bank of america

I’m really alarmed at what I’m positive is about to happen to social security. I don’t know if you guys caught this story, but last week Senator Alan Simpson, who is on Obama’s deficit commission referred to social security as “a milk cow with 310 million tits”. He made another appalling comment a few days later, but I’m going to stick with social security for this post.

Simpson isn’t alone. republican representatives have had nothing but disdain for social security since its inception. I’m not going to list all of the republicans that are opposed to social security because the list includes almost all of them. They view social security as an entitlement program, and anyone that collects a social security check as a scourge on society. I said that republican representatives have a disdain for social security because polls show that even republican voters don’t feel the same way. Three out of four Americans are strongly in favor of preserving social security, which means that a significant percentage of republican voters want to preserve it. Their elected officials simply aren’t representing them.

There’s a fundamental dishonesty in the way republican representatives view social security. It’s not an entitlement, as they claim. Social security is something that we all pay into for our whole professional lives. When we retire, we collect the money that we contributed. There’s no entitlement involved here. The same holds true of unemployment insurance. We pay into it when we work, and we collect from it when we’re laid off. No fucking entitlement to see here!

Welfare is an entitlement. Medicaid is an entitlement. These are not programs that we pay into, and then collect when we need them. Tax cuts for the rich are an entitlement. Cutting capital gains tax is an entitlement. Donald Trump shouldn’t be entitled to pay less taxes on his capital gains than you pay on your earned income. Paris Hilton is not entitled to inherit the totality of her grandfathers wealth, simply for being born. Any tax code that allows people to pay less taxes on anything than we do on earned income is an entitlement. More than that, it’s bullshit. The earned income tax rate should be the lowest tax rate that we have. No other system of taxation is equitable. Earned income is the hardest to come by. You have to work for it. It should not be taxed at a higher rate than any other type of income. Period. I honestly can’t conceive of a rational person disagreeing with that, unless they’re the heir to a large fortune. But 99% of American’s aren’t, so what the fuck are they thinking? Are they under the delusion that Paris Hilton is working harder than they are?

Back to social security. As it stands right now, we have a 2.5 trillion dollar surplus (sort of) in social security. It’s the only damned place in our economy where there’s a surplus of any kind. I say sort of, because that 2.5 trillion dollars is effectively made up entirely of US bonds. It’s not actual cash. Bush, Clinton, and Bush 2.0 all siphoned money out of social security. Bush 2.0 took every nickle that was left to pay for his war, occupation, and tax cuts. When a president takes money out of social security, they leave an IOU, or a bond in place of the cash. When the US borrows money from China or any other country, they give that country US bonds in exchange for that loan. Those bonds are insured by “the full faith and credit” of the US government. If we were to ever default on these bonds, our economy would crumble because we wouldn’t be able to borrow any more money. It works exactly the way your credit card does. If you miss a payment, you can’t use that card until you get current on what you owe.

I’ve never, ever heard a single politician talk about defaulting on our bonds to China as a means of balancing the budget. That would be an insane idea that would bury the US.

So why the fuck do they feel so comfortable with the notion of defaulting on the bonds to you? Because they honestly have nothing but disdain for you. They don’t respect you, and they don’t give a damned about your quality of life. They’re openly talking about stealing your money, and they’re doing it to get your vote! ARE YOU BATSHIT CRAZY? Why would you vote for that? It’s your goddamned money! They have to falsely call it an “entitlement” to try and get you to go along with this scheme. And while Americans are overwhelmingly in favor of preserving social security, most of us don’t believe that it will pay out when we retire. Managing expectations is 60% of the battle in getting anything done. If we accept the idea that social security is going to be diminished on us, then we’ve set ourselves up to get robbed. This is madness!

Yes, social security will be in trouble in 2037 if we maintain the current rules. By 2038, if we do nothing to the system at all, social security will pay each recipient 78% of what it pays now in order to keep the system solvent. Keep in mind that what I mean by solvent, is self sustaining (i.e NOT an entitlement). There’s a simple solution to the solvency problem. As it stands now, we stop making social security contributions when we’ve reached an income of $106,800 per year. After you’ve made that, you’re no longer paying into the system until the next calendar year. All we need to do is remove that cap, and problem solved! I don’t know about you, but when I’m 107,000 into my annual earnings, that’s when I can most afford to get taxed. I honestly don’t even notice when those contributions stop being taken out of my check.

If I were writing the US tax code, here’s what I would do;

-No federal taxes on anyone for the first 35k you earn. That first 35k is when you most need every cent you make.

-Federal taxes would kick in on every cent over 35k that you earn, and the percentage would increase incrementally on every 35k.

-Capital gains tax would be some percentage higher than earned income taxes, and they would be paid on every cent of capital gains. Right now, rich people defer some of their income to take stock options, in order to avoid paying that higher earned income tax rate. This must end. They’re stealing from you by doing this.

-There would be no contribution cap on any federal insurance program (social security, medicare, unemployment, etc).

Look, if I have to be taxed, I’d rather be taxed on the last 35k that I earn every year than on the first 35k. That first 35k is the money that keeps me from being homeless. The last 35k is what keeps me in Ferragamo handbags.

And let me say one more thing to the “entitlement” hating crowd. Until you can name one single first world country that doesn’t have social safety nets, you need to shut the fuck up. There’s no such thing as a first world country with no social safety nets. “Safety net” and “first world” are inextricably intertwined. And if you’re telling yourself otherwise, they you’re a complete idiot. If you can’t show me how your bullshit idea of every man for himself has worked to improve one single country, then SHUT UP ALREADY. I’m tired of hearing about your fucking unicorn.It makes me bitchy.

Social security is the only solace you have when Enron, Arthur Anderson, and WorldCom rob you by suckering you into investing in their worthless company. Social security is the only solace you have when Bank Of America, CitiBank, Goldman Sachs, Wachovia, and Chase falsely inflate the value of your home by giving out loans to people that can’t afford the other homes on your block. Social security is the only solace you have when the lobbyists for the financial institutions that robbed you, buy politicians so that they can turn Fannie and Freddie into coconspirators in the real estate ponzi scheme.

Corporations are picking your picket every single day, in a million different ways. Our wages haven’t gone up in a decade. I got into the staffing business almost 14 years ago. When I started, I was hiring JAVA developers. I’m still hiring JAVA developers today, for the exact same wage that I was paying them 14 years ago, when gas literally cost half as much as it does today, and milk was $2.50 a gallon. You’re making less money, while the company sells its wares at a higher profit.

We’re on the fast track to turning into Mexico. Taking away social security will accelerate that devolution faster than other single factor that got us on this road.

You’re not the one sucking on the tit. You’re the fucking cow. And when your milk stops lubricating our country, you’re fucked, and your kids are fucked. Wake up!

I mean it. Screw trying to reform the system. This is the conclusion I’ve come to after a rigorous review of our current economic system.

Sure, our economic stability went to shit when we started peeling back regulations on banks and investment banks back in the 80s. Regulations that by the way, kept us virtually bust free for forty years. And yes, continued deregulation through the 90s and 00s did make for a more volatile and precarious financial system, resulting in shorter boom and bust cycles. But I still say fuck it. We shouldn’t bother to regulate.

I know I sound nutty again, but there’s a method to my madness.

I really believe that our chances of getting the kind of regulation that we had in the 40s in place is pretty damned close to impossible. The financial industry has way too much money invested in our politicians. Our congressmen, senators, and president aren’t about to bite the hand that feeds them. We’re not going to get any kind of reform that will prevent banks from doing precisely what they did to tank the economy in 2008. We’re sure as hell not going to get any regulation that will stop investment banks from creating new “financial products” that could potentially be even more devastating than the financial products that just screwed us. So let’s not even bother. Who needs another long, drawn out battle like the one we just had on health reform, that will leave us almost as screwed as we would be if we did nothing?

I say we leave the banks alone. Let them do what they want to do, completely unmolested by government oversight.

What we should do instead, is start national banks to compete with the private banking system. I’m not talking about taking over the banks. I’m talking about creating new banks.

Right now, Bank Of America, CitiBank, WaMu, Chase, and all of the other banks that are “too big to fail” are borrowing 100% interest free money from the federal government. Money that we had hoped they would use to lend to small businesses so that we could jump start the economy. But they’re not actually lending that interest free money the way that we wanted them to. They’ve calculated that they can make much bigger short term profits if they take that interest free money and gamble it on derivatives. What they’re not gambling on derivatives, they’re lending to you in the form of credit card debt. And they’re charging you an exorbitant interest rate to borrow money that they’re getting for free.

So why not cut them out? Let’s get rid of the middle man and create national banks. We just did this with student loans. We used to let banks be the middle man in the student loan system. It was a great deal for them. They loaned out the money which they got from the federal government and charged interest for it, but were completely insured by the federal government if you defaulted on paying the loan. They got all of the reward with absolutely no risk. So we finally decided to cut them out of the equation. Student loans are now going to come directly from the federal government. The interest that you pay on those loans will now be paid directly to the federal government to keep the system going. Makes sense, right? So why can’t we do that for small business loans, mortgages, and personal loans? Why are we letting private banks interject themselves between us and the federal government who supplies the money anyway?

This would solve every single problem that we face today. We wouldn’t have to worry about the banks being too big to fail because we would have a solid banking system in place. So if you fail, fuck you. We’ll be just fine. A national bank would give consumers more options. We could decide for ourselves if we trust the private system over the government bank. We wouldn’t have to worry about small businesses being left out in the cold by banks that don’t want to lend to them. We certainly won’t be paying 30% interest on credit cards since national banks wouldn’t have derivatives trading to finance. We wouldn’t have to worry about ever bailing out another undeserving bank executive again. And since banks are so averse to government interference, we could stop the FDIC insurance system that we currently provide them. And we can charge the private banks interest on the money that they’re getting for free now.

This is the perfect solution to every single problem that we face. And the banks would get what they want; free reign.

I honestly don’t know why we’re not having a serious conversation about starting national banks. Unless I’m missing something, it seems like the solution to all of our national problems. And it creates more competition. Who can argue with that?