TaxCheat Geitner -- Hand in the Till
 

This is pitiful.. Geitner came out today to mark the US debt ceiling as broken. And he has an idea...

http://thehill.com/homenews/administ...s-debt-ceiling

OMG.. There goes ANOTHER "trust fund".. If I was a Fed employee, I'd be taking to the streets with NoOneReal.
(probably different demonstrations tho)

Even if I TRIED to understand how he can get away with this, I can't fathom how "not reinvesting (matured) securities" is not a legal suit for mismanagement of public funds..

It's a tactic. Just as "They're not going to pay the troops!" was the last time around.

When the House goes to "recess" do they, like, play on Jungle Gyms and teeter-totters?

Dave

Considering that we are the only nation that plays this childish "debt cieling" nonsense why get yourknickers in a twist?

There was a guy on Newshour that discussed this - the feds can take money from other programs to stave off default till early to mid August.

It was good, I didn't catch his name. He said both defaulting and raising are bad, that the day of reckoning is coming. Even raising it, he likened it to walking towards a cliff, but you don't know where the edge is.

We're what, 115 billion a MONTH in the red? So raising taxes will work? That's $4600 a year for every man woman and child!

Pete

How much would it be for men, women, and children in various economic strata (and tax brackets) if corporations like GE began to pay taxes again, and at historically reasonable rates? How about if Bush's irresponsible tax cuts were allowed to expire?

If we want to be at war, we ought to want to pay for it. Let's not forget how we got into this mess. Things were looking pretty good in 1999.

Yeah, spending the SS money and cutting the military like there'd never be another threat really worked out for us.

No matter WHO pays, simply raising taxes will take 115 billion - 1.3 TRILLION a year - out of the economy. Over 10% of GNP! Over and above what they already take.

How big of a government do you want?

Pete

We couldn't do THAT! Why, we wouldn't be able to use the tax code to shape and direct social policy, or to reward our political benefactors. How could we possibly let our politicians use tax money to launder political contributions if we did THAT!

And, if you think we looked good in 1999, do you also pay your Master Card with your Visa?

First, we're trying to pay for the government expenditures we already incurred over the past 10 years.

Secondly, nobody is talking about making up the deficit solely through taxes. Most reasonable economists (also the Debt Commission) set out a formula of 3:1 (cuts vs. revenue).

BS, I am.


seriously though that ratio would be inverted if anyone is being serious

You mean we couldn't use the tax code to further increase the unsustainable gap in wealth in this country? We couldn't use the tax code to further incentivize corporations to outsource good jobs? You bring up a good point about political contributions... we shouldn't allow corporations to make them.

As I recall, in the late '90s our economy had enjoyed an extended period of growth and prosperity, and our budget had a surplus for the first time in decades. Yes, we were entering a recession, typical and to be expected as part of the normal business cycle. Although I might not agree that tax cuts the way they were implemented were the best way out of the recession, there is a defensible argument to be made in their favor. There is NOT a defensible argument regarding maintaining those cuts once the economy began to improve AND during a time when we were spending enormously on wars and a new Medicaid drug benefit (that itself was implemented in a way to benefit the insurance and pharmaceutical companies far more than the needy seniors).

If there is pain to be had in digging out of our hole, shouldn't a good deal of that pain be borne by those who have benefitted disproportionately from its creation?

Yep, we've had this discussion before. The SCOTUS decision was unpopular because it allowed ORGANIZATIONS to be treated the same as individuals for purposes of political speech, including political contributions as a form of free speech. You don't see anyone on the Hill advancing legislation aimed at overriding this SCOTUS ruling. Why? Because unions and PACS are organizations too.

Like I said, if you believe we had a balanced budget in the '90's, you must think you can pay your MasterCard with your Visa.

Plus, the national debt increased every single year Clinton was in office, according to the CBO, including the SS ripoff.

Pete

as a % of GDP?

No, in absolute terms.

Pete

I wish Obama would tell Boehner to do whatever he wants. Go on TV and say "They know the risks and they know the consequences. My administration believes it is reckless to intentionally sully the good credit of the United States and understands that good, tax paying American Citizens will pay the price for their extremist measures. But they were freely elected and they need to do what they think is right."

What would Boehner and Co do then? They KNOW they have to approve raising the debt ceiling. Playing political games with it is stupid. Obama should call their bluff.

Kinda fair and balanced debate goin on..

Whell stole my sarcastic return to JonL about why we can't rescind all those Green GE tax credits..

About the 1990's -- Pete you are brave and usually right, but Clinton did buy on to balancing the budget (even with that lip-biting episode where he repented "for raising your taxes too much"). And as a result, with the help of a Republican majority, the budget went into surplus for a couple quarters. In fact, at the time, I researched how amazed the Treasury was that there was no mechanism for "paying down the debt" in place at that time. See the Feds can't carry over cash from yr to yr, so if there IS a surplus, they have to buy back bonds early. And that hadn't happened in soo long, they forgot how to do that. But WHELL is right, it was STILL done by stealing about 300Bil/yr in payroll taxes from (largely) the "working class".

JonL:

First - we need some evidence that "the rich" benefitted from the downturn in the economy. MOST of the "tax targeted rich" got PUMMELED in their private 401K and savings. Only the traders who positioned themselves out of Fanny/Freddy and the housing bubble increased their worth. But for these few, the last 5 years is probably close to a wash. We are ALL being economically deflated. Top to bottom.. Yes, there's a gap -- but it's becoming just about as meaningful as the gap between the Howells and everyone else on Gilligan's Island.

Second -- We're seeing the results of criminally poor financial management at the Congressional level. That Geitners recent action is just the latest example of negligient fiduciary responsibility. For THAT -- the guilty have to pay. Just like demanding accountability on Wall Street, we need accountability and some "perp walks" from the govt. Not going to let them continue these criminal acts. Especially, the continuing lie that the SS/MC crisis is still years off. Stop the lying now -- and we can talk about fixing it. You stop the criminal acts, before you swing into repair mode.

Thirdly, we have excused about 1/2 of America from contributing to this crisis by reducing their INCOME taxes to zero (or refunding a negative tax thru EITC). That puts a crimp into the repair effort. Now progressive income is OK I guess to a point. If we hadn't stolen from this bottom half thru excess payroll taxes for most of their lives, I'd have NO compunctions about asking them to contribute a token amount to the fix. Were none of THESE people for the wars that helped shove us into an untenable financial muck-up? Were none of these people for the housing policies that inflated the housing bubble? Were none of these people for all the Green crappola that's been over-hyped at GE? Were none of these people in favor of including drug benefits to MCare?

Fourthly, the better method than targeting specific incomes with higher tax brackets, is to start closing the existing "tax expenditures" (as the left likes to call them) or loopholes. Do it as uniformly and universally as possible. Don't promote the class warfare rhetoric which truly isn't gonna fix the problem.. (See california e.g. where about 30,000 people in that state pay 60% of state income tax. So when THOSE people take a hit in a declining market -- the whole state goes into the red).

But I'm not in a mood to see the Treasury stealing from yet ANOTHER pile of OPiuM (other peoples money). Or punishing the lower class with a dollar devaluation and NOT calling that a tax.

BTW: I was kinda laid back about Obama and his predilection for class warfare and progressive politics. Was hoping he would at least roll back the Patriot act and get us untangled from the Mid East. But when Geitner went thru after the revelation that he couldn't follow simple instructions for filing HIS taxes --- my patience started to run out. This man SHOULD NOT have that job..

Debt outstanding, treasury department:

09/30/2010 13,561,623,030,891.79
09/30/2009 11,909,829,003,511.75
09/30/2008 10,024,724,896,912.49
09/30/2007 9,007,653,372,262.48
09/30/2006 8,506,973,899,215.23
09/30/2005 7,932,709,661,723.50
09/30/2004 7,379,052,696,330.32
09/30/2003 6,783,231,062,743.62
09/30/2002 6,228,235,965,597.16
09/30/2001 5,807,463,412,200.06
09/30/2000 5,674,178,209,886.86
09/30/1999 5,656,270,901,615.43
09/30/1998 5,526,193,008,897.62
09/30/1997 5,413,146,011,397.34
09/30/1996 5,224,810,939,135.73
09/29/1995 4,973,982,900,709.39
09/30/1994 4,692,749,910,013.32
09/30/1993 4,411,488,883,139.38
09/30/1992 4,064,620,655,521.66
09/30/1991 3,665,303,351,697.03
09/28/1990 3,233,313,451,777.25

http://www.treasurydirect.gov/govt/r...t/histdebt.htm

that's what i figured

so really it did not go up at all

Btw, for the record, both parties were responsible for looting SS.

Pete

Pete:

Don't sweat it. You are correct in every way except as the govt would explain a surplus. So for us normal math capable folks, you are OK with those numbers.

In terms of the Budget Books, there was a surplus. THEN -- after they stole the 300Bill from payroll tax and showed it as REVENUE --- the treasury made "a purchase" of 300Bill in Bonds (different series from publically traded, practically worthless) as an intergoverment transfer to the "trust fund". So in terms of the public budget books, they ignored the transfer.

Many ardent leftists still argue that those trust fund bonds are actually earning INTEREST! And that the fund is solvent for another couple decades. Those people should have their GEDs revoked.. If you pretend that the trust fund is due interest when you calculate the solvency dates (which they actually do) -- the SIZE of the theft just increases..

http://quaap.com/D/clinton-surplus-factcheck

All part of the lies and theft and money-laundering that occured since LBJ.. And worse than that --- It's exactly what Geitner is doing today with Fed Employee Retirement monies..

You are assuming that the wealthy spend their money here and not on the Riviera, or Paris, or London, or Berlin.:rolleyes:

No sweating, I see the debt increased, therefore, no surplus. 1+2=3, except government :)

The two parties are Janus. Talking out both sides of the mouth, get you coming and going, I bet one could go on like that a while lol. They work for themselves.

Rob, we need to figure out how to get them furrners to spend money here! Maybe Chicago pizza? Hmmm... Got it! Great Lakes beer!

Pete

I know that the disparity in wealth in this country has increased dramatically over the past decade... for whatever reason. I also know that during that time the taxes paid by the wealthiest Americans has decreased dramatically. Perhaps a good start to increasing revenues (while also responsibly reducing spending) would be to restore the tax structure to where it has historically been during periods of protracted economic growth fueled by a vibrant middle class. BTW, I'm not suggesting that the downturn benefitted the wealthy, but it certainly didn't cause the same degree of hardship that it caused the middle class and below. I am suggesting that our tax policy has benefited the wealthy to the detriment of the rest of us.

I surely don't get your Gilligan's Island analogy.

It would be nice to reduce the hyperbole in DC and start discussing issues in a rational manner that isn't totally influenced by lobbying and pandering.

The reason so many lower income people pay little or no income tax is because far too many people have subsistence level incomes or below. I don't know what you mean about "stealing" from people with payroll taxes. We all get services from the gov't, and they need to be paid for. The fact that people (of whatever means) may have been "for" or "against" various policies in a general sense has no bearing on if those people as individuals or as a member of a particular class should pay or not pay for the policies. We are all in this together. If our elected (?) leaders take us into war, it is incumbent upon them to demand that we pay for it. If we do not want to pay for it, we need to get our leaders to change their policies. Our leaders lacked the courage, foresight, or principle to demand that we make sacrifices to achieve our objectives.

Furthermore, it's disingenuous to "blame" normal people for supporting various policies that were so convoluted and arcane in their implementation as to be totally unintelligible. Do think anyone who benefitted from housing policies was given an explanation about CDOs, mortgage backed securities, economic bubbles, bank failures, foreclosures, etc, while they were being told that homeownership was the American dream and that real estate was a "sure thing?" As to the drug benefits, there was TREMENDOUS opposition to the way it was implemented because it was confusing to the supposed beneficiaries and a windfall for the actual beneficiaries - the pharmaceutical companies and the insurance companies. I also believe that a majority of Americans would favor a sound "green" energy development policy if it was funded by eliminating oil company tax breaks, and I bet most would even support it if it included a modest gas tax of a couple of pennies per gallon.

No argument that loopholes should be closed. However, this mantra of "class warfare" is a stupid red herring. Only the most radical of leftists are saying anything that approaches class warfare rhetoric. It's a nice way for those who are benefitting from the increasing income disparity to deflect criticism of the unfair policies that help them. It's as if a bully keeps poking his finger in your eye and when you punch back he gets you arrested for assault.

How much taxation is legitimate before you call it "stealing?"

Oh My JonL:

Important stuff first --- When I referred to Geitners hand being in the Fed Employee Fund, that's not taxation, but it is STEALING. Just plain ole fiduciary mismanagement. White collar crime. I'm not (bigL) libertarian enough to call ANY taxation theft or stealing.


Not really.. Hard to find ANYONE in Dem leadership that hasn't used the phrases "millionaires and billionaires" in referencing their target for redistribution. In fact, referring to their only viable party of opposition as the "party of millionaires and billionaires" is part of the revolution. I just laugh when I think of Fox New's audience as composed of "millionaires and billionaires". And Obama was outed as a Progressive several times during his campaign and folks tried to warn that there would be ample support for the radical Progressive agenda.

More important stuff there. Maybe it's an age thing. You had the filthy rich Howells on that island trying to maintain their status and pretend that they were still elite and superior in social graces. When in reality, they were eating crap off the beach and living in a hut. Those RICH that the class warfare revolution want to tax are one Federal Reserve policy change away from living in hut like the rest of us. So much invested in shaky or risky investments. They are in a position to lose MORE in a downturn than then the lower 50% who don't contribute at all.

So the point is -- it's ludicrous fiscal policy to bet the farm on the income of the top 5 or 10%. Unless of course, you want to discover (like California) that all your social programs and govt pretend altruism gets dumped every time the market tanks. It's like financing your health care system off tobacco tax revenues. Not a very wise or stable thing to do.

Whoops --'nother important clarification...

For over 30 years, Congress allowed EVERY working American to be payroll taxed (SS/MC) at rates that FAR EXCEEDED what was required to run those programs. That's the groundwork for the theft. The actual implementation of the theft was when they took those revenues INTENDED TO PAY INSURANCE PREMIUMS and spent them on any crap they liked at the time. AND -- they did that knowing that both SS/MC were structured as "pay as you go" programs with no means of "lock-boxing" those HUMONGEOUS overcharges. (Amounts to at least 6 TRILLION bucks so far).

JonL: That's clearly theft that hurt the "working class" more than others. Can't be construed any other way. Why we ever trust the Fed Govt to run "Universal" anything again is beyond me...

Seemed to me that any time you were speaking about taxation you called it stealing, including taxation that occurred before Geitner. Sorry if I misinterpreted.

Your examples hardly qualify as "class warfare rhetoric" to me. Nor does Obama's being "outed" (Outed??? WTF???) as a Progressive seem to me to be class warfare rhetoric. I think you have a very thin skin, or pretend as much to be able to take cheap shots based on labels rather than on substance.

Maybe I should've raised the "class warfare!" cry of outrage when Reagan talked about welfare queens. Maybe I should do it now every time someone invokes the meaningless statistics about which HALF of the population pays more taxes without also talking about how the income is also apportioned.

I'm plenty old enough to remember Gilligan's Island, Thurston Howell III and "Lovey." Your analogy is way into the realm of hyperbole. What's the wealth distribution like in this country DESPITE the disastrous economic conditions that have existed for the last few years? And no one is advocating that a restoration of historically sustainable progressive tax rates is the ENTIRE solution, but it should certainly be a part of it. Just because a downturn might affect tax revenues doesn't mean we shouldn't pursue a reasonable tax strategy anyway. Hell, my house might burn down one day. Should I live outdoors instead of facing that possible disaster? Finally, you cannot compare a state's budgetary situation to that of the Federal government. The Feds are allowed to run a deficit, the states are not. There is nothing wrong with the ability to run a deficit at the federal level, the problem is being irresponsible about it, the way Bush was by cutting taxes and engaging in reckless spending at the same time during a period of economic growth when somewhat higher taxes could have been tolerable. I believe it is sound fiscal policy to run a deficit during an economic downturn and run a surplus during economic prosperity.

Oh, this is interesting... you wrote So I should subsidize their gambling addiction? They may be in a position to lose much more in dollars than the lower 50% but not in lifestyle or security.

Zzzzzzzzz, Zzzzzzzzzzz, Zzzzzzzzzzzzz, Zzzzzzzzzzzzzz....................God, you guys are boring.

I think we should just let wealthy individuals and corporations off scot free. That's right, give them whatever they want, no taxes, hack wages and salaries in half or two thirds, repeal all labor and environmental laws, tell everyone no more paid vacations, personal days, employer sponsored health or dental benefits, no government oversight of anything at all........just let them completely run amok. So long as the rest of us are equally free to do whatever we please with impunity as well. So the libertarians can finally see what they've been asking for.

I, for one, wouldn't mind busting a few scab heads. Sounds like fun.

Dave

You forgot to mention the distribution of wealth. It is even more out of whack than the distribution of income. This is important, of course, control of capital is directly proportional to control of opportunity. Over the last ten years, the top one percent have absorbed an amazing proportion of the entire country's increase in wealth.

Regards,

D-Ray

Harold Myerson came up with a good idea in this mornings WaPo. We can cut the deficit simply by cutting of the welfare we pay to certains states that take more out of the pot than they put in. Sista Sarah's Alaska being a prime example.

Bad idea, because there are "donor states", like the one I'm in in Michigan, that have been getting the short end of the stick for years. It'll never happen, I suspect, but before we think about balancing the Fed budget, let's at least equalize the funds that are coming back to the states, so the states can balance their budgets more effectively.

D-Ray:

I actually looked at that MIT proof of "wealth gap" paper and it's not what you seem to think it is. Most all of the graphs depict a questionably useful variable of "bargaining power" which is derived from a ratio of income to productivity. Thus -- because computers hit the desk top in the 1980's and an influx of 14Mil low wage immigrants came in thereafter -- it would take weeks to debate whether that paper says ANYTHING about a simple wealth or income gap widening. I believe you that there is an increasing WEALTH gap -- it's just that it doesn't look like those graphs..

D-Ray and JonL:

Sorry JonL that you've missed all the class warfare skirmishes. Don't know how you missed the daily Pelosi-Reid soundbites about economic justice and morality of giving the rich tax breaks. Or the attempts to impose CEO salary caps into the businesses affected by TARP. But the Revolution (based largely on class envy) was in FULL swing til the last election. That's when the 1st round skirmish ended. And when I said that Obama was "outed" during the campaign, I was refering to his impromptu remarks with Joe -- that plumber guy. Whom he tried to convince would be better off -- if we just spread the wealth around.

D-Ray & JonL -- do you think that this wealth gap happened because "the rich" STOLE this money from you or the poor? Do you really think that if they get $100,000 bonus that someone in the lower echelons just got robbed?

Let's put some names to this to make it specific.. Can you tell me why Jay Leno should have to pay for 10 additional HUmVees this year? Why the Williams sisters (Venus/Serena) need to defer building their families' security to the tune of subsidizing ethanol production by a couple extra milllion dollars? Why not pick on Elvis?? He's DEAD and he's still making MILLIONS per year.. Why not just take ALL of that? Justin Bieber was pan-handling on the streets just a few ago -- certainly he doesn't need all that income! ALL these folks are 1st generation rich. No dynasties there. Not a threat to me. Why are they your target for our fiscal mismanagement crisis? Why not take an extra 3 or 4% from the Illinois lottery winner? THAT --- was just accidental luck.. Or the guy who's sitting on his ass collecting royalties on the pop-open cans? Or the cardiologist who does 250 bypasses a year? Are THESE the people who contributed to our present sad state of affairs?

The idea that the govt has an equal claim to my Grandma's Steinway as I have or that these people are rich because they screwed 'the middle class' or the working poor is ridiculous.

The answer is -- I want accountability FIRST. I want our money OUT of Chrysler and GM. I want the rest of stimulus RETURNED to the treasury because the fact that it still isn't spent just PROVES it was pirate booty for a bunch of politicians. I want perp walks from Barney Frank et al who said that Fanny/Freddy would never cost Americans a nickel. Most of all -- I want Geitner to get his hands out of the Fed Employees Fund and appoint someone who doesn't use it like a private slush fund..

THEN -- we can talk about shaking down Jay Leno and Kobe Bryant and Arriana Huffington for some cash.

With respect to Federal tax revenues, this is unquestionably true. Alaska is second only to New Mexico in terms of the ratio of Federal Funds Received/Federal Taxes Paid. New Mexico's ration is 2.00 and Alaska's is 1.87.

http://www.taxfoundation.org/files/sr139.pdf

As for Geitner having his hand in the till, he's being forced by an incompetent Congress in general (and a doomsday-threatening Republicans in particular) to do his best to keep the country financially afloat until a settlement on the debt crisis is reached. If he does nothing between now and Aug 2, and as a result, causes T Bills/Bonds yields to increase dramatically, Congressional tactics to reduce the deficit will actually increase it. I'm no fan of Geitner, but he's doing the right thing here.

So FinBow:

Your just peachy with purposely mismanaging an employee trust fund to fix a "cash flow" problem. That is won't have an adverse outcome on the people vested in that account or the taxpayers?

Get those CongressCritters BACK to D.C. NOW.. Show some f)(ing urgency... Where's the OVERSIGHT? or leadership?

We're just doomed..

Well the lower echelons are not even keeping pace with inflation. But I agree, we should not add extra taxes on the wealthy, they create jobs. So the top 5% have 65% of the nations wealth, so where are the fu*king jobs?:rolleyes:

BTW, you will note that the majority of free-loading states are Red.:p

I'm absolutely not peachy with it. OTOH, I see no alternative. Had we gone into default several days back, the cost of financing our debt (once an agreement gets done) would outstrip any potential savings from the agreement.

If you're following the whole budget mess, the "Gang of 6" has now become the "Gang of 5" as Tom Coburn bailed out of frustration/disgust/whatever. I actually admire Coburn's singular (within the GOP) to stand up against Grover Norquist and his loss will be felt within the Group.

IMHO, the GOP has built a Tea Party monster which demands "no compromises" (as if they have the monopoly on truth). Beyond that, they all made their solemn "no tax" pleges to Grover Norquist. Ain't this the same party who birthed this mess about 8 years ago?

Compromises built the Levithian. Time to cut, cut, cut.

That makes any red blooded rightie happy :)

The SS 'trust fund' was already empty when Shrub took over.

Pete

I understand your sentiment, Pete. However, we shouldn't allow the perfect to be the enemy of the good. For example, if the GOP holds our for, say, 4 trillion in cuts, but only gets 3.5 trillion should they let the Aug 2 deadline pass? I say no, because interest rates on the remaining debt will skyrocket, thereby eating up the savings. I'd rather have the American people have the difference (0.5 trillion) than our creditors in the form of higher interest rates.

Pssst - let me tell you a secret - there is no way we'll default



.