The point of my blog article is to honestly and openly examine those GOP economic positions that need to be corrected. These times call for honest and open examinations of each party and each policy. Only by correcting what's wrong, can we hope to create a real and long lasting economic recovery for this country.
Red flavor-aid is a popular term used to describe problems with the GOP's economic platform while blue flavor-aid is used to describe problems with the Democratic Party's economic platform. Today we'll look at red flavor-aid.
Red flavor-aid says cut federal income taxes on corporations and wealthy Americans but around three-quarters of all U.S. businesses are currently structured as flow-throughs (e.g. pass-throughs) and currently pay zero federal income taxes while the wealthy's maximum hedge fund rate on long term capital gains is 15%.
If you're wealthy, the profits on your investments increasingly flow tax free through the businesses you invest in directly into your hedge fund where capital gains are taxed at a maximum rate of 15%.
The hedge fund then invests in the very corporations offshoring and outsourcing American jobs, capital investment, and invention/innovation to foreign countries and workers.
These companies also submit requests to the U.S. Office of Foreign Labor for almost a million foreign workers a year to be insourced to displace American workers further.
Though quotas exist, the Foreign Labor Certification FY 2010 Annual Report reveals that the United States Department of Labor's Office of Foreign Labor Certification (OFLC) processed 422,228 employer applications requesting 851,556 foreign workers in 2010, in the middle of a U.S. Great Recession to give foreign workers American jobs right here on U.S. soil!
A quick look at the Census Bureau's U.S. Population clock for April 2012 reveals one new international foreign worker enters the U.S. every forty four seconds. That's over 707,000 foreign workers entering the U.S. this year and taking new jobs while displacing American citizens from existing jobs right here on U.S. soil.
These companies actively resist protecting American made goods and services. They resist the implementation of tariffs and/or value added taxes (VAT) on goods and services not made or performed in the United States using only the labor of American citizens despite all of our serious trading partners engaging in the practice to protect their own domestic markets for their citizens.
Reference: http://www.brookings.edu/blogs/up-front/posts/2011/10/21-tax-reform-gale
This actually accelerates the nation's woes further gutting the U.S. labor market and ceding away our invention/innovation to foreign interests to use against us.
How is this red flavor-aid an economic solution for America?
And recently, the countries we've offshored and outsourced to have begun forming their own businesses (which are often state capitalized and owned in places like China) and begun competing directly against the very U.S. businesses that gave U.S. invention/innovation to them to build their products with.
But they also are buying American companies. Arco and Amoco oil companies are now British owned, IBM PC is now a Chinese company, Lucent Technologies and RCA are now French, Zenith is Korean, Frigidaire is Swedish and Westinghouse Nuclear is Japanese, Chrysler is close to being 70% owned by Fiat, etc...
Not to mention we're displacing American students to fill our colleges with these same country's students many of whom are working for their respective country's spy networks (such as China's Student Information System) and are here for our science and technology domains.
Reference: http://www.huffingtonpost.com/2011/01/24/chinas-student-informatio_n_813056.html
And we haven't even touched the formation of immigration networks that are violating the law by only hiring other immigrants and blocking American citizens from the industries they've taken control of.
The GOP wants to continue ALL of the above practices hurting our economy, the national interest, and the average American worker. That is red flavor-aid.
Cutting government spending to eliminate the deficit is necessary; however, cutting government spending by itself won't fix our economic problems.
The 2012 enacted U.S. budget contains $2.469 trillion in receipts and $3.796 trillion in outlays, for a deficit of $1.327 trillion.
Reference: http://www.gpo.gov/fdsys/search/pagedetails.action?packageId=BUDGET-2013-BUD
If we got rid of the deficit and cut government spending in half tomorrow, we'd still not have an economic recovery in this nation because of our broken trade paradigm and lack of good paying jobs for American workers in the private sector.
The result would be that we would stop increasing our national debt and start paying it off which is desirable but millions more Americans would flood into a very poor U.S. labor market without access to adequate medical care in an environment where income and wealth ownership disparity between the top 1% in this country and everyone else is quickly rising (see The Great Divergence by Timothy Noah).
Despite the rhetoric for cutting red tape and helping American workers and small businesses that both major political parties engage in, both parties are committed to policies that will further injure the U.S. political system and economy. Though some of their policies are the same (e.g. more free trade, more immigration, more nefarious treaties, etc...), some of their policies do differ and favor different demographics and special interests. The differences themselves will not materially change the downward decline of the U.S. standard of living for most Americans.
Red flavor-aid asserts that the U.S. can right our economy by cutting government spending and lowering federal income taxes further on corporations (most of whom pay zero federal income taxes) and the wealthy (who pay historically low federal income taxes) while expanding free-trade agreements and negotiating treaties (free trade and nefarious treaties are two items that blue-flavor aid has fully supported as well) that actually increase red tape, favor large trans-national corporations, hurt American workers, hurt small businesses, hurt U.S. startups, and actually increase red tape.
Reference: http://www.businessinsider.com/history-of-tax-rates
It will not.
What it will do is further redistribute America's income, wealth, ownership, and control to businesses and the wealthiest Americans; hollow out the U.S. labor market further as increased investment goes into companies offshoring and outsourcing jobs, capital investment, and innovation while insourcing foreign workers; increase immigration networks to further displace American workers because these interests won't E-verify the nation; strip unemployed Americans who can't find employment of medical care; and quite possibly begin to result in real increases in incarceration (1 in 31 Americans is already in jail/prison or on parole/probation) as millions of Americans become destitute, hungry, and homeless due to a severe scaling back of government jobs and social services.
We don't see that occurring right now as homeless rates are low due to social services and families taking up the slack for their unemployed in a labor market where unemployment isn't being properly accounted for.
Current methods of measuring unemployment are inaccurate in that they do not adequately take into account those who have lost their jobs and become discouraged over time from actively looking for work, those who are self-employed such as tradesmen or building contractors or IT consultants making a shadow of what they once did, involuntary early retirees, those on disability pensions who still wish to work in occupations suitable for their medical conditions, those who work for payment for as little as one hour per week but would like to work full-time, the available working population incarcerated in U.S. prisons (who may or may not be working while incarcerated), the "involuntary minimum-wage part-time" workers who are grossly underemployed (e.g. a middle-aged computer networker or programmer who is working in a retail store because he cannot find a permanent job for example), involuntary stay-at-home mothers who would prefer to work, and graduate and professional school students who were unable to find worthwhile jobs after they graduated with their college, etc...
The GOP platform is not going to change any of the above. That's red flavor-aid also.
In order to fix this economy, we have to fix U.S. trade and put unemployed and grossly underemployed Americans back to work in the private sector so they can both pay taxes again and not become expensive social problems.
Also desirable is decertifying public employee unions, E-Verifying the country, protecting U.S. invention/innovation like we did during the Cold War (to gain and maintain invention/innovation competitive advantages), and scaling back government spending.
The GOP just wants to lower federal income tax rates on U.S. businesses that don't pay any federal taxes or whom are at historically low rates currently and wealthy investors who pay historically low rates currently so they can invest in countries to further gut the domestic labor market and hand over what remains of our innovation advantage to foreign countries and foreign workers and dramatically cut government jobs and social services in a Great Recession without doing any of the other to ensure Americans can not just survive but prosper. That's red flavor-aid.
January 24, 2013 update - A new report from the non-partisan Congressional Research Service (CRS) finds that U.S. corporations report a huge share of their profits as officially earned in small, low-tax countries where they have very little investment and workforce while reporting a much smaller percentage of their profits in larger, industrial countries where they actually have massive investments and workforces.
Both red flavor-aid and blue flavor-aid are extremely damaging to most American citizens and the long-term national interest of the United States of America.
Recommended:
Barry C. Lynn, senior fellow at the New America Foundation think tank in Washington, D.C., explains what most Americans sense but don't yet understand, namely the how and why the level of monopolization has increased to the point where it hurts America's entrepreneurs and small businesses while staying just under the regulatory agencies ability to break it.
Red flavor-aid is a popular term used to describe problems with the GOP's economic platform while blue flavor-aid is used to describe problems with the Democratic Party's economic platform. Today we'll look at red flavor-aid.
Red flavor-aid says cut federal income taxes on corporations and wealthy Americans but around three-quarters of all U.S. businesses are currently structured as flow-throughs (e.g. pass-throughs) and currently pay zero federal income taxes while the wealthy's maximum hedge fund rate on long term capital gains is 15%.
If you're wealthy, the profits on your investments increasingly flow tax free through the businesses you invest in directly into your hedge fund where capital gains are taxed at a maximum rate of 15%.
The hedge fund then invests in the very corporations offshoring and outsourcing American jobs, capital investment, and invention/innovation to foreign countries and workers.
These companies also submit requests to the U.S. Office of Foreign Labor for almost a million foreign workers a year to be insourced to displace American workers further.
Though quotas exist, the Foreign Labor Certification FY 2010 Annual Report reveals that the United States Department of Labor's Office of Foreign Labor Certification (OFLC) processed 422,228 employer applications requesting 851,556 foreign workers in 2010, in the middle of a U.S. Great Recession to give foreign workers American jobs right here on U.S. soil!
A quick look at the Census Bureau's U.S. Population clock for April 2012 reveals one new international foreign worker enters the U.S. every forty four seconds. That's over 707,000 foreign workers entering the U.S. this year and taking new jobs while displacing American citizens from existing jobs right here on U.S. soil.
These companies actively resist protecting American made goods and services. They resist the implementation of tariffs and/or value added taxes (VAT) on goods and services not made or performed in the United States using only the labor of American citizens despite all of our serious trading partners engaging in the practice to protect their own domestic markets for their citizens.
Reference: http://www.brookings.edu/blogs/up-front/posts/2011/10/21-tax-reform-gale
This actually accelerates the nation's woes further gutting the U.S. labor market and ceding away our invention/innovation to foreign interests to use against us.
How is this red flavor-aid an economic solution for America?
And recently, the countries we've offshored and outsourced to have begun forming their own businesses (which are often state capitalized and owned in places like China) and begun competing directly against the very U.S. businesses that gave U.S. invention/innovation to them to build their products with.
But they also are buying American companies. Arco and Amoco oil companies are now British owned, IBM PC is now a Chinese company, Lucent Technologies and RCA are now French, Zenith is Korean, Frigidaire is Swedish and Westinghouse Nuclear is Japanese, Chrysler is close to being 70% owned by Fiat, etc...
Not to mention we're displacing American students to fill our colleges with these same country's students many of whom are working for their respective country's spy networks (such as China's Student Information System) and are here for our science and technology domains.
Reference: http://www.huffingtonpost.com/2011/01/24/chinas-student-informatio_n_813056.html
And we haven't even touched the formation of immigration networks that are violating the law by only hiring other immigrants and blocking American citizens from the industries they've taken control of.
The GOP wants to continue ALL of the above practices hurting our economy, the national interest, and the average American worker. That is red flavor-aid.
Cutting government spending to eliminate the deficit is necessary; however, cutting government spending by itself won't fix our economic problems.
The 2012 enacted U.S. budget contains $2.469 trillion in receipts and $3.796 trillion in outlays, for a deficit of $1.327 trillion.
Reference: http://www.gpo.gov/fdsys/search/pagedetails.action?packageId=BUDGET-2013-BUD
If we got rid of the deficit and cut government spending in half tomorrow, we'd still not have an economic recovery in this nation because of our broken trade paradigm and lack of good paying jobs for American workers in the private sector.
The result would be that we would stop increasing our national debt and start paying it off which is desirable but millions more Americans would flood into a very poor U.S. labor market without access to adequate medical care in an environment where income and wealth ownership disparity between the top 1% in this country and everyone else is quickly rising (see The Great Divergence by Timothy Noah).
Despite the rhetoric for cutting red tape and helping American workers and small businesses that both major political parties engage in, both parties are committed to policies that will further injure the U.S. political system and economy. Though some of their policies are the same (e.g. more free trade, more immigration, more nefarious treaties, etc...), some of their policies do differ and favor different demographics and special interests. The differences themselves will not materially change the downward decline of the U.S. standard of living for most Americans.
Red flavor-aid asserts that the U.S. can right our economy by cutting government spending and lowering federal income taxes further on corporations (most of whom pay zero federal income taxes) and the wealthy (who pay historically low federal income taxes) while expanding free-trade agreements and negotiating treaties (free trade and nefarious treaties are two items that blue-flavor aid has fully supported as well) that actually increase red tape, favor large trans-national corporations, hurt American workers, hurt small businesses, hurt U.S. startups, and actually increase red tape.
Reference: http://www.businessinsider.com/history-of-tax-rates
It will not.
What it will do is further redistribute America's income, wealth, ownership, and control to businesses and the wealthiest Americans; hollow out the U.S. labor market further as increased investment goes into companies offshoring and outsourcing jobs, capital investment, and innovation while insourcing foreign workers; increase immigration networks to further displace American workers because these interests won't E-verify the nation; strip unemployed Americans who can't find employment of medical care; and quite possibly begin to result in real increases in incarceration (1 in 31 Americans is already in jail/prison or on parole/probation) as millions of Americans become destitute, hungry, and homeless due to a severe scaling back of government jobs and social services.
We don't see that occurring right now as homeless rates are low due to social services and families taking up the slack for their unemployed in a labor market where unemployment isn't being properly accounted for.
Current methods of measuring unemployment are inaccurate in that they do not adequately take into account those who have lost their jobs and become discouraged over time from actively looking for work, those who are self-employed such as tradesmen or building contractors or IT consultants making a shadow of what they once did, involuntary early retirees, those on disability pensions who still wish to work in occupations suitable for their medical conditions, those who work for payment for as little as one hour per week but would like to work full-time, the available working population incarcerated in U.S. prisons (who may or may not be working while incarcerated), the "involuntary minimum-wage part-time" workers who are grossly underemployed (e.g. a middle-aged computer networker or programmer who is working in a retail store because he cannot find a permanent job for example), involuntary stay-at-home mothers who would prefer to work, and graduate and professional school students who were unable to find worthwhile jobs after they graduated with their college, etc...
The GOP platform is not going to change any of the above. That's red flavor-aid also.
In order to fix this economy, we have to fix U.S. trade and put unemployed and grossly underemployed Americans back to work in the private sector so they can both pay taxes again and not become expensive social problems.
Also desirable is decertifying public employee unions, E-Verifying the country, protecting U.S. invention/innovation like we did during the Cold War (to gain and maintain invention/innovation competitive advantages), and scaling back government spending.
The GOP just wants to lower federal income tax rates on U.S. businesses that don't pay any federal taxes or whom are at historically low rates currently and wealthy investors who pay historically low rates currently so they can invest in countries to further gut the domestic labor market and hand over what remains of our innovation advantage to foreign countries and foreign workers and dramatically cut government jobs and social services in a Great Recession without doing any of the other to ensure Americans can not just survive but prosper. That's red flavor-aid.
January 24, 2013 update - A new report from the non-partisan Congressional Research Service (CRS) finds that U.S. corporations report a huge share of their profits as officially earned in small, low-tax countries where they have very little investment and workforce while reporting a much smaller percentage of their profits in larger, industrial countries where they actually have massive investments and workforces.
Both red flavor-aid and blue flavor-aid are extremely damaging to most American citizens and the long-term national interest of the United States of America.
Recommended:
Barry C. Lynn, senior fellow at the New America Foundation think tank in Washington, D.C., explains what most Americans sense but don't yet understand, namely the how and why the level of monopolization has increased to the point where it hurts America's entrepreneurs and small businesses while staying just under the regulatory agencies ability to break it.
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