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Tag Archives: what creates jobs

What the Numbers say about Creating Jobs in America – Part 2/4

It is a tragedy how fast most Americans forget the root causes of the current financial challenges in America.

Three lawmakers, all Republicans, introduced the Gramm-Leach-Bliley Act to the U.S. Senate.  During the debate in the House or Representatives, a democrat from Michigan argued that the bill would result in banks becoming “too big to fail” (sound familiar). At first, most democrats were against the bill but eventually, due to compromises, the effort of corporate lobbyists and deal making, many democrats were won over to vote for it.

Keep in mind that the Republicans won a majority position in both houses of Congress in the elections of 1994, and controlled both houses until 2006—except the Senate for most of 2001 and 2002, when the Democrats held the majority in that one House of Congress.

Therefore, in 1999, Republicans were the majority in both houses of congress. When the final Gramm-Leach-Bliley Act passed in the Senate, the vote was 90 to 8 (92%) and in the House 362 to 57 (86.3%)

Even if President Clinton had wanted to veto it, which he didn’t, he wouldn’t have succeeded since a two-thirds majority vote (66%) in both Houses of Congress is required to override a presidential veto. Since the Gramm-Leach-Bliley Act arrived at the White House for President Clinton to sign with more than a two-thirds majority vote in favor, there wasn’t much he could have done if he had wanted to.

Then, during the Bush years (2001 – 2009), the United States launched three expensive wars: The Iraq War—based on false claims of Weapons of Mass Destruction—the war in Afghanistan, which was mostly neglected under Bush, and the global war on terrorism.

Due to these wars and the Bush tax cuts for the wealthiest Americans, the national debt exploded.

I’m sort of going off topic with this paragraph, but I saw “Act of Valor,” which is about the Navy Seals and the CIA fighting the global war on terror. I recommend “Act of Valor”. The acting may be a bit stiff but that is not the point. The realism makes this movie worth watching. This is no Rambo or Mission Impossible. “Act of Valor” is closer to the reality and what America’s Navy Seals face as they fight to protect America. Politicians and corporate lobbyists might be corrupt and greedy for power and money, but America’s men and women mostly from the working class serve in the military out of patriotism.

Back on topic—President G. W. Bush, with help from the GOP majority in both Houses of Congress, lowered taxes for the wealthiest Americans (the lowest rate in almost 80 years—the last time the rate was this low was before the Great Depression and experts say this contributed to that economic collapse).

On February 9, 2012, the official debt of the US government had reached $15.4 trillion—an increase of $5.9 trillion since President Obama moved into the White House. While the GOP blames Obama for that debt during an election year, we must not lose focus on how much Obama inherited when he was elected president.

According to the Huffington Post, lowering taxes for the wealthy costs the U.S. Treasure $11.6 million every hour.

Total, the cost of the Bush tax cut for the top 5% of income earners since 2001 is more than one trillion dollars, which is about $100 billion annually. Source: Cost of Tax Cuts.com

Interest from the national debt, which President Obama inherited from Presidents Reagan, H. W. Bush and G. W. Bush is about $400 billion annually. Source: US Debt Clock.org

On top of that $500 billion annually, the wars G. W. Bush started has cost more than $1.3 trillion since 2001—that’s another $130 billion. Source: Cost of War.com

However, the cost was more than just money. According to the Congressional Budget Office, since combat is being financed with borrowed money, the price tag for these wars is not over, and if Bush had not gone to war over false claims of weapons of mass destruction  in Iraq, 4,482 Americans would not have been killed; more than 32,000 would not have been wounded (medical care for these wounded combat veterans will costs hundreds of millions in the decades to come); about 114,000 Iraqi civilians would still be alive and Iraq has cost more than $800 billion so far.

In addition, CalSTRS probably would still be funded close to 100%, as it was in 2001, for future obligations to its 856,360 members, while the 429,600 active members paid about $3 billion dollars into the retirement fund in 2011—money taken from monthly paychecks of working educators.

Continued on March 1, 2012 in What the Numbers say about Creating Jobs in America – Part 3 or return to Part 1

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

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What the Numbers say about Creating Jobs in America – Part 1/4

Since I’m a member of the California State Teachers’ Retirement System (CalSTRS), I receive the “Retired Educator,” a quarterly newsletter.  The topic of this series of posts was motivated by the 2012 Winter edition.

To earn my monthly CalSTRS check, I first had to work thirty years as a classroom teacher in California’s public schools while 8% of my monthly paychecks went into CalSTRS to help fund that retirement system, which proves that it is not an unearned entitlement as some might want the nation to believe.

In fact, according to the 2011 Summary Report in the newsletter, contributions from members, the State of California and the federal government, which is why we cannot collect Social Security, was almost $6 billion in 2011. About half came from working members.

In addition, I do not earn an annual six-figure income through CalSTRS. In fact, when I left teaching in 2005, I took a 40% pay cut, as most teachers do, and lost my medical plan, because I could not afford the cost of COBRA, which was more than $1,000 a month.  Add another 14 years working outside education, and the total number of years I worked for a pay check was forty-five.

I discovered from that “Retired Educator” newsletter that CalSTRS lost $53.95 billion between 2007 – 2009 while President G. W. Bush still lived in the White House, but earned back $36.92 billion (2009 – 2011) with President Obama.  Note: CalSTRS did not receive bail out money from the federal government. That money mostly went to big private sector banks—not retirement programs such as CalSTRS.  If you want to know where the money went and how much, CNN.com shows you.

I’ve read that total losses globally were in the trillions. One financial Website set the total at more than $60 trillion US dollars. In China, alone, about 20 million people lost manufacturing jobs leading to labor unrest in 2008 and 2009. In the US, that number of job losses was about nine million.

Even though the CalSTRS newsletter didn’t say so, I learned that the wealthy do not create most jobs as Republicans claim—the working class creates most jobs by spending what little they earn, while the wealthy hoard most of their money in safer investments than those needed to create jobs as you shall learn from this series of posts.

However, I have an old friend that keeps telling me we cannot raise taxes on the wealthy one percent and/or the top twenty percent (those earning $55,000 or more annually—6.24% earn more than $100,000), because it will stop job growth.  He also happens to be a neoconservative-libertarian, evangelical Christian.  He despises liberal and progressive politics and policies.  He has said more than once that he believes G. W. Bush may have been America’s greatest president, and if anything bad happens in America, it is the fault of those evil liberal-progressive Democrats.

It doesn’t matter what the facts reveal. Anything that does not match his opinions/beliefs are liberal lies. He also listens faithfully to the conservative  Dennis Prager radio talk show and belongs to and attends Dennis Prager Fan Club meetings.

Conservative talk radio in the United States is a phenomenon that got its start in the 1980s when the Fairness Doctrine was allowed to expire under President Reagan (he vetoed it after both Houses of Congress voted it into law). This veto then allowed broadcasters to present a political opinion or point of view or pundit (mostly lies, exaggerations and misinformation) without being required to allow equal time for alternative views or rebuttals. The ideology that benefited the most from the loss of the Fairness Doctrine was conservative talk radio shows such as Dennis Prager’s.  See Prager’s Parrots to learn more.

My old friend and Prager fan has also said that he wouldn’t mind if Social Security were repealed as long as the government refunded him the money he paid into the system—and this comes from a guy that lost a half million dollars in the stock market after saving that money in tax sheltered retirement accounts. Later, he had to do battle with the IRS for years because they came for their share of that tax-sheltered money that he borrowed from his tax shelter and gambled away.

No matter what this old friend believes and preaches as if it were one of the Gospels, I’ve learned that what put America on the road to ruin causing the 2007-2011 global financial crises has more to do with the Gramm-Leach-Bliley Act repealing the Glass-Steagall Act of 1933 (this was the final nail in the coffin), which deregulated banking, insurance, securities, and the financial services industry, allowing financial institutions to “grow very big”.

The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between investment banking, which issued securities, and commercial banks, which made money through deposits.

The deregulation also removed conflict-of-interest rules that had prevented investment bankers from serving as officers of commercial banks.

It was the repeal of these prohibitions that was later claimed by many to have contributed to the 2007 global financial crises by allowing depositors’ money to flow into risky investments, and according to the Huffington Post, in the first 15 months after the start of the 2007 global financial crises, American Retirement Accounts Lost $2 Trillion and the federal government did nothing to slow the tide of those losses as they bailed out banks and the auto industry.  By the middle of 2009, those losses may have climbed as high as $4 trillion, which is much more than the $54 billion CalSTRS lost.

Continued on February 29, 2012 in What the Numbers say about Creating Jobs in America – Part 2

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Lloyd Lofthouse is the award-winning author of The Concubine Saga. When you love a Chinese woman, you marry her family and culture too. This is the love story Sir Robert Hart did not want the world to discover.

To subscribe to “Crazy Normal”, look for the “E-mail Subscription” link in the top-right column.

 

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