https://www.truthdig.com/videos/chris-hedges-american-empires-descent-dystopia-video/
In a powerful speech delivered at The Sanctuary for Independent Media in Troy, N.Y., Chris Hedges analyzes fascism and empire in the Trump age.
The Truthdig columnist begins by enumerating the many factors that are currently contributing to the United States' demise politically, socially and environmentally. He then adds, "Overseeing [America's] descent at the highest level of state and federal government is a motley collection of imbeciles, con-artists, thieves, opportunists and war-mongering generals, and yes, I am also speaking about the Democratic Party."
Watch the full speech at the video link above.
Monday, December 4, 2017
Sunday, December 3, 2017
SC155-1
https://www.peakprosperity.com/blog/113504/youre-just-not-prepared-what%E2%80%99s-coming
You're Just Not Prepared For What’s Coming
Not even close
I hate to break it to you, but chances are you're just not prepared for what’s coming. Not even close.
Don't take it personally. I'm simply playing the odds.
After spending more than a decade warning people all over the world about the futility of pursuing infinite exponential economic growth on a finite planet, I can tell you this: very few are even aware of the nature of our predicament.
An even smaller subset is either physically or financially ready for the sort of future barreling down on us. Even fewer are mentally prepared for it.
And make no mistake: it's the mental and emotional preparation that matters the most. If you can't cope with adversity and uncertainty, you're going to be toast in the coming years.
Those of us intending to persevere need to start by looking unflinchingly at the data, and then allowing time to let it sink in. Change is coming – which isn't a problem in and of itself. But it's pace is likely to be. Rapid change is difficult for humans to process.
Those frightened by today's over-inflated asset prices fear how quickly the current bubbles throughout our financial markets will deflate/implode. Who knows when they'll pop? What will the eventual trigger(s) be? All we know for sure is that every bubble in history inevitably found its pin.
These bubbles – blown by central bankers serially addicted to creating them (and then riding to the rescue to fix them) – are the largest in all of history. That means they're going to be the most destructive in history when they finally let go.
Millions of households will lose trillions of dollars in net worth. Jobs will evaporate, causing the tens of millions of families living paycheck to paycheck serious harm.
These are the kind of painful consequences central bank follies result in. They're particularly regrettable because they could have been completely avoided if only we’d taken our medicine during the last crisis back in 2008. But we didn't. We let the Federal Reserve --the instiution largely responsible for creating the Great Financial Crisis -- conspire with its brethern central banks to 'paper over' our problems.
So now we are at the apex of the most incredible nest of financial bubbles in all of human history.
One of my favorite charts is below, which shows that even the smartest minds among us (Sir Isaac Newton, in this case) can succumb to the mania of a bubble:
How Newton's Fortune Fell To Earth chart
It's enormously difficult to resist the social pressure to become involved.
But all bubbles burst -- painfully of course. That’s their very nature.
Mathematically, it's impossible for half or more of a bubble's participants to close out their positions for a gain. But in reality, it's even worse. Being generous, maybe 10% manage to get out in time.
That means the remaining 90% don’t. For these bagholders, the losses will range from 'painful' to 'financially fatal'.
Which brings us to the conclusion that a similar proportion of people will be emotionally unprepared for the bursting of these bubbles. Again, playing the odds, I'm talking about you.
How Exponentials Work Against You
Bubbles are destructive in the same manner as ocean waves. Their force is not linear, but exponential.
That means that a wave's energy increases as the square of its height. A 4-foot wave has 16 times the force of a 1-foot wave; something any surfer knows from experience. A 1-foot wave will nudge you. A 4-foot wave will smash you, filling your bathing suit and various body orifices with sand and shells. A 10-foot wave has 100 times more destructive power. It can kill you if it manages to pin you against something solid.
A small, localized bubble -- such as one only affecting tulip investors in Holland, or a relatively small number of speculators caught up in buying swampland in Florida -- will have a small impact. Consider those 1-foot waves.
A larger bubble inflating an entire nation’s real estate market will be far more destructive. Like the US in 2007. Or like Australia and Canada today. Those bubbles were (or will be when they burst) 4-foot waves.
The current nest of global bubbles in nearly every financial asset (stocks, bonds, real estate, fine art, collectibles, etc) is entirely without precedent. How big are these in wave terms? Are they a series of 8-foot waves? Or more like 12-footers?
At this magnitude level, it doesn't really matter. They're going to be very, very destructive when they break.
Our focus now needs to be figuring out how to avoid getting pinned to the coral reef below when they do.
Understanding 'Real' Wealth
In order to fully understand this story, we have to start right at the beginning and ask “What is wealth?”
Most would answer this by saying “money”, and then maybe add “stocks and bonds”. But those aren't actually wealth.
All financial assets are just claims on real wealth, not actually wealth itself. A pile of money has use and utility because you can buy stuff with it. But real wealth is the "stuff" -- food, clothes, land, oil, and so forth. If you couldn't buy anything with your money/stocks/bonds, their worth would revert to the value of the paper they're printed on (if you're lucky enough to hold an actual certificate). It’s that simple.
Which means that keeping a tight relationship between 'real wealth' and the claims on it should be job #1 of any central bank. But not the Fed, apparently. It's has increased the number of claims by a mind-boggling amount over the past several years. Same with the BoJ, the ECB, and the other major central banks around the world. They've embarked on a very different course, one that has disrupted the long-standing relationship between the markers of wealth and real wealth itself.
They are aided and abetted by both the media and our educational institutions, which reinforce the idea that the claims on wealth are the same as real wealth itself. It’s a handy system, of course, as long as everyone believes it. It has proved a great system for keeping the poor people poor and the rich people rich.
But trouble begins when the system gets seriously out of whack. People begin to question why their money has any value at all if the central banks can just print up as much as they want. Any time they want. And hand it out for free in unlimited quantities to the banks. Who have their own mechanism (i.e., fractional reserve banking) for creating even more money out of thin air.
Pretty slick, right? Convince everyone that something you literally make in unlimited quantities out of thin air has value. So much so that, if you lack it, you end up living under a bridge, starving.
Let's express this visually.
“GDP” is a measure of the amount of goods and services available and financial asset prices represent the claims (it's not a very accurate measure of real wealth, but it's the best one we’ve got, so we’ll use it). Look at how divergent asset prices get from GDP as bubbles develop:
Asset Prices vs GDP chart
What we see in the above chart is that the claims on the economy should, quite intuitively, track the economy itself. Bubbles occurred whenever the claims on the economy, the so-called financial assets (stocks, bonds and derivatives), get too far ahead of the economy itself.
This is a very important point. The claims on the economy are just that: claims. They are not the economy itself!
Yes the Dot-Com crash hurt. But that was the equivalent of a 1-foot wave. Yes, the housing bubble hurt, and that was a 2-foot wave. The current bubble is vastly larger than the prior two, and is the 4-foot wave in our analogy -- if we’re lucky. It might turn out to be a 10-footer.
The mystery to me is how people have forgotten the lessons of prior bubbles so rapidly. How they cannot see the current bubbles even as the data is right there, and so easy to come by. I suppose the mania of a bubble, the 'high' of easy returns, just makes people blind to reality.
It used to take a generation or longer to forget the painful lessons of a bubble. The victims had to age and die off before a future generation could repeat the mistakes anew.
But now, we have the same generation repeating the same mistakes three times in less than 20 years. Go figure.
In this story, wishful thinking and self-delusion have harmful consequences. It's no different than taking up a lifelong habit of chain-smoking as a young teen. Sure, you may be one of the few who lives a long full life in spite of the risks, but the odds are definitely not in your favor.
The inevitable destruction caused by the current froth of bubbles is going to hurt a lot of people, institutions, pensions, industries and countries. Nobody will be spared when these burst. The only question left to be answered is: Who’s going to eat the losses?
This is not a future question for a future time; it's one that's being answered daily already. Pensioners are already taking cuts. Puerto Rico will not be fully rebuilt. Shale wells drilled when oil was $100/barrel, but being drained empty at $50/barrel, represent capital already hopelessly betrayed. Young graduates with $100,000 of student debt face lost decades of capital building. The losers are already emerging.
And there’s many more to follow. This story is much closer to the beginning than the end.
The bubbles have yet to burst. We’re just seeing the water at the shore’s edge beginning to retreat, wondering how large the wave will be when it arrives. Hoping that it’s not a monster tsunami.
The End Is Nigh
History's largest bubbles have had the exact same root cause: an expansion of credit that causes leverage to go up faster than the income available to service it.
Simply put: bubbles exist when asset price inflation rises beyond what incomes can sustain. They are everywhere and always a credit-fueled phenomenon.
S&P 500 price chart
Look at the ridiculous trajectory of the S&P 500, especially since Trump got elected. I don’t know about you, but pretty much everything that has happened in the US over the past year has been either a diplomatic clown show or a financial cruelty to the average citizen. And yet prices have risen at their highest pace in two decades?
My view is that the Trump election was a totally unexpected black swan shock for the global central banking cartel, and it freaked out. With the Dow down -1,000 points in the late night hours following Trump's surprise win, the central banks dumped gobs and oodles of money into the equity markets to prevent carnage.
All that money calmed investors and sent prices roaring higher over the following months. The resulting 80-degree rocket launch will hurt a lot when it comes back to earth. Good going central banks!
This is all happening when we’re as close as ever to a military (if not nuclear) confrontation with North Korea, Russia is busy beefing up its war machine, Saudi Arabia has pivoted away from the US towards China and Russia, and most of our European allies are inching away from us.
Meanwhile, the FCC is about to rule against the vast majority of the public and allow US corporations to turn the internet into a pay-for-play toll road -- completely undermining the core principle of the most transformative and useful invention of the millennium. By eliminating net neutrality the FCC has ruled 'against' you, and 'for' the continued usurious profits of the cable companies.
Worse, heath care premiums continue to increase by double-digits each year. They're going up by a horrifying 45% in Florida and 57% in Georgia, to name just two unfortunate states out of many.
And to really rub salt in the wounds of the nation, the DC swamp is busy passing a tax change that will further drive an enormous gap between the 0.1% and everybody else by lowering taxes on corporate profits (already the lowest in the world if you measure both tax on profits and value-added taxes).
How to pay for the massive cost of this deficit-exploding bill? Easy, just eliminate deductions for average people (such as the state and local tax deductions) and begin taxing the waived tuition of graduate students. That’s right, the government helped to massively bloat tuition fees via massive lending to students and then wants to squeeze the poorest and hardest-working among them.
I wish I were kidding here. But like a cruel joke re-told at the wrong moment, the GOP is busy destroying the meager and precarious financial situation of our citizens just so it can toss a few more dollars into the already-bloated wallets of the richest people in the country.
The long rise of the ultra-wealthy is not some mystery. It arose as a predictable consequence of the financialization of, well…everything that began in the 1980’s:
US Wealth Inequality chart
The above chart speaks to a deeply unfair system that punishes hard working people in order to give more to those who merely shuffle financial instruments around or own financial assets.
This is the system that the Fed is working so hard to preserve. This is the system that Washington DC is working so hard to sustain.
It’s flat out unfair and punitive. It both punishes and rewards the wrong folks, respectively. Debtors are provided relief while savers are punished. The young are saddled with debts and face impossible costs of living mainly to preserve the illusion of wealth for a little longer for the generation in front of them.
For so many reasons, folks, none of this is sustainable. If the system doesn't crash first under the weight of its excessive debts or the puncturing of its many asset price bubbles, the brewing class and generational wars will boil over if the status quo trajectory continues for much longer....
You're Just Not Prepared For What’s Coming
Not even close
I hate to break it to you, but chances are you're just not prepared for what’s coming. Not even close.
Don't take it personally. I'm simply playing the odds.
After spending more than a decade warning people all over the world about the futility of pursuing infinite exponential economic growth on a finite planet, I can tell you this: very few are even aware of the nature of our predicament.
An even smaller subset is either physically or financially ready for the sort of future barreling down on us. Even fewer are mentally prepared for it.
And make no mistake: it's the mental and emotional preparation that matters the most. If you can't cope with adversity and uncertainty, you're going to be toast in the coming years.
Those of us intending to persevere need to start by looking unflinchingly at the data, and then allowing time to let it sink in. Change is coming – which isn't a problem in and of itself. But it's pace is likely to be. Rapid change is difficult for humans to process.
Those frightened by today's over-inflated asset prices fear how quickly the current bubbles throughout our financial markets will deflate/implode. Who knows when they'll pop? What will the eventual trigger(s) be? All we know for sure is that every bubble in history inevitably found its pin.
These bubbles – blown by central bankers serially addicted to creating them (and then riding to the rescue to fix them) – are the largest in all of history. That means they're going to be the most destructive in history when they finally let go.
Millions of households will lose trillions of dollars in net worth. Jobs will evaporate, causing the tens of millions of families living paycheck to paycheck serious harm.
These are the kind of painful consequences central bank follies result in. They're particularly regrettable because they could have been completely avoided if only we’d taken our medicine during the last crisis back in 2008. But we didn't. We let the Federal Reserve --the instiution largely responsible for creating the Great Financial Crisis -- conspire with its brethern central banks to 'paper over' our problems.
So now we are at the apex of the most incredible nest of financial bubbles in all of human history.
One of my favorite charts is below, which shows that even the smartest minds among us (Sir Isaac Newton, in this case) can succumb to the mania of a bubble:
How Newton's Fortune Fell To Earth chart
It's enormously difficult to resist the social pressure to become involved.
But all bubbles burst -- painfully of course. That’s their very nature.
Mathematically, it's impossible for half or more of a bubble's participants to close out their positions for a gain. But in reality, it's even worse. Being generous, maybe 10% manage to get out in time.
That means the remaining 90% don’t. For these bagholders, the losses will range from 'painful' to 'financially fatal'.
Which brings us to the conclusion that a similar proportion of people will be emotionally unprepared for the bursting of these bubbles. Again, playing the odds, I'm talking about you.
How Exponentials Work Against You
Bubbles are destructive in the same manner as ocean waves. Their force is not linear, but exponential.
That means that a wave's energy increases as the square of its height. A 4-foot wave has 16 times the force of a 1-foot wave; something any surfer knows from experience. A 1-foot wave will nudge you. A 4-foot wave will smash you, filling your bathing suit and various body orifices with sand and shells. A 10-foot wave has 100 times more destructive power. It can kill you if it manages to pin you against something solid.
A small, localized bubble -- such as one only affecting tulip investors in Holland, or a relatively small number of speculators caught up in buying swampland in Florida -- will have a small impact. Consider those 1-foot waves.
A larger bubble inflating an entire nation’s real estate market will be far more destructive. Like the US in 2007. Or like Australia and Canada today. Those bubbles were (or will be when they burst) 4-foot waves.
The current nest of global bubbles in nearly every financial asset (stocks, bonds, real estate, fine art, collectibles, etc) is entirely without precedent. How big are these in wave terms? Are they a series of 8-foot waves? Or more like 12-footers?
At this magnitude level, it doesn't really matter. They're going to be very, very destructive when they break.
Our focus now needs to be figuring out how to avoid getting pinned to the coral reef below when they do.
Understanding 'Real' Wealth
In order to fully understand this story, we have to start right at the beginning and ask “What is wealth?”
Most would answer this by saying “money”, and then maybe add “stocks and bonds”. But those aren't actually wealth.
All financial assets are just claims on real wealth, not actually wealth itself. A pile of money has use and utility because you can buy stuff with it. But real wealth is the "stuff" -- food, clothes, land, oil, and so forth. If you couldn't buy anything with your money/stocks/bonds, their worth would revert to the value of the paper they're printed on (if you're lucky enough to hold an actual certificate). It’s that simple.
Which means that keeping a tight relationship between 'real wealth' and the claims on it should be job #1 of any central bank. But not the Fed, apparently. It's has increased the number of claims by a mind-boggling amount over the past several years. Same with the BoJ, the ECB, and the other major central banks around the world. They've embarked on a very different course, one that has disrupted the long-standing relationship between the markers of wealth and real wealth itself.
They are aided and abetted by both the media and our educational institutions, which reinforce the idea that the claims on wealth are the same as real wealth itself. It’s a handy system, of course, as long as everyone believes it. It has proved a great system for keeping the poor people poor and the rich people rich.
But trouble begins when the system gets seriously out of whack. People begin to question why their money has any value at all if the central banks can just print up as much as they want. Any time they want. And hand it out for free in unlimited quantities to the banks. Who have their own mechanism (i.e., fractional reserve banking) for creating even more money out of thin air.
Pretty slick, right? Convince everyone that something you literally make in unlimited quantities out of thin air has value. So much so that, if you lack it, you end up living under a bridge, starving.
Let's express this visually.
“GDP” is a measure of the amount of goods and services available and financial asset prices represent the claims (it's not a very accurate measure of real wealth, but it's the best one we’ve got, so we’ll use it). Look at how divergent asset prices get from GDP as bubbles develop:
Asset Prices vs GDP chart
What we see in the above chart is that the claims on the economy should, quite intuitively, track the economy itself. Bubbles occurred whenever the claims on the economy, the so-called financial assets (stocks, bonds and derivatives), get too far ahead of the economy itself.
This is a very important point. The claims on the economy are just that: claims. They are not the economy itself!
Yes the Dot-Com crash hurt. But that was the equivalent of a 1-foot wave. Yes, the housing bubble hurt, and that was a 2-foot wave. The current bubble is vastly larger than the prior two, and is the 4-foot wave in our analogy -- if we’re lucky. It might turn out to be a 10-footer.
The mystery to me is how people have forgotten the lessons of prior bubbles so rapidly. How they cannot see the current bubbles even as the data is right there, and so easy to come by. I suppose the mania of a bubble, the 'high' of easy returns, just makes people blind to reality.
It used to take a generation or longer to forget the painful lessons of a bubble. The victims had to age and die off before a future generation could repeat the mistakes anew.
But now, we have the same generation repeating the same mistakes three times in less than 20 years. Go figure.
In this story, wishful thinking and self-delusion have harmful consequences. It's no different than taking up a lifelong habit of chain-smoking as a young teen. Sure, you may be one of the few who lives a long full life in spite of the risks, but the odds are definitely not in your favor.
The inevitable destruction caused by the current froth of bubbles is going to hurt a lot of people, institutions, pensions, industries and countries. Nobody will be spared when these burst. The only question left to be answered is: Who’s going to eat the losses?
This is not a future question for a future time; it's one that's being answered daily already. Pensioners are already taking cuts. Puerto Rico will not be fully rebuilt. Shale wells drilled when oil was $100/barrel, but being drained empty at $50/barrel, represent capital already hopelessly betrayed. Young graduates with $100,000 of student debt face lost decades of capital building. The losers are already emerging.
And there’s many more to follow. This story is much closer to the beginning than the end.
The bubbles have yet to burst. We’re just seeing the water at the shore’s edge beginning to retreat, wondering how large the wave will be when it arrives. Hoping that it’s not a monster tsunami.
The End Is Nigh
History's largest bubbles have had the exact same root cause: an expansion of credit that causes leverage to go up faster than the income available to service it.
Simply put: bubbles exist when asset price inflation rises beyond what incomes can sustain. They are everywhere and always a credit-fueled phenomenon.
S&P 500 price chart
Look at the ridiculous trajectory of the S&P 500, especially since Trump got elected. I don’t know about you, but pretty much everything that has happened in the US over the past year has been either a diplomatic clown show or a financial cruelty to the average citizen. And yet prices have risen at their highest pace in two decades?
My view is that the Trump election was a totally unexpected black swan shock for the global central banking cartel, and it freaked out. With the Dow down -1,000 points in the late night hours following Trump's surprise win, the central banks dumped gobs and oodles of money into the equity markets to prevent carnage.
All that money calmed investors and sent prices roaring higher over the following months. The resulting 80-degree rocket launch will hurt a lot when it comes back to earth. Good going central banks!
This is all happening when we’re as close as ever to a military (if not nuclear) confrontation with North Korea, Russia is busy beefing up its war machine, Saudi Arabia has pivoted away from the US towards China and Russia, and most of our European allies are inching away from us.
Meanwhile, the FCC is about to rule against the vast majority of the public and allow US corporations to turn the internet into a pay-for-play toll road -- completely undermining the core principle of the most transformative and useful invention of the millennium. By eliminating net neutrality the FCC has ruled 'against' you, and 'for' the continued usurious profits of the cable companies.
Worse, heath care premiums continue to increase by double-digits each year. They're going up by a horrifying 45% in Florida and 57% in Georgia, to name just two unfortunate states out of many.
And to really rub salt in the wounds of the nation, the DC swamp is busy passing a tax change that will further drive an enormous gap between the 0.1% and everybody else by lowering taxes on corporate profits (already the lowest in the world if you measure both tax on profits and value-added taxes).
How to pay for the massive cost of this deficit-exploding bill? Easy, just eliminate deductions for average people (such as the state and local tax deductions) and begin taxing the waived tuition of graduate students. That’s right, the government helped to massively bloat tuition fees via massive lending to students and then wants to squeeze the poorest and hardest-working among them.
I wish I were kidding here. But like a cruel joke re-told at the wrong moment, the GOP is busy destroying the meager and precarious financial situation of our citizens just so it can toss a few more dollars into the already-bloated wallets of the richest people in the country.
The long rise of the ultra-wealthy is not some mystery. It arose as a predictable consequence of the financialization of, well…everything that began in the 1980’s:
US Wealth Inequality chart
The above chart speaks to a deeply unfair system that punishes hard working people in order to give more to those who merely shuffle financial instruments around or own financial assets.
This is the system that the Fed is working so hard to preserve. This is the system that Washington DC is working so hard to sustain.
It’s flat out unfair and punitive. It both punishes and rewards the wrong folks, respectively. Debtors are provided relief while savers are punished. The young are saddled with debts and face impossible costs of living mainly to preserve the illusion of wealth for a little longer for the generation in front of them.
For so many reasons, folks, none of this is sustainable. If the system doesn't crash first under the weight of its excessive debts or the puncturing of its many asset price bubbles, the brewing class and generational wars will boil over if the status quo trajectory continues for much longer....
SC154-15
https://www.globalresearch.ca/the-colossal-gop-tax-cut-scam-boosted-by-overnight-senate-passage/5621282
The Colossal GOP Tax Cut Scam Boosted by Overnight Senate Passage
Capitol Hill arm-twisting failed to enact Trumpcare – so far at least. It succeeded overnight Friday for passage of grand theft Senate legislation – the misnamed Tax Cuts and Jobs Act.
House and Senate versions of the measure have nothing to do with economic growth or jobs creation – everything to do with grand theft and public betrayal.
It continues the longstanding transfer of the nation’s wealth from ordinary Americans to corporate predators and super-rich households – thirdworldizing the country, already unfit to live in, serving its privileged class exclusively.
Commenting on last night’s Senate passage, an Economic Policy Institute (EPI) email press release said:
“Senate Republicans just voted to hand tax breaks to millionaires, billionaires and corporations on the backs of working families.”
“They claim that their tax plan will boost wages for American workers. But real-world evidence suggests otherwise.”
“Cutting corporations’ taxes is not a recipe for increasing workers’ wages. It’s a recipe for exacerbating income and wealth inequality.”
Ballooning the federal deficit over the next decade will mean “higher interest rates, an overvalued US dollar and growing trade deficits.”
“US manufacturing and other traded goods industries (including agricultural products and other traded commodities) will be hard hit by the Republican tax plan, because it is financed through a large increase in the government budget deficit.”
Cutting taxes for corporate predators and high net worth households won’t contribute to economic growth. Nor will the GOP scheme create jobs or boost worker wages.
It’ll “simply redistribute income from the bottom up…(a) Robin Hood-in-reverse plan…disast(ous) for most working families…a payoff to the Trump family and the the wealthy individuals and big business that helped put him in office,” EPI explained.
It’s a slap in the face to millions of voters who elected Trump, expecting better, betrayed instead.
Expecting either wing of America’s duopoly governance to serve everyone fairly is wishful thinking.
Americans for Tax Fairness said the following about passage of the Senate tax cut bill:
“All but one Republican in the Senate just voted to raise taxes on 87 million middle-class families, add a trillion dollars to the deficit, and trigger automatic cuts to Medicare. All so that their corporate campaign donors and billionaire benefactors can get massive tax cuts.”
“Medicaid, education and other critical services will soon be on the chopping block. Corporations will be encouraged to ship more jobs and profits offshore, while their foreign shareholders will see a windfall. That’s anything but America First.”
“It’s no coincidence that corporate sources contributed massive amounts to the campaign coffers of members of Congress who sit on the tax committees. Corporations and wealthy businesses get most of the tax breaks given by this bill.”
“That’s quite a return on investment. Meanwhile, Donald Trump will personally save millions of dollars in taxes each year while working families will continue to struggle to make ends meet.”
“This fight is not over. We will fight tooth and nail to protect working families from this wealth grab. And every single member of Congress who voted for this sham will answer to their constituents.”
If the GOP tax cut becomes law, social justice in America will be the big loser, especially Medicare Medicaid and education, followed by Social Security later on.
They’re essential programs, fundamental for everyone besides the nation’s privileged class, benefitting hugely from capital gains and other investment income.
They’ll get more ahead from a GOP agenda of putting ordinary Americans last, privileged ones alone first.
House and Senate tax cut legislation made America’s deplorable state worse, a race to the bottom for the poor and eroding middle class – the nation’s wealthy doing better than ever under a system rigged to serve them exclusively.
The Colossal GOP Tax Cut Scam Boosted by Overnight Senate Passage
Capitol Hill arm-twisting failed to enact Trumpcare – so far at least. It succeeded overnight Friday for passage of grand theft Senate legislation – the misnamed Tax Cuts and Jobs Act.
House and Senate versions of the measure have nothing to do with economic growth or jobs creation – everything to do with grand theft and public betrayal.
It continues the longstanding transfer of the nation’s wealth from ordinary Americans to corporate predators and super-rich households – thirdworldizing the country, already unfit to live in, serving its privileged class exclusively.
Commenting on last night’s Senate passage, an Economic Policy Institute (EPI) email press release said:
“Senate Republicans just voted to hand tax breaks to millionaires, billionaires and corporations on the backs of working families.”
“They claim that their tax plan will boost wages for American workers. But real-world evidence suggests otherwise.”
“Cutting corporations’ taxes is not a recipe for increasing workers’ wages. It’s a recipe for exacerbating income and wealth inequality.”
Ballooning the federal deficit over the next decade will mean “higher interest rates, an overvalued US dollar and growing trade deficits.”
“US manufacturing and other traded goods industries (including agricultural products and other traded commodities) will be hard hit by the Republican tax plan, because it is financed through a large increase in the government budget deficit.”
Cutting taxes for corporate predators and high net worth households won’t contribute to economic growth. Nor will the GOP scheme create jobs or boost worker wages.
It’ll “simply redistribute income from the bottom up…(a) Robin Hood-in-reverse plan…disast(ous) for most working families…a payoff to the Trump family and the the wealthy individuals and big business that helped put him in office,” EPI explained.
It’s a slap in the face to millions of voters who elected Trump, expecting better, betrayed instead.
Expecting either wing of America’s duopoly governance to serve everyone fairly is wishful thinking.
Americans for Tax Fairness said the following about passage of the Senate tax cut bill:
“All but one Republican in the Senate just voted to raise taxes on 87 million middle-class families, add a trillion dollars to the deficit, and trigger automatic cuts to Medicare. All so that their corporate campaign donors and billionaire benefactors can get massive tax cuts.”
“Medicaid, education and other critical services will soon be on the chopping block. Corporations will be encouraged to ship more jobs and profits offshore, while their foreign shareholders will see a windfall. That’s anything but America First.”
“It’s no coincidence that corporate sources contributed massive amounts to the campaign coffers of members of Congress who sit on the tax committees. Corporations and wealthy businesses get most of the tax breaks given by this bill.”
“That’s quite a return on investment. Meanwhile, Donald Trump will personally save millions of dollars in taxes each year while working families will continue to struggle to make ends meet.”
“This fight is not over. We will fight tooth and nail to protect working families from this wealth grab. And every single member of Congress who voted for this sham will answer to their constituents.”
If the GOP tax cut becomes law, social justice in America will be the big loser, especially Medicare Medicaid and education, followed by Social Security later on.
They’re essential programs, fundamental for everyone besides the nation’s privileged class, benefitting hugely from capital gains and other investment income.
They’ll get more ahead from a GOP agenda of putting ordinary Americans last, privileged ones alone first.
House and Senate tax cut legislation made America’s deplorable state worse, a race to the bottom for the poor and eroding middle class – the nation’s wealthy doing better than ever under a system rigged to serve them exclusively.
Saturday, December 2, 2017
SC154-14
http://davidstockmanscontracorner.com/lemmings-in-full-stampede-toward-the-fiscal-cliff/
Lemmings In Full Stampede Toward The Fiscal Cliff
The lemmings are now in full stampede toward the cliffs. You can literally hear the cold waters churning, foaming and crashing on the boulders far below.
From bitcoin to Amazon, the financials, the Russell 2000 and most everything else in between, the casinos are digesting no information except the price action and are relentlessly rising on nothing more than pure momentum. The mania has gone full retard.
Certainly earnings have nothing to do with it. As of this morning, the Russell 2000, for instance, was trading at 112X reported LTM earnings.
Likewise, Q3 reporting is all over except for the shouting and reported LTM earnings for the S&P 500 came in $107 per share. That's of signal importance because fully 36 months ago, S&P earnings for the September 2014 LTM period posted at $106 per share.
That's right. Three years and $1 of gain. They talking heads blather about "strong earnings" only because they think we were born yesterday.
What happened in-between, of course, was the proverbial pig passing through the python.
First, the global oil, commodities and industrial deflation after July 2014 took earnings to a low of $86.44 per share in the March 2016 LTM period.
After that came the opposite---the massive 2016-2017 Xi Coronation Stimulus in China. The new Red Emperor and his minions pumped out an incredible $6 trillion wave of new credit, thereby artificially stimulating a global rebound and a profits recovery back to where it started three years ago.
The difference of course is that $106 of earnings back then were priced at an already heady (by historical standards) 18.6X, whereas $107 of earnings today are being priced at a truly lunatic 24.6X.
After all, nothing says earnings bust ahead better than an aging business cycle, a cooling Red Ponzi, an epochal shift toward central bank QT (quantitative tightening) and a massive Washington Fiscal Cliff. Yet every one of those headwinds are self-evident and have made their presence known with a loud clang in the last few days.
Self-evidently, we are now 36 months closer to the next recession in a business cycle which at 101 months is already approaching the 1990s record of 118 months and facing far greater headwinds. Foremost among these is the unprecedented but unavoidable turn of the central banks---after two decades of relentless expansion--- toward interest rate normalization, QT (quantitative tightening) and trillions of debt and other securities sales (demonetization or balance sheet shrinkage).
The new Janet Yellen in tie and trousers made that perfectly clear at yesterday's confirmation hearing:
Powell said he expected the balance sheet to shrink to about $2.5 trillion to $3 trillion over the next three to four years under a program set in motion by Yellen......On interest rates, Powell said: "I think the case for raising interest rates at our next meeting is coming together."
Actually, the promised balance sheet shrinkage process is going to rapidly escalate from $10 billion per month of Fed bond sales now, to $30 billion by spring and $50 billion by next October. That amounts to a $600 billion annual run rate; and when the ECB and other banks join the "normalization" party in 2019 and beyond total central bank bond sales will pierce through the $1 trillion per year level.
And that's a very big deal because the law of supply and demand has not yet been abolished, meaning prices and yields in the global bond market are heading for a big reset. For instance, if the UST 10-year benchmark note normalizes to a yield of 4.0%, its price will fall by more than 40% from current levels (2.35%).
Needless to say, the entire market for risk assets including equities, junk bonds, corporates and real estate is predicated upon current ultra low yields and historically unprecedented leverage. So smash the price of the benchmark bond by 40% and you have a cascading chain of downward valuation adjustments that will reach the tens of trillions.
But that's not all. The 19th Party Congress is over, but the Red Suzerains of Beijing wasted no time throttling down China's red hot credit bubble and hyperventilating housing market. The chart below is the smoking gun----and puts the lie to the foolish Wall Street meme of the moment that the world economy is in the midst of an outburst of "synchronized growth".
Actually, it's puffing on the exhaust fumes of a veritable housing hysteria during the run-up to China's 19th Party Congress, which saw home mortgage issuance soar by nearly 60% in 2016.
Now, however, Beijing's clampdown is giving Ross Perot's famous "sucking sound to the south" an altogether new definition. In the most recent period, year over year mortgage growth actually turned negative----meaning China's gigantic apartment construction and building materials complex will be cooling rapidly, too.
Needless to say, what happens in the Red Ponzi does not stay in the Red Ponzi. The modestly rebounding global figures for industrial production, trade and GDP reported recently were just feeding off the massive credit impulse evident in the red line below.
When S&P earnings were peaking back in September 2014, China's total credit growth from all sources---including its $15 trillion shadow banking system---had slowed to a 15% annual run rate, but then was gunned to upwards of 30% during the Coronation Boom from early 2016 onwards.
But now that Mr. Xi's very thoughts have been enshrined in the Communist Party constitution---check-by-jowl with the wisdom of the Great Helmsman, Mao Zedong----credit growth is plummeting. Even China's new Red Emperor recognizes that $40 trillion of debt on a purported $12 trillion economy (actually far lower when massive malinvestments are deleted from the reported GDP "flows") is a recipe for collapse.
Xi Jinping may well be delusional about the capacity of centralized bureaucrats--even ones with all the guns--- to tame and stabilize the greatest Ponzi-style digging, constructing, borrowing, spending and speculating scheme in recorded history. But his goal is a third term in 2022, and in the interim he means to mop down China's fevered borrowing and building spree with alacrity.
Accordingly, the global commodity and CapEx cycle will rapidly weaken as the red line in the chart heads toward the flat-line. The talking heads will not be gumming about synchronized global growth much longer.
But what they will be talking about soon is a US Fiscal Cliff like none before. It now seems that the desperate GOP politicians of Capitol Hill have come up with so many fiscal gimmicks that they may actually cobble together 51 votes in the Senate.
But the emerging Rube Goldberg Contraption, which sunsets all of the individual tax cuts after 2025, and then piles on top a "trigger tax", which most surely would turn the whole things into massive ($350 billion) tax increase after a 2024 "growth" test, is actually a giant debt trap.
In fact, between 2018 and 2024 the emerging Senate "compromise" would generate upwards of $1.4 trillion of new debt including interest on the added borrowing. That's because as we explained yesterday the Senate tax bill is front-loaded with the annual revenue loss peaking at $250 billion in 2020 and diminishing steadily thereafter to just $145 billion in 2025 and a slight surplus in 2027.
Consequently, the public debt builds up rapidly in the early years---long before any added growth could possibly move the needle. We will provide more detailed calculations on this crucial point tomorrow and completely debunk the "growth will pay for it" story.
But suffice it to say here that the massive front-loaded borrowing embedded in the Senate tax bill would come on top of the $6.1 trillion already built into the CBO baseline for the 2018-2024 period and another $1 trillion that will be needed for disaster relief and the Donald's massive defense build-up and dramatically heightened pace of global military operations.
In a word, we do not think you can finance $8.5 trillion of new Federal debt in an environment in which the Fed and its convoy of fellow traveling central banks are also selling bonds by the trillions. That is, without triggering a "crowding out" effect of the kind that has been in hibernation every since Greenspan's cranked up the Eccles Building printing presses after the 22% stock market plunge in October 1987.
The irony is that the GOP is setting up a fiscal cliff which will exceed $1 trillion per year of new borrowing as early as 2020 ($775 billion baseline plus $225 billion of revenue losses and added interest from the tax cut) based on the erroneous view that domestic economic growth is being stunted by high corporate taxes.
This chart below should put the lie to that confusion once and for all. Even as the effective corporate tax rate has been marching down hill for decades, the trend rate of economic growth has been steadily falling.
Notwithstanding today's GDP blip, real final sales have grown at just 1.2% per year over the last decade or by only one-third of the rate extant when the effective corporate tax rate was more than double the current 20% level.
Image result for images of effective us corporate tax rate
So today's lemming actually are marching toward a Fiscal Cliff---- oblivious to the true meaning of the Senate tax bill maneuvers. But by definition, at the blow-off peak of a great financial bubble markets are oblivious to everything except the price action.
In that context, Bitcoin is neither an outlier nor a one-off freak; it's a poster boy for an unhinged financial system where honest price discovery, two-way markets, fear of risk and financial discipline have been completely destroyed by the central banks.
Whatever its eventual merits as a private money and payment system away from the grasping hand of the Deep State, bitcoin (and the mushrooming slate of other cryptos) at the moment is in the throes of the kind of mania that reminds us of why runaway bubbles eventually generate their own demise.
Image result for bitcoin chart in last year
For want of doubt, Zero Hedge early today calculated out bitcoin's accelerating rate of rise.
Needless to say, the sequence below is not the birthing throes of a new money being born; it's just another iteration of the same old lemmings stampeding toward the cliff:
$0000 - $1000: 1789 days
$1000- $2000: 1271 days
$2000- $3000: 23 days
$3000- $4000: 62 days
$4000- $5000: 61 days
$5000- $6000: 8 days
$6000- $7000: 13 days
$7000- $8000: 14 days
$8000- $9000: 9 days
$9000-$10000: 2 days
$10000-$11000: 1 day
Big dip overnight was bought and as US equity markets prepare to open, Bitcoin just topped $11,000...
Lemmings In Full Stampede Toward The Fiscal Cliff
The lemmings are now in full stampede toward the cliffs. You can literally hear the cold waters churning, foaming and crashing on the boulders far below.
From bitcoin to Amazon, the financials, the Russell 2000 and most everything else in between, the casinos are digesting no information except the price action and are relentlessly rising on nothing more than pure momentum. The mania has gone full retard.
Certainly earnings have nothing to do with it. As of this morning, the Russell 2000, for instance, was trading at 112X reported LTM earnings.
Likewise, Q3 reporting is all over except for the shouting and reported LTM earnings for the S&P 500 came in $107 per share. That's of signal importance because fully 36 months ago, S&P earnings for the September 2014 LTM period posted at $106 per share.
That's right. Three years and $1 of gain. They talking heads blather about "strong earnings" only because they think we were born yesterday.
What happened in-between, of course, was the proverbial pig passing through the python.
First, the global oil, commodities and industrial deflation after July 2014 took earnings to a low of $86.44 per share in the March 2016 LTM period.
After that came the opposite---the massive 2016-2017 Xi Coronation Stimulus in China. The new Red Emperor and his minions pumped out an incredible $6 trillion wave of new credit, thereby artificially stimulating a global rebound and a profits recovery back to where it started three years ago.
The difference of course is that $106 of earnings back then were priced at an already heady (by historical standards) 18.6X, whereas $107 of earnings today are being priced at a truly lunatic 24.6X.
After all, nothing says earnings bust ahead better than an aging business cycle, a cooling Red Ponzi, an epochal shift toward central bank QT (quantitative tightening) and a massive Washington Fiscal Cliff. Yet every one of those headwinds are self-evident and have made their presence known with a loud clang in the last few days.
Self-evidently, we are now 36 months closer to the next recession in a business cycle which at 101 months is already approaching the 1990s record of 118 months and facing far greater headwinds. Foremost among these is the unprecedented but unavoidable turn of the central banks---after two decades of relentless expansion--- toward interest rate normalization, QT (quantitative tightening) and trillions of debt and other securities sales (demonetization or balance sheet shrinkage).
The new Janet Yellen in tie and trousers made that perfectly clear at yesterday's confirmation hearing:
Powell said he expected the balance sheet to shrink to about $2.5 trillion to $3 trillion over the next three to four years under a program set in motion by Yellen......On interest rates, Powell said: "I think the case for raising interest rates at our next meeting is coming together."
Actually, the promised balance sheet shrinkage process is going to rapidly escalate from $10 billion per month of Fed bond sales now, to $30 billion by spring and $50 billion by next October. That amounts to a $600 billion annual run rate; and when the ECB and other banks join the "normalization" party in 2019 and beyond total central bank bond sales will pierce through the $1 trillion per year level.
And that's a very big deal because the law of supply and demand has not yet been abolished, meaning prices and yields in the global bond market are heading for a big reset. For instance, if the UST 10-year benchmark note normalizes to a yield of 4.0%, its price will fall by more than 40% from current levels (2.35%).
Needless to say, the entire market for risk assets including equities, junk bonds, corporates and real estate is predicated upon current ultra low yields and historically unprecedented leverage. So smash the price of the benchmark bond by 40% and you have a cascading chain of downward valuation adjustments that will reach the tens of trillions.
But that's not all. The 19th Party Congress is over, but the Red Suzerains of Beijing wasted no time throttling down China's red hot credit bubble and hyperventilating housing market. The chart below is the smoking gun----and puts the lie to the foolish Wall Street meme of the moment that the world economy is in the midst of an outburst of "synchronized growth".
Actually, it's puffing on the exhaust fumes of a veritable housing hysteria during the run-up to China's 19th Party Congress, which saw home mortgage issuance soar by nearly 60% in 2016.
Now, however, Beijing's clampdown is giving Ross Perot's famous "sucking sound to the south" an altogether new definition. In the most recent period, year over year mortgage growth actually turned negative----meaning China's gigantic apartment construction and building materials complex will be cooling rapidly, too.
Needless to say, what happens in the Red Ponzi does not stay in the Red Ponzi. The modestly rebounding global figures for industrial production, trade and GDP reported recently were just feeding off the massive credit impulse evident in the red line below.
When S&P earnings were peaking back in September 2014, China's total credit growth from all sources---including its $15 trillion shadow banking system---had slowed to a 15% annual run rate, but then was gunned to upwards of 30% during the Coronation Boom from early 2016 onwards.
But now that Mr. Xi's very thoughts have been enshrined in the Communist Party constitution---check-by-jowl with the wisdom of the Great Helmsman, Mao Zedong----credit growth is plummeting. Even China's new Red Emperor recognizes that $40 trillion of debt on a purported $12 trillion economy (actually far lower when massive malinvestments are deleted from the reported GDP "flows") is a recipe for collapse.
Xi Jinping may well be delusional about the capacity of centralized bureaucrats--even ones with all the guns--- to tame and stabilize the greatest Ponzi-style digging, constructing, borrowing, spending and speculating scheme in recorded history. But his goal is a third term in 2022, and in the interim he means to mop down China's fevered borrowing and building spree with alacrity.
Accordingly, the global commodity and CapEx cycle will rapidly weaken as the red line in the chart heads toward the flat-line. The talking heads will not be gumming about synchronized global growth much longer.
But what they will be talking about soon is a US Fiscal Cliff like none before. It now seems that the desperate GOP politicians of Capitol Hill have come up with so many fiscal gimmicks that they may actually cobble together 51 votes in the Senate.
But the emerging Rube Goldberg Contraption, which sunsets all of the individual tax cuts after 2025, and then piles on top a "trigger tax", which most surely would turn the whole things into massive ($350 billion) tax increase after a 2024 "growth" test, is actually a giant debt trap.
In fact, between 2018 and 2024 the emerging Senate "compromise" would generate upwards of $1.4 trillion of new debt including interest on the added borrowing. That's because as we explained yesterday the Senate tax bill is front-loaded with the annual revenue loss peaking at $250 billion in 2020 and diminishing steadily thereafter to just $145 billion in 2025 and a slight surplus in 2027.
Consequently, the public debt builds up rapidly in the early years---long before any added growth could possibly move the needle. We will provide more detailed calculations on this crucial point tomorrow and completely debunk the "growth will pay for it" story.
But suffice it to say here that the massive front-loaded borrowing embedded in the Senate tax bill would come on top of the $6.1 trillion already built into the CBO baseline for the 2018-2024 period and another $1 trillion that will be needed for disaster relief and the Donald's massive defense build-up and dramatically heightened pace of global military operations.
In a word, we do not think you can finance $8.5 trillion of new Federal debt in an environment in which the Fed and its convoy of fellow traveling central banks are also selling bonds by the trillions. That is, without triggering a "crowding out" effect of the kind that has been in hibernation every since Greenspan's cranked up the Eccles Building printing presses after the 22% stock market plunge in October 1987.
The irony is that the GOP is setting up a fiscal cliff which will exceed $1 trillion per year of new borrowing as early as 2020 ($775 billion baseline plus $225 billion of revenue losses and added interest from the tax cut) based on the erroneous view that domestic economic growth is being stunted by high corporate taxes.
This chart below should put the lie to that confusion once and for all. Even as the effective corporate tax rate has been marching down hill for decades, the trend rate of economic growth has been steadily falling.
Notwithstanding today's GDP blip, real final sales have grown at just 1.2% per year over the last decade or by only one-third of the rate extant when the effective corporate tax rate was more than double the current 20% level.
Image result for images of effective us corporate tax rate
So today's lemming actually are marching toward a Fiscal Cliff---- oblivious to the true meaning of the Senate tax bill maneuvers. But by definition, at the blow-off peak of a great financial bubble markets are oblivious to everything except the price action.
In that context, Bitcoin is neither an outlier nor a one-off freak; it's a poster boy for an unhinged financial system where honest price discovery, two-way markets, fear of risk and financial discipline have been completely destroyed by the central banks.
Whatever its eventual merits as a private money and payment system away from the grasping hand of the Deep State, bitcoin (and the mushrooming slate of other cryptos) at the moment is in the throes of the kind of mania that reminds us of why runaway bubbles eventually generate their own demise.
Image result for bitcoin chart in last year
For want of doubt, Zero Hedge early today calculated out bitcoin's accelerating rate of rise.
Needless to say, the sequence below is not the birthing throes of a new money being born; it's just another iteration of the same old lemmings stampeding toward the cliff:
$0000 - $1000: 1789 days
$1000- $2000: 1271 days
$2000- $3000: 23 days
$3000- $4000: 62 days
$4000- $5000: 61 days
$5000- $6000: 8 days
$6000- $7000: 13 days
$7000- $8000: 14 days
$8000- $9000: 9 days
$9000-$10000: 2 days
$10000-$11000: 1 day
Big dip overnight was bought and as US equity markets prepare to open, Bitcoin just topped $11,000...
SC154-13
http://www.informationclearinghouse.info/48322.htm
The GOP Plan Is the Biggest Tax Increase in American History, By Far
The tax bill moving its way through Congress is routinely referred to as a $1.5 trillion tax cut. And, in some ways, that’s true: on net, it would reduce the amount of taxes collected by the federal treasury by about $1.5 trillion over 10 years.
But that figure masks the eye-popping scale and audacity of the GOP’s rushed restructuring of the economy. Most immediately, the plan will take a large chunk out of state and local revenue that isn’t factored into that total. But more broadly, the bill cuts taxes by a full $6 trillion over a decade.
Senate Majority Leader Mitch McConnell, R-Ky., said Friday afternoon Senate Republicans have the votes to pass the plan, which gets referred to as only a $1.5 trillion cut because it raises $4.5 trillion in taxes elsewhere. But the key question is who gets a tax hike and who gets a tax cut. Put simply, the bulk of the tax cut is going toward the rich, while the tax increases go to everybody else.
And so the bill, properly described, is two things: the largest tax cut — and also the biggest tax increase — in American history.
Republicans have spent years describing the Affordable Care Act as the largest tax increase in U.S. history, ignoring the fact that the tax increases were balanced out by subsidies to pay for health coverage. In that respect, the ACA was a significant transfer of wealth from the top to the middle and bottom, which earned it the ire of the GOP. But all told, it raised less than $1 trillion in taxes over 10 years to pay for all that. The relative stinginess, in fact, is what fueled its unpopularity, as premiums and deductibles remained too high. But what Republicans lambasted as a historic tax hike represents just one-fifth of the tax increase of the new GOP bill.
Where’s that money going?
The Tax Policy Center estimated that about 80 percent of the benefit of the tax plan will go to the top 1 percent, who will enjoy the following elements of the tax cut:
A full $1.5 trillion alone is going to slash the corporate tax rate. CEOs have said repeatedly they plan to pocket that money rather than invest it or give workers higher wages.
The alternative minimum tax, paid almost exclusively by the rich, is also eliminated. That’s a $700 billion giveaway.
Another $150 billion goes to repealing the estate tax, which currently exempts the first $11 million of the deceased’s estate, so nobody even remotely middle class pays it. The repeal benefits so few people you can practically list them out.
More than $200 billion in cuts goes to a provision that allows a greater deduction for dividends on foreign earnings. That’s not for you.
Roughly $600 billion goes to reducing taxes on “pass-throughs” and other businesses not set up as corporations, which law firms, lobby shops, and doctors’ offices often benefit from. Poor and middle-class people do not tend to set themselves up as pass-throughs.
Under current law, many tax credits phase out at low-income thresholds. The GOP plan changes that by raising the threshold so richer people can also claim the credit. That provision alone is, by definition, a $200 billion tax cut for the wealthy.
Individual and family tax rates are cut by about $1 trillion, and some regular people will indeed see some of that money as a tax cut — but not much. As the New York Times noted, by 2027, people making between $40,000 and $50,000 would see a combined increase of $5.3 billion in taxes. Where would that money go? Folks earning more than $1 million would see their taxes collectively cut by $5.8 billion a year.
The list above brings the total well close to $5 trillion in tax cuts almost exclusively for the wealthy. The last major element of the bill, the doubling of the standard deduction, would benefit a broader range of people, but it comes at the expense of states, cities, and towns.
Where does the money to pay for all of this come from?
While Obamacare was a transfer of wealth from the top to the bottom, this bill sends money back the other way.
Even some of the ways the plan “raises” taxes on the rich wind up being a tax cut. Some $300 billion is raised by allowing companies who stashed profits offshore to repatriate it at a much lower rate. That repatriated cash will go straight to dividends for shareholders and stock buybacks — but it gets counted as a tax increase, which then allows the GOP to give an equal $300 billion cut on the other side of the ledger. It’s neat how that works.
The bill raises $1.6 trillion by repealing the personal exemption everybody gets on their tax returns. Getting rid of it across the board is extraordinarily regressive, since it gives the same benefit to the likes of Jared Kushner as it gives to people who have much less money than he does, so they’re hit much harder.
It raises another $1.3 trillion by going after deductions for state and local taxes, mortgage interest, charitable contributions, interest on student loans, medical expenses, teachers’ out-of-pocket expenses for paper and pencils for students, and a bunch of other nickel-and-diming of the middle class. No change drawer in the car, couch cushion, or plastic piggy bank is going untouched in the hunt for money to pay for the tax cut.
(The state and local deduction is effectively a subsidy for state and local spending on things like schools, roads, and police departments. Removing that will pressure states and cities to cut spending, so future teacher layoffs at your neighborhood school will be used to pay for the tax cuts, but because that happens at the state and local level, it isn’t factored into the Congressional Budget Office or Joint Committee on Taxation analyses.)
The plan gradually raises $128 billion in taxes by changing the way inflation is tabulated, so that your taxes slowly creep up over the years as the brackets come down.
And then, of course, the plan adds about $1.5 trillion to the debt over 10 years. That gets you most of the way to $6 trillion, with a handful of smaller tax hikes thrown in, some of which won’t obviously hurt the middle class. The domestic production deduction, a $96 billion boondoggle, is repealed, for instance, and $54 billion is saved by ending the credit for testing cures for rare diseases.
House Speaker Paul Ryan, R-Wis., went on NPR on Friday morning to try to defend the largest tax hike in American history.
“What does it say that — in practice according to independent analyses, I mean you do have winners and losers, not everybody gains, businesses gain, people with large estates to leave to their heirs gain, high-income people gain — but a lot of middle-income people do not gain in terms of money,” NPR’s Steve Inskeep said.
“I disagree with that. The average tax cut for a middle-class family is going to be $1,182,” Ryan responded.
Inskeep pushed back. “Lily Batchelder of New York University took some numbers from the Joint Committee of Taxation, bipartisan part of Congress as you know very well, and concluded that something like 100 million households in this country under the House bill, and even more under the Senate bill, would either get no tax cut or would get a tax increase,” Inskeep said. “Does that sound right to you?”
It didn’t sound right to Ryan.
“No, it doesn’t sound right unless it’s a person that’s not paying taxes already,” he said. “I think some people are cherry picking statistics.”
The GOP Plan Is the Biggest Tax Increase in American History, By Far
The tax bill moving its way through Congress is routinely referred to as a $1.5 trillion tax cut. And, in some ways, that’s true: on net, it would reduce the amount of taxes collected by the federal treasury by about $1.5 trillion over 10 years.
But that figure masks the eye-popping scale and audacity of the GOP’s rushed restructuring of the economy. Most immediately, the plan will take a large chunk out of state and local revenue that isn’t factored into that total. But more broadly, the bill cuts taxes by a full $6 trillion over a decade.
Senate Majority Leader Mitch McConnell, R-Ky., said Friday afternoon Senate Republicans have the votes to pass the plan, which gets referred to as only a $1.5 trillion cut because it raises $4.5 trillion in taxes elsewhere. But the key question is who gets a tax hike and who gets a tax cut. Put simply, the bulk of the tax cut is going toward the rich, while the tax increases go to everybody else.
And so the bill, properly described, is two things: the largest tax cut — and also the biggest tax increase — in American history.
Republicans have spent years describing the Affordable Care Act as the largest tax increase in U.S. history, ignoring the fact that the tax increases were balanced out by subsidies to pay for health coverage. In that respect, the ACA was a significant transfer of wealth from the top to the middle and bottom, which earned it the ire of the GOP. But all told, it raised less than $1 trillion in taxes over 10 years to pay for all that. The relative stinginess, in fact, is what fueled its unpopularity, as premiums and deductibles remained too high. But what Republicans lambasted as a historic tax hike represents just one-fifth of the tax increase of the new GOP bill.
Where’s that money going?
The Tax Policy Center estimated that about 80 percent of the benefit of the tax plan will go to the top 1 percent, who will enjoy the following elements of the tax cut:
A full $1.5 trillion alone is going to slash the corporate tax rate. CEOs have said repeatedly they plan to pocket that money rather than invest it or give workers higher wages.
The alternative minimum tax, paid almost exclusively by the rich, is also eliminated. That’s a $700 billion giveaway.
Another $150 billion goes to repealing the estate tax, which currently exempts the first $11 million of the deceased’s estate, so nobody even remotely middle class pays it. The repeal benefits so few people you can practically list them out.
More than $200 billion in cuts goes to a provision that allows a greater deduction for dividends on foreign earnings. That’s not for you.
Roughly $600 billion goes to reducing taxes on “pass-throughs” and other businesses not set up as corporations, which law firms, lobby shops, and doctors’ offices often benefit from. Poor and middle-class people do not tend to set themselves up as pass-throughs.
Under current law, many tax credits phase out at low-income thresholds. The GOP plan changes that by raising the threshold so richer people can also claim the credit. That provision alone is, by definition, a $200 billion tax cut for the wealthy.
Individual and family tax rates are cut by about $1 trillion, and some regular people will indeed see some of that money as a tax cut — but not much. As the New York Times noted, by 2027, people making between $40,000 and $50,000 would see a combined increase of $5.3 billion in taxes. Where would that money go? Folks earning more than $1 million would see their taxes collectively cut by $5.8 billion a year.
The list above brings the total well close to $5 trillion in tax cuts almost exclusively for the wealthy. The last major element of the bill, the doubling of the standard deduction, would benefit a broader range of people, but it comes at the expense of states, cities, and towns.
Where does the money to pay for all of this come from?
While Obamacare was a transfer of wealth from the top to the bottom, this bill sends money back the other way.
Even some of the ways the plan “raises” taxes on the rich wind up being a tax cut. Some $300 billion is raised by allowing companies who stashed profits offshore to repatriate it at a much lower rate. That repatriated cash will go straight to dividends for shareholders and stock buybacks — but it gets counted as a tax increase, which then allows the GOP to give an equal $300 billion cut on the other side of the ledger. It’s neat how that works.
The bill raises $1.6 trillion by repealing the personal exemption everybody gets on their tax returns. Getting rid of it across the board is extraordinarily regressive, since it gives the same benefit to the likes of Jared Kushner as it gives to people who have much less money than he does, so they’re hit much harder.
It raises another $1.3 trillion by going after deductions for state and local taxes, mortgage interest, charitable contributions, interest on student loans, medical expenses, teachers’ out-of-pocket expenses for paper and pencils for students, and a bunch of other nickel-and-diming of the middle class. No change drawer in the car, couch cushion, or plastic piggy bank is going untouched in the hunt for money to pay for the tax cut.
(The state and local deduction is effectively a subsidy for state and local spending on things like schools, roads, and police departments. Removing that will pressure states and cities to cut spending, so future teacher layoffs at your neighborhood school will be used to pay for the tax cuts, but because that happens at the state and local level, it isn’t factored into the Congressional Budget Office or Joint Committee on Taxation analyses.)
The plan gradually raises $128 billion in taxes by changing the way inflation is tabulated, so that your taxes slowly creep up over the years as the brackets come down.
And then, of course, the plan adds about $1.5 trillion to the debt over 10 years. That gets you most of the way to $6 trillion, with a handful of smaller tax hikes thrown in, some of which won’t obviously hurt the middle class. The domestic production deduction, a $96 billion boondoggle, is repealed, for instance, and $54 billion is saved by ending the credit for testing cures for rare diseases.
House Speaker Paul Ryan, R-Wis., went on NPR on Friday morning to try to defend the largest tax hike in American history.
“What does it say that — in practice according to independent analyses, I mean you do have winners and losers, not everybody gains, businesses gain, people with large estates to leave to their heirs gain, high-income people gain — but a lot of middle-income people do not gain in terms of money,” NPR’s Steve Inskeep said.
“I disagree with that. The average tax cut for a middle-class family is going to be $1,182,” Ryan responded.
Inskeep pushed back. “Lily Batchelder of New York University took some numbers from the Joint Committee of Taxation, bipartisan part of Congress as you know very well, and concluded that something like 100 million households in this country under the House bill, and even more under the Senate bill, would either get no tax cut or would get a tax increase,” Inskeep said. “Does that sound right to you?”
It didn’t sound right to Ryan.
“No, it doesn’t sound right unless it’s a person that’s not paying taxes already,” he said. “I think some people are cherry picking statistics.”
Friday, December 1, 2017
SC154-12
http://www.informationclearinghouse.info/48316.htm
It Is Your Human Duty To Stand Unapologetically In Your Own Authority
I just got done reading an unintentionally hilarious article in The Guardian whose author Tim Dowling shared it under the billing “I watched RT for a week so you don’t have to.” The whole thing is a story by a man immersed in mainstream narratives who spent a week perpetually aghast at how “surreal” it is to suddenly be hearing stories outside his echo chamber. Even while conceding that some of the programming was downright enlightening, Dowling just couldn’t get over the fact that he was seeing different things on RT than he was on BBC News and ended up writing about the experience in the way one might speak about their trip to a furry convention.
“The annoying thing about RT is that some of the reporting is very good and genuine,” Misha Glenny is quoted as saying in the article. “The trick is trying to differentiate that from the propaganda.”
Which is of course true of all mainstream news media, but most westerners just call their propaganda “news”. They place deep faith in what is told to them in the confident, assertive voices of the millionaires on mainstream media, and with everything else they’re trained to plug their fingers in their ears and brainlessly scream “propaganda!” until the dissonance stops.
They don’t stand in their own authority. They commit the grave crime against humanity of abdicating their authority to someone else.
The three most routinely overlooked and underappreciated aspects of day-to-day human experience are probably, in order of significance, (1) consciousness itself, (2) the extent to which mental habits dominate and determine our lives, and (3) the extent to which other people are trying to manipulate what we think. I tend to wage my little battles here focusing on the third one.
The typical westerner is saturated in a barrage of corporate media propaganda telling them what to believe about their world, their society and their leaders, but it’s so much more than that. There are religions, ideologies and limitless agendas all vying for space in your mental playground. Anywhere you look there are advertisers trying to manipulate you into buying stuff. Most of your personal relationships will be with people who are deeply invested in your being a certain way, and they’re always nudging you in that direction in various subtle and not-so-subtle ways.
Hell, a lot of the ideas we get in our heads about how a person ought to live were spoken by people who died long ago. We get our advice on how to live from dead people. How much sense does that make? The world those philosophers and spiritual teachers knew when they were alive is long gone, but we look to them for advice on how to navigate this wildly unprecedented situation in which our species now finds itself.
We’re born into this. From the very beginning of our lives, long before we have the capacity to begin critically examining information, we are shaped and molded by this chaotic torrent of agendas. A large part of our perspectives and mental habits come from other people, and it can be very, very difficult to sort out what’s real and what’s just some dead idea implanted there long ago that we made the mental habit of taking for granted. But truly standing in your own authority uninfluenced by propaganda, groupthink or societal pressures is one of the most revolutionary things that anyone can possibly do.
So much of the evolve-or-die transformation our species is currently undergoing is necessarily an inside job. An elite class of plutocrats is convinced that the riff raff need to be told what’s what so we’ll comply with their benevolent leadership, and yet these same pricks have marched us into a new cold war and to the brink of ecosystemic disaster, to say nothing of the economic exploitation, endless war, Orwellian surveillance and militarized police state they’ve created. We need to reclaim our minds from the lies that these horrible people have filled us with before we’ll ever have a shot at wresting the steering wheel from their clutches and averting disaster.
Truly insisting upon your own mental sovereignty typically brings an enormous social backlash. Many of my readers will have lost friends last year when they refused to play along with the establishment narrative that it was absolutely essential to elect Hillary Clinton to the presidency, and that’s just one tiny taste of it. Insisting on only being true to what’s true for you will disrupt entire relationships as you quickly discover that you were surrounded by people who’ve come to rely on you being true to what’s true for them instead. Your entire worldview can experience an upheaval, and with it all the alliances and connections you’d made as a result of your previous worldview.
But it is its own reward. Letting go of your old loyalties to other people’s stories about you, them, your society, your government and your world provides an immense freedom and fearlessness that can move mountains, a stable ground on which to take your stand which will never disappear from underneath you, and a delightful expansive spaciousness in your day-to-day living once you’ve eliminated all the various manipulators which were pushing and pulling on you in different ways.
My writings lean heavily toward the populist because I believe all ordinary people are much better at running things than a handful of sociopathic oligarchs, but populism will never have a shot if people can’t free their minds from exploitative manipulations. If we can still be directed every which way like a cat chasing a laser point, any populist revolution will just be used to shore up power for whoever’s the alpha manipulator on the scene.
So begin tearing down the system by tearing down its influences on you. Question all your most basic assumptions about reality itself, and if it can’t stand on its own, discard it.
Be distrustful of people who put a lot of energy into telling you about themselves; they’re trying to control your perception of them. Be even more distrustful of people who put a lot of energy into telling you about youreself; they’re trying to control your perception of you. You are sovereign. Own those perceptions. Reject any attempts to prevent you from owning what’s yours as aggressively as you need to.
It is at its core a betrayal of humanity for you to abdicate your authority over your own worldview to anyone, be it Noam Chomsky or Ron Paul or me. Nobody belongs in that throne but you. Trusting in any authority but your own is shirking your most important existential responsibility. As far as you are concerned, figuring out what’s true is your job and no one else’s.
Once you’ve rejected all narratives but your own point of view and are standing firmly grounded in your own truth, the notion that “propaganda” poses any threat to you becomes laughable. You have the ability to look at what comes up and examine it under the light of your own truth, and if it’s useful to you it becomes a tool in your toolbox. If not, it’s sent on its way. The idea that anyone would want anybody to “watch RT for a week so that you don’t have to” becomes baffling.
As far as your worldview is concerned, you are lord supreme. You can pretend that that authority belongs to some asshole on CNN or Fox or The Intercept or right here on Medium, but you’ll be living a lie. Nobody can interpret this experience for you, and if they tell you they can it’s because they’re trying to use you. Make your stand on your own two feet.
It Is Your Human Duty To Stand Unapologetically In Your Own Authority
I just got done reading an unintentionally hilarious article in The Guardian whose author Tim Dowling shared it under the billing “I watched RT for a week so you don’t have to.” The whole thing is a story by a man immersed in mainstream narratives who spent a week perpetually aghast at how “surreal” it is to suddenly be hearing stories outside his echo chamber. Even while conceding that some of the programming was downright enlightening, Dowling just couldn’t get over the fact that he was seeing different things on RT than he was on BBC News and ended up writing about the experience in the way one might speak about their trip to a furry convention.
“The annoying thing about RT is that some of the reporting is very good and genuine,” Misha Glenny is quoted as saying in the article. “The trick is trying to differentiate that from the propaganda.”
Which is of course true of all mainstream news media, but most westerners just call their propaganda “news”. They place deep faith in what is told to them in the confident, assertive voices of the millionaires on mainstream media, and with everything else they’re trained to plug their fingers in their ears and brainlessly scream “propaganda!” until the dissonance stops.
They don’t stand in their own authority. They commit the grave crime against humanity of abdicating their authority to someone else.
The three most routinely overlooked and underappreciated aspects of day-to-day human experience are probably, in order of significance, (1) consciousness itself, (2) the extent to which mental habits dominate and determine our lives, and (3) the extent to which other people are trying to manipulate what we think. I tend to wage my little battles here focusing on the third one.
The typical westerner is saturated in a barrage of corporate media propaganda telling them what to believe about their world, their society and their leaders, but it’s so much more than that. There are religions, ideologies and limitless agendas all vying for space in your mental playground. Anywhere you look there are advertisers trying to manipulate you into buying stuff. Most of your personal relationships will be with people who are deeply invested in your being a certain way, and they’re always nudging you in that direction in various subtle and not-so-subtle ways.
Hell, a lot of the ideas we get in our heads about how a person ought to live were spoken by people who died long ago. We get our advice on how to live from dead people. How much sense does that make? The world those philosophers and spiritual teachers knew when they were alive is long gone, but we look to them for advice on how to navigate this wildly unprecedented situation in which our species now finds itself.
We’re born into this. From the very beginning of our lives, long before we have the capacity to begin critically examining information, we are shaped and molded by this chaotic torrent of agendas. A large part of our perspectives and mental habits come from other people, and it can be very, very difficult to sort out what’s real and what’s just some dead idea implanted there long ago that we made the mental habit of taking for granted. But truly standing in your own authority uninfluenced by propaganda, groupthink or societal pressures is one of the most revolutionary things that anyone can possibly do.
So much of the evolve-or-die transformation our species is currently undergoing is necessarily an inside job. An elite class of plutocrats is convinced that the riff raff need to be told what’s what so we’ll comply with their benevolent leadership, and yet these same pricks have marched us into a new cold war and to the brink of ecosystemic disaster, to say nothing of the economic exploitation, endless war, Orwellian surveillance and militarized police state they’ve created. We need to reclaim our minds from the lies that these horrible people have filled us with before we’ll ever have a shot at wresting the steering wheel from their clutches and averting disaster.
Truly insisting upon your own mental sovereignty typically brings an enormous social backlash. Many of my readers will have lost friends last year when they refused to play along with the establishment narrative that it was absolutely essential to elect Hillary Clinton to the presidency, and that’s just one tiny taste of it. Insisting on only being true to what’s true for you will disrupt entire relationships as you quickly discover that you were surrounded by people who’ve come to rely on you being true to what’s true for them instead. Your entire worldview can experience an upheaval, and with it all the alliances and connections you’d made as a result of your previous worldview.
But it is its own reward. Letting go of your old loyalties to other people’s stories about you, them, your society, your government and your world provides an immense freedom and fearlessness that can move mountains, a stable ground on which to take your stand which will never disappear from underneath you, and a delightful expansive spaciousness in your day-to-day living once you’ve eliminated all the various manipulators which were pushing and pulling on you in different ways.
My writings lean heavily toward the populist because I believe all ordinary people are much better at running things than a handful of sociopathic oligarchs, but populism will never have a shot if people can’t free their minds from exploitative manipulations. If we can still be directed every which way like a cat chasing a laser point, any populist revolution will just be used to shore up power for whoever’s the alpha manipulator on the scene.
So begin tearing down the system by tearing down its influences on you. Question all your most basic assumptions about reality itself, and if it can’t stand on its own, discard it.
Be distrustful of people who put a lot of energy into telling you about themselves; they’re trying to control your perception of them. Be even more distrustful of people who put a lot of energy into telling you about youreself; they’re trying to control your perception of you. You are sovereign. Own those perceptions. Reject any attempts to prevent you from owning what’s yours as aggressively as you need to.
It is at its core a betrayal of humanity for you to abdicate your authority over your own worldview to anyone, be it Noam Chomsky or Ron Paul or me. Nobody belongs in that throne but you. Trusting in any authority but your own is shirking your most important existential responsibility. As far as you are concerned, figuring out what’s true is your job and no one else’s.
Once you’ve rejected all narratives but your own point of view and are standing firmly grounded in your own truth, the notion that “propaganda” poses any threat to you becomes laughable. You have the ability to look at what comes up and examine it under the light of your own truth, and if it’s useful to you it becomes a tool in your toolbox. If not, it’s sent on its way. The idea that anyone would want anybody to “watch RT for a week so that you don’t have to” becomes baffling.
As far as your worldview is concerned, you are lord supreme. You can pretend that that authority belongs to some asshole on CNN or Fox or The Intercept or right here on Medium, but you’ll be living a lie. Nobody can interpret this experience for you, and if they tell you they can it’s because they’re trying to use you. Make your stand on your own two feet.
SC154-11
http://www.blacklistednews.com/America%E2%80%99s_Military-Industrial_Addiction/61907/0/38/38/Y/M.html
America’s Military-Industrial Addiction
" Polls show that Americans are tired of endless wars in faraway lands, but many cheer President Trump’s showering money on the Pentagon and its contractors, a paradox that President Eisenhower foresaw, writes JP Sottile "
The Military-Industrial Complex has loomed over America ever since President Dwight D. Eisenhower warned of its growing influence during his prescient farewell address on Jan. 17, 1961. The Vietnam War followed shortly thereafter, and its bloody consequences cemented the image of the Military-Industrial Complex (MIC) as a faceless cadre of profit-seeking warmongers who’ve wrested control of the foreign policy. That was certainly borne out by the war’s utter senselessness … and by tales of profiteering by well-connected contractors like Brown & Root.
President Dwight Eisenhower delivering his farewell address on Jan. 17, 1961.
Over five decades, four major wars and a dozen-odd interventions later, we often talk about the Military-Industrial Complex as if we’re referring to a nefarious, flag-draped Death Star floating just beyond the reach of helpless Americans who’d generally prefer that war was not, as the great Gen. Smedley Darlington Butler aptly put it, little more than a money-making “racket.”
The feeling of powerlessness that the MIC engenders in “average Americans” makes a lot of sense if you just follow the money coming out of Capitol Hill. The Project on Government Oversight (POGO) tabulated all “defense-related spending” for both 2017 and 2018, and it hit nearly $1.1 trillion for each of the two years. The “defense-related” part is important because the annual National Defense Authorization Act, a.k.a. the defense budget, doesn’t fully account for all the various forms of national security spending that gets peppered around a half-dozen agencies.
It’s a phenomenon that noted Pentagon watchdog William Hartung has tracked for years. He recently dissected it into “no less than 10 categories of national security spending.” Amazingly only one of those is the actual Pentagon budget. The others include spending on wars, on homeland security, on military aid, on intelligence, on nukes, on recruitment, on veterans, on interest payments and on “other defense” — which includes “a number of flows of defense-related funding that go to agencies other than the Pentagon.”
Perhaps most amazingly, Hartung noted in TomDisptach that the inflation-adjusted “base” defense budgets of the last couple years is “higher than at the height of President Ronald Reagan’s massive buildup of the 1980s and is now nearing the post-World War II funding peak.” And that’s just the “base” budget, meaning the roughly $600 billion “defense-only” portion of the overall package. Like POGO, Hartung puts an annual price tag of nearly $1.1 trillion on the whole enchilada of military-related spending.
The MIC’s ‘Swamp Creatures’
To secure their share of this grandiloquent banquet, the defense industry’s lobbyists stampede Capitol Hill like well-heeled wildebeest, each jockeying for a plum position at the trough. This year, a robust collection of 208 defense companies spent $93,937,493 to deploy 728 “reported” lobbyists (apparently some go unreported) to feed this year’s trumped-up, $700 billion defense-only budget, according to OpenSecrets.org. Last year they spent $128,845,198 to secure their profitable pieces of the government pie.
The Pentagon, headquarters of the U.S. Defense Department, as viewed with the Potomac River and Washington, D.C., in the background. (Defense Department photo)
And this reliable yearly harvest, along with the revolving doors connecting defense contractors with Capitol Hill, K Street and the Pentagon, is why so many critics blame the masters of war behind the MIC for turning war into a cash machine.
But the cash machine is not confined to the Beltway. There are ATM branches around the country. Much in the way it lavishes Congress with lobbying largesse, the defense industry works hand-in-glove with the Pentagon to spread the appropriations around the nation. This “spread the wealth” strategy may be equally as important as the “inside the Beltway” lobbying that garners so much of our attention and disdain.
Just go to U.S. Department of Defense’s contract announcement webpage on any weekday to get a good sense of the “contracts valued at $7 million or more” that are “announced each business day at 5 p.m.” A recent survey of these “awards” found the usual suspects like Raytheon, Lockheed Martin and General Dynamics. The MIC was well-represented. But many millions of dollars were also “won” by companies most Americans have never heard of … like this sampling from one day at the end of October:
Longbow LLC, Orlando Florida, got $183,474,414 for radar electronic units with the stipulation that work will be performed in Orlando, Florida.
Gradkell Systems Inc., Huntsville, Alabama, got $75,000,000 for systems operations and maintenance at Fort Belvoir, Virginia
Dawson Federal Inc., San Antonio, Texas; and A&H-Ambica JV LLC, Livonia, Michigan; and Frontier Services Inc., Kansas City, Missouri, will share a $45,000,000 for repair and alternations for land ports of entry in North Dakota and Minnesota.
TRAX International Corp., Las Vegas, Nevada, got a $9,203,652 contract modification for non-personal test support services that will be performed in Yuma, Arizona, and Fort Greely, Alaska,
Railroad Construction Co. Inc., Paterson, New Jersey, got a $9,344,963 contract modification for base operations support services to be performed in Colts Neck, New Jersey.
Belleville Shoe Co., Belleville, Illinois, got $63,973,889 for hot-weather combat boots that will be made in Illinois.
American Apparel Inc., Selma, Alabama, got $48,411,186 for combat utility uniforms that will be made in Alabama.
National Industries for the Blind, Alexandria, Virginia, got a $12,884,595 contract modification to make and advanced combat helmet pad suspension system. The “locations of performance” are Virginia, Pennsylvania and North Carolina.
Sharing the Largesse
Clearly, the DoD is large enough, and smart enough, to award contracts to companies throughout the 50 states. Yes, it is a function of the sheer size or, more forebodingly, the utter “pervasiveness” of the military in American life. But it is also a strategy. And it’s a tactic readily apparent in a contract recently awarded to Raytheon.
U.S. Capitol.
On Oct. 31, 2017, they got a $29,455,672 contract modification for missions systems equipment; computing environment hardware; and software research, test and development. The modification stipulates that the work will spread around the country to “Portsmouth, Rhode Island (46 percent); Tewksbury, Massachusetts (36 percent); Marlboro, Massachusetts (6 percent); Port Hueneme, California (5 percent); San Diego, California (4 percent); and Bath, Maine (3 percent).”
Frankly, it’s a brilliant move that began in the Cold War. The more Congressional districts that got defense dollars, the more votes the defense budget was likely to receive on Capitol Hill. Over time, it evolved into its own underlying rationale for the budget.
As veteran journalist William Greider wrote in the Aug. 16, 1984 issue of Rolling Stone, “The entire political system, including liberals as well as conservatives, is held hostage by the politics of defense spending. Even the most well intentioned are captive to it. And this is a fundamental reason why the Pentagon budget is irrationally bloated and why America is mobilizing for war in a time of peace.”
The peace-time mobilization Greider referred to was the Reagan build-up that, as William Hartung noted, is currently being surpassed by America’s “War on Terror” binge. Then, as now … the US was at peace at home, meddling around the world and running up a huge bill in the process. And then, as now … the spending seems unstoppable.
And as an unnamed “arms-control lobbyist” told Grieder, “It’s a fact of life. I don’t see how you can ask members of Congress to vote against their own districts. If I were a member of Congress, I might vote that way, too.”
Essentially, members of Congress act as secondary lobbyists for the defense industry by making sure their constituents have a vested interest in seeing the defense budget is both robust and untouchable. But they are not alone. Because the states also reap what the Pentagon sows … and, in the wake of the massive post-9/11 splurge, they’ve begun quantifying the impact of defense spending on their economies. It helps them make their specific case for keeping the spigot open.
Enter the National Conference of State Legislatures (NCSL), which notes, or touts, that the Department of Defense (DoD) “operates more than 420 military installations in the 50 states, the District of Columbia, Guam and Puerto Rico.” Additionally, the NCSL is understandably impressed by a DoD analysis that found the department’s “$408 billion on payroll and contracts in Fiscal Year 2015” translated into “approximately 2.3 percent of U.S. gross domestic product (GDP).”
And they’ve become a clearinghouse for state governments’ economic impact studies of defense spending. Here’s a sampling of recent data compiled on the NSCL website:
In 2015, for example, military installations in North Carolinasupported 578,000 jobs, $34 billion in personal income and $66 billion in gross state product. This amounts to roughly 10 percent of the state’s overall economy.
In 2014, Coloradolawmakers appropriated $300,000 in state funds to examine the comprehensive value of military activities across the state’s seven major installations. The state Department of Military and Veterans Affairs released its study in May 2015, reporting a total economic impact of $27 billion.
Kentuckyhas also taken steps to measure military activity, releasing its fifth study in June 2016. The military spent approximately $12 billion in Kentucky during 2014-15. With 38,700 active duty and civilian employees, military employment exceeds the next largest state employer by more than 21,000 jobs.
In Michigan, for example, defense spending in Fiscal Year 2014 supported 105,000 jobs, added more than $9 billion in gross state product and created nearly $10 billion in personal income. A 2016 study sponsored by the Michigan Defense Center presents a statewide strategy to preserve Army and Air National Guard facilities following a future Base Realignment and Closure (BRAC) round as well as to attract new missions.
Electoral Impact
But that’s not all. According to the DoD study cited above, the biggest recipients of DoD dollars are (in order): Virginia, California, Texas, Maryland and Florida. And among the top 18 host states for military bases, electorally important states like California, Florida and Texas lead the nation.
President Trump speaking at a Cabinet meeting on Nov. 1, 2017, with Secretary of State Rex Tillerson to Trump’s right and son-in-law Jared Kushner seated in the background. (Screen shot from whitehouse.gov)
And that’s the real rub … this has an electoral impact. Because the constituency for defense spending isn’t just the 1 percent percent of Americans who actively serve in the military or 7 percent of Americans who’ve served sometime in their lives, but it is also the millions of Americans who directly or indirectly make a living off of the “defense-related” largesse that passes through the Pentagon like grass through a goose.
It’s a dirty little secret that Donald Trump exploited throughout the 2016 presidential campaign. Somehow, he was able to criticize wasting money on foreign wars and the neoconservative interventionism of the Bushes, the neoliberal interventionism of Hillary Clinton, and, at the same time, moan endlessly about the “depleted” military despite “years of record-high spending.” He went on to promise a massive increase in the defense budget, a massive increase in naval construction and a huge nuclear arsenal.
And, much to the approval of many Americans, he’s delivered. A Morning Consult/Politico poll showed increased defense spending was the most popular among a variety of spending priorities presented to voters … even as voters express trepidation about the coming of another war. A pair of NBC News/Survey Monkey polls found that 76 percent of Americans are “worried” the United States “will become engaged in a major war in the next four years” and only 25 percent want America to become “more active” in world affairs.
More to the point, only 20 percent of Americans wanted to increase the troop level in Afghanistan after Trump’s stay-the-course speech in August, but Gallup’s three decade-long tracking poll found that the belief the U.S. spends “too little” on defense is at its highest point (37 percent) since it spiked after 9/11 (41 percent). The previous highpoint was 51 percent in 1981 when Ronald Reagan was elected in no small part on the promise of a major build-up.
So, if Americans generally don’t support wars or engagement in the world, why do they seem to reflexively support massive military budgets?
Frankly, look no further than Trump’s mantra of “jobs, jobs, jobs.” He says it when he lords over the sale of weapon systems to foreign powers or he visits a naval shipyard or goes to one of his post-election rallies to proclaim to “We’re building up our military like never before.” Frankly, he’s giving the people what they want. Although they may be war-weary, they’ve not tired of the dispersal system that Greider wrote about during Reagan’s big spree.
Ultimately, it means that the dreaded Military-Industrial Complex isn’t just a shadowy cabal manipulating policies against the will of the American people. Nor is the “racket” exclusive to an elite group of Deep State swamp things. Instead, the military and the vast economic network it feeds presents a far more “complex” issue that involves millions of self-interested Americans in much the way Eisenhower predicted, but few are willing to truly forsake.
America’s Military-Industrial Addiction
" Polls show that Americans are tired of endless wars in faraway lands, but many cheer President Trump’s showering money on the Pentagon and its contractors, a paradox that President Eisenhower foresaw, writes JP Sottile "
The Military-Industrial Complex has loomed over America ever since President Dwight D. Eisenhower warned of its growing influence during his prescient farewell address on Jan. 17, 1961. The Vietnam War followed shortly thereafter, and its bloody consequences cemented the image of the Military-Industrial Complex (MIC) as a faceless cadre of profit-seeking warmongers who’ve wrested control of the foreign policy. That was certainly borne out by the war’s utter senselessness … and by tales of profiteering by well-connected contractors like Brown & Root.
President Dwight Eisenhower delivering his farewell address on Jan. 17, 1961.
Over five decades, four major wars and a dozen-odd interventions later, we often talk about the Military-Industrial Complex as if we’re referring to a nefarious, flag-draped Death Star floating just beyond the reach of helpless Americans who’d generally prefer that war was not, as the great Gen. Smedley Darlington Butler aptly put it, little more than a money-making “racket.”
The feeling of powerlessness that the MIC engenders in “average Americans” makes a lot of sense if you just follow the money coming out of Capitol Hill. The Project on Government Oversight (POGO) tabulated all “defense-related spending” for both 2017 and 2018, and it hit nearly $1.1 trillion for each of the two years. The “defense-related” part is important because the annual National Defense Authorization Act, a.k.a. the defense budget, doesn’t fully account for all the various forms of national security spending that gets peppered around a half-dozen agencies.
It’s a phenomenon that noted Pentagon watchdog William Hartung has tracked for years. He recently dissected it into “no less than 10 categories of national security spending.” Amazingly only one of those is the actual Pentagon budget. The others include spending on wars, on homeland security, on military aid, on intelligence, on nukes, on recruitment, on veterans, on interest payments and on “other defense” — which includes “a number of flows of defense-related funding that go to agencies other than the Pentagon.”
Perhaps most amazingly, Hartung noted in TomDisptach that the inflation-adjusted “base” defense budgets of the last couple years is “higher than at the height of President Ronald Reagan’s massive buildup of the 1980s and is now nearing the post-World War II funding peak.” And that’s just the “base” budget, meaning the roughly $600 billion “defense-only” portion of the overall package. Like POGO, Hartung puts an annual price tag of nearly $1.1 trillion on the whole enchilada of military-related spending.
The MIC’s ‘Swamp Creatures’
To secure their share of this grandiloquent banquet, the defense industry’s lobbyists stampede Capitol Hill like well-heeled wildebeest, each jockeying for a plum position at the trough. This year, a robust collection of 208 defense companies spent $93,937,493 to deploy 728 “reported” lobbyists (apparently some go unreported) to feed this year’s trumped-up, $700 billion defense-only budget, according to OpenSecrets.org. Last year they spent $128,845,198 to secure their profitable pieces of the government pie.
The Pentagon, headquarters of the U.S. Defense Department, as viewed with the Potomac River and Washington, D.C., in the background. (Defense Department photo)
And this reliable yearly harvest, along with the revolving doors connecting defense contractors with Capitol Hill, K Street and the Pentagon, is why so many critics blame the masters of war behind the MIC for turning war into a cash machine.
But the cash machine is not confined to the Beltway. There are ATM branches around the country. Much in the way it lavishes Congress with lobbying largesse, the defense industry works hand-in-glove with the Pentagon to spread the appropriations around the nation. This “spread the wealth” strategy may be equally as important as the “inside the Beltway” lobbying that garners so much of our attention and disdain.
Just go to U.S. Department of Defense’s contract announcement webpage on any weekday to get a good sense of the “contracts valued at $7 million or more” that are “announced each business day at 5 p.m.” A recent survey of these “awards” found the usual suspects like Raytheon, Lockheed Martin and General Dynamics. The MIC was well-represented. But many millions of dollars were also “won” by companies most Americans have never heard of … like this sampling from one day at the end of October:
Longbow LLC, Orlando Florida, got $183,474,414 for radar electronic units with the stipulation that work will be performed in Orlando, Florida.
Gradkell Systems Inc., Huntsville, Alabama, got $75,000,000 for systems operations and maintenance at Fort Belvoir, Virginia
Dawson Federal Inc., San Antonio, Texas; and A&H-Ambica JV LLC, Livonia, Michigan; and Frontier Services Inc., Kansas City, Missouri, will share a $45,000,000 for repair and alternations for land ports of entry in North Dakota and Minnesota.
TRAX International Corp., Las Vegas, Nevada, got a $9,203,652 contract modification for non-personal test support services that will be performed in Yuma, Arizona, and Fort Greely, Alaska,
Railroad Construction Co. Inc., Paterson, New Jersey, got a $9,344,963 contract modification for base operations support services to be performed in Colts Neck, New Jersey.
Belleville Shoe Co., Belleville, Illinois, got $63,973,889 for hot-weather combat boots that will be made in Illinois.
American Apparel Inc., Selma, Alabama, got $48,411,186 for combat utility uniforms that will be made in Alabama.
National Industries for the Blind, Alexandria, Virginia, got a $12,884,595 contract modification to make and advanced combat helmet pad suspension system. The “locations of performance” are Virginia, Pennsylvania and North Carolina.
Sharing the Largesse
Clearly, the DoD is large enough, and smart enough, to award contracts to companies throughout the 50 states. Yes, it is a function of the sheer size or, more forebodingly, the utter “pervasiveness” of the military in American life. But it is also a strategy. And it’s a tactic readily apparent in a contract recently awarded to Raytheon.
U.S. Capitol.
On Oct. 31, 2017, they got a $29,455,672 contract modification for missions systems equipment; computing environment hardware; and software research, test and development. The modification stipulates that the work will spread around the country to “Portsmouth, Rhode Island (46 percent); Tewksbury, Massachusetts (36 percent); Marlboro, Massachusetts (6 percent); Port Hueneme, California (5 percent); San Diego, California (4 percent); and Bath, Maine (3 percent).”
Frankly, it’s a brilliant move that began in the Cold War. The more Congressional districts that got defense dollars, the more votes the defense budget was likely to receive on Capitol Hill. Over time, it evolved into its own underlying rationale for the budget.
As veteran journalist William Greider wrote in the Aug. 16, 1984 issue of Rolling Stone, “The entire political system, including liberals as well as conservatives, is held hostage by the politics of defense spending. Even the most well intentioned are captive to it. And this is a fundamental reason why the Pentagon budget is irrationally bloated and why America is mobilizing for war in a time of peace.”
The peace-time mobilization Greider referred to was the Reagan build-up that, as William Hartung noted, is currently being surpassed by America’s “War on Terror” binge. Then, as now … the US was at peace at home, meddling around the world and running up a huge bill in the process. And then, as now … the spending seems unstoppable.
And as an unnamed “arms-control lobbyist” told Grieder, “It’s a fact of life. I don’t see how you can ask members of Congress to vote against their own districts. If I were a member of Congress, I might vote that way, too.”
Essentially, members of Congress act as secondary lobbyists for the defense industry by making sure their constituents have a vested interest in seeing the defense budget is both robust and untouchable. But they are not alone. Because the states also reap what the Pentagon sows … and, in the wake of the massive post-9/11 splurge, they’ve begun quantifying the impact of defense spending on their economies. It helps them make their specific case for keeping the spigot open.
Enter the National Conference of State Legislatures (NCSL), which notes, or touts, that the Department of Defense (DoD) “operates more than 420 military installations in the 50 states, the District of Columbia, Guam and Puerto Rico.” Additionally, the NCSL is understandably impressed by a DoD analysis that found the department’s “$408 billion on payroll and contracts in Fiscal Year 2015” translated into “approximately 2.3 percent of U.S. gross domestic product (GDP).”
And they’ve become a clearinghouse for state governments’ economic impact studies of defense spending. Here’s a sampling of recent data compiled on the NSCL website:
In 2015, for example, military installations in North Carolinasupported 578,000 jobs, $34 billion in personal income and $66 billion in gross state product. This amounts to roughly 10 percent of the state’s overall economy.
In 2014, Coloradolawmakers appropriated $300,000 in state funds to examine the comprehensive value of military activities across the state’s seven major installations. The state Department of Military and Veterans Affairs released its study in May 2015, reporting a total economic impact of $27 billion.
Kentuckyhas also taken steps to measure military activity, releasing its fifth study in June 2016. The military spent approximately $12 billion in Kentucky during 2014-15. With 38,700 active duty and civilian employees, military employment exceeds the next largest state employer by more than 21,000 jobs.
In Michigan, for example, defense spending in Fiscal Year 2014 supported 105,000 jobs, added more than $9 billion in gross state product and created nearly $10 billion in personal income. A 2016 study sponsored by the Michigan Defense Center presents a statewide strategy to preserve Army and Air National Guard facilities following a future Base Realignment and Closure (BRAC) round as well as to attract new missions.
Electoral Impact
But that’s not all. According to the DoD study cited above, the biggest recipients of DoD dollars are (in order): Virginia, California, Texas, Maryland and Florida. And among the top 18 host states for military bases, electorally important states like California, Florida and Texas lead the nation.
President Trump speaking at a Cabinet meeting on Nov. 1, 2017, with Secretary of State Rex Tillerson to Trump’s right and son-in-law Jared Kushner seated in the background. (Screen shot from whitehouse.gov)
And that’s the real rub … this has an electoral impact. Because the constituency for defense spending isn’t just the 1 percent percent of Americans who actively serve in the military or 7 percent of Americans who’ve served sometime in their lives, but it is also the millions of Americans who directly or indirectly make a living off of the “defense-related” largesse that passes through the Pentagon like grass through a goose.
It’s a dirty little secret that Donald Trump exploited throughout the 2016 presidential campaign. Somehow, he was able to criticize wasting money on foreign wars and the neoconservative interventionism of the Bushes, the neoliberal interventionism of Hillary Clinton, and, at the same time, moan endlessly about the “depleted” military despite “years of record-high spending.” He went on to promise a massive increase in the defense budget, a massive increase in naval construction and a huge nuclear arsenal.
And, much to the approval of many Americans, he’s delivered. A Morning Consult/Politico poll showed increased defense spending was the most popular among a variety of spending priorities presented to voters … even as voters express trepidation about the coming of another war. A pair of NBC News/Survey Monkey polls found that 76 percent of Americans are “worried” the United States “will become engaged in a major war in the next four years” and only 25 percent want America to become “more active” in world affairs.
More to the point, only 20 percent of Americans wanted to increase the troop level in Afghanistan after Trump’s stay-the-course speech in August, but Gallup’s three decade-long tracking poll found that the belief the U.S. spends “too little” on defense is at its highest point (37 percent) since it spiked after 9/11 (41 percent). The previous highpoint was 51 percent in 1981 when Ronald Reagan was elected in no small part on the promise of a major build-up.
So, if Americans generally don’t support wars or engagement in the world, why do they seem to reflexively support massive military budgets?
Frankly, look no further than Trump’s mantra of “jobs, jobs, jobs.” He says it when he lords over the sale of weapon systems to foreign powers or he visits a naval shipyard or goes to one of his post-election rallies to proclaim to “We’re building up our military like never before.” Frankly, he’s giving the people what they want. Although they may be war-weary, they’ve not tired of the dispersal system that Greider wrote about during Reagan’s big spree.
Ultimately, it means that the dreaded Military-Industrial Complex isn’t just a shadowy cabal manipulating policies against the will of the American people. Nor is the “racket” exclusive to an elite group of Deep State swamp things. Instead, the military and the vast economic network it feeds presents a far more “complex” issue that involves millions of self-interested Americans in much the way Eisenhower predicted, but few are willing to truly forsake.
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