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11/21/08
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August 12, 2005 Politicians consider raising taxes a threat to their positions. They all want to promise tax cuts, not tax increases. None of them want to even mention the idea of increasing taxes of any sort unless it can be done on the sly without the public noticing or caring much. For example, few realize that payroll taxes have been increased each of the last five years simply by raising the “cap” from $80,400 to $90,000 and when President Bush claims that he will not raise these taxes; no one calls him on the fact that he’s already done it every year he’s been in office. As a result, politicians have turned to borrowing as a way to supplement their revenue. It allows them to plan a budget of $2.54 trillion for fiscal 2006 for instance, although last year’s tax receipts were less than $1.9 trillion and this year, fiscal 2005, doesn’t look much better. In an act of flippant financial irresponsibility, they plan on borrowing the difference. Like a credit card or mortgage, borrowing is nothing more than a future debt that taxpaying citizens must someday pay. Propaganda and misleading terminology aside, no one but the taxpaying public can pay off any part of the nation’s debt, a debt incurred by the federal government’s borrowholic compulsion. And considerably less than half of the country’s population pays income taxes, the government’s largest single source of revenue. Far too many Americans, even if they pay any attention at all to the national debt, believe that it’s the government’s problem. The government ran up the debt and it’s the government’s responsibility to handle it or pay it off. And the government does all it can to encourage this delusional thinking by labeling 42 percent of the national debt “Intragovernmental Holdings” (IH) and promoting the false idea that “the government owes itself” or various departments owe the Treasury even though there is no record of where this borrowed/stolen money went or which department owes the Treasury how much. It will come as a big surprise to these citizens to someday realize that the government ran up this debt in their name and there is nobody to cover it except the taxpayers of America and/or their offspring. Others, including individuals, pension houses, insurance companies, 401(k) and IRA managers, and so forth, believe that treasuries are the “safest investment in the world” yielding a marginal but secure profit. Whether they realize it or not, these American investors are loading their neighbors down with debt and expect their fellow citizens to honor these securities with annual interest and pay-off at maturity. And the government will make certain these loans are honored with tax money, taking it away from other programs or borrowing even more to keep the process going. The government cannot afford to miss any annual interest payments or payoffs or the game is up. Default is disaster. Van Zeff, the man in charge of selling treasuries in more flavors than Baskin Robbins, Commissioner of the Treasury’s Bureau of Public Debt, claims to be managing more than $2 trillion a year in sales mostly to replace treasuries that mature at the rate of several billion a day, a feat that not only keeps the national debt from going down but keeps it in pace with inflation. None of the talking heads of our tabloid news services have ever questioned this man or even acknowledged his existence or role in our economy. We currently have a debt obligation of $7.89 trillion that will top $8 trillion by the end of the calendar year. Approximately $4.6 trillion of this current debt comes from investors, including foreign countries that hold more and more of our debt while many Americans with money to invest have turned to real estate and fear another “bubble” such as they’ve already experienced with the stock market due to scams that were pathetically small compared to what’s pulled off by our government. On the other side, we have the IH portion ($3.3 trillion) of the debt with 151 trust funds all holding “special” nonmarketable treasuries. More than 92 percent of these so-called trusts belong to entitlements like Social Security, Medicare, the government’s own Federal Employees Retirement System (FERS), Military Retirement, Veterans Life Insurance, highway maintenance from gas taxes, unemployment taxes, airport and airways taxes, and so forth. In most cases, this was dedicated money that was paid in surplus that was not supposed to be spent elsewhere so the government pretended to have merely borrowed it. It’s all a sham – a supreme scam – the greatest economic hoax a government has ever pulled on its own citizens. The good news is that this IH portion of the national debt could be eliminated by the push of a delete key and everyone in the country would be better off except the government. To the government, our largest nonproductive bureaucratic employer, these bogus securities in bogus trust funds are a means to double tax us and it’s already happening in several of these accounts. For instance, the Unemployment Trust Fund has already gone from $92 billion to $53 billion in “holdings” and no one questions where the real money to pay benefits came from. All it would take is a little honesty on the part of our current two party political systems that each have a different strategy to avoid the issue of over taxation and corruption that they’ve each generated and supported since at least 1983. Almost all of this bogus debt has been accumulated in the last twenty-five years or so. And that honesty is sadly missing. Meanwhile, Alan Greenspan is worried over the fact that individual Americans are accumulating more personal debt than savings. As well he should since the foreign nations that hold so much of our honest treasuries could cash them in any time they tire of or feel threatened by our aggressive foreign policies and extension of Empire. And paying off these creditors could fall like a sledgehammer on the American taxpayers. And yet we continue to borrow from our former enemies and countries that are strategic competitors putting us further and further under their thumb. While Mr. Greenspan claims that these countries are “anxious to invest in America," that’s more sales pitch than fact. Treasuries are becoming more and more difficult to sell. If you follow these sales, you can’t help but notice that less than half of the treasuries “tendered” are actually “accepted” while the Treasury has had to bring the thirty year bond back to increase appeal. And our balance of trade deficit continues to grow. The evidence
is all over the place, but the American people have yet to “connect
the dots” to the economic squeeze they are caught in and are easily
distracted by things ranging from the trivial to life and death ventures
that the oligarchy throws in the way while complacent and overpaid news
services either ignore or avidly support the scam. Send a message to your elected representatives. Click here to start. Be sure to send a copy to Ed Henry.
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