SYNDICATED COLUMN: Thrifty Families and Other Lies

Like Their Government, Americans Live on Debt

his State of the Union address President Obama repeated this ancient canard: “We have to confront the fact that our government spends more than it takes in,” he said. “That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same.”

Republicans have used this “families balance their budgets, so should government” line for years. Now Democrats are doing it too. Everyone is jumping aboard the pseudo-austerity bandwagon. (Why pseudo? Neither party really wants to balance the federal budget because it can only be done by bringing home the troops, shrinking the Pentagon by 90 percent, ending corporate welfare, and soaking the rich—i.e. major campaign donors—with higher taxes.)

The family budget talking point is a fascinating meme that reflects a rarely considered national blind spot. As with other cases of mass denial (we think we’re generous do-gooders around the world, foreigners see us for the crazy mean torturers we also are), we give ourselves more credit than we deserve.

We Americans value thrift and personal responsibility. We believe we should live within our means. These cultural ideals stem from our Puritan history.

But we don’t live up to our ideals. Not even close.

Americans are up to the ears in debt.

Four out of five individuals have at least one credit card. The average family has an outstanding balance of $10,700. It spends 21 percent of its monthly income to pay interest on that balance.

The average American family has assets: It owns a house worth $160,000. But it owes $95,000 to the bank. As the housing market continues to crash, equity shrinks.

Our average family’s savings are virtually nonexistent: $3,800 in the bank, no retirement account whatsoever (for half of families, average retirement savings $35,000 for the other half), no mutual funds, no stocks, no bonds.

The claim that American families live within their means is a joke.

To be fair, it’s not entirely their fault. The typical American family only earns $43,000. It’s hard to buy much of anything, much less the house that embodies the American Dream, with that. And it’s impossible to save.

So they/we borrow.

As grim as a life of indebted servitude may seem, imagine what the American economy would look like if families really did live within their means, spending no more than they earned. No debt. No credit.

Markets for big-ticket items—homes, automobiles, major appliances—would crash and burn. Countless businesses would go under.

According to the National Association of Realtors 23 percent of homebuyers paid cash in January. That’s more than ever before but that still leaves at least 77 percent relying on mortgage financing. (Why “at least”? Most “cash” transactions include money borrowed from banks and credit unions.) Take 77 percent of purchasers out of the buy side of the equation and million-dollar homes would be worth five figures.

Pop! Credit is the biggest bubble of all.

If credit went away, most Americans’ biggest asset would vanish. Everyone would be “under water” to their lenders. The burbs would soon look like Afghanistan.

The same goes for cars: At least 88 percent of buyers take out a loan.

What would happen if these buyers had to save actual cash money before they could hit the showroom? They wouldn’t buy a car. Air would get cleaner but the economic collapse that began in 2008, which has put one out of five Americans out of work, would accelerate dramatically.

Two-thirds of the U.S. economy directly relies on consumer spending. People can only purchase goods and services using one of three sources: income, savings or credit. As we’ve seen, the average American family doesn’t have savings. Its income has been falling since 1968.

That leaves credit. If consumer credit vanished, the corporato-capitalist system currently prevailing in the U.S. would deteriorate from its current, merely unsustainable form into total chaos. Without credit cards and other loans citizens would seethe, trapped between the mutually irreconcilable forces of falling wages and the aggressive advertising and marketing of products they would never be able to afford. There would only be two possible long-term outcomes: revolution, or the ruling classes would be forced to pay substantially higher wages to workers. To corporate elites, the latter choice would be too unpalatable to countenance.

The typical American family cannot live within its means because it cannot earn enough to sustain its lifestyle. Were it to downgrade its living standards to a level it could afford, there wouldn’t be enough consumer spending to drive the economy. This would force further personal austerity. Eventually we’d all be living outside.

You know what’s funny? Unlike the American family, the U.S. government can spend less than it earns. It can increase revenues by raising taxes. Unlike families, it spends trillions of dollars on stuff—wars—that it doesn’t need and actually makes things worse.

It could even use its power to force employers to pay workers what they deserve. If the government did that, families might not need credit.

They could (finally) live within their means.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL

SYNDICATED COLUMN: Stamped Out

The Statue of Liberty Stamp Error and the End of America

It may seem like a minor thing. Objectively it is a minor thing. But the Great Statue of Liberty Stamp Screw-up of 2011 presents a picture-perfect portrait of a society in the midst of collapse.

You can tell a lot about the state of a country from its stamps and its currency. At a nation’s peak its graphic iconography tends to be striking, elegant and original. As it begins to wane abstraction gives way to self-caricature, innovative design to self-parody, high art to kitsch.

Look at U.S. stamps and paper money from 100 or 50 or even 30 years ago and you’ll see my point. Quarters were nearly sterling silver; now they’re mystery metal (nickel-copper-zinc alloy).

America: we’re not what we used to be.

A century ago President Theodore Roosevelt commissioned the famous Beaux Art sculptor Augustus Saint-Gaudens to redesign the nation’s coinage. Among the results were Saint-Gaudens’ breathtaking $20 gold “double eagle”; numismatists consider it one of the most elegant coins of the 20th century.

How the mighty have fallen! According to U.S. Mint officials recent revamps of the $100, $50, $20, $10 and $5 bills were undertaken without the slightest consideration for aesthetics. They didn’t even consult an art director. Stymieing counterfeiters was the sole concern.

Now the U.S. Postal Service has issued its newest first-class “forever” stamp. As the most widely used denomination, a new forever is a big deal.

The new stamp features a photo of the head of the Statue of Liberty. Well…not exactly. Instead of the Statue of Liberty paid for by coins donated by French schoolchildren, the proud iconic figure which has greeted millions of immigrants to New York, the stamp bears the visage of the small replica which stands in front of the New York-New York casino in Las Vegas.

Mistakes happen. As every philatelist knows, another error—the 1918 “Jenny Invert,” which features an image of an upside-down airplane—is one of the most prized collectibles in philately because Post Office officials destroyed all but one sheet of the 100 stamps.

That’s the usual response to a catastrophe in stampdom. Ten years ago Postal Service recalled and destroyed the entire run of a stamp that wrongly placed the Grand Canyon in Colorado.

But that was before the economic collapse that began in 2008. The Postal Service is broke. Quality standards? Can’t afford them. Incredibly, postal officials are allowing this monstrosity, this bastard creation, this artistic obscenity—the face is clearly the wrong one—to be sold at your local post office.

“We still love the stamp design and would have selected this photograph anyway,” USPS spokesman Roy Betts told The New York Times.

Uh-huh.

“The [postal] service selected the image from a photography service, and issued rolls of the stamp bearing the image in December,” reported the newspaper. “This month, it issued a sheet of 18 Lady Liberty and flag stamps. Information accompanying the original release of the stamp included a bit of history on the real Statue of Liberty. Las Vegas was never mentioned.”

It’s bad enough that they use photographs. Stamps should be engraved. Engraved stamps look classier and more substantial.

But whether they are using an engraver, illustrator or photographer, a U.S. stamp ought to be a big gig. For an assignment such as this I would expect the USPS to hire a professional and pay huge money—six-figures huge. It’s a stamp, for Chrissake.

Nope. The U.S. Postal Service buys stock photos. For stamp design. That’s right—the same cheesy clipart you can download for your kid’s birthday party invitation.

Insane.

In and of itself, this is no big deal. These are lean times. Austerity abounds. Why not save a few bucks?

It matters because symbolism matters. The kind of country that puts stock photos on its stamps is the kind of country that puts a single air traffic controller in charge of one of its biggest airports. The kind of country that doesn’t fix its mistakes is the kind that tells people under the age of 55 that they can go to hell and die when they get old and sick because it’s more important to cut taxes for rich scum than to fund Medicare.

As for the symbolism of a phony Statue of Liberty that stands in front of a casino in the nation’s gambling capital—well, that’s obvious.

It would be fine if the money being saved by printing crappy stamps went to new textbooks in inner-city schools. But it doesn’t. It goes to Halliburton and Bill Gates. Now that American workers have been hung out to dry, robbed and fleeced, wrung out and burned out, the government and its associated agencies (the USPS is quasi-governmental) have turned on themselves in service to the 21st century robber barons.

Don’t get mad about the stamps. Get mad at what they mean.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL

Asleep at the Switch

Only one air traffic controller was assigned to run the tower at National Airport in Washington DC–and he fell asleep.

Die Union Scum

After 9/11 conservatives loved firefighters. Now they’re bashing unions…which includes firefighters.

SYNDICATED COLUMN: The Phony Budget Crisis

Forget Austerity. Tax the Rich.

Everywhere you look, from the federal government to the states to your hometown, budget crises abound. Services are being slashed. Politicians and pundits from both parties tell us that the good times are over, that we’ve got to start living within our means.

It’s a lie.

Two case studies have made news lately: California, where new/old governor Jerry Brown is trying to close a $25 billion shortfall with a combination of draconian cuts in public services and a series of regressive tax increases, and Wisconsin, where right-winger Scott Walker says getting rid of unions would eliminate the state’s $137 million deficit.

Never mind the economists, most of whom say an economic death spiral is exactly the worst possible time for government to cut spending. Pro-austerity propaganda has won the day with the American public. A new Rasmussen poll funds that 58 percent of likely voters would approve of a shutdown until Democrats and Republicans can agree on what spending to cut.

The budget “crisis” is a phony construction, the result of right-wing “starve the beast” ideology. There is plenty of money out there—but the pols don’t want it.

There is no need to lay off a single teacher, close a single library for an extra hour, or raise a single fee by one red cent.

Every government can not only balance its budget, but wind up with a surplus.

The solution is simple: tax the rich.

Over the last 50 years tax rates for the bottom 80 percent of wage earners have remained almost static. Meanwhile the rich have received tax cut after tax cut after tax cut. For example, the rate paid by the top 0.01 percent—people who currently get more than $6.5 million a year—fell by half (from 70 to 35 percent).

Times are tough. Someone has to pay. Why not start with those who can most afford it?

Europe has the world’s best food, its best healthcare system and its best vacation policy. It also has one of the fairest ways to generate revenue for government: a wealth tax. In Norway, for example, you pay one percent of your net worth in addition to income tax.

What if we imposed a Norwegian-style wealth tax on the top one percent of U.S. households? We’re not talking upper middle class here: the poorest among them is worth a mere $8.3 million. This top one percent owns 35 percent of all wealth in the United States.

“Such a wealth tax…would raise $191.1 billion each year (one percent of $19.1 trillion), a significant attack on the deficit,” Leon Friedman writes in The Nation. “If we extended the tax to the top 5 percent, we could raise $338.5 billion a year (one percent of 62 percent of $54.6 trillion).”

But that’s just the beginning. Wealthy individuals are nothing next to America’s money-sucking corporations.

Business shills whine that America’s corporate tax rate—35 percent—is one of the world’s highest. But that’s pure theory. Our real corporate rate—the rate companies actually pay after taking advantages of loopholes and deductions—is among the world’s lowest. According to The New York Times, Boeing paid a total tax rate of 4.5 percent over the last five years. (This includes federal, state, local and foreign taxes.) Yahoo paid seven percent. GE paid 14.3 percent. Southwest Airlines paid 6.3 percent. “GE is so good at avoiding taxes that some people consider its tax department to be the best in the world, even better than any law firm’s,” reports the Times‘ David Leonhardt. “One common strategy is maximizing the amount of profit that is officially earned in countries with low tax rates.”

America’s low effective corporate tax rates have left big business swimming in cash while the country goes bust. As of March 2010 non-financial corporations in the U.S. had $26.2 trillion in assets. Seven percent of that was in cash.

The national debt is $14.1 trillion.

Which is a lot. And, you see, entirely by choice.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL

SYNDICATED COLUMN: Hope and Change? Not for Americans

Turmoil from Mideast to Midwest

If irony were money we’d be rich.

“You’ve got to get out ahead of change,” President Obama lectured a week ago. “You can’t be behind the curve.” He was, of course, referring to the Middle East. During the last few weeks there has been a new popular uprising every few days: Tunisia, Egypt, Yemen, Jordan, Bahrain, Libya.

And now, Wisconsin.

In Madison, where a new Republican governor wants to gut the rights of state workers to form unions and negotiate for higher wages, tens of thousands of protesters have filled the streets and sat in the State Capitol for days. “It’s like Cairo has moved to Madison these days,” said Congressman Paul Ryan (R-WI).

Revolutionary foment is on the march around the globe, but Mr. Hopey Changey is nowhere to be found now that it’s here in the U.S. Whatever happened to “get ahead of change?” What’s good for the Hosni isn’t good for the Barry.

Deploying his customary technocratic aloofness in the service of the usual screw-the-workers narrative, President Obama sided with the union-busters: “Everybody has to make some adjustments to the new fiscal realities,” he scolds.

“Everybody,” naturally, does not include ultrarich dudes like our multi-millionaire president. Obama, who declared a whopping $5.5 million in annual income for 2009 (the last year available), has neither reduced his salary nor donated a penny of his $7.7 million fortune to the Treasury to help adjust to those “new fiscal realities.”

Hard times, doncha know, are for the little people. “We had to [my italics] impose a freeze on pay increases for federal workers in the next two years as part of my overall budget freeze,” said Obama. “I think those kinds of adjustments are the right thing to do [in Wisconsin].”

“Had to.” Interesting pair of words. They imply that there was no other choice. What a brazen lie.

Three more words: Tax. The. Rich. Rich people and corporations are making out like bandits. If they paid their fair share, there’d be no need to cut budgets.

“Adjustments.” How bloodless. For normal people, Herr President, losing two percent of one’s pay is not a mere adjustment. It hurts.

Obama’s grandstanding had-to freeze on federal pay will save $5 billion over two years. Which is nothing. That’s what the Pentagon chucks down the Iraq and Afghanistan ratholes in a single week.

The federal deficit is $14 trillion. That’s $14,000 billion. Obama’s federal pay freeze, which amounts to a piddling four hundredths of one percent, is empty symbolism.

As the striking members of the PATCO air traffic controllers union learned in 1981, higher wages and working conditions are for foreigners, not Americans. Ronald Reagan had nothing but praise for Solidarity in Poland (declaring that “the right to belong to a free trade union” was “one of the most elemental human rights”).

At the same time he was defending Polish workers Reagan fired all of America’s 11,345 striking air traffic controllers and ordered their union decertified.

All political systems are built on contradictions that eventually lead to their downfall. The U.S. relies on a whopping chasm between soaring rhetoric (freedom, democracy, individual rights) and brutish reality (preemptive war, supporting dictators, torture, spying on citizens)—a gap that is so wide and so glaring that it is amazing anyone ever takes the propaganda seriously.

A recent report in The New York Times slathers on a rich quadruple serving of syrupy irony. The Obama Administration asked the CIA to prepare a secret memo about the revolutions in the Middle East, specifically analyzing “how to balance American strategic interests and the desire to avert broader instability against the democratic demands of the protesters.”

What, exactly, are those “strategic interests”? Business. Dictators cut sweetheart deals with big corporations that donate to the Democratic and the Republican parties.

Democracy—real democracy, the kind people are fighting for in Bahrain and Madison, is incompatible with free-market capitalism.

Which is what union members in Wisconsin, as well as those of us who don’t belong to unions but understand that we would be working 100-hour weeks in death-trap factories without them, see clearly. The American Dream is just that— a dream. And it’s not for Americans.

Obama’s statement about the Arab autarchies is astonishingly tone deaf to realities here at home. “I think that the thing that will actually achieve stability in that region is if young people, if ordinary folks, end up feeling that there are pathways for them to feed their families, get a decent job, get an education, aspire to a better life,” he said. “And the more steps these governments are taking to provide these avenues for mobility and opportunity, the more stable these countries are.”

Well, yes.

According to a recent Bloomberg National poll, most American adults believe that their children will have worse lives than they do.

That’s true even about those who have all the so-called advantages.

At this writing the unemployment rate for recent college graduates is 80.3 percent.

How will they pay their loans?

The rate is even higher for other young adults.

In a way, the unemployed and underemployed should thank Obama and the plutocrats he helps protect. The ruling classes’ shortsighted refusal to give up some of the loot they’ve stolen will soon bring about the real changes Americans require and deserve.

(Ted Rall is the author of “The Anti-American Manifesto.” His website is tedrall.com.)

COPYRIGHT 2011 TED RALL

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