Alright Fine, We’ll Talk About the Tea Parties

I didn’t want to give these idiots any relevancy, but since the nutjobs are sprouting up all over the place, I guess I’ll take some time to respond, however inane their arguments are.

Ok so I think the best way to do this is to just rattle off some facts (and some opinions) in list format for ease of reading:

Here’s are 10 questions for all you people at these so-called T.E.A. (Taxed Enough Already…cute isn’t it?) Parties ranting and raving about wasteful spending and deficits–

1. Why all of a sudden are  you upset about paying taxes?
2. Why all of a sudden are you upset about government spending?
3. Why all of a sudden are you upset about the bailout and the stimulus package?
4. Where have you been over the past eight years?
5. Where have you been while GWB and his Republican administration racked up the largest deficit in our country’s history?
6. Where were you when GWB and his administration would not include Iraq in the normal budget and would only pay for it with “emergency spending money” so he could hide the billions that were being funneled to private contractors (aka his friends) over in the Gulf to rebuild and secure a nation that we had just irresponsibly attacked for no good reason?
7. Where were  you when GWB passed the first stimulus package?
8. Where were you when Ronald Reagan tripled the national debt (i.e. more than equaled the entire debt burden produced by the previous 200 years of American history?
9. Where were you when GWB doubled it after Clinton eliminated it?
10. Where were you when Reagan (because of his insane cut taxes/raise spending economics) was forced to raise taxes TWICE to avert a fiscal catastrophe?!

I don’t mind if  you are worried about government spending. I will respect your views as much as their are LOGICAL and VIABLE with facts, history, and reality. But you Republicans and Libertarians and Fox News nuts at these tea parties don’t have facts, history, or reality on your side.

You protest when there is a Democrat in the Oval Office and a Democratic Congress. But you’re silent when there is a Republican President and/or Congress. You are currently a party that is living in a heaping pile of lies, revisionist history, and alternate reality.

You’re not protesting spending. You have rallied behind deficit spending for the past 30 years. You are protesting the fact that you lost the election in embarassing form. You are protesting because you are sore losers and you’re not willing to allow the “other side” even 100 days to try to right this enormous ship that has been diverted off track by your leaders.

Rather than taking to the streets to allegedly protest wasteful spending (by, ironically, wastefully spending on millions of tea bags), why don’t you all take some time to READ FACTS and LEARN HISTORY and deal with REALITY. Just for a change. Just to see where it leads you. You might upset your other ignorant, fire-breathing friends and family members, but you might just feel a little better inside yourselves.

Dozen Dumbest Taxes of All Time

It’s official – tax day is here. UGH. So in honor of this day, we’ve copied the Huffington Post’s Dozen Dumbest Taxes for your enjoyment. They’re pretty funny.

THE NOBEL PRIZE TAX:
Being rewarded for helping bring world peace or writing a great novel can cost you. The “Nobel prize” tax–in reality it also applies to other prizes such as the Pulitzer–is a tax levied against the money a prizewinner receives. Unless, that is, he or she chooses to give it all to charity.

ILLEGAL DRUG TAX
Often referred to as the “crack tax,” this tax targets possession of illegal drugs such as marijuana and cocaine. Over 20 states currently have such taxes on the books. When you pay the tax in Tennessee, you even receive stamps to attach to your illegal substances as proof of payment. And, not to worry, you don’t have to identify yourself in order to pay the tax. Still, do people voluntarily pay the tax, thus admitting to possession? It appears not often, but Tennessee did collect $1.8 million from the tax in 2006; however much of that came from confiscated drugs on which, alas, taxes hadn’t been paid.

BEARD TAX
Tsar Peter I was one of history’s great tax enthusiasts. His taste in taxes was fairly eccentric, and he is know to have taxed everything from beehives to beards. In an effort to regulate his countrymen’s appearance, Peter the Great introduced a special tax on the latter item in 1705. With the exception of the clergy, anyone with a beard was required to pay for the right to sport facial hair

SODA FOUNTAIN DRINK TAX
If you are the type of person who infinitely prefers fountain soda to can soda, you may want to think again before moving to the Windy City. Chicago taxes can soda at 3%, but fountain soda at three times that amount, or 9%.

JOCK TAX
It seems even jocks get picked on by the IRS. 20 of the 24 states with a pro sports team require athletes to pay state income tax for each game they play there. The tax can be traced to the 1991 NBA Finals when the Chicago Bulls beat the LA Lakers, only to receive tax bills from California for the three games the team played there. While the tax applies to other kind of performers who do business in multiple states, it seems that athletes, with their high visibility and well-documented schedules, are the easiest to target come tax time.

URINE TAX
The Roman emperor Nero levied a tax on the collection of urine in the 1st century (his successor, Vespasian, was also a fan of the tax, and applied it to all public toilets.) At least after collecting the urine from public latrines the Romans put it to good use–launderers, for example, apparently found it useful as a source of ammonia for whitening togas.

TATTOO TAX
Anyone looking to decorate their body with their loved one’s name or finally get that eyebrow ring they’ve always dreamed of may not want to do so in Arkansas, where tattoos and body piercings are subject to an additional 6% state sales tax.

SPARKLERS TAX
Celebrating Fourth of July in West Virginia may lose some of its glory when you realize that the state imposes a special tax on businesses selling sparklers and other ‘novelties.’ That comes in addition to the state’s 6 percent sales tax, and so it may be better to head out of state to buy those trick noisemakers.

SALT TAX
Salt taxes have appeared in various nations over the course of history, yet rarely have they been well received by those made to pay them. The French, the Chinese and the British all implemented them at some point. In 1930, Gandhi led an anti-salt tax protest known as the Dandi March, which helped build support for the move towards Indian independence.

BLUEBERRY TAX
It’s not clear why the state of Maine has singled out the blueberry, but be warned that if you want blueberries from there you will be paying a penny-and-a-half per pound tax, which the states imposes on anyone who grows, sells or purchases the fruit.

WINDOW TAX
Also known as the “glass tax,” it was introduced by William Pitt the Younger in eighteenth century England. Any property that had more than six windows was hit with the tax. Not surprisingly, many windows were bricked-over as a result.

NUDITY SALES TAX
Wear less, pay more. At least that’s the case in Utah, which imposes a 10% tax on any sexually explicit business where someone appears nude or partially nude. The tax covers everything from merchandise to food.

UBS To Out 17,000 people. Just like Tim and Cassie

Feb. 19 (Bloomberg) — The U.S. government sued UBS AG, Switzerland’s largest bank, to try to force disclosure of the identities of as many as 52,000 American customers who allegedly hid their secret Swiss accounts from U.S. tax authorities.

U.S. customers had 32,940 secret accounts containing cash and 20,877 accounts holding securities, according to the Justice Department lawsuit filed today in federal court in Miami. U.S. customers failed to report and pay U.S. taxes on income earned in those accounts, which held about $14.8 billion in assets during the middle of this decade, according to the court filing.

“At a time when millions of Americans are losing their jobs, their homes and their health care, it is appalling that more than 50,000 of the wealthiest among us have actively sought to evade their civic and legal duty to pay taxes,” John A. DiCicco, acting assistant attorney general in the Justice Department’s tax division, said in a statement.

The lawsuit came a day after UBS agreed to pay $780 million and disclose the names of about 250 account holders to avoid U.S. prosecution on a charge that it helped thousands of wealthy Americans evade taxes. The U.S. and Zurich-based UBS disagreed over how many account holders the bank must disclose to the Internal Revenue Service, agreeing to resolve it in court.

Summons Enforcement

With today’s lawsuit, the U.S. asked a federal judge to enforce its so-called John Doe summonses. On July 1, a federal judge in Miami approved an IRS summons seeking information on thousands of UBS accounts owned or controlled by U.S. citizens. Negotiations between the U.S., Switzerland and UBS have been at a standstill since then, according to a Justice Department filing.

UBS said in a statement that it expected today’s filing.

“UBS believes it has substantial defenses” to the U.S. attempt to enforce the summonses and will “vigorously contest” the case, the bank said in the statement. The bank’s objections are based on U.S. laws, Swiss financial privacy laws, and a 2001 agreement between UBS and the IRRS, according to the statement.

The Justice Department accused UBS of conspiring to defraud the U.S. by helping 17,000 Americans hide accounts from the Internal Revenue Service. The U.S. will drop the charge in 18 months if the bank reforms its practices, helps prosecutors and makes payments.

The case is U.S. v. UBS AG, 09-20423, U.S. District Court, Southern District of Florida

Source

How to save on your taxes

Now is the time to start thinking about your taxes because your refund could help you get through these tough economic times.

“Good Morning America” financial contributor and president of Ariel Investments Mellody Hobson shares five ways to maximize your tax refund this year.

New Homeowner Deduction

As part of the housing bailout bill passed by Congress, homeowners who do not itemize their taxes can claim a property tax deduction of $500 or $1,000 if you are married and filing jointly, in addition to the standard deduction.

And if you were a first-time home buyer in 2008, you may be eligible for a tax credit of up to $7,500 or 10 percent of the purchase price, whichever is less.

There is an important catch to this credit though. You have to pay it back in the next 15 years, in equal amounts each year, which makes it a bit more like a loan than a credit. So if you took the maximum credit of $7,500, you would need to pay back $500 per year for the next 15 years. But it still helps you get some much needed cash now when the economy is so bad, and you can pay it back a little at a time as things get better.

Unemployed Can Deduct Many Job Hunting Expenses

If you were laid off in the last year, most of the expenses incurred while looking for a job can be deducted from your taxes, so carefully track these expenses. For example, any money you spent on creating and mailing your resume is deductible. You can also deduct expenditures for career coaches and headhunters. You can even deduct long distance or cell phone charges related to the job search, as well as travel expenses incurred for interviews, including mileage.

Commonly Missed Deductions

Teacher Book Credit: Teachers who paid for books or other classroom supplies can deduct up to $250.

College Tuition Credit: Parents who paid their children’s college tuition in 2008 can deduct up to $4,000.

Clean Fuel Credit: If you bought a hybrid car or truck you’re eligible for a conservation tax credit of between $250 and $1,000. Depending on the make of the car you could get a fuel economy credit of between $400 and $2,400.

Prepaid Refund Cards From Tax Preparation Companies

Many tax preparation services have introduced prepaid tax refund debit cards, where your tax refund amount is loaded on a debit card. These cards are targeted at consumers who don’t have a bank account — approximately 28 million Americans — and the 45 million Americans who pay high bank fees because they don’t maintain the minimum balance.

However, these refund cards are a better alternative to high-cost refund anticipation loans, which could carry annual interest rates of more than 187 percent.

It takes many cards about two weeks to arrive, which is about the same amount of time it would take the typical e-filer to get his or her return.

Many — not all — of the cards also have hidden fees, such as a one-time fee for the card, transaction fees, inactivity fees and added ATM fees.

If you have the ability to e-file or do not need your tax return right away and you have a bank account, I’d suggest you do not use these prepaid refund cards because of all the fees.

The H&R Block prepaid debit card is called the Emerald Card. There’s no wait to receive the card, but it can’t be activated until you actually get your refund. The fees associated with the card are:

an ATM fee of $1.95 per transaction
a $2.50 inactivity fee if card isn’t used for three months.
a $10 replacement charge if the card is lost or stolen
the balance on the card cannot be redeemed for cash

H&R Block responded, saying there are minimal fees associated with its prepaid debit card. The company provided “GMA” with a list of fees and benefits associated with the card:
no fee to receive a card or to set up the card
no fee to receive payroll direct deposit on the card. This feature allows people to avoid paying to have payroll checks cashed, saving them, on average, $360 to $500 a year
no point-of-sale transaction fee
no monthly fee for active cards. If there is no activity on the card for three months, beginning in the fourth month, the client will see a $2.50 monthly inactivity fee. However, there is no fee to cancel the card, so that would be a better option
a $1.95 ATM fee; however, we educate all of our clients on ways to avoid this fee, which is especially important for clients who are new to banking. We give them instructional materials that let them know that many grocery stores, drugstores, etc., will let you get cash back with a purchase for no fee
no fee for VRU to check their balances
no fee for a personalized card. Clients can request one for free and are automatically sent a personalized card after reloading money on the card four times
and, every Emerald Card comes with a savings account and there is no fee to open or maintain that. Clients have the option of splitting their refund — part into the spend account, part into savings

Save Before You File: Increase Your Exemptions

Increasing your exemptions may lower your eventual refund, but it will increase your take home pay during the year. For example, in 2008, the IRS issued approximately 107 million refunds averaging $2,400, or a total amount of $256 billion.

When you get a refund, it means you overpaid your taxes and essentially loaned the government money during the course of the year, free of interest.

With an average refund of $2,400, you could be entitled to three extra exemptions. In the 25 percent tax bracket, that could boost your take-home pay by $2,625 per year, and you’ll have that money to use right away with every paycheck instead of waiting until the end of the year.

Source

Low On Cash? Call Larry Flint! HAHAHAHA!

There is an increasing number of recession-pinched Los Angeles homeowners turning to Hollywood for help, offering their houses as sets for feature films, commercials and even adult movies. This is allowing them to keep their cost of living, if not their privacy.

Another upside of pimping their houses out to production companies:

Income from residential filming for fewer than 15 days a year isn’t subject to federal taxes, according to the Internal Revenue Service.

An Article for all our Conservative…er…Fans

I’m Bob the Banker, and I’m mad as hell and I’m not going to take it anymore. If Barack Obama wins, he’s going to take my hard-earned money and hand it over to a bunch of deadbeats and losers. He’s going to turn the greatest country on earth into a socialist hell. Nothing less than our free-enterprise system is threatened. I’m angry! I’m really, really angry! And when you hear exactly how deeply Obama’s far-left tax scheme is going to reach into my pocket, you’ll be even angrier.

First of all, I’d like to give a big shout-out to my little brother Sam — or “Joe,” as he seems to be calling himself now. If it weren’t for Joe, America might never have realized that it was on the verge of installing Karl Marx II in the White House. As you probably know, Joe told Obama he was “getting ready to buy a company that makes $250,000 to $280,000 a year.” Then he asked, “Your new tax plan is going to tax me more, isn’t it?” That’s when V.I., I mean Barack, Obama said, “When you spread the wealth around, it’s good for everybody.”

Hello, Mr. Engels! These true-believing pinkos can only hide their true colors for so long. Sooner or later, they’re gonna slip up and reveal their plan to declare class war. It’s in their (Red) blood. Thank goodness that John McCain picked up on Obama’s fatal mistake and is making it the centerpiece of his campaign. The best and brightest Republican pundits agree: Obama’s colossal boo-boo could turn this whole race around.

I know, I know. The “elite” liberal media have been beating up on Joe, saying he isn’t a plumber, isn’t named Joe and isn’t really going to buy any business. But you know what? Real Americans, not snooty liberals who swank around at Georgetown cocktail parties, don’t care. They know that the point is that Joe wants to buy that plumbing business, and no Harvard-educated pinko should raise his taxes if he does. The American dream is aspirational!

Besides, Joe’s story is irrelevant anyway. Because it just so happens that I make exactly the same amount of money as that plumbing business that Joe hopes to buy someday. Obama’s tax plan will hit me right in the wallet.

I kept telling the McCain people this. I explained to them that I really am a small businessman who is angry that his taxes will go up under Obama. I told them they should make me their poster child, not Joe. I told them I wasn’t on some kind of ego trip, I just wanted to help save America from socialism. But for some reason they didn’t seem interested. They kept saying something about how they really needed someone who was named “Joe the Plumber.” Go figure.

Anyway, let’s get back to my story. I’m a typical middle-class American. I run a small family bank in Ohio. I’m no Master of the Universe, no hedge-fund manipulator. I have a couple of dozen employees. I work hard. I obey the laws. I have a family. But if Barack Trotsky Obama wins, I can kiss it all goodbye. I’ve done well for myself, but $280,000 a year doesn’t go as far as it used to, even here in Akron.

The numbers don’t lie. So here they are.*

So, as I said, I make $280,000 annually after business expenses. I’m married and filing jointly. Under Obama, my itemized deductions would actually increase slightly — I’d get $49,420 in itemized deductions, while under McCain I’d get $48,975. But my personal exemptions would increase slightly under McCain — he’d give me $6,911, whereas I’d only get $6,132 from Obama.

That leaves my taxable income at $213, 766 under Obama, $213,433 under McCain. Now we have to factor in the bracket cutoff, which for 2009 is $208,850. Anything below that figure for married couples filing jointly is taxed at the fourth tier, 28 percent. Any income above it, until you get up to near $400,000, is taxed at the fifth tier. And this is where the raving income-redistribution scheme of Barack Robespierre Obama kicks in.

As you can see, my taxable income is about $5,000 higher than the cutoff. McCain is going to tax that $5,000 at the current rate, which is 33 percent. But Obama’s crazed plan calls for raising that rate to — get ready for it — 35 percent.

And here’s what this means. Under McCain, my total tax bill would be $48,254. Under Obama, it would be $48,511.

That’s a difference of $257. I’ll say it again: Two hundred and fifty-seven dollars.

That’s not two hundred and fifty-seven dollars I, or America, can afford.

Sarah Palin Owes $25,000 in Back Taxes…WTF People!

Several tax experts said they believe Republican vice-presidential nominee Sarah Palin is required to pay federal taxes on $25,000 in reimbursements from the state of Alaska for her children’s travel expenses.

The Alaska governor released her 2006 and 2007 tax returns on Friday, sparking a lively debate on tax blogs and among tax professionals over whether reimbursements and per-diem meal payments from the state should be subject to federal taxes. Since taking office in December 2006, Gov. Palin, whose state salary is $125,000 a year, received reimbursements totaling $43,500 for travel and lodging for her family in connection with state business. Of that total, $25,000 was for her children’s travel and the rest was for her husband, Todd, the Washington Post reported.

While several tax experts have raised serious questions about whether the payments to Gov. Palin are taxable income, they said the case was clearer cut for treating the reimbursements for the children’s expenses as taxable income. “The kids are a slam dunk problem,” said Robert Spierer, a partner with the accounting firm Perelson Weiner LLP in New York City. “The husband you could make an argument that he had to be there because it was required for spouses to be there.”

But not the children, he said. “I don’t think I would ever claim that on my clients’ returns. I can’t think of a real strong argument for it.”

Gov. Palin also accepted $17,000 in per-diem meal payments for nights spent at her home in Wasilla, 40 miles from the governor’s office she used in Anchorage, Alaska’s largest city. Gov. Palin often used that office rather than traveling to the state capital of Juneau, more than 800 miles away. Several tax experts have argued this should be counted as taxable income.

The McCain-Palin campaign released an opinion letter from Washington, D.C., criminal tax lawyer Roger M. Olsen, concluding that Gov. Palin complied with Alaska law in not reporting the reimbursements and meal payments as income.

A spokesman for the McCain campaign said Gov. Palin relied on the W2 wages form from the state of Alaska in filing her tax return, which was prepared by H&R Block. The W2 did not include the travel reimbursements as income.

“The state believes it is interpreting IRS policy correctly. It has no indication to believe that it is misinterpreting that policy,” said Brian Jones, a McCain campaign spokesman.

Gov. Palin “has every right to assume the state of Alaska knows how to handle her W2,” said Alan D. Westheimer, a certified public accountant in Houston. “These people [the Palins] are not tax lawyers. They went to H&R Block” to prepare their taxes.

Mr. Westheimer said this shows a good-faith attempt on the part of the Palins to comply with the law. Of the travel reimbursements for her children, “it may not be the letter of the law,” he said, “but it’s arguably within the spirit of the law because it’s related to her job.”

Tax experts said a good case could be made that Mr. Palin, as the spouse of the governor, was required to attend official functions and was thus eligible for the travel and lodging reimbursements, even though he is not an Alaska state employee. Many of them said it is less clear why Gov. Palin’s children would be required at official state functions.

Bryan Camp, a tax professor at Texas Tech University School of Law and a former Internal Revenue Service lawyer in Washington, said the IRS would ask several questions to determine whether the travel reimbursements were reported properly.

Those questions include whether Mr. Palin and the children were employees of the state of Alaska, whether they traveling for bona fide business purposes, and whether they would have been able to deduct those travel expenses on their own tax returns for business purposes.

Because the answer to at least one and possibly more of those questions is no, “The Palins should have reported the $43,000 in family travel allowances received in 2007 as income,” Mr. Camp wrote in an analysis.

Jared Bernstein Doesn’t Get McCain….Neither Do I

About a year ago, I had a memorable chat with a high-ranking Republican operative. The presidential primaries were revving up, and he asked me which Republican candidate I feared the most. Without hesitating, I answered McCain.

My rationale was simple. While he was increasingly out-of-step with the public on the war, so were all the other Republican candidates. But unlike them, McCain had repeatedly stood up to his party on matters economic, especially the Bush tax cuts, and he did so with resonant language.

In 2001, when the richest one percent of households held 18% of all income, he said he could not “in good conscience support a tax cut in which so many of the benefits go to the most fortunate among us, at the expense of middle-class Americans.”

In 2003, when we had gone through a recession, were waging an expensive war, and the federal budget had flipped from surplus to deficit, he voted against another round of tax cuts for the wealthiest, this time arguing that “At a time of war, at a time of economic stagnation, at a time of rising national debt…one might expect our national leaders to pursue policies calling for shared sacrifice to achieve shared benefits. Regrettably, that is not the case.”

The most recent data show that in 2006, 23% of all income is held by the richest 1%, the highest level on record but for one year: 1928. Spending on the war has not abated, and the budget deficit is on the rise. Middle-class Americans, who allegedly weighed so heavily on McCain’s conscience circa 2001, are much more squeezed now than they were then.

The economy is surely in recession. Financial markets are deeply screwed up, and on Friday we learned that the job market contracted by another 159,000 last month, the ninth month of consecutive job losses.

In other words, if the Bush tax cuts didn’t make sense in 2001 and 2003, they make a whole lot less sense now.

Yet McCain doesn’t merely want to extend these cuts forever. He wants to expand them dramatically, by cutting the corporate tax rate by about a third, at the cost of $735 billion over 10 years, according to the non-partisan Tax Policy Center (TPC). As Biden effectively emphasized in last week’s debate, that move delivers $4 billion in annual tax cuts to the Exxon-Mobil’s of the world.

What happened? How does McCain’s erstwhile good conscience countenance this policy? The answer, or at least the spin, was revealed to me a few weeks ago in a debate I had with his top economist, Doug Holtz-Eakin. When I pointed out that these cuts do nothing to help the middle class, while needlessly raining more wealth on the “haves,” Doug disagreed. Based on the fairy dust of supply-side, trickle-down economics, he asserted that these cuts would lead to more jobs and income for middle-class families. Contrary to McCain’s position a few years back, the campaign now frames a cut in corporate taxation as their middle-class tax cut.

(Fact check: Data from the non-partisan Congressional Budget Office show that middle class people get a mere 3% of their income from corporate sources, compared to 88% for the top fifth, and about 60% for the top 1%. In our new State of Working America, we show that an important factor driving the almost unprecedented level of inequality right now is the double whammy of a) the growth of corporate income, like dividends and capital gains, versus labor market income, i.e., earnings, and b) the increased concentration of corporate income among the richest households.)

The only way McCain can implement this fiscal policy without generating unsustainable debt levels is to cut deeply into government spending. His and Palin’s hated earmarks won’t get you there (in Palin’s case, of course, the hatred is newly founded). His promise to freeze certain aspects of discretionary government spending gets you even less savings than the earmarks. They’ll have to go after the entitlements, and since Social Security is actually a relatively small problem in this regard, for their plan to work, they have to cut the heck out of Medicare and Medicaid.

This brings you to their truly unfortunate health care plan, which I wrote about last week in this space.

So, my first point is that McCain and his team have crafted an economic plan that contradicts the candidate’s recently held fundamental views and is far out-of-touch with the needs of the country. That might not have posed a big problem except for the fact that a series of events, including the middle-class squeeze generated by stagnant incomes and rising prices, recession, and financial meltdown, have made the economy front and center in this campaign.

How did McCain end up with an economic platform, especially on taxes, that is so out of sync with his past views as expressed in the above quotes, an agenda that is anything but “mavericky.”

The answer comes from the Palin debate last week. Since Ms. Palin is a newcomer on the national scene with scant governing experience, little knowledge of the major issues, and few deeply held views, she serves as a talking head for the people behind the curtains, the staff and advisors running the campaign. When McCain spouts this stuff, he’s filtering it through years of intense experiences, as a veteran, a former POW, and member of the Senate for 26 years. With Palin, it’s unfettered, thin, talking points.

What we learn–and yes, I fully grant you that we knew this well already, but the debate was a strong reminder–is that the same neocons that wrote the Bush agenda wrote McCain’s. Despite the fact that the electorate has moved on, they can’t help themselves.

For example, they briefed Palin to spout the supply-side, anti-government, Reaganisms that are so deeply out of sync with where things are at right now. As we speak, the economy is reeling from market excesses and lax oversight, driven by an ideology that guaranteed us that unchained from its government overseers, the invisible hand would guide us to the economic promise land. Instead, it’s guided us over a cliff.

Yet, here’s how Palin reminded the audience about the true meaning of patriotism: “Patriotic is saying, government, you know, you’re not always the solution. In fact, too often you’re the problem so, government, lessen the tax burden and on our families and get out of the way and let the private sector and our families grow and thrive and prosper.”

That recipe has certainly worked wonders over the past eight years.

Palin channeled the other great neocon tactic: talk it, don’t walk it. I don’t think she mentioned “Wall St.” without the preface of “greed and corruption,” but she failed to offer one concrete proposal to address that. To the contrary, she and McCain still want to turn part of the dollars flowing into Social Security over to the stock market.

Obama, on the other hand, back in March articulated a six point plan that had it been in place, would arguably have prevented much of what’s going wrong in markets today.

The campaign’s fondest hope is, of course, that the economy would just go away so they could get back to arguing foreign policy, where polls are more favorable toward their guy. But it’s too late for that, and anyway, most people scored the first presidential debate a draw in matters of foreign affairs, as Obama effectively tied McCain to Bush’s failed Iraqi policy.

More importantly, as the election nears, the undecided voters who will decide this thing seem to be recognizing the importance of the Obama “change” mantra. Unlike myself, most people don’t have the time and interest to track the income shares of the top 1%, but for a while now, vast majorities have recognized that the country is on the wrong track, and for all its verbiage, the Obama campaign is really quite simply about getting it back of the right one.

We can have great arguments about whether his plan to end the war, his tax policies to favor the middle class while raising taxes on, and only on, the very high end, or his health care plan are, in fact, the right ones. But at this point, one of their key selling points is that they take us on a different path than the one we’re on.

That’s largely policy wonkery, I grant you, but let’s close out with some reflections on character. Lo those many months ago, when I chatted with my conservative counterpart, I feared McCain because I viewed him as having the character to stick to his convictions, many of which I disagreed with, but that’s not something you see enough of in politics these days.

He’s lost that. It started with the policy reversals discussed above, was amplified by the outright lies of the campaign, and culminated in the cynical, reckless, and politics-over-country choice of a running mate who is dangerously unprepared to step into the presidency.

At this point I really wonder: what’s in it for him? Why does McCain want to be president? Those who have followed him for years don’t recognize his agenda, his tactics, his positions (e.g., the great populist regulator!). How could a man of seemingly deep conviction morph into this caricature? His campaign is empty, with no spiritual or intellectual core; its tactics have devolved into a series of crass surprises and Hail Mary passes.

I get Obama in this regard. To get the country back on track, to reconnect middle-class living standards and growth, to rein in market fundamentalism, to rectify a series of unjust and even fatal policy choices, to restore America’s standing in the world, he seeks to implement his change agenda.

But I don’t get McCain. I hope the country doesn’t get him either.

Factchecking Debate #1

Did Kissinger Back Obama?

McCain attacked Obama for his declaration that he would meet with leaders of Iran and other hostile nations “without preconditions.” To do so with Iran, McCain said, “isn’t just naive; it’s dangerous.” Obama countered by saying former Secretary of State Henry Kissinger – a McCain adviser – agreed with him:

Obama: Senator McCain mentioned Henry Kissinger, who’s one of his advisers, who, along with five recent secretaries of state, just said that we should meet with Iran – guess what – without precondition. This is one of your own advisers.

McCain rejected Obama’s claim:

McCain: By the way, my friend, Dr. Kissinger, who’s been my friend for 35 years, would be interested to hear this conversation and Senator Obama’s depiction of his — of his positions on the issue. I’ve known him for 35 years.
Obama: We will take a look.
McCain: And I guarantee you he would not — he would not say that presidential top level.
Obama: Nobody’s talking about that.

So who’s right? Kissinger did in fact say a few days earlier at a forum of former secretaries of state that he favors very high-level talks with Iran – without conditions:

Kissinger Sept. 20: Well, I am in favor of negotiating with Iran. And one utility of negotiation is to put before Iran our vision of a Middle East, of a stable Middle East, and our notion on nuclear proliferation at a high enough level so that they have to study it. And, therefore, I actually have preferred doing it at the secretary of state level so that we — we know we’re dealing with authentic…

CNN’s Frank Sesno: Put at a very high level right out of the box?

Kissinger: Initially, yes.But I do not believe that we can make conditions for the opening of negotiations.

Later, McCain’s running mate, Sarah Palin, was asked about this by CBS News anchor Katie Couric, and Palin said, “I’ve never heard Henry Kissinger say, ‘Yeah, I’ll meet with these leaders without preconditions being met.’” Afterward Couric said, “We confirmed Henry Kissinger’s position following our interview.”

After the McCain-Obama debate, however, Kissinger issued a statement saying he doesn’t favor a presidential meeting:

Kissinger: Senator McCain is right. I would not recommend the next President of the United States engage in talks with Iran at the Presidential level. My views on this issue are entirely compatible with the views of my friend Senator John McCain.

$42,000 per year?

McCain said – and Obama denied – that Obama had voted to increase taxes on “people who make as low as $42,000 a year.” McCain was correct – with qualification.

McCain: But, again, Senator Obama has shifted on a number of occasions. He has voted in the United States Senate to increase taxes on people who make as low as $42,000 a year.
Obama: That’s not true, John. That’s not true.
McCain: And that’s just a fact. Again, you can look it up.
Obama: Look, it’s just not true.

Yes, as we’ve said before, Obama did in fact vote for a budget resolution that called for higher federal income tax rates on a single, non-homeowner who earned as little as $42,000 per year. A couple filing jointly, however, would have had to earn at least $83,000 per year to be affected. A family of four with income up to $90,000 would not have been affected.

The resolution actually would not have altered taxes without additional legislation. It called generally for allowing most of the 2001 and 2003 Bush tax cuts to expire. McCain is referring to the provision that would have allowed the 25 percent tax bracket to return to 28 percent. The tax plan Obama now proposes, however, would not raise the rate on that tax bracket.

Timetable Tiff

Obama contradicted McCain about what Joint Chiefs of Staff Chairman Admiral Mike Mullen’s said regarding “Obama’s plan” for troop withdrawals.

McCain: Admiral Mullen suggests that Senator Obama’s plan is dangerous for America.
Obama: That’s not the case.
McCain: That’s what …
Obama: What he said was a precipitous…
McCain: That’s what Admiral Mullen said.
Obama: … withdrawal would be dangerous. He did not say that. That’s not true.

Admiral Mullen did say in a Fox News interview that having a time line for withdrawal would be dangerous.

Mullen (July 20): I think the consequences could be very dangerous in that regard. I’m convinced at this point in time that coming – making reductions based on conditions on the ground are very important.

However, interviewer Chris Wallace had just told Mullen to take Obama out of the equation.

Wallace (July 20): But I’m asking you in the absence – forget about Obama. Forget about the politics. If I were to say to you, “Let’s set a time line of getting all of our combat troops out within two years,” what do you think would be the consequences of setting that kind of a time line?

So strictly speaking Mullen was not talking specifically about “Obama’s plan.” He did say a rigid timetable could have dangerous consequences.

Earmarks Down, Not Up

McCain was way off the mark when he said that earmarks in federal appropriations bills had tripled in the last five years.

McCain: But the point is that – you see, I hear this all the time. “It’s only $18
billion.” Do you know that it’s tripled in the last five years?

In fact, earmarks have actually gone down. According to Citizens Against Government Waste, there was $22.5 billion worth of earmark spending in 2003. By 2008, that figure had come down to $17.2 billion. That’s a decrease of 24 percent.

Taxpayers for Common Sense, another watchdog group, said in 2008 that “Congress has cut earmarks by 23 percent from the record 2005 levels,” according to its analysis.

$3 million to study the DNA of bears?

And while we’re on the subject of earmarks, McCain repeated a misleading line we’ve heard before.

McCain: You know, we spent $3 million to study the DNA of bears in Montana. I don’t know if that was a criminal issue or a paternal issue, but the fact is that it was $3 million of our taxpayers’ money. And it has got to be brought under control.

McCain’s been playing this for laughs since 2003. The study in question was done by the U.S. Geological Survey, and it relied in part on federal appropriations. Readers (and politicians) may disagree on whether a noninvasive study of grizzly bear population and habitat is a waste of money. McCain clearly thinks it is – but on the other hand, he never moved to get rid of the earmark. In fact, he voted for the bill that made appropriations for the study. He did propose some changes to the bill, but none that nixed the bear funding.

Iraqi Surplus Exaggerated

Obama was out of date in saying the Iraqi government has “79 billion dollars,” when he argued that the U.S. should stop spending money on the war in Iraq.

Obama: We are currently spending $10 billion a month in Iraq when they have a $79 billion surplus.

As we’ve said before, there was a time when the country could have had as much as $79 billion, but that time has passed. What the Iraqis actually “have” is $29.4 billion in the bank. The Government Accountability Office projected in August that Iraq’s 2008 budget surplus could range anywhere from $38.2 billion to $50.3 billion, depending on oil revenue, price and volume. Then, in early August, the Iraqi legislature passed a $21 billion supplemental spending bill, which was omitted from the GAO’s surplus tally since it was still under consideration. The supplemental will be completely funded by this year’s surplus. So the range of what the Iraqi’s could have at year’s end is actually $47 billion to $59 billion. The $79 billion figure is outdated and incorrect.

$700 billion for oil?

McCain repeated an exaggerated claim that the U.S. is sending $700 billion per year to hostile countries.

McCain: Look, we are sending $700 billion a year overseas to countries that don’t like us very much. Some of that money ends up in the hands of terrorist organizations.

That’s not accurate. McCain also made this claim in his acceptance speech at the Republican National Convention. He’s referring to the amount of money the U.S. spends in importing oil. But the number is inflated. In fact, we actually pay more like $536 billion for the oil we need. And one-third of those payments go to Canada, Mexico and the U.K.

(Note: A few of our readers messaged us, after we first noted McCain’s mistake, with the thought that he was referring to foreign aid and not to oil. If so he’s even farther off than we supposed: The entire budget for the State Department and International Programs works out to just $51.3 million.)

Tax Cut Recipients

Obama overstated how many people would save on taxes under his plan:

Obama: My definition – here’s what I can tell the American people: 95 percent of you will get a tax cut. And if you make less than $250,000, less than a quarter-million dollars a year, then you will not see one dime’s worth of tax increase.

That should be 95 percent of families, not 95 percent of “American people.” An analysis by the Urban-Brookings Tax Policy Center found that Obama’s plan would decrease taxes for 95.5 percent of families with children. Overall, 81.3 percent of households would get a tax cut under his proposal.

Health Care Hyperbole

Obama and McCain traded incorrect statements on each other’s health care plan.

Obama: So you may end up getting a $5,000 tax credit. Here’s the only problem: Your employer now has to pay taxes on the health care that you’re getting from your employer.

As we said before, McCain’s plan doesn’t call for taxing employers on health care benefits; it would instead tax employees. As the law stands now, employees don’t pay taxes on the dollar value of their health insurance benefits. Under McCain’s plan, they would.

McCain also misrepresented Obama’s plan when he said that his opponent favored “handing the health care system over to the federal government.”

McCain: Well, I want to make sure we’re not handing the health care system over to the federal government which is basically what would ultimately happen with Senator Obama’s health care plan. I want the families to make decisions between themselves and their doctors. Not the federal government.

McCain made a similar claim in his acceptance speech, when he said that
Obama’s plans would “force families into a government run health care
system.” We called it false then and we stand by that. Obama’s plan mandates coverage for children, but not for adults, and it does not require anyone to be covered by a nationalized system. Obama’s plan expands the insurance coverage offered by the government, but allows people to keep their own plans or choose from private plans as well.

Ike Was No Quitter

McCain mangled his military history:

McCain: President Eisenhower, on the night before the Normandy invasion, went into his room, and he wrote out two letters.

One of them was a letter congratulating the great members of the military and allies that had conducted and succeeded in the greatest invasion in history, still to this day, and forever.

And he wrote out another letter, and that was a letter of resignation from the United States Army for the failure of the landings at Normandy.

The story is widely circulated in military circles but not entirely true. Eisenhower (then a general, not yet a president) did in fact write a letter taking responsibility should the D-Day invasion fail. But Eisenhower’s letter does not mention resigning. Here’s the full text:

Eisenhower (June 5, 1944): Our landings in the Cherbourg-Havre area have failed to gain a satisfactory foothold and I have withdrawn the troops. My decision to attack at this time and place was based on the best information available. The troops, the air and the Navy did all that bravery and devotion to duty could do. If any blame or fault attaches to the attempt it is mine alone.

No mention of quitting the Army, or his command.

A Longer Timetable

Obama stretched out his schedule for withdrawing troops from Iraq. During the debate, Obama said we could “reduce” the number of combat troops in 16 months:

Obama: Now, what I’ve said is we should end this war responsibly. We should do it in phases. But in 16 months we should be able to reduce our combat troops, put – provide some relief to military families and our troops and bolster our efforts in Afghanistan so that we can capture and kill bin Laden and crush al Qaeda.

But in Oct. 2007, Obama supported removing all combat troops from Iraq
within 16 months:

Obama (Oct. 2007): I will remove one or two brigades a month, and get all of our combat troops out of Iraq within 16 months. The only troops I will keep in Iraq will perform the limited missions of protecting our diplomats and carrying out targeted strikes on al Qaeda. And I will launch the diplomatic and humanitarian initiatives that are so badly needed. Let there be no doubt: I will end this war.

The quote appears in “Barack Obama and Joe Biden on Defense Issues” – a
position paper that was still available on the campaign’s Web site as Obama spoke.

Still Soft on Iran?

McCain repeated the false insinuation that Obama opposed naming Iran’s Islamic Revolutionary Guard Corps as a terrorist organization.

McCain: There is the Republican Guard in Iran, which Senator Kyl had an amendment in order to declare them a sponsor of terror. Senator Obama said that would be provocative. …

Obama: Well, let me just correct something very quickly. I believe the Republican Guard of Iran is a terrorist organization. I’ve consistently said so. What Senator McCain refers to is a measure in the Senate that would try to broaden the mandate inside of Iraq. To deal with Iran.

Obama has in fact said that the IRGC should be named a terrorist group. He was a cosponsor of the Iran Counter-Proliferation Act, which, among other things, named the IRGC a terrorist organization. What he voted against was the Kyl-Lieberman amendment, which also called for the terrorist group distinction. But Obama said that he opposed the amendment on the grounds that it was “saber-rattling.”

Obama press release (Sept. 26, 2007): Senator Obama clearly recognizes the serious threat posed by Iran. However, he does not agree with the president that the best way to counter that threat is to keep large numbers of troops in Iraq, and he does not think that now is the time for saber-rattling towards Iran. In fact, he thinks that our large troop presence in Iraq has served to strengthen Iran – not weaken it. He believes that diplomacy and economic pressure, such as the divestment bill that he has proposed, is the right way to pressure the Iranian regime. Accordingly, he would have opposed the Kyl-Lieberman amendment had he been able to vote today.

Who’s Naive on Georgia?

McCain called Obama’s initial statement on the conflict in Georgia “naive.” It’s worth noting Obama’s words echoed those of the White House.

McCain: Well, I was interested in Senator Obama’s reaction to the Russian aggression against Georgia. His first statement was, “Both sides ought to show restraint.”

Again, a little bit of naivete there. He doesn’t understand that Russia committed serious aggression against Georgia.

It’s true, as McCain said, that during the conflict between Georgia and Russia, Obama said, “Now is the time for Georgia and Russia to show restraint, and to
avoid an escalation to full scale war” in his first statement on the conflict. But so did the White House. Press secretary Dana Perino said on Aug. 8, “We urge restraint on all sides – that violence would be curtailed and that direct dialogue could ensue in order to help resolve their differences.” We pointed this out when New York Mayor Rudy Giuliani mischaracterized Obama’s response to the crisis during the GOP convention.

Boeing Boasts

McCain was went too far when he said, “I saved the taxpayers $6.8 billion by fighting a contract that was negotiated between Boeing and DOD that was completely wrong. And we fixed it and we killed it.”

McCain certainly did lead a fight to kill the contract, and the effort ended in prison sentences for defense contractors. But the contract isn’t exactly “fixed” yet. In fact, questions have been raised about the role McCain has played in helping a Boeing rival secure the new contract.

After the original Boeing contract to supply refueling airliners was nixed in 2003, the bidding process was reopened. And in early 2007, Boeing rival EADS/Airbus won the bid the second time around. But Boeing filed a protest about the way the bids were processed, and the Government Accountability Office released a report that found in Boeing’s favor. In the summary of GAO’s investigation, the organization said there were “significant errors” with the bid process and that the directions given to Boeing were “misleading.”

Further, the New York Times reported that “McCain’s top advisers, including a cochairman of his presidential campaign, were lobbyists for EADS. And Mr. McCain had written to the Defense Department, urging it to ignore a trade dispute between the United States and Europe over whether Airbus received improper subsidies.” A liberal campaign finance group ran an ad hitting McCain on the connections back in July and our colleagues at PolitiFact found their attacks to be true, saying: “Center for Responsive Politics prepared a report for PolitiFact that backs [the charge] up. U.S. employees of EADS/Airbus have contributed $15,700 in this election cycle to McCain’s campaign.”

Nuclear Charges

McCain said Obama was against storing nuclear waste. That’s not exactly his position.

McCain: And Senator Obama says he’s for nuclear, but he’s against reprocessing and he’s against storing.

Obama: I — I just have to correct the record here. I have never said that I object to nuclear waste. What I’ve said is that we have to store it safely.

Obama’s official position is that he does support safe storage of nuclear waste:

Obama fact sheet: Obama will also lead federal efforts to look for a safe, long-term disposal solution based on objective, scientific analysis. In the meantime, Obama will develop requirements to ensure that the waste stored at current reactor sites is contained using the most advanced dry-cask storage technology available. Barack Obama believes that Yucca Mountain is not an option. Our government has spent billions of dollars on Yucca Mountain, and yet there are still significant questions about whether nuclear waste can be safely stored there.

But the McCain campaign has attacked Obama before on this issue, going as
far as to claim Obama did not support nuclear energy at all, which was false. Obama has said he supports nuclear as long as it is “clean and safe.”

Against Alternative Energy

Obama said that McCain had voted 23 times against alternative energy:

Obama: Over 26 years, Senator McCain voted 23 times against alternative energy, like solar, and wind, and biodiesel.

Here’s the Obama campaign’s list of the 23 votes. We find they’re overstating the case. In many instances, McCain voted not against alternative energy but against mandatory use of alternative energy, or he voted in favor of allowing exemptions from these mandates. Only 11 of the 23 votes cited by the Obama campaign involve reducing or eliminating incentives for renewable energy.

Meanwhile, McCain was indignant at the suggestion that he’d voted against alternative energy at all.

McCain: I have voted for alternate fuel all of my time. … No one can be opposed to alternate energy.

But McCain’s record says differently. As we say above, he has voted against funding for alternative energy on 11 occasions. He may be in favor of alternative energy in theory, but he has declined opportunities to support it.

In McCain’s energy plan, he supports nuclear power and “clean” coal, which are alternative energies. But they don’t qualify as renewable energy, such as hydro,
solar and wind power. McCain’s plan makes a vague promise to “rationalize
the current patchwork of temporary tax credits that provide commercial
feasibility.” The experts we talked to weren’t sure what exactly that meant.

Committee Oversight

Both candidates were right in talking about Obama’s NATO subcommittee.

McCain: Senator Obama is the chairperson of a committee that oversights NATO, that’s in Afghanistan. To this day he’s never had a hearing. …

Obama: Look, the — I’m very proud of my vice presidential selection, Joe Biden, who’s the chairman of the Senate Foreign Relations Committee. And as he explains and as John well knows, the issues of Afghanistan, the issues of Iraq, critical issues like that don’t go through my subcommittee because they’re done as a committee as a whole.

As we’ve already reported Obama’s subcommittee on Afghanistan does have jurisdiction over NATO, which is supplying about half of the troops in Afghanistan. His subcommittee does not have jurisdiction over Afghanistan proper.

Getting the Dates Wrong

We also caught McCain getting his congressional history a little wrong.

McCain: Back in 1983, when I was a brand-new United States congressman,
the one — the person I admired the most and still admire the most, Ronald
Reagan, wanted to send Marines into Lebanon. And I saw that, and I saw the
situation, and I stood up, and I voted against that because I was afraid
that they couldn’t make peace in a place where 300 or 400 or several
hundred Marines would make a difference. Tragically, I was right: Nearly
300 Marines lost their lives in the bombing of the barracks.

This isn’t quite right. Marines were initially deployed to Lebanon in August 1982. McCain, however, was not elected to the U.S. House until November 1982, more than three months after Marines had already landed.

McCain is referring to a 1983 vote to invoke the War Powers Act. That bill, which Ronald Reagan signed into law on October 12, 1983, authorized an 18-month deployment for the Marines. On October 13, a suicide bomber destroyed the Marine barracks in Beirut. McCain did in fact break with most Republicans to vote against the bill.

–by Brooks Jackson, Lori Robertson, Justin Bank, Jess Henig, Emi Kolawole and Joe Miller.

McCain Wants to Take Away Social Security Benefits From Those That Already Paid For Them

FROM THE HUFFINGTON POST….

Franklin Delano Roosevelt, signing statement, The Social Security Act. August 14,1935.

“We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.”

At the time it was considered social engineering. Concerns over global and even national trends in population were as much a part of the decision as was the simple humanity of it. Income security, the reasoning goes, would alleviate the need for large families, the parochial solution for retirement income. That part of it has worked spectacularly, perhaps so well that its success even threatens the program. Fewer children equals fewer contributors.

It has been in place for 73 years and for many is the sole source of income in old age. It is immensely popular with people in all strata of society because it is an extraordinary good deal, if you live long enough. To break even on it only takes about 12 years of retirement, attainable by fully half of the population.

Social Security has been troubled of late. I am part of the problem, born 1951, I am of the generation that will stress the system, some say even break it. At a time when retirement savings are at an all time low and private companies have been curtailing pension plans, Social Security becomes all that much more important to the public.

What’s wrong? A little deeper history.

When it was instituted, Social Security operated by collecting about what it needed to meet current benefit payments. What came in was paid out. In 1982, that all changed. During the Reagan Administration, Alan Greenspan proposed that SSA taxes be increased to save up for the pending retirement of the baby boomers.

The Greenspan plan sunk increases in collections of SSA tax into government bonds in the Social Security Trust Fund. The, perhaps unintended, consequence was essentially force feeding of the government coffers. In effect, the government got a loan that it did not need from every American worker. The income tax was cut, eliminating most of the upper brackets and the SSA collections were essentially passed on to those in higher income brackets.

Under Clinton, the force feeding of SSA collections into government began to be referred to as the Social Security Surplus. Clinton used it to pay down other national debt, rightly assessing that in order for the debt to the Trust Fund to be repaid, we would need a solvent government. Paying down the extra-Social Security debt and balancing the budget seemed to assure that the government’s indebtedness to the Greenspan plan could be serviced.

Bush 43 came along and reversed what Clinton had accomplished by lowering taxes even further and making the repayment of the SSA Trust account virtually impossible without raising taxes.

So there you have it. The Greenspan plan could not have worked unless the SSA Trust were somehow held in cash or private securities and not government bonds. What has been referred to as “raiding” the SSA trust fund ensued. But that is a misnomer. Government was force fed from the SSA Trust fund and instead of using that force feed to retire the national debt, Republicans used it to cut taxes for the wealthy. In as plain an English as it can be put, your Baby Boomer SSA premium you paid ended up in the hands of the wealthy. The solution is for them to pay it back.

Now having laid out the problem, lets examine the solutions for this problem that are proposed by the two Presidential candidates.

Obama vs. McCain

First of all, Obama has a detailed plan for retirement security, over and above Social Security, enunciated on his website. McCain does not even mention Social Security on his website.

Obama proposes this to “fix” Social Security, paraphrasing from his website:

“Ask those making over $250,000 to contribute a bit more to Social Security. Those making over $250,000 to pay in the range of 2 to 4 percent more in total (combined employer and employee). “

Although not mentioned specifically, the roll back of the Bush tax cuts would also help. And again, the main beneficiaries of the Social Security Surplus were those making more than $250, 000 per year.

Obama’s plan appears to be consistent with the facts of what happened to the Social Security Surplus, recognizing that there were elements of society that have enjoyed a benefit from that surplus and asking them to give some back.

John McCain consistently proposes, as the AFLCIO website reports, diverting some percentage of the SSA income stream to private accounts, or “privatization” of Social Security. This does nothing whatsoever to solve the projected shortfalls in funding that will begin in about fifteen years. And the debate over the wisdom of placing tax collections in private investment is as old as the program itself. But that is a subject for another setting.

So essentially McCain’s plan must be characterized as simply doing nothing, effectively cutting benefits to the people who paid for them already. And that characterization, that they have paid for them, may elicit some criticism from people who do not understand that the Greenspan plan was an exception to the formula of Social Security. Before Greenspan, it was current workers supporting retired workers. Greenspan made it, by collecting more money than current obligations, a loan to the government by the Baby Boomers.

Raising Taxes, oh my!

Finally, on taxes and the economy, the Republicans and some Democrats even, have it wrong. The conventional wisdom is that higher taxes hurt the economy. There is no actual evidence of that. In fact if you plot tax rates against GDP, there is no observable correlation. As this is one of the key arguments against raising taxes, it is an important concept to understand.

Taxes are GDP neutral because the money paid to government in taxes does not leave the economy. Similarly, benefits distributed to retirees through Social Security do not leave the economy. All that is at stake is where and how the money gets spent, on, say, a textbook or a six pack.

The more money there is in circulation and the faster it changes hands, the better the economy, up to the point where it is growing too fast, creating inflation.

Money in the hands of the working class creates economic prosperity from the bottom up by increasing demand. Wealth, capitalism, cannot create prosperity is absence of demand. That is the reason that countries where the population is poorer have lousy economies.

Don’t Be Fooled – McCain Will Raise Taxes

They (the elephants) might not want you to know this, but….it’s my job.

From Salon.com

It seems that Douglas Holtz-Eakin, John McCain’s chief economic advisor, has exposed yet another hole in the Straight Talk Express. Time’s Joe Klein reports that in a forthcoming book by Fortune columnist Matt Miller, Holtz-Eakin admits that the next president will have to raise taxes. “If you do nothing on the spending side, you’re going to have to raise taxes whether you’re a Republican, a Democrat or a Martian,” Holtz-Eakin tells Miller.

So why does McCain keep voicing his opposition to tax hikes, and hitting Obama for supposedly wanting them? Holtz-Eakin had an idea about that too. When Miller asked him why Republicans continue to push tax-cuts, Holtz-Eakin replied, “It’s the brand… and you don’t dilute the brand.”

Holtz-Eakin has also previously acknowledged, to Time’s Michael Scherer, that Obama’s tax plan will lower taxes over ten years.

So perhaps Holtz-Eakin should sit down with McCain himself as well, because the candidate seems to disagree with his chief economic advisor on these two points — at least publicly. In his acceptance speech at the Republican Convention, McCain said, “I will keep taxes low and cut them where I can. My opponent will raise them… My tax cuts will create jobs. His tax increases will eliminate them.”

Sarah Palin Doesn’t Like to Pay Taxes

From the Washington Post’s Matthew Mosk:

In addition to being a mayor and raising four children, Sarah Palin found time for another venture in her Wasilla years — she was part-owner of an Anchorage car wash.

Palin and husband Todd each held a 20 percent stake in Anchorage Car Wash LLC, according to state corporation records filed in 2004.

A review of Palin’s gubernatorial disclosure filings indicates that she failed to report her stake in the company on the form that requires candidates for governor to disclose any interest in a nonpublicly traded company.

The car wash venture was not entirely smooth sailing. State records show the business ran into trouble with Alaska’s division of corporations business and professional licensing after Palin became governor of the state in 2006.

A Feb. 11, 2007 letter to the governor’s business partner advises that the car wash had “not filed its biennial report and/or paid its biennial fees,” which were more than a year overdue.

The warning letter was written on state letterhead, which carried Palin’s name at the top, next to the state seal.

On April 3, 2007, the state went further and issued a “certificate of involuntary dissolution” because of the car wash’s failure to file its report and pay state licensing fees.

Palin’s gubernatorial disclosure filings also reveal her involvement in another failed startup — a marketing business which was to go by the name Rouge Cou, which evidently is a literal French translation of “red neck.” On the 2005 form, Palin describes the firm as one for which she secured a license but did not conduct any business.

Interesting. So Sarah Palin doesn’t pay her taxes. Wow, she’s really taking a strong stand on that economic policy of hers!