Mush at the Tucson Observer
On Thursday I went out and picked up a copy of the local gay publication, The Tucson Observer. There on the front page was one of the most astounding ridiculous “economics” articles I’ve seen in a while. It wasn’t economics, it was a fantasy of sorts. Somewhere there, perhaps on their website: www.tucsonobserver.com is the article. Oh, don’t worry if you can’t find the mush, I would think the response I emailed to them is sufficient. The problem with mush, of course, is that it requires so much explanation, or destruction, as the case may be, that the response is longer than the article. Cogent articles can be dealt with briefly, mush requires more, alas. I gave the paper permission to either print my response, or a portion thereof with a link to this blog. We shall see if that is done, of if they are just another self-protecting journalistic tour-de-force. Like the weathermen on TV, when newspapers publish wrong and even addled information they have no qualms of never apologizing or correcting. As the legal briefs always say, “to the best of my knowledge.” Alas, there’s so little knowledge left that most people are never right. Ahem.
I was disheartened to read your article “Tax scams overshadow America’s national debt” in this week’s issue. Not disheartened because of some “tax scam,” nor any measure of what is a “fair tax,” both lamented in this article, but at the sheer mush of the article itself. Mr. Smith starts off by saying “it isn’t even news …” Well, it is to me. And as an avid reader of economics and politics of all stripes, I have never heard that “.0001%” of the wealthiest Americans have managed to secret an “estimated … $21 to $32 trillion” in offshore accounts. First, estimated by whom? This I got to hear. Oh, a Mr. Gibson! Who is he? It’s not said. But how many people is .0001%? Let’s count: 320 million Americans, 145 million working. 145 million x .0001% = 145. And so exactly 145 people have “looted” $32 Trillion dollars? Surely this is a jest, yes?
But then, too – which amount? The spread between the two numbers is $11 trillion; the US economy annual GDP is only $14 or $15 trillion. And if the two amounts stashed are so far apart someone is not doing their estimations correctly, or simply is not privy to any real numbers. Surely to arrive at an estimate an educated guess based on some research might be required, no? Given that the money stashed is by its very nature “hidden,” ergo, unknown, how was this number arrived at? The article doesn’t even attempt to tell us. And to say that such enormous wealth is stashed away presupposes that less than 150 people have somehow managed to earn one and a half to more than twice the amount of the entire US economy. Where and how did they ever earn it? Is this cumulative over decades? And in what offshore locales might this vast wealth be hidden? Switzerland? The Caymans? How could Mr. Gibson get this information? They don’t just hand it out to inquiring reporters. Meanwhile, the largest banks on earth are all claiming less than $500 billion in assets. Are the well regulated banks that good at hiding $32 trillion? Not to mention that the credit shortfalls means that these banks aren’t even lending out the $32 trillion to earn yet more money; which is contrary to the point of banks. Banks don’t “Lend” money, they rent it out, after all, at interest.
Then Mr. Smith complains, rightfully, about the scoundrels in Washington who set up a tax code so Byzantine that it comprises 76,000 pages of contradictory provisions. Then at the end of his article he urges us all to vote. For whom, pray tell? Incumbents win over 90% of all elections, 95% of all incumbents run again and again. And the opponents are of a piece to continue to keep the IRS code exactly as it is. In fact, the Code hasn’t changed much except growing in pages and provisions, with 16,000 IRS new IRS agents coming to work under Obama’s healthcare law. (Nothing says “healthcare” like the IRS, but that’s a different issue.) I dare say, voting for more of the same is not quite the solution to whatever this problem is. Not to mention, it seems as if most politicians are quite sure that the country is not in “dire financial straits” at all. Obama has repeatedly said “All’s well, the private sector is doing fine.” Yet, at least ¼ of Tucson’s retail stores are empty. Something doesn’t add up, eh?
Still, the taxes collected by the IRS total some $2.2 trillion, and the current expenses of the government total some $4 trillion. Forget the zeros, it’s as if someone earned $22,000 and spent $40,000. When the current administration came to power the national debt was said to be $10 trillion, in three years it has bloomed to $15 trillion. The $2.2 trillion is ample taxes, it’s the spending, and that also shows no sign of abating. But to say that such a few people were “looting the economy” is ludicrous. There’s no way that $20 or $30 trillion could even be in the economy to “loot.” Money doesn’t just sit there waiting for a bank robber to come along. It’s earned – through the purchases of consumers of the products offered by companies. Put down that iPad if you wish to stop the rich from getting richer. And the people who earn it have the legal right to prevent its taxation, as amply ruled by the Supreme Court, and admitted by the IRS code itself. To call it a “scam” implies boldly that this is somehow illegal. And following the law simply cannot be a “scam.” Ask Bernie Maddow.
Now, the top two Americans on the Fortune 400 are Bill Gates and Warren Buffett, each with roughly $100 billion. The rest run down to $1 billion, which is the cut off point to be included. Add up their wealth and it comes to less than $10 trillion. Take 100% of it, and you couldn’t pay off the current debt of the US. And how could they possibly have hidden $30 trillion when they didn’t even have it? At most, should people use no deductions only an additional $1 trillion could be pulled out of the hands of citizens. It would then take some 32 years for the $32 trillion to be accumulated. And how is one group of citizens taking another group’s money conceivably “fair”? What a strange concept, just to take people’s wealth because you have less.
Ah, an answer provided, sort of. Mr. Smith says: “Big deal. Owning another human being was legal …” Yes indeed, and what the Democratic party did since its inception until they finally saw some light in the 1960s when they finally ended Jim Crow laws in the South was quite reprehensible; Republicans even prosecuted a war over it. Meanwhile, money is labor (time is money, eh?) – and to take someone’s money because you feel you deserve it is taking their labor – they earned that money, legally and morally. Steve Jobs left an estate valued at more than $8 billion. Where did he get his money? Go ahead, look in your hands, there it is – your iPad, iPod, iPhone, and Lord knows what other “i” devices I haven’t heard of. And to take someone’s labor is, in fact, slavery, or robbery at best. Yet, while Mr. Smith seems to be saying slavery was wrong, he now urges it upon us anew.
Mr. Smith laments, too, that the financial services industry was bailed out. Yes, it was. To the tune of $700 billion in TARP, and an additional $700 billion a year later. That’s $1.4 trillion. A far cry from even the low ball $20 trillion he claims was looted. Not to mention that the $1.4 trillion stayed in America’s public banks and did not go to private offshore accounts.
His fourth paragraph says I can’t picture what $32 trillion amounts to – and it’s ridiculously simple: it amounts to exactly $32 trillion. Why, the writer is sure that it’s more than the entire economies of Japan and the USA. Sounds like it’s very clear to me, and Japan and the USA are in the real world, last I looked.
In the fifth paragraph he laments the “Mitt Romney’s of the world,” except, well, that poor man has less than $300 million, he’s not even on the top 400 list. Say he’s lying, say he’s got $600 million. How could he, or anyone like him, then secret away some $32 Trillion? Meanwhile, among the .0001% are Gates and Buffett, both of whom are stout Obama supporters, yet with over $100 billion apiece. The rich are for which party? Buffett is constantly at the White House giving economic advice – “tax the rich” he says, and then he himself uses every trick in the book to lower his taxes! Hypocrisy, no? Meanwhile, their money is mostly in stocks. If it’s taken, and sold for cash to pay the debt, the market would crash, and this year’s annual deficit would be only $1.7 trillion instead of $1.9 trillion. Next year, no money to take, the deficit right back up again. Oh, be against the rich, I don’t care – but the two richest men in this nation seem to be Democrats, and are working to stop the Mitt Romney’s of this world while far outshining them in wealth.
But then too, in paragraph 5, this Gibson fellow is referred to as saying that the offshore accounts of this miniscule bunch are worth more than the two largest economies on earth – the idea is farcical at best. And who is this Mr. Gibson and where does he get his figures from? If the IRS can’t find the money to tax, as laments Mr. Smith, perhaps they should hire the intrepid Mr. Gibson. Reader Supported News is mere gossip, while the Economist, the most respected economics magazine for nearly 100 years, doesn’t report such figures.
Then Mr. Smith say that the hidden cash is double the “debt” – alas, no, it is not. The debt of the nation, including Social Security IOUs, Medicare/caid promises, unfunded liabilities, current accounts, etc, etc, totals more than $100 trillion. Why, even back when Reagan was in office it was estimated by the Social Security Administration itself that they needed $20 Trillion to cover their promises. So this fantasy number of $32 trillion is only 1/3 of the outstanding debt of the nation. And the current administration projects the annual deficits to continue at $1.5 trillion for the next 10 years, adding an additional $15 trillion to the current debt. Well, there goes half the $32 trillion. Of course, Obama and his party were “horrified” at the measly $500 billion deficit of Bush’s last year in office; but are ecstatic about the tripling of the deficit – for the good of the people, of course.
The European Union’s debt is well beyond $100 trillion, if only because the EU has an extra 100 million people than we do, and they collect less taxes because they have less wealth to tax, and they made more promises to just give money away without any money to give. The USA is currently lending the EU’s Central Bank some $80 billion every few months to continue to bail out the finances of Greece and Spain, and the rest of the PIIGS. (Portugal, Ireland, Italy, Greece and Spain.) What an apt name; they haven’t cut their spending whatsoever, but borrow anew.
Mr. Smith states that Gibson is the “first writer I’ve seen who put this in a perspective we can all understand.” Well, Gibson is so wrong it’s not funny, and his perspectives are juvenile. To merely say that if you spent a million a day since Jesus is only $700 billion is hardly some great perspective, it’s simple math; it’s been uttered countless ways. Meanwhile, Smith says that “money being hidden from tax collectors by the wealthy” – and yet two paragraphs later he says “people doing this say it’s legal, and for the most part it is.” Yes, well, if it is legal, then it is perfectly reasonable for the “people doing this” to say “it’s legal.” And it can’t be “hidden,” it’s just removed from taxation by provisions of the IRS code. Don’t like it? Get rid of the IRS code. Meanwhile, neither party plan on getting rid of it. But, as Mr. Smith says, the primaries are coming up, urging us to vote. So what? The two parties are your choice. The two parties who created the IRS code and won’t get rid of it.
There’s no such thing as “Hiding behind the law,” which so greatly concerns the moralizing Mr. Smith. What there is is “following the law.” Or not following it. Gay men, for instance, never followed the law, nor did we hide from it, and yet the law was not enforced. But paying taxes according to the IRS code is perfectly legal, and enforced, and finding helpful provisions within its many pages is legal, too, whether one likes the Code or not.
Then Mr. Smith goes back to Mr. Gibson’s laments about the difficulties of We the People in paying bills, and having rough choices. Indeed, we do. That’s partly because people spend too much and are taxed too much – and now, for “fair taxes” the two gentlemen urge greed for other people’s money, while decrying the greed of those people whose money they wish to take. Then Mr. Smith has the audacity to talk of “legal” and “morals.” Well, greed is greed, so where is Mr. Smith’s morality now? Bizarrely, too, if the money in these offshore accounts is used to pay down the debt then Gibson’s bedraggled individuals won’t see a dime of it. Their burden won’t be lessened one bit. The money will oddly go right back to banks and the rich, and yes, even China, which own the Treasury Bills and bonds of the USA which the government sells by the trillions to finance the deficit and debt.
Still, what Gibson points out in his examples are but a small example of the big problem that the Congress has ignored, – it earns $2.2 trillion and spends $4 trillion – and it has shown itself alarmingly insouciant about the whole affair.
But truly, if your going to report on economics, at least make it rational, and with real figures.
Then I added this postscript to the email, to sort of clue those folks in:
[PS, because my response is long you probably won’t publish it. Because the subject is complex yet deserves some exploration, I therefore took the liberty of posting this response to my blog on Saturday, August 11th – along with a link to your newspaper and your confounded mush headed article. Fear not, you are not the only ones in this nation who are mush headed on economics. Just as Mr. Smith points out, it is “congress” and “politicians” who are at fault. It is not, however, businessmen who take advantage of what the government offers. Amazingly, despite the alleged differences between say, oh, Liberal Democrats and the Tea Party Republicans, both of these have such similar views on the corruptness of politics and worry about the “rich” and big corporations – albeit with somewhat differing solutions – the former more politics, the latter less, supposedly. But truly amazing is that both of these “different sides” are in league with each other in seeking “buy American” and “buy local” and “outsourcing” and “bring the jobs home” and “no more foreign accounts,” and “pay your fair share of taxes,” and a fear of China, and wanting to end virtually all foreign trade. That alleged polar opposites both want to curtail our foreign trade is emblematic of the convergence between the alleged Left and Right in our nation; “bipartisan,” of course merely means “one party rule.” “Demopublican” might well be the name of the party. As I often joke – they both want to install a “dictatorship of the masses” upon everyone using old turgid thick books written by bushy beaded old men from a continent far away – one Karl Marx’s Das Kapital, the other the Bible. And while the Left calls the Right “new Hitlers,” the right calls the Left “new Stalins” – without a blessed clue that Hitler and Stalin were in league with each other as murderous socialists. The former “National Socialism” to be installed in an ever growing nation, the latter “International Socialism” to be installed in an, um, ever growing nation.
And you certainly, then, have my permission to publish a portion of any of this with a link to my blog, so that anyone left with a brain in this nation my pursue the matter further.]
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