Posts Tagged ‘Subsidies’

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IT’S YOUR TURN

February 27, 2011

This one turns into a rant quickly.

The current political discussion about our government’s financial “crisis” is loaded with useless dialogue – okay…  crap. This “problem” was intentionally created and therefore easily fixed, but none of our congressional leaders will tell the truth about it. Instead we’re told that we all have to sacrifice in order to “…get our fiscal house in order.”

No we don’t – at least not most of us.

You don’t need to be a Pulitzer Prize winning economist to understand the simple solution to this contrived fiscal issue.

Let’s apply the K.I.S.S.* method, shall we?

Every business has two basic elements: money coming in and money going out. The goal: more money coming in than going out. Simple.

Our government is a not-for-profit business that provides services at a far less cost per person than any for-profit company can, for the obvious reason: it doesn’t need to make a profit – just break even. Again, simple.

As our population grows and expenses increase (money going out), so must income (money coming in). Cutting expenses alone, does not improve the financial health of government or any business, for that matter. That’s an amateur’s solution. What must be done to offset expenses is increase income. In the case of government, there’s only one basic source of income: taxes. But these tax increases need to come from those who can most afford it, not the rest of us. The ultra-wealthy had a great ride for the last 30 years so it’s time for them to “man-up.”

The truth is we can easily get out of this mess in the next 5-10 years by taking the tax rates on the top 2% of wage earners back to the 1990’s levels – a measly 3.5% increase. Income to the government: $4+ trillion. Bingo! Budget deficit balanced and debt reduction begins.

But why stop there? Here’s another $399 billion in income for the government:

1.)   Reduce Pentagon spending by the amount that went unaccounted for to private, no-bid military contracts. $9 billion alone went missing in Iraq from October, 2003 to June, 2004, under Paul Bremer’s watch. No audit has been done on the Pentagon in the last 20 years. Imagine what a good forensic audit would expose.

2.)   Eliminate tax subsidies for oil companies – the top 5 profit earners in the Fortune 500. ($45 billion)

3.)   Remove the subsidies for Medicare Advantage – a privately operated, for-profit program offered by Humana, United HealthCare, Anthem, Wellpoint and other health insurance companies (the top six insurers made a total of $3.4 billion in profits during Q3, 2010) and is not part of Medicare or Medicaid. ($108 billion)

4.)   Create millions of jobs in infrastructure repair and replacement as well as new technologies. From 1993 to 2000, nearly 22.5 million private sector jobs were created thanks to the 1993 Deficit Reduction Act, thus eliminating the budget deficit, and giving us a surplus. ($237 billion by 2000) This can easily be done again. Back then, all the opposition said this would hurt our economy, including the governor of my home state, John Kasich, who was a congressman at the time.

So quit screaming about the unions – they’re not the problem. Only 36.2% of public jobs and 6.9% of private sector jobs are union. Any organization wanting livable wages and reasonable benefits for workers is not what caused this fiscal crisis. As for collective bargaining: taking away employees’ rights to negotiate with employers will only drive wages down, further reducing revenue to the government and creating an even larger gap between income and expenses.

While I’m thinking about it,  leave Social Security alone too. This insurance program is also not a culprit. Not only do we pay for this program while we’re working, those who receive SSI income in retirement have been paying taxes on it since 1984, when Ronald Regan signed the 1983 Amendments to the Social Security Act. We’ve been paying our “premiums” for this “policy” for decades so we’re entitled to the money. A simple tweak of the tax code so that those earning more than $106,800 per year pay their fair share will make Social Security viable for decades. The same goes for Medicare.

We, the vast majority of wage earners in this country (about 98%), have been sacrificing since the 1980’s. We’re done – it’s your turn, 2%’ers. Quit trying to pick our pockets of the few coins we have left and instead, dig into your own.

There’s more than plenty there.

I’m exhaling now.

Sincerely,

www.MichaelKontras.com

* Keep It Simple Stupid