Is It the Lack of Simple Math Skills That Grows America's Debt?

Congress has been refusing to act on paying down the debt. A year ago I was not terribly concerned about this because even in my wildest imagination did I think they would let it continue to grow.
The housing crisis and bad economy did not just happen, they were created. In 2003 I began warning people about the outrageous mortgages that banks were manipulating people into. I spent 6 years getting those that would listen out of them. I worked with a financial company in an attempt to prevent the housing bubble and economic collapse. We made a heck of a difference and the company still does but too many people believe political rhetoric and the media.
The reason the temporary (Bush) tax cuts went into effect in 2001 and 2003 was because the government was trying to prevent what was about to come from being catastrophic.
The cuts of 2001 were put into play with the "Economic Growth and Tax Relief Reconciliation Act of 2001" and in 2003 with the "Jobs and Growth Tax Relief Reconciliation Act of 2003". Because they knew we were headed for a recession, they attempted to stimulate the economy by temporarily putting more money into the hands of middle-Americans yet created the debt by decreasing revenue from those that could afford to pay and creating loopholes and credits for already profitable corporations. To make up the difference, they borrowed. The country jumped for joy because taxes were cut but neglected to view the whole picture.
Everyone has been aware that baby boomers, our largest generation, are aging becoming a high cost to Medicare and Social Security. Both of which they are entitled to after paying in throughout their careers.
9/11 happened in 2001, war was on the horizon and we went into Iraq in 2003. We launched military operations in Afghanistan in October of 2001.
Knowing that government spending would be extremely high to fund these 2 wars and and we would now have to pay back the baby boomers for their contributions, taxes were cut 2 times for all - including America's wealthiest citizens Tax payer dollars were directed to subsidize America's already profitable corporations. This increased already high profits of those making billions of net dollars. What sense did that make?
When you increase your costs would you decrease your income? Of course not! Yet this is what our Federal Government did and some current Members of Congress force it to stay this way.

Mortgages were not sold to people that could not afford them. The terms were set so that the mortgages would implode making them unaffordable in time. The banks are insured from losses on these. Salt in the wounds; consumers pay the insurance premium to protect the banks (MIP, PMI). The banks temporarily lose funds during the period that people are in the homes, not paying and continue through the foreclosure process. After re-selling the home and showing their over-all profit loss, banks collect their insurance payout. The payout is based on the homes value at the time of the original mortgage - when house values were high. The bank still owns the property and enters into a new mortgage contract with buyers making new profit at today's lower values.
During the time that banks had knowingly temporary losses, the bailout was created. This was necessary at the time for the good of the people dependent on banks. Originally it was going to be a gift to banks from the American people that banks had taken advantage of but Senator Obama convinced Congress to make it a loan benefiting tax payers in the long run.
The banks and the government (who repealed protective laws to make it possible) worked together in taking our homes, crashing our economy and giving our hard earned money to corporations including oil companies and purposely putting the federal government into deep debt.
Next steps, get the country angry about the high debt and blame the middle-class, the poor and the millions of Americans that stand together for employee protection; Labor Unions.


By frightening citizens with America's debt, giving the false impression that the millions of Americans that stand together for employee protections are "thugs" and pushing other false fears, the rich will continue to get richer and wages for most Americans may decline after years of being stagnant.

Historically, Americans have united to establish laws and Government Departments to prevent the greed of a few from destroying our great country. Millions of Americans, (citizens are our Nations true Government as long as we insist on it) created the Department of Labor, OSHA, minimum wage laws, and many, many others. These are frequently under attack by certain politicians and are always fought for by many citizens organized together as a labor force.
If big money can convince enough Americans that the areas that protect the middle class have created an unnecessary "big government", the people will lose all control and big money wins. The fight of our ancestors will be lost and we begin again. I joined that fight before it's too late. We are making progress and I am confident but it is an uphill battle.

Click here for information from Americans that ending the temporary tax cuts for millionaires would directly affect

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The Donald allows a Tour of His 757

Very nice!! Thanks for the tour! My questions to Mr. Trump;
1) Did you use the "accelerated depreciation" allowed by the Stimulus Package to write this off of your taxes or no?
2) Would you have made this purchase if this tax break had not been available or would you have gone out of business?

3) President Obama wants to end this tax break that was meant to be temporary. Is this a reason for your disliking him?

Thanks,
An American Tax payer.
BTW - If your answer to question #1 is yes, your welcome!
Love,
The Diminishing Middle Class

MN Budget; Where is the Leadership?

Minnesota Government is shut down.
There has been a difference of opinion as to how to adjust to make up for the $6.2 billion budget shortage. In February, Minnesota's Management and Budget office,  declared  that the projected state deficit had fallen to $5 billion from $6.2 billion.

Not only that, but the state will end its current fiscal year in June with a $663 million surplus instead of a projected $400 million, because Dayton accessed federal money tagged for health care expenses for poor adults - money that Tim Pawlenty refused.
Let's keep in mind that less than 1/3 of states pay more into the Federal Government than they take back. MN has been one of these "Donor" states at least as far back as 1977. This does not necessarily mean we financially support the country, states have different resources that need Federal funding. Although the Federal Government needs more money right now, is it wrong for us to take a little more to shape up our state after so many years of MN donating to other states? Can other states contribute more, at least for a while? We are one of the highest taxed states.


Following suit with the rest of the nation but not hit as hard as most other states;

23,000 jobs were lost in MN in the last 6 months of 2007
55,000 jobs lost in 2008.  

75,000 lost in 2009, bottoming out September 2009.

September 2009 thru November 2010, MN jobs grew by 40,700 and have been slowly increasing since.
When thousands of people no longer pay taxes because of income loss, the state loses revenue. Former Governor Pawlenty, during time of a recession and after, made billions of dollars in cuts to health and human services, local governments, job programs and put higher education back to 2006 levels. He also put into process the states very high corporate tax to begin declining bringing it from a flat 9.8% down to 4.8% in a six year period. He believes in low Corporate taxes and low taxes for top incomes. The fuel excise tax was increased by .005 twice in 2008 then set to increase annually. The MN property tax  increases averaged 5.3%  during 2007 through 2009 and 2.6% in 2010. 


We run into some difficulties here.  With many more unemployed, not of their own accord, but because of lack of jobs we have more hungry and people without. Services were being cut as the number of people in need increased. The Federal Stimulus included extensions of unemployment insurance payments which helped laid off workers make ends meet and continue to purchase necessities which continued to provide sales for businesses. 
The "foreclosure boom" that began in 2006 has caused property values to decline and many owe more on their mortgages than the homes are worth. Rather than property taxes declining with the values, taxes have increased.
Although property and excise  tax increases distribute tax burdens, some individuals and businesses that have been struggling in this economy have complained of the increased costs.
As we slowly recover from the deep recession of 2007, can we afford to go from one of the highest corporate tax states to one of the lowest?

MN has a diverse economy. The relative outputs of our business sectors closely match the US as a whole. 33 of the top 100 US publicly traded companies (by revenue in 2008) are headquartered here, including the largest privately held corporation in the US, Cargill.We are farmers, laborers, minors, business owners, executives. We have been historically successful and have a humble pride in working together and have a strong work ethic. Even in the Nations difficult times we maintain one of the lowest unemployment rates.

Politically, we historically vote for a Democrat as President. In the last 32 years, we have chosen Republican Governor's in 20 of these years, Independent for 4, Democrat for 8 and most recently chose Mark Dayton (D), the great-grandson of the founder of MN Dayton's Corporation the original parent company of Target which is still headquartered in Mpls.

Most Minnesotans don't judge people differently based on whether the person rides in a limousine or a green school bus. We look for integrity and for people we feel we can trust.
When the going gets tough we get going. We pull together.

The last decade we have seen a change. We have seen political party wars that we are not accustomed to. We have seen division in our elected leadership. In 2009, our DFL held a leadership summit that included 2 of our respected former Governor's, Al Quie and Arnie Carlson both Republicans. Rather than utilize the advice and experience of these people that have provided what MN wants, our GOP scheduled a different meeting at the same time with MN business owners, discluding our DFL. How did we respond to this? We elected Mark Dayton to have the final say over the decisions of our elected lawmakers. We want our officials to work together to provide us with the best.

‎Governor Dayton announced in February 2011 that he would only accept a balanced budget that includes responsible cuts and responsible revenue increases. He was clear as to what he would approve and what he would veto. Instead of working numbers out, our House and Senate continuously submit proposals that are outside of our Governor's direction and leave shortages of over $1 billion. Is it impossible to devise ways to be responsible in both areas?


MN nice = smile, be respectful and courteous, work hard and harder as times dictate, never forget; especially when it comes time to vote.

Question: The last compromise Governor Dayton proposed was to raise income taxes on incomes of $1,000,000. If he is still talking the rate he was in March, which I'm not sure if that has changed, instead of taking home $17,721 a week, they would take home $17,125 a week. That is a big difference. Do you think it is wrong to place such a large % of the burden on these few or do you think they should do it temporarily until we recover?

Congressional Budget Office 6/2011 and Budgets, Decisions, Decisions

What does the CBO say about the Nations budget?

They project the federal debt to reach roughly 70 percent of gross domestic product. The sharp rise in debt stems partly from lower tax revenues and higher federal spending related to the recent severe recession. However, the growing debt also reflects an imbalance between spending and revenues that predated the recession." The retirement of the baby-boom generation portends a significant and sustained increase in the costs of Social Security, Medicare, and Medicaid to rise from 10% of the GDP to 15%.

If current laws are kept in place, meaning that Medicare’s payment rates for physicians will decline by about a third, tax cuts enacted in 2001 and extended in 2010 are allowed to expire (2021), the growing reach of the alternative minimum tax, the tax provisions of the recent health care legislation, and the way in which the tax system interacts with economic growth - revenues would grow to be much higher than typically seen in recent decades reaching 23% by 2035 and still growing. Activities such as national defense and a wide variety of domestic programs would decline to the lowest percentage of GDP since before World War II. These revenues would offset almost all of the rising costs attributed to aging boomers. Debt and the interest accumulated would slowly rise from 69% of the GDP to 84% by 2035.

There are "several changes to current law that are widely expected to occur or that would modify some provisions of law that might be difficult to sustain for a long period." These include; further extension of tax cuts enacted in 2001 and extended in 2010, "the reach of the alternative minimum tax being restrained to stay close to its historical extent; and that over the longer run, tax law will evolve further so that revenues remain near their historical average of 18 percent of GDP. This scenario also incorporates assumptions that Medicare’s payment rates for physicians will remain at current levels", and that some policies enacted in the March 2010 health care legislation to restrain growth in federal health care spending will not continue in effect after 2021. If these changes are made, the significantly lower revenues and higher outlays will cause federal debt to grow much more rapidly, exceeding 100% of GDP by 2021, 109% by 2023 and approach 190% by 2035.

"To keep deficits and debt from climbing to unsustainable levels, policymakers will need to increase revenues substantially as a percentage of GDP, decrease spending significantly from projected levels, or adopt some combination of those two approaches. Making such changes while economic activity and employment remain well below their potential levels would probably slow the economic recovery. However, the sooner that medium- and long-term changes to tax and spending policies are agreed on, and the sooner they are carried out once the economy recovers, the smaller will be the damage to the economy from growing federal debt. Earlier action would permit smaller or more gradual changes and would give people more time to adjust to them, but it would require more sacrifices sooner from current older workers and retirees for the benefit of younger workers and future generations." Please see attached full report

The causes of these problems were attributed to a combination of; baby-boomers aging, what has come to be known as "The Bush Bailout" and "Obama's Stimulus Package" as well as growing interest on these debts and budget imbalance prior to 2007.

Several states have experienced budget deficits. States received Federal monies from the stimulus and, unfortunately, did not plan for future revenues to cover existing costs. Federal and States are deciding how to raise revenues. Someone will be paying more taxes. Will it be the wealthiest, middle-America, the poorest or a combination?

In Wisconsin, Governor Walker understands that revenue must be increased but is afraid that raising taxes on the wealthiest and/or profitable companies will scare business away from the state. He chose to increase revenue by raising taxes on those earning under $24,680 that do not receive public assistance and working families that qualify for the Federal Earned Income Credit.

Minnesota is at a standstill. The Governor wants to reinstate some higher taxes on the wealthiest and profitable companies but refuses to raise taxes on the poor and middle-class. The Senate and House Majorities, similar to WI, refuse to raise taxes on the wealthiest and profitable companies and insist on raising taxes on the poor and middle class. If they don't make a decision by Thursday, the state will, as it did under Former Governor Pawlenty, experience a costly shut-down.

These same National Debates continue. Who will pay higher taxes?