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Investing 101 - Jul 31, 2011 - Printable Version
- A Seven Step Plan to Save America (Part 1)
by Mark Faulk
Welcome to the new age of politics, where a handful of corporate shills elected under the guise of responsible government can hold the entire country hostage under the threat of collapsing the economy. It’s “Give us what we want or we’ll bring down the entire world: the sequel.” First we break the bank bailing out Wall Street, giving tax breaks to the ultra-wealthy, and financing unwinnable wars. And now, it’s payback time. It seems our country’s lawmakers have finally come to an agreement on how many poor, elderly, students, and disabled will be sacrificed in the name of surrender to the ruling class. According to the Associated Press, the agreement will mean that states will lose federal funding over the next decade for, among other things, the Head Start school readiness program, Meals on Wheels, worker training initiatives, transit agencies, and education grants that serve disabled children.
I thought I would throw my own recommendations for cutting the national debt into the political paper shredder that our country has become. I started working on this piece about four weeks ago, but it seemed presumptuous to think that I would have a better plan for reducing the deficit then our elected representatives in Washington. As it turns out, almost anyone in America could come up with a better plan than the one that appears to be on the verge of limping through Congress just in the nick of time. My numbers are pulled from the most reliable sources I could find, and some of them might be off, but then, I’m a writer, not an economist. Get over it.
END THE WARS IN IRAQ AND AFGHANISTAN:
This one is a no-brainer. President Obama promised to end both wars during his campaign, and other than feeding the military industrial complex; neither war serves a continuing purpose. And the media trying to blame the tragic bombing in Norway on a blond fake al-Qaida terrorist doesn’t change that. Neither does the now hollow patriotic battle cry of fighting some vague global terrorist threat. If America collapses from the debt of fighting endless wars that have long since outlived their usefulness, then the terrorists win.
SAVINGS TO END WARS IN IRAQ AND AFGHANISTAN: $170 Billion per year
TOTAL SAVINGS OVER THE NEXT TEN YEARS: $1.7 Trillion
CUT MILITARY SPENDING:
First of all, let’s call it what it really is: The War Department. Putting a spin on it by changing the name of the War Department, first to the National Military Establishment (in 1947), and then to the Department of Defense two years later, doesn’t change history. While an argument can be made that declaring war on Afghanistan was an act of defense, most of our military actions since World War II have been political and aggressive in nature, not defensive.
Even the nature of military conflict has changed. War is not the same as it was in World War I or WWII. The recent killing of Osama bin Laden illustrates that most successful attacks on terrorism, which both Bush and Obama have called our greatest military threat, are small, pinpointed strategic attacks, not massive Shock and Awe blanket bombings of entire countries. So do we really need to spend as much money on our military as the rest of the world combined? Instead, we should revamp our military approach to fit the smaller, intelligence-based attacks that have proven to be more effective in fighting the compact terrorist cells that are our only real military threat in this day and age.
The United States also has the largest occupying forces in the world, with a military presence of 2.5 million troops stationed in over 700 military bases in 150 countries worldwide. It’s difficult to imagine that we couldn’t easily cut those numbers in half without any significant change to the security of the world, and certainly not to the security of the United States, which should be our main priority.
To counteract the arguments made by such military hawks as Republican historian Robert Kagan that “The announcement of a defense cutback would be taken by the world as evidence that the American retreat has begun”, we need to instead herald as a new era of military might. And yes, I’m suggesting that we put our own positive spin on it:
“The United States is overhauling our military complex in order to address the current and future threats of terrorism that are the world’s greatest danger. We will capitalize on our successes in pinpointing and taking out terrorist cells and eliminating their leaders by creating a leaner, more strategic-based fighting machine.” (And oh, by the way, it will save American taxpayers $147 billion a year while we’re improving our military capabilities.)
SAVINGS TO CUT OVERALL MILITARY BUDGET (DEPARTMENT OF DEFENSE AND HOMELAND SECURITY) 25%: $147 Billion per year
TOTAL SAVINGS OVER THE NEXT TEN YEARS: $1.47 Trillion
TAX THE RICH:
Another no-brainer, and anyone who argues differently is either highly misinformed, delusional, or one of the lucky 2% who actually earn over $250,000 a year. Polls taken over the past few months have shown that somewhere between 65 and 72% of Americans favor raising taxes on the rich. Frankly, I’m surprised it’s not 97%, but either way, it’s as clear a mandate as Washington will ever have that we want the rich to pay their fair share.
Let’s be clear here, this is not Washington taking money away from hardworking Americans who happen to be wealthy, it’s money that was handed to them on a silver platter in the guise of tax breaks to stimulate the economy under President Bush. Bush lowered taxes for the wealthy in 2001, 2002, 2003, 2004, and 2006. It did absolutely nothing to stimulate the economy or job growth, and sent the deficit into the stratosphere. His giveaways to the rich turned a projected surplus of $6 trillion into a $6 trillion deficit. In fact, Ronald Reagan’s budget director David Stockman called Bush’s tax cuts “the worst fiscal mistake in history”. So yes, the money given to the top 1% in tax breaks did contribute to the current economic quagmire, and it’s way past time they gave some of it back.
IRS statistics show that the top 400 earners in the US had an average income of $270 million, and paid actual taxes equal to 18.1% of their income. On the other hand, the average taxes paid by wage earners with an income of $60,000 per year were 25%. How can anyone call that fair?
As recently as 1988, the rich were paying 35% in taxes on dividends and capital gains (where they make the bulk of their income), now they pay 15%. Here’s a breakdown of the results of lowering taxes on the ultra-wealthy since 2001:
- 66% of the income growth went to the top 1% of all Americans.
- The top 1% of U.S. households owned nearly twice as much of America's corporate wealth as they did just 15 years ago.
- 83% of all U.S. stocks are now in the hands of 1 percent of the people.
- The average executive's paycheck is now 500 to 1 over the average worker's paycheck. It used to be 30 to 1 in the 1950's
- The top 10% of Americans earned around 50 percent of our national income.
- The bottom 80% of American households now only own 7% of the liquid financial assets.
Enough said.
REVENUE FROM RAISING TAXES ON CAPITAL GAINS, DIVIDENDS, ESTATE, AND INCOME FOR THOSE MAKING OVER $250,000 A YEAR: $70 BILLION PER YEAR.
TOTAL REVENUE OVER THE NEXT TEN YEARS: $700 BILLION
So there you have it, we’ve only tackled three of the ways that we could begin to pay down our national debt, and we’re already cutting it by $3.87 trillion dollars over the next ten years. I can’t promise that the proposals in the second part of this series will equal that substantial number, but I can promise you that my ideas to pay down our national debt won’t put the burden on the poor, the elderly, and the disabled, or even on the middle class, for that matter. And it won’t take a single penny from Social Security, Medicare, Medicaid, public education, or benefits to single mothers.
And that, my fiscally responsible Americans, is the Faulking Truth.
Mark Faulk, author of “The Naked Truth: Investing in the Stock Play of a Lifetime”, which chronicles an incredible true story of fraud in our financial markets www.thenakedtruthbook.com , has written over 150 articles on the topic of financial reform and naked short selling since 2004, and has logged hundreds of hours in radio and television interviews. He recently completed work on a major documentary about financial fraud, due to be released in 2011.
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