Monday, July 4, 2011

EDITORIAL: Debt Ceiling Talks

By Christina Fermin

Politics & Society Columnist

With all the buzz about debt ceiling talks going on, I decided to do a little research. For those of you who do not know, the debt ceiling is a cap set by Congress on the amount of money the federal government can legally borrow and spend. The cap refers to debt owed to the public, such as anyone who purchases U.S. bonds, along with debt owed to the federal government trust funds like Social Security and Medicare. The current limit is $14. 294 trillion and was reached on May 16. Basically the federal government spends more money than it brings in, by billions every month. So raising the debt ceiling is essentially an argument on whether or not we should pay our bills.

Under Republican leadership since Ronald Reagan the debt ceiling has doubled every time there has been a “conservative” in the White House. Which is ironic since Republican platform boasts “spending cuts” and “smaller government.” Anytime there is a spending hike or tax cut the debt ceiling inevitable gets raised to pay for these things. Congress has the authority to raise the debt ceiling anytime, but Republicans are refusing to raise the debt ceiling without some severe spending cuts and their aim is at Social Security, Medicare and other programs that the public relies on. Democrats are refusing to raise the debt ceiling without raising taxes for people making over $500,000 and getting rid of oil and gas subsidies, which are usually in the billions of dollars per year.

A subsidy is money granted by the federal government to assist in an industry or business. That’s funny because last I checked oil, coal, gas was doing fine and did not need any type of subsidy considering that when you look at this chart the top ten most profitable companies, 7 are oil and gas companies. These company profits are in the hundreds of billions, why are they getting federal grants?? Why are Republicans defending this practice? There are a few hundred people that make more money than the bottom 90% of this country, why are we not raising taxes on them?

Up until the current wars we are fighting, historically all wars have been paid for by raising taxes. The Iraq and Afghanistan wars are the first wars in history that have been funded by borrowing. During the 1950s the richest Americans were paying up to 92% in taxes. The current tax bracket for anyone who makes over $379,150 is 35%. While the capital gains tax is at an all time low at 15%, this is where many wealthy elite make their money. Corporate tax is one of the highest in the world topping at 35%, but with all types of subsidies and loopholes, many corporations end up paying nothing or even getting money back from the federal government.

While Republicans continue to chip away at programs the public heavily relies on and Democrats too weak to stand by the American people attempt to negotiate with Republicans it is us the people who are directly affected by their shenanigans. It seems clear, Congress needs to raise taxes on individuals making over $500,000 per year, raise the capital gains tax, eliminate corporate subsidies and loopholes, eliminate tax havens such as the Caymen Islands and heavily fine anyone or Corporation that tries to hide money, end all military occupations across the world, cut military spending which accounts for almost 60% of our budget and reinvest in America.

Tim Geitner and Federal Reserve chairmen Ben Bernanke argue that by not raising the debt ceiling, it would cause chaos here and abroad. These are the same people who took $700 billion American tax payer dollars and gave it away to the banksters here and abroad. I personally do not believe a word they say, if anything someone needs to throw both of them in jail for looting and lying to the American public. To hell with the debt ceiling, just doing what I mentioned above alone could probably steer us clear from having to raise the debt ceiling. Our GDP and our debt are about equal, how about we start lowering it? Raising taxes on the super wealthy, along with closing tax loopholes for Corporations and the elite would bring in enough money so that our GDP is not equal to our debt. Call your representative and tell them, to hell with the debt ceiling, raise taxes on the rich!!!

Peace & Love,


About the Columnist

With a bachelors degree in political science from Florida Atlantic University, Christina Fermin has always cultivated her love for history, politics, sociology, ancient knowledge and teachings, the outdoors, the ocean and the environment. Christina strives to make our world better by helping us all create a new reality and understanding of all taking place here and now.


Sounds like you need a bit more research, so let me help you out.

First of all, under Reagan top rates were slashed from 75% down to 25%, yet the share of income taxes collected by the "Rich" went from 25% to 45%. Why? Because the rich do what the rich do ... they make money. How does a rich person make more money? Simple, you EXPAND. By expanding you build more, make more, sell more, research more, improve more. All this MORE stuff leads to more hiring, more hiring leads to more taxpayers paying taxes and more profits for those rich guys who are then taxed more.
This is why Federal Receipts under Reagan DOUBLED from 500 Billion to nearly 1 Trillion.
They didn't teach you that statistic in the Liberal leaning colleges did they?

Here's another little problem. Even when the tax rate WAS over 90%. The Feds NEVER took in more than 21.9% of GDP. Why? Simple. The Rich aren't FOOLS. If YOU were taxed at over 90% would you continue to invest, build, expand, research more, more, more and more, when you know that over 90% of the take will go back to the Feds? Of course not! You move to Singapore, China, Hong Kong or the Netherlands where they're only going to take 25% or less. Your not stupid. Of course that means less American Jobs, but hey, if your rich and you want to stay rich, you do what the rich do. You make money.

Here's a plan, do what WORKS, what's ALWAYS worked.

You cut taxes on the job creators to no more than 25%, and you cut spending to no more than 19% of GDP. When Harding did this, unemployment dropped form over 12% to less than 6% in two years. In another 2 years it was down to LESS than 2%.

When Reagan nearly did this, (he got it down to 28%)unemployment dropped from nearly 14% to less than 7% in 3 years, and down to around 4% by the end of his term.

Clinton got it HALF right, by cutting Capital Gains taxes down to 20% from 28%, problem was that he increased taxes on people like Manufacturers, who then started leaving the country in droves.

Bush got it partially right and cut Manufacturers down to 35% and Capital Gains to 15%, but failed to cut the spending down to less than 19% of GDP. Even so, we seem to forget that Bush took the economy from nearly 8% unemployment to just under 4% and had the longest running expansion of ANY president with 52 MONTHS of Job creation from about a year after 911 to 2007. That particular run created MILLIONS of jobs.

No increasing taxes on the Job creators won't bring in more money. We need to cut spending, plain and simple. From the Military to Education to Social Security and Medicare. EVERYTHING needs to be on the table. It's the only way to bring the country back from certain financial collapse.

As for these, "Loopholes", they're the same loopholes that every other business enjoys. You know, things like the ability to deduct your EXPENSES like paying leases for Federal lands to drill oil, paying Health Insurance costs for your employees and other costs of doing business.
All this rucus about Mobil not paying taxes, people seem to forget that they had people and equipment in the gulf that was ordered SHUT DONW by the government, they sustained BILLIONS in losses, but they shouldn't be allowed to deduct those losses? That's just ridiculous and an impediment to business. If the U.S. takes those steps, they'll simply move their operations to Mexico or Brazil, and U.S. workers will lose their jobs.
Most years Mobil Oil actually pays more in income taxes than one half of the entire U.S. Population, and that doesn't even include what they pay to the Federal government for the lease of lands and the percentage of oil they have to give for the Strategic Petroleum Reserves.


Twitter Delicious Facebook Digg Stumbleupon Favorites More

Related Posts Plugin for WordPress, Blogger...