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Mayor Emanuel’s Fiscal hyperbole

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Recently, in regards to the city’s fiscal condition, Mayor Rahm Emanuel said “If we make no reforms at all across our pension funds, we would have to raise City property taxes by 150%… Business and families would flee, not just from our city but from our state,”

This deceptive wording and hyperbolic rhetoric has been a calling card for Rahm ever since he questionably attained the position of mayor. Rahm is using the fiscal crisis that the states faces as an excuse to gut the pensions of hardworking Teachers, Firefighters, and Policemen in Chicago.

tifNot once does he bring up Tax Increment Financing (TIF). TIF used to be a off-the-book financial robbery of 1 of every 10 tax dollars that the city collects from its citizenry. In fact this fiscal diversion has robbed the city of more than 5.5 Billion dollars in revenue since 1986.

What is TIF and how is it possible that tax payers are funding something that delivers almost nothing in terms of public services? TIF was supposed to be a program that diverts tax dollars to designated projects that improve impoverished areas of the city, but it has proven to be just another tax subsidy for private companies. It turns out that it is a slush fund for corporate elites masquerading as an economic development tool for under-developed communities.

The costs of TIF has greatly exceeded the pension requirements for the city, but Emanuel only mentions the pension programs as a cause or solution for the fiscal wrongs of Chi-Town. For shame on you Emanuel for ignoring decade of fiscal sleight of hand that has been masked in the veil of the TIF program. Since 2007, the cost of the TIF program has exceeded that of the pension programs, so why isn’t consideration given to modify that program? Oh yeah, no one makes billions upon billions of dollars in corporate welfare and crony rewards.

The city’s pension costs were $385.8 million in 2012, while TIF diverted $457 million in property tax revenues. If this was just about the city’s budget, Emanuel would be looking at the revenue that is diverted by the TIF program than the pension and it will less of a negative impact on the lives of our citizens.

In a nutshell, Mayor Emanuel is not giving the citizens the full picture. He is merely pointing is budget cutting fingers at the well-earned pension program as the main rationale for the city’s financial shortfall. Please remember Mr. Emanuel that these pensions are the result of hardworking public workers giving up raises, benefits, vacation time and other benefits in order help with financial problems at that time. The teachers, firemen, policemen, sanitation workers and other public sector works have suffered and struggled, in order to reap a somewhat equalizing earned reward now (pensions) and now you want to strip them of that; for shame.

Chicagoans, this is yet another in a long list of reasons you should vote this Rahm out of office. Bye Rahm, HOPEFULLY!

 

 

 

 

 

 

 

 

 

 

European Austerity Do Your Counterproductive Dance!

EuropeanAusterity

In 2009 Europe shared in the fiscal joy that was the crash of all crashes. The answer that the European Union, the bonds market, and the banks saw as the remedy for said fiscal crash was to slash government spending. This slashing approach to the Grand Recession was supposed to trim the budget in the attempt to minimize the debt and to reassure jittery bond market holders.

This approach to an economic downturn is commonly referred to as Austerity. Austerity is from the Latin word “austērus” or Greek “austērós” meaning “harsh, rough, and bitter”. While austerity was supposed to deliver stability, lower the debt, and revive the market of the European economy, what it actually delivered was severe and unconsciousable economic pain.

What Austerity delivered was a further shrinking of the European economy; it lowered governmental tax revenues, and was counter-productive in terms of addressing the depression. In fact, there has never been a major economy that grew by cutting; it is the fallacy that appears to never die. As you shrink an economy (which has its foundation in government) so do you shrink governmental revenue and thus stagnate the economy further! Can you say “Economy 101”?

Here is an attempt at a analogy; your company has just suffered a great economic loss and your answer is to address this loss is to cut your personnel, cut your inventory, reduce advertising, and to cut the services you offer. How exactly will this fix the problem of economic abyss?  If you get shrink the means in which you can make income; how do you recover?  The answer is you DON’T! Read more…

It Started With Reagan Rant….

imagesAmerica clear your head of previous reflections of the political greatness of Reagan. Please rinse your face off, lay back in a relaxing chair, clear your head, and take a deep breath for a Reagan reality check.

Now, let’s take a look at what 30 years of Reaganomics, aka Trickle-down economics, aka supply side economics, aka Laissez faire Capitalism has actually done for America’s political outlook. What should  be said is what Reagan has done to America!

Reagan; the man and presidency has been paved with grandiose praise equivalent to political sainthood from those on the right of the political spectrum. The political sainthood that has been bestowed on Reagan does not end with Republicons; it also includes our current president Barak Obama. You know the supposed Socialistic anti-American Kenyan Marxist Lefty Barak Hussein Obama.

Obama reflected on the Reagan presidency by saying “I think Ronald Reagan changed the trajectory of America in a way that, you know, Richard Nixon did not and in a way that Bill Clinton did not“. Obama went on to say “ he [Reagan] tapped into what people were already feeling, which was, we want clarity, we want optimism, we want a return to that sense of dynamism and entrepreneurship that had been missing.” An interesting take on Reagan the man and presidency; a short sided and mistaken take on Reagan’s disastrous impact on American political and economic direction.

Reagan ushered in Reaganomics in 1980 with the promise of less government, more economic and social freedom. Reagan promised a vast reduction in all regulations from economics to manufacturing and everything in-between. Does this sound anything like the First Republicon Depression? Dare we say yes? WE DARE!

With his election and its ideologies being accepted by America and politicians at large; one can say that Reagan was transformational, but in a very regressive way. Reagan took us from a progressive WE nation into a regressive ME nation with policies that began the decimation of the middle class of America. His presidency hurt America  by creating a vast and monstrous movement of wealth to the top 5 percent all while increasing taxes on the working class.

In the 1940s, 50s, 60s, 70s and into the first couple of years of the 1980s, Americans had continuously growing incomes that followed the same trend line as the worker’s productivity. As the American worker’s productivity rose, meaning that the employer got more work out of a worker for the same number of work hours, so did that employees pay scale. This business model worked well for all parties involved; the employer, the employee, and the market all benefited from this productivity boom. Read more…

Reply to Conservative on Unions, WHAT? Part 3

No Unions, REALLY?!?

No Unions, REALLY?!?

The initial question posted by Warren Drew

Given the fight later today over final passage of a right to work law in Michigan, I figured it might be worthwhile to mention a couple things about right to work.

First, right to work laws do not prohibit unions.  They merely allow workers to decline to join a union.  There are plenty of unions in right to work states.

Second, right to work laws do not appear to reduce wages.  The state with the highest wages for assembly line workers is Alabama, a right to work state.  The metro areas with the highest wages are Tuscaloosa and Spartanburg, both in right to work states.  BLS figures from here:

http://www.ehow.com/info_7802584_average-auto-assembly-line-worker.html#ixzz2Eijftiyi

Right to work laws just keep the unions honest, and make them work for the workers rather than just for the union bosses.  From the standpoint of industry, they just balance out federal laws that are very much prounion.

My reply to Warren Drew

+Warren Dew
Your posting of surface information is not beneficial to those who are not aware of the financial implications of right-to-work-for-less laws (RTWFL).

The first point is partially true; it does not prohibit unions; it ONLY allows workers benefit from the unions activism on their behalf without paying into the very union that created the benefits that they enjoy. You know to loosely use an analogy; it like eating going into McDonalds, eating a Big Mac, and not paying for it. Fair right?

Your second point is also only true on the surface. While what you stated may be correct on the surface when you really look the facts it is deceiving to be kind. The United States Department of Labor, Bureau of Labor Statistics, Occupational Employment Statistics state that Occupational Employment and Wages Estimates shows median hourly wages of all the Right to Work States (RTW) and all the Collective-Bargaining States (CBS) as follows: Read more…

America Has The Highest Corporate Rates In The World! REALLY!!??

December 4, 2012 1 comment
2012-12-04_1357

Tax to GDP Ratios in the OECD area, 1975 to 2009
CLICK TO ENLARGE!!

In the vast caverns of the Republicon/corporate political ecosystem one will hear that constant bombardment of “America has the highest corporate rates in the world” which is true if you only look at the surface numbers. Surface facts are often used to miss-lead the American populace into subscribing to policies and doctrines that only benefit the 1 to 5 percent of America. Conserva-Dems, Republicons, and the corporate trolls find this lie particularly pleasing to utter.

With all due respect, Republicons are masterful at getting around 45% of Americans to believe things that are just factually untrue and economic disasters except when used as a form of upward wealth extraction. Some of the near and dear ones to the wallets of the financially elite are “Death tax“, “death panels“, “job creators“, “tax cuts equates to job growth“, “war on Christmas“, “welfare queens“, “makers and takers“, and “freedom (in terms of Healthcare and social Security)”. The bevies of deceitful terms that are in common use today by those calling themselves “conservatives” are endless; see Thom Hartmann’s book “Cracking The Code” for further enlightenment. These phrases may come off the tongue smoothly, but what do they mean by them and what has been the proven result of following this ideology?  As the saying goes “figures don’t lie, but any liar can figure”! Resisting the urge to go into a rant about all of those misleading words; they are another subject, for another blog, on another day!

Republicons and corporate toadies will not miss an opportunity to utter “the US has the highest tax rates among OECD (Organisation for Economic Cooperation and Development) countries in the world”, but this political talking point is an easily dis-proven phrase. Now the mere utterance of that phrase is not untrue, but it conveniently fails to disclose the truth behind the phrase. While America’s corporate tax rate is the highest among the top developed countries in terms of the number, maxing out at 35%. America has the lowest actual paid rate in the developed world, as a percentage of Gross Domestic Product (GDP) America is dwarfed by other countries. This simply means that America collects the least amount of tax dollars than all but 2 of the OECD countries. Read more…

Fiscal Cliff: effects on taxation and revenues!!

November 26, 2012 4 comments

The more one learns about the “Fiscal Cliff” (The Postal Accountability and Enhancement Act) the more we know and that is an empowering educational tool for the voting populace. Now let’s look at why Republicons are so afraid of the fiscal cliff and the accompanying expiration of the Bush tax cuts. Once America understands the fundamental underpinnings of the fiscal cliff in terms of taxation the more un-cliff’like they may find it. Fiscally it is appealing in many aspects seeing that a lot of it impacts the rich and dividend investors and furthermore increases revenue.

The scariest aspect of the fiscal cliff for Republicons is, dare WE say, returning the top marginal tax rat to 39.6% (which is the rate under Clinton, you know the president that gave us a surplus) from the current 35%, but wait there’s more. Not only will the top marginal rate return to reasonable level, but it will also raise capital gains tax rates to 20% from the ridiculous maximum rate of 15%. In my humble opinion, the top marginal income tax rate should have never been lower than 50%, for reasons that I will address in another blog. I even dare to contest the special treatment of capital gains; I think that capital gains should be taxed as normal income, period (again, I will address that in another blog). Another revenue increasing result of the fiscal cliff would be that stock dividend income would be taxed as regular income and that would be a beautiful thing and I would call it “a start towards fiscal sanity”!

The beauty, in my estimation, or the danger, in the estimation of the rich and the Republicon party, in the fiscal cliff kicking in is that there will be more cuts to loop-holes and tax breaks which primarily benefit the rich. For example, Estate taxation, or the death tax as conservatives call them, would go up by changing the estate tax that currently only applies to those inheriting over 5.1 million to anyone inheriting one million dollars or more,  (boo hoo). This would mean anyone inheriting over 1 million dollars would have to pay a 35% estate tax. Another topper would be that the AMT (alternative minimum tax) would also change in aspect of who would be subjected to it. So far, the changes that could take effect does not make 99% of the United States populace worry or fearful of this cliff that everyone is talking about; although I could be just fiscally naive. The so-called fiscal cliff has some bearing on the Affordable Care Act (ObamaCare). Apparently there is a 3.8% medicare surtax that will be implemented on wage earners making over $200,00 and families making over $250,000 annually. Read more…

Fiscal Cliff?? Slogan, Warning, or What?

November 26, 2012 1 comment

Thank you Occupy Philly for the satire on the Fiscal Cliff.

When listening to the pundits constantly echoing of the phrase “fiscal cliff” with the added implication of dread in their voice; I could not resist my wonk urge to get a clear definition of what the fiscal cliff is and its implications in a sterile (non-partisan) fiscal way. right, as if that is possible!

After much exhausting research on the “Google” I have come to understand that it means as much as Alan Greenspan’s “irrational exuberance” and that’s not saying much. Irrational exuberance was a phrase coined by Greenspan to warn us that investors were over-weighing the market without actually saying that they were over-weighing the market (some say that Greenspan was warning of an impending fiscal bubble  but I am not sure he was that astute). It is an illusive way to warn about a possible fiscal disaster without warning about a possible fiscal disaster, but leaving yourself cover to be able to say “I WARNED YOU”. You know, “having your cake and eating it too” or as a  friend of mine often said “It’s my SAVE ASS move!”.

The name “fiscal cliff” is a classic political misnomer seeing that there’s no major impact on the economy with its onset; anyone would infer different from its title, fiscal cliff. Any use of the word “cliff” typically means immediate and life-ending descent from a high distance which does not apply in this case. Ever since Bernanke used the phrase “fiscal cliff” at a hearing of the House Financial Services Committee in February of this year, the term has been used for a multiplicity of partisan needs. Well let’s get an understanding of what Ben Bernanke meant when he said it, so let’s go to the way-back machine to get the jest of it. To quote Bernanke “I hope that Congress will look at [the spending cuts and revenue increases] and figure out ways to achieve the same long-run fiscal improvement without having it all happen at one date,”. Read more…

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