“What The Government Doesn’t Want You To Know”

   Has President Obama blown it for himself? Yes. Why? Because he wasted 18 months on being a partisan player instead      of passing laws that he promised as a Democrat while canvassing prior to his election.

Is the united States in dire straits? Yes. Why? Because American Republicans during the 8 years of George Bush refused    to acknowledge the fact that a government, any government, relies on taxation to pay it bills and debts. Remember the    presidential debates in 2000 between Al Gore and George Bush, and how the two men argued over how to spend America’s anticipated $2.2 trillion budget surplus?

How’s this for increases! For the fiscal year ending 2008 when Bush left office the US budget deficit was $10.8 trillion. Yes. I said deficit; a $1.3 trillion that was spent per year on average.  And as of fiscal year ending 2010 under Obama, the US deficit sky-rocketed to $14.3 trillion an increase of $4.1 trillion, thanks to Mr. Bush signing bills allowing for tax reductions during his Presidency to continue after he left the Oval Office of which Obama had his hands tied to repeal.

It is my impression that most Republicans do not understand how governments pay their bills, debts and obligations which, I might add, includes their own Republican salaries. Nor do they realize where that money comes from. Taxation. Isn’t that simple? Amongst other income revenues, the majority will come from taxation. The populace and corporations that supply this revenue helps to pay a countries bills. It also pays down the national debt. Taxes pay for the infrastructure of a country. Taxes pay for the salaries of teachers, our policing and fire personal and equipment, new roads and repairs, health services, Search and Rescue and assistance in time of disasters. I must correct myself on the latter entry. President Bush didn’t help those who lost everything in New Orleans after Hurricane Katrina. Why? Because most were black minorities living in poor areas with no insurance. He let them fend for themselves or bused them to an even worse site in Dallas. A football stadium with a lack of any decent service for the thousands. He even allowed them to be shot by the Louisiana State National Guard for trying to survive on rotting food in half submerged supermarkets.

Taxation. That is what pays the bills. Most countries know this. That is why they succeed. But the United States? Not on your life. Under Bush’s Presidency, the first major economic initiative he was a massive tax cut for the rich, enacted in June of 2001. Those with incomes over a million got a tax cut of $18,000-more than 30 times larger than the cut received by the average American.

These inequities were compounded by a second tax cut by the Bush administration. In 2003, this one skewed even more heavily toward the rich. Together these tax cuts, when fully implemented and if made permanent, mean that in 2012 the average reduction for an American in the bottom 20 percent will be a scant $45, while those with incomes of more than $1 million will see their tax bills reduced by an average of $162,000. (1)

In 2009, 7,000 tax incurring Americans earning more than $1 million didn’t pay federal taxes on their income. 28 percent of large foreign corporations, those with more than $250 million in assets, doing business in the United States paid no federal income taxes in 2005 despite $372 billion in gross receipts. In addition, about 25 percent of the largest U.S. companies paid no federal income taxes in 2005 despite $1.1 trillion in gross sales that year. (2)

The Republicans know the following but don’t want You to know. That’s because it involves lobbyists that support and donate huge sums of money to their coffers and once in the White House will receive more tax breaks increasing more personal wealth. So, here we go.

The New York Times reported that, in addition to paying no federal income taxes this year (2010), General Electric (GE), the largest US corporation, is set to get a tax credit from the government of $3.2 billion.” (3) But is there any real reason to believe that? Sure, GE has an army of accountants and lobbyists trying to reduce its tax burden, but wouldn’t you if you had $150 billion in worldwide revenue and $14.2 billion in pre-tax income last year? (4) Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings. Bank of America received a $1.9 billion tax refund from the IRS in 2009, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion. Chevron received a $19 million refund from the IRS after it made $10 billion in profits in 2009. Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS in 2009. Valero Energy, the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS in 2009 and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction. Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department. ( I loved that one! ) Next, Citigroup last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury. ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction. Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent. (5)

Taxation. Where some of the American tax dollars are being spent on a massive scale? The Military. Think very carefully about these figures and consider the following. How many school children could continue their education to college ‘free’ for the amounts spent by the United States? Or, provide Medicare or Medicaid “Free” to all American citizens? Or, provide most seniors with the funds to live reasonably? I can go on and on.

The amount the U.S. military spends annually for tent air conditioning in Iraq and Afghanistan: $20.2 billion, according to the Pentagon.

The 33,000 troops who will return home by the end of next year match the numbers sent to Afghanistan in 2010, at a cost of about $30 billion. That comes out to approximately $1 million per soldier.

The Obama administration has requested almost $13 billion to train and equip Afghan security forces in the next fiscal year.

The US military consumes about 1.2 million barrels of oil, or more than 50 million gallons of fuel, each month in Iraq at an average $127.68 a barrel which amounts to $1.84 billion per year. And that’s just Iraq.

By the end of 2008, the U.S. had spent approximately $900 billion in direct costs on the Iraq and Afghanistan Wars.

Budget Breakdown for 2012, which includes the DoD spending, FBI counter-intelligence, International Affairs, Veterans Affairs, Homeland Security, Veterans Pensions, Interest on debt incurred in past wars, NASA, satellites and Other defence-related mandatory spending is estimated between $1.030-$1.415 trillion.

This is how a great portion of American tax revenue is being spent with no return on the dollar. Just thought I would let you know. Dire straits? Undeniably yes.

  1.  http://www.vanityfair.com/politics/features/2007/12/bush200712
  2.  http://www.reuters.com/article/2008/08/12/us-usa-taxes-corporations-
  3.  http://www.wsws.org/articles/2011/mar2011/taxe-m31.shtml
  4. http://www.forbes.com/2011/04/13/ge
  5. http://blogs.suntimes.com/sweet/2011/03/

“My Name Is…”

My Name Is...by Warren RileyMy first science fiction short story will be published soon. I’m very pleased that it will be the first of eleven sci-fi stories I have written. I have included the cover for your perusal that my wife so generously and diligently created. I’m extremely pleased with the entire layout. I hope you will come back to my blog repeatedly. Here is a brief story outline.

Bonito de Silva knew he had joined a dangerous and possibly lethal operation by agreeing to serve the US Treasury Department as a black operative. He was aware it was a deadly game he was playing. With his assignments came total denial of his part in any clandestine or subversive activity by the U. S. State Department. His insertion and eventual acceptance by the Medellin Cartel had taken two years to complete. What Bonito was not aware of was that his placement as a mole would lead to his betrayal. The Cartel’s intricate network of clandestine informants within America’s infrastructure was far more reaching than the American government comprehended. And so it was that Benito had been exposed by a loyal friend and would now pay the ultimate price.

Later in the story:

Behind this single spent shell were small twisting contrails of air created by the bullet’s passage. Realizing he could move both arms and feet, Bonito was awe-struck. He realized he could move his right hand just enough to allow the bullet to pass harmlessly. In a state of surrealism, he observed the bullet penetrate and shatter the improvised cross. Wooden shards flew in every direction. He turned his head and faced his accusers. The four soldiers seemed to be frozen in a state of suspended animation. The enigma ended abruptly. All sense of motion and sound returned to normal as quickly as it had withdrawn.

Can A Country Be Downgraded?

Is it wrong that just one organization can downgrade a multi-national corporation, an entire state or country on the speculation of its current and future debt repayment? The answer is yes.

Moody’s Corporation (NYSE: MCO) is the holding company for Moody’s Analytics and Moody’s Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized ratings scale. It is one of the big three credit rating agencies and has a 40% share of the world market, as does its main rival, Standard & Poor’s. Fitch Ratings has a smaller share.

Moody’s has been accused of “blackmail”. In one example the German insurer Hannover Re was offered a “free rating” by Moody’s. The insurer refused. Moody’s continued with the “free ratings”, but over time lowered its rating of the company. Still refusing Moody’s services, Moody’s lowered Hannover’s debt to junk, and the company in a few hours lost $175 million in market value. As the housing market collapsed in late 2007, Moody’s Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression. A McClatchy investigation has found that Moody’s punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings.  [http://en.wikipedia.org/wiki/Moody%27s]

Moody downgrades Portugal’s rating to “Junk Bond” status

Moody’s Investor Service said Tuesday it downgraded Portugal’s long-term government bond ratings to Ba2, or junk grade, from Baa1. The outlook is negative. Moody’s said it downgraded Portugal on the growing risk the country will need a second round of financing, and that it will not be able to meet deficit reduction and debt stabilization targets as set out in European Union and International Monetary Fund agreements.  [http://topics.treehugger.com/article/0fhfelP5wPg1J]

Moody’s cuts Ireland rating to just above “Junk Bond” status

The cut in the credit rating also means that the Irish Government will have to pay more in interest for its debt raisings. This is a very bitter pill that it must swallow. Ireland cannot afford the increase in borrowing costs. Not only does it raise the cost of borrowing but with a rating just above junk level, it will actually mean that it will be harder to attract investors willing to purchase Irish government bonds.  [http://australianstagflation.wordpress.com/2011/04/16/irelandmoodys-cuts-rating-to-just-above-junk-bond-status/]

Moody’s cuts Greece’s credit rating deep into “Junk Territory”

Minds will be concentrated after ratings agency Moody’s downgraded Greece by three notches deep into junk territory, citing a growing risk that Athens would have to restructure its debt and impose losses on private investors. Greece intends to present a fresh austerity plan on Friday, a government official said, after Moody’s cut its credit rating deep into junk territory and said there was an even chance of eventual default.  [http://arabnews.com/economy/article447368.ece]

Moody’s says Iceland’s debt may be cut to “Junk Status”

Kenneth Orchard, a vice president and senior credit analyst at Moody’s Investors Service, talks about Iceland’s credit rating after voters rejected a proposed bill on repaying U.K. and Dutch loans made during the island’s banking crisis.  [http://www.bloomberg.com/news/2010-03-08/moody-s-orchard-says-iceland-s-debt-may-be-cut-to-junk-video.html]

Moody’s has cut California bond rating to near “Junk Bond” Status

Not only is this a slap in the face to California, but it also means that California will have to be paying higher interest rates on its bonds. When you’re broke, paying higher interest rates is not a good option.  [http://www.mcculloughsite.net/stingray/2009/07/15/moodys-cuts-california-bond-rating.php]

Moody’s cuts Japan’s TEPCO to “Junk Status”

Ratings agency Moody’s on Monday downgraded TEPCO, the operator of Japan’s stricken Fukushima nuclear plant, to below investment grade, warning the rating was on review for further possible action. The Japanese unit of the major US credit rating firm said it downgraded Tokyo Electric Power’s senior secured debt rating to Ba2 from Baa2. It also downgraded TEPCO’s long-term issuer rating to B1 from Baa3.  [http://www.france24.com/en/20110620-moodys-cuts-japans-tepco-junk-status]

Moody’s Warns of Downgrade for U.S. Credit

Moody’s Investors Service warned Thursday that it might downgrade the United States government’s sterling credit rating if Congress did not increase the nation’s debt limit “in coming weeks,” putting a spur to the sputtering talks between party leaders and the White House on a plan to restore fiscal stability. Independent analyses have shown that more than half of the $14.3 trillion debt is from policies enacted during the past decade when Republicans controlled both the White House and Congress, and much of the rest from lost revenues and stimulus spending and tax cuts since Mr. Obama took office at the height of the financial crisis and recession.

Moody’s, one of the premier credit-rating agencies, said that political gamesmanship over raising the government’s $14.3 trillion debt ceiling has been worse than expected. If progress toward increasing the limit isn’t made by mid-July, Moody’s said it would take another step toward reducing the country’s top-of-the-line AAA rating by putting the United States under review for a possible downgrade.   [http://www.nytimes.com/2011/06/03/us/politics/03congress.html]

How much power is needed to collapse world economics? These are the top five institutional owners of Moody’s. Berkshire Hathaway, Capital World Investors, T. Rowe Price Associates, Inc., Capital Research Global Investors and ValueAct Capital Management, L.P. I rest my case.