The Newt Truth? Our Federal Govt Running Amok? Wreck­ing Ball Aimed At So­cial Se­cu­rity NOT Stimulus: Rout of Wolves Needed to Evict the Stench of Skunks In D.C.

I continue to give a good portion of my time currently to trying to fathom how we (the USA, land of my birth and ex-home of the free) got this far down the rabbit hole. I'd swear (if I did swear, of course) that someone was pulling my leg in exactly the same way they fooled the German people prior to World War II when they were told by the very-serious Powers-That-Be that "if they agreed to such-and-such losses of their liberty, that very soon Germany would be back on its feet financially! Oh, and lots of funny-acting/looking Germans would also have to go to prison and concentration camps, of course, but . . . relax . . . don't think about that right now as it's best for everyone to just play along until we get this country back on the road to prosperity!"

So what's got me freshly hot under the collar?

They've figured out how to secretly deny us (f*ck with, in plain words) the benefits we all should receive from our already-paid-in Social Security (FICA) taxes, while not taxing the b/millionaires or stopping the war spending to decrease those much-touted scary deficit figures. And it hasn't even had to be a closely-kept secret from an inattentive and/or ignorant population that doesn't know (any longer) what the meaning of words in a bill signifies (let alone know how Social Security withholding has historically been calculated and why).

Good grief, Charlie Brown. Your grandparents could figure out these thieves faster than you or your parents can. I used to like this President (for a few weeks anyway, until he appointed all those Goldman Sachs alumni who have continued to run the Treasury like it's their personal bank). Now I wonder if his affirmative action (and you know he was catered to, right?) didn't hamper his mathematical education. Or maybe it's just his judgment I'm now getting familiar with. (Some editing was inserted into the following article to ensure clarity - Ed.)

This theft from the pub­lic is being de­ceit­fully pre­sented as a tax break, as if So­cial Se­cu­rity “taxes” were just like the "in­come" tax we pay. It’s not at all that.

First of all, the em­ployer’s share of the pay­roll tax is just like the em­ployer con­tri­bu­tion to a worker’s pen­sion or 401(k). It’s your money they are con­tribut­ing, be­cause it is used to cal­cu­late your re­tire­ment ben­e­fit amount. If they pay less, you are get­ting less.

The same is true of the pay­roll tax you see de­ducted from your pay­check. It might hurt just as much as the in­come tax that is with­held when you look at how it re­duces your take-home pay, but while the in­come tax mostly ends up to pay for end­less wars, for tax give­aways to cor­po­ra­tions, and for things like oil-de­ple­tion al­lowance sub­si­dies to the oil com­pa­nies, the pay­roll tax is your money and is put into the Trust Fund to cal­cu­late your re­tire­ment ben­e­fit!

Cut­ting the amount de­ducted from your check may or may not re­duce the amount of your ben­e­fit (that’s un­clear), but if Con­gress does this with­out com­pen­sat­ing for the cut by tak­ing money from some other tax, such as a sup­ple­men­tal tax on the rich, to com­pen­sate for the loss of funds in the Trust Fund - and that is what the Re­pub­li­cans in Con­gress are de­mand­ing with their re­fusal to pass any new taxes on the wealthy - then it just strength­ens the hand of those who are claim­ing that So­cial Se­cu­rity is going “bank­rupt,” and that the sys­tem needs to be “re­formed” by re­duc­ing ben­e­fits or de­lay­ing the re­tire­ment age.

You can place the facts about this Congressional leadership in any framework that you like, but the stench has gotten so high this week that you cannot fail to identify the source. Dave Lindorff reports from Nation of Change:

The US Con­gress is such a craven bunch that you re­ally have to turn to Olde Eng­lish to aptly de­scribe them.

Con­sider that on Thurs­day, by a vote of 93-7, the Sen­ate ap­proved a Na­tional De­fense Au­tho­riza­tion Bill that ef­fec­tively de­fines the US “home­land” as a war zone, and that al­lows for the in­def­i­nite in­car­cer­a­tion with­out trial of any­one, in­clud­ing US cit­i­zens and Green Card hold­ers, with­out trial, in bla­tant vi­o­la­tion of the Sixth Amend­ment of the US Con­sti­tu­tion and of fun­da­men­tal in­ter­na­tional ju­di­cial stan­dards.

These elected rep­re­sen­ta­tives, so ready to sell out the fun­da­men­tal rights of the peo­ple and the na­tion’s her­itage, can be best de­scribed, using Olde Eng­lish usage, as a “con­gress” of ba­boons, or a “cow­ardice” of curs, a “sneak” of weasels” or per­haps just a “stench” of skunks.

And it’s not over. Both houses of Con­gress are also con­sid­er­ing a pro­posal by Pres­i­dent Obama of a mea­sure that will se­ri­ously un­der­mine So­cial Se­cu­rity - a fur­ther cut in the So­cial Se­cu­rity 12.4% pay­roll tax by 3.1% for work­ers and a match­ing 3.1% cut in the 40% share of that tax paid by em­ploy­ers - mea­sures which taken to­gether would gut the So­cial Se­cu­rity Trust Fund by more than $350 bil­lion in one year.

This theft from the pub­lic is being de­ceit­fully pre­sented as a tax break, as if So­cial Se­cu­rity “taxes” were just like the in­come tax we pay. It’s not at all that. First of all, the em­ployer’s share of the pay­roll tax is just like the em­ployer con­tri­bu­tion to a worker’s pen­sion or 401(k). It’s your money they are con­tribut­ing, be­cause it is used to cal­cu­late your re­tire­ment ben­e­fit amount. If they pay less, you are get­ting less.

The same is true of the pay­roll tax you see de­ducted from your pay­check. It might hurt just as much as the in­come tax that is with­held when you look at how it re­duces your take-home pay, but while the in­come tax mostly ends up to pay for end­less wars, for tax give­aways to cor­po­ra­tions, and for things like oil-de­ple­tion al­lowance sub­si­dies to the oil com­pa­nies, the pay­roll tax is your money and is put into the Trust Fund to cal­cu­late your re­tire­ment ben­e­fit!

Cut­ting the amount de­ducted from your check may or may not re­duce the amount of your ben­e­fit (that’s un­clear), but if Con­gress does this with­out com­pen­sat­ing for the cut by tak­ing money from some other tax, such as a sup­ple­men­tal tax on the rich, to com­pen­sate for the loss of funds in the Trust Fund - and that is what the Re­pub­li­cans in Con­gress are de­mand­ing with their re­fusal to pass any new taxes on the wealthy - then it just strength­ens the hand of those who are claim­ing that So­cial Se­cu­rity is going “bank­rupt,” and that the sys­tem needs to be “re­formed” by re­duc­ing ben­e­fits or de­lay­ing the re­tire­ment age.

This is sup­posed to be our Con­gress, but it is close to pass­ing leg­is­la­tion that is a huge prepara­tory step to­wards fas­cism, turn­ing the mil­i­tary into a do­mes­tic po­lice force within the coun­try’s bor­ders, and re­turn­ing the US to a pre-Rev­o­lu­tion­ary era when po­lice and sol­diers could grab peo­ple, charge them with trea­son, sedi­tion or ter­ror­ism, and just lock them up or even ex­e­cute them with­out trial.

In­deed, that kind of be­hav­ior is why we had a rev­o­lu­tion back in 1776! And this same Con­gress is stealth­ily un­der­min­ing So­cial Se­cu­rity and Medicare, the two most im­por­tant lega­cies of the New Deal and the Great So­ci­ety eras, and unar­guably the two most pop­u­lar pro­grams run by the fed­eral gov­ern­ment.

And it’s not just Con­gress. Pres­i­dent Obama started this prob­lem off when he re­neged, once elected, on his cam­paign promise to close the mil­i­tary prison camps at Guan­tanamo and to run a gov­ern­ment that re­spected the Con­sti­tu­tion.

He did nei­ther, con­tin­u­ing to en­dorse de­ten­tion with­out trial, and ac­tu­ally ex­pand­ing on the Con­sti­tu­tional crimes of his pre­de­ces­sor, Pres­i­dent George W. Bush, by or­der­ing the sum­mary ex­tra-ju­di­cial ex­e­cu­tion of at least two Amer­i­can cit­i­zens, who are as­sured the right to a trial by a jury of their peers under the Bill of Rights of the US Con­sti­tu­tion.

He also came up with the truly lousy idea, passed by Con­gress last year, of cut­ting the So­cial Se­cu­rity pay­roll tax by 2% from it’s nor­mal 6.2% level. Now he’s tripled down on the same scam by propos­ing in­creas­ing that cut to 3.1% for work­ers and an­other 3.1% for em­ploy­ers!

This wreck­ing ball aimed at the So­cial Se­cu­rity pro­gram is being sold as an “eco­nomic stim­u­lus” pro­gram, when al­most any econ­o­mist will read­ily ex­plain that it won’t work.

First of all, since the pay­roll tax re­duc­tion goes to every per­son who pays the FICA tax, it means not just low in­come work­ers will get it, but also wealthy “work­ers.” And while the sav­ings for a per­son earn­ing min­i­mum wage would be just $500, and would cer­tainly be spent on some­thing (though not nec­es­sar­ily on Amer­i­can goods, since half of the things peo­ple buy are im­ported!), the sav­ings for a wealthy per­son earn­ing above the So­cial Se­cu­rity tax­able max­i­mum of $106,000 would be $3300, and would likely not be spent, but rather saved, doing noth­ing to boost eco­nomic ac­tiv­ity.

Fur­ther­more, the 3.1% re­duc­tion in pay­roll taxes paid by em­ploy­ers would not likely lead to any ad­di­tional hir­ing - the sup­posed jus­ti­fi­ca­tion for giv­ing them the same re­duc­tion - but would just be used to in­crease prof­its and div­i­dends to wealthy in­vestors. In fact, this scheme was tried once back in the 1970s dur­ing the Carter ad­min­is­tra­tion, and has been heav­ily re­searched, with econ­o­mists find­ing no ev­i­dence that the pay­roll tax “hol­i­day” led to any new jobs. The best char­ac­ter­i­za­tion of this whole idea is not an old Eng­lish word, but an old Amer­i­can one: cocka­mamie.

Clearly, on the ev­i­dence of these two mea­sures work­ing their way through Con­gress now, we have a fed­eral gov­ern­ment that has run amok, that is re­spond­ing not to the peo­ple but to nar­row cor­po­rate in­ter­ests that seek to both im­pov­er­ish the cit­i­zens and to pre­pare for greater lev­els of pub­lic un­rest and re­bel­lion by putting into place the tools of a po­lice state.

Any­one who doubts this need only look at the co­or­di­nated at­tacks on the Oc­cupy Move­ment, with SWAT-style para­mil­i­tary po­lice sweep­ing through en­camp­ments in cities across the coun­try, tear­ing down tents and bru­tally ar­rest­ing the young ac­tivists bold enough to chal­lenge the cor­po­ratist fed­eral gov­ern­ment’s poli­cies and to frontally crit­i­cize the work­ings of Amer­ica’s vaunted cap­i­tal­ist sys­tem.

The 2012 elec­tion is going to be a wa­ter­shed, but it is not much of a choice on offer. We have two cor­po­ratist par­ties vying for the spoils of gov­ern­ment, nei­ther of which is re­motely try­ing to re­sist the bur­geon­ing power of the cor­po­rate oli­garchy, and both of which are mov­ing ahead to cre­ate a po­lice state and to vi­ti­ate two key so­cial pro­grams

Where to turn? Per­haps the can­di­dacy of Rocky An­der­son, the for­mer mayor of Salt Lake City, who has an­nounced the for­ma­tion of a new Jus­tice Party, and who has said he in­tends to run for pres­i­dent on its ticket. An­der­son is quoted in Utah’s De­seret News as forth­rightly say­ing that the Amer­i­can peo­ple “want to see an al­ter­na­tive party. They rec­og­nize that these two mil­i­tarist, cor­po­ratist par­ties have brought us to this dis­as­trous place to where we are today."

Let’s hope he’s right! It’s going to take a “rout of wolves” to oust the ba­boons, curs, weasels and skunks from Wash­ing­ton and turn this dis­as­ter around.

(Dave Lindorff is an investigative reporter, a columnist for CounterPunch, and a contributor to Businessweek, The Nation, Extra! and Salon.com. He received a Project Censored award in 2004. Dave is also a founding member of the online newspaper ThisCantBeHappening!)

Weasels? Thieves?

Those are complimentary terms for what these con artists really are.

Organizing is the only solution to get rid of these traitors!

And here's the Newt Truth (coming via The Angry Bear):

The Numbers Behind Newt's Plan to Balance the Budget

by Mike Kimel

Newt Gingrich's website provides information on The Gingrich Jobs and Prosperity Plan. It starts with this:

America only works when Americans are working. Newt has a pro-growth strategy similar to the proven policies used when he was Speaker to balance the budget, pay down the debt, and create jobs.

Excellent. That statement should be enough to get an idea of what the program will look like. I want to focus on the first piece: balancing the budget. (You can't pay down the debt unless you run a surplus, so balancing the budget also deals with that issue.)

Here's what the surplus/GDP looks like for the years from 1988 to 2004. The gray bar covers the years from 1995 (the Republican Revolution took office, and Newt Gingrich became speaker in 1995) to 1998 (Gingrich resigned as speaker in November 1998.)

(Incidentally - the surplus is simply Total Federal Receipts less Total Federal Expenditures, which come from lines 37 and 40 of the BEA's National Income and Product Accounts Table 3.2. GDP comes also comes from the BEA.)

Figure 1.

As you can see, the deficit did indeed turn into a surplus when Gingrich was in office. However, the chart makes it clear the trend began before Newt took office and continued after Newt left office. In fact, it seems that the deficit started falling in 1993. The surplus, on the other hand, peaked in the year 2000, fell, and the budget returned to a deficit. So what defined the years from 1993-2000? Oh yeah, they were the years Clinton was President. So Newt is basically saying he would support the policies that produced success in the Clinton years.

That is wonderful . . . those were years of great prosperity. You have to go back to the JFK & LBJ years to find presidents who oversaw faster growth rates in real GDP. But let's stay focused on the deficit and surplus issue. In fact, let's deconstruct the number into its constituent parts. Figure 2 shows Total Federal Receipts/GDP and Total Federal Expenditures/GDP.

Figure 2.

As is evident from Figure 2, Total Federal Receipts/GDP hit a low point in 1992 and started to rise in 1993, eventually peaking in the year 2000 and then falling. Total Federal Expenditures/GDP hit a high point in 1992, then began falling in 1993, eventually hitting a local nadir in 2000 and then starting to rise again. The trend during the Newt Gingrich years looks like the rest of Clinton years... well, except for a slight slowing in the rate at which expenditures were dropping.

Now, you might be thinking that Newt's comments about deficit reduction speak more to his views on expenditures than on taxes. After all, few Republicans talk about increasing the tax burden these days and it would take a lot of guts for Newt to break with his party on this one. But looking once more at the numbers its obvious Newt really does want Americans to pay more.

Consider . . . in 1995, Gingrich's first year as speaker, federal expenditures were 22% of GDP. In 1998, they were 20% of GDP. But . . . revenues in 1995 were 19.2% of GDP. That is to say, had revenues remained at the 1995 level, they would have been less than expenditures and the budget would have still been deficit Newt's last year in office (and in fact, in 1999 as well). But Newt takes credit for balancing the budget.

Thus . . . by necessity he is taking credit for raising the tax burden on the American people. Granted, there were no hikes in the marginal rate while he was speaker, but the increase in the tax burden came about with increased enforcement and regulation. This is a man with political courage! This is a man who puts doing the right thing above any thoughts of personal gain!

Now, I'd like to put the tax hikes that Newt seems to be advocating in context. For this, I'm going to steal a graph from Presimetrics, the book I coauthored with Michael Kanell. In it, we used a slightly different version of the tax burden: instead of Federal Revenues/GDP, we looked at the percentage of people's income that went to taxes. We looked at the annualized rate of change of this version of the tax burden for each Congressional administration from 1952 to 2008.

Here's what we found:

Figure 3.

As Figure 3 shows, the Republican Revolution (which granted, extended a few years beyond Newt) oversaw the largest (by far!!!) annualized increase in the tax burden of any Congress in several decades!

Because taxes aren't that popular with Republicans these days, Newt is downplaying the issue, but he seems to be dogwhistling it for those of with some familiarity with the numbers. The only alternatives are that he is ignorant of the numbers, or that he is will to obfuscate the facts, but hopefully we can expect more than that from someone running for the highest office in the land.

Comment:

kharris
The latest cleverness regarding Newt is that he has two modes of speech - attack and brag. He claims to be a thinker, and he is, but his thoughts are not the thoughts he wants us to think he is thinking. His smarts are all put into attacking and bragging, not coming up with good answers. And certainly not with relating facts.

Newt is bragging about deficit reduction and growth, but the sources of deficit reduction and the sources of growth are of little interest to him. They don't help him brag and they don't help him attack, so there aren't worth mentioning.

The fun will come when (if) Clinton gets involved. He is far more popular than Gringrich. He left office with very high approval ratings, unlike Gringrich. If Gingrich wants to claim credit for balancing the budget and spurring growth, he'll have to tussle with Clinton for credit. Worth watching, I'd say.

And now, on to the South Carolina primary! And the coming Newtonian disintegration.
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