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The Rest Of The World Is Absolutely Disgusted With Our Big Brother Spying Methods
The rest of the world has found out that the U.S. government has been listening to their phone calls and watching what they do on the Internet and they do not like it one bit. Outrage has been pouring in from all over the planet, and one member of the European Parliament is even comparing the NSA to the Stasi. But instead of stepping back and reevaluating our Big Brother spying methods now that they have been revealed, Barack Obama and other leading members of Congress are defiantly declaring that there is nothing wrong with these methods and that no changes will be made. The U.S. government is going to continue to invade the privacy of the citizens of the rest of the world as much as it possibly can, and our leaders don’t seem to really care what the international response is. And make no mistake – the goal of the U.S. intelligence community is to literally know everything about everyone. The chief technology officer of the CIA, Gus Hunt, made the following shocking admission back in March: “We fundamentally try to collect everything and hang onto it forever.” He followed that statement up with this gem: “It is really very nearly within our grasp to be able to compute on all human-generated information.” In other words, they want it all, and they nearly have the capacity to gather it all already. So where does this end? Will the U.S. intelligence community ever be happy until they have every piece of data on every single person on the entire planet? Do we really want a government that collects “everything” and hangs on to it “forever”?
Thanks to Edward Snowden, the rest of the globe is starting to understand the extent to which the U.S. government has been spying on them. Needless to say, a lot of people are extremely upset about this.
In Germany (a country that knows a thing or two about Big Brother tactics), some prominent politicians are publicly denouncing the surveillance that the U.S. government has been doing on their citizens. In fact, one German politician has accused the U.S. of employing “American-style Stasi methods”…
In a guest editorial for Spiegel Online on Tuesday, Justice Minister Sabine Leutheusser-Schnarrenberger said reports that the United States could access and track virtually all forms of Internet communication were “deeply disconcerting” and potentially dangerous.
“The more a society monitors, controls and observes its citizens, the less free it is,” she said.
“The suspicion of excessive surveillance of communication is so alarming that it cannot be ignored. For that reason, openness and clarification by the U.S. administration itself is paramount at this point. All facts must be put on the table.”
Markus Ferber, a member of Merkel’s Bavarian sister party who sits in the European Parliament, went further, accusing Washington of using “American-style Stasi methods”.
In Italy, the government official in charge of data protection, Antonello Soro, said that the surveillance that the NSA is doing “would not be legal in Italy” and would be “contrary to the principles of our legislation and would represent a very serious violation”.
In Russia (another country with a long history of using Big Brother tactics), President Vladimir Putin has expressed significant concern about the NSA spying program and there are even rumors that Russia will be offering asylum to Edward Snowden…
Alexey Pushkov, head of the Duma’s international affairs committee and a vocal US critic, said on Twitter: “By promising asylum to Snowden, Moscow has taken upon itself the protection of those persecuted for political reasons. There will be hysterics in the US. They only recognise this right for themselves.”
He continued: “Listening to telephones and tracking the internet, the US special services broke the laws of their country. In this case, Snowden, like Assange, is a human rights activist.”
But even more important than what foreign politicians think about the NSA spying scandal is what average people all over the globe think. This scandal is causing millions of average people all over the planet to look at the United States with disgust and disdain. How can we hold ourselves out as the “defenders of freedom” to the rest of the globe when we are openly telling them that we are going to spy on them as much as we possibly can? How do we expect the rest of the world to look at us as “the good guys” when we are selfishly grabbing and recording all of their emails, phone calls and Internet searches without any concern for their privacy whatsoever?
What makes all of this even worse is that our top intelligence officials are making jokes about this scandal. For example, just check out the wisecracks that the Director of National Intelligence, James Clapper, was making at an awards ceremony on Friday…
With the current and past directors of national intelligence at the Omni Shoreham to honor former CIA and National Security Agency chief Michael Hayden, the result in speeches and interviews with intel professionals was a gumbo of outrage, worry and humor.
Director of National Intelligence James Clapper told the black-tie crowd of more than 700 he would “address the elephant in the room” and proceeded, to applause, to denounce “the unauthorized leaks as reprehensible and egregious.” Clapper characterized the program as completely legal, debated and reauthorized by Congress under strict oversight and by court order “to make our nation safe and secure.”
He then cracked a few jokes. “Some of you expressed surprise that I showed up—so many emails to read!” Clapper said. Greeting fellow banqueter John Pistole, the administrator of the Transportation Security Administration who recently reversed a planned policy to permit air travelers to carry certain knives on planes, Clapper said, “John, can I borrow your pocket knife?”
How in the world can he make a joke about reading our emails at a time like this?
This is how arrogant the U.S. intelligence community has become. They feel like they can do whatever they want and get away with it.
For example, back in March Clapper flat out lied to the U.S. Congress about the surveillance that the NSA is doing. When he was asked by Senator Ron Wyden if the NSA was collecting any information on the American people, Clapper completely denied it.
The following is from a transcript of that exchange…
“Does the NSA collect any type of data at all on millions or hundreds of millions of Americans?” Oregon Republican Sen. Ron Wyden asked Clapper at the March 12 hearing.
“No, sir,” Clapper responded.
“It does not?” Wyden pressed.
Clapper recanted and said: “Not wittingly. There are cases where they could, inadvertently perhaps, collect — but not wittingly.”
Apparently Clapper must have “forgotten” that the government is forcing all of the big telephone companies to turn over all of their call records to the NSA every single month.
And you know what? The truth is that the government is not just collecting “metadata” about our phone calls. The content of our calls is being recorded and stored as well. Just check out this story from the Blaze…
Hollywood actor Shia LaBeouf in 2008 during an appearance on the Tonight Show with Jay Leno detailed how he learned phone calls were allegedly being recorded.
Promoting the film “Eagle Eye,” which according to IMDb shows how “technology of everyday life [is used] to track and control,” LaBeouf told Leno that an FBI consultant for the movie said one in five phone calls made are recorded and logged.
“And I laughed at him,” LaBeouf said.
“And then he played back a phone conversation I’d had two years prior to joining the picture,” LaBouf continued.
Both Leno and LaBeouf concluded it was “extremely creepy.”
The American people, along with the people of the entire planet, deserve the truth about this.
Unfortunately, Barack Obama is certainly not going to tell us the truth, and there will probably only be a half-hearted effort by some members of Congress to get to the bottom of things.
That is why it is going to be important to take this to court, and thankfully a couple of lawsuits are already in the works.
According to U.S. News & World Report, one of these lawsuits is being filed by a former Justice Department prosecutor…
Former Justice Department prosecutor Larry Klayman amended an existing lawsuit against Verizon and a slew of Obama administration officials Monday to make it the first class-action lawsuit in response to the publication of a secret court order instructing Verizon to hand over all phone records of millions of American customers on an “ongoing, daily basis.”
Klayman told U.S. News he will file a second class-action lawsuit Wednesday in the U.S. District Court for the District of Columbia targeting government officials and each of the nine companies listed in a leaked National Security Agency slideshow as participants in the government’s PRISM program.
And according to USA Today, the ACLU has also filed a lawsuit…
National Security Agency surveillance programs came under more scrutiny Tuesday as the American Civil Liberties Union filed a lawsuit and a prominent senator and Internet giant Google called on the Obama administration to disclose more information.
In its lawsuit, the ACLU said an NSA program that harvests phone calls violates the rights of all Americans.
“The program goes far beyond even the permissive limits set by the Patriot Act and represents a gross infringement of the freedom of association and the right to privacy,” said Jameel Jaffer, the ACLU’s deputy legal director.
Hopefully these lawsuits will reveal more details about the spying that has been taking place.
There is also a “bipartisan coalition” of 86 Internet companies and civil liberties organizations that have sent a letter to Congress demanding action on these issues. You can read the full letter right here. Some of the organizations involved include the Electronic Frontier Foundation, Reddit, Mozilla, FreedomWorks, and the Center for Digital Democracy.
Will Congress listen to them?
Probably not.
But at least they are trying to do something about this.
The key will be to get the American people outraged enough about all of this that they won’t forget about it in a week or two. And that is not an easy thing to do.
There have been a couple of public opinion polls taken over the past few days that show some very curious results. A Rasmussen survey found that 59 percent of Americans are against the government secretly collecting our phone records and only 26 percent are in favor. But a Washington Post survey found that 56 percent of Americans consider the collecting of our phone records to be “acceptable” and only 41 percent consider the practice to be “unacceptable”.
How could those two surveys get such wildly different results?
A lot of it is in the way that they ask the questions.
In the end, our politicians don’t really care too much about what the general public thinks anyway. They are just going to continue to do what they have been doing and the rest of the world will continue to become even more disgusted with us.
We are recklessly destroying our global reputation and our leaders do not even seem to care. But someday America will need some friends, and when that day arrives we may find that we don’t have too many left.
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International News • If The Rest Are Only Half As Bad As Ireland …
If The Rest Are Only Half As Bad As Ireland …
SUNDAY, MAY 12, 2013 4:05 PM
Ireland was one of the first European countries to get hit by the financial crisis. It decided to bail out its banks at the direct cost of the taxpayer. In 2012, those banks were still overleveraged (and still are today) to the same level as for instance Cyprus, with assets over 800% of GDP. Probably only Iceland has been worse (UK?!). According to IMF/EC, 2012 Irish national debt was 117% of GDP; not a pretty number either. This all as a lead-up to a May 5 article by Dan White in the Irish Independent that TAE’s own Nicole Foss sent over recently. But first a little history, for who may be bit shaky on it, just for fun, and to explain how Ireland got to have its present population of 4.5 million people.
The population of Ireland in the 1830′s, when it was part of Britain, was around 8.5 million. There are estimates of as much as 10-12 million; in those days counting everyone, even in a census, was an obvious struggle. Ireland then had perhaps 30% of the overall population of the kingdom, a sharp contrast with today.
In 1845, the Great (Potato) Famine hit home. Over the next 5 years, 1 million Irish died of hunger and disease, and 1 million emigrated. And it didn’t stop there. Millions more emigrated in the following decades, and the country remained dirt poor, so starvation didn’t stop either. Some say Britain liked things that way (religion was always a big factor). Only in the 1916 Great Rising, the -catholic – Republic of Ireland gained independence, while – protestant – Northern Ireland became part of the UK.
Ironically, it was the very same potato that, once it came to Europe from the Americas in the 16th and 17th centuries, allowed for a huge increase in population in Ireland and beyond. The "Old World" didn’t have a crop that all by itself people could live on. Now they had one. And then someone imported blight.
Today, the Irish Republic counts 4.5 million citizens, or 4 million less than in 1830. Northern Ireland’s 1.8 million make up some of the loss, but the picture is clear: 180 years later, during which time world population rose from just over 1 billion to just under 7 billion, and Britain went from some 20 million to 63 million, Ireland’s population still hasn’t recovered (will it ever?).
There is the Irish diaspora, however. Approximately 15 times as many people of – often fiercely proud- Irish descent live elsewhere in the world today than live in Ireland. In the US alone there are over 40 million.
So today, we have (the Republic of) Ireland at 4.5 million people. That’s useful when looking at debt numbers. Especially since it is just about 70 times less than the US at 315 million. Irish unemployment is 14.1%, youth unemployment 30.3%, both numbers somewhat recovering from deeper pits.
One more thing before we get to the article: it refers to GNP, Gross National Product. Refresher: it’s almost the same as GDP, but not exactly. The latter is a measure of the value of goods and services produced in a country, the former is a measure of the value of goods and services produced in a country by its domestic institutions and individuals. For most countries both will be quite similar, but in Ireland, GNP is estimated to be perhaps as much as 25% smaller than GDP.
The reason for this is that Irish tax laws make the country very attractive for foreign companies (there are some 600 American ones alone operating in the Republic). Ergo (simplified): a lot of the revenue generated in GDP leaves the country as profit for mother companies, and doesn’t count towards GNP. This makes some voices even claim that recent GDP gains are false signs of a recovery, and that when measured in GNP, there has been no recovery whatsoever. One more detail: Irish property prices have fallen over 50% since 2007.
So there: Ireland’s initial cost for the bailout of its banks was €40 billion ($52.4 billion if you use a 1:1.31 exchange rate). In 2011, US "investment manager" BlackRock conducted a stress test that concluded that the four Irish banks still in business, AIB, Bank of Ireland, Permanent TSB and EBS (now part of AIB), would require an extra €24 billion of capital. So that added up to €64 billion ($83.5 billion). In comparative US terms (70 times bigger), that was $5.85 trillion.
And thus we finally get to Dan White, who says the Irish are far from done bailing out. He starts off referring to numbers published by (Danish, thus foreign) Danske Bank Ireland the week before, and takes it from there:
Taxpayer beware! Irish banks need another €30 billion at least
[..] The latest write-offs mean that Dankse will have written off almost €3.6 billion, just over a third of a loan book which had a total peak value of just over €10.5 billion. If that isn’t enough to give taxpayers a bad case of the heebie jeebies then nothing will.
For those of us who have followed the crisis from the beginning Dankse has been a useful pointer to future developments at the Irish-owned banks. Unlike its domestic counterparts, who are still in denial about the full extent of their problems, Dankse has been upfront about its loan losses. Where Dankse goes today the Irish-owned banks look set to follow tomorrow. [..]
The BlackRock stress tests concluded that total loan losses at the continuing Irish-owned banks would amount to between €27.5 billion and €40 billion. The biggest single source of these losses would be residential mortgages with BlackRock forecasting losses of between €9.9 billion and €16.9 billion.
The other big generators of losses were forecast to be commercial real estate lending (between €8.1 billion and €10.3 billion) and corporate lending, including SMEs (between €7 billion and €9.5 billion). [SME=small business]
Even on the basis of the banks’ own figures it is clear that these projected losses were hopelessly optimistic. According to the most recent AIB results, €8.1 billion of its €39.5 billion Irish mortgage book was more than 90 days in arrears at the end of December 2012.
Over at Bank of Ireland €3.6 billion of its €27.5 billion Irish mortgage book was more than 90 days in in arrears at the end of last year, while €5.5 billion of Permanent TSB’s €24.5 billion Irish mortgage book was similarly suspect.
At the end of December 2012 some €38 billion of owner-occupier mortgages and €10.6 billion of buy-to-let mortgages were in arrears, while a further €6.7 billion of owner-occupier and €3.2 billion of buy-to-let mortgages had been restructured but were not in arrears. By value that’s the equivalent to over 41% of the total €142 billion stock of outstanding mortgages held by the domestic and foreign-owned banks.
Apply this pro rata to the €91.5 billion of Irish mortgages held by the domestic banks and one is looking at over €37 billion of compromised loans. With property prices having fallen by at least 50% since 2007 it would seem reasonable to provide 50% against these loans, say €18.5 billion.
In addition the Irish-owned banks have at least €50 billion of loss-making tracker mortgages on their books. Some of the foreign-owned banks have been offering to reduce loan balances by between 20% and 25% for tracker customers who are prepared to switch to a variable rate. Even a 20% write-down on trackers would cost the Irish banks another €10 billion.
Throw in a further 20% provision for those mortgages not currently impaired, €11 billion, and the Irish-owned banks are looking at mortgage losses of €39.5 billion, €22.6 billion more than forecast by BlackRock in its "worst case scenario".
And that’s barely the half of it.
The Irish-owned banks have €27 billion of SME lending on their books. Last month the Central Bank’s director of credit institutions, Fiona Muldoon, revealed that 50% of SME lending was in distress. On the basis of a 50% write-down of the distressed loans and a 20% precautionary write-down of the remainder that translates into a further €9.4 billion of losses, €4.9 billion greater than BlackRock’s "worst case scenario".
The Irish-owned banks also still have almost €30 billion of commercial property lending on their balance sheets. Once again one has to ask, just how realistic is BlackRock’s "worst case scenario" of €10.38 billion of losses.
By the time one adds losses on other lending, to large corporates, personal loans, credit cards etc. and it is hard to see how the cost of any fresh bank recapitalisation could come in at under €30 billion. That would bring the total cost to the Irish taxpayer of "fixing" our bust banks to almost €100 billion.
Clearly greater love hath no government than that which lays down its citizens for its banks!
Looking through White’s numbers, for instance "Irish-owned banks have at least €50 billion of loss-making tracker mortgages on their books", I’m thinking even he stays on the cautious side, but they’re bad enough as is already. The "total €142 billion stock of outstanding mortgages" translates to $186 billion, which in "US Size" (x70) would be over $13 trillion, about on par with the US at $41.350 per capita, but in a country that has no particular history of owning homes. It’s not home value, it’s mortgages. Not assets, but debt. And prices have already fallen over 50% in Ireland since 2007.
As late as October 2010 Ireland declared itself "fully funded well into 2011", but just one month later, in November 2010, the government asked for a €67.5 billion "bailout" from the EU and the IMF as part of an €85 billion ‘program’ (the Irish State "funded" €17.5 billion itself). By August 2011 total funding for the six biggest banks by the ECB and the Irish Central Bank came to about €150 billion; at that point the largest of the six, Bank of Ireland, had a market capitalisation of just €2.86 billion.
The question then becomes how Ireland is going to facilitate another €30 billion bank recapitalisation. The government stated this spring it was getting ready to ask for further aid, but EU forces apparently – and curiously – have a completely different take on this. Before Ireland was recently handed a 7-year extension on paying back the loans, the "donors" made clear they not only don’t feel like approving extra aid, they want Ireland to exit the bailout scheme and return to the bond markets for funding. As the Irish Times reported on April 12:
Euro zone believes deal will see Ireland exit bailout this year
An imminent deal to postpone Ireland’s bailout repayments will be enough to secure a smooth exit from the EU-IMF programme later this year, according to the chief of the euro zone finance ministers. The position set out by Dutch minister Jeroen Dijsselbloem is in defiance of the Government’s claim for further aid to ease the cost of propping up Allied Irish Banks and Bank of Ireland.
Although the IMF has strongly backed Dublin’s push for the ESM rescue fund to bear historic debts of the two banks, Mr Dijsselbloem indicated in an interview with The Irish Times yesterday that a decision on that front might not be taken for at least another year.
That is well beyond Ireland’s anticipated return to private debt markets at the end of the bailout and means he expects the Government will be able to do without a specific pledge of bank debt relief from the ESM fund.
Asked if the return to market financing would be eased by a definitive commitment of ESM aid, Mr Dijsselbloem insisted that the two issues should be separated. "The access to the markets is relevant right now, and this year, and we will try to help Ireland and Portugal in exiting the programmes," he said.
"The direct recap instrument ESM isn’t available at the moment," he added. "What we can do is to look at the maturities of the EFSF loans and that’s why we are . . . discussing a proposal by the troika on more time for Ireland and Portugal [NB: 7-year extension since granted]. That would greatly help both countries going back to the markets and finding their own funding."
While agreement on whether the ESM can retroactively bear historic debts is anticipated in June, Mr Dijsselbloem said a decision on which countries can use the scheme will only be taken after a common bank supervisor is set up in the middle of next year.
The Government campaign for ESM aid relies on a pledge by euro zone leaders to break the link between bank and sovereign debt, but Germany and like-minded allies, such as the Netherlands and Finland, remain sceptical.
Last week, the IMF reiterated its call for the ESM to take equity stakes in the two Irish pillar banks, arguing that it could play "an invaluable role in marking prospects for recovery and debt sustainability more robust". However, Mr Dijsselbloem said he could not predict whether the retroactive application of the direct recapitalisation instrument would be sanctioned at all.
In other words, there’s now a substantial stretch of financial no man’s land in Europe. The EU still doesn’t have its newest "direct recap" instrument, the ESM Stability Mechanism, ready yet while its predecessor, the EFSF, is still sort of active, though it can’t take on any new commitments, and what’s – still – being discussed is in what shape EFSF loans can be transferred to the ESM – if they can at all – . Of course a banking union could play a large role in all this, but that looks as far away as ever.
Meanwhile, affording Ireland and Portugal more time to pay back loans appears to be seen in Brussels as some kind of end solution, but how realistic is that? Ireland would need to cough up, what, €10 billion a year over that 7 year period (?!), while, in the short term, ingesting another €30+ billion into its banks. Anyone who doesn’t think of Dijsselbloem, Lagarde and Draghi as the next reincarnation of the genius of Albert Einstein might come away with some doubts as to whether this is going to work out.
Nor does this stop at Ireland, of course, or Portugal. Take for instance this loud warning about Spain from everyone’s favorite right-wing anti-Europe correspondent for the Telegraph, Jeremy Warner:
Spain is officially insolvent: get your money out while you still can
I’d not noticed this until someone drew my attention to it, but the latest IMF Fiscal Monitor, published last month, comes about as close to declaring Spain insolvent as you are ever likely to see in official analysis of this sort. Of course, it doesn’t actually say this outright. The IMF is far too diplomatic for such language.
Let’s take the projected budget deficit first. This is expected to decline quite steeply this year to 6.6% of GDP, but that’s mainly because the cost of bailing out the banking sector fell substantially on last year’s budget. On a like-for-like basis, there has in fact been very little fall in the underlying deficit. And nor on the present policy mix is there ever likely to be, for that’s where the deficit is projected to remain until the end of the IMF’s forecasting horizon in 2018. Next year, the deficit is expected to be 6.9%, the year after 6.6%, and so on with very little further progress thereafter. [..]
The situation looks even worse on a cyclically adjusted basis. What is sometimes called the "structural deficit", or the bit of government borrowing that doesn’t go away even after the economy returns to growth (if indeed it ever does), actually deteriorates from an expected 4.2% of GDP this year to 5.7% in 2018. By 2018, Spain has far and away the worst structural deficit of any advanced economy, including other such well known fiscal basket cases as the UK and the US.
So what happens when you carry on borrowing at that sort of rate, year in, year out? Your overall indebtedness rockets, of course, and that’s what’s going to happen to Spain, where general government gross debt is forecast to rise from 84.1% of GDP last year to 110.6% in 2018. No other advanced economy has such a dramatically worsening outlook. And the tragedy of it all is that Spain is actually making relatively good progress in addressing the "primary balance", that’s the deficit before debt servicing costs.
What’s projected to occur is essentially what happens in all bankruptcies. Eventually you have to borrow more just to pay the interest on your existing debt. The fiscal compact requires eurozone countries to reduce their deficits to 3% by the end of this year, though Spain among others was recently granted an extension. But on these numbers, there is no chance ever of achieving this target without further austerity measures, which even if they were attempted would very likely be self defeating. In any case, it seems doubtful an economy where unemployment is already above 25% could take any more. [..] Spain is chasing its tail down into deflationary oblivion.
All this leads to the conclusion that a big Spanish debt restructuring is inevitable. Spanish sovereign bond yields have fallen sharply since the announcement of the European Central Bank’s "outright monetary transactions" programme. The ECB has promised to print money without limit to counter the speculators. But in the end, no amount of liquidity can cover up for an underlying problem with solvency.
Europe said that Greece was the first and last such restructuring, but then there was Cyprus. Spain is holding off further recapitalisation of its banks in anticipation of the arrival of Europe’s banking union, which it hopes will do the job instead. But if the Cypriot precedent is anything to go by, a heavy price will be demanded by way of recompense. Bank creditors will be widely bailed in. Confiscation of deposits looks all too possible.
I don’t advise getting your money out lightly. Indeed, such advise is generally thought grossly irresponsible, for it risks inducing a self reinforcing panic. Yet looking at the IMF projections, it’s the only rational thing to do.
Let’s cautiously summarize it this way: Europe’s finances – still – are in tatters. Ireland and Spain are just two examples. We can come up with similar stories about a handful (or two) of other countries. Perception for now remains that Draghi will do whatever it takes – re: buy buy buy – to rescue anyone and everyone. But that perception rests on the idea that he can, in the first place. Jeremy Warner puts his finger on a sore spot that doesn’t get nearly enough attention anymore:"… in the end, no amount of liquidity can cover up for an underlying problem with solvency".
The illusion of central bank omnipotence, be it in setting interest rates or in buying up any and all kinds of paper, will continue until it doesn’t; we have our media, our politicians and our own gullibility and wishful thinking to thank for that. In the meantime, though, hardly any of the problems in Europe are truly being solved. Moreover, those that are even attempted will increasingly involve bail-ins as a way of funding bail-outs.
It’s just a matter of time until the walls come down, and of course it’s ironic that the longer reality can be kept hidden underneath the carpet, the less real it seems. But that’s simply a predictable consequence of having short attention spans. And we should be able to look beyond that.
http://theautomaticearth.com/Finance/if … eland.html
Statistics: Posted by yoda — Sun May 12, 2013 2:08 pm
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Higher Taxes on the Rich Are a Precursor to Higher Taxes on the Rest of Us
By Daniel J. Mitchell
President Obama repeatedly assures us that he only wants higher taxes on the rich as part of his class-warfare agenda.
But I don’t trust him. 
In part because he’s a politician, but also because there aren’t enough rich people to finance big government (not to mention that the rich easily can alter their financial affairs to avoid higher tax rates).
Honest leftists are beginning to admit that their real target is the middle class. Here are a few examples.
- The New York Times endorsed higher taxes on the middle class in 2010.
- The then-House Majority Leader Steny Hoyer also gave a green light that year to higher taxes on the middle class.
- Earlier this year, MIT professor and former IMF official Simon Johnson argued that the middle class should pay more tax.
- The Washington Post also called for higher taxes on the middle class this year, as did Vice President Joe Biden’s former economist.
In other words, politicians often say they want to tax the rich, but the real target is the middle class. Indeed, this is the history of tax policy. In a post earlier this year, warning the folks in the Cayman Islands not to impose an income tax, I noted how the U.S. income tax began small and then swallowed up more and more people.
[T]he U.S. income tax began in 1913 with a top rate of only 7 percent and it affected less than 1 percent of the population. But that supposedly benign tax has since become a monstrous internal revenue code that plagues the nation today.
The same thing is true elsewhere in the world.
Allister Heath explains for London’s City A.M. newspaper.
The introduction of income taxes around the world have tended to follow a very similar pattern over the past couple of centuries. First, we get generally low income tax rates, with most people exempt and with the highest rate only affecting a few people relatively lightly. Eventually, tax rates shoot up for everybody – including to crippling levels for top earners – and millions more are caught by income tax. The next stage is that the ultra-high tax rates for top earners are reduced to manageable levels – but ever more people are brought into the tax system, with the higher brackets also catching vastly more folk.
By the way, you can see that Allister makes a reference to tax rates being reduced for top earners. That’s largely because many politicians learned an important lesson about the Laffer Curve. Sometimes, the best way to “soak the rich” is by lowering their tax rates. Unfortunately, President Obama still needs some remedial education on this topic.
Allister then looks at some specific United Kingdom data revealing how more and more middle class people are now subject to higher tax rates.
The biggest change in the UK has been the number of people paying what is now the 40p tax rate: up six-fold in thirty years, from 674,000 in 1979-80, 2.5m in 1999-2000 to 4.048m in 2011-12. This number will jump again to around 5m in 2014, according to the Institute for Fiscal Studies. When Margaret Thatcher came to power, just 2.6 per cent of taxpayers paid the top rate; by the time of the next election, 16.7 per cent will.
If Obama and other statists get their way, we’ll see similar statistic in the United States. Higher income tax rates for the rich will mean higher income tax rates for the rest of us. Though I’m even more worried about a value-added tax, which would be a huge burden on ordinary people and a revenue machine for greedy politicians.
It’s worth noting, by the way, that the American tax code actually is more “progressive” than the tax codes of Europe’s welfare states. This is largely because we don’t pillage poor and middle-class taxpayers with a VAT.
P.S.: Since I mentioned the Laffer Curve above, I should emphasize that the goal of good tax policy should be to maximize growth, not to maximize tax revenue.
P.P.S.: And don’t forget that poor and middle-income taxpayers also will be hurt because slower growth is an inevitable consequence when tax rates climb and the burden of government spending increases.
Higher Taxes on the Rich Are a Precursor to Higher Taxes on the Rest of Us is a post from Cato @ Liberty – Cato Institute Blog
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How QE3 Will Make The Wealthy Even Wealthier While Causing Living Standards To Fall For The Rest Of Us
The mainstream media is hailing QE3 as a great victory for the U.S. economy. On nearly every news broadcast, the “talking heads” are declaring that Ben Bernanke’s decision to pump 40 billion dollars a month into our financial system is definitely going to help solve our economic problems. The money for QE3 is being created out of thin air and this round of quantitative easing is going to be “open-ended” which means that the Federal Reserve is going to keep doing it for as long as they feel like it. But is this really good for the average American on the street? No way. Despite two previous rounds of quantitative easing, median household income has still fallen for four years in a row, the employment rate has not bounced back since the end of the last recession, and new home sales have remained near record lows. So what have the previous rounds of quantitative easing accomplished? Well, they have driven up the prices of financial assets. Those that own stocks have done very well the past couple of years. So who owns stocks? The wealthy do. In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans. Those that have invested in commodities have also done very nicely in recent years. We have seen gold, silver, oil and agricultural commodities all do very well. But that also means that average Americans are paying more for basic necessities such as food and gasoline. So the first two rounds of quantitative easing made the wealthy even wealthier while causing living standards to fall for all the rest of us. Is there any reason to believe that QE3 will be any different?
Of course not.
This time the Federal Reserve is focused on buying mortgage-backed securities. Yes, the same financial garbage that helped cause the last crisis. The Fed plans to gobble up tens of billions of dollars of that trash every month from now on.
But will the Fed pay true market value for those mortgage-backed securities? If you believe that, I have a bridge to sell you.
So this is going to be a huge windfall for some people, and that does not include us.
Not a single penny of this 40 billion dollars a month will go directly into our hands. The theory is that it will “filter down” to us eventually.
But that hasn’t happened with previous rounds of quantitative easing.
So where does the money go?
A recent CNBC article discussed a very interesting report from the Bank of England about the effects of quantitative easing….
It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.
Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.
Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”
Wow.
Who benefits from quantitative easing?
According to the Bank of England, it is “mainly the wealthy” who benefit.
As I noted the other day, Donald Trump said essentially the same thing when he told CNBC the following….
“People like me will benefit from this.”
As I already discussed above, a lot of quantitative easing money gets into the financial markets where it pumps up the prices of financial assets.
But not all of it goes there.
We were told that the whole idea behind quantitative easing was that it was supposed to get banks lending again, but this has not happened. Instead, banks are sitting on unprecedented amounts of money. Just look at how the first two rounds of quantitative easing have caused excess reserves being held by banks to explode from close to zero to over 1.5 trillion dollars….
Of course one of the biggest problems is that the Federal Reserve is still paying banks not to lend money.
Yes, you read that correctly.
The Federal Reserve is paying banks to park money with them. So instead of risking their money by lending it out to us, the banks can just park it at the Fed and make risk-free profits for as long as they want.
Must be nice.
If the Federal Reserve really wanted banks to start lending again, all the Fed has to do is to stop paying banks not to lend money.
But of course if more than 1.5 trillion dollars suddenly started flooding into our economy (especially after you consider the multiplier effect) we would be dealing with nightmarish inflation unlike anything we have ever seen before.
So if you want to know why inflation was not even worse after QE1 and QE2 it is because more than a trillion and a half dollars is being parked with the Fed.
So did QE1 and QE2 do any good for average Americans?
Let’s go to the charts.
This first chart shows that the percentage of working age Americans with a job has stayed extremely flat since the end of the last recession.
Does it look like QE1 and QE2 made a difference to you? I don’t see any difference….
Okay, but what about new home sales?
Did QE1 and QE2 help them?
Nope….
But the mainstream media is still buying the baloney the Fed is pushing.
The mainstream media is promising us that home sales will soon rise and that lots of new jobs are on the way.
Sadly, the truth is that things have steadily gotten worse for average Americans over the past 4 years despite all of the money printing the Fed has been doing. If you doubt this, just read this article.
But this is all that Ben Bernanke seems to have left. When printing money doesn’t work, his answer is to print even more money.
QE3 is likely to cause agricultural commodities and the price of oil to rise even further.
So unless you can convince your employer to give you a corresponding raise, this is going to mean that your paychecks are not going to go as far as they did before.
And so that means a lower standard of living.
In a recent article, Bruce Krasting issued an ominous warning….
Higher inflation expectations in the US will filter around the globe. Post the extraordinary steps Ben took yesterday, people will be stocking up on “stuff”. Things like rice, flour, cooking oil, soy, wheat and sugar. If you can eat it, buy it now. It will be more expensive in a month. While your at it, fill up the gas tank, the price is going up next week and every week for the next few months.
In addition, the policy of the Federal Reserve of keeping interest rates as low as possible is absolutely crippling the finances of many retirees. Even the former president of the Federal Reserve Bank of Atlanta, William F. Ford, recognizes this….
One of the overlooked consequences of the Federal Reserve’s recent rounds of monetary stimulus is the adverse impact those policies have had on the interest income of savers. The prolonged and abnormally low interest-rate structure put in place by the Fed has made life particularly difficult for retirees and others who depend on conservative interest-sensitive investments. But the negative effects do not stop there. They spillover into the overall performance of the economy.
Just about everything that the Federal Reserve does these days is bad for ordinary Americans.
But the Fed is not going to stop. The Fed is addicted to money printing now, and as a recent article by Peter Schiff explained, the Fed is just going to “up the dosage” until it gets what it wants….
The Fed will try to conjure a recovery on the backs of currency debasement. It will not stop or alter from this course. If the economy fails to respond to the drugs, Bernanke will simply up the dosage. In fact, he is so convinced we will remain dependent on quantitative easing that he explicitly said he won’t turn off the spigots even if things noticeably improve.
This is complete and total incompetence by Ben Bernanke and his cohorts over at the Fed.
Economist Marc Faber believes that Ben Bernanke should resign, and I agree with him….
“If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous — it doesn’t work that way. It’s a temporary boost followed by a crash.”
And yes, a crash is coming.
Bernanke can try to put it off for a while, but every action he takes is just making the eventual crash even worse.
And some in the financial community clearly recognize this. For example, credit rating agency Egan-Jones downgraded the credit rating of the United States to AA- on Friday.
The primary reason they gave for the downgrade was QE3.
Ben Bernanke and the Federal Reserve are destroying the U.S. dollar and destroying our financial system for a short-term economic sugar high.
It is utter insanity.
That is why we desperately need to get the American people educated about the Federal Reserve system. It is at the very heart of our economic problems and yet neither major political party is willing to blame the Fed for the problems that it is causing.
A bunch of unelected bankers that are not accountable to the American people are running our economy into the ground and the American people do not even realize what is happening.
Please share this article with as many people as you can. Hopefully we can get the American people to understand that more money printing is definitely not the solution to our problems.
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Democrats’ Problem: Teachers and Their Unions Just Like the Rest of Us
By Neal McCluskey
Let’s face it: everyone is trying to make a profit. There’s nothing wrong with that—it’s normal, with people doing things because they feel they’ll make them better off. The problem starts when you insist that you’re a saint—that you’re somehow far more selfless than most other people—and you just can’t keep up the charade any longer. Welcome to the Democratic Party’s teacher union problem.
It seems that trying to keep the party’s union-heavy base happy while simultaneously appearing unbeholden to entrenched interests is going to be a tricky balancing act for the Democrats. But dealing with teachers unions—which adding the National Education Association and American Federation of Teachers together have about 4.7 million members—is going to be particularly treacherous. Educators are by far the biggest unionized bloc, and almost certainly the most troublesome. Indeed, as the Los Angeles Times reports today, Democrats are particularly rent asunder on education issues, and a new movie about a parent taking on the union to turn a bad public school into a charter school—the so-called parent trigger—is driving another wedge.
The movie, Won’t Back Down, has already been panned by AFT president Randi Weingarten. But at least her union—unlike the larger and more obstinate National Education Association—acknowledges that there are education problems, and maybe the unions’ time-honored demand of “more money and no accountability” has had something to do with them.
“We bear a lot of responsibility for this,” Weingarten recently told the New York Times. ”We were focused—as unions are—on fairness and not as much on quality.”
No doubt part of the reason that at least the AFT is accepting a little blame is that it sees that teachers unions are losing the sympathies of many members of the public. People are seemingly growing tired of seeing unionized educators enjoying good incomes and expensive perks while those paying the taxes struggle and test scores languish.
The problem with the union reinvention—at least as captured by the Weingarten quote—is that it probably strikes many people as hollow. Why? Because they know that unions are run by normal people and represent normal people, and what they want first and foremost is not what’s best for kids or “fairness,” but getting as good a deal for themselves as possible. In other words, they are starting to see through unions’ selfless-angels facade—the public relations sham of people just wanting a living wage while they give the mythical 110 percent “for the kids” —and are glimpsing normal, profit-seeking human beings who have had a fairly cushy deal over the decades.
Teachers unions, as those of us at Cato’s Center for Educational Freedom have said, are not the root problem in education, nor are they or the people they represent any more evil or good than most other people. The root educational problem is that public schools are government schools, and politics—which cannot be detached from government—rewards concentrated special interests, of which unionized teachers are among the biggest.
For the Democratic Party, the big problem is that for decades the teachers unions have insisted that they and their members as far more noble than almost anyone else. At least, more noble than anyone openly seeking a profit, which is most people. But the public is catching on: teachers and their unions are just as self-interested as most other people, and government-run schooling has enabled them to get some awfully nice, taxpayer-funded deals. So what do you do? Acknowledge the paper-mache wings have fallen off and risk the wrath of the teacher unionists, or keep up the angelic charade and hope the public stops noticing reality? Neither is a happy prospect for the Democratic Party.
Democrats’ Problem: Teachers and Their Unions Just Like the Rest of Us is a post from Cato @ Liberty – Cato Institute Blog
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American • These 12 Hellholes Are Examples Of What The Rest Of America
These 12 Hellholes Are Examples Of What The Rest Of America Will Look Like Soon
Do you want to see where this country is headed? If so, don’t focus on the few areas that are still very prosperous. New York City has Wall Street, Washington D.C. has the federal government and Silicon Valley has Google and Facebook. Those are the exceptions. The reality is that most of the country has been experiencing a slow decline for a very long time and once thriving cities such as Gary, Indiana and Flint, Michigan have become absolute hellholes. They are examples of what the rest of America will look like soon. 60 years ago, most Americans were decent, hard working people and there were always good jobs available for anyone that was willing to roll up his or her sleeves and put in an honest day of work. But now all of that has changed. Over the past decade, tens of thousands of manufacturing facilities have shut down and millions of jobs have left the country. Cities such as Cleveland, Baltimore and Detroit were once shining examples of everything that was right about America, but now they stand out like festering sores. The "blue collar cities" have been hit the hardest by the gutting of our economic infrastructure. There are many communities in America today where it seems like all of the hope and all of the life have been sucked right out of them. You can see it in the eyes of the people. The good times are gone permanently and they know it. Unfortunately, the remainder of the country will soon be experiencing the despair that those communities are feeling.
The following are 12 hellholes that are examples of what the rest of America will look like soon….
#1 Gary, Indiana
Gary, Indiana was once a great industrial city.
Today, it is one of the ten most dangerous cities in America, and the population has fallen by about 50 percent.
The following is from a recent Daily Mail article….
Frequently rated one of the ten most dangerous cities in the United States, Gary once boomed with jobs and opportunities but now faces the acute difficulties of America’s growing rust belt, with 22 percent of families in the once-great city now lying below the poverty line.
This modern American ghost town began life as home for workers at the United States Steel Corporation plant until economic competition from abroad forced a 90 percent job cut.
It is hard to describe what is happening to Gary without using the word "depressing". You can watch a great video that shows what Gary, Indiana looks like these days right here.
This is what happens when industry leaves and there are no jobs. Gary has become a wasteland and there is essentially no hope for a turnaround.
The following is how James Kunstler described what he experienced when he traveled through Gary, Indiana recently….
Between the ghostly remnants of factories stood a score of small cities and neighborhoods where the immigrants settled five generations ago. A lot of it was foreclosed and shuttered. They were places of such stunning, relentless dreariness that you felt depressed just imagining how depressed the remaining denizens of these endless blocks of run-down shoebox houses must feel. Judging from the frequency of taquerias in the 1950s-vintage strip-malls, one inferred that the old Eastern European population had been lately supplanted by a new wave of Mexicans. They had inherited an infrastructure for daily life that was utterly devoid of conscious artistry when it was new, and now had the special patina of supernatural rot over it that only comes from materials not found in nature disintegrating in surprising and unexpected ways, sometimes even sublimely, like the sheen of an oil slick on water at a certain angle to the sun. There was a Chernobyl-like grandeur to it, as of the longed-for end of something enormous that hadn’t worked out well.
Sadly, Gary is far from alone. There are a whole host of other formerly great U.S. cities that are degenerating into hellholes as well.
#2 Chicago, Illinois
There is something truly special about Chicago. Most of America loved the Bears of the Walter Payton era, the Bulls of the Michael Jordan era and the Cubs of the Ernie Banks era. Chicago is also known for great architecture and great pizza.
But these days "the windy city" is becoming known for other things.
The murder rate in Chicago is up 38 percent so far this year, and the recent spike in violence in the city has made national headlines.
As I noted the other day, there are only about 200 police officers in Chicago’s Gang Enforcement Unit to deal with an estimated 100,000 gang members.
That means that those officers are outnumbered 500 to 1, and more gang members pour into the city every single day.
The escalating violence in Chicago was detailed in a recent article in the Telegraph….
"This is a block-to-block war here, a different dynasty on every street," said a dreadlocked young man heavily inked in gang tattoos who calls himself "Killer".
"All the black brothers just want to get rich, but we got no jobs and no hope. We want the violence to stop but you ain’t safe if you ain’t got your pistol with you. Too many friends, too many men are being killed. We don’t even cry at funerals no -more. Nobody expects to live past 21 here."
The victims and killers are mainly black males aged between 15 and 35, often with gang affiliations – but not exclusively. A seven-year-old girl, Heaven Sutton, was buried this month after being gunned down at her mother’s street sweet store. And last week, two girls aged 12 and 13 were shot and badly-wounded as they walked home from a newly-opened community centre.
If you are thinking of moving to Chicago, you might want to think again.
#3 Detroit, Michigan
I have written repeatedly about Detroit because it is a perfect example of what the rest of America is going to look like soon.
Once upon a time it was regarded as one of the top manufacturing cities the world had ever seen, but today it has become a total hellhole.
There are very few decent jobs available, poverty has exploded and crime is everywhere.
If you can believe it, 53.6% of all children in Detroit are living in poverty, and only 25 percent of all students in Detroit graduate from high school at this point.
And as I wrote about recently, justifiable homicide in Detroit increased by a whopping 79 percent during 2011, and the rate of self-defense killings in Detroit is now approximately 2200% above the national average.
Is it any wonder that you can still buy a house for $100 in some areas of Detroit?
The truth is that many areas of Detroit now resemble a post-apocalyptic wasteland. Perhaps that is why one team of investors actually wants to turn some of the worst areas of Detroit into a zombie theme park….
Derelict areas of Detroit face being taken over by hordes of ‘flesh and brain-eating zombies’ if an ambitious business plan takes off.
Entrepreneur Mark Siwak wants to create live-action terror theme park ‘Z World’ on Motor City’s run-down and abandoned streets.
Customers would pay to be chased by professional actors and try to seek shelter in ghostly homes, factories and businesses.
You can see some great video of the "ruins of Detroit" right here.
#4 Stockton, California
Stockton is one of the ten most dangerous cities in America and it recently made national headlines when it declared bankruptcy.
Unfortunately, as spending on law enforcement has declined it has given the criminals a lot more room to operate in Stockton. The following is from a recent Business Insider article….
The city has cut more than $90 million in spending over the past few years, specifically in its police department. The city has cut over one quarter of its police jobs, which has led to a "surge in murders," and has created an "emboldened criminal element" in the city. According to police spokesman Joe Silva, the city has had 87 murders since the start of 2011, 29 of which have already occurred this year. In contrast, there were 35 murders in 2009 and 48 in 2010. With six months left in the year, there have already been more murders in the city since the start of 2011 than the two-year stretch of 2009-2010.
A while back in Stockton a billboard was put up with the following message: "Welcome to the 2nd most dangerous city in California. Stop laying off cops."
#5 Flint, Michigan
Flint, Michigan is a city that Michael Moore has made famous. Flint once supported hordes of middle class workers thanks to a thriving auto industry, but today it is a just a rotting shell. It looks like a war went through it and nobody bothered to clean up the mess.
At this point, the murder rate in Flint, Michigan is worse than the murder rate in Baghdad. That is how nightmarish things have become in Flint.
The following is from an article in the New York Times….
It’s not that the cops here are scared; it’s just that they’re outmanned, outgunned and flat broke.
Flint is the birthplace of General Motors and the home of the U.A.W.’s first big strike. In case you didn’t know this, the words “Vehicle City” are spelled out on the archway spanning the Flint River.
But the name is a lie. Flint isn’t Vehicle City anymore. The Buick City complex is gone. The spark-plug plant is gone. Fisher Body is gone.
What Flint is now is one of America’s murder capitals. Last year in Flint, population 102,000, there were 66 documented murders. The murder rate here is worse than those in Newark and St. Louis and New Orleans. It’s even worse than Baghdad’s.
Politicians love to go to Flint and make speeches, but things never get any better. The following are comments that Joe Biden made about Flint, Michigan during a recent speech he gave to promote a jobs bill….
"In 2008, when Flint had 265 sworn officers on their police force, there were 35 murders and 91 rapes in this city. In 2010, when Flint had only 144 police officers, the murder rate climbed to 65 and rapes–just to pick two categories–climbed to 229. In 2011, you now only have 125 shields. God only knows what the numbers will be this year for Flint if we don’t rectify it."
But don’t look down on Flint – these kinds of conditions are coming to where you live soon enough.
#6 West Philly
Did you know that 36.4% of all children that live in Philadelphia are living in poverty?
There are some sections of Philadelphia that are actually very nice, but there are others that look like society has forgotten about them for decades.
A recent article by Jim Quinn entitled "More Than 30 Blocks Of Grey And Decay" described the depressing conditions in West Philadelphia. Quinn refers to his drive through this area as "the 30 Blocks of Squalor"….
The real unemployment rate exceeds 50%, murder is the number one industry, with drugs a close second.
But it was not always this way. Once upon a time, West Philly was actually a thriving area and was full of middle class families.
So what happened?
That is a very good question.
According to Quinn, the physical decay in West Philly is matched by the social decay….
The once proud homes are in shambles. Bags of garbage dot the landscape. Most of the people who live here are parasites on society. Personal responsibility, work ethic, education and marriage are unknown concepts in this community. Even though more than 50% of the students in West Philly drop out of high school and the SAT scores of West Philly High students are lower than whale ****, the bankrupt school district spent $70 million to build a new high school/prison to babysit derelicts and future prison inmates. The windows do not have steel bars yet, as the architect was smart to put all windows at least eight feet above street level.
These days there is a lot of despair in "the city of brotherly love". It is so sad to see what is happening to what once was such a proud city.
#7 Cleveland, Ohio
Cleveland has always had a love/hate relationship with itself. Many who live there call it "the mistake by the lake", but the truth is that it was once a truly great city.
Sadly, today it is symbol of what has gone wrong with America.
There has been a steady stream of businesses that have left Cleveland and today 52.6% of all children that live in Cleveland are living in poverty.
There are not enough good jobs in Cleveland anymore, and so there are not enough workers to buy the tens of thousands of homes that have been foreclosed or abandoned.
So what is being done with all of those empty homes?
Unfortunately, they are being torn down.
The following comes from a recent CBS News report by Scott Pelley….
Across America, recession-fueled foreclosures and plummeting home values have left countless properties abandoned and vulnerable to looting. As Scott Pelley reports, the problem has gotten so bad in Cleveland, Ohio, that county officials have demolished more than 1,000 homes this year – and plan to demolish 20,000 more – rather than let the blight spread and render nearby homes worthless.
Does that seem right to you?
Should Cleveland be destroying tens of thousands of homes that families could be using?
Something has gone very, very wrong in this country.
#8 Camden, New Jersey
If you want to see what a hellhole looks like just visit Camden, New Jersey.
Although you will probably want to take an armed escort with you.
As industry has abandoned Camden, the gangs have basically taken over. The "growth industries" in Camden these days are drug dealing and prostitution.
In an article entitled "City of Ruins", reporter Chris Hedges described what life is like in Camden at this point….
There are perhaps a hundred open-air drug markets, most run by gangs like the Bloods, the Latin Kings, Los Nietos and MS-13. Knots of young men in black leather jackets and baggy sweatshirts sell weed and crack to clients, many of whom drive in from the suburbs. The drug trade is one of the city’s few thriving businesses. A weapon, police say, is never more than a few feet away, usually stashed behind a trash can, in the grass or on a porch.
Not that other cities in New Jersey are shining examples for the rest of the world either.
For example, if you want to get really depressed just drive through the bad parts of Newark some time.
#9 St. Louis, Missouri
According to U.S. News and World Report, the most dangerous city in the United States is St. Louis.
If you have a death wish, just wander around the streets of East St. Louis at night.
There is a decent chance that someone will shoot you.
Things were not always this way in St. Louis. But today things have gotten so bad that you can find packs of wild dogs roaming the city digging through trash and threatening children.
The following is from a report by the local CBS affiliate in St. Louis….
…Lewis Reed is sounding the alarm. "I’ve witnessed packs of dogs, 10 and 15 dogs running together, and I’ve seen all these dogs I’m talking about they don’t have collars, they don’t have tags, these are truly wild dogs," he said.
Reed says stray dogs are terrorizing the north side. "It’s obscene that parents have to walk their kids to school, in some parts of the city, with a golf club to fend off wild dogs."
This kind of thing is actually happening in America?
#10 New Orleans, Louisiana
The problems that New Orleans has experienced have been well documented.
But unlike most of the cities listed above, at least New Orleans has an excuse. New Orleans permanently lost 29% of its population after Hurricane Katrina, and large sections of the city were essentially destroyed by that storm.
Even today, there are still some areas of New Orleans that look as if they have just been bombed.
It has been estimated that about 20 percent of the homes in New Orleans are still standing vacant, and poverty is rampant. New Orleans will probably never fully recover to the level it was at before Hurricane Katrina hit.
#11 Oakland, California
Oakland has always been in the shadow of San Francisco, and the contrast between the two cities continues to grow.
Oakland has always been considered one of the more dangerous cities in America, and this year crime rates in Oakland are rising rapidly. The following is from a recent article in the New York Times….
At the beginning of April, murders in Oakland were up 26 percent over a year ago, rapes were up 41 percent, and robberies were up 35 percent.
When Chief Batts arrived as a “change agent” in 2009, the police department employed 837 officers. It now has 635. The department no longer responds to burglaries that are not still in progress, and frequently does not respond to other calls for help.
So if your house has been robbed and the burglars are gone what are you supposed to do?
Due to a crippling lack of resources, the previous police chief decided that his department would no longer be able to respond to all crimes.
The following is a partial list of the crimes that police in Oakland are no longer likely to respond to….
burglary
theft
embezzlement
grand theft
grand theft: dog
identity theft
false information to peace officer
required to register as sex or arson offender
dump waste or offensive matter
loud music
possess forged notes
pass fictitious check
obtain money by false voucher
fraudulent use of access cards
stolen license plate
embezzlement by an employee
extortion
attempted extortion
false personification of other
injure telephone/power line
interfere with power line
unauthorized cable tv connection
vandalism
So what do you do if you are a victim of one of those crimes in Oakland?
That is a very good question.
#12 Baltimore, Maryland
If you can believe it, Baltimore was actually once a great city.
But today it has become a crime-ridden, drug-infested hellhole.
I used to drive up to Baltimore all the time. It truly is a "blue collar" city. There are a lot of really hard working people there.
Unfortunately, there are not nearly enough jobs for everyone and a lot of people have turned to drugs and crime.
There are some areas of Baltimore that you really should never enter by yourself. If you do go into them, you might not make it back out.
There was one incident in Baltimore earlier this year that was particularly disturbing.
One poor young man had gotten drunk and was apparently wandering around all by himself. Some thugs approached him and they clearly sensed that he was vulnerable. So they knocked him to the ground, stripped him of his car keys, his watch, his money, his cell phone and his clothes.
A crowd gathered around to watch, and instead of helping the man, several of them got out their cell phones and laughed hysterically while they recorded the incident with their cell phone cameras for YouTube.
What made all of this even sadder is that this happened right in front of a Baltimore courthouse.
What in the world has happened to this nation?
All of us that still love this country should be deeply saddened by everything above.
America is rotting from the inside out, and if we are ever going to find any solutions we need to start admitting how bad things have really become.
The truth is that our problems are not limited to one political party, one special interest group or to one region of the country. The social decay that is plaguing America can literally be found everywhere.
For much more on this, please see the following four articles….
1) "25 Signs The Collapse Of America Is Speeding Up As Society Rots From The Inside Out"
2) "70 Reasons To Mourn For America"
3) "20 Signs That Society Is Breaking Down And That America Has Been Overrun By Psychos"
4) "12 Factors That Are Turning The Streets Of America Into A Living Hell"
So don’t laugh at Detroit or Cleveland or St. Louis.
The rest of the country is declining too.
If the city where you live is not a hellhole already, it will be soon enough.
http://theeconomiccollapseblog.com/
Statistics: Posted by yoda — Mon Jul 16, 2012 12:04 am
View full post on opinions.caduceusx.com
These 12 Hellholes Are Examples Of What The Rest Of America Will Look Like Soon
Do you want to see where this country is headed? If so, don’t focus on the few areas that are still very prosperous. New York City has Wall Street, Washington D.C. has the federal government and Silicon Valley has Google and Facebook. Those are the exceptions. The reality is that most of the country has been experiencing a slow decline for a very long time and once thriving cities such as Gary, Indiana and Flint, Michigan have become absolute hellholes. They are examples of what the rest of America will look like soon. 60 years ago, most Americans were decent, hard working people and there were always good jobs available for anyone that was willing to roll up his or her sleeves and put in an honest day of work. But now all of that has changed. Over the past decade, tens of thousands of manufacturing facilities have shut down and millions of jobs have left the country. Cities such as Cleveland, Baltimore and Detroit were once shining examples of everything that was right about America, but now they stand out like festering sores. The “blue collar cities” have been hit the hardest by the gutting of our economic infrastructure. There are many communities in America today where it seems like all of the hope and all of the life have been sucked right out of them. You can see it in the eyes of the people. The good times are gone permanently and they know it. Unfortunately, the remainder of the country will soon be experiencing the despair that those communities are feeling.
The following are 12 hellholes that are examples of what the rest of America will look like soon….
#1 Gary, Indiana
Gary, Indiana was once a great industrial city.
Today, it is one of the ten most dangerous cities in America, and the population has fallen by about 50 percent.
The following is from a recent Daily Mail article….
Frequently rated one of the ten most dangerous cities in the United States, Gary once boomed with jobs and opportunities but now faces the acute difficulties of America’s growing rust belt, with 22 percent of families in the once-great city now lying below the poverty line.
This modern American ghost town began life as home for workers at the United States Steel Corporation plant until economic competition from abroad forced a 90 percent job cut.
It is hard to describe what is happening to Gary without using the word “depressing”. You can watch a great video that shows what Gary, Indiana looks like these days right here.
This is what happens when industry leaves and there are no jobs. Gary has become a wasteland and there is essentially no hope for a turnaround.
The following is how James Kunstler described what he experienced when he traveled through Gary, Indiana recently….
Between the ghostly remnants of factories stood a score of small cities and neighborhoods where the immigrants settled five generations ago. A lot of it was foreclosed and shuttered. They were places of such stunning, relentless dreariness that you felt depressed just imagining how depressed the remaining denizens of these endless blocks of run-down shoebox houses must feel. Judging from the frequency of taquerias in the 1950s-vintage strip-malls, one inferred that the old Eastern European population had been lately supplanted by a new wave of Mexicans. They had inherited an infrastructure for daily life that was utterly devoid of conscious artistry when it was new, and now had the special patina of supernatural rot over it that only comes from materials not found in nature disintegrating in surprising and unexpected ways, sometimes even sublimely, like the sheen of an oil slick on water at a certain angle to the sun. There was a Chernobyl-like grandeur to it, as of the longed-for end of something enormous that hadn’t worked out well.
Sadly, Gary is far from alone. There are a whole host of other formerly great U.S. cities that are degenerating into hellholes as well.
#2 Chicago, Illinois
There is something truly special about Chicago. Most of America loved the Bears of the Walter Payton era, the Bulls of the Michael Jordan era and the Cubs of the Ernie Banks era. Chicago is also known for great architecture and great pizza.
But these days “the windy city” is becoming known for other things.
The murder rate in Chicago is up 38 percent so far this year, and the recent spike in violence in the city has made national headlines.
As I noted the other day, there are only about 200 police officers in Chicago’s Gang Enforcement Unit to deal with an estimated 100,000 gang members.
That means that those officers are outnumbered 500 to 1, and more gang members pour into the city every single day.
The escalating violence in Chicago was detailed in a recent article in the Telegraph….
“This is a block-to-block war here, a different dynasty on every street,” said a dreadlocked young man heavily inked in gang tattoos who calls himself “Killer”.
“All the black brothers just want to get rich, but we got no jobs and no hope. We want the violence to stop but you ain’t safe if you ain’t got your pistol with you. Too many friends, too many men are being killed. We don’t even cry at funerals no -more. Nobody expects to live past 21 here.”
The victims and killers are mainly black males aged between 15 and 35, often with gang affiliations – but not exclusively. A seven-year-old girl, Heaven Sutton, was buried this month after being gunned down at her mother’s street sweet store. And last week, two girls aged 12 and 13 were shot and badly-wounded as they walked home from a newly-opened community centre.
If you are thinking of moving to Chicago, you might want to think again.
#3 Detroit, Michigan
I have written repeatedly about Detroit because it is a perfect example of what the rest of America is going to look like soon.
Once upon a time it was regarded as one of the top manufacturing cities the world had ever seen, but today it has become a total hellhole.
There are very few decent jobs available, poverty has exploded and crime is everywhere.
If you can believe it, 53.6% of all children in Detroit are living in poverty, and only 25 percent of all students in Detroit graduate from high school at this point.
And as I wrote about recently, justifiable homicide in Detroit increased by a whopping 79 percent during 2011, and the rate of self-defense killings in Detroit is now approximately 2200% above the national average.
Is it any wonder that you can still buy a house for $100 in some areas of Detroit?
The truth is that many areas of Detroit now resemble a post-apocalyptic wasteland. Perhaps that is why one team of investors actually wants to turn some of the worst areas of Detroit into a zombie theme park….
Derelict areas of Detroit face being taken over by hordes of ‘flesh and brain-eating zombies’ if an ambitious business plan takes off.
Entrepreneur Mark Siwak wants to create live-action terror theme park ‘Z World’ on Motor City’s run-down and abandoned streets.
Customers would pay to be chased by professional actors and try to seek shelter in ghostly homes, factories and businesses.
You can see some great video of the “ruins of Detroit” right here.
#4 Stockton, California
Stockton is one of the ten most dangerous cities in America and it recently made national headlines when it declared bankruptcy.
Unfortunately, as spending on law enforcement has declined it has given the criminals a lot more room to operate in Stockton. The following is from a recent Business Insider article….
The city has cut more than $90 million in spending over the past few years, specifically in its police department. The city has cut over one quarter of its police jobs, which has led to a “surge in murders,” and has created an “emboldened criminal element” in the city. According to police spokesman Joe Silva, the city has had 87 murders since the start of 2011, 29 of which have already occurred this year. In contrast, there were 35 murders in 2009 and 48 in 2010. With six months left in the year, there have already been more murders in the city since the start of 2011 than the two-year stretch of 2009-2010.
A while back in Stockton a billboard was put up with the following message: “Welcome to the 2nd most dangerous city in California. Stop laying off cops.”
#5 Flint, Michigan
Flint, Michigan is a city that Michael Moore has made famous. Flint once supported hordes of middle class workers thanks to a thriving auto industry, but today it is a just a rotting shell. It looks like a war went through it and nobody bothered to clean up the mess.
At this point, the murder rate in Flint, Michigan is worse than the murder rate in Baghdad. That is how nightmarish things have become in Flint.
The following is from an article in the New York Times….
It’s not that the cops here are scared; it’s just that they’re outmanned, outgunned and flat broke.
Flint is the birthplace of General Motors and the home of the U.A.W.’s first big strike. In case you didn’t know this, the words “Vehicle City” are spelled out on the archway spanning the Flint River.
But the name is a lie. Flint isn’t Vehicle City anymore. The Buick City complex is gone. The spark-plug plant is gone. Fisher Body is gone.
What Flint is now is one of America’s murder capitals. Last year in Flint, population 102,000, there were 66 documented murders. The murder rate here is worse than those in Newark and St. Louis and New Orleans. It’s even worse than Baghdad’s.
Politicians love to go to Flint and make speeches, but things never get any better. The following are comments that Joe Biden made about Flint, Michigan during a recent speech he gave to promote a jobs bill….
“In 2008, when Flint had 265 sworn officers on their police force, there were 35 murders and 91 rapes in this city. In 2010, when Flint had only 144 police officers, the murder rate climbed to 65 and rapes–just to pick two categories–climbed to 229. In 2011, you now only have 125 shields. God only knows what the numbers will be this year for Flint if we don’t rectify it.”
But don’t look down on Flint – these kinds of conditions are coming to where you live soon enough.
#6 West Philly
Did you know that 36.4% of all children that live in Philadelphia are living in poverty?
There are some sections of Philadelphia that are actually very nice, but there are others that look like society has forgotten about them for decades.
A recent article by Jim Quinn entitled “More Than 30 Blocks Of Grey And Decay” described the depressing conditions in West Philadelphia. Quinn refers to his drive through this area as “the 30 Blocks of Squalor”….
The real unemployment rate exceeds 50%, murder is the number one industry, with drugs a close second.
But it was not always this way. Once upon a time, West Philly was actually a thriving area and was full of middle class families.
So what happened?
That is a very good question.
According to Quinn, the physical decay in West Philly is matched by the social decay….
The once proud homes are in shambles. Bags of garbage dot the landscape. Most of the people who live here are parasites on society. Personal responsibility, work ethic, education and marriage are unknown concepts in this community. Even though more than 50% of the students in West Philly drop out of high school and the SAT scores of West Philly High students are lower than whale ****, the bankrupt school district spent $70 million to build a new high school/prison to babysit derelicts and future prison inmates. The windows do not have steel bars yet, as the architect was smart to put all windows at least eight feet above street level.
These days there is a lot of despair in “the city of brotherly love”. It is so sad to see what is happening to what once was such a proud city.
#7 Cleveland, Ohio
Cleveland has always had a love/hate relationship with itself. Many who live there call it “the mistake by the lake”, but the truth is that it was once a truly great city.
Sadly, today it is symbol of what has gone wrong with America.
There has been a steady stream of businesses that have left Cleveland and today 52.6% of all children that live in Cleveland are living in poverty.
There are not enough good jobs in Cleveland anymore, and so there are not enough workers to buy the tens of thousands of homes that have been foreclosed or abandoned.
So what is being done with all of those empty homes?
Unfortunately, they are being torn down.
The following comes from a recent CBS News report by Scott Pelley….
Across America, recession-fueled foreclosures and plummeting home values have left countless properties abandoned and vulnerable to looting. As Scott Pelley reports, the problem has gotten so bad in Cleveland, Ohio, that county officials have demolished more than 1,000 homes this year – and plan to demolish 20,000 more – rather than let the blight spread and render nearby homes worthless.
Does that seem right to you?
Should Cleveland be destroying tens of thousands of homes that families could be using?
Something has gone very, very wrong in this country.
#8 Camden, New Jersey
If you want to see what a hellhole looks like just visit Camden, New Jersey.
Although you will probably want to take an armed escort with you.
As industry has abandoned Camden, the gangs have basically taken over. The “growth industries” in Camden these days are drug dealing and prostitution.
In an article entitled “City of Ruins“, reporter Chris Hedges described what life is like in Camden at this point….
There are perhaps a hundred open-air drug markets, most run by gangs like the Bloods, the Latin Kings, Los Nietos and MS-13. Knots of young men in black leather jackets and baggy sweatshirts sell weed and crack to clients, many of whom drive in from the suburbs. The drug trade is one of the city’s few thriving businesses. A weapon, police say, is never more than a few feet away, usually stashed behind a trash can, in the grass or on a porch.
Not that other cities in New Jersey are shining examples for the rest of the world either.
For example, if you want to get really depressed just drive through the bad parts of Newark some time.
#9 St. Louis, Missouri
According to U.S. News and World Report, the most dangerous city in the United States is St. Louis.
If you have a death wish, just wander around the streets of East St. Louis at night.
There is a decent chance that someone will shoot you.
Things were not always this way in St. Louis. But today things have gotten so bad that you can find packs of wild dogs roaming the city digging through trash and threatening children.
The following is from a report by the local CBS affiliate in St. Louis….
…Lewis Reed is sounding the alarm. “I’ve witnessed packs of dogs, 10 and 15 dogs running together, and I’ve seen all these dogs I’m talking about they don’t have collars, they don’t have tags, these are truly wild dogs,” he said.
Reed says stray dogs are terrorizing the north side. “It’s obscene that parents have to walk their kids to school, in some parts of the city, with a golf club to fend off wild dogs.”
This kind of thing is actually happening in America?
#10 New Orleans, Louisiana
The problems that New Orleans has experienced have been well documented.
But unlike most of the cities listed above, at least New Orleans has an excuse. New Orleans permanently lost 29% of its population after Hurricane Katrina, and large sections of the city were essentially destroyed by that storm.
Even today, there are still some areas of New Orleans that look as if they have just been bombed.
It has been estimated that about 20 percent of the homes in New Orleans are still standing vacant, and poverty is rampant. New Orleans will probably never fully recover to the level it was at before Hurricane Katrina hit.
#11 Oakland, California
Oakland has always been in the shadow of San Francisco, and the contrast between the two cities continues to grow.
Oakland has always been considered one of the more dangerous cities in America, and this year crime rates in Oakland are rising rapidly. The following is from a recent article in the New York Times….
At the beginning of April, murders in Oakland were up 26 percent over a year ago, rapes were up 41 percent, and robberies were up 35 percent.
When Chief Batts arrived as a “change agent” in 2009, the police department employed 837 officers. It now has 635. The department no longer responds to burglaries that are not still in progress, and frequently does not respond to other calls for help.
So if your house has been robbed and the burglars are gone what are you supposed to do?
Due to a crippling lack of resources, the previous police chief decided that his department would no longer be able to respond to all crimes.
The following is a partial list of the crimes that police in Oakland are no longer likely to respond to….
- burglary
- theft
- embezzlement
- grand theft
- grand theft: dog
- identity theft
- false information to peace officer
- required to register as sex or arson offender
- dump waste or offensive matter
- loud music
- possess forged notes
- pass fictitious check
- obtain money by false voucher
- fraudulent use of access cards
- stolen license plate
- embezzlement by an employee
- extortion
- attempted extortion
- false personification of other
- injure telephone/power line
- interfere with power line
- unauthorized cable tv connection
- vandalism
So what do you do if you are a victim of one of those crimes in Oakland?
That is a very good question.
#12 Baltimore, Maryland
If you can believe it, Baltimore was actually once a great city.
But today it has become a crime-ridden, drug-infested hellhole.
I used to drive up to Baltimore all the time. It truly is a “blue collar” city. There are a lot of really hard working people there.
Unfortunately, there are not nearly enough jobs for everyone and a lot of people have turned to drugs and crime.
There are some areas of Baltimore that you really should never enter by yourself. If you do go into them, you might not make it back out.
There was one incident in Baltimore earlier this year that was particularly disturbing.
One poor young man had gotten drunk and was apparently wandering around all by himself. Some thugs approached him and they clearly sensed that he was vulnerable. So they knocked him to the ground, stripped him of his car keys, his watch, his money, his cell phone and his clothes.
A crowd gathered around to watch, and instead of helping the man, several of them got out their cell phones and laughed hysterically while they recorded the incident with their cell phone cameras for YouTube.
What made all of this even sadder is that this happened right in front of a Baltimore courthouse.
What in the world has happened to this nation?
All of us that still love this country should be deeply saddened by everything above.
America is rotting from the inside out, and if we are ever going to find any solutions we need to start admitting how bad things have really become.
The truth is that our problems are not limited to one political party, one special interest group or to one region of the country. The social decay that is plaguing America can literally be found everywhere.
For much more on this, please see the following four articles….
1) “25 Signs The Collapse Of America Is Speeding Up As Society Rots From The Inside Out“
2) “70 Reasons To Mourn For America“
3) “20 Signs That Society Is Breaking Down And That America Has Been Overrun By Psychos“
4) “12 Factors That Are Turning The Streets Of America Into A Living Hell“
So don’t laugh at Detroit or Cleveland or St. Louis.
The rest of the country is declining too.
If the city where you live is not a hellhole already, it will be soon enough.
View full post on The Economic Collapse
Forget The Election Results – Greece Is Still Doomed And So Is The Rest Of Europe
The election results from Greece are in and the pro-bailout forces have won, but just barely. It is being projected that the pro-bailout New Democracy party will have about 130 seats in the 300 seat parliament, and Pasok (another pro-bailout party) will have about 33 seats. Those two parties have alternated ruling Greece for decades, and it looks like they are going to form a coalition government which will keep Greece in the euro. On Monday we are likely to see financial markets across the globe in celebration mode. But the truth is that nothing has really changed. Greece is still in a depression. The Greek economy has contracted by close to 25 percent over the past four years, and now they are going to stay on the exact same path that they were before. Austerity is going to continue to grind away at what remains of the Greek economy and money is going to continue to fly out of the country at a very rapid pace. Greece is still drowning in debt and completely dependent on outside aid to avoid bankruptcy. Meanwhile, things in Spain and Italy are rapidly getting worse. So where in that equation is room for optimism?
Right now the ingredients for a “perfect storm” are developing in Europe. Government spending is being slashed all across the continent, ECB monetary policy is very tight, new regulations and deteriorating economic conditions are causing major banks to cut back on lending and there is panic in the air.
Unless something dramatic changes, things are going to continue to get worse.
Yes, the Greek election results mean that Greece will stay in the euro – at least for now.
But is that really a reason for Greeks to celebrate?
Right now, the unemployment rate in Greece is about 22 percent. Businesses continue to shut down at a staggering rate and suicides are spiking.
So far this month, about 500 million euros a day has been pulled out of Greek banks. The entire Greek banking system is on the verge of collapse.
Meanwhile, the Greek government is still running up more debt. It is being projected that the Greek budget deficit will be about 7 percent of GDP this year.
The Greeks went to the polls and they voted for more of the same.
Are they crazy?
Someone once said that the definition of insanity is doing the same thing over and over again and expecting different results.
Unfortunately, it looks like things are going to continue to get worse in Greece for quite some time.
And the rest of Europe is heading into a very bleak economic future as well.
At the moment, unemployment in the eurozone is at a record high.
Most analysts expect it to go even higher.
To say that Spain has an unemployment problem would be a massive understatement. The unemployment rate in Spain is even higher than the unemployment rate in Greece is. In fact, unemployment in Spain is the highest that it has ever been since the introduction of the euro.
The Spanish banking system is a complete and total disaster at this point. The Spanish government has already asked for a 100 billion euro bailout for its banks.
But that might not be nearly enough.
Spain is facing a housing collapse similar to what the United States went through back in 2008 and 2009. Right now, home prices in Spain are absolutely collapsing….
Fresh data yesterday shows how desperate the crisis is becoming in Spain. The property crash is accelerating. House prices fell at a 12.6pc rate in the first quarter of this year, compared to 11.2pc the quarter before, and 7.4pc in the quarter before that. Prices have fallen 26pc from their peak.
“Fundamentals point to a further 25pc decline,” said Standard & Poor’s in a report on Thursday. It may take another four years to clear a glut of one million homes left from the building boom.
Meanwhile, money is being pulled out of banks in Spain at a very alarming rate. As panic spreads we are seeing slow motion bank runs all over Europe. Over the past few months massive amounts of money have been moved from troubled nations to “safe havens” such as Switzerland and Germany.
Investors are getting very nervous and yields on Italian and Spanish debt are spiking again.
Last week yields on Spanish debt hit their highest levels since the introduction of the euro. Without massive ECB intervention the yield on 10 year Spanish bonds will almost certainly blow well past the 7 percent danger mark.
The credit rating agencies are indicating that there is danger ahead. Moody’s recently downgraded Spanish debt to just one notch above junk status. Spain is heading down the exact same road that Greece has gone.
The situation in Europe is very grim.
Greece is going to need bailouts for as far as the eye can see.
Spain is almost certainly going to need a huge bailout.
Italy is almost certainly going to need a huge bailout.
Ireland and Portugal look like they are going to need more money.
France is increasingly looking vulnerable, and Francois Hollande appears to have no real solutions up his sleeve.
As I have said so many times before, watch Europe.
Every few weeks there are headlines that declare that “Europe has been saved” but things just keep getting worse.
The governor of the Bank of England, Mervyn King, said the following a few weeks ago….
“Our biggest trading partner is tearing itself apart with no obvious solution.”
And that is the truth. There is no obvious solution to the problems in Europe. The politicians could kick the can down the road for a while longer, but in the end there will be no avoiding the pain that is coming.
The equation for what is happening in Europe that I have shared before still applies….
Brutal austerity + toxic levels of government debt + rising bond yields + a lack of confidence in the financial system + banks that are massively overleveraged + a massive credit crunch = A financial implosion of historic proportions
We are watching a slow-motion financial train wreck that is absolutely unprecedented happen right in front of our eyes and our politicians are powerless to stop it.
It is going to be a long, hot summer for the European financial system.
On election day in Greece, the mood was incredibly somber. Instead of celebrating, most Greeks seemed resigned to a very hard future. As an article in the Telegraph described, the entire nation seems to be grinding to a halt….
This is the election that is supposed to decide whether Greece stays in the euro. Yet as it, and Europe, face what could be their Katrina moment, the dominant sense here is not of panic, or fear, or even hope – but of a country in suspended animation, grinding to a halt.
The Athens Heart shopping centre, in the southern suburbs, is polished, full of big brands, and almost totally empty of customers. “We’ve had five sales all day,” says Steryiani Vlachakou, the assistant in the Champion sportswear store. “It’s been getting a lot, lot worse.”
Sadly, it is not only Greece that is doomed.
The truth is that all of Europe is doomed, and when Europe falls the entire globe is going to feel it.
So get ready for the hard times that are coming. The pain is going to be immense and most people are not even going to see it coming.
View full post on The Economic Collapse
International News • Germans wary of financial burden they bear for rest of euro
Germans wary of financial burden they bear for rest of euro zone
DOUG SAUNDERS
BERLIN — The Globe and Mail
Published Sunday, Jun. 10 2012
When primary-school teacher Vanessa Kuhn-Baumann opens her pay statement every month, she thinks dark thoughts about Spain and Greece. Despite the prosperity of her country, her bank statements and tax returns feel like a constant reminder of the price of European solidarity and economic unity.
Like all Germans, Ms. Kuhn-Baumann has a 5.5 per cent “solidarity surcharge” on top of her income tax withdrawn from her paycheques – a fee imposed in 1991 to pay for the reunification of Germany after the communist German Democratic Republic ceased to exist. East Germany at the time looked like Greece does today: broke, unemployment-stricken, inefficient, debt-burdened and in need of outside help.
Meant to be a temporary measure to get the poor and indebted East Germans back on their feet and convert their worthless currency to deutschmarks, the “Soli,” as the tax is known to Germans, has been extended for more than two decades (it is set to expire in 2019) and has cost taxpayers more than $2.2-trillion.
“The last time we Germans bailed someone out was 21 years ago, and look, I’m still paying for it today – I’ve been paying for my entire working life,” says Ms. Kuhn-Baumann, 34, a Bavarian who, since she moved to eastern Berlin, now lives in the former East Germany, a region that remains mired in high unemployment and dependency. “I look around me here, and I wonder what we got for all that money.”
In many ways her attitude, possibly shared by a majority of Germans today, is Chancellor Angela Merkel’s biggest political problem. Any solution to the euro crisis – which this weekend pushed Spain to ask for a continent-wide rescue for its banks – will be expensive for Germany, though nowhere near as expensive as the collapse of the euro or one of its larger member states. But Ms. Merkel faces voters who believe, deep in their hearts, that a euro bailout will be a repeat of the disappointing project of German reunification.
“I think the German taxpayers realize that it’s quite difficult to support another area. They fear that Greece will be a never-ending story like we’ve had with the eastern part of Germany,” says Matthias Kullas, an economist with the German Centre for European Policy. “They’re still making payments for that today, and they look at the Mediterranean and they see another place that looks like East Germany. So, naturally they’re wary.”
It is that wary electorate, rather than her own beliefs, that has caused Ms. Merkel to avoid taking decisive and large-scale action to rescue the euro, say senior officials in her conservative Christian Democratic Union. It is the prospect of a voter revolt that has caused her to talk exclusively of austerity and cutbacks at a moment when economists and other European leaders increasingly agree that an inflationary policy designed to boost demand, led by Germany, is badly needed. Facing a series of knife-edge state elections this year and a national election in 2013, she feels she must avoid statements or actions that could turn public opinion against her party.
That opinion was visible this weekend, as European finance ministers met to bail out Spain’s collapsing banks with a €100-billion ($129.3-billion) loan from the continent’s bailout fund, when a poll for the Bild newspaper showed that 66 per cent of Germans are unwilling to do anything to support Spanish banks, and only 26 per cent are worried about the stability of the euro.
Underlying it all is the dead weight of tens of millions of German voters who, like Ms. Kuhn-Baumann, see the poorer members of the 17-nation euro zone as another set of East Germanys – and note that the former GDR, even after $2-trillion in taxpayer aid, is faring more poorly, by several measures, than neighbouring Poland.
Part of this is the fault of the German media and think tanks, which have constantly repeated the misleading idea that the euro crisis was created by excessive government spending in the periphery, and that Germany is simply paying for the irresponsible profligacy of others. One influential German commentator, the historian Arnulf Baring, has gone so far as to call the euro bailout “Versailles without war” – a reference to the crushing reparation payments imposed on Germany after the First World War.
http://www.theglobeandmail.com/news/wor … le4246116/
Statistics: Posted by yoda — Mon Jun 11, 2012 12:29 am
View full post on opinions.caduceusx.com
How The Super Rich Avoid Taxes Even As They Demand That The Rest Of Us Pay More
The way that we tax people in the United States is fundamentally broken and should be completely discarded. The U.S. tax code is absolutely riddled with loopholes that allow the super rich to legally avoid taxes while many of the rest of us are being taxed into oblivion. In our system of taxation, middle class families that work hard and try to play by the rules are deeply penalized while those that are willing to abuse the system make out like bandits. There is something fundamentally wrong with a system that enables wealthy politicians such as Barack Obama and Mitt Romney to pay a smaller percentage of their incomes in taxes than millions of middle class families. Mitt Romney has millions of dollars parked down in the Cayman Islands and in other tax havens. He does this to avoid taxes. Unfortunately, most Americans do not have the resources to funnel money through offshore tax havens. Most Americans just automatically have their paychecks shredded by taxes and then try to live on whatever is left over. Most Americans are just trying to survive financially from one month to the next. But the super rich have options. Thanks to technology, they can live almost anywhere they want and they can run their companies and manage their investments from anywhere in the world. The truth is that the wealthier you are the easier it is to avoid taxes. But even as the ultra-wealthy do their best to avoid taxes, many of them still feel free to demand that the rest of us be taxed more.
So what are some of the ways that the super rich avoid taxes?
Well, let’s start with those that are just “somewhat wealthy”. Many millionaires still want or need to be U.S. citizens, so they are subject to the U.S. tax code. Fortunately for them, their tax lawyers know of thousands of loopholes that have been designed to help the rich avoid taxes.
The following is from a recent article by Jen Talley….
Some of the richest people in the country pay the least, relatively speaking, in taxes. How is this possible? Answer: Through the clever manipulation of the U.S. tax code’s loopholes. And it works: as income rises, effective tax rates rise as well, but only up to a point. IRS data shows that the effective income tax rate flattens out at just over 24 percent for those making over a million dollars. As income exceeds $1.5 million, the rate begins to decline; those with incomes above $10 million pay an average income tax rate of around 19 percent. So, how do they do it?
You could write an entire series of books on the technical details of how this gets done. Trust me, I studied tax law when I was in law school.
If you are interested in digging into some of the technical details of tax avoidance, a recent Businessweek article detailed 10 ways that the wealthy use our current tax code to avoid paying billions of dollars in taxes. It is an article worth reading if you have the time.
Sadly, tax avoidance by the wealthy is not just something that happens in the United States. The truth is that the exact same kind of thing happens in the UK as well.
There is not an easy fix to this problem. Our politicians have had decades to try to come up with a fair tax system and they have completely failed. The wealthy are always several steps ahead of them.
But federal taxes are not the only taxes that can be avoided. The vast difference in state tax rates creates another opportunity.
One advantage that wealthy Americans have is that they are far more mobile than most other Americans are. So if they don’t like the tax system in one state they can simply pick up and move to another state.
According to the Tax Foundation, 3.4 million Americans left New York state between 2000 and 2010.
So where did they go?
The following is from a recent CNS News article….
Where are they escaping to? The Tax Foundation found that more than 600,000 New York residents moved to Florida over the decade – opting perhaps for the Sunshine State’s more lenient tax system – taking nearly $20 billion in adjusted growth income with them.
There is no state income tax in Florida. So moving from New York to Florida can end up saving you a bundle.
The same kind of migration is happening out west as well. According to that same CNS article, hundreds of thousands of people have been moving from California (a high tax state) to Texas (no state income tax)….
Between 2000 and 2010, the most recent data available, 551,914 people left California for Texas, taking $14.3 billion in income. Texas has no state income tax or estate tax.
A total of 48,877 people moved to Texas from California between 2009 and 2010 alone, totaling $1.2 billion in income. Another 28,088 from California relocated to Nevada and 30,663 to Arizona, a loss of $699.1 million and $707.8 million in income respectively.
Not that anyone really needs much of an excuse to move away from California. It is rapidly decaying right in front of our eyes.
But a lot of families do not have the same options that wealthy people do. Unfortunately, most average Americans are tied to their jobs and it would be much more difficult for them to pick up and move across the country. In this economy it can be economic suicide to give up a good job.
The reality is that most of us simply do not have the resources to play the same kinds of games that the wealthy play.
Sadly, even our most prominent politicians avoid taxes.
Just look at Massachusetts Senator John Kerry. He has avoided approximately $500,000 in taxes by docking his yacht in Rhode Island rather than in Massachusetts.
Yet Kerry sure does love to call for more taxes on the rest of us, doesn’t he?
Now let’s talk about the “super rich” and the “ultra-wealthy”. For many people that are worth billions of dollars, tax avoidance has become an art from.
Facebook co-founder Eduardo Saverin made national headlines recently when he gave up his U.S. citizenship, but the truth is that his case is small potatoes compared to the global elite and the shadow banking system that supports them.
According to the IMF, the global elite are holding a total of 18 trillion dollars in offshore banks.
That amount is more than the GDP of the entire planet for an entire year.
So what do I mean by “offshore banks”? I defined the term in a previous article….
Well, the term originally developed because the banks on the Channel Islands were “offshore” from the United Kingdom. Most “offshore banks” are still located on islands today. The Cayman Islands, Bermuda, the Bahamas, and the Isle of Man are examples of this. Other “offshore banking centers” such as Monaco are actually not “offshore” at all, but the term applies to them anyway.
Traditionally, these offshore banking centers have been very attractive to both criminals and to the global elite because they would not tell anyone (including governments) about the money that anyone had parked there.
It has been reported that 80 percent of all international banking transactions involve offshore banks. A whopping 1.4 trillion dollars is being held in offshore banks in the Cayman Islands alone.
An article that appeared in the Guardian estimated that a third of all the wealth on the entire planet is being kept in offshore banks. One of the primary reasons for this is tax avoidance.
A lot of wealthy individuals never even visit these tax havens and yet reap the benefits anyway. The truth is that tax avoidance has become way too easy. The following example is from a recent Politico article….
A plausible scenario plays out like this: I hire an accountant. Doing her job, my accountant tells me that if I sign a few legal documents and route my money through a small Caribbean island, I could keep more of my paycheck and pay a lower tax rate. I may have earned my money in the United States, but legally I can claim that it was, in fact, earned in a tax haven.
Are you disgusted yet?
You should be.
But even though they avoid taxes like the plague, many of these elitists have the gall to call for higher taxes on all the rest of us.
For example, let’s review what the managing director of the IMF, Christine Lagarde, said in a recent interview….
“Do you know what? As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax.”
Even more than she thinks about all those now struggling to survive without jobs or public services? “I think of them equally. And I think they should also help themselves collectively.” How? “By all paying their tax. Yeah.”
It sounds as if she’s essentially saying to the Greeks and others in Europe, you’ve had a nice time and now it’s payback time.
“That’s right.” She nods calmly. “Yeah.”
And what about their children, who can’t conceivably be held responsible? “Well, hey, parents are responsible, right? So parents have to pay their tax.”
Well, it turns out that she doesn’t pay any income taxes at all on her own income….
The IMF chief Christine Lagarde was accused of hypocrisy yesterday after it emerged that she pays no income tax – just days after blaming the Greeks for causing their financial peril by dodging their own bills.
The managing director of the International Monetary Fund is paid a salary of $467,940 (£298,675), automatically increased every year according to inflation. On top of that she receives an allowance of $83,760 – payable without “justification” – and additional expenses for entertainment, making her total package worth more than the amount received by US President Barack Obama according to reports last night.
Her “diplomatic status” allows her to escape all income taxes.
So perhaps she should pay her “fair share” before pointing the finger at anyone else.
But she is not the only one being hypocritical.
The super rich claim that they should pay lower taxes on investment income for the good of our “capitalist system”, but when their banks are about to go under they are more than happy to have those losses be socialized.
As I wrote about yesterday, the stage is already set for another massive round of bailouts when the next great financial crisis strikes. Once again our taxes will pay for the mistakes of the ultra-wealthy.
The truth is that our system is fundamentally broken.
We need to abolish the income tax and shut down the IRS.
Those two steps alone would do wonders for our economic system.
We also need to shut down the Federal Reserve and break up the too big to fail banks.
Unfortunately, the vast majority of our politicians are not even willing to consider any of those solutions.
So our fundamentally broken system will continue to chug along.
It really is sad.
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