I must confess, I’m confused; I’m looking forward in to a future that seemingly has no sound prospects and, frankly, the conversation that needs to be had, is barely a whisper! Listening to the Poli-Cor-Speak of the non-economic versed politician, the dearth of coherent strategy is so completely absent, I believe one could hear mollusk hiccup!
The economic conundrum that the U.S. finds itself has been years in the making and transcends the terms of Administrations of both Parties though the controller of the purse-strings, the U.S. Senate, has largely been Democratic Party controlled for much of the period of malfeasance and under whose supervision, the abuses are the forms most severe. And, Mr. President, the U.S. is already bankrupt, financially, economically, industrial and political so don’t bother making the threat, it’s far too late!
No, the U.S. will not spend its way out of the inevitable and an even GREATER “no” is that we can not “tax the rich” to solve the problem. This argument is the puerile equivalent of a child dropping the rope ladder from his tree-house to keep others from climbing up! Yes it works, but only so long as its occupant has no plans to return home for dinner!
Here are a few basic economic statistics that illustrate precisely how vacant the argument actually is:
Total U.S. Household Income (TUSHI): $7.896 Trillion
U.S. Households Earning > $150,000/year: (28% of TUSHI) or $2.2 Trillion
U.S. Households Earning > $250,000/year: (17.5% of TUSHI) or $1.4 Trillion
(U.S. Census 2007)
U.S. Gross Domestic Product (est 2009): $14.4 Trillion
Agriculture (1.9%): $274 Billion
Industrial (19.2% [*1)]): $2.77 Trillion
Services (79.6%): $11.4 Trillion
Note:(1) [2% growth, global rank of 152nd]
(CIA Factbook 2009)
U.S. Government Spending as a percentage of GDP: 46.22% or $6.7 Trillion
(Excluding “unfunded mandates of $107 Trillion which grow at an
estimated annual rate of $1.3 Trillion and the Debt Servicing Costs)
(U.S. Treasury, 2008)
U.S. Government Debt (est 2009): $12.9 Trillion
(Excluding “unfunded mandates”, Federal Reserve “float” (est: $6.7 Trillion) and State/Municipal Debt (est: $3.4 Trillion) and related Debt Servicing accruals)
Now then, if we accept for the moment that by “taxing the rich” we are going to pull ourselves out of this purulent abyss and that Harry Reid, Nancy Polosi, Charlie Rangle, John McCain, Leahy and so are the supreme representative of cogent thought, then, let us take the query one step further shall we!
- Double the Federal Income Tax on the >$150,000 Households.
This stunning inspiration will produce an annual revenue increase of: $440 Billion
Here is some very bad news: The Interest on the Federal Debt alone is $383 Billion/year and growing!!!
So much for the “Tax the Rich” solution!
There are a few more points worth directing your attention too:
- Note that the “wealth creating” (Agriculture & Industrial) component of the U.S. Economy (GDP) is (only) approximately $3 Trillion.
- Note that the “wealth consuming” (Services) component of the U.S. Economy (GDP) is $11.4 Trillion of which $6.7 Trillion is Government Spending. And, remember, this does not include the “off book” items illustrated, parenthetically, above.
With consideration, if only, to these two observations we can now understand why, in part, the U.S. Economy is failing so miserably and why spending and taxing only make the problem worse. In short, the Government is spending, again just considering the “on budget” items, by a factor of 2.2 “times” the National Economy. If we consider the “off budget” spending, the “unfunded mandates”, “Debt Service”, Federal Reserve “Float” exposure and the systemic effect of Inflation, clearly, the “factor” is far, FAR more severe. The numbers don’t lie!
This is not only an indication of how far outside the realm of “astute reason” one might consider the “tax the rich” logic, but more so, how blatantly ignorant the typical Politician actually is! If an American Citizen functioned in this fashion, they’d be “hot bunking” with Mr. Madoff at the Federal “Pen” and spending double time in a retention facility for the criminally insane!
And yet, there is another equally puzzling observation: the number of Americans who accept as a given this form of divisiveness and support and/or recommend the same “tax the rich” solution as if to be the supremely righteous and punitive form of economic justice! What has happened to our Ideals, what has become of our sense of propriety and “just reward”?
There is no Political Party of Conscious Thought who would dare proffer this form of predation let alone consider “The Reinvention of The Rich Lie” to an unsuspecting People! The simple fact that “they” do is a resounding affirmation of the assertion that there is NO “conscious thought”!
To consider that wealth is the resource of plunder is to accept that waste is the equal of reward and there is no reconciliation of the two posits just as there is no extracting water from a dry well or making a poor man rich by making a rich man poor!
Lowering the standard by which we measure success in now way increases nor does it fuel regard and the desire for the rewards of success; it only rewards the loathing of the few with increased level of companionship!
If we dare to resolve to an outcome worth pursuing then we are going to have to design a means with which to pursue said outcome! Legislating what amounts to Economic Alchemy, which we can clearly see to be dysfunctional, then instead of Reinventing Yet Another Lie we best set about Reinventing an entirely New Form of Functional Economic Policy.
The Road Map is already there, it’s in the pages of our own, unique, History patiently waiting for a willing participant!
And yet, the room is silent, not a one speaks of what is; the conscience subverted by passing fancies and illusions of greater conquest!
Insist on a change in the conversation, the message is on point, there is clear purpose but it is the practice that has no deliberate intension for a positive outcome!
The choice is clear, the intention however is not!
Curtis C. Greco, Founder