Beginning with the General Motors bailout with a total cost to taxpayers of over $11 billion and the total cost to society of over $50 billion in order to shore up UAW pension plans, the Obama administration has systematically pilfered hundreds of billions of dollars of taxpayer money to give away to their supporters to guarantee their victory in the next election.
Hillary Clinton in her most recent go around of announcing that she is running for president attacked special-interest groups and the billionaires running this nation. While she and President Obama are getting the nation to focus on the alleged transgressions of billionaires, this administration has been doling out funds with little regard to any financial consequences to the middle class while at the same time proclaiming that they are protecting the middle class.
Some of the examples include high tax rates on workers (regardless of income levels), to the staggering debt left for future generations, to include massive state and local pensions for government employees, substantial contracts to corporate donors for government services such as the ACA exchanges, to failed green energy initiatives at taxpayer expense, to bailouts of cities like Detroit and Chicago and other failed Democratically controlled cities, while all in the guise of providing a helping hand – a helping hand that enslaves rather than helps.
Since 2008 the national debt has increased from $10 trillion to over $18 trillion. In addition, the annual deficit is in excess of $450 billion per year despite near zero interest rates on the national debt. If the Federal Reserve raises the interest rates in September or October 2015 as they plan, the interest on the national debt will explode making the deficit that much higher. For instance in 2008, the interest on the federal debt of $10 trillion was $451 billion. In 2014, the interest on the federal debt of almost $18 trillion was $430 billion.
The subsidizing of current social programs and other spending by the federal government by floating debt to be paid by future generations reduces the stigma, impact and sense of urgency of how the nation is being bankrupted. Some economists have even been able to delude people into believing that the debt does not matter.
The inherent dangers of all of these policies of federal deficits, bailing out the companies and cities, failure to deal with burgeoning governmental pension plans and health costs, and massive expansion of safety net programs are that society will eventually become overwhelmed by debt and dis-incentivized to work due to the overwhelming problems created by government.
Liberals have asserted that taxing the wealthy will solve the problem. The fatal flaw of their argument is that they want to tax income and not assets and refuse to acknowledge that it may be the spending that is the culprit.
The super wealthy pay little taxes because they are already wealthy not because of income. All the liberal policy will do by taxing income will guarantee that the wealthy will become wealthier. Unfortunately to understand this argument you have to understand the tax code which most people do not which furthers the ability of the liberal agenda to protect the super wealthy at the expense of the middle class while at the same time appearing as if they are protecting the middle class.
This massive defrauding of America creates three separate classes: the super wealthy, the poor and disenfranchised, and government employees or the political class.
The political class ensures that all government employees at the state and local levels are protected and receive benefits not available to anyone else in society any longer because of these failed governmental policies.
The super wealthy are able to protect their wealth by Democrat and Republican support of preferential tax treatment specifically designed for the super wealthy. Warren Buffett pays less percentage of taxes because he supported candidates who helped design it that way!
The defrauding of America is occurring because failed policies are being masked by unfounded allegations of class warfare. This smokescreen is allowing more and more funds to be transferred to the political class at the expense of middle America.
Two separate decisions occurred in June 2015 which will set the stage for whether or not our nation will survive this massive wealth transfer and defrauding of the American people. In the first case the New Jersey Supreme Court sided with Governor Christie about not having to make payments to the pension plan of state workers. The case will likely head to the US Supreme Court.
In a separate decision, the exact opposite conclusion was reached. The Illinois Supreme Court ruled against pension reform as a means of curing the State of Illinois’s and the City of Chicago’s fiscal woes. This decision will likely bankrupt the city of Chicago and make the state of Illinois insolvent. The impact of that decision will be felt by the state’s citizens and future residents of the state of Illinois.
Class warfare is often the term that used to hide fraud and wealth transfer in government. The current administration has done a masterful job of masking $8 trillion of debt and untold trillions in years going forward by hiding behind class warfare while it furthers its agenda of protecting the political class at the expense of the very people who elected them.
The only question that can be asked at this time is: is the United States too big to fail?
Col. Frank Ryan, CPA, USMCR (Ret) and served in Iraq and briefly in Afghanistan and specializes in corporate restructuring and lectures on ethics for the state CPA societies. He has served on numerous boards of publicly traded and non-profit organizations. He can be reached at [email protected] and twitter at @fryan1951.