Wednesday, September 19, 2012

Good News (sort of) Regarding Credit Card Debt

Good news, Americans are strengthening their balance sheets by paying down credit card debt...
Oops, bad news --- Americans are spending their "excess" funds on reducing debt rather than buying things and promoting our economic recovery ...
But more good news --- because of lower debt levels, Americans will have the capacity to spend more in the future which will support economic growth ...
Oops, but maybe more bad news --- our partisan Congress doesn't seem too interested in doing anything significant to foster economic recovery --- and what are the prospects that will change after the November elections?

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The Republicans Charge "Class Warfare" -- They're Right

New York Times Editorial, September 18, 2012

It turns out that Mitt Romney was right. There is class warfare being waged in the 2012 campaign. It is Mr. Romney who is waging it, not President Obama, and he’s stood the whole idea on its head.

When you think of class warfare, you probably think of inciting anger, resentment and jealousy among the have-nots against the haves. That’s what Mr. Romney has accused Mr. Obama of doing, but those charges have always been false. The truth is that Mr. Romney has been trying to incite the anger of a small slice of the richest Americans who need no government assistance but get it anyway, against the working poor, older Americans, the disabled workers and veterans, and even a significant chunk of middle-class Americans.

That was the message of remarks that Mr. Romney made in May at a private fund-raiser held at a private equity manager’s estate in Florida, a moment when he thought he was safe from annoying reporters and cameramen, and other Americans who are not rich enough to have bought a ticket to the event. 

A video made public on Monday by the magazine Mother Jones showed a Mitt Romney who felt free to speak candidly about his campaign and how he would conduct a presidency. In that safe zone, Mr. Romney spoke with a bone-chilling cynicism and a revolting smugness. If he is elected, he said, capital will come back and “we’ll see — without actually doing anything — we’ll actually get a boost in the economy.” That’s the state of trickle-down economics in the 21st century. 

Gone was the pretense that he will be a president of all Americans. Mr. Romney rather neatly divided the country between the people who matter and the 47 percent he does not care about. 

To Mr. Romney, that 47 percent consists of people who do not make enough money to be required to pay federal income tax. They are freeloaders, he said, “who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it.” It is not his job, he said, as a candidate nor apparently as president if he is elected, “to worry about those people.” 

By his definition, those undeserving freeloaders include workers in low-paying, menial jobs (sometimes more than one job) who don’t even earn $9,750 a year, the amount at which they would start to owe federal income tax. Also included are older Americans whose Social Security pensions are too low to be taxed, disabled veterans and people who were maimed on the job. 

This group also includes some middle-income Americans who make, say, $50,000 a year but are not required to pay taxes after they take advantage of child credits, marriage penalty relief and other tax breaks, many of which are part of the Bush-era tax cuts that Mr. Romney backs with a blind ideological fervor. 

But, of course, Mr. Romney was not talking about the Americans who make so much money that they are able to avoid paying any tax at all or who, like him, are able to shelter their incomes in overseas banks or tax loopholes that permit them to pretend that ordinary income comes from investment and thus pay lower taxes. Mr. Romney has been paying, by his own account, about 13 percent to 15 percent of his enormous income in federal income taxes. Just compare that with your own tax return.

Everything about Mr. Romney’s characterization of this mythical slice of lazy, shiftless Americans was wrong. A vast majority of Americans pay federal taxes, either income tax or payroll taxes for Social Security and Medicare — or both — as well as other federal fees. They also pay state and local taxes and sales taxes.

The government’s revenue problem does not start with the poor but with the richest people, through the Bush tax cuts and other changes. The tax cuts for the richest people should expire now, and the middle-class cuts should do so eventually. But that will not happen as long as people like Mr. Romney protect the rich by turning the working poor and middle class into the enemy. 

Mr. Romney may have been talking about electoral tactics: those people are going to vote for Mr. Obama, so let’s concentrate on our kind of people. It’s also possible that he was mouthing the words of the extreme right without really believing them. But all the possible explanations say terrible things about Mr. Romney’s character. 

The right wing has long been whining about people who don’t pay taxes and who, therefore, don’t deserve a say in government. They have it backward. The shame is not that those people don’t pay income taxes. The shame is how many poor people there are when the top 1 percent can amass uncountable fortunes fed by tax breaks and can donate tens of millions of dollars to political candidates to keep it that way.