because Germany makes real products instead of packaging financial products until they are no longer recognizable.

Fortunately, Germany has succumbed only partially to the political trend of neoliberalism, and it has not been completely transformed the way Great Britain, once such an important role model, was. It is now becoming clear that a new statism is needed, and that nothing is as sturdy as a strong and solvent government.

Even though it has weaknesses and is better off not playing the investment banker, as in the case of the ill-fated state-owned banks, only a government and not a consortium of investors, no matter how large, ultimately has the strength and the endurance to overcome the sort or crisis we have experienced since the 2008 crash. Even more importantly, only the state acts with democratic legitimacy. Finally, and most importantly, only the state has the ability to ascend above particular interests and keep an eye on the common good.

--------------------

Here's an example of how Republican governors increase the

debt load of states by cutting the taxes of the "haves," leading

to hikes in debt maintenance costs and reduction of services.

Most of the governors, like the US presidents, were Republican,

and were unwilling to raise taxes, nor spend less on programs and

entitlements they liked. A rule of thumb is if the program benefits

the "have nots," Republicans don't like it, an exception being

No Child Left Behind:

State debt has ballooned

Through 10 years and three governors, Wisconsin's IOUs are 87% higher

By Steven Walters

Nov. 26, 2007

excerpts: ...state government slid 87% deeper in long-term debt over the past 10 years.

That decade spans the leadership of Democratic Gov. Jim Doyle and Republicans Scott McCallum and Tommy G. Thompson. The 87% increase was three times the U.S. inflation rate over that period.

Figures show that debt rose the most - by $1.8 billion- under [Republican] Thompson between 1996 and 2001, when he resigned to become a cabinet secretary for President Bush...

Also rising is annual debt-service payments on those bonds...That $874 million is cash that can't be used for other important programs. By comparison, that amount is close to what it cost to run the state's prison system last year.

Officials say there are several reasons for the soaring debt:

• Hemmed in by past no-tax-increase promises, legislators and governors have instead OK'd record borrowing to have the best of both election-year worlds - continued spending for popular programs while pushing paying for those programs off into the future.

But a major bond agency, Standard & Poor's Ratings Services, last week frowned at the state's finances - including the growing debt load and an emergency fund of less than 1%. The agency changed its rating outlook from "positive" to "stable," but did not downgrade its ratings for specific bond issues.

It's another reason Wisconsin has the largest deficit of any state, under the so-called generally accepted accounting principles, or GAAP, system of budgeting, Berry noted.

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XXL Toys for the Super Rich

Yacht Building Business in Germany Booms

By Janko Tietz

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It take a recession and a jobless recovery for some to finally

see the damage that tax breaks without conditions does to the US.

If multi-national corporations headquartered in America no longer

have most of their employees in the US, they should be considered

foreign companies, and should not have the same access to the

political system and government contracts that domestic companies

do. If they threaten to leave entirely, that's fine since basically

they are just showing their true face.

American businesses that once hired American workers to make

and export products are fast becoming mere importers, yet they

retain the facade of being an American business. IBM, Apple,

General Electric and Dell all fall into this category. Even the ships

carrying their products to US shores fly foreign flags. Then they

have the audacity to complain that their taxes are too high, even

though US corport tax rates are about as low as they get for any

industrialized nation. Even more infuriating is the Republicans

are naive enough to lower their taxes, or at least keep them low,

even as the nation faces record deficits and record debt

maintenance costs:

Business Is Booming: America's leading corporations have found a way to thrive even if the American economy doesn't recover. This is very, very bad news.

By Harold Meyerson, 28 Jan 2011

The American Prospect

excerpts: When he was CEO of General Electric, in 1998, Jack Welch pithily summarized his vision for corporate America: "Ideally, you'd have every plant you own on a barge to move with currencies and changes in the economy."

Since then, corporations have discovered that they don't need barges in order to unmoor themselves from the American economy. As corporate profits skyrocket, even as the economy remains stalled in a deep recession, Americans confront a grim new reality: Our corporations don't need us anymore. Half their revenues come from abroad. Their products, increasingly, come from abroad as well....

Indeed, the number of [Chinese] Foxconn employees who assemble these companies' products often exceeds by a wide margin the number of workers these companies employ directly in the United States. At Apple, the ratio of Foxconn employees at work on Apple products to U.S.-based Apple employees is 10-to-1: 250,000 Foxconn workers to 25,000 Apple workers. The same ratio exists at Dell.

...the most widely admired American companies, such as Apple, Hewlett-Packard, and General Electric...Their zeal for offshoring has lowered the prices of the goods Americans buy while increasing our trade deficit, shrinking our manufacturing sector, and flattening our wages...With each passing year, and even more so during the recession, America's leading corporations grow more and more decoupled from the American economy. Their interests grow increasingly detached from those of our workers, our consumers -- and our economic future....

The implications of this shift in the conduct of American big business are profound -- and terrifying. At a time when small business can't expand because high unemployment and the decline of home values have depressed consumer demand, big business is increasingly committed to expanding its sales and production abroad rather than at home. That's why the current downturn is different from its predecessors: Unlike any recession in American history -- including the Great Depression -- this one has come at a time when America's leading employers can return to profitability without rehiring large numbers of American workers....

But there's another way to look at the recession...it's the cumulative consequence of our leading banks and corporations investing in job-creating enterprises abroad rather than in the U.S. Thus, the disjuncture between the record-high profits of American corporations and the otherwise dismal indices of national economic health....[By contrast with the American banks, German] banks are restricted to doing business in their regions; they have to concentrate on the real [local] economy"....

A growing number of pension funds are investing in infrastructure projects alongside governments, though much of it is abroad: CalPERS, the nation's largest pension fund, owns almost 13 percent of London's Gatwick Airport. What we need to bring such investments home are infrastructure banks, on both the federal and state level, that could leverage public and private funds for infrastructure projects in the U.S....

This rise in profits, however, has not been accompanied by a rise in employment, wages, or national income....The multinationals' profits depend not just on their sales and production overseas but also on reducing labor costs in the U.S. by pushing down wages and the size of their U.S. workforce...With small business floundering at home, and big business flourishing abroad, where, exactly, will the economic recovery come from? Who will do the hiring?...

But keeping labor costs low in the U.S. -- by avoiding rehiring, substituting temporary for fulltime workers, increasing productivity, depressing wages, and shifting employment abroad -- can be an ongoing boost to a company's bottom line, particularly if its revenues increasingly derive from foreign rather than domestic consumers. America's leading employers are pursuing all of these strategies....

The high level of joblessness has obscured another troubling story: the declining incomes of the employed. The median annual wage of American workers declined by $159 in 2009 from the previous year, to a mere $26,261 (that means half of all employed American workers make even less than that). The hourly wage for new hires in manufacturing plants, both union and nonunion, today is roughly $15 -- about half of what it was just a few years ago....Employers have been free to impose the costs of the recession and the costs of doing business [e.g., healthcare costs] on their workers -- and keep all the proceeds for themselves....

The hiring that is going on, moreover, isn't located in the higher-wage manufacturing sector, which has been declining steadily as a percentage of the workforce as a result of both offshoring and productivity increases....The recovery, in other words, is every bit as alarming as the recession. The America emerging from the financial crisis of 2008 is distinctly downwardly mobile....

What this means is that the equilibrium between production, pay, and purchasing -- the equilibrium that Henry Ford famously recognized when he upped his workers' wages to an unheard-of $5 a day in 1914, the equilibrium that became the model for 20th-century American capitalism -- has been shattered. Making and selling their goods abroad, U.S. multinationals can slash their workforces and wages at home while retaining their revenue and increasing their profits. And that's exactly what they've done....

Another alternative to economic stagnation is a massive dose of investment in America's increasingly decrepit infrastructure, where employment is by its nature tied to place. Much of the funding would have to come from the government, but by no means all....

In the absence of private-sector hiring, the recession will just keep rolling along unless the government radically shifts its trade and industrial policies and expands its own role in creating jobs...Grove proposes we levy a tax on imports from offshored labor and direct the proceeds to the kind of innovative high-tech company that he once led -- if and only if such companies mass-produce their inventions here in the U.S. Tax credits for domestic manufacturing and job creation, tax cuts for corporations that invest and hire at home, and "Buy America" stipulations for government procurement are other ways to bolster domestic manufacturing and the creation of good jobs in the U.S. No such provisions, however, were included in the semi-stimulus package of tax-cut extensions that the White House negotiated with congressional Republicans in December....

In an impressive display of industrial-strength chutzpah, corporate America is now demanding lower tax rates even as it daily disinvests in its home country. Worse yet, the new Congress seems likely to grant its wish -- lowering taxes indiscriminately on those rare corporations that invest in America and on those more numerous corporations that abandon it. Is it too much to ask of the government that it discriminate between friend and foe? How about rewarding companies that pledge, as Siemens, Daimler, and BMW have in their own country, to keep or create a specified number of highly skilled jobs here at home? How about mandating, as Germany has, that companies put worker representatives on their boards, as a means of slowing corporate flight? America's economic decline is at bottom institutional, and reversing it requires institutional solutions that change the structure of American corporations.

Absent such reforms, the future trajectory of American corporations is clear. They will drift off, each on their barges, leaving behind them an America receding into penury and squalor.

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More discussion:

Charts and articles that rate US states based on "business climate" are really just propaganda since, for example: 1) all the waste and such it points out are just trivialities, 2) CA had low unemployment (5.8%) up until 2008 and the Great Recession and is doing just fine regardless of its supposed business climate, and 3) every state in the US already has the lower taxes than the rest of the developed world. Therefore, the chart for business climate should be turned on its head and all those states with lower taxes ought to be upping their taxes so the US can catch up with Europe which is ahead of the US in every conceivable measure: universal education, universal healthcare, universal employment (Europe has lower unemployment than the US, with only the PIIGS countries being the exceptions), European countries have lower debt with even the PIIGS countries have lower debt than the US, with Greece, Italy and maybe there's another exception. Ireland has lower debt, but it had a temporary cash flow problem, but only because it bailed out its banks.

What's going on with CA and WI and other states is debt maintenance is taking up more and more of the budget (4% of budget in WI, and 6.7% in CA), and it's come to the point where they have to make big cuts in services or raise taxes, because they can't borrow any more--SAYS the bond ratings agencies. They just downgraded California's debt to lower than Greece's which means its below junk bond status (i.e., not investment grade) and Wisconsin's was downgraded from "positive" to "stable."

----------------

http://www.businessweek.com/news/2010-04-01/california-debt-beats-greece-s-in-bond-sales-credit-markets.html

Debt service as a ratio of the general fund is 6.7 percent, according to Treasurer Bill Lockyer.

Moody’s Investors Service rates California’s debt Baa1, its third-lowest level of investment grade, while Greece is ranked two steps higher at A2.

Wisconsin news:

http://www.jsonline.com/news/wisconsin/29332524.html

About 4% of all general-fund spending this year will go to pay off state debt,

But a major bond agency, Standard & Poor's Ratings Services, last week frowned at the state's finances - including the growing debt load and an emergency fund of less than 1%. The agency changed its rating outlook from "positive" to "stable," but did not downgrade its ratings for specific bond issues.

BBC News - Greek bonds rated 'junk' by Standard & Poor's

Apr 27, 2010 ... If it reaches junk status, a country loses its investment grade status. ... Greece's 2-year government bond yield surged to almost 15% on ...

news.bbc.co.uk/2/hi/8647441.stm

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Wisconsin protests: why 'week of rage' matters to rest of America

Wisconsin protests at the state Capitol pit a new wave of tea party-inspired Republicans against Democrats defending their most cherished ideals. It's a political drama that echoes across the country and could play out again across the newly 'red' Midwest.

By Patrik Jonsson, Staff writer / February 18, 2011

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STATES' WORKERS UNDER SIEGE

Governors push layoffs, givebacks to close $124B in budget gaps

FEBRUARY 20, 2011, BY JACK TORRY, THE COLUMBUS DISPATCH

excerpt: Because every state except Vermont requires a balanced budget, governors and legislators face a stark choice: cut spending or raise taxes. But some Democratic governors are taking a different approach than Republicans.

In New York, Democratic Gov. Andrew Cuomo wants to lay off 9,800 state workers and freeze salaries. In California, Democratic Gov. Jerry Brown is calling for steep cuts in education and health care while asking voters in June to extend for five years a series of tax increases.

And in Illinois, Democratic Gov. Pat Quinn has tried to close a $15 billion deficit by pushing through the legislature an increase in the state income tax to back a plan to issue $8.75 billion in bonds. The money would be used to pay what the state owes to schools and health-care providers.

----------------

State employees, which in many states include teachers

since the state pays part of their salary, pensions and health

benefits, constitute a large part of the populace. In Wisconsin

there are 300,000 state employees out of 5 million people, so

that's one out of every 16 people. Due to such ratios, if state

employees are overpaid or have a defined-benefit healthcare

plan, it can quickly become burdensome on the public, as in

NY state, according to the NY Times:

NYT: If Public Employee Costs Aren't Reined In New York

Won't be Able to Provide Essential Services

excerpt: At a time when public school students are being forced into ever more crowded classrooms, and poor families will lose state medical benefits, New York State is paying 10 times more for state employees’ pensions than it did just a decade ago.

That huge increase is largely because of Albany’s outsized generosity to the state’s powerful employees’ unions in the early years of the last decade, made worse when the recession pushed down pension fund earnings, forcing the state to make up the difference...most state employees pay only 3 percent of their salaries to their pensions, half the level of most state employees elsewhere. Their health insurance payments are about half those in the private sector.In all, the salaries and benefits of state employees add up to $18.5 billion, or a fifth of New York’s operating budget. Unless those costs are reined in, New York will find itself unable to provide even essential services.

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Libertarian Wankers (in the Republic Party), by Roland Shirk, 8 Feb 2011

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Shiller: Income Inequality Is A Problem That Could Be ‘Bigger Than This Whole Financial Crisis’

excerpt: ...it’s going to create resentment and hostility. It’s not a country that — we could turn into a country that even the rich would rather not be in.... In 2007, the last year for which data is available, executives and other highly compensated employees received more than one-third of all pay in the U.S.

http://thinkprogress.org/2011/01/31/income-inequality-egypt/#

Currently, the top one percent of households make nearly 25 percent of the total income in the country, after they made less than 10 percent in the 1970′s. Between 1980 and 2005, “more than 80 percent of total increase in Americans’ income went to the top 1 percent.”

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US Approaching Insolvency, Fix To Be 'Painful': Fisher

http://www.cnbc.com/id/42209447

excerpt: The United States is on a fiscal path towards insolvency and policymakers are at a "tipping point," a Federal Reserve official said on Tuesday.

"If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when," Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt.

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As income disparity grows in US, millionaires and business

professors come clean about barely paying any taxes,
and they follow the tax code, taking advantage of loopholes:

Buffett Slams Tax System Disparities: Speech Raises at Least $1 Million for Clinton Campaign

By Tomoeh Murakami Tse, Washington Post Staff Writer, June 27, 2007

excerpt: Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent....The rich can take advantage of tax loopholes, including one that allows those managers to pay the capital gains tax rate of 15 percent instead of the ordinary top income tax rate of 35 percent.

Taxes, Warren Buffett, and Paying My Fair Share

by Justin Wolfers, May 1, 2008

excerpt: Now, I’m no Warren Buffett (believe me!), but I’ve just finished figuring out my federal taxes for the year. I live comfortably (one of the virtues of teaching in a business school), but was dismayed to learn that my federal taxes for 2007 amount to only 16 percent of my income.

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School cuts raise doubts among some GOP voters

They worry that the cuts will undermine the quality of their local districts, 24 Mar 2011

excerpt: "I voted for him because I wanted some restraint on frivolous spending," Blaha told The Associated Press, adding that he now regrets his vote. "I did not anticipate that he considered education a frivolity."

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GOP appears poised to take on entitlements, 27 Mar 2011

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Public education devastated by California budget cuts

By Kevin Martinez

5 June 2009

excerpt: One of the testimonies from the speakers mentioned how a $300 million cut to bus transportation would leave many children stranded without the means to get to school from home.

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Firefighters face new threat: private 911 service

Ambulance firms try to lure cash-strapped cities, challenging unions

By Dan Levine and Martha Graybow, 17 Apr 2011

SAN FRANCISCO/NEW YORK — For-profit ambulance companies present American communities with an offer that's hard to refuse these days.

They will take over 911 emergency rescue service at little or no charge to cash-short cities and counties and promise to bring down labor costs spent on public employees....For the men and women in fire departments, this is no drill. With fewer fires to fight as building codes have improved, providing emergency medical service has become a big part of what they do.

The upshot has been numerous clashes pitting private players against fire chiefs and the influential union, the International Association of Fire Fighters.

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S&P Cuts U.S. Ratings Outlook to Negative, 18 Apr 2011

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People hoarding gold, 22 Apr 2011

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Amanpour Accuses Paul Ryan of ‘Reverse Robin Hoodism,’ Freeland Urges ‘Courage’ to Raise Taxes, 1 May 2011

excerpt: “As town halls across America erupt in anger over a plan to slash spending, Republicans find themselves under fire.”

It also says two-thirds of the savings that you want to make in spending cuts come at the expense of programs designed for the poor, for the disadvantaged. And this is reverse Robin Hoodism, if you like – take from the poor, give back to the rich again.

I think there should be more taxes on the very rich. They’re doing incredibly well in this economy, but it is going to be about more taxes on the middle class, including consumption taxes.

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Fears of return to the 1970s are overdone

By Spencer Jakab, April 29 2011

excerpt: People are afraid that the US is in for a Japan-style decades long recession, or non-growth, or 1970s Carter-era stagflation. Now no president can come along and artificially stimulate the economy with deficit spending like Reagan did due to the high national debt. He didn't fix any FUNDAMENTAL economic problems, it seems, but only made the situation much worse using Voodoo economics.

----------------

Comment: In this article they say that taxation and redistribution doesn't work.

What they leave out is that the rich in the US pay a lesser percent in taxes than everyone

else thanks to the tax code being vitiated by their lobbyists, giving the rich tons of tax breaks and credits, the low 15% tax on capital gains being one example. Moreover, education has taken big budgetary hits since the 1970s, and every state is in the race to to the bottom to see

who can spend less on education than poor O'le Mississippi:

Technology Widens Gap Between Rich and Poor

Gap Between Richest and Poorest Widened in Most Industrialized Countries, OECD Says

excerpt: The report comes as globalization and its effects face a backlash in some countries, due to a perception that some kinds of jobs in industrialized countries are being lost to emerging countries. In addition, governments world-wide are trying to rein in budget deficits, making it harder for them to redistribute wealth through benefits, the most direct way to reduce inequality.

The average income of the richest 10% of the population of the 34 OECD member countries is currently about nine times that of the poorest 10%, the paper said. The ratio is lower than that in Nordic and many other Continental European countries. It is around 14 to 1 in Israel and the U.S., and 27 to 1 in Chile and Mexico.

Governments have typically tried to reduce inequality through redistribution. However, said the report, "the stabilizing effect of taxes and benefits on household income inequality has mostly declined." Moreover, "redistribution strategies based on government transfers and taxes alone would be neither effective nor financially sustainable."

The OECD said the solution to the growing inequality was training and education for the low-skilled. "Policies that invest in human capital of the work force are needed," it concluded.

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5 Jun 2011:

http://www.cnbc.com/id/43264595

The debt and deficit problem in the US is so serious that former Federal Reserve Chairman Alan Greenspan finds himself in the position of recommending the highest tax rates in more than a decade.

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22 Jun 2011: Credit agencies rating finally bring conflict between

deficit hawks and war hawks in Republican party to a head--only about

30 years worth of deficits late:

http://www.msnbc.msn.com/id/43480902/ns/politics/

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30 Jun 2011: US corporations complain about paying the lowest effective tax rate

in the industrialized world, and yet complain that they can't find enough educated, qualified workers. Whose to blame for that? Many students can't afford to go to college, and many go into the military or work to get education money, but what's their successful degree completion rate after going through all that rigamarole?

'Skills gap’ leaves firms without worker pipeline

Problem has left businesses without the workers they need in a rapidly changing economy, 30 Jun 2011

Career and technical education programs, once derided as being for those who couldn't cut it academically, offer one path. But growing those programs has not been a national priority and their quality is inconsistent at best. Education Secretary Arne Duncan has called career and technical education the "neglected stepchild" of education reform.

Part of the problem is the dropout rate. In Rhode Island, for every 100 students who start high school, only 73 will graduate, according to Ray DiPasquale, president of the Community College of Rhode Island. That puts the state slightly above the national average of about 72 percent.

But of those 73 who graduate in Rhode Island, 40 will enter college. And of that number, just 21 earn a degree.

At CCRI, the on-time graduation rate is only 9.8 percent, in part because the vast majority of its nearly 18,000 students require remedial coursework. The national rate is 15 percent.

------------

Due to Reagan and later Republicans cutting education budgets,

and causing students to take on huge debt loads, the US has stagnated

in educational attainment compared to the rest of the developed world.

The generation that went to school before Reagan looks good compared

to the rest of the developed world, but during the Reagan years and

post-Reagan years, the US went into decline. Reagan's rhetoric suggested

he was for better education, but at the same time he starved for money,

meaning he was a great con man for the rich, or a Robin Hood for the rich:

Obama aims to lift college graduation rates, but his tools are few, 9 Aug 2010

The US ranks behind 11 countries in the share of young workers with associate's degrees...

Other countries have now surpassed the US among the newest crop of workers. Among today’s American 25- to 34-year olds, slightly more than 40 percent have associate’s degrees or higher, a tad higher than for their parents’ generation. But that rate places the US only 12th of the 36 countries in the College Board study.

Obama says the lower ranking is unacceptable. “We know how important an education is in the 21st century,” he said. “It is a prerequisite to prosperity."

Later, Obama added, “We know that in the coming decades, a person’s success in life will depend more and more … on a higher education.”

Obama highlighted three reasons American college graduation rates have stagnated:

Rising costs. Tuition and housing costs rose 439 percent from 1982 to 2008, compared with a 147 percent increase in median family income (not adjusted for inflation), according to a 2008 report from the National Center for Public Policy and Higher Education.

A disconnect between skills learned and skills needed. Obama has emphasized the role of community colleges throughout his presidency, urging (and funding) an upgrade in curriculums to teach more skills related to “the growing sectors of our economy.”

Dropout rates. More than one-third of US college students fail to complete their degrees six years after enrollment, the president said. He proposed investment in curriculum redesigns – especially remedial programs – to help grow graduation rates from the numbers already enrolling in colleges.

also see: http://academicbiz.typepad.com/piloted/2007/10/us-education-co.html

Reagan left education in his home state of California and in the US generally in a state much worse than he found it:

The Educational Legacy of Ronald Reagan, 2004, by Gary K. Clabaugh

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Ironically, Republicans accuse Democrats of "class warfare," but

that's what Republicans have done since Reagan. The rich aren't

"hurt" by paying taxes, but the poor are hurt when the rich don't

pay taxes. If "class warfare" by definition involves hurting, then

Republicans are guilty of it and Democrats are not. Besides, recalling

Reagan's statements about welfare recipients, there's no doubt

Republicans are guilty of class warfare from the point of their

meteoric rise in US politics:

Sen. Sherrod Brown: GOP "Committing Class Warfare", 30 Jun 2011:

"The only thing that Cantor missed is that usually they say when President Obama does something like that or when we do something like that they usually accuse us of 'class warfare.'When in fact, we're not committing class warfare, we're just pointing out how they've committed class warfare for two decades by loading up the tax code with all these breaks for people who already have privilege," Brown said.

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Stifled By High Corporate Tax Rates? Baloney!

http://www.ohiomm.com/blogs/blog_mass_destruction/2011/03/26/stifled-by-high-corporate-tax-rates/ID=14927/

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Take a look at the actual historic data on taxation here:

http://blogs.ajc.com/jay-bookman-blog/2011/06/11/us-a-low-tax-country-and-getting-lower/?cxntfid=blogs_jay_bookman_blog

excerpt: In a no doubt vain effort to inject actual data and reality into a tax debate dominated by illusion and rhetoric, the Center for American Progress has assembled a collection of 10 charts “demonstrating the simple, clear truth that federal taxes in the United States are very low.”

Some people won’t believe it, because they have been trained to believe otherwise. But isn’t it odd how seldom that “training” includes actual data and actual facts.

http://www.americanprogress.org/issues/2011/06/low_tax.html

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Taking From the Poor and Giving to the Rich

Both Parties' Debt Plans Play Robin Hood in Reverse

By J.J. Goldberg

Published July 29, 2011

http://forward.com/articles/140550/#ixzz1TZbx0k8h

excerpt: What they don’t tell you is that income tax is only part of the story, and a declining part. When Reagan took over in 1981, 47% of all federal revenue came from personal income taxes, 12.5% from corporate tax and 30% from the so-called payroll tax. (That last one is the special Social Security and Medicare tax, which hits everyone, rich or poor, with the same rate on every dollar they earn up to a given ceiling. Anything you earn above the ceiling is payroll-tax-free.) Today the government gets 43% from personal income tax and 7% from corporate tax. The payroll tax, the most regressive federal tax, provides 40% of all revenue.

The result has been a dramatic shift of the tax burden from the rich to the middle class and poor. In 1980, the bottom half of the population, with 17.7% of the nation’s income, paid 0.5% of all federal revenue. Today the bottom half takes home 12.25% of the income and provides 6% of revenues.

At the other end, the top 2% took home about 15% of all income in 1980 and paid about 48% of all revenue. Today, the top 2% takes home about 28% of income and pays 32% of revenue.

Finally, which spending has gone up? When Reagan first entered, he raised military spending. Over time that slowed down. Social Security? It’s stayed around 20% of the budget. Housing? Research? Parks? Minimal. Here’s what’s shot up: Medicare and Medicaid, from less than 7% of budget to about 20%. Recipients don’t visit the doctor more often, but the same visits cost more every year. Anything else going up? Yes: annual interest on the debt.

And there you have it: A monumental shift of income to the very rich from everyone else, and a quiet shift of the tax burden from the richest to everyone else. A gigantic hole in our Treasury. Some very rich job-creators. And jobs? Not so much.

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Why the US Should Raise Taxes

German Example Shows Way Out of Debt Crisis,

A Commentary by Peter Bofinger, 08/12/2011

excerpt: Almost all the industrialized economies are struggling under the weight of enormous debt levels. The problem is their government revenues are too low. Debt-ridden countries like the United States, Ireland and Japan need to raise their taxes to a similar level to Germany.

As the current discussion in the United States amply illustrates, there is no chance of tax increases happening there any time soon. Any budget consolidation there will clearly have to happen on the expenditure side. In terms of the economy, this has major drawbacks, because reducing government spending has a very strong negative effect on the economy. In contrast, raising income taxes disproportionately affects higher earners. That has a significantly smaller impact on the economy, because such people save a large proportion of their income rather than spending it.

Spending cuts are especially problematic from the point of view of growth if they are undertaken by countries like the US which already spend less than the average on education, infrastructure and social transfers. If a state that is already skinny is told to go on a diet, it can easily succumb to anorexia.

For most countries, therefore, the best way out of the debt crisis is to raise their excessively low government revenues to a reasonable level. In that respect, sovereign states are a bit like hotels: If you want to have four-star standards, you can't charge three-star prices. And if people in the US flatly refuse to pay more for their government, they will, in the medium term, find themselves living in a middling economy.

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OP-ED CONTRIBUTOR

Stop Coddling the Super-Rich

By WARREN E. BUFFETT

Published: August 14, 2011

excerpt: If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

To understand why, you need to examine the sources of government revenue. Last year about 80 percent of these revenues came from personal income taxes and payroll taxes. The mega-rich pay income taxes at a rate of 15 percent on most of their earnings but pay practically nothing in payroll taxes. It’s a different story for the middle class: typically, they fall into the 15 percent and 25 percent income tax brackets, and then are hit with heavy payroll taxes to boot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

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Christopher HolshekColonel (retired), U.S. Army (Reserve) Civil Affairs

GET UPDATES FROM CHRISTOPHER HOLSHEK

London Calling

Posted: 8/14/11

excerpt: From London to Libya, Spain to Syria, Egypt, Greece, Israel, Chile, Russia, East Africa, and Philadelphia, the common thread is the widening gap between rich and poor and the disenfranchisement, disconnectedness, and dissent it fosters....

And it's not just a disparity of wealth; it's a deficit of opportunity. When you look at the world and see hundreds of millions of idle, unemployed, and estranged youth who feel -- as the punks of a previous generation chanted -- they have "no future, no future," some pretty big things are going to happen. This is the real issue. When the youth of America, for example, figures out that one of every four of their near-future tax dollars will be paying for nothing else but debt, in order to protect "entitlements" and low tax rates for richer, older people, and to feed the military industrial complex, to say they will become politically active could turn out to be an understatement.

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The bottom 50% of Americans pay no income tax, and what they pay on payroll they get back as a tax refund. This is a big propaganda point on Right news channels, BUT they never talk about income disparity or the GINI Index, which, if they would, would put it in perspective, and also worry fiscal conservatives. Also, they don't talk about the money not refunded.

The poor get their income tax refunded, but they don't get back any unemployment insurance, nor social security. Only income tax. Also, 40% of the American population owns almost nothing--only 0.3% of America's wealth. Also, the GINI Index rose from 40 in 2000 to 45 in 2010. That means that the top 10% of Americans take home 45% of the income in America each year. So if the bottom 50% of Americans didn't end up having all their income tax refunded, they'd likely own zero percent of America by now. Besides that, they are probably paying down big credit card debts, and all that money goes at rates of 17% or 27%, and is paid to the rich who own the credit card companies, who might be Americans or Arab sheiks:

CIA Fact Book on the rising Gini Index in America:

https://www.cia.gov/library/publications/the-world-factbook/fields/2172.html

United States 45 (2007) means that the top 10 percent of Americans had 45%

of the income earned in 2007.

40.8 (1997) means that the top 10 percent of Americans had 40.8% of the

income earned in 1997.

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http://www.pbs.org/newshour/rundown/2011/08/knowing-the-newshour-was-planning.html

Something is wrong in a country with disparity this stark. It's a vivid example of what Paul Solman finds in his reporting: that in the United States, the richest fifth own 84 percent of the nation's wealth, while the bottom two-fifths -- 40 percent of the population -- owns an almost invisible 0.3 percent of the nation's property.

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http://cancercouple.blogspot.com/p/uncle-sam-and-gini.html

The graph shows that during the Roaring Twenties the income of the top 10% of the population rose steadily until the Wall Street crash of 1929 and the stabilized at about 45%. That is, 10% of the population received 45% of the national income in those years leaving 55% of income for the bottom 90%.

A lot of poor don't have a car, boat or house, but rent houses or apartments. When they do have houses and boats and cars, they are second hand and not worth much on the market, or they are one missed payment away from being repo'd. In fact, there are exact statistics for the net worth of families, and most people don't own all that much:

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http://www.csmonitor.com/USA/2011/0726/Wealth-gap-widens-Whites-net-worth-is-20-times-that-of-blacks

In 2009, the median net worth of white households was $113,149, compared with $6,325 for Hispanics and $5,677 for blacks.

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Top 1 Percent Control 42 Percent of Financial Wealth in the U.S. – How Average Americans are Lured into Debt Servitude by Promises of Mega Wealth:

http://www.mybudget360.com/top-1-percent-control-42-percent-of-financial-wealth-in-the-us-how-average-americans-are-lured-into-debt-servitude-by-promises-of-mega-wealth/

The Bottom 80% of Americans own only 7% of the financial wealth in America.

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1 in 7 Americans Lived in Poverty in 2009, New Census Data Show

http://www.pbs.org/newshour/rundown/2010/09/poverty-uninsured-rates-rise-as-recession-continues.html

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The shadow economy in America that supposedly equalizes everything

when it is take into account only amounts to ten percent of GDP. So basically

babysitters and lawn mowing is the great equalizer of incomes in America. Ha!:

http://www.haaretz.com/themarker/booming-shadow-economy-could-pay-for-some-social-justice-1.379226

Just how large is Israel's black economy? A 2010 report by Schneider, Buehn and Montenegro, published by the World Bank, found that it was equal to 23% of the GDP in 2007. This is much higher than in Germany (16.7%), Britain (13.2%), Japan (12.1%) and the United States (9%), among others.

In total, Israel came in 38th on the researchers' list of 151 countries, ranked starting with those with the smallest shadow economies between the years 1999 and 2007, placing it right after Belgium and Kuwait and right before India and Spain.

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List of U.S. states by Gini coefficient

http://en.wikipedia.org/wiki/List_of_U.S._states_by_Gini_coefficient

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Why Germany's Rich Must Pay Higher Taxes: Debt and Democracy:08/26/2011, A Commentary by Jakob Augstein

excerpts: Let me describe the current situation with a few figures. The 5,000 best-earning German households have increased their share of the total national revenue by about 50 percent since the mid-1990s. At the same time, the real income of all Germans has remained about the same over this period. The net share of wages -- that is, the share of national income accounted for by wages -- was about 44 percent in West Germany up until the 1980s. Ten years later, it was just over 38 percent. Now it's about 35 percent. In the same period, the portion of income accounted for by profits has continually risen.

Huge redistributions are happening. That's a fact that has been known for some time. But most of us have just sat around and watched. Why? Because the ideology of privatization, small government and neo-liberalism has permanently fogged the minds of a generation.

Spoiling the Rich and Placating the Poor

But the ideology has started to show cracks. Writing in the Sunday edition of the heavyweight conservative newspaper Frankfurter Allgemeine Zeitung recently, the prominent German journalist Frank Schirrmacher argued that a decade of economic policies based on loosely regulated financial markets is proving to be the "most successful" way to make the left-wing critique of free-market capitalism, which had fallen out of favor, popular again.

It's not the power of left-wing arguments that has brought capitalism to its knees. Capitalism has grown for so long that it has reached the point of being incompatible with democracy. We live in a system where the few profit but the many do not. But in a democracy the majority are still needed at the ballot box every few years. They're expected to give their votes -- and then keep quiet. In return for this service, the state hands out (ever-smaller) benefits from the public treasury. But where should the money come from, if the rich and the corporations pay fewer and fewer taxes and keep their money for themselves, while the poor pay no taxes because they have no money?

Answer: debt. Public debt is the price paid by countries to allow the rich to grow richer while the poor grow poorer. This system has now come to the end of the road.

A strategy of spoiling the rich and placating the poor can't work any longer. The only choice now is to raise taxes or cut spending.

But if the government cuts spending, inequality will rise. Whether it's schools, public swimming pools, libraries or hospitals, the wealthy don't care if these public institutions are in a good condition. But everyone else does. Popular rage will grow. We can imagine where it might lead in Germany -- toward the far right. If the government cuts spending, it will not reform the system in the direction of more democracy. Instead, it will push it toward totalitarianism.

If we want to save our society, there is only one answer: to raise taxes. The top tax bracket in Germany is lower than ever. In the past, 53 or 56 percent were normal levels -- now the maximum rate of income tax is 42 percent. The rich person who takes advantage of all possible tax breaks pays just over 30 percent. That's crazy. The state can no longer afford to make do without money from its wealthiest citizens.

The Berlin economics professor Giacomo Corneo has called for a tax bracket of 66 percent for the nation's top earners. He's right.

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Neo-liberals have a religious belief in the efficacy of market forces to

solve every problem, and are loath to intervene in a situation, and thereby

short-circuit the forces of economics. Though there are plenty of examples

showing that such supreme faith is unwarranted when it comes to solving poverty

or a raft of problems foreign and domestic, a Neo-liberal's faith is buoyed

by the fact that any money not spent on solving the problem will find its way more

quickly to those who don't need it, as surely as the ring would find its way to

Dark Lord Sauron. Lately, for example, German Foreign Minister Guido Westerwelle

opted out of joining NATO to affect regime change in Libya, instead putting

his faith in economic sanctions to do the job. Westerwelle was the leader of

the Free Democrats, a party that has been strongly pro-business since the 1980s,

the same time as Neo-Liberalism became dominant in the US and UK. Since, however,

Gaddafi had tanks and planes, it's hard to imagine sanctions having any more

effect on Gaddafi than they are having on Syria's dictator al-Assad, who is firmly

entrenched in power due mainly to his tanks and planes:

The World from Berlin: German Foreign Minister 'Has Lost All Authority', 08/29/2011

Free Democrats

http://en.wikipedia.org/wiki/Free_Democratic_Party_(Germany)

Throughout its history, the FDP's policies have shifted between emphasis on social liberalism and economic liberalism. Since the 1980s, the FDP has maintained a consistent pro-business stance.

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Interview With Historian Hans-Joachim Voth

'The Euro Can't Survive in Its Current Form'

Interview by Alexander Jung and Gerhard Spörl, 08/31/2011

SPIEGEL: But with higher consumer taxes you won't tap the biggest source, the really wealthy. US billionaire Warren Buffet is constantly demanding to pay more taxes.

Voth: The problem isn't Warren Buffet, the problem is the people who are as rich as Warren Buffet but who don't feel like paying tax. They simply emigrate to Zug or elsewhere in Switzerland if they are facing higher taxes. New laws may feel good but they usually don't generate revenues.

SPIEGEL: Does that also apply to wealth tax?

Voth: I like it but it's only a solution if it is equally high in all countries. But I don't understand at all why non-earned income, for example from inheritance, is taxed at a far lower rate than earned income. The children of rich parents have many advantages; they don't have to inherit many millions as well.

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