S&P Downgrades USA's Credit Outlook

None of that is politically palatable. There is a very narrow spectrum of taxability that will keep the people in office in office. You can play with how you sell it. In the late 70s, for example, it was high rates, a lot of loopholes. When Reagan sold people on lower rates, it was lower rates, but fewer loopholes. The net effect was close to the same thing in terms of tax revenues. The amount of tax revenues they end up bringing in still stays within a small range (taking into account how robust the economy is at the moment, to create income), because the only thing that has changed is the rhetoric.

Congress is not going to push through a "higher tax rates, no loopholes," bill. Sure, it would raise a lot more revenue. And if we are going to run these levels of debt, we should be raising a lot more revenue. But your Congressman wants to stay in office. And that kind of tax code will get lots of people unelected, from the President on down. Taxes are the number one populist issue.

The flip side problem is that debt is a two-pronged problem. It is not just revenues, it is spending. And it has been the spending side that has put us into such great debt. Again, though, Charley Congressman, gets and retains power by handing out favors to special interest. And favors = Federal money getting handed out like bags of money get handed to mob hoods. So lowering the spending amounts -- starting with the failed entitlement programs, which are sinking us most -- is a political football too. Not handing out favors gets lots of people unelected, from the President on down.

This is the system we have allowed to form because at points during the last 50 to 100 years, as a population, we didn't check it properly and we allowed our legislators to hand out more and more favors for power, and didn't hold anyone's feet to the fire regarding how to pay for it.

And as with any kind of Federal spending, once the special interests get their hands in the cookie jar, you can't just scale it back by saying, "OK, we're done." You have to pry the money from their dead cold hands. In fact, they expect more and more, and they hold the office of Charley Congressman over his head for ransom to get it. It's why it has gotten worse and worse, and not even with the warnings people are voicing now, do I expect it to change. It is going to take a real crisis to force change.

 

I wish people would realize this is not a GOP issue. It's a political issue. The rising income gap is due to what I posted about above. People with the money to buy government favors are the ones getting richer. Fuck up your investment bank? Call up your old co-worker at the Treasury Department. Need to revive your equipment making company that no one has any demand for? Get Congress to put $100 million into a massive spending bill.

This is not Republicans or Democrats. It is our political system. It has become pay for play. And only a small percentage have the ability to pay. In return, they are getting wealthier. And that is why there has been a rising income gap.

That is a simplistic post that doesn't account for a lot of other things. But that is what is going on in a nutshell. And meanwhile, people who aren't part of that pay for play group -- people on this message board -- have silly arguments about Republicans and Democrats and argue it so vehemently -- when there is so little difference between the two. The political parties that actually have power in this country use empty rhetoric to win over the masses and people actually get sold on it. And BOTH Republicans and Democrats use money to buy their power from a small segment of the population that is riding their influence to a greater income gap.