My Solution To Americas Woes

Once upon a time in America

We used to build things. Not just consumer goods but infrastructure.

In the 1950s we created the world’s greatest interstate highway system and electrified virtually all of rural America. A decade later we sent a man to the moon and brought him safely back while developing a new technology that would drive our economy well into the 80s. We had the money to eradicate Small Pox from the face of the Earth, remove the scourge of polio and tuberculosis from our soil, give every veteran a college degree and build things, really big things. Now the Interstate is in falling apart, half of the bridges are in need of repair, sewer and water systems are broken, unemployment is at 10%, there is no money to maintain anything and everything we buy or use is made in China. How the hell did this happen?

The making of a perfect financial storm

In 1960 John Kennedy cut the top tax rate from 70% to 50% starting a trend that it seems never ended.In the mid 70s banks invented credit cards making it possible to go into debt without collateral or a loan application. Then the Supreme Court nationalized bank’s interest rates neutralizing state usury laws. Over the next 35 years consumer spending went from less than 1 trillion to over 10 trillion dollars a year while outstanding consumer debt climbed from $200 billion to more than $2.4 trillion.

The 1980s gave us the Reagan revolution and fast-track free trade agreements that made it easy for corporations to outsource manufacturing so jobs began to flow across our borders into low paying countries without worker protections or environmental concerns. At the same time massive tax cuts for the wealthy and corporations, increased pentagon spending and military adventurism throughout Central America and the Middle East necessitated borrowing from foreign countries to meet day to day expenditures. The deficit and debt exploded.



George H. Bush and Bill Clinton gave the economy a brief respite by raising taxes and spurring consumer spending, the only way to replace the GDP loss from outsourcing manufacturing. For a few brief years we actually enjoyed a budget surplus and a shrinking debt. However, Clinton continued to globalize our manufacturing with more free trade agreements and he signed the Graham, Leach, Bleighly act into law effectively erasing the financial restraints put in place after the Great Depression of 1929.

Enter George W. Bush.

In less than three months we lost the surplus to even more tax cuts for the top 2% of incomes and corporations. Then, after ignoring terror threats in the face of blatant warnings from within and without our intelligence agencies, he used the 911 attack to start two wars which for the first time in the history of the United States were financed with foreign money. What few environmental and business regulations remained suffered from neglect and lack of funding. Jobs continued to flow overseas, income disparity increased and the deficit continued to grow and the debt to explode. In late 2000 Senator Phil Graham wrote, and Bush signed, the Commodities Modernization Act simultaneously creating and deregulating derivatives trading. Eight years later the entire U.S. banking industry imploded. The housing industry, the bedrock of our economy, died from bad loans hidden in convoluted mortgage backed commodities rated A+ by unregulated rating agencies. Almost every other industry followed suit.

This is what Obama and the Democrats inherited and all they have been able to do is nibble around the edges and it’s unlikely that any meaningful changes will come anytime soon from this weak administration. The promised hope and change has delivered just more of the same. A bitter disappointment.

NOW I hear from people:  "All I hear from you is Bitching Fed Up - whats your solution?"

Well fuckers here ya go!!!

What I would if I were King

Tax Reform: Leave income tax as-is up to $350k. Add two new brackets; $350-1,000,000 @ 40% and $1,000,000 up @ 50%. Tax capitol gains at the same rate as earned income (it’s called un-earned income for a reason). Raise or eliminate the cap on Social Security and Medicare. Implement a .01% tax on all stock, bond and commodity trades (Lincoln funded the Civil War with such a tax). Tax inheritance over $1 million/heir @ 50% (they did nothing to earn it so anything they get is a freebie). Change the Alternative Minimum Tax to $500k and adjust it to inflation. Close corporate loopholes that allow corporate headquarters in a P.O. Box in the Caribbean to avoid taxes. Close loopholes that allow corporations to hide profits in foreign branches (corporate tax revenues fell from 5% of GDP in 1980 to 1.4% in 2009). Penalize moving jobs offshore and reward new job creation inside our borders (U.S. corporations created 1.4 million jobs in 2009-all overseas).

Financial reform: Repeal Graham, Leach, Bleighly thus reinstating Glass Stiegel. Outlaw derivative trading and short selling, if it doesn’t exist or you don’t own it you can’t sell it. Regulate commodities trading to reflect real future value changes. Pass a national usury law with the maximum interest rate pinned to individual’s credit history and the Fed interest rate. Much of my other ideas have been implemented or will be by the new Consumer Protection Bureau.

Budget: Reduce Defense spending by 40% (about $225 billion) by closing foreign bases, cutting extravagant weapons systems purchases, phasing out civilian contractors and re-evaluating real world threats and tactics. Internalize all social spending and eliminate any private sector middle men. Enforce Pay-Go with an emphasis on user fees and taxes on those who would benefit where possible.
Domestic policy: Increase Federal R&D spending to 1950s levels. Revamp the GI bill to make it comparable to the one for WWII vets. Restructure the safety net to provide help early before a person loses everything. Find ways to reduce the cost of higher education and increase wages for teachers, paying them commensurate with their value to society (at $70k/year we can pick the very best school teachers). Move to Medicare for All financed by the lifting of payroll tax caps.

Foreign policy: Don’t even get me started . . .

Very little of this can happen short term because of sheer momentum, special interests, and simple Republican recalcitrance but some move toward any of these policies, in my opinion, is a move toward fiscal and social responsibility.

Edited by Dave Capra 12/30/2101
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x87026
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