Mortgage Our Future?

Senator Tom Coburn suggested today that it is not realistic to mortgage our future to continue our spending of today.

Where was he during the Bush administration?  I believe he was elected in the 2004 election cycle, and therefore has some responsibility for our current debt problem, but I like his style.

What I don't like is that no one is understanding the fundamental flaws in our current economic system where money moves up the totem pole, essentially putting all that extra weight from the cash at the top on the people at the bottom.

We subsidize the rich by taking from the poor and the middle wage earners, which no longer have any money to have moved up the totem pole.

There are so many things wrong here that most people think they've divined the single problem which brought us to this place of economic stagnation, but it is not that simple.

We began mortgaging our future during the Reagan administration when credit became cheaper and added to the national debt by vast amounts of private debt.  Our wages became stagnant due in large part to tax cuts for the wealthy, which took money out of the pockets of the poor by government entitlement spending cuts, and by negating corporation's investments in their workforce by essentially ending retirement programs except for those of labor unions.  But Reagan wasn't done yet and he busted the Air Traffic Controllers union, thereby showing that unions could be busted.

Now, at the time, not only were we busting unions and giving the wealthiest people in the country massive tax cuts, but we were forced to view the 401(k) section of the Reagan tax cuts as the only retirement participation, which continued to bring down the amount of money available to middle wage earners whilst corporations have exercised their right to divest themselves of pensions by legalistic manipulation of the system and declaring a re-organization of their companies.

These pension divestments were provided for by the Pension Benefit Guaranty Corporation, instituted under Richard Nixon, but our corporations did not pay all the funds they were committed to pay.

Consequently we are $750 Billion more dollars in debt because of corporations shirking their legal obligations.  For instance, the PBGC had to take on the pension responsibility for Lehman Brothers' retirees after the failure of the corporation, which includes some 21,000+ people.

As you can see, there is more than enough blame to go around, but we haven't touched upon more than 10% of the problems compounded by both corporation's actions and governmental actions and inaction.

The largest part of the problem was instituted by Ronald Reagan when he began deficit spending by not paying for a $1.2 Trillion tax cut, like George Bush, for the immensely wealthy.  At that point in time, the richest people had paid as much as 70% income tax and Reagan moved that down to 56%, as I recall.  It was a fiasco as far as tax revenues were concerned, so Reagan then increased taxes in 1985, 1986, 1987 and 1988, almost all of which fell on the middle wage earner's backs.

We just moved trillions of dollars from the middle wage earner to the rich in just a little over 20 years in one paragraph.

Reagan also deregulated both the airline industry, which used that opportunity to start massive re-organizations, cutting pilot unions benefits and then dropping them on the PBGC, yet again.  While he was at it, he deregulated the Savings and Loan industry, resulting in 500 Billions of dollars of taxpayer bailouts, some of which went into the pockets of Neil Bush, George W.'s brother, either directly or indirectly.  I don't believe Neil was prosecuted, but he did make a whooping $50,000 payment deal within a federal lawsuit whilst maintaining his innocence.

Of course, the above was during the time his father was President.

And, of course, Neil changed gears yet again (he had failed at every business he tried), and during George W.'s presidency gained large preferred contracts across the country to provide school books at a lucrative rate under No Child Left Behind. There were much better books available, widely known in the educational institution, yet were overlooked during this same time.

Out of all of this we have again moved Billions of dollars more to the rich, and the outcome is a regionally based system where airline pilots, with the lives of hundreds in their hands per flight, are earning far less than minimum wage without pensions, and we also have an education system still reeling from a dropout rate over 30% because our teachers couldn't teach pupils how to learn.  Instead the teachers taught how to pass standardized tests.  That knowledge lasts until the test is taken, and the class moves on to the next test.

And yet no one is learning how to learn.  This eats into our employment base.  Billions more are lost or pocketed on wasted education efforts and even more is lost to not having a capable workforce for maintaining jobs in America.  The loss of these jobs ends up directly in a lack of tax revenues for the government to continue funding our entitlement programs.

But one of the most outrageous decisions made which created our massive deficit spending was made by Richard Nixon, who, in a conversation with Bob Haldeman (available from the Nixon tapes) decided he liked the Kaiser proposal for health care, which essentially was described by Haldeman as "the least health care for the greatest cost".

That system still exists today and is bankrupting our country.  In another few years health care costs alone are going to become greater than 1/3 of our expenditures vs GDP.

But one thing you have to understand is that we are talking about costs of health care, which are going up so fast that inflation is overshadowed by the extra expenses.

The Republicans have been suggesting that cuts in Social Security, Medicare and Medicaid are needed, but their solutions don't answer the rapidly increasing costs, which are controllable.  By simply cutting the government's involvement with paying these costs they have decided to kill any and all of these social programs, Social Security, for example, which has been around since FDR.

And that is what they want to do.  They have been trying to "starve" the beast, as they have been saying for a couple of decades now, so that the programs are no longer pertinent to the American people.

But it is just another way for them to move money up the totem pole by placing the costs on the seniors, the disabled and the poor, all as they are creating more poor on a day by day basis.

If you look at the situation in the long term, what happens?  More seniors, disabled and poor will not be able to participate in health care and this would actually kill an entire industry.  Then there would be even more millions of people out of jobs because there are only so many doctors necessary to service a few million rich people.  Big Pharma wouldn't be researching more ways to fight the newest infirmaries plaguing America, and again more unemployed.

By the Republicans desiring to "starve the beast" of government, they actually condemn our modern economical system to a slow but unrelenting death.  And where are the rich going to spend their money when no one accepts money anymore?  The poor will have long before devised a system to guarantee their survival.  The rich will still think paper money makes a difference.