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The American Economy

Posted:

The American Economy               

09.19.12

Dr. A. H. Krieg 

Board of Directors American Third Position (A3P) the European American political party.

 

The bearer of bad tidings is not generally looked upon with societal favor, but reality must prevail and in our present economic climate that is not happening. The Republocrats are far to busy maligning each other, the media freezes out third parties, reality and truth is the victim. The fact of the matter is, that basic economic indicators point to the collapse of the dollar along with the entire American economy. This is not accidental it is planned!

Case one: The US Dollar Index is what is called a basket of currencies. They consist of the Euro, Yen, British Pound, Canadian Dollar, Swiss Frank, and Swedish Krona. The index is used to gauge the performance of the dollar relating to all the other currencies. DXY now stands at 79.07 down (-23% in the last three months) This is closely reflected in a 15% inflation rate (ShadowStats) that may be anticipated to grow to 25%+ by next spring due to Benjamin Shalom Bernanke’s $40 billion a month “Quantative Easing”. If you like paying double for gas and eggs just wait until “The One” is reelected.

Case two: Taxes are rising dramatically due to government overreach and massive spending. Even though the economy is in a considerable growing downturn that has lowered government revenues, individual taxes have risen. Meanwhile 46.7% of Americans are not paying any taxes. The rise is not only national but states hard pressed to pay ridiculous union pensions are universally increasing fees, licenses, and anything they can get away with. In the mean time inflation adjusted dollars are down to $19,409 today from 24,701 just ten years ago. The Cook County teachers who just ended their strike earn $76,000 annually with a pension of $ 41,000 average while the median income in Cook County is $ 44,000.

Case three: The top ten percent of American earners pay 71% of all collected taxes. This is called the progressive tax system as outlined in the communist Manifesto. It penalizes self-reliance, industry, industrial growth, and development. The 71% however only earned 43% of the total income. The lowest 50% earners paid 2% of all collected taxes, but they earn 13% of the total. This system is unsustainable. Only change to a consumption tax will fix this.

Case three: Federal revenue by source indicates that individual income taxes account for 47.4% of all collected taxes, Social insurance that is also dumped into the “General Fund” is 35.6%, corporate taxes 7.9%, Customs and duties 5.7% Excise taxes 3.1% Estate and gift taxes 0.3%. This is an incredibly stupid system, which should be replaced by a consumption tax.

Case four: America has the highest corporate tax base in the world. 39.26%, the next highest is Japan with 36.8%; Japan has been in an economic doldrum for three decades. The combined national average corporate tax is a basket of Canada, France, England, and Switzerland is at 25.47%. This drives business away from America reduces employment, reduces government income and stifles the economy.

Case five: Obamacare will drastically increase federal taxes. Total tax hikes over the first ten years of enactment will be $500 billion. As there are also increases in higher income taxes, higher investment taxes, there will be slower economic growth. The first large hit comes in 2013 when a new payroll tax in investment income goes into effect in January, hurting all retirees. Other increases of Obamacare are; medical instruments tax, fees on pharmaceutical companies, special fees and regulations on insurance carriers, new restrictions on HAS & FSA accounts, special tax increase for “Good” private health insurance plans, a new health insurance tax, 16,000 IRS agents to oversee Obamacare, and individual employers mandates.

Case six: The projected Obama budget for 2013 hikes taxes by $ 2 trillion. Obama FY 2013 budget includes $ 1.5 trillion in tax hikes, when coupled with Obamacare it is $ 2 trillion. This includes the largest tax hike in American history by expiring the Bush tax cuts. Also proposed by Obama is an increase in corporate taxes, death duties, capital gains taxes, on international business, repeal of the inventory valuation rules, increased unemployment insurance costs, higher taxes on energy producers, (Already kicked in with the closing of coal mines in PA) and increased taxes on all insurance. All this works out to $ 1,433.1 billions and includes an Obama proposed $75 billion tax cut for the poor who don’t pay any taxes in the first place.

Case seven: Contrary to Fabian and Keynesian economics tax increases do not increase government income, quite the contrary as was shown during the Reagan presidency where reduced federal taxes increased governed tax collected income. From 1960 to 2012 top individual income taxes fell from 91% to 35% today. Government income from taxes never in that time fluctuated more than 4-percentage points the average was 7.7 with a high of 9.2 and a low of 7.1. So a drop of 49% in the tax rate had virtually no effect on collected taxes.

Case eight: Tax revenues have an historic average of 18.1% of the GDP; today we are over 25%. The concept of increasing taxes in such a horrible economy is downright stupid.

Case eight: Unemployment continues to grow as more and more Americans cease looking for jobs. Actual unemployment (ShadowStats) is now at 24.7% the number of Americans looking for jobs exceeds 23 million. New monthly jobs offered are on average 100,000 below that number necessary for new job seekers, never mind those out of work.

The latest move on the slippery slope to oblivion is Helicopter Ben’s $40 billion per month Quantitive Easing, in case you’re not a mathematician, that works out to $480 billion, say ½ trillion dollars added onto the already $ 2 trillion projected deficit for 2013. Projected to 2016 it would mean a national debt of say about $ 27 trillion deficit by that time. This will mean a growth of the inflation index to 25% in 2013 and gradually climbing to 40% by 2016. Additionally the interest payment on $27 trillion is unsustainable for America. The average taxpayer does not now understand how that will impact him. Let me be frank. Gasoline at $7.50 eggs at $4.25 per doz, milk at $6.00+ Ben is making the dollar worthless so that they can pay down the national debt to foreign interests at 10 cents on the dollar, the problem with that is that the American consumer takes an even bigger hit than do our creditors. Shades of the Weimar republic and Zimbabwe, which by the way is also run by an idiot.

In all his time in public office, Obama has never once stated that the wealth of the people ever since the industrial revolution grew every year until 1971, when the average American worker began to see his income falling. This reduction in income coincides with the expansion of progressives and the gradual socialization of America. Their central issue is the creation of massive government dependency and I am not speaking of the generally accepted forms of it, the 47% of the general public that pays no taxes, but the perversion of the entire society. Firstly we see the unrelenting growth of government and the incredible pay and benefit packages by government workers. Then we see the states involvement through schoolteachers, whose incomes have become obnoxious. Lastly but most importantly we see the takeover of the private sector through massive subsidies to government favored green projects, $6.7 billion to date all of which has been lost. The Ethanol industry that without government subsidies would die an immediate a well deserved death. Likewise solar electricity and solar hot water all of which are economic losers. Ethanol has induced farmers, and producers to government dependency. GM –Government Motors. In which we have about $37 billion invested and is now totally dependent on government. The Volt for example lives only on government orders, costing taxpaers $135,000 for each car produced.  Insurance and AIG the largest in the world insurer is now on government tit. Banksters and Wall Street who are now also a new dependency class. Obama and his communist czars, and communist cabinet are turning the entire nation into a communist dependency state.

Remember the Cloward & Piven theory for the destruction of a capitalist economy? The formula is simple; overload all the social services until the entire economy collapses under its social service weight. That is exactly what is happening. Obama is a great admirer of this economic practice and has implemented it in America. On October 2006 we had 260,000 on food stamps today we have 47 million. The government has taken over college loans making all borrowing students state dependent. Disability has seen an increase of 36% in the last three years. 46.7 million Americans are on one or another form of state dependency, that’s 37% of the total population. We have 24 million illegal immigrants using our schools, hospitals, and social services and contributing nothing to our society. Our national social costs have outpaced our ability to afford them or even the interest payments for them, years ago, so the government prints worthless money to provide services that none of us can afford and in the process bolster inflation.

 

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