The $20 Trillion – Where is it now? Part 3
Last time we took a deeper look at how we accumulated our $20 Trillion National Debt and why that huge investment didn’t help stimulate our economy like it should have. Now we are going to look at how our economic system has become stacked against the poor and middle class people and what the long term effects of that will be if it remains unchanged.
So our trade needs to remain healthy, our jobs market needs to remain healthy, and we MUST have taxes paid back into our government to sustain the programs that we have determined are needed for us to remain a healthy society. Otherwise – forget it! Our economy will grind to a halt.
This is the reason that Trade, Jobs, and Taxes are three of the primary issues in this, or any other, election cycle. The sad thing is politicians all know these things, and they also know how to persuade voters to think that they will provide the necessary safeguards to assure a healthy economy. So we have to make certain that we are not fooled by politicians who say things we know are important when they have no intention of helping to assure the types of legislation that truly foster a sustainable economic environment. There are powerful people with powerful interests that know how to manipulate their speeches to say one thing and mean another.
So how do we see through deception? Again, my father would have said to, “follow the money trail.” The first “test” can begin with the last of the above three points that are needed to keep the economy from becoming that “House of Cards” – which none of us wants. That point is, taxes – specifically taxes relative to the amount of income that one has left over after living needs are met. We HAVE to start here because the answer to this question will affect the rest of the puzzle.
First of all, any income that is not subject to taxes stops the above cycle of the flow of funds, at least with respect to that portion of income which is not taxed.
So with the basic premiss in place, at least for this discussion, let’s take an honest look at taxes, because it will help us find where that $20 trillion is today. There are many things we know for certain. First of all, we have made that investment into our society – we have poured billions (No, trillions) into our society already. So why haven’t we gotten Samuelson’s multiplication effect to boost our economy back? Well, if all of that money was now in the hands of the average person on the street then our economy would be in, not just the healthiest place it’s ever been, but also in the biggest economic expansion in our history! At least, that is how it should have worked, anyway. Let me again say this another way… we’ve already invested $20 trillion into our society. Why isn’t it helping? If Samuelson is right, this should mean we are in the biggest economic expansion of our economy in history. No one else has ever done that much.
That money has been spent first on defense, and secondly on entitlements. So, I’m going to say, people who provide defense equipment, or services and people who provide housing, or food, or medical services and equipment, or medications, or fuel, etc. would seem to be the logical place to start looking for who has most of that $20 trillion we are trying so desperately to identify. (Do ya’ think?) Put simply, are the people who provide these types of goods and services the sort of people who are also paying the most taxes? Please don’t make everyone laugh. Not by a long shot! No! They are NOT paying the most taxes! Even though they could pay taxes out of income which is far above anything they need to use for living expenses.
Suppose some of the wealthiest people in America decide they don’t want their money to be subject to taxes. Afterall, they will argue, that they took the risks to make that money so they deserve the benefits. Let’s also say that they begin to find all sorts of ways to encourage certain people to run for public office – people who will support their idea that they no longer want to pay any taxes. Now suppose that those candidates, because of the disproportionate finances that are made available to them, get elected and begin to pass laws which help those wealthiest people to invest their huge profits in an overseas factory where they will only need to pay a fraction of the amount that they now pay in wages here at home or in off shore “slush funds” where the earnings on those funds are not subject to our taxes, and their funds are no longer readily available for the average American borrowers to borrow for purchases of homes, cars, etc. Those wealthy people aren’t getting any poorer by building factories overseas because they still own them after they are built and they will have even more profits from all the money they are saving from paying far lower wages. Does this sound like a downward spiral?
The reason we have to look at taxes first is because the lack of taxes entirely cuts off the multiplication effect of federal spending in our economy. And, if income is not taxed, and local jobs are not created, and therefore production goes to other nations, then we reap nothing from this huge investment of $20 trillion which we said we were willing to make… FOR OUR FUTURE!
The American Dream dies.
Is your lightning quick mind starting to have any revelations yet about what might be going wrong with our economy, our Social Security programs and our national debt? I’m sorry but it is it’s even worse than that… we also have laws on the books that provide tax breaks for our businesses back here at home for both investments and losses that pertain to their businesses. Both the investments and losses are allowed to be spread over many years against any taxes they might owe… not just those they might owe in any particular year… but also the current laws allow tax credits these same people can use in years to come, in case they don’t have enough income to use up all their credit in a single year…and, just in case they might actually start having to show income at a future date..
Additionally, most people of wealth do not directly risk their own money… they often use their own money only as evidence of their creditworthiness. So they borrow money for investments in their businesses or encourage others to invest their corporate or personal money in these businesses to limit the risks they actually incur. This is how a recent candidate was able to charge off all of his losses from a single year against any future taxes that he might have incurred, possibly over as many as 18 years of future income.
My question is this… whose money is really at risk? You might be surprised to find that it is really the average citizens again. How? Because we have laws on the books to bail out banks and other financial institutions who suffer losses, and those funds, sadly, are secured by Federal funds… in other words… by the “good faith and credit of the United States… by US!
As if that isn’t enough advantage for the super wealthy, we have also allowed them to receive extra tax credits for these same people for making “investments in their businesses.” We allow these credits because we assume that they would only make those investments to improve their productivity and provide additional jobs for everyone. We assume that people would only make investments if they intended to continue their business long after these credits are used up. Yet we have no requirement to pay back those taxes, which were given in good faith in our future, if those businesses should pull up stakes and, subsequently move their factories overseas. They can even then charge off the so called losses they incur for closing their business facilities here in the U.S. – pretty good deal, huh? Use other people’s money… Invest it in their businesses…Get tax credits for doing so… pay themselves exorbitant salaries, benefits, and bonuses while they are doing all of this… then move those businesses overseas when they find they can pay lower wages in those countries… charge of the losses they “suffered, for having t save their businesses” by moving away… and then allow the banks and others back here to pay for the huge losses left behind… which all of us have to eventually pick up the tab for. I tell you… NOW THAT’S A PONZI SCHEME IF i EVER SAW ONE!
You have to also consider what has happened in the process when all of our local workers back here lost their jobs. Those out of work people no longer pay taxes and have to join all of the poor, old “Mrs. Average” people out there, hoping that someone will not just let them starve in the streets…
and the problem compounds!
Let me finish this admittedly simple illustration by saying this. The seven heirs of the Walmart Corporation have an estimated worth of $248 Billion – more than Bill Gates and Warren Buffett combined and more than the combined wealth of the lower 44% of the entire United States population. That means they have more money than 140 million of our neighbors, relatives, and friends. Recently the top three of those Walmart heirs decided to declare a dividend for themselves which increased their wealth over $4 Billion in addition to whatever income they already would have received for a the year. But they declared that dividend earlier than normal for Walmart – just prior to when an increased taxation bill went through Congress. Also, that type of income is treated as Unearned Income and taxed at a much lower rate than Earned Income.
The average Walmart employee earns an estimated hourly wage of approximately $8.90 per hour and most are not allowed to work a full 40 hour week – which means Walmart does not have to offer them any benefits such as health insurance, paid vacations, etc.. Most of those employees have to depend upon food stamps in order to feed their families. AND, THIS IS ONLY ONE EXAMPLE of United States corporations owned by billionaires. We haven’t even started on the defense contractors who, when recently asked by the Government Accounting Office for the legally required audit to let us be able to trace where the money was spent and who had it now, were unable to account for where $6 Trillion of that money had gone! Or Verizon, General Electric, and Exxon Mobil who recently paid no taxes whatsoever for two years while receiving over $4 Billion in government subsidies and benefits! TALK ABOUT WELFARE!!! The biggest WELFARE recipients of all time were the billionaires on Wall Street that we all paid to bail out due to their blatant fraud and mismanagement that came to a head in 2008 – a debt that we will be paying for long after any of us are dead and gone. Our grandchildren will still be paying for their mistakes – but it is still not enough for them – they still want more.
Before we leave this story… there are two startling facts that have now face our nation. The first is that 90% of the entire increases in wages for our whole country have gone to the top 1% of our population. That means 90% of the money we all invested…90% of the $20 trillion in national debt that we have run up hasn’t gone to stimulate the economy, as we all hoped… it has gone to the TOP 1% – THE WEALTHIEST PEOPLE IN OUR NATION!!!
The second fact is this…recently, the combined wealth of that same the top 1% of the wealthiest people in America, now totals more than the combined wealth OF ALL OF THE REST OF US… COMBINED!!!
Apply this fact to the above story and we come to an unmistakable problem. If 90% of all increased income has gone to 1% of our population and that 1% now has assets totalling more than all of the rest of us… then they need to be paying as much in taxes as all of the rest of us combined. Do you believe that is the case.
If you do, then I have a casino I want to sell you in Atlantic City.
Is my example too simplistic? Of course it is. However it is, at the same time, essentially sound.
The indisputable answer to the question we asked at the beginning – “Where did the $20 trillion that makes up our national debt go?” Who has it now? The poor? Hardley! They still barely live from month to month. So who does have those dollars stored up for themselves and their heirs for generations to come? The answer is as plain as the nose on our proverbial national face… and every four years they trot out another one of their own kind for us to elect to perpetuate a system that has brought down every similar society in history. The inevitable truth is 99% of a population will not always allow the 1% to steal from the 99% any hope for a better life!.
It is an immoral. wicked, shameful system that is allowing this to happen. Those $20 Trillion dollars of national indebtedness aren’t gone – they were simply transferred. There are people who made their immense fortunes off of those dollars. They hold on to them tighter than anyone. They buy elections with them. They pay for all sorts of propaganda ad campaigns to try to hide their treachery.. They sell the cheapest quality toilet paper (Koch Brothers), the cheapest quality general merchandise possible (Walmart), and the most oil products (Exxon Mobil)…most of their products are sold to the 44% least wealthy people… with so much of their merchandise coming from those factories and facilities they built overseas… taking our jobs… ALL WHILE PAYING LITTLE OR NO TAXES AND RECEIVING BILLIONS IN GOVERNMENT SUBSIDIES TO DO SO!
This is why it is so important to expect EVERY candidate who runs for public office to release his or her taxes. They are going to be making the decisions about your taxes… and theirs… and their friends.
The same people who now have the bulk of that $20 trillion we have bee following have now gone a step further to insure that NOTHING changes their wealth position. The Supreme Court decision called,”Citizen’s United” (the name is one of the sickest reverse puns in history) changed our laws to give a so called “equal” status to corporations as people – as if that was ever the intention of the founding fathers. Yet, as if to prove that equality between the lives of the citizens and their corporations wasn’t ever the goal of the decision the 1%ers wanted, under the terms of the decision, the corporations can give essentially unlimited funds to elections, while individual citizens are limited to $2700 per candidate. For that to be what the founders of our nation intended, they would have said “We the corporations and, to a lesser extent,…people, in order to form a more perfect union…”
Moreover, once again, this means that the banks and the people who invested in those corporations are actually funding those political contributions – whether they want to or not.
Why do you think these the people who have allowed this additional atrocity to become law are fighting so hard to keep the next President from appointing someone to the Supreme Court who might change that horrible decision? This is the worst decision of my life time and one most likely to bring down our society in our history.
Why wouldn’t I weep? Some people will almost doubtless try to dismiss my argument, by saying, “What does Steven know, anyway. He’s just a minister.” That’s true. But maybe they should consider this additional truth. I was also an estate planner fo many years with my father who, like me was also a minister… but also taught business law, economics, and estate planning for Bryn Mawr College. I took Dad’s courses and together we taught seminars all over the Untied Statas. I also hold a PhD. That doesn’t qualify me a an economist, but it does mean, I do know how to research. In addition, as a minister, why wouldn’t I cry the same tears that Jesus cried when he went to the poor, wept when he saw their plight, and rebuffed the corruptions and lack of compassion among many of the wealthy of his day? AND WHAT HE SAID WASN’T JUST TO HIS DAY ALONE. Shane Clayborne, in his book, “The Irresistible Revolution”, wrote, “Dedicated to all the hypocrites, cowards and fools… like me. May we find the Way, the Truth, and the Life… in a world of shortcuts, deception and death.”
How can I stay silent? Can you even imagine how many of those people who have no hope for tomorrow are crying out to God for Him to somehow help them because they have no hope left? The sheer volume of prayers of the desperate ones is becoming deafening. It will take the majority of us to wake up for their prayers (and ours) to be answered. None of us wants to see America fall. But it will unless we create a fair tax system that with privilege comes the requirement to not to rape the very system that gave them opportunity.
When saint Francis saw the corruption of the love of money in his day, he sold all his goods, gave away all his wealth and worked the rest of his life to benefit the poor. When asked why he had given away all that he had to live this kind of life, he said, “I had given myself so completely to my own self the first part of my life that I knew only a complete change would save me from what I once was.”
The order he started of like minded people is still in existence today.
He was following “Someone’s” example. The question is, “Are we?” Or do we, like Francis need a complete change in what we are allowing to be excused as “normal”.
Ammon Hennacy, a Catholic activist (1893-1970) once wrote, “Love without courage and wisdom is sentimentality, as with most ordinary church members. Courage without love and wisdom is foolhardiness, as with the ordinary soldier, Wisdom without love and courage is cowardice, as with the ordinary intellectual. But the one who has love, courage, and wisdom moves the world.”
I know one that needs moving.
I’m Steven Phillips,
Thank you for taking the time to consider my thoughts.