The Bush Presidency Irreparably Ruptured the Nation’s Budget

August 10, 2013
By

As the nation witnesses the initial impact of financial strain brought to bear on Federal government operations by a modest 10% spending reduction in the budget called “sequestration”, it appears Congress has already found the limits of how far they can push across the board spending cuts before dysfunction begins to set in.

This dog and pony show seems a bit contrived when you consider the annual unfunded Federal deficit represents a measly 3% of total household net wealth ($70 trillion).  As a matter of fact, household wealth has been growing three times faster than the nation’s debt for the past thirty years.  Why do we even have a national debt, given the nation’s current assets are four times greater than its current liabilities?

Contrast this statistic to the fact that 80% of adults are struggling on the edge of poverty to exist as reported recently by the Associated Press.  Based on the objectives of the current budget negotiations, it appears that Republicans want to increase the percentage of adult Americans struggling on the edge of poverty from 80% to 90%.  It is not a fluke that the generation of historic levels of national wealth since 1980 has also created a historic regression in the standard of living of the working class.

These two diametrical facts can be reconciled once you understand that the national debt is a slush fund for the wealthy.  237 years after the Declaration of Independence was signed by our forefathers, the American experiment has come full circle, and its citizens are once again ruled by and subjects of a modern day aristocratic class of billionaires and millionaires.

By abusing the power of government and embellishing their talking points with lies and deception, our ruling politicians have engulfed America’s working class in a class warfare financial squeeze.  This squeeze is destroying the standard of living for tens of millions of Americans in order to create unearned wealth for corporations and their stakeholders as well as fund wealth protection programs to keep the balance sheets of the wealthy inflated.

By institutionalizing tax avoidance for corporations and the wealthy as the primary function of the government, our politicians have disabled an important check and balance dynamic in our economy that if it worked properly would create a balanced budget, a debt free America and a more equal distribution of wealth.  As a consequence of social engineering via the tax code, politicians have created a portal into our economy that redirects trillions of dollars of wealth from the working class to the top 20% of America’s richest citizens.

Two of the architects of America’s current wave of class warfare, Koch brothers’ operatives Representatives Paul Ryan (R-WI) and Eric Cantor (R-VA), continuously spew false budget data and deceptive class warfare doctrine as a tool to help Republicans increase and retain control over our government.  While these two politicians spin their lies blaming the entitlement programs for the budget deficit and chirp about an unfair tax burden placed upon the wealthy, they fail to tell you that over $65+ trillion of new wealth has been created since 1980.  Most of this wealth has been diverted into tax avoidance schemes creating the illusion of a budget crisis.

The most obvious perversion of economic data surrounds the Federal budget.  Let’s begin with the fact that our political class counts Medicare revenues as income taxes in a veiled effort to hide how few income taxes are actually collected as a percentage of wealth.  In reality, the government collects more Federal payroll taxes from citizens living on the edge of poverty than it collects Federal income taxes from the citizens who own 90% of America’s $70 trillion of aggregate wealth.  For more detail, see http://blog.solonsays.com/the-middle-class-and-working-poor-pay-the-most-federal-taxes-2/

The graph below has been generated using budget figures that have separated Social Security and Medicare revenues and outlays from the General Fund.

 

solon

 

In 2000, the final year of the Clinton Presidency, the nation for the first time since the 1950s was able to pay its bills in full without using entitlement Trust Fund surplus tax revenues.  Over this same 60+ year period, the entitlement programs have remained fully funded accruing surplus assets that have been used deceitfully to support tax cuts for the wealthy.

Like a deliberate act of sabotage, the nation’s finances irreparably ruptured under the Bush Presidency.  During his administration, the ratio of U.S. tax collections to spending minus Social Security/Medicare revenues and outlays plunged from a historical high of 104.1% in 2000 to a historical low of 34% at the end of 2009.  It will be impossible to bridge this gap again and create a long-term balanced budget given the ferocity of the top-down class warfare being waged against the working class by today’s political class who are sworn to serve corporations and the wealthy.

This deliberate raid on the nation’s budget by Republicans during the Bush Presidency was the equivalent of pillaging our economy like a conquering army dividing the spoils of war among its warriors.  First, Republicans treated the wealthy to unwarranted tax cuts simply because they had the political power to do so.  Next, Republicans had no problem instigating two elective political wars in Iraq and Afghanistan, principled on foreign nation building as a path to Middle East peace, to appease factions within their party.  There was never a consideration to pay for these wars since the nation’s credit card payments are saddled to the working class and working poor and their unborn.

In 2008, ‘s Wall Street’s losses and profit guarantees from the financial meltdown were also added to the national credit card.  Eventually, the write-offs from the Federal Reserve’s quantitative easing policy to support the hidden accounting losses flooding the balance sheets of the international financial community will be added to the nation’s credit card too.

The cover-up by Republicans of the subversive purpose to use the nation’s budget as their personal slush fund is lodged in their orchestrated, unremitting and bogus attack on the finances of the Social Security and Medicare/Medicaid Trust Funds. Their peacock dance around the nation’s Trust Funds is designed to conceal how few, if any taxes, are being collected from all sources of wealth income that should be paying the bills accruing in the General Fund.

Even though the ratio of tax collections to unfunded spending is being shrunk to some degree under the feckless Obama Presidency, it will be short lived because it only takes one election to reopen the doors of the Treasury to additional looting and/or unfunded spending sprees to reward party loyalists.  Just think of Mitt Romney peddling more tax cuts for the wealthy, throwing more unfunded spending to the military industrial complex and sponsoring another unfunded war against Iran or Syria.

By all appearances and statistical evidence, the real “Evil Doers” attacking America are not Muslims attacking our freedoms, but our own political class financially molesting the working class to enhance their personal wealth.  The economic policies being layered on America by our collective political system are destroying the family structure of the working class while stoking exponential growth in the rate of poverty.

The resulting toll of needless human suffering being imposed on America by a diminished standard of living and lack of opportunity will eventually dwarf the inhumane conditions of the Great Depression created largely by the policies of President Calvin Coolidge (R).  President Coolidge, like President George W. Bush (R), favored tax cuts for the wealthy, a small Federal government and limited government regulation which fostered the creation of unearned wealth for America’s elite from the frenzied speculation practices of the financial community.

The long standing Republican declaration that tax cuts pay for themselves by stimulating economic growth should be enshrined on a slab of marble and placed in the Con Artist Hall of Fame.  This faux doctrine, used as justification to decouple the wealthy from their fair share of the tax burden when measured by all sources of wealth income, is the greatest con ever perpetrated on the American people.

Read more about “Tax Equality as America’s Next Civil Rights Movement” at www.solonsays.com.

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