The Political
Foundation of the status quo in America is based on a Grand Bargain of
Complicity between the top 25% who pay approximately 90% of the taxes, and the
bottom 50% who draw on the benefits that come from government. James Madison in
the "Federalist Papers" outlined this complicity in the "Tyranny
of the Majority". What is becoming painfully evident is
that the political elite in America have falsely over-promised on the
entitlements that can be delivered, which is now surfacing in the political turmoil
of the Fiscal Cliff negotiations and has the potential to quickly lead towards a constitutional crisis.
Meanwhile the very top 1% of Americans, that pay 25%
of the taxes and control most of the productive wealth in the nation, are
securing and exercising increasing powers within the government, through what
is becoming increasingly identified as
'Crony Capitalism" and "Corporatocracy". Thomas Jefferson also warned us about
this potential constitutionally destabilizing influence which could emerge within
the structure of the 'separation of powers'.
Out of a population of 315 million, presently only 115
million Americans have full time, non-government funded jobs. This is the same
as 12 years ago and before an additional 33 million students, immigrants, single
parents of others attempted to enter the workforce. It is now fracturing the
social compact and the revealing the delusion of the American dream being
available to all who are willing to work for it. There is no work, and
certainly insufficient work which pays a wage which will support what is
expected as a middle class standard of living.
This Grand Bargain is now rapidly fraying
as 75 million baby boomers begin retiring and find the promises made to
everyone cannot possibly be met. As
the Fiscal Cliff crisis is blatantly bringing to the public's attention, for
those who can read between the carefully crafted lines, funding for Social
Security, Medicare/Medicaid, National Security and Interest on the debt is
consuming more than can be realistically raised through taxation.
To collect enough tax revenue to avoid
going deeper into debt would require over $8 trillion in tax collections
annually. Expropriating the entire income of the top 25% of households that pay
almost 90% of the tax and all corporate taxes would only bring in $6.7
trillion.
"The actual liabilities of the federal government—including Social Security, Medicare, and federal employees' future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion"
Chris Cox and Bill Archer, Former Congressmen - WSJ 11-26-12
Claims on welfare and disability programs are
skyrocketing at the same time that the demographics of an aging populace are
causing 10,000 people a day to enter Social Security and Medicare, the two
costliest government programs. Meanwhile, the upper-middle class that pays most
of the taxes has been slammed with lower income and a devastating drop in their
housing-based net worth. Compounding this is the fact that the disillusioned
wealthy have slowed dramatically their invested CAPEX (Capital Expenditures) in
productive assets in the US.
This above confluence and much more indicates that is leading
to a Constitutional Crisis by the end of the decade.
No comments:
Post a Comment