The biggest untold story about how we pay for government involves a big switcheroo by America’s wealthy.
Decades ago, wealthy Americans financed the federal government mainly by paying taxes. Their tax rate was far higher than what it is today.
Now, wealthy Americans finance the federal government mainly by lending it money, and collecting interest payments on those loans, profiting when the rest of us pay them back.
Follow the money: As the debt continues to grow, interest payments are becoming huge. Taxpayers could soon be paying more in interest on the federal debt than we spend on the military or on Medicaid.
Interest on the debt is expected to hit $390 billion next year, nearly 50 percent more than in 2017, according to the Congressional Budget Office.
Who’s receiving these interest payments? Mostly Americans, not foreigners. And most of these Americans are wealthy investors who park their savings in treasury bonds held by mutual funds, hedge funds, pension funds, banks, insurance companies, personal trusts, and estates.
The richest 1 percent of Americans now owns 40 percent of the nation’s wealth, which is more wealth than the bottom 90 percent put together.
Which means a big chunk of the growing interest payments American taxpayers make on the federal debt is going to… rich Americans.
Now, keep following the money. One of the biggest reasons the federal debt has exploded is that tax cuts, starting with the Bush administration in 2001 and extending through Trump’s 2017 tax cut, have reduced government revenues by over $5 trillion.
The Trump-Republican tax cut will cause the debt to explode even further. Trump’s own Office of Management and Budget predicts an added $100 billion a year in deficits over the next decade, adding up to $1 trillion of additional debt.
Keep following the money: Most of the benefits from those tax cuts are going to the wealthy. 65 percent have gone to the richest fifth of Americans, 22 percent to the top 1 percent.
So you see the big switcheroo? The rich used to pay higher taxes to the government. Now, the government pays the rich interest on a swelling debt, caused largely by lower taxes on the rich. Which means a growing portion of everyone else’s taxes are now paying the rich interest on those loans, instead of paying for government services everyone needs.
That’s wrong. America’s wealthy have never been wealthier. They should pay their fair share of taxes. The big switcheroo should be reversed.
Is being a billionaire a disqualifier for office?
As predicted in this space back in December, phase one of the Bloomberg 2020 media coronation is well underway.
The former Mayor of New York City has spent years funneling hundreds of millions of dollars to non-profits, cultural institutions, the academy, and political candidates. Now, it has paid off with a bumper crop of endorsements.
In the process, he has collapsed former Vice President Biden's support in the African-American community in South Carolina over just several news cycles.
Your tax dollars at work: Trump admin’s new policies more alarming than president’s vengeance campaign against perceived enemies
So, while Donald Trump has been parading his vengeance campaign against perceived enemies, what’s his actual government been doing?
Inquiring skeptics want to know.
Mostly, once we set aside the pomp of awarding undeserved medals to Rush Limbaugh and continuing to irritate foreign leaders who had considered themselves allies, the answer is that the government continues to pursue the anti-immigrant, anti-science, anti-environmental policies that have marked the last three years.
He is promoting a candidate for the Federal Reserve board who believes in returning the country to valuing the U.S. dollar to the gold standard, a policy rejected decades ago, he is talking about cutting a fifth of U.S. aid to foreign countries, and he is backing an end to fighting fraud in student loans. A deputy secretary of the Department of Veteran Affairs has dismissed, while the department has been spending millions in outside health services with no apparent accountability. And the Pentagon has been ordered to halt a $10 billion computer project because of a lawsuit filed by Amazon that says Trump put his heavy thumb on the scale to keep the contract from going its way.
Jeffrey Epstein case threatens to drag Virgin Islands elite into the muck. Will it matter?
ST. THOMAS, U.S. Virgin Islands — The U.S. Virgin Islands opened up a new and explosive front in the battle over Jeffery Epstein’s $600 million estate last week when it included one of the sex offender’s companies, Southern Trust, as a co-defendant in the case.With that late amendment, the attorney general’s office seemed to be painting a target on some of the island’s most prominent figures, including Gov. Albert Bryan Jr., and a former first lady, Cecile de Jongh.Social media and the island’s legal community erupted with speculation that the powerful officials might get dragged into the mire... (more…)