The Real Wealth Redistribution

Common political myth holds wealth redistribution to be a socialist-inspired evil that takes the hard-earned money of those who’ve worked, produced, innovated, planned and contributed in order to give to those who’ve done none of these things: the slackers, stoners, welfare-bums, the undeserving poor, the criminals, the ne’er-do-wells.Certainly, this can and does go on, but these costs are a mere spit in the ocean in the big picture of how wealth is taken from one pocket to line another.

In actual practice, wealth redistribution goes on daily through millions of transactions, public and private but neither in the manner nor the direction this myth presupposes.

The truthful part of this myth is that government (i.e. public) expenditure is the vehicle by which a large part of this transfer of wealth is realized.

As it is also true that the past four years have seen what can only be termed as insanity in government spending, we have the perfect opportunity to study how wealth redistribution really works.

With taxation, the mechanism by which resource transfer occurs is transparent, so the persons responsible for new tax-financed government spending are accountable to the public through the political process. With borrowing or with the printing of money (or its modern equivalent, Federal Reserve monetizing of debt through purchases of Treasury obligations), the burden on the private sector is largely disguised, avoiding the accountability desirable in a democratic society.

The big questions

April 15th just passed a couple of weeks ago, and we all sent in our tax returns, or filed an extension. However reluctantly, we paid what we owed; that is the 51% of Americans who actually pay taxes.

Every one of us understands what taxes are – a portion of our earnings we are obligated to provide the government (at various levels) in return for needed services. Our money goes in, and out comes infrastructure, police services, fire-fighters, education, the War on Drugs, the War on Terror, the War…, our legislative assemblies themselves, the masses of public employees … and so on. We know and accept that there are many things in civilization we need to fund collectively.

But, do you ever stop and ask yourself why it takes $3.5 trillion dollars for the government to provide the basics of civilization to 340 million people, each and every year? Have you done the math? Does it seem credible?

Somehow, somewhere, at some point in history it all seems to have gone wrong. It must have. Lord knows we're in a mess.

"Do you find yourself wondering: How did we get here? How did the United States of America get into such a predicament whereby in one year, 2008, the financial system nearly vaporized, the stock market crashed, real estate tanked, and major corporations were being bailed out. . . .How did our great country, a bastion of capitalism, devolve into a Bailout Nation where the gains were privatized, but the losses were socialized?" -- from the foreword by Bill Fleckenstein to the book “Bailout Nation” by Barry Ritholtz

During both FY2009 and FY2010, the U.S. government collected about $400 billion less than FY2008 revenues of $2.5 trillion. During 2009, individual income taxes declined 20%, while corporate taxes declined 50%. At 14.9% of GDP, the 2009 and 2010 collections were the lowest level of the past 50 years.

How much tax revenue did the government collect from the nation in fiscal 2010?

Approximately $2.16 trillion from an economy producing an estimated $14.7 trillion annually, or approximately 15% of GDP (gross domestic product.) This is made up of individual income taxes (42%,) Social Security/Insurance taxes (40%) and corporate taxes (9%.) Social Security taxes are supposedly to finance that particular program alone so this means a rounded figure of 50% of all collected revenues are available to fund government expenditures, or $1.8 trillion.

How much money did the government spend in 2009?

You would think that would be an easily answerable question with only 1 correct answer, but there’s actually four. It’s important to understand why there are 4 correct answers and the distinction between the different figures.

Here are the 4 correct answers:

  • 4,397,478$ million dollars or $4.4 trillion
  • 3,727,371$ million dollars or $3.7 trillion
  • 3,517,681$ million dollars or $3.5 trillion
  • 3,000,665$ million dollars or $3 trillion.

So how are all of these technically correct? Let’s start from the bottom and go up.

The bottom number, 3 trillion, is the total number of on-budget outlays. Whereas the second from the bottom, 3.5 trillion, is the total number of off-budget outlays. Off-budget accounts are programs such as Social Security and the Postal Service. Each of these things are supposed to fund themselves, therefore, they are considered “off-budget”.

To understand the top two numbers you have to understand the concept of an “outlay“. An outlay can represent an account either spending or receiving money. Any income that isn’t a tax is called a negative outlay. Negative outlays can be selling government land, a business-like transaction, like selling stamps, or could even be interest received on a trust-fund or investment.

These accounts that make money are still considered “outlays” even though they are negative. Therefore, when the government reports its total spending it adds up all of its outlays and, as you’ll remember from algebra class, when you add a negative number you subtract it from the total. So how much the government spends is offset by these negative outlays. The top 2 answers are the total government outlays with the negative outlay accounts removed.

In 2009, the total on-budget spending (with negative outlays removed) was 3.7$ trillion dollars – which doesn’t include Social Security or the postal service. The total including both on and off-budget spending (with negative outlays removed) is the top number, 4.4$ trillion dollars.

This is something that should be kept in mind anytime a group reports spending as a percentage of total spending.

How much did the government spend in 2010?

An estimated $5,896 billion according to the government. Why estimated? Because the numbers aren’t in yet.

But wait – the answer isn’t really that simple;’ nothing related to government accounting is. There are four equally correct answers to that question, but as the government still hasn’t got its books in order, we’ll have to visit 2009 for the explanation. Look to the right. So now you know the above figure is total outlay with the negative outlay removed, and that the estimated 2010 spending inclusive of off budget outlays is the official figure of $3.5 trillion – which is still an estimate. But in truth, the government did spend $5.8 trillion. The fact that some outlays produce an income is beside the point – don’t you think?

Why do they prefer $5,896 billion to the term $5.8 trillion? (And what is a trillion anyway? It's a million million. It's a thousand billion. It's a one followed by 12 zeros.) I don’t know. Maybe they think it sounds better, that we won’t figure it out.)

How much did the American people pay in interest on national debt in 2010? Now here’s where you have to forget the governments pie chart (it’s inaccurate) and do a little calculating on your own. The actual figure according to the US Treasury is $413,954,825,362.17 paid out in interest on the national debt.

That $414 billion dollars represents 22% of the $1.8 trillion collected from taxes available to fund government business. Ouch! Now we must reduce our $1.8 trillion by the amount of interest we must pay on past borrowings, which leaves us with $1.4 trillion dollars to cover all other government expenditures.

Now what was that figure I heard bandied about as planned expenditures for fiscal 2011? $3.69 trillion if memory serves. One interesting figure in that budget was $211 billion budgeted as net interest expense. “Net of what?” we may well ask. Does our deeply indebted government have a secret source of interest income, a few trillion tucked away here and there in bearer bonds, or investments? Or is it receiving interest payments on all that bail-out money? (Aha – more on that later.)

No, we’ll use our common sense. If the US Treasury paid out $414 billion in interest in 2010, is it likely to be less in 2011 seeing as we haven’t paid one red cent of the debt, and have in fact increased it? No. So would we be too far wrong in suggesting something in the neighborhood of $500 billion in interest payments? I don’t think so. If some interest income enters into the picture, let’s not use it to obfuscate the facts. So let’s set that amount aside as already spent and we’re looking at a mere $3.2 trillion dollars the government intends to spend.

But we only have $1.4 trillion available.

Right off the bat it becomes clear we must borrow a further $1.8 trillion, because that’s our deficit.

What to do? What to do? Year after year of deficit budgeting and spending has led us to this dreadful impasse that only fools could not see coming, and as not all our elected leaders are fools, we must then understand they intended these results. Of were they so shortsighted they couldn't see beyond the next election?

As though they'd suddenly woken up to the situation this morning, they now decide it was all a bad thing."We must reduce out deficit," they cry.

“Tax the rich to make up the deficit!” suggest some. Okay. Being poor, that sounds like a grand idea to me. But as of the end of 2010, the total worth of all American billionaires is $1.3 trillion, so even if we cleaned them out completely, we still can’t pay this year’s deficit.

Shall we throw in the millionaires? There are approximately 2.6 million millionaires (earning in excess of $1million annually and not to be confused with lesser annual earners who have amassed over $1million in assets, approximately 7.8 million households) in the country with an estimated 4.2 trillion in assets (not including primary residences.)

Yes, take it all; leave them with nothing but the shirts on their backs, and we can cover not only this year’s deficit but if we are frugal, we might cover next year’s as well. Problem solved!

It is simply not possible to pay off the national debt. Rather than delve into the mechanics of currency, Treasury Bonds, fractional reserve banking and all the rest of it here in this article, I offer you a link to a remarkably clear article called “It is now mathematically impossible to pay off the U.S. national debt.” I highly recommend this for anyone not familiar with how these things function.

And then what?

The rest of us who calculate our monthly budgets in hundreds and our annual income in thousands are still faced with $14 trillion of debt to pay. This unimaginable amount, remember, is equal to the entire output of the American economy for one year. (U.S. GDP for 2010 is $14.7 trillion.)

So can’t we just raise taxes on everybody just a little bit and get rid of this year’s budget deficit at least?” you ask.

Uh – no, not really.

According to the Tax Foundation’s Microsimulation Model, to cover the budget deficit for this one year alone, Congress would have to multiply the tax rate for every American by a factor of 2.4. This would make the 10% tax rate 24%, the 15% rate would become 36% and the 35% rate would have to be 85%.

This would be economic suicide, because there’s one thing the Republican house has dead to right – reducing private wealth and converting it to public wealth is counter-productive to the economy. It would grind to a near halt, and it would not reduce the national debt by one penny, only eliminate the budget deficit for one year.

“The National Debt is like a cancer,” said Erskine Bowles, one of the heads of the President’s national debt commission, addressing the National Governors Association.

“A terminal cancer?”  you wonder.

Well, according to Bowles, if the current trend continues, the US Government will be spending $2 trillion just for interest on the debt by 2020. (And we were worried by a $3-4 trillion dollar budget…)

If not terminal, mighty sick!

But wait – there’s more.

Staggering as a debt equal to the entire output of the economy is, it is only the tip of the iceberg. It does not reflect huge liabilities the government has as commitments.

Of course, you’d have to be blind, deaf and encased in a hermetically sealed tomb not to be familiar with the unfunded liability of Social Security, the history of which is worthy reading. Since the Johnson Administration, when the hitherto untouched trust funds were ‘borrowed’ to pay for budgetary deficits of the time, and the subsequent divestiture of the fund by Congress during the Reagan Administration, the Social Security funds contain nothing but unmarketable and illiquid IOU’s. For decades, only an amount equal to current requirements has gone into the trust and the rest of the collected Social Security taxes went into general funds and were spent. As of August 2010, the all too foreseeable consequence of such a policy arrived. The system paid out more benefits than it received in payroll taxes.

Of course, say those now demanding an end to such a state of affairs, if the various administrations who helped themselves to the taxpayers’ retirement funds had not done so, the National Debt would be that much greater. True – but now you have an unfunded liability which amounts to the same thing, does it not?

Or were you planning to default on the entire population?

And then, there’s Medicare. Well, there’s medical care in general – a subject too complex to cover in detail here and one that some economists are calling an H bomb waiting to go off. 52 million Americans without medical insurance and that number is climbing, soaring costs, burdening the employers with cost of their workers’ health care (a heavy handicap in a competitive global economy,) a proposed voucher system sending an aging population full of pre-existing conditions to the private providers that don’t want them….. The picture’s not pretty.

The unfunded liability over the next 75 years for Social Security and Medicare are estimated as $5.3 trillion and $13.4 trillion respectively.

So far, even if we could freeze the picture right where it is, do nothing but pay off our collective national debts and liabilities, cut spending to zero and increase taxes to the maximum supportable, the American taxpayer is on the hook for $33.4 trillion dollars.

This is roughly $101,000 dollars for every man, woman and child in the United States. Oh!

And the interest clock is ticking, ticking, ticking!

Yes, financially speaking we are in a lot of trouble.

But wait – there’s more!

Did you smile a little bitterly to yourself when you heard that Standard and Poors downgraded US bond issues from stable to negative because, said the investment rating service, current budgetary debate does not address the problem of the national debt and spending? I did. I smiled quite broadly. The irony was too much.

Standard and Poors is a private institution owned by the same people who wander Washington hallways greasing the wheels, dispensing largesse and occasionally holding hat in hand looking for help. They are the firm that gave all those mortgage backed securities a triple star rating.

Yep, the same guys that hyped the stinking toxic assets that nearly destroyed not only the American financial system, but teetered the world are now slapping us on the wrist with a “Tut! Tut! You simply must stop this infighting and find the discipline to cut spending -- or else.”

This from the firm that played a major role in leaving the American taxpayer holding the tab for over $13 trillion in liabilities (and still counting.) Now that’s chutzpah!

”… the damage to these companies was self-inflicted: the excess leverage, mortgage exposure, deregulation and lowering of credit standards took place at the behest of these firms. They were not killed by others, they committed suicide. … This was not a "perfect storm" -- unforeseeable random events that just happened. In reality, it was a series of conscious decisions made by investment banks, commercial banks, government officials, regulators and central bankers that were simply awful. ” – from Bailout Nation by Barry Ritholtz

2008 and 2009 saw the greatest financial feeding frenzy in history, including bailouts for Fannie Mae and Freddie Mac (now taxpayer owned,) GM and Chrysler, AIG (three times) Bank of America (two times) and Citigroup (three times); capital injections into other major banks, and government-engineered mergers involving once vaunted firms Bear Stearns, Goldman Sachs, Morgan Stanley, Merrill Lynch, and Washington Mutual; the FDIC receivership, nationalization and sale of Washington Mutual, now in the hands of JP Morgan, and Wachovia, flipped over the course of a weekend to Wells Fargo…. (Wells Fargo bought Wachovia for $15 billion, but managed to squeeze a $74 billion tax shelter through the IRS for the purchase. Net profit: $59 billion dollars. The CEOs of the biggest 15 investment banks, mortgage firms and commercial banks "retired" from the firms they helped to ruin, and took home more than $1.5 billion in compensation.)

This was TARP, and you all remember it.

“Of the $389 billion made in TARP loans by the government, now $234 billion has been repaid, and $35 billion in income has been made on the repaid loans and sale of other securities, according to the Treasury.” – Peter Schroeder, The Hill

Oh ho! the Treasury made an 8.9% return, you would think upon reading this. But the money was borrowed in the first place at an average rate of 3.5%, so let’s not forget to factor that in (because no one has mentioned it, not in this article or in any of the others I’ve found.)

General Motors chairman Ed Whitacre is appearing in ads on all the Sunday morning shows repeating the message of his Wall Street Journal op-ed, titled “The GM Bailout: Paid Back in Full,” and the company’s full-page newspaper ads:

We’re proud to announce: We’ve repaid our government loan. In full. With interest. Five years ahead of the original schedule.

In the Wall Street Journal, Whitacre says the company has made a $5.8 billion payment to the governments of the United States and Canada. But don’t I recall that the GM bailout was $50 billion? First, part of the bailout went into an “escrow fund,” and that government money is being used to pay back the small part of the bailout that was officially a loan. Second, GM is asking for another $10 billion loan to retool its plants to meet the stiffer Corporate Average Fuel Economy standards and paying back one government loan — with other government money — will make it easier to get another government loan.

Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate--a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company--arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.)

But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion--the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.

So how is it paying it?

As it turns out, the Obama administration put $13.4 billion of the aid money as "working capital" in an escrow account when the company was in bankruptcy. The company is using this escrow money--government money--to pay back the government loan.

For the whole story go to Forbes.com: GM is still Government Motors

But what it boils down to as my simple mind sees it is: GM used government money to pay back other government money in order to get yet more government money.

And oh, by the way, there is no such thing as government money. Every nickel or dime the government hands out either came from the taxpayers or is owed by the taxpayers.

Even GM proudly announced they’d paid back their loan “in full, with interest and years ahead of schedule.” (Did they? Good question. See the excerpt to the right.)

For once the people come out ahead!

And yet, conflicting reports arise. According to the Ethisphere TARP Index, which supposedly tracks the government’s bailout investments, Wall Street provided junk collateral for the low-cost to no-cost financing. In fact, the agency reported the various investments had depreciated in value by almost $147.7 billion by the end of 2009. In other words, TARP’s losses came out to almost $1,300 per taxpayer.

How could there be such diversity in the reports on TARP’s successful profitability and repayment? We’ll probably never know the whole story. Evidently there's more to be written.

“The Troubled Asset Relief Program Inspector General (TARP IG), Neil Barofsky, announced in his January 20, 2010 report that TARP has continued to develop into a sophisticated white-collar investigative agency. Through December 31, 2009, TARP has opened 86 and has 77 ongoing criminal and civil investigations. These investigations include complex issues concerning suspected TARP fraud, accounting fraud, securities fraud, insider trading, bank fraud, mortgage fraud, mortgage servicer misconduct, fraudulent advance-fee schemes, public corruption, false statements, obstruction of justice, money laundering, and tax-related investigations.”

So indeed there was trouble in paradise, but considering the good citizens remained oblivious to the real liability and risk they faced, it was an all's-well-that-ends-well collective shrug that finished the story. It could have been worse, we said to each other.

The credulous public sighed in relief. It hadn’t turned out so bad after all. TARP was now no longer a huge public liability, but was (maybe) even making money. Even if the fund didn’t do what we’d all been told it was supposed to do: save assets, stop foreclosures, open up credit on the lower end so we could all get back to our jobs of spending, at least it paid for itself. And as TARP was being repaid, so was the government’s borrowings the taxpayers had underwritten – wasn’t it?

Not exactly. As is often the case, TARP spawned children, an ocean of alphabet soup to continue the process of “rescuing the economy.” Here are some of these offspring acronyms:

  • Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (AMLF)
  • Term Asset-Backed Securities Loan Facility (TALF)
  • Primary Dealer Credit Facility (PDCF)
  • Commercial Paper Funding Facility (CPFF)
  • Term Securities Lending Facility (TSLF)
  • TSLF Options Program (TOP)
  • Term Auction Facility (TAF)
  •  Public/Private Investment Program (PPIP)

All of these programs are administered by the Federal Reserve Bank.

This evening, I watched with interest as a second first in history in the past few months played out before my wondering eyes. Ben S. Bernanke, Chairman of the prior-to-now secretive organization held a press conference, which he opened with the line, “…our commitment to transparency.”

In fact, The Fed’s first ever financial report of any kind to the public begins with “The Federal Reserve is committed to transparency…”

But let’s not lose sight of the fact that not only is this commitment a recently developed one, it took an act of Congress: the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and a lawsuit from Bloomberg News to force this sudden spirit of openness.

That’s why the press conference was the second first in history, because the first first was the Fed opening its books for scrutiny, which had never, in all the years of its existence, not once been done before. They provided the details of 21,000 transactions under TARP and TALF. Now, GAO (Government Accountability Office) has formulated a committee of staffers to audit the approximately $3.3 trillion dollars. (You see, while TALF began with only $200 billion in its budget, like all such publicly funded things, it grew – and grew.)

They are, they report, discovering a series of “outrages and lunacies.”

“Our jaws are literally dropping,” said Warren Gunnels, an aide to Se. Bernie Sanders of Vermont. “Every one of these transactions is outrageous.”

Nine firms -- five of them foreign -- were able to borrow $5 billion in U.S. government securities, which effectively act like cash on Wall Street, for four weeks at the minuscule interest rate of 0.0077 percent.

That is not a typo.

On 31 separate transactions, the lucky nine were able to borrow billions for 28 days as part of a crisis-era Fed program that lent the securities, known as Treasuries, for 28-day chunks to ensure that firms had cash on hand to lend, invest with and trade. The market was seizing up; effectively free money, courtesy of Uncle Sam, helped it thaw.

The European firms -- Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (U.K.), Barclays (U.K.), and BNP Paribas (France) -- borrowed $5 billion worth of Treasuries 19 different times, each paying just $383,561.64 in interest for the privilege. Deutsche led the way with seven such deals.

That's equal to 0.0077 percent interest for the 28-day loan. The annual interest rate equals one tenth of one percent. (For debt backed treasury bonds on which the taxpayer will pay 3-3.5% interest.)

The Fed sent $9.6 billions in bailout aid to the Central Bank of Mexico, to Bavaria and more than 70 loans to the Central Bank of Bahrain (the major shareholder of which is the Bank of Libya, our ex-friend Quaddafi,) $2.2 billion to the South Korea Development Bank (whose purpose is to promote economic development, yes – but in South Korea) and why, when America is borrowing from the Middle East at a rate of 3%, did the Fed send $35 billion to the Arab Banking Corporation of Bahrain at a rate as low as one quarter percent?

.(Let’s see if I have this right: government borrows funds at 3% and uses those funds to loan the money to banks at one quarter percent. Said banks use the money to buy Treasury Bonds on which the government pays rates between 3-3.5%.  Which means the taxpayer is now footing the bill to the tune of 6% and the bank is profiting around 3%. Whoowee!  What a neat swindle.)

During the crisis, the Fed routinely made billions of dollars in “emergency loans” to big banks at near zero interest. In a startling number of cases, the banks used the funds to buy Treasury bonds, loaning the money back to the Government at a higher rate.

“People talk about how these loans were paid back,” said a congressional aide who has studied the transactions. “But when a bank is lending money at near zero percent, and the bank turns around and lends that money back to the state at three percent, how is that different than just handing them taxpayer money?”

5 billion went at very low interest rates to Toyota and Mitsubishiwhich which granted, do own factories in the United States. But how does the Fed explain massive purchases of securities in BMW, Volkswagon, Honda and Nissan? (Which makes sense when American taxpayers are trying to save GM and Chrysler and even hold a 60% equity in the former??)

But even more disturbing, according to the investigators, were the long lists of investment funds, hedge funds and other investors with addresses in the Cayman Islands that received TALF funding to the tune of hundreds of millions each, for an aggregate of some $71 billion in the first run-off and destined to become $2 trillion.

“It was as if someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government and handed them the keys to the Treasury.”

The purpose of TALF according the Fed is to get more loans written, lower rates and bring down the cost of borrowing. You see, even though the Fed funneled piles and piles of money to the banks, they didn’t start lending to consumers again. No, they had other uses for the money, and they went on their merry way foreclosing and buying guaranteed securities (as well as each other.) The benefits of TALF according to Forbes are:

“Firms are now selling funds backed by the government's TALF program. Although the various government bailouts have gotten a lot of bad press, the Term Asset-Backed Loan Facility [TALF] seems to be making the world a better place for financial stock investors.

Now there are new funds that are selling TALF-backed securities to qualified, wealthy and mostly sophisticated investors, in effect helping to get these issues off the books of the banks that hold them. The majority of these TALF funds will be bought by institutional investors, or even family trusts, with few, if any being sold to retail-level investors, at least just yet. For those closely watching the TALF world it sends a message loud and clear that the federal government is loathe to let any major banks fail, and is doing what it can to help them unload some of their most dangerous liabilities.”

Unload their most dangerous liabilities” means bundling all the crappy loans they made: credit card debt, car loans, student loans, consumer loans of all sorts -- dark blots on their balance sheets and selling them as “asset-backed securities.” Supposedly, only new loans “with an established credit rating” were to be eligible (though how a new loan can have an established credit rating escapes my logic,) or in the words of the hyped-up press releases “buy only the “best” new loans from banks, lenders and even the U.S. Small Business Administration.”

What happened? The banks could not take their existing shaky loans and borrow through TALF directly, so Bank A bundles up $20 million in loans and Bank B also bundles up $20 million in loans and sell those bundles to each other, thus qualifying as “new” loans. And they did. They laundered toxic loans (and laundered is the right word) passed them through the TALF program, bring them back onto their books all nice and clean – and guaranteed by the taxpayer.

But the story becomes even more twisted.

Borrowings from TALF are leveraged nine to one. That’s right. You, Mr. Hedge Fund, buy an asset with a face value of $100 (value being an unregulated mystery) for $80. You part with $2.40 while the Fed contributes $77.60 (of the taxpayers’ money.) Huge, huge leverage. (And such leverage is what got us into this mess, isn’t it?)

TALF loans are written as no-recourse loans. Which means if you, Mr. Hedge Fund, don’t pay your loan at maturity the Fed takes your asset and calls it square. For a $2.40 investment, you now have $77.60 of the public’s money in your pocket, and the Fed holds your worthless bundle of laundered loans. Why would you bother to pay?

Or, at some point after the loan you rerun the model of your asset and it turns out it was worth only $20. You lose your $2.40 and the taxpayer loses $77.60. But, the bank buys the asset back from you at $20 while paying you a fund-management fee for your trouble. (Bank sells high, buys low; Hedge Fund collects a fee, and the taxpayer is screwed.)

The recent scrutiny of these 21,000 transactions is the first oversight the TALF program or any of the other alphabets has undergone, and those doing the scrutiny are appalled at what they’ve found – so far. We should listen to them. The TALF program offers enticing possibilities for bailout profiteers to double, triple or quadruple their investments on highly risky ventures, and if they go bad, the taxpayers absorb 90% of the loss.

Not convinced this is the greatest and most successful redistribution of wealth ever seen in this country?

Then, let’s take a look at yet another program guaranteed by the taxpayers, PPIP (Public-Private Investment Program.) This program encourages private investors to buy "toxic" or risky assets on the books of struggling banks. Doing so, we're told, will get banks lending again because the burdensome assets won't weigh them down. Unfortunately, the incentives the Treasury Department is offering to get private investors to participate are so generous that the government -- and, by extension, American taxpayers -- are left with all the downside.

Here’s how the Nobel Prize-winning economist Joseph Stiglitz described PPIP for the New York Times:

"Consider an asset that has a 50-50 chance of being worth either zero or $200 in a year's time. The average 'value' of the asset is $100. Ignoring interest, this is what the asset would sell for in a competitive market. It is what the asset is 'worth.' Under the plan by Treasury Secretary Timothy Geithner, the government would provide about 92 percent of the money to buy the asset but would stand to receive only 50 percent of any gains, and would absorb almost all of the losses. Some partnership!

"Assume that one of the public-private partnerships the Treasury has promised to create is willing to pay $150 for the asset. That's 50 percent more than its true value, and the bank is more than happy to sell. So the private partner puts up $12, and the government supplies the rest -- $12 in 'equity' plus $126 in the form of a guaranteed loan.

"If, in a year's time, it turns out that the true value of the asset is zero, the private partner loses the $12, and the government loses $138. If the true value is $200, the government and the private partner split the $74 that's left over after paying back the $126 loan. In that rosy scenario, the private partner more than triples his $12 investment. But the taxpayer, having risked $138, gains a mere $37."

Worse still, the PPIP can be easily manipulated for private gain, says economist Jeffrey Sachs.

“A bank with worthless toxic assets on its books could actually set up its own public-private fund to bid on those assets. Since no true bidder would pay for a worthless asset, the bank's public-private fund would win the bid, essentially using government money for the purchase. All the public-private fund would then have to do is quietly declare bankruptcy and disappear, leaving the bank to make off with the government money it received… Time will tell whether private investors actually take advantage of the program's flaws in this fashion.”

What does Wall Street have to say about the mechanics of all this, you wonder. When they stop rubbing their hands with glee at the possibilities, do they stop and ponder the risk of such high-leveraged, public-money guaranteed risky transactions?

"It beats any financing that the private sector could ever come up with," a Wall Street trader commented in a recent Fortune magazine story. "I almost want to say it is irresponsible."

To what extent is the American taxpaying public at risk? Impossible to estimate with any accuracy at this time, is the general consensus, but by examining the opinions of others out there, including those who have been actively involved, I’ve found quotes of from $6 trillion to $16 trillion in risk from both commitments and toxic assets as collateral. If we take the middle ground at $11 trillion…

Kind of makes a few million spent on junkies and welfare bums look like petty cash.

“They did it. Yes, there is a ‘they’: the captains of finance, their lobbyists, and allies among leading politicians of both parties, who together destroyed an American regulatory system that had been functioning splendidly. They got to rewrite the laws to enable their massive greed over everything from the tax codes to the sale of toxic derivatives over the past quarter century, smashing the American middle class and with it the nation’s experiment in democracy.” – The Great American Stickup by Robert Scheer

My point?

The people who arranged things in this manner are not stupid. They knew what they were doing and they know what they are doing. It is intentional. They have built not only a house of cards, but a leaning tower of cards that any good wind will blow away. And worse, it is the American people holding the bill to the tune of $44 trillion (or most likely more.)

In light of all this, the theater presented to us on the nightly news of self-serving wind-bags slicing off a million here, a billion there from the barely respiring body of the nation’s economy is more high comedy than political debate. But it passes for political process in this age of sloganism and propaganda, of choosing up sides (left or right,) donning our labels and speaking our roles instead of learning and thinking for ourselves.

Despite all the accusations aimed at this current administration of leaning too far to the left, the only socialism I see in practice is the collectivization of the financial risk and burden left on the public shoulders by short-sighted policies, poor decisions, and a complete abdication of the government’s responsibility to the people. (Yes, the people.) That’s their job and it says so in the constitution.

$44 + trillion. It beggars the imagination.

Standard and Poors can go ….. themselves. They were and are a part of the looting – which is not a thing of the past, and continues even now, just as fast as new acronyms can be thought up. They warn us to get our debt growth down to level that is “sustainable.” But there is no such thing.

No, the truth is that we have created an economic nightmare from which there simply is no escape under the current system. The national debt will never be repaid and the never ending spiral of debt and paper money that we have created is doomed to failure.

So what will happen someday when the current economic system does collapse?

That will be for the American people to decide. Hopefully they will learn from past mistakes and return to constitutional roots, including those warnings left in the writings of those that framed that document regarding central banks and deficits, and devise a financial system based on solid economic principles.

Every day, as though blithely ignorant of what is going on around them, people say things like, “I don’t want to pay taxes to support some junkie on welfare who never worked a day in his life.”

Personally, I don’t want to pay taxes to absolve financial institutions of the consequences of their bad decisions. I don’t want to pay taxes to line the pockets of profiteers who dream up new ways to redistribute wealth into their own pockets. I don’t want to pay taxes to underwrite money going to Behrain (of all places) to stabilize their banks’ liquidity. I don’t want to pay taxes for the likes of Christy Mack, wife of John Mack, CEO of Morgan Stanley and a woman with no previous business experience to get $220 million in TALF funds to play investor with her private offshore fund. I don’t want to pay taxes to become a shareholder in GM and then have my taxes go out in near-zero interest loans to their competitors. I don’t want to pay taxes to cover interest on borrowings at 3.5% only to have it loaned out to people who don’t need it at 0.25%.

I want to pay my taxes so that money may be spent in making this country a better place to live. (And nothing else!)

Where is Robin Hood when you need him?

More by this Author


Comments 91 comments

Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

This is a truly amazing piece of writing. I learned a great deal from reading this, and plan to read it several times to make certain I got it all. I only wish this could be made required reading for every citizen of this country.

At last, I understand.

Fantastic hub in my opinion.


Jeff Berndt profile image

Jeff Berndt 5 years ago from Southeast Michigan

Thanks for a very useful hub. This marks the second time I've clicked the "awesome" button, and I seem to recall the first time was also on one of your hubs.

Interestingly, the bailouts and TARP and so on were among the reasons the tea party originally formed. But the group was very quickly distracted and co-opted by the very folks who benefit from the byzantine money shuffling you've captured here.

Well done, Lynda.


resspenser profile image

resspenser 5 years ago from South Carolina

Mercy! That makes my head hurt. Is it too early in the morning to drink beer?


ocbill profile image

ocbill 5 years ago from hopefully somewhere peaceful and nice

Lots of good info. What about scenarios of the economy improving with real estate. Economists, pundits or whatever you call them say this will spur the economy and reduce the deficit. some of the best soothsayers from early 2000 said the housing bust would happen & expect a recovery in 2016. It might be too late by then with our inflated currency, no QE3, and states budget crises. The Land of Opportunity? Oh yes, and it helps more than ever to speak additional languages. I wish I knew what to short in the market?


Happyboomernurse profile image

Happyboomernurse 5 years ago from South Carolina

You've pulled a tremendous amount of documented and researched material together into one comprehensive article that helps people see what's really going on. We sense it in our gut, but you show how the wealth transfer is actually occurring. I've bookmarked this article cause it's simply too much to absorb in one reading.


Susie Writes profile image

Susie Writes 5 years ago from Northern California

VERY GOOD info Lynda! Voted up and shared on FB. Thank you for spending the time to research and write this all out.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Nice to see you Old Poolman. Thank you. I know I earned myself enmity among some by scoffing at their slogans and bleatings that ignored the reality of what was happening right before their eyes if they only cared to look and think for themselves. It also earned me the accusation of being of "the left." In truth, I am neither right nor left, not being a joiner and not the type to swallow propaganda at face value. On some issues I may lean left (such as my belief that a centralised single payer system for medical care would be far more efficient, economical and humane) and on others to the right (my financial and government beliefs.) I wish more people would lay down their self-applied political labels and study the situation, learn and make their own decisions with an open mind. The division of the population along political lines is, in my opinion, another intentional distraction to keep us from working together. Again, I thank you. To be told I have helped someone see and understand is a great compliment -- the best. Lynda

Thanks Jeff. Yours is a view I respect. You are another who doesn't follow the herd but thinks for himself and speaks his mind with clarity and logic. Yes, the original "liberty" movement of the early days of the Tea Party is gone and they have indeed been co-opted. Good point. Thanks again.

Hi resspenser. Never the wrong time for beer. But don't let the headache stop you from thinking about things. Thanks. Lynda

ocbill -- Thanks for reading and commenting though your point does make me wonder if you truly read this article. The economy will improve with real estate? How? I heard on the news the other night things were improving in Florida and I asked myself "Where?" It turned out the whole report was based on one suburb in the panhandle where real estate sales had increased due to the influx of military personnel who had been transferred there. Some recovery! Seeing as the salaries of the military are paid by the taxpayer... Come to Florida and let me show you around. Let me show you the houses that were worth $250,000 three years ago now being sold for $65,000. Let me show you the endless number of house sitting vacant, moldering in the humidity now worth zero. But all of this misses the point. No modest improvement of the economy is going to reduce the massive financial obligations and risk liabilities sitting on the shoulders of the public. Until that is addressed -- and I can see no solution beyond collapse -- there will be no recovery. The coming financial tsunami will swamp all our boats (though the yachts will probably ride high.) All that can be done is to postpone the reckoning. If we're lucky, we may postpone it long enough that we may die still believing in all the lies. Then it will be the next generation's problem.

Too late by 2016 when this mythical real estate recovery is to happen? My friend, it is already too late.

Hi happyboomernurse. Thank you. Yes, I think we all know in our guts things are not as we are being led to believe. We sense what is going on, and those in charge make sure we are too distracted by trivia, spectacle, false hopes, outright lies and infighting to think and figure it out. It requires an unaligned viewpoint to see the big picture. Thank you again.

Thanks, Susie Writes, for the vote and the like. Hope you found the information useful.


Quilligrapher profile image

Quilligrapher 5 years ago from New York

A magnificent achievement, Lynda! Bravo. Your powerful, concise, and utterly depressing delivery numbs my psyche and instills a sense of helplessness. We live in a country with an aging population, a shrinking work force, and no future. Once our nation is stripped of its wealth, the anonymous corporate titans of greed will find other nations to exploit. It is hard to imagine a remedy that is not fueled by desperation and steeped in violence. Q.


BkCreative profile image

BkCreative 5 years ago from Brooklyn, New York City

I can use this as a teaching tool for my students. The surprising thing is - they seem to understand this better than adults. Although it was an adult who made the observation that grown-ups like to believe the illusion that they too will become rich one day - so let's keep going as we have been.

I said to colleagues 30 years ago that the "good times" are in fact an illusion, and this cannot last - do the math - most Americans are disfranchised and always have been. Yet the 'haves' remained the gatekeepers spewing the usual sound bites "you people don't want to work" or "love it or leave" or "women are having babies to get on welfare" (wouldn't it be great if we lived in culture that provided childcare benefits, paid maternity leave, and healthcare - if not for the lazy no-good welfare seeking mother but for the child. Like the rest of the so-called industrialized civilized world - a basic human right but not here.)

What are my hopes Lynda? I expect President Obama to be in office for another term (we actually don't vote for President) - because he is keeping the country from totally crashing and burning and dragging down the rest of the world's economy. When my bank crashed a couple years ago it was one of the worst bank disasters in US history, but no one heard about it, because JP Morgan Chase was allowed to buy it immediately, otherwise millions of us would have taken to the streets and we can't have that- can't have the idiots actually see what is going on. After President Obama leaves office we will totally crash and burn and this is really the best America can do. It has always been borderline broke with most of the population being disfranchised - but now it is across the board. Let it crash and burn. It is a country built on the blood, free labor and now cheap labor of others - with us remaining the idiot consumers who will buy anything and still foolishly hope it will return to what it once was - and there lies the problem.

Your hub is better than anything written that I can find out there that I would be willing to share with others.

Rated up.


someonewhoknows profile image

someonewhoknows 5 years ago from south and west of canada,north of ohio

How long did it take you to write this Excellent "One of a kind"hubpage?

I would have entered it in one of the contests for best new hubpage..

Everyone reading this should send a link from it to all their friends and relatives ,community organizatons ,unions etc.. and ask them to send a message to their congressmen.to stop this theft of the taxpayer.


Charles James profile image

Charles James 5 years ago from Yorkshire, UK

I have rated up and "Awesome" because this is simply one of the best hubs I have seen on Hubpages.

I have also linked to it from my "Socialism 101" hub because anyone interested in how modern capitalism works should read it.

If you have time, it would be interesting to learn how many of the organisations funded by the US taxpayer do not pay significant or any US taxes on their resulting profits.


Amanda Severn profile image

Amanda Severn 5 years ago from UK

Lynda, this is astonishing. I'm going to have to re-read it several times just to be able to digest the sheer amount of detail and analysis you have put together here. Realistically, this is not actually news - I've known for some time that America was in deep, deep trouble financially. Half of Europe is in a similar position. But seeing the actual figures disected and analyzed is more than sobering. However did things get so bad?


Old Poolman profile image

Old Poolman 5 years ago from Rural Arizona

I just read this for the third time. This hub belongs in the hub pages hall of fame. It is probably the best hub I have ever read.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas

A truly sad state of affairs which, if true on the majority of counts, undermines the faith of every single American citizen regardless of political affiliation or philosphy. An action of such magnitude would constitute a conspiracy on a world scale level. Given the substance of it, even the most optimistic among us could not speculate on an America which could survive such financial bath. I have to question why Bernake is not sitting in front of a Congressional hearing this very minute explaining the actions in play at the Fed at the moment. Hell, even a stupid person with no knowledge of financial practices whatsoever would ever agree to such assinine, absurd, financial wrangling as described in your piece. This is a tragedy. This is also well presented...thank you for doing the research and sharing the information. WB


drbj profile image

drbj 5 years ago from south Florida

Thank you, Lynda, for this sad but true well-written summary of the state of the Union, so to speak, which is tragic and depressing.

And thank you for your unrelenting research in putting it all together. Voted UP.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thanks Quilligrapher for your kind comments. You are wrong about no future -- of course America has a future. It just won't be like the present -- which is perhaps a very good thing. Thanks again.

Hi BKCreative. Always nice to hear from you. Yes, could have beens, should have beens -- but things are as they are. As most of this plunder has taken place under President Obama's administration, I find it hard to give him credit for holding us together. I, for one, believe he has not done well for the American people but then he lost my respect with the health care debacle. Should he decide to do something about this mess, I may change my view of him. Right now, I see him as kind of a wishy-washy non-entity. Sorry if my opinion offends. So -- do you think the government should default instead of raising the debt ceiling? Isn't that what you said: crash and burn. That's how it will have to start -- or finish. Sooner or later, someone is going to have to say "It's enough." Why not now?

Hi someonewhoknows -- Thank you. How long have I been working on this hub? Oh the ideas have been formulating for quite a while now. Much of the research I already had from other projects, and the more research you do, the easier it is to find things.... So all in all, a week or two. Thanks again. Lynda

Hello Charles James. First let's understand the scenario described here is NOT capitalism. Capitalism does not include government manipulation of bank sales, guarantee of loans, highly leverage transactions back by the public. No, this is definitely not capitalism, but it IS what is happening here and now. Thanks for your comment.

Hi Amanda -- How did things get so bad? Easy. Each administration acted like today was everything and tomorrow nothing, using deficit budgeting and spending and putting off the day of reckoning... Well, I think that day is fast approaching. Don't you?

Thanks so much, Oldpoolman.

Hi Wayne Brown. Tell you what. If you have doubts this is all true then check it out for yourself. The information is easy to find. Why is BErnanke not sitting before a Congressional inquiry? Because the government is scared stiff of the bankers. He who pays the piper calls the tune -- is the appropriate proverb, I believe. Besides, doesn't President Obama need to raise a billion dollars for his campaign? Thanks so much for commenting and glad you enjoyed the article.

Hi drbj -- sad but true. And thanks so much. Lynda


Mr. Happy profile image

Mr. Happy 5 years ago from Toronto, Canada

Robin Hood's around. (lol) He's thinking ... so I hear.

I do think the Federal Reserve Bank (a fraudulent enterprise from its shady foundation, with a misleading name) has to go.

And we gotta do something about the "Market(s)", I sure don't like suffering when it is suffering - I have nothing to do with it, personally. I do not appreciate the way it intrudes in my life (and my news coverage).

Times are getting interesting ...

Cheers for another superb piece of writing Mrs. Lynda! All the best. (We need you.)


rkhyclak profile image

rkhyclak 5 years ago from Ohio

I'm speechless and more than a little disgusted. This was an amazing piece of writing. Thank you for putting so much into this. It lays our dismal situation out so that ANYONE can understand it. Tweeted and shared on FB. Thank you!


Christopher Price profile image

Christopher Price 5 years ago from Vermont, USA

Lynda-

Thank you very much for this comprehensive composition.

Although bits and pieces and fragments of this information are occasionally dropped, like breadcrumbs on the trail, by the perpetrators and the media, this is, by far, the best summary of this crime against the American people I have come across.

I noticed you quoted an aide to Vermont's Senator Bernie Sanders, and I find it most appropriate, since it was Sanders who has likened the Republican proposals for establishing a national budget as "Robin Hood in reverse", robbing from the poor to give to the rich".

The only silver lining I can see is...once America is relegated to 3rd world country status by greedy businessmen, corrupt politicians and incompetent regulators we will be able to reopen factories and produce goods for sale overseas in the Chinese-owned successor to Walmart.

Gung-ho!

CP


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thank you Mr. Happy I imagine things aren't so very different in Canada at this time, though perhaps not as blatant.. Lynda

rkhyclak Thank you for reading and commenting. Lynda

Christopher Price -- before you declare that a silver lining, perhaps you should go and read my hub, The cost of economic growth -- China a case study. Linked here: http://hubpages.com/education/The-Cost-of-Economic... You may decide that lining's not so shiny after all. Thanks for your thoughts. Lynda


Mr. Happy profile image

Mr. Happy 5 years ago from Toronto, Canada

lol @ Mr. Price ... you would like your kids to work in factories for roughly several pennies per hour with no safety, no breaks, etc.? How do you think prices are so cheap? Really ...

Someonewhoknows, Zionists beating and imprisoning Jews is nothing new: http://www.israelversusjudaism.org/how-to-help.cfm

Cheers.

Mrs. Lynda, things have always been different here yet, not really. Why is that? That frustrates me: this country has everything one can dream of ... why are so many people here living in miserable conditions with hardly any opportunities? Very upsetting.

All the best!


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Sorry Someone Who Knows, but I don't want all those links here, no offense intended. Why don't you write a hub on it and I will comment there. I'm writing about something that actually happened, is happening, not some conspiracy theory. In my opinion linking such things here only demeans this article which is based provable events. Please understand. And thanks anyway.

Hi Mr Happy -- I lived most of my life in Canada, and yes it's different. But the same kind of rip-offs go on and on and on there too (just smaller.) Why do some people have nothing in the midst of such riches? Because they have no political power, they are weak and disenfranchised. That's why. Thanks for commenting. Lynda


Christopher Price profile image

Christopher Price 5 years ago from Vermont, USA

Lynda (and Mr Happy)-

My "silver lining" comment was tongue-in-cheek...tragic/comic sarcasm...pseudo-optimism when faced with a doomsday scenario.

You know, this may be the only time the rats responsible for the sinking of the ship desert it by sailing away on their own yachts.

Yeah, more sarcasm.

CP


Mr. Happy profile image

Mr. Happy 5 years ago from Toronto, Canada

I see what you are saying Mr. Price. Yet, when Life is endangered and/or when any living thing suffers, I get quite serious and I will more often than not miss sarcasm. Thank you for your explanation though.


smcopywrite profile image

smcopywrite 5 years ago from all over the web

great hub. why am i paying interest on the national debt? is this paying interest to ourselves? why? i have already been taxed probably 5-6 different times on the same dollar before i pay it back to the government in income taxes. i get taxed on it when i receive it from my employer. medicare, fica, feds and state. i spend the dollar at the store and i get taxed again in my state. we have an income tax of 6%. i get taxed again when i do my taxes-they tax my gross amount. i get taxed on it if i put in my savings account and earn interest. if i withdraw it to pay my mortgage i get taxed on property taxes for my home. you can get taxed on the same dollar over and over again.would this count as redistribution of wealth?namely my wealth?


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

smcopywrite In a word -- yes. It is a redistribution of wealth, but interest on the national debt is not interest paid to yourself -- unless you're the holder of Treasury Bonds of course. Thanks for commenting. Lynda

Hi Christopher Price -- I got that, actually but just wanted to put in a plug for my hub. Lynda


JasonPLittleton profile image

JasonPLittleton 5 years ago

Nice wealth redistribution.


Hello, hello, profile image

Hello, hello, 5 years ago from London, UK

An absolute masterpiece. Congratulation and i am sure everybody agrees with you. Your are a marvel.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thanks Jason (I think -- not quite sure what you mean here.)

Hi Hello. Thank you so much. Lynda


Storytellersrus profile image

Storytellersrus 5 years ago from Stepping past clutter

Hey immartin, I agree with all the above comments. I voted up and awesome.

I have to reread this a couple times, but I was wondering why you didn't add in the value of Corporations when you were listing billionaires and millionaires zeroing out to help with the deficit? Their tax rate is lower, but if they paid what the rest of us pay, how much would it go down? Just wondering.

I have been thinking of this dilemma for a long time, as have many or shall I say most Americans, and I wonder what would happen if we as the lower level of society banded together and began to set policy, elect our own officials, live as if this upper echelon does not exist. I say that because these beyond upper class folk are hardly Americans anymore. They live in a global world, with homes in many countries around the world. Most don't care what happens to those beneath them; they hardly even see us. It reminds me of what happens when I walk through a group of teenagers; I become invisible. TO them, we are invisible and our problems don't matter; they will simply jet off somewhere else, where they live lives beyond our imaginings.

Here is just one quote on the subject; "During the period of imperialism, the main arena of class struggle was the struggle between the peoples of the earth and the imperialist powers. Under globalization, a new proletariat is emerging in the imperialist center, to join ranks with a proletariat in the former colonies - propertyless, with little or no permanent tie to the capitalist system."

BKCreative wrote, "it was an adult who made the observation that grown-ups like to believe the illusion that they too will become rich one day - so let's keep going as we have been." I recently realized this is why so many of my friends continue to vote Republican. They truly believe one day they will join these folk, who could care less about them.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Hi Storytellersrus, nice to see you again. Why not tax corporations same as income tax? Here's a few reasons I've heard. One: Out of their profits they pay dividends to their shareholders who (theoretically) do pay income tax. Two: Taxes as an operating expense will be recovered through pricing and passed on to the consumer. Three: Increased taxes make an area (state, country, whatever) less desirable to do business in, and the corporate entity will move to whichever area provides the most attractive situation. So: states compete with each other to attract business to relocate to their area, even to the point of paying them, in the form of tax credits and incentives, to do so. There are others, but I'm too tired to think of them all right now.

Does it matter? What are we really paying for when we pay our taxes. I love it when people say, I don't want to pay for bums to get paid for nothing. I don't want to pay for someone else's medical care -- and so on. Well, I don't want to pay for war. I don't want to pay to loan out borrowed money to billionaires, etc. etc. But nobody cares what I want. No more than I care what that fellow wants. We get what we get.

Why don't we (the poor people) form our own world and ignore the rich? Because they own our government. They will call it treason and send the army to crush us, but not before Fox News dubs us all communists and Bill O'Reily announces we don't understand American exceptionalism..... You get the picture.

No, when change comes it will be brutal, I'm afraid. And finally, yes you are right about people having this belief they will be one of the rich one day. So many people believe in the Great Fantasy, even while they struggle to get through another month, face old age with only Social Security and listen to politicians talk about doing away with that.... And still the country will be in debt to the tune of $44 trillion (or more.)

Would someone please explain how being in Iraq and Afghanistan is protecting American interests? Aren't American interests best served by caring for the American people -- but oh, that's out of fashion. That's the "nanny state," the "entitlement culture." Right, take away all the jobs and blame the people for being in need. Makes sense to me.

Thanks for commenting here. Lynda


THAT Mary Ann 5 years ago

It is a truly impressive Hub, clearly setting down some incredibly complex and thought-provoking questions. Thank you.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thank you Mary Ann.


Deborah Demander profile image

Deborah Demander 5 years ago from First Wyoming, then THE WORLD

Lynda, what a fantastic piece of work you have here. This should be required reading for all Americans, and particularly all politicians. Maybe we should hand it out at the voting booths. Superb work.

Namaste friend.


Mr. Happy profile image

Mr. Happy 5 years ago from Toronto, Canada

"Why don't we (the poor people) form our own world and ignore the rich? Because they own our government. They will call it treason and send the army to crush us, but not before Fox News dubs us all communists and Bill O'Reily announces we don't understand American exceptionalism....."

I think what you are describing here is already happening in Syria, Lybia and a few other places in the Arab world and the Middle East.

The lucky part I think is that the army which is usually sent to crush protests that get too large, is made-up of us. Therefore, when we decide enough is enough, no government or crooked band of politicians can stand a chance. Not all soldiers are willing to shoot their brothers, cousins, fathers, mothers and so on.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Hi Deborah, I'm pretty sure the politicians already know about it. But thanks for the compliment and glad you were startled? shocked? surprised? by the contents. Lynda

Hey Happy, Don't misunderstand. This is not a call to revolution or anything... Not my intent at all. Just an honest look at what is going on -- for once. I don't have a position. Just writing what I see. The above comment was made tongue in cheek and not to be taken seriously.

As for your idea the armed forces will aid those in revolt in certain parts of the world -- it depends. A lot of them are paid handsomely to protect the status quo and they shoulder arms against the people gladly believing in rewards to come. "Just following orders." Sound familiar?


Mr. Happy profile image

Mr. Happy 5 years ago from Toronto, Canada

No revolution here Mrs. Lynda - I am aware of that; I certainly do not see you as a militant person either. I understood that we were speaking in general terms.

"Just following orders" never works in the long run in my opinion because it simply is not an excuse.

All the best.


Wayne Brown profile image

Wayne Brown 5 years ago from Texas

Actually my comment was not an expression as to the credibility of your information, it was more like a prayer hoping that it was not so! Glad to comment and i will reinterate that you certainly did a nice job putting it together and communicating to everyone. Thanks much! WB


Docmo profile image

Docmo 5 years ago from UK

Astounding research - very well summarised and captured. The Economy always is a complex issue but you have underlined the sheer obfuscation that goes on in the higher echelons of power in order to justify wealth redistribution. I personally feel that the market forces have gone increasingly complex with the collusion between insurers, banks and hedge fund managers. Money itself has become a business rather than a method of transaction and you have very well captured the state of this. voted up/awesome!


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Hi Wayne Brown, Sorry to say it is so. Thanks.

Hi Docmo -- thanks for dropping by and commenting here. I imagine the same situation exists in the UK -- well of course it does. Thanks for commenting.


nicomp profile image

nicomp 5 years ago from Ohio, USA

Amazing and a great read. We should be teaching this in high school.

GM and Chrysler paying back their bailouts 'early' does tickle me. Evidently it's OK for the feds to pick winners (UAW) and losers (bond holders) as long as it all happens in the short term.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thanks nicomp. It's been a while. Thanks for commenting here and yes, apparently we've all been dealt a hand of marked cards.


JON EWALL profile image

JON EWALL 5 years ago from usa

lmmartin

A TERRIFIC HUB,a little long but loaded with a wealth of information.

Thanks, have a great day


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thank you, Jon. Some subjects simply can't be covered in a few paragraphs, which is unfortunate for those unable to sustain attention for longer than a few hundred words.


albertacowpoke profile image

albertacowpoke 5 years ago from Redwater, Alberta

This is a very interesting hub, which highlights the irresponsible spending by all legislators. Thanks for the reality check. Mos try to keep it to a simplistic point of view. You have broken it down though, in easy to understand sections.

Great hub.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thanks Albertacowpoke. Can always expect common sense above all from the prairie boys... Glad you enjoyed the read. Lynda


Hollertrek 5 years ago

I'm not sure where this total wealth of millionaires being 1.7 trillion comes from, but a recent study from Oxford University completed a study saying America's billionaires and millionairess have roughly 47 trillion in assets. Where's the disconnect?

JH


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

We are confusing assets with income -- simple. I am speaking of annual income only. That's the disconnect. Lynda


JON EWALL profile image

JON EWALL 5 years ago from usa

'' Aren't American interests best served by caring for the American people -- but oh, that's out of fashion. That's the "nanny state," the "entitlement culture." Right, take away all the jobs and blame the people for being in need.''

14 MILLION OUT OF WORK AND no tax dollars coming into the treasury. So raise taxes on the so called rich.The solution is for the people to get back to working again. Just wondering how many jobs union members have been given to them by union locals? The so called rich aren't hurting like the middle class and the poor.A living wage today looks like an unemployment check and/or food stamps or welfare payments.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

I agree with all you have to say, which is why I hold American interests are best served in caring for the American people and getting the country back to work is definitely the first step. This current fashion of blaming people for their misfortune is ugly, and we see so much of it in the media.

I don't think unions are the biggest problem -- far from it. Union busting is the goal these days, at least according the what I hear and see in the propaganda around me. I'm not surprised to see you write this here. You know, Jon, in the eighteen months or so you've been commenting on my hubs, I've noticed you always tend to repeat the latest messages of the media. Perhaps it's just coincidence, but I doubt it.

When we continually elect millionaires -- indeed the system is rigged so that only millionaires can be elected, should we be surprised when our government does not tend to the needs of the people but of the interests of the wealthy only. What do they know of working for a wage and stretching each dollar?


someonewhoknows profile image

someonewhoknows 5 years ago from south and west of canada,north of ohio

There must be a few millionaires who worked for their money and knew how to "Stretch" the dollars they paid out in every way possible.Including their employees,I would think.and I don't personally know any millionaires.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Yes, someonewhoknows, there must be a few millionaires who can relate to how the rest of us live and understand the problems, and I'm sure there's one or two honest politicians as well. And fairies and elves and .... Lynda

PS I do know a few millionaires.


JON EWALL profile image

JON EWALL 5 years ago from usa

lmmartin

How many people did they put to work spreading the wealth around ?


Springboard profile image

Springboard 5 years ago from Wisconsin

I'm going to agree with Mr. Poolman and simply reiterate that this is an amazing piece of writing. I very much enjoyed this. Although, admittedly the entirety of this piece does make me feel a bit ill. These are such staggering numbers it just boggles the mind to death.

I think key to the numbers getting better, aside from STOPPING SPENDING, which is the obvious part, is to get America back to work. And I'm not talking about just these crappy service jobs that don't offer pensions, don't offer good wages, and often times offer dismal other benefits like medical. AND NO, NO, NO...just want to be clear here that I'm not suggesting we get unions robust and firing on all cylinders again. That's not what we need at all. But we DO need to get our factories back. We DO need to shop locally more often than not and support small, local business more than the big boxes. We DO need to demand American made, and buy American made whenever it's possible to do so.

Because for me the whole tax thing and spending thing really is more about ending the NEED for all of these government services, and you do that by increasing your taxpayer base. Let's get that 51% figure to around more like 60%-70% of the American people paying taxes. How much money can we save on welfare programs I wonder? How much less might we have to rely on social security programs, and how much more money might go INTO the program IF better than 2/3rds of the population is actually paying into the system?

It's a real mess we're in. It's not even so simple as I've just stated to get out of it. But SOMETHING has to give here. Because I think every hard working, taxpaying American is taxed to the hilt as it is, and taxing more will, as you stated, do no good at all. It won't even scratch the surface. And taxing the rich, by the way, is the dumbest idea in the world considering they are the ones who create jobs. How many times have I said it that a tax on the rich is a tax on you and I, because all they do when their taxes go up is pass the cost on in the form of higher prices, reduced wages, reduced hiring, and reduced percentage of benefits they contribute to—such as in our healthcare benefits and 401k matches. Sort of a good example of shooting oneself in their own foot, no?


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

I agree with what you say here, Springboard. Definitely, buying American (or locally made for those outside of the US) should be a target for everyone, but when you bring it up in conversation the response is usually something like "I shop at Walmart 'cause where else can I get tee shirts for two bucks." Of course, a tee shirt that costs two bucks means someone got paid five cents to make it, but let's not look at reality.

I could take some exception with the idea it is the rich who create jobs -- studies and statistics suggest otherwise. Usually, it is the middle class who provide jobs -- but then I consider anyone making one million or below middle class, not wealthy. When wealth becomes concentrated in so few hands, as it has now, this is counterproductive. That segment of society that does create jobs and a healthy economy is being squeezed out of existence.

We need to support home-grown and that would be the best way -- no doubt. Thanks for a well-thought comment and nice to meet you. Lynda


albertacowpoke profile image

albertacowpoke 5 years ago from Redwater, Alberta

Immartin, you hit the nail on the head. Small business is what creates local jobs. The very wealthy hide their money offshore to hide it from the taxman or woman. Having read a few comments for this hub, it is apparent that the media, both on the left and right, has a major impact in forming people's opinions. Of course the media operates with its own agenda.

Politicians are owned by the very wealthy, who, for the most part, also own the media. No big surprise then.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

How very true, albertacowpoke. So many of us have lost the ability to think for ourselves, instead parroting what we are told. I find this idea of drawing up into teams and voicing the approved agenda without thought, without personal reflection so very tedious not to mention dangerous. What passes for freedom these days makes me laugh. Some of this propaganda is so blatant it amazes me that anyone can accept it!

It is possible to agree with some conservative ideas and some liberal ideas without swallowing the entire program. More importantly, it is an absolute necessity to see and think for yourself, otherwise we are nothing but pawns in the schemes of the powerful.


albertacowpoke profile image

albertacowpoke 5 years ago from Redwater, Alberta

With today's resources on the internet, it is relatively simple to inform yourself. There are economic models, precedence setting examples, etc. We all, of course, have our own bias, but we should be aware of them.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Unfortunately, the internet is also a hotbed of political rantings, ravings, and biases and just another battlefield of the ideologies. While some of us will read from both sides in the interest of actually learning, we are few. Facts and passed over in favor of prejudices. Sad, but so very true.


JON EWALL profile image

JON EWALL 5 years ago from usa

lmmartin

Right on target.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thanks Jon.


PrometheusKid profile image

PrometheusKid 5 years ago from Heaven

So you are telling me as Tax increased revenue for the state becomes larger and goverment grows. And if we do the opposite government shrinks.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

No, I'm not telling you that at all.


JON EWALL profile image

JON EWALL 5 years ago from usa

lmmartin

For instance visit whitehouse.gov. The info on that site tells a visitor of the great job our president is doing. Well if he did what he prints and says, the economy and jobs would be in high gear and the oil and gas would be flowing. The EPA is putting coal electric generating stations out of business with new regulations. A hub member told me to see President Obama’s 2012 budget on the site. The only thing that I found was a PIE CHART showing percentages of the budget, no money numbers. One should investigate the true facts and try to get by the propaganda.


PrometheusKid profile image

PrometheusKid 5 years ago from Heaven

hmmm but actually it makes sense how easy is to understand this world we live in.

More tax bigger government, lower taxes smaller government.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Yes, Jon. Certainly we need more transparency in govt spending. But let's be honest; isn't it ridiculous to demand the President fix the situation when he has very limited power and he is only one man? It isn't up to the President alone you know, but all of us to make things better. But that is an aside to the subject matter of this hub.

All that is but a spit in the ocean compared to the money bilked from the American taxpayer and handed over to the uber-rich in schemes that would make Machieveli (sp) proud. And to think we waste our time worrying about druggies on welfare and illegals getting health care when billions are changing hands in these "good old boy" transactions that go to feather offshore accounts and do not create jobs -- other than jobs for the accountants and lawyers who dream up new ways to hide it. The rich are far more adept at theft than the poor, you know. Or didn't you get any of what I've told you here?

And for your information, I would rather lose money than poison the air and water. I can live on very little being the fiscal conservative I am in my own life, but I can't live without decent air to breath or safe water to drink. As far as I'm concerned, make sure those coal plants are clean. If you want a look at what happens if they are not, read my hub on China. Want a link? Here:http://hubpages.com/education/The-Cost-of-Economic... You didn't comment there so I assume you missed it.


fetty profile image

fetty 5 years ago from South Jersey

A brilliant hub ! I also need to return to read , later. Your work is always amazing. Thanks for another fine read.


JON EWALL profile image

JON EWALL 5 years ago from usa

lmmartin

'' Usually, it is the middle class who provide jobs -- but then I consider anyone ''

The poor don't provide jobs. The middle class don't provide jobs to the poor and in most cases don't provide jobs to the middle class. The government is the #1 big business producing jobs in this recession. Money to run and pay for the government comes from people working paying taxes (13.9 million unemployed ), taxes from profits made by business ( who employ the workers )and taxes from the rich that have money to invest, sometimes in the government or their BUSINESS. If business don't make profit they close and people lose their jobs. Why do they close? Well, if more money goes out than money coming in, they go broke or go into debt, and then file for bankruptcy ( shafting the creditors). The US Government ( the people) is the largest employer who spends more money than it takes into the treasury, yet don't go out of business and is an exception to the rule. When more money comes in, that’s called a surplus. The government don’t get taxed on the surplus, THEY JUST SPEND IT.

''I would rather lose money than poison the air and water.'' When your money runs out someday, your world will change just like the 43,000 receiving food stamps, welfare checks, losing their houses, loss of values in their investment and because some industry providing the jobs are shut down because of the POSSIBLITIES of hurting the environment, air and water.

Truly, there is a time and place for everything in this world will live in.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Uh, PometheusKid -- history shows, less taxes more government borrowing.

Thank you, fetty. There's nothing I'd rather hear than I've provided food for though.

WTF, Jon? This is an article about the abuses of the bail-out funding, not the EPA, nor whether it is acceptable to trade the health of our planet for short-term profit, nor whether I will lose the house I've already paid for (which yes, has already devalued to a great extent thanks to the antics of the very people I'm writing about here.)

And why the aggression? You have this profound need to discuss everything but the subject matter at hand. Perhaps because it just doesn't fit with your pre-packaged, borrowed (and unexamined, I believe) rhetoric. Who is it you think you're talking too? Some uneducated earth child? I've run businesses, started businesses, given employment to others for years ...

This is tedious and much as I've attempted to share and debate with you, it's like talking to a recorded message.Go find a soap-box elsewhere. The forums perhaps? They like this kind of sh*t there.


JON EWALL profile image

JON EWALL 5 years ago from usa

lmmartin

OH MY, NASTY LADY, ANOTHER SIDE OF YOU WAS EXPOSED!

CHECK THIS FORUM OUT IF YOU DARE TO COMMENT?

JON EWALL: " What does SOCIAL JUSTICE mean in the world today?"


albertacowpoke profile image

albertacowpoke 5 years ago from Redwater, Alberta

What we need is a little bit of "Cowboy Logic". Instead of opposing sides talking points, take a realistic approach. Let's face it, he or she with the most campaign donations ends up being elected. That makes it simple. Every politician has a debt of gratitude to those that donated to his/her campaign. As such governing is done to take care of special interests and not necessarily for the good of the country.

That kinda explains why there are so many rich morons supposedly governing in the public interest.

They better do something about the debt though. It's not really endearing, when the IMF lists the US along with Spain, Ireland and Japan as those countries that need to do the most homework to solve their debt crisis.

While partisanship may be a good campaign stature, they better get into the compromise mode.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Hi Albertacowpoke -- I'm all for a realistic approach but did not write this article about this subject in order to provide ranting space for those off on their own mission and agenda. Heaven forbid we should let reality interfere with ideology!

I agree with your statement wholeheartedly -- let's get off our favored hobby horses and deal with REAL problems, and one of the most pressing is a by-product of the issues pouring out of the mouths of our politicians -- that we are rapidly destroying the very foundation we need -- the air, earth and water. As I suggested to Jon, take a look at the hub on China. For all their growth in industrial capacity, they are destroying their very land and the quality of life for the greatest number of people (not the wealthy) is deteriorating rapidly. The EPA is not to blame for the situation we now find ourselves attempting to solve, the financial plutocracy is, which this modest hub is attempting to highlight. The EPA is charged to ensure we do not follow China's self-destructive example.

The IMF may sit back and tell us we need to "fix" our finances, which is more than ironic considering their role in how we all got here. Their reaction to Greece, for example, should be a shining example of their attitude. "We don't care how poor your nation is, you owe us money. Squeeze your people harder. Pay!" Leave Greece for a moment and look at the poorest of third-world nations who struggle to hand over up to 80% of their meager GDP to make interest payments to that august body. Yes, the peasants must labor to fill the treasury of the kings. History does naught but repeat the same sad situation time and time again.

But what will posterity remember of us (assuming their is a posterity)? Will we be pitied for the number of unemployed, the food stamps, the foreclosures or reviled for the stinking toxic world we left behind? I suggest it will be the latter.

So yes, our leaders (such as they are) had better get into compromise mode and work to find a way out of this mess, but as they are all bought and paid for by those responsible for this debacle, it is unlikely it will be anything different than bleed the peasants even more.

Collapse is imminent, no doubt. But you can be sure when the tsunami of financial ruin hits and all the little boats are sunk, the luxury yachts will still ride high.

So quite frankly, Albertacowpoke, I don't think there are any real solutions beyond a complete change in our fundamental ideology, and that is more than unlikely.

But you can be sure, the people I am writing about in this hub will be grabbing up as many of the broken pieces as they can.


Quilligrapher profile image

Quilligrapher 5 years ago from New York


GrowingDown profile image

GrowingDown 5 years ago from South of the Mason Dixon Line

Since the issue of taxes is involved here, I feel it necessary to state the following.

BY ORDER OF THE SECRETARY OF THE TREASURY

TREASURY ORDER: 150-06

SUBJECT: Designation as Internal Revenue Service

CANCELLATION DATE: August 22, 2005

REASON FOR CANCELLATION: TO 150-06, dated July 9 1953. The entity formerly known as the Bureau of Internal Revenue would be known as the Internal Revenue Service. TO 150-06 is cancelled.

I suggest everyone figures out what this means.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Hi Quilligrapher -- a man of few words, I see.

Hi Growingdown -- Thanks for sharing. I'm not sure why it is shared, but thanks anyway. This comment is cancelled.


Dave Bottoms 5 years ago

Astonishingly complete post.

I'm putting this link on my FaceBook page, and elsewhere.

It was fun while it lasted, eh, Big Boys?

Hope y'all all got paid.

D


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

Thanks Dave. Feel free to post and link as much as you like. Thanks for commenting here. Lynda


PrometheusKid profile image

PrometheusKid 5 years ago from Heaven

Uh, PometheusKid -- history shows, less taxes more government borrowing.

Where do they borrow the money from?

The only reason someone would be in debt is owing someone money.


lmmartin profile image

lmmartin 5 years ago from Alberta and Florida Author

No kidding? Wow, debt means owing someone money. What a revelation!

Seriously, if you want to know who they borrow the money from, go to the hub Who Are America's Creditors.


Sharon Ellis. 4 years ago

I will point out that the Post Office, whether in Canada or the United States, receives no subsidies. The US post office owes money, but that's thanks to having to pre-funding the retirement and medical insurance for 75 years. A bit odd, don't you think?


lmmartin profile image

lmmartin 4 years ago from Alberta and Florida Author

Yes, I agree that's odd. I also find it odd that so far all austerity measures (which would not be needed except for this rape and pillage party I've described) are always on those services needed by the "common" folk. Extremely odd, don't you think?


JohnfrmCleveland profile image

JohnfrmCleveland 4 years ago from Cleveland, OH

lmmartin - I agree with 95% of what you say. But I urge you to take another look at money creation and government bonds - Modern Monetary Theory demonstrates clearly that those bonds are not debt, and a certain amount of fiat dollars can be created at no cost. The misconception that America is in tons of debt is the basis of so many of our political decisions... it's tragic. And those misguided decisions always land hardest on the poor.

John


lmmartin profile image

lmmartin 4 years ago from Alberta and Florida Author

John, of course bonds are debt. They must be paid off with interest at the appointed time, and fiat dollars do incur a cost -- each dollar represents its face value in debt, and the production of more dollars merely devalues those already in circulation. As we've already had this discussion on another hub, I decline to do so again. But hey, thanks for commenting and we can agree to disagree on the 5%.


JohnfrmCleveland profile image

JohnfrmCleveland 4 years ago from Cleveland, OH

I understand. It is a difficult thing to let go of an idea one has clung to for a long time.

John


lmmartin profile image

lmmartin 4 years ago from Alberta and Florida Author

Better than turning to an idea that makes no sense. Do you ever stop to think what you're saying? The government may sell bonds to citizens both national and international at an interest rate of 3% but "it's not a debt" and "fiat money can be generated whenever..." at no cost or consequence. It's not that I don't understand what you are flogging here, I do, but I dismiss it (as do most with an understanding of economics) as being one of the most destructive theories of our times. We are seeing the result of those who believe money can just be generated out of thin air, and spent with no regard to future repercussions. And quite frankly, I am tired of your insistence I need to educate myself on these ideas. I have. I've rejected them as being unsound and if you stopped to think about it (hopefully using critical thinking) you would see the inherent flaws therein.

Many, many, many well educated, intelligent people do not agree with your beloved theories, including some of the leading economists of our times. Indeed, I would say it is you who is blinker-sighted.

Now, please stop insulting my intelligence by insisting I simply don't understand. My disagreement with you is not based on ignorance. Thank you.


forbcrin profile image

forbcrin 3 years ago from Michigan

The magician never performs miracles. The magician only catches your eye in one direction, to perform the tricks where no one looks...

It's been done since the beginning of time. As long as we don't refuse to accept the old ways, looking for new ones, we would always be trapped into this destructive game...

You got the picture of what's going on, but what would be the way out of the mess?

I don't really believe that humans are happy if they lived in a rational world!


lmmartin profile image

lmmartin 3 years ago from Alberta and Florida Author

"I don't really believe that humans are happy if they lived in a rational world!"

You believe that humans are happiest living in a world of smoke and mirrors? Being deceived, cheated, used? Kept in ignorance in order to serve the master of the day?


forbcrin profile image

forbcrin 3 years ago from Michigan

What I believe is irrelevant, I am just stating facts...


lmmartin profile image

lmmartin 3 years ago from Alberta and Florida Author

No, you're stating opinion -- and I'm glad to hear your opinion. But let's not confuse it with fact. I think people are just too complacent, kind of lazy and far too trusting. They believe and don't want their beliefs challenged.


forbcrin profile image

forbcrin 3 years ago from Michigan

I hope you are kidding me, because if you don't, I wonder your grasp of Semantics, and Logic.

Anyone who is "complacent, kind of too lazy and far too trusting" is a person who likes the status quo, unless is a total idiot who can't use his or her brains to understand the reality...

And by the way, are the pictures you are using yours? I thought that Hub Pages does not agree with copyrights violations, and so far, not using proper credit, you are an offender...


lmmartin profile image

lmmartin 3 years ago from Alberta and Florida Author

You note I used the words "I believe" or "I think" before describing what that might be. My belief does not make a fact and this I acknowledge by opening with that phrase. Try it sometime. If I have something to present as fact, you'll know the difference.

This article is over two years old. At that time, requirements were not as stringent as they are today. Pictures used here are either in the public domain or are licensed. I often used bigstockphotos, among others. But, as I very rarely write for this site any longer these days, I haven't gone back and figured out what came from where. Nor do I intend to. Howver, I'll be happy to take the photos down if necessary, or even remove my content entirely, if Hub Pages so requests.

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