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The US is Broke -- Not!

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The conservative network of viral emails has been buzzing about a short video done by a retired accountant that shows our revenue to be insufficient to support any of the Federal discretionary budget once our obligations for debt service and entitlements are paid.  Evidently this is news to many people and the video is presented in a context of shock, fear and great urgency.  My spouse, Marguerite, emailed one of our mutual friends to allay his fears and put the matter in perspective.  Here is what she said:

Dear Jim--I apologize for delaying getting back to you.  I've wanted to do some research of my own before I responded.

I've sent an email to SNOPES. com (an independent, non-partisan fact-checking organization) to check this out.  I'll let you know what I hear.  However, the charts that Richmond sent you say a lot of what I'm going to say, and I have a few items to add:

   - first and foremost, especially during the campaign election season, I take EVERYTHING I read and ask "Says who?"  If the source is anything except a reputable, non-partisan fact-checking organization, I take it with a grain of salt.  The recent AARP Magazine suggested two fact checkers:  Flackcheck.org (from the U. of Penn. Annenberg Public Policy Center) and Facethefactsusa.org (from George Washington University);  I also like Snopes.com, Factcheck.com, About.com, Truthout.org;  there are so many outright lies going around the Internet that people (including ME!) have passed on, only to find later that I was passing information that was completely false

   - check out The Story of Broke (www.storyofstuff.org);  one of the great lies is that our country is "broke" (item below from Van Jones--to read the entire article go to   www.rebuildthedream.com/blog/2012/08/28/a-very-dangerous-lie/)

Our economy today is almost as big and rich as all of Europe's COMBINED -- including economic powerhouses like Germany. Our economy today is almost twice as big as China's. (And we have only one third of the Chinese population.) No other country even comes close to our wealth.

If that is so, then how come only some of us are hurting? How come big corporate profits are at an all-time high while people are out of work? Why are Wall Street banks thriving while folks are losing their homes?

One reason: global corporations and big banks are hoarding so much cash, refusing to recirculate it in the form of fair taxes and good wages. Instead, they use a few of their extra bucks to buy elections and elected officials -- Paul Ryan is just the worst example, not the only one.

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Those politicians then try to convince us that we should all accept more misery, while their mega-donors stockpile more cash than the Pharoahs ever dreamed about having.

Enough is enough.

If someone tells you we're too broke to do anything positive, ask them where the money went. Ask them who got a big bonus last year. Who got a new private jet? Ask about the Bush tax giveaways for the rich. Ask about the bailouts for Wall Street. Ask about tax shelters, subsidies for polluters, Halliburton expense accounts, or the massive bill for two wars.

   - on the revenue side, there are many ways to increase revenues;  one that's gaining great support nationwide is the so-called "Robin Hood tax";  identified by Robert Reich, the Robin Hood Tax would put a less than 0.05% tax on Wall Street financial transactions and would raise $350 BILLION each year.  Many pressing social needs could be addressed through this tiny tax on the excesses of Wall Street speculators (speculators whose transactions allow them to bet against their own investors!);  according to BlackRock, one of the largest private equity firms, the principle basically is "of every 20 deals, 17 are expected to fail under the added debt; two have to survive and one has to hit big for the firm to have a fairly strong return on its private equity fund."  Comments Ron Suskind (see his credentials below), "It's hard to find any product, save crack cocaine, that causes ruin for 85%of its users."

   -  on the mandatory expense side, there are many ways to decrease spending without harming those who most need critical social programs; for example, one of the refinements of the National Health Care bill that got lost in the partisan politics was the work of Jack Winnberg at Dartmouth College.  Trained at Johns Hopkins, he began to do research on the huge data bank that Medicare and Medicaid created.  What he found was that thousands of risky and expensive procedures were being performed each year without any likely medical value.  He founded the Darmouth Atlas Project and a new school of "evidence-based" medicine....  With accountability and data-driven rigor, Dartmouth's findings point the way toward improved treatment at lower costs....  If even a fraction of the Dartmouth methodologies were implemented, health care would be improved and the federal budget rescued." (pp 138-139 from Confidence Men:  Wall Street, Washington & the Education of a President by Ron Suskind--a Pulitzer Prize winning journalist); just to show the magnitude of the waste, the Medicare Prescription Drug Improvement and Modernization Act of 2003, added costs of $500 BILLION over 10 years, a massive handout to the pharmaceutical industry.

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   - then there's the matter of wealth accumulation:  when most of the nation's household spending power is accumulated among the top 1%, who can buy the goods and services that keep the economy growing? as Henry Ford demonstrated so effectively, when his workers could afford to buy the cars they built, Henry Ford sold a LOT more cars!

so greater equity benefits EVERYONE, as well as the economy

Sometimes, there is elegant simplicity that allows a complex point to be made, but in the case of the Federal Budget, I think your source has missed some key elements.

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http://rbshreve.com

Richmond Shreve is a retired business executive whose careers began in electronics (USN) and broadcasting in the 1960s. Over the years he has maintained a hobby interest in amateur radio, and the audio-visual arts while working in sales and (more...)
 

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compared with assets as well as income when determ... by Mark Adams JD/MBA on Tuesday, Sep 11, 2012 at 11:15:08 AM
...Let's do an honest forensic accounting of what ... by Scott Baker on Tuesday, Sep 11, 2012 at 12:18:58 PM
people headaches by telling them about things that... by Mark Adams JD/MBA on Tuesday, Sep 11, 2012 at 12:29:41 PM
Alas, no. This Administration has cracked down on... by Scott Baker on Wednesday, Sep 12, 2012 at 10:33:53 AM
http://costofwar.com/ ... by Daniel Geery on Tuesday, Sep 11, 2012 at 2:15:03 PM
And let us not forget the $228 Trillion in Derivat... by Scott Baker on Tuesday, Sep 11, 2012 at 3:56:19 PM
And let's not forget that an enormous part of the ... by Marika on Wednesday, Sep 12, 2012 at 3:55:20 PM
They create more debt.  From Dr. Michael Huds... by Scott Baker on Thursday, Sep 13, 2012 at 9:54:16 AM
Interesting how the debt clock on the so-called en... by Scott Baker on Wednesday, Sep 12, 2012 at 10:37:47 AM
Thank you Scott for this valuable info. I too have... by Nancy S on Tuesday, Sep 11, 2012 at 11:50:25 PM
ratified TPP, that flat out prohibits signing coun... by Laura Stein on Wednesday, Sep 12, 2012 at 4:50:07 PM
Thank you for the link Laura. I think I have sent ... by Nancy S on Wednesday, Sep 12, 2012 at 5:20:48 PM
Yes, this so-called trade deal is really a way to ... by Scott Baker on Monday, Nov 5, 2012 at 1:16:31 PM
Then there's Proof Platinum Coin Seigniorage and i... by Robert Bostick on Monday, Nov 5, 2012 at 10:13:05 AM
I'm not sure about that one.  The constitutio... by Scott Baker on Monday, Nov 5, 2012 at 1:18:14 PM
Of course, first we need to defeat the Republicans... by BFalcon on Wednesday, Sep 12, 2012 at 1:49:51 AM
the US is broke as far as services for poor and lo... by Marta B on Wednesday, Sep 12, 2012 at 3:04:45 PM
only because the rich have been picking their pock... by zon moy on Friday, Sep 14, 2012 at 2:45:40 PM
If Ben prints the United States will not go broke ... by Lance Ciepiela on Thursday, Sep 13, 2012 at 10:41:48 AM
Let me be more clear. To be "broke" is to have no... by Richmond Shreve on Sunday, Sep 16, 2012 at 2:05:26 PM
A fiat currency issuer is never dependent upon rev... by Robert Bostick on Monday, Nov 5, 2012 at 10:20:19 AM
A fiat money system, like ours, can produce money ... by Scott Baker on Monday, Nov 5, 2012 at 1:21:43 PM
While SNOPES is a good place to start researching ... by Robyn Hamlin on Sunday, Sep 16, 2012 at 10:28:42 AM
The US income distribution is unimaginably distort... by David Chandler on Sunday, Sep 16, 2012 at 12:12:35 PM
There is some delusion and wistful thinking in thi... by Paul Craig Roberts on Sunday, Sep 16, 2012 at 12:23:58 PM
From my article on this subject by the same name "... by Scott Baker on Sunday, Sep 16, 2012 at 5:44:28 PM
Scott excellent review of the options. Given ... by Robert Bostick on Monday, Nov 5, 2012 at 10:47:51 AM
Tell me how the sole issuer of fiat currency can r... by Robert Bostick on Monday, Nov 5, 2012 at 10:22:12 AM
I urge eveyone to read this below which I dedicate... by Rixar13 on Sunday, Sep 16, 2012 at 1:27:21 PM
I urge eveyone to read this below which I dedicate... by Rixar13 on Sunday, Sep 16, 2012 at 1:28:33 PM
The USA is not broke, but it is $16 trillion in de... by J. Dexter Smith on Monday, Sep 17, 2012 at 9:06:34 PM
We do not borrow from China or anyone. The dollars... by Robert Bostick on Monday, Nov 5, 2012 at 9:48:02 AM
Understanding modern money theory is best facilita... by Robert Bostick on Monday, Nov 5, 2012 at 9:51:15 AM
Seigniorage and the Irrelevance of the Debt Limit&... by Robert Bostick on Monday, Nov 5, 2012 at 9:29:54 AM
click here The idea of using coin seigniorage to r... by Robert Bostick on Monday, Nov 5, 2012 at 9:57:08 AM