The Number One Reason Americans Vote For The Democratic Party

Certainly there are many reasons why Americans vote for the Democrat Party; however, the primary and number one objective reason why Americans vote Democrat is:

I. As of January 2012, the U.S. Census Bureau announced that an astounding 49 percent of all Americans live in a home that receives some form of government benefits.

http://www.census.gov/sipp/tables/quarterly-est/household-char/2010/3-qtr/table2.xls

II. Now we add in all government workers that depend on government for their income. Total employment by industry (including federal, state, and local government employment) can be found at:

http://www.bls.gov/webapps/legacy/cesbtab1.htm

As of October 2012, the federal government employs about 2,807,000 people. State governments employ about 5,242,000 people. Local governments employ about 14,344,000 people.

So we need to add another 22,393,000 Americans plus all of their dependents that rely on government.

III. Next let's look at how much money government is pumping into the private sector to get an idea of how beholden the private sector is to government money (both what they collect in taxes but also what they borrow because government spends more than it has to the tune of $1 trillion a year currently):

1. Alan Peters and Peter Fisher (Associate Professors, Graduate Program in Urban and Regional Planning, University of Iowa) estimate that state and local governments provide $40–50 billion annually for corporate welfare.

2. The Cato Institute studies show about $100 billion a year currently is allocated as corporate welfare by the federal government.

3. The U.S. bailouts of Bush and Obama total $11 trillion committed with $3 trillion already spent.

http://money.cnn.com/news/storysupplement/economy/bailouttracker/

4. There are a material number of private sector businesses and self-employed individuals that profit off government contracts and many other ways besides the above.

Conclusion: It's apparent that the majority of the U.S. population is dependent on government for their money either completely or partially and they primarily vote for the Democratic party because the Democratic party promises to continue giving them government money despite much of what they receive originating from government borrowing and deficit spending rather than actual revenues.

Democratic voters are choosing the path Greece did and choosing it for exactly the same reason. Greece once had a healthy expanding private sector and economy but they greatly expanded government spending, expanded government employment, expanded government employee compensation, expanded welfare, expanded free trade, and raised taxes until their economy simply crashed.

All major credit rating agencies now give the U.S. a NEGATIVE outlook and have downgraded the U.S. credit rating. Further downgrades are expected as the national debt increases due to deficit spending. Eventually, if the U.S. doesn't change the path they are on, the national debt will become so large that the U.S. credit rating will decline dramatically resulting in an inability to continue borrowing to cover the massive deficit spending and the U.S. will resort to high taxation (driving an exodus of revenue generators offshore) and finally straight monetization. Hyper-inflation will occur and the world will drop the dollar as their currency of choice. Foreign creditors will press for repayment. This will have an extremely negative impact on the American people most have yet to comprehend.

And tragically, many modern liberals celebrate this as if it were a good thing arguing that it is inevitable that the U.S. decline and other nations reign supreme. The truth is that it never was inevitable that the U.S. decline to become a 2nd tier nation any more than it was inevitable that Holland and France would lose global dominance to Great Britain during the age of discovery. It is, rather, gross mismanagement and the choices our leaders are making which are resulting in our absolute decline. We certainly could make different choices to retain our lead.

This fantasy the modern liberals espouse that the entire world is coming together to hold hands and sing kumbaya in Marxist harmony is never going to occur. It certainly did not in the 20th century when much of the earth was unified in that worldview and it's not going to in the 21st century.

The countries which are supplanting us have very different political systems which are much more authoritarian and class-based. Individual liberty is going to diminish in the world and classfulness is going to become entrenched in a more world-wide system ruled by elitists that have no intention of sharing any more resources and power than they have to in order to maintain control.

Yet modern liberals celebrate the demise of their nation and what it stands for in the world because it's "fair" in their estimation. Their progeny will feel differently.

This growth we see in China and India isn't so much organic as it is a result of us giving and them taking what we have. We denude ourselves to build them up... them being our competitors.

It's tragic to see our failing public education system producing a belief-system template in our younger population that is deceived to the extent they actively work toward their own decline because for us to lose and them to win is "fair." What great ignorance of history, economics, politics, sociology, psychology, etc... They were taught to lose. They were taught that losing is better than winning.

Yet these same "progressives," champion increasing welfare. Welfare spending has hit a stunning, all-time high becoming the single largest government expense. A new report, prepared by the non-partisan Congressional Research Service (CRS) reveals that that the government’s means-tested 83 welfare programs jumped from $563 billion in 2008 to $1.03 trillion in 2011 and are rapidly accelerating at a rate that should give any sane American reason to pause.

The 83 federal programs examined by the non-partisan Congressional Research Service included only "means-tested" programs, meaning that their benefits are paid only to households or individuals with incomes at or below federal poverty levels.

They do NOT include programs to assist veterans, or entitlement programs, like Social Security and Medicare, to which people contribute through payroll deductions or monthly premiums.

They do NOT include the currently estimated $1 trillion through 2022 that government will need to spend on subsidies (e.g. government medical welfare spending) for ObamaCare.

They do NOT consider the enormous liability of simply adding up to 11 million poor illegal aliens to existing welfare programs if current immigration "reform" efforts are successful.

By comparison, the non-partisan Congressional Research Service noted that in 2011, the federal budget expenditure for Social Security was $725 billion, $480 billion for Medicare and $540 billion for non-war related defense programs.
 
Even without all the new immigration and amnesty designs, the current rate of welfare growth in the U.S. is categorized as unsustainable. That means the rate of deficit spending on welfare growth is so enormous that it will eventually devalue the dollar to the point of catastrophic consequence if it isn't reformed.

Lyndon Johnson's "Freedom from Want" welfare mentality has created a sprawling culture of welfare dependency that didn't exist before in America. It's a fact that if we cut all welfare spending tomorrow, the federal budget would almost be balanced. That's how much we are currently spending on 83 welfare programs.

The author isn't suggesting all welfare spending be ended but rather illustrating that austerity has a place in economic recovery along with trade reform, financial sector reform, reducing red tape on small businesses and start-ups, protecting American invention/innovation, correcting bureaucratic over criminalization on the American people which is creating risk aversion, etc... to increase and protect revenue. Both reducing spending and increasing revenue are desirable.

But the "progressive" wants to levy draconian taxes, which has begun, and greatly increase welfare spending while celebrating America's economic decline as "fair" for the world. That's not a recipe for economic recovery but rather an assurance of eventual U.S. economic collapse.

Some political scientists argue that's what they are after; however, a self-induced economic collapse as a key tactic in the cultural Marxist's "long march."

Sadly, the mainstream corporate media conglomerates have abandoned their role as the "fourth estate" to act as marketing organizations for either the socialist left or the neoconservative right with most aligning with the socialist left.

Both the GOP and the Democrat's economic platforms and political ideologies are flawed to such extent that a prosperous balanced sustainable recovery will never occur from either party in their present state.

There are many undesirable real life consequences to losing. Fixing America (2011) is a road-documentary daring to pick ordinary Americans' brains about America's financial crisis, the disconnect with the political elite, and ultimately collects their thoughts, their emotions and especially their solutions to fix America’s financial problems. Here's the trailer:



The Hoover Institution at Stanford University interviews Stanley Kurtz, a social anthropologist [PhD Harvard] and senior fellow at the Ethics and Public Policy Center, the author of 'Radical-in-Chief' a book about Obama's classical Marxist past and the extent the socialist left played in the financial and housing collapse through their community bottom-up activities.



United In Hate: The Left's Romance with Tyranny and Terror Hardcover by Dr. Jamie Glazov

Part 1: http://youtu.be/vP8jNwvvLJo
Part 2: http://youtu.be/4dg51EiQry0

Discover the Networks:

http://www.discoverthenetworks.org

"This website describes the networks and agendas of the political Left. The database is divided into 10 major sections."

Know The Common Propaganda Techniques Used By The Media:

The U.S. Labor Market and Household Income Continue To Worsen

From 2001 to 2010, U.S. median household income fell from $72,956 to $69,487. Now this is nominal dollars which magnifies the fall in household income for $72,956 in 2001 would be worth $89,996 in 2010 after adjusting for inflation as per the consumer price index (CPI).

The U.S. median household net worth, which is the value of assets minus debt, dropped from $129,582 to $93,150 over the same 10-year period. Again, this is in nominal dollars and $129,582 in 2001 would be $159,848 in 2010 after ajusting for inflation as per the consumer price index (CPI) (1).

(1) http://www.pewsocialtrends.org/2012/08/22/the-lost-decade-of-the-middle-class/#chapter-1-overview

The results of the 2011 American Community Survey (ACS), released by the U.S. Census Bureau, show that between 2010 and 2011, inflation-adjusted median household income either fell or stayed the same in every state except Vermont and that the distribution of income became more inequitable (2).

Worse yet, a new 2012 study from Sentier Research shows that U.S. median household income has continued to fall since the "end" of the Great Recession stating, "almost every group is worse off now than it was three years ago" (3).

Also declining were U.S. real wages (4) and the U.S. middle class (5).

(2) http://www.census.gov/newsroom/releases/archives/american_community_survey_acs/cb12-175.html

(3) http://www.huffingtonpost.com/2012/08/24/us-annual-income-recovery-recession_n_1828127.html

(4) http://www.huffingtonpost.com/2011/10/20/us-incomes-falling-as-optimism-reaches-10-year-low_n_1022118.html

(5) http://www.pewsocialtrends.org/files/2012/08/pew-social-trends-lost-decade-of-the-middle-class.pdf

One of the social impacts of this has been that the wealthy are increasingly segregating themselves from their less fortunate neighbors as this August, 2012 Pew Reasearch report titled 'The Rise of Residential Segregation by Income' reveals (6).

(6) http://www.pewsocialtrends.org/2012/08/01/the-rise-of-residential-segregation-by-income/

Job growth for U.S. citizens became scarcer too. Domestic job creation is now well below what is needed even to meet new entrants to the labor market with the labor force participation rate at 63.5%, which is the lowest share of Americans over age 16 in the workforce since September 1981. As the Wall Street Journal stated, "That's going way backward!" (7).

(7) http://online.wsj.com/article/SB10000872396390443819404577637653650025944.html?mod=googlenews_wsj

Complicating this dismal domestic labor market are statistics showing that in some areas of the country what domestic job creation there is has been increasingly going to immigrants both legal and illegal. Pew reported that in the second quarter of 2010, American citizens lost more than a million jobs while foreign-born workers gained 656,000 jobs (11). A Center For Immigration Studies (CIS) report showed that of jobs created in Texas since 2007, 81 percent were taken by newly arrived immigrant workers (legal and illegal) (8a).

A November, 2012 CIS report titled 'Who Got Jobs During the Obama Presidency? Native and Immigrant Employment Growth, 2009 to 2012' reveals that, "Since President Obama took office, 67 percent of employment growth has gone to immigrants (legal and illegal)" (8b).

(8a) http://cis.org/immigrants-filled-most-new-jobs-in-Texas
(8b) http://cis.org/who-got-jobs-during-obama-presidency

Despite much of the new job growth now bypassing U.S. natural born citizens, the large influx of immigrants is one of the reasons (in addition to high U6 unemployment, a decrease in real wages, the nation's broken trade paradigm, failure to protect intellectual property and trade secrets from foreign nations to wield for an economic domestic competitive advantage, etc...) for the dramatically increased size of the nation’s low-income population, (9) their resulting dependence on welfare, (10) and their growing reliance on unreported untaxed income (11).

(9) http://cis.org/2012-profile-of-americas-foreign-born-population

(10) http://www.cis.org/immigrant-welfare-use-2011

(11) http://cis.org/kammer/informal-economy

In the past, the U.S. simply absorbed the influx of foreign immigrants because U.S. businesses were booming and U.S. businesses used domestic labor almost exclusively. Free trade has changed that and now we simply don't have the jobs anymore. With demand for labor way way down and the supply of labor way way up, compensation for labor has also fallen. So there are fewer jobs and lower compensation and they are increasingly going to immigrants (both legal and illegal) who are creating immigrant networks that almost always hire other immigrants.

Except for the holiday Q4 temporary turn-around that occurs each year, all of these problems are getting worse over time not better.

Charitable donations have been seriously impacted (12), suicide rates are up (13), and the number of people who have fallen at least 12 months behind in student loan payments has risen by about a third over the last five years. Nearly one in every six borrowers with a student loan balance is currently in default (14).

(12) http://www.barna.org/donorscause-articles/571-the-economy-continues-to-squeeze-americans-charitable-giving

(13) http://www.bloomberg.com/news/2011-04-14/suicide-rates-rise-in-u-s-as-economy-declines-cdc-study-finds.html

(14) http://www.nytimes.com/2012/09/09/business/once-a-student-now-dogged-by-collection-agencies.html?_r=1&pagewanted=all

Furthermore, the U.S. deficit for 2012 is the highest on record (after the supposed end of the Great Recession) at $1.327 trillion usd (15) and inflation is occurring.

Note that U.S. military spending for 2011 is the highest on record (after the end of the Iraq War) at almost $712 billion usd (16) though the Office of Management and Budget (17) revealed that U.S. military spending for 2012 decreased a few billion dollars to almost $706 billion from its high of almost $712 billion in 2011. It should be noted; however, that the Obama administration has predicted in the 'President's Budget' that U.S. military spending overall will rise again in 2013 and 2014 primarily due to defense-related debt interest. Wikipedia explains 2012 military expenditures in layperson's terms (18).

(15) http://www.gpo.gov/fdsys/search/pagedetails.action?packageId=BUDGET-2012-BUD

(16) http://www.sipri.org/databases/milex

(17) http://www.whitehouse.gov/omb/budget/Historicals/

(18) http://en.wikipedia.org/wiki/Military_budget_of_the_United_States#Budget_breakdown_for_2012

Finally, primarily due to the state's enormous population, it's said that "as California goes: there goes the nation."

From the mid-1980s to 2005, California's population grew by 10 million, while Medicaid recipients soared by seven million; tax filers paying income taxes rose by just 150,000; and the prison population swelled by 115,000 (19).

(19) http://online.wsj.com/article/SB10001424052702304537904577277242682364690.html?mod=WSJ_Opinion_LEADTop

But it is the next couple of decades that will see the absolute decline of the U.S. economy in the world according to a recent Economic Co-operation and Development (OECD) report which states:

"On the basis of 2005 purchasing power parities (PPPs), China is projected to surpass the Euro Area in a year or so and the United States in a few more years, to become the largest economy in the world, and India is projected to surpass Japan in the next year or two and the Euro area in about 20 years" (20).

(20) http://www.oecd.org/economy/economicoutlookanalysisandforecasts/lookingto2060.htm

VIEW BONUS VIDEO: THE FLAW:

David Sington's documentary THE FLAW takes an in-depth look at how the credit bubble hastened the economic crash and is a documentary about the causes of the financial crisis, directed by David Sington, which splices the thoughts of economists such as Robert Shiller and Joseph Stiglitz with the testimony of participants in the housing market and some entertaining cartoons and archive clips. It takes its title from the testimony of Alan Greenspan to Congress in which he admitted to a flaw in his reasoning.

Wiki Leaks Details Of The Trans-Pacific Partnership (TPP) Negotiations

Thanks to leaked documents, we now know some of the undesirable details of the secret Trans-Pacific Partnership (TPP) Negotiations being conducted away from the public arena and most don't pertain to trade!



Rather, TPP would impose a system of binding global governance over our federal and state laws and courts. We would be obliged to conform our domestic policies on land use, food safety, financial regulation, foreign ownership, patents and copyright, and more to TPP's terms.

Failure to do so would result in trade sanctions and/or obligations to compensate foreign firms with our tax dollars - penalties imposed by foreign tribunals. We now know the following:

• Offshoring Incentives: TPP has the investor protections also found in NAFTA that help corporations offshore jobs by removing many of the risks associated with relocating to low-wage nations. The U.S. has lost more than 5 million (1 out of 4) of its manufacturing jobs since NAFTA and the global WTO went into effect. This will mean a loss of many more American jobs.

• Ban on "Buy American": Any firm operating in a TPP signatory nation would get privileged access to U.S. procurement contracts paid with our tax dollars! TPP would send our taxpayer money offshore, rather than recycling it here to create American jobs. "Buy American" would be penalized if not made outright criminal.

• U.S. Submitted to Jurisdiction of Foreign Tribunals: TPP would expand the notorious "investor-state" system, subjecting the U.S. to the jurisdiction of World Bank and U.N. tribunals. The tribunals would be empowered to order payment of our tax dollars to foreign corporations operating within the U.S. if they object to complying with the same laws that apply to U.S. firms.

• More Financial Instability: TPP would forbid bans on risky financial products or services while making measures to reduce systemic risk, such as capital controls, illegal.

• Higher Medicine Prices: Big PhRMA would get new privileges to raise drug prices.

Etc...

TPP secrets: Obama covertly handing more power to corporations



Interestingly, New Scientist published a study conducted by a trio of complex systems theorists at the Swiss Federal Institute of Technology in Zurich which combined the mathematics long used to model natural systems with comprehensive corporate data to map ownership among the world's transnational corporations (TNCs).

What they discovered analyzing the relationships between the 43,000 largest transnational corporations on earth was that 147 organizations, mainly banks, wielded a disproportionate power over the global economy.

http://www.newscientist.com/article/mg21228354.500-revealed--the-capitalist-network-that-runs-the-world.html

Forbes explained the size of these 147 companies is simply a reflection of the way most people invest in the public markets; however, allowing the world financial system to be dominated by a relatively few firms is obvious: when they go broke they take everyone else with them, as we have already witnessed.

Another problem is that they wield enormous power over governments and can end up dictating and oppressing the populations and small businesses (e.g. their competitors) of entire nations effectively becoming the "iron hand in the velvet glove" over not only our jobs, income, and property but also our government, rule of law, etc...

It is by leveraging our own government, that they have created a trade and business paradigm by which they displace our U.S. middle class into the ranks of the poor acquiring their income, wealth, and property in the process. The TPP is simply the next logical step for them to take.

It should also be noted that the Commerce Clause of our Constitution is an enumerated power listed in Article I, Section 8, Clause 3 which states that the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

Obama is currently "freelancing" the executive branch to push through a secret treaty to regulate commerce in the United States that allows for foreign corporations operating in the US to appeal regulations to an international tribunal that could over rule American laws. This is a secret backdoor strategy and it's completely out of line.

Also:
1. Visit 'Economy In Crisis' at http://www.economyincrisis.org for more information.

2. Enter your zip code at the Electronic Frontier Foundation to tell your representatives you want "to bring transparency to the TPPs agreement and ensure that the TPP text reflects the interests of all U.S. industries and citizens."

Balance The Budget And Pay Off The National Debt

The 2012 enacted U.S. budget contained $2.469 trillion in receipts and $3.796 trillion in outlays, for a deficit of $1.327 trillion.

Here's how it is being spent:

Public encyclopedia reference: http://en.wikipedia.org/wiki/2012_United_States_federal_budget#Total_revenues_and_spending

You can verify the data by accessing the 2012 Budget of the U.S. Government available from the U.S. Government Printing Office (GPO): http://www.gpo.gov/fdsys/search/pagedetails.action?packageId=BUDGET-2012-BUD

This author is an honorably discharged U.S. military veteran but notice that the largest discretionary cost in the budget is military spending at almost $712 billion for 2011. Except for government spending on welfare (not counted are veteran's programs, Obamacare, or entitlement programs like Social Security or Medicare):  it is the number one discretionary cost to the U.S. taxpayers.

The enormous amount spent on Iraq Wars aside (which arguably didn't need to be fought as Iraq had zero to do with 911 and al-qaeda though I would say we could have joined the powers in the region in keeping with our treaty obligations with those countries if they wanted Saddam gone badly enough to pay the brunt of the cost rather than the other way around), we are paying enormous sums of taxpayer money to protect Europe from Russia (completely unnecessary as the Cold War is over and the EU can certainly take over that responsibility) and wealthy asian countries like Japan, South Korea, and Taiwan. We get a rebate back from these countries but it's paltry compared to what we outlay in military spending for them.

Want to see what our military spending looks like compared to the rest of the world? We account for almost half of the entire world's military spending just by ourselves:

Public encyclopedia reference: http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures

You can verify the data by accessing the Stockholm International Peace Research Institute (SIPRI) military expenditure database: http://milexdata.sipri.org/

A major expense is the interest on our national debt. There's a lot of confusion on the internet about the national debt but the numbers are all published by our government and I have them right here.

The U.S. Treasury National Debt Statistics shows that on January 31, 1981 ten days after Ronald Reagan took office for the first time (U.S. Presidents enter office on January 20th and leave office on January 21st four years later unless they resign or are impeached), the U.S. national debt was only $934.073 billion total.

The monthly statement of the public debt of the United States for January 1981 can be accessed here: ftp://ftp.publicdebt.treas.gov/opd/opdm011981.pdf

As of March 8, 2012, the U.S. national debt is $15,517,794,642,311.25.

Type in the date above to confirm: http://www.treasurydirect.gov/NP/BPDLogin?application=np

Now debt is accounted for when it is incurred, not when it is paid. Here's what that looked like as of July 26, 2011:

Documentation: http://www.whitehouse.gov/infographics/us-national-debt

The OMB publishes the annual cost of interest paid on the national debt which is a major non-discretionary expenditure in the U.S. budget at $241.598 billion dollars for 2012 and estimated to be $248 billion for 2013 (see S-5).

This money goes out of the pockets of taxpayers every year straight into the pockets of our creditors and foreign countries hold a good share of it these days. The Treasury Bulletin, available online from the Financial Management Service categorizes ownership of U.S. Government securities by types of investors.

In order to reduce the amount spent on interest of our national debt, we need to balance the budget and then start paying it down. All spending areas can be reformed to help do this; however, how and what is cut must be carefully considered lest Americans be unecessarily hurt and even killed if areas such as medicare/social security, medical care for the indigent, disability, etc... are negatively impacted.

And it's important to note that tax breaks add up to almost the entire cost of the deficit currently.

It's also important to note that government welfare spending has rapidly increased as well.

But since the people and U.S. businesses don't want to give up their tax breaks, careful spending reform to lower the deficit combined with increasing revenue through fixing our economy is another way to balance the budget.

Though about 75% of all U.S. businesses are currently structured as pass-throughs that pay zero federal income taxes (contrast that with the year 1986, when non-taxable U.S. businesses comprised only 24 percent) and taxes on the wealthy are at historically low rates (for example, the hedge fund long-term capital gain rate is taxed at a maximum of 15%), we can carefully reform spending (including military spending) and fix our economy to balance the budget.

Putting 40 more million unemployed, underemployed, and underpaid American citizens to work at good paying jobs paying taxes would bring in hundreds of billions of tax dollars each year to the federal government. And it would benefit state and local governments as well. The combination of fixing our economy and appropriately reducing government spending would put the U.S. back in the black.

But that requires fixing U.S. trade, ending horizontal monopolies, ensuring job growth goes to American citizens rather than insourced foreign workers like so much of new job growth does now, etc... and neither party has shown an interest to do any of these things (we'll discuss why both party's politicians are deliberately ignoring fixing the U.S. economy and arguing about relatively minor federal spending cuts at another time as it's beyond the scope of this post).

The point that new job growth increasingly goes to foreign workers instead of American citizens is a major obstacle to balancing the budget. When American citizens are bypassed, new job growth doesn't benefit them and they don't pay taxes nor spend money. Also, the quality of the jobs is omitted from almost all media reports. Most of these new jobs are not on par with what Americans are accustomed to in pay and benefits and what we need to see to balance the budget.

The press has been touting new job growth in the media of late but they have omitted mentioning that a good share of it has gone to migrant workers and foreign workers insourced by the U.S. Labor Bureau's Office of Foreign Labor Certification nor that the jobs are not on par with what Americans are used to earning.

Look at the U.S. population clock and you'll see that as of the date of this article we net one international migrant worker every 46 seconds. That's 686,020 new American jobs going to foreign workers each year currently.

And though quotas exist, the U.S. Office of Foreign Labor Certification (OFLC) also imports foreign white collar workers to take new U.S. middle class jobs that are created in the U.S. but not offshored or outsourced as so many have been and contiue to be. In fact, the OFLC processed 422,228 employer applications requesting 851,556 foreign workers in 2010 and more in 2011.

Consider that in Texas, for example, between 2001 and 2007 the Center for Immigration Studies was able to show that 81% of all new job growth went to immigrant workers (both legal and illegal). Natural born American citizens were just passed over though the job growth was touted in the media and used to propel Rick Perry's run for the presidency. Both the red and blue teams play these games with the American public.

Documentation: http://cis.org/immigrants-filled-most-new-jobs-in-Texas

They have also ignored discussing U.S. population growth. New born American citizens quickly grow into adults that need to earn sustainable incomes and we have a net gain every year and when you add the foreign workers and the new population growth together, the U.S. is actually going backwards in job growth.

The number of illegals working in the Southwest may surprise you. Here's a study showing California's economy being negatively impacted by two million illegal aliens working under the table in that state.

Weak outlook for state seen: Many are working under the table, UCLA group says.

Cutting spending isn't going to be enough. If we are going to balance the budget without ending tax breaks and raising taxes, we need to generate revenue by fixing our broken economy and immigration system. Simply implementing a value-added tax (VAT) on all foreign made goods would bring in hundreds of billions of dollars into the U.S. Treasury. It would also stimulate new job growth in the U.S. resulting in increased tax revenues.

U.S. government employees should be agitating to fix trade so they can draw their income off government revenues rather than deficits as they currently do. It's in their long-term interest to do so. It's in all U.S. citizen's long-term interests.

But instead, their public employee unions, along with other Democrats are agitating for a "trillion dollar coin" solution. They assert that simply having Geithner mint trillion dollar coins, walk them over to the Federal Reserve and deposit them in the Treasury’s account to erase our national debt is a solution.

This makes about as much sense as waiving a magic amnesty wand to do away with all of the problems illegal immigrants are creating in this country which is to say it makes no sense at all. Obviously, the social and economic problems being caused by illegal immigrants remains after amnesty but now there is no way to remove them.

Likewise, to simply coin trillions of dollars out of thin air for the government to spend is called straight monetization and it has very serious negative consequences to a nation's people and economy.

From the Wiemar Republic to the Argentine economic crisis, modern history is replete with concrete examples of how printing enormous amounts of money from thin air has melted down entire economies.

Some of the negative consequences are that it generates high inflation adversely impacting savings and pensions while spurring increases in the price of goods and services eventually resulting in capital flight and replacement of the dollar as the currency of choice in the world ushering in uber-negative draconian economic problems for the U.S. people... for you.

Of course, it violates the rule of law and principles of economics as well as U.S. central banking policy while encouraging U.S. fiscal profligacy by finding a way to fund excessive government expenditures that does not bear the cost of paying interest on reserves or any interest differential between new and old debt (as the Treasury would if the Fed used standard open market operations). And, as stated, it has a much greater inflationary potential than open market operations because a direct infusion to the Treasury will definitely be spent while injections of reserves into the banking system will likely not enter the spending stream.

This is a very bad idea lacking any common sense that manages to undermine any semblance of sanity in both monetary and fiscal policy simultaneously. But the Democrats call it a solution. If you're trying to finish destroying the U.S. economy, then it's a "solution." That it is being seriously discussed by our politicians is a sign of how far the U.S. economy has fallen and what a mess has been made of U.S. fiscal and monetary policy.

The author hopes his "MBA analysis" has helped you to have a better understanding.

I recommend visiting Economy In Crisis for more information:
http://www.economyincrisis.org/

Update April 2014: China is poised to supersede the U.S. as the largest economy in the world but note that China's national debt is only about $5 trillion USD (1). Not a big deal since the U.S. owes China a little over $5.308 trillion (2)(3)(4). Of course, nobody owes the U.S. anything. We're stuck with our $17.577 trillion debt.

To provide some perspective, the entire U.S. national debt the month Ronald Reagan took office (note U.S. Presidents enter office on January 20th and leave office on January 21st) on January 20, 1981 was only $934.073 billion (5).

Now, using the CPI calculator (6), $934.073 billion in 1981 would be equal to $2,678.579 trillion in 2014. If the U.S. had passed the balanced budget legislation brought in 1982 (7), we'd be in an excellent position right now with respect to our national debt.

Data Sources:

(1) http://www.nationaldebtclocks.org/debtclock/china

(2) Federal Reserve Statistical Release. H.4.1. Factors Affecting Reserve Balances. Release Date: 17 April 2014. [Online Document]. Accessed 23 April 2014. [Data through 16 April 2014]. http://www.federalreserve.gov/releases/h41/Current/

(3) U.S. Treasury. Major Foreign Holders of Treasury Securities. Accessed 23 April 2014. [Data through February 2014]. http://www.treasury.gov/ticdata/Publish/mfh.txt

(4) U.S. Treasury. Monthly Treasury Statement of Receipts and Outlays of the United States Government for Fiscal Year 2014 Through March 30, 2014. [PDF Document]. [Data through March 2014]. http://www.fms.treas.gov/mts/mts0314.pdf

(5) Source: ftp://ftp.publicdebt.treas.gov/opd/opdm011981.pdf

(6) http://data.bls.gov/cgi-bin/cpicalc.pl

(7) http://fpc.state.gov/documents/organization/169050.pdf

U.S. Pass-Through Businesses Make Record Profits But Pay No Federal Income Taxes

Many Americans are confused about how U.S. corporations can be making record profits yet not paying any federal income taxes. The way most of them do it is through the “pass-through.”

Sole proprietorships, partnerships, most LLC's, and Sub-chapter S corporations qualify for pass-through status.

http://en.wikipedia.org/wiki/S_corporation

Despite record high corporate profits, the vast majority of U.S. businesses do not pay any income taxes to the federal government whatsoever and the percentage of U.S. companies doing this is increasing.

The ones that still do pay federal income taxes employ accountants to take advantage of loopholes and to shield profits in complex tax shelters to reduce tax liabilities as much as possible but let's look at the ones that don’t pay any income taxes (often despite record profits).

These companies are called pass-throughs which are structured to shuttle company profits along to investors (e.g. other names for “investors” are “shareholders” and “owners”).

Pass-through companies use a special structure to pass along profits to investors who then are supposed to pay income taxes. Despite taxes for the wealthy being at historically low rates currently, they funnel this money into hedge funds and other tax sheltered vehicles.

Pass-throughs are legal and encouraged by Congress and state governments and the Wall Street Journal reports that 69 percent of U.S. corporations were organized as nontaxable pass-through businesses in 2008.

Contrast that with the year 1986, when non-taxable U.S. corporations only comprised 24 percent of all U.S. corporations.

The National Federation of Independent Businesses survey found that 75% of all U.S. small businesses pay zero federal income taxes.

The percentage of all corporations and businesses (including non-profits) aggregated, is that about 75% pay no federal income taxes anymore and their number is rising.

Large companies are often structured as pass-throughs, with an estimated 60 percent of U.S. businesses that have profits of $1 million or more comprising this category, the largest such percentage of nontaxable businesses in any developed country.

http://bottomline.msnbc.msn.com/_news/2012/01/10/10094176-companies-that-pay-no-federal-income-tax-on-the-rise

For the wealthiest Americans, this money often passes right through non-taxed "pass-through" businesses into their hedge funds where long term earnings are taxed at a maximum rate of 15%... far less of a percentage of income than the typical middle-class wage earner pays.

Our government also bestows money grants to these U.S. companies from public funds and process U.S. business applications to insource foreign workers which displaces American workers while permitting them to offshore and outsource American jobs, capital investment, and innovation to foreign countries and workers.

For example, though quotas do exist, in 2010 the U.S. government processed 422,228 employer applications requesting 851,556 foreign workers in 2010 so American corporations can give foreign workers American jobs right here on U.S. soil.

http://www.foreignlaborcert.doleta.gov

Much of the "job growth" we see in the news today is going directly to these insourced foreign workers and immigrants both legal and illegal.

The Center for Immigration Studies (CIS) was able to show that in Texas, for example, between 2001 and 2007 81% of all new job growth went to immigrant workers (both legal and illegal) instead of American natural born citizens.

http://cis.org/immigrants-filled-most-new-jobs-in-Texas

Our government also enables a broken U.S. immigration system that fostered the establishment of Spanish-speaking immigrant networks all over the Southwest that block American citizens from working in the U.S. as those jobs go directly to the friends and family of the immigrants bypassing American workers.

A UCLA study showed that a weak economy in the state of California was the result of more than two million Spanish-speaking immigrant workers who were receiving their pay off the books without paying taxes (yet using all of the social services and public education they could qualify for both for themselves and their children). These immigrant networks typically only hire other immigrants or their families.

http://www.sfgate.com/default/article/Weak-outlook-for-state-seen-Many-are-working-2567081.php

Our government makes the American middle-class and blue-collar workers pay the lion’s share of the country’s bills (the individual income tax has been the largest single source of federal revenue since 1950) while permitting most corporations and businesses operating in the U.S. to avoid paying federal income taxes of any kind whatsoever and, at the same time, engaging in trade practices and immigration policies that are wreaking economic havoc on the very people's bottom lines who are paying the lion's share of the country's bills.

And for those companies that still do pay federal income taxes, the tax codes of foreign countries are exploited.

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.

I hope you have found this informative and will think about the ramifications.

2013 Update: And, the gap between hourly compensation and productivity is the highest it's been since just after World War II. This divergence is one of the major drivers of the nation's growing income inequality and it's getting worse every year.

http://money.cnn.com/2013/03/07/news/economy/compensation-productivity/index.html

Red Flavor-Aid - The Problem with Republican Economics

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.

Inside Job:

'Inside Job' provides a comprehensive analysis of the global financial crisis of 2008, which at a cost over $20 trillion, caused millions of people to lose their jobs and homes in the worst recession since the Great Depression, and nearly resulted in a global financial collapse.

Through exhaustive research and extensive interviews with key financial insiders, politicians, journalists, and academics, the film traces the rise of a rogue industry which has corrupted politics, regulation, and academia. It was made on location in the United States, Iceland, England, France, Singapore, and China.


Fall Of The Republic documents how an offshore corporate cartel is bankrupting the US economy by design. Leaders are now declaring that world government has arrived and that the dollar will be replaced by a new global currency.

President Obama has brazenly violated Article 1 Section 9 of the US Constitution by seating himself at the head of United Nations' Security Council, thus becoming the first US president to chair the world body.

U.S. Recovery Is Dependent On Fixing Its Broken Trade Paradigm

Before leaving office, U.S. President George H. W. Bush signed the North American Free Trade Agreement (NAFTA) On December 17, 1992 which Bill Clinton ratified and it became law. The era of American "free" trade had begun.

The result has been a hollowing out of American jobs, wealth, and innovation to foreign trading partners and the U.S. falling to the bottom in the 2010 CIA factbook for the worst trade account balance. There will be no long-lasting sustainable economic recovery for America until the broken trade paradigm is fixed.

So what went wrong? Trade works when it economically benefits a nation. The problem with our current "free" trade paradigm is that commercial activity is unbalanced to the point where it depletes our economy while enriching others. This has resulted in a redistribution of American jobs, wealth, and innovation which has benefited our trading partners, and those U.S. special interests that profit from it, but materially injured most Americans and the ability of the United States to maintain long-term economic, military, and political supremacy.

Our current "free" trade amounts to a unilateral abandonment of trade barriers by the U.S. to exploit cheap foreign labor and operating conditions for U.S. businesses with the justification that the developing world will grow from accessing our market to create viable markets which U.S. companies can then serve someday.

The problems with this are manifold. First, it leaves a great many Americans unemployed, underemployed, and underpaid. Secondly, foreign markets refuse to follow our lead. They continue to protect their own markets while engaging in damaging activities that range from intellectual property theft to currency manipulation.

U.S. presidents have worked hard with the G20 to try and get foreign countries to do away with their value added taxes (VAT) on American goods and truly dismantle their trade barriers but it's been a material failure. These countries benefit from maintaining a trade advantage and have no desire to negate it.

Our trade imbalance tells the story. Between 1989 and 2009, Americans bought over $6 trillion more from the world than we sold to them and just in 2010 and 2011, we added more than $1 trillion of trade deficit to that $6 trillion. -reference: U.S. Bureau of Economic Analysis

More recently, our trading partners have begun a big push of both buying American companies and forming many new businesses to serve their own markets.

Trading partners like Ireland and Sweden simply keep their tax rates below that of the United States (no matter how low we lower the tax rate on the wealthiest investors and public corporations foreign countries will simply offer a better rate because it costs them nothing to do so and they benefit from it at U.S. expense) enticing U.S. businesses to simply abandon the U.S. and relocate and an increasing number are taking advantage because of "free" trade. The U.S. becomes a place to dump their foreign made goods and services for profit.

The result of this has hurt all but the wealthiest American investors and the multinationals who have profited short-term from the hollowing out of America to maximize their wealth and the foreign countries and workers which benefit from this unilateral unfair trade paradigm.

Initially, the consumer benefited from lower priced goods but the cost of foreign goods is rising due to foreign demand for them increasing negating the benefit of them to Americans.

Yet the most damaging aspect of the unilateral unfair trade paradigm is that U.S. companies and Americans are so undermined by the broken "free" trade paradigm that there's little incentive to build or grow business in the United States anymore while existing American small business owners continue to realize decreased profits overall.

Unfortunately, there is nothing on the horizon from either U.S. political party suggesting they even want to fix U.S. trade. They don't get paid by the special interests profiting from it to fix it. They get paid not to fix it.

As a result, the GOP solution is simply to cut off government social benefits to Americans in a Great Recession in order to decrease spending while seeking tax cuts for the wealthiest Americans in order to implement "trickle-down theory" and stimulate the economy while the Democratic solution is to gain greater government control to try and reduce the costs while raising taxes. Either "solution" won't fix U.S. trade but will create more problems.

Both parties largely ignore military spending which has surged to almost $700 billion a year in 2010, before dropping slightly in 2011, enormous partisan pork earmarks (each just wants the other party to stop theirs), campaign reform to redirect political power away from special interests back to the American people, the decertification of public unions, the massive influx of insourced immigrant foreign labor and illegal immigration which continues to displace American workers, and most importantly: FIXING America's broken business trade paradigm.

It's important for voters to understand that trickle-down theory increasingly fails to benefit American workers because of the broken business trade paradigm. Before "free" trade, American companies used American workers almost exclusively. Now they increasingly use foreign workers both abroad and also insourced in large numbers on visas. Trickle-down today increasingly ends up in the pockets of foreign partners and workers and not American workers.

This is why the GOP strategy to implement trickle-down economics will fail to bring recovery to the average American. They are increasingly bypassed. It simply enriches the wealthy owners of the multinationals and props up foreign producer nations economies and foreign workers who increasingly make most of the products sold in the U.S. today while delivering American invention and innovation into their hands to exploit with respect to their own businesses that compete with the U.S. businesses giving them American invention/innovation!

And even here in the U.S. public corporations increasingly seek out the cream of the crop from the vast pool of low-paid foreign workers to insource

These reasons are also important factors why pumping stimulus money into our economy (a practice both the Bush and Obama administration's engaged in) hasn't brought a jobful economic recovery to most Americans and the practice of borrowing to "stimulate" the U.S. economy in this current "free" trade paradigm will eventually make things much worse rather than produce the long-lasting sustainable economic recovery to America its proponents claim. It flows in and it flows out bypassing Americans.

All the partisan politics being played in the media and by our elected representatives (and we need serious campaign reform to free our politicians from having to look to the pockets of the elitists and multinationals who are benefiting from our broken paradigm to even hold office) aren't going to solve this problem.

We can bring democide to America and balance the budget/pay off the national debt and our nation will still decline. We can turn to socialism in an effort to bring costs down to almost nothing and we'll still decline. Why? Because American jobs, capital investment, and innovation are being transferred to foreign trading partners enmasse due to our broken unilateral unfair business trade paradigm that passes as "free" trade today.

There will be no long-term sustainable economic recovery for the American people until the broken business trade paradigm is fixed.

As things stand right now, we may be looking at two futures. If the GOP "wins," we will end like Mexico. If the Democrats "win," we will end like Greece. Either way, the U.S. Gini index will continue to grow as a disparity between the wealthiest and everyone else continues. America as we know is slowly passing into history and the primary reason for it is a broken business trade paradigm.

The American people need to grasp this and demand in one voice systemic MAJOR trade reform back to a business trade paradigm that benefits Americans and the long-term U.S. national interest. It is the ONLY way to save the standard of living for Americans in the United States of America.

We have to return to an economy that out innovates, efficiently produces, and quickly supplies what the world needs and wants using American labor while protecting our innovation like we did during the Cold War so our competitors don't simply take it and use it against us. That's what made us the strongest economy in the world and what will restore us to long-term jobful sustainable prosperity.


Recommended Reading:

The Rich get Richer and Everyone Else Gets Poorer

The wealthiest one-tenth of 1 percent (0.1%) receives an astonishing percentage of national income and assets in the United States.

Statistically, the top one percent are becoming wealthier even as the working and middle class become poorer. The tea party means well but, unfortunately for America, are bent on hurting Americans to "fix" the problem rather than simply fixing the problem.

As John Hamilton, retired U.S. Foreign Service officer, points out:

"The distribution of our national income has become severely skewed. It is worse than in every single country of the Middle East and approaches Latin America's discord-sowing levels. On the Gini Index, where higher numbers represent higher inequality, the U.S. comes in at 45. For comparison, the numbers in Latin America range from 41 in Venezuela to 59 in Haiti. With a score of 23, Sweden leads all nations in having the most equal distribution of income.

The growing income inequality has been fueled by years of free trade policies, corporate offshoring of jobs, tax cuts for the rich and deregulation of the financial industry.

Such inequality throttles economic development. In the United States, the economic activity of a robust middle class has been an important driver of growth. Until recently, that is. In 1970, when our Gini coefficient was 39.4, the wealthiest 1 percent of Americans took in 9.7 percent of national income. That was a lot, but today the equivalent figure is 23.7 percent. The wealthiest one-tenth of 1 percent receives an astonishing 12.3 percent of national income.

According to former Secretary of Labor Robert Reich, middle-class economic activity is no longer generating new growth and jobs. As the purchasing power of the middle classes declined after 1970, families coped for a time. Women earned a second income; all workers put in longer hours and families drew on the equity in their homes. As those strategies are now exhausted, job growth is anemic. And because the wealthy can spend only a fraction of their income, they are not generating new growth either."

Hedge fund managers, for example, have their fee-derived income taxed at 15%. As Warren Buffet famously noted, he pays a lower rate of income tax than his salaried secretary. In the 1950's hedge funds had not caught on and the rich paid much higher capital gain taxes. The top marginal income tax rates for the super rich were over 90 percent. With John Kennedy's tax cut, the top rate dropped to 70 percent. Corporate taxes were almost 50 percent. This fueled a massive growth for the middle class whose taxes were very low and resulted in very low unemployment.

Today the super rich pay a small hedge fund tax and greatly reduced income tax. If the latest GOP tea party tax cut legislation for the rich goes through the Senate and is signed into law, the super rich income tax rate will drop to a mere 25 percent.

Meanwhile, what's left of the the middle and working classes make up the difference in federal and income tax rates while the poor join them in ever-increasing consumption taxes, sales taxes, fines, and fees. The middle class in particular is sinking into the mire and out of sight!

So what happens when the country decides not to materially tax the top one percent or public corporations any more, despite their accounting for an ever increasing percentage of national income which often doesn't get spent? The simple answer is: they go after the rest of us.

Government is currently seeking consumption taxes, fees, and fines at record levels. They are after taxes on Internet purchases, the gas pump, and almost any and every imaginable way they can come up with to get more money from you and I (even as they are seeking ways to slash medical care to the poor and soon-to-be elderly though government public employee unions who live off of tax dollars are mostly protected).

This hurts the poor, blue, and middle classes, but not the super-wealthy or the corporations. Contrast the GOP proposed 25 percent tax rate for the super rich with the super rich tax rate of about 90 percent in the 1950's which fueled a huge middle class that hired American workers after the Great Depression.

Knowing this, we have to wonder why middle-class Americans line up and pull the lever at voting time to ensure the rich get richer and everyone else gets poorer. Is it a passionate ignorance rooted in a disconnect and escapism?

The GOP Ryan plan will strip away Medicare and Social Security benefits for everyone under 55 (despite them paying into the fund their entire working lives), eliminate much student aid, make healthcare more inaccessible, encourage states to raise taxes through increasing state taxes, sales taxes, consumption taxes, fees, and fines yet will slash taxes on the rich to record lows while ignoring the issues of trade reform, corporate offshoring of jobs, deregulation of the financial industry, etc... all of which benefits the top 1 percent but hurts the American worker and small businesses.

But here's the real problem with the GOP tea party best thinking:

The rich are the primary investors in the large public corporations which have been moving into middle class spaces and offshoring, outsourcing, and insourcing middle and working class American labor to other countries citizens rather than Americans now for a couple decades. This has created a hollowed out middle class, a poorer working class, more poor, and high unemployment (i.e. the unemployment rate doesn't account for the number of actual unemployed Americans).

The public corporate takeover of the middle and working class space has been likened to locust swarms of old that flew in, consumed everything in their path, and left nothing behind them but big retail centers to dump their foreign made consumption junk (which is now rising in price since demand for it overseas has increased) on what's left of America.

This is not an anti-corporation article. The small private corporations of the middle-class, employee owned corporations, and yes large public corporations have a healthy role to play in our economy. But what's been allowed to occur is unbalancing the nation and any real solution must account for it.

All of this has put tremendous pressure on the middle and working American classes and they spawned the tea party in an attempt to address it. Unfortunately, they really don't understand what we've shared and so they voted for corporate sponsored and paid for GOP legislatures to do something about it. What do you think those legislatures are doing?

They are taking steps to ACCELERATE the problem by giving big tax cuts to the rich and ensuring corporations can continue to operate without paying federal taxes so the large public corporate takeover of the middle class space continues faster hurting both Americans and the national interest.

The choice here:

1. You can reduce taxes on the rich and large public corporations more and further accelerate the decline of the middle and working classes hurting them and the poor and driving us right into a new American caste system.

2. You can raise taxes on the rich; close the ability of U.S. businesses to structure as flow-throughs or relocate outside the country to avoid paying taxes and reform their loopholes; implement adjustable value added taxes on all products and services sold in the U.S. that use foreign labor for both American and foreign companies; lower taxes for the middle and working class like we did in the 1950's; roll back the red tape and tort on U.S. startups; E-Verify the nation and end the illegality of the Spanish-speaking immigrant networks that refuse to hire American citizens that are not friends and family members, etc...

U.S. businesses have fifty state choices to operate in using American labor. They cannot simply abandon the U.S., except as a place to dump their goods and services. And, labor unions undergo reform so we don't have a repeat of the situation that occurred in the 1970s.

This funds the government and invigorates the middle-class which expands competing with the large business space in hiring the working class (and poor) at decent wages (not minimum wage retail outlets which dump foreign made goods on the public after decimating all middle and working class in the spaces they took over) and greatly reducing unemployment. This protects American jobs from illegal workers and illegal immigrant networks. Since American citizens actually spend their money in the U.S., instead of sending it out of the country to support relatives, it further drives economic domestic recovery and economic expansion around the world.

The tea party is unwittingly pushing us the wrong way into a new American caste system where everyone but the super rich become poorer by the year. But then the GOP has been going down this road for a long time.

Reagan signed the great amnesty and engaged in massive deficit spending and every other Republican administration has since. They outspent the Democrats, who under Clinton managed to incur a surplus which the Republicans spent during the Bush years and then continued running massive deficits beyond anything the Democrats did in the years since Reagan.

Ronald Reagan must be credited for winning the Cold War with this tactic of massive deficit spending on the military; however, the Republicans chose to continue the practice while passing unfair "free" trade legislation with its offshoring and outsourcing; tax cuts for the rich; massive immigration and insourcing, etc... which when coupled with Democrat mismanagement in almost all of these same areas led us into the situation we are in today.

It can even be argued that initially, Obama simply implemented the previous administration's bailout and spend philosophy after the Bush administration wasted a taxpayer fortune to charge Iraq for still missing WMDs instead of stopping a domestic economic meltdown caused by systemic changes in our economy, the trade imbalance, credit bubble, post-financial deregulation debacle, and housing bubble though it is true that the Bush administration and the Republicans did try to reign in Fannie and Freddie (but the Democrats would not let them). Afterwards, Obama certainly displayed a massive deficit spending philosophy of his own.

The truth is that Democrats are simply not fiscally conservative and the Republicans are primarily fiscally conservative these days when it comes to hurting Americans in a Great Recession. Both ignore most of what needs to be fixed. Both want to make things worse for most Americans.

They pay a fortune to ensure the military defense of wealthy Asian and European countries that should be paying for their own defense. They spend another fortune fighting wars all over the globe... most of which are unnecessary. They seek deep tax cuts for the rich and trade legislation that only helps the wealthiest Americans and corporations but hurts American workers and small businesses. They won't even give them a fair chance by considering adjustable value added taxes (VAT) on foreign goods and services. They won't fix healthcare. They ignore government public employee unions and pensions and their own partisan pork. Etc...

And we simply cannot innovate our way out of this. This is because the way business is done has changed as a result of the free trade legislation. It used to be that innovation happened here, was closely protected, and wielded to give the USA and the world what they needed and wanted using American labor.

Increasingly today, innovation happens here and there and the innovation that occurs here is simply shipped overseas as fast as possible to China, India, etc... where foreign labor is used to produce the goods that are then shipped back and dumped on the American public through large public corporate retail chains. It's a pail with a big hole in the bottom. You pour the idea creation, invention, innovation water in and it runs out the bottom into other countries buckets.

Then there’s the issue of massive illegal immigration and chain migration from the poorest of Latin America which has materially affected state’s safety nets, taxpayers, and economy in negative ways. Instead of bringing the brightest people on the planet and making them Americans, we simply allowed the poorest to violate our laws… those least able to contribute to America and gave them and their children citizenship without ever properly enculturating them to be Americans.

Should we give them a path to citizenship at this point? Some say we should and some say we should not. Personally, we believe we can by opening up the normal process of becoming an American to them (no amnesty) IF we implement a national E-Verify program, alter our open chain migration policy, and dismantle the sprawling Spanish-speaking immigrant networks that have taken hold of entire industries in the Southwest and actively block non-Hispanics from them.

We need to create loyal Americans who can really contribute to our country and economy... not Americans-In-Name-Only (AINO) who have no idea what it means to be an American and whose loyalty is to another country. Dual citizenship does not make us stronger.

Both parties are responsible for the current economic mess and pursuing policies that hurt Americans instead of fixing them in a way that is good for Americans. But you have to look at the facts, instead of the hyperbole coming from both parties, to understand this.

Read this: Why Wall Street Protestors Are Angry!

Support this: Citizens for Responsibility and Ethics in Washington DC (CREW)

Watch this: Park Avenue: Money, Power & The American Dream (2012)

The Unemployment Situation

More than ever before, Americans are feeling uncertain about the future. Business has changed dramatically. In addition to offshoring and outsourcing of American jobs, capital investment, and innovation to foreign countries and workers and the formation of supplier and retail monopolies that injure American entrepreneurship and market selection, the U.S. government continues to insource large numbers of foreign workers on various foreign labor certification programs while ignoring the sprawling immigrant networks that illegally only hire other immigrants.

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 Bachelor's degrees doing odd jobs or working part-time, etc...

So it is no surprise that we see articles like the following which reveal about one hundred million adult Americans wake up each morning without a job to go to: There Are 100 Million Working Age Americans That Do Not Have Jobs

The cost of education continues to rise despite the fact that a college degree, while desirable and beneficial, is no longer a guarantee of employment anymore and student loan debt is at an all time high in the U.S. with large numbers of college graduates unemployed, underemployed, and underpaid.

If you aren't a government worker with a generous pension and guaranteed retirement and health benefits for the rest of your life and are either unemployed or underemployed, what are you going to do in this economic environment?

Several months ago, the Economist stated that 56.2% of college graduates in the United States between the ages of 25 and 29 are working low skilled jobs while the Chronicle of Higher Education last month reported that 60% of the increase in the number of college graduates from 1992 to 2008 worked in low skilled jobs.

The Economic Policy Institute (EPI) said in January that there are "no jobs for more than three out of four unemployed workers." NBC reported in February that "The numbers are staggering: 78 percent of the jobs lost since 2007 were held by men, leaving one out of every five working age men out of work."
Gallup reported in 2010 that underemployment is almost 20% and a 2010 Bureau of Labor Statistics report showed that underemployment more than doubled in all age groups between ages 30 and 54.

Furthermore there are a few disturbing reports in the media that some companies have instructed their human resource departments not to hire unemployed career professionals.

The AARP Public Policy Institute just reported that older workers"endured a staggering 331% increase in unemployment over the last 10 years" and that "During this 10-year period, the number of people unemployed individuals age 55+ increased from 490,000 to 2,114,000. The number of unemployed individuals age 65+ jumped from 143,000 to 479,000."

The U.S. Bureau of Labor Statistics in 2010 said the employment status of persons with a disability in the United States is much higher than those without a disability even as their Office of Foreign Labor Certification (OFLC) approved 117,409 foreign workers (just on the H1B visa classification) to enter the country (in a Great Recession) and take American jobs from American workers.

The U.S. Census Bureau’s U.S. population clock reveals that this year alone, 686,106 net migrant workers entered the United States to displace American citizen workers.

Then we have to take into account the United State's birth population growth. Though U.S. population growth has been slowing, we still had 4,135,665 new births in this country this year for a material net gain after deaths were subtracted. Little people grow up to be adults that need to earn a sustainable income too.

Center for Disease Control and Prevention FastStats U.S. births

Then there are the illegals who are taking American jobs in immigrant networks built to accomodate them right here in the United States. In Texas, for example, between 2001 and 2007 the Center for Immigration Studies was able to show that 81% of all new job growth went to both legal AND illegal immigrant workers. This was widely touted in the media as a recovery for Texas and used to propel Rick Perry into the spotlight… until everyone found out Americans didn’t get the new jobs that is.

This is not good news for any of America's unemployed and underemployed workers.

Unemployed, underemployed, and grossly underpaid American citizens need jobs and access to medical care in the United States. The media and our politicians are wrong to give the lion's share of new job growth to foreign workers while ignoring the overall loss due to population growth for political reasons.

Link: http://www.wnd.com/2013/08/heres-the-real-unemployment-rate-2/

Update: Bureau of Labor Statistics Data show Americans dropping out of the labor market.

Labor Force Statistics from the Current Population Survey: