WHERE THE TEA PARTY?

I would say I am surprised at how the tea party has exploded in popularity with the public, until I remember what the Federal government did to cause it. Naturally, many patriots finally had enough and revolted.

I voted for Dwight Eisenhower in 1956, and have never looked back, until now. The national GOP, in my humble opinion, is no longer the representative of the conservative common man which it had always tried to be, and still pretends it is. I am a dues paying member of the Morgan GOP, but blind allegiance and financial contribution to any national party because you think they are pursuing your ideals alone is what got us here. On the other hand, the Democrat Party is certainly not representing any tax-paying citizen either. Wake up America!

Dwight Eisenhower, a military genius, warned us in his departing speech as President, to beware of the military/industrial complex, who, perhaps with all good intentions, would become so powerful in the name of national defense; that they would in effect, control the country’s economy and direction. Whatever you believe in terms of government’s role among its citizens; rest assured there is a counterpart in the other party who believes you are nothing but a complete radical, and is willing to invest and work to stop you. This is what drives the funding of both parties and keeps them both alive and strong. Both of them send the same message, and both succeed with it. Send me money, because the other guy is the bogeyman!

Both parties now belong to the money, and the grassroots needs to face it. Washington is run by lobbyists, who are paid by people wanting special legislation for their own selfish interests. Many fired elected representatives simply graduate to lobbying, probably at higher pay. And I am talking about both parties. Yet, I predict the tea party will never be able to acquire control of the Republican Party, and they certainly won’t gain control of the Democrat party. I also predict that no third political party will ever supplant either of the other two, whose main objective is to see who will get to control and spend the money. The third party always costs one side or the other an election, but never wins one itself. What then can the tea party do to help?

Today 40% of every dollar the Congress appropriates is borrowed money. Now Ben Bernanke says he is going to print even more artificial dough; by buying back the same debt the Treasury has already issued, from the banks who bought it from them in the first place, with more counterfeit fiat money. This is inflation personified! The US dollar continues to sink to a new low in the index basket comparing it to other major currencies --- 77 cents against the average basket of international currencies.

I watched Republican minority leader John Boehner earlier this year on television in Pennsylvania, where he said: “We need to tell the nation we are broke, and tell them Social Security retirement age needs to go up to age 70, and further it needs to be means tested. This means if you have worked your tail off to accumulate any assets of your own, you will be denied SS. This is from the man who wants to be the next Speaker of the House. One of the possible solutions, I would offer for the SS problem, is not to raise the retirement age, but to remove the SS tax cap on all income above the present $106,000 annual limit. Most Americans pay SS tax on every dollar they make. But the man, or woman who makes $1 million per year, pays SS tax on only 10% of his income. If you agree, please let all three of your elected Federal representatives know how you feel!

I watched Senator Corker (R-Tennessee), whom I personally like, tell CNBC last Friday morning that everything was on the table, including means testing for SS, which means if you make too much in retirement, you will not ever get it Yes, I can live without it, but I paid for it for 51 years, and I feel I am due it.

Don’t think they will never do means testing. Already Medicare premiums are means tested. I have never made over $250,000 annually in my life. But I was told two years ago my Medicare premiums were going up because my retirement income was too high, and they did go up. But the national GOP wants to tell us a tax increase for those making over $250,000 in annual income will penalize nearly every small business in America. How many small businesses do you know who really “net” over $250,000 a year? I ran a small business for 40 years, and I never did. But I can tell you there are thousands of Wall Street financiers who do. And they are saying to both parties, “If you take my money, you darn sure better not raise my taxes, and I have plenty of money to give.” The Wall Street cats play the middle income class against the poor among us, and laugh all the way to the bank.

You may not know the average 2009 income of the top 25 hedge fund managers, who are largely responsible for the mortgage debacle which caused our recent economic collapse, was over $1 billion each. Why are they partially responsible? Because when Greenspan kept rates at one per cent for eighteen months after 9/11, they said to the money market, “This one per cent is killing us. Figure out how to get us ten per cent return, and we will buy as much as you can provide.” Some unscrupulous mortgage brokers, with Barney Frank’s encouragement, figured how to do it. Make ten per cent mortgages to people who can’t pay, and don’t care; but they will sign anything if you tell them they are getting a house with no money down. These fund managers each made one billion with a “B.” The poor beggars only averaged $464 million each in 2008, a really bad year because of the crash. Before the crash in 2007, they averaged $900 million each. So they, alone in America, are better off already than they were before the crash. Yet, their income tax rate on all this earned income is 15% capital gains, because of a huge tax loophole called “carried interests.” The national GOP will not even consider talking about changing it, even entirely apart from the Bush tax cuts, which are a separate issue.

Two years ago, Goldman-Sachs was on the verge of being broke, and they borrowed $5 billion at 10% interest from Warren Buffett, America’s second richest man, to gain capital. Now the government has bailed out all the Wall Street cats. And Goldman is now sitting on $390 billion in net liquid cash, and wants to pay Buffett back early, even with a penalty. They already paid back TARP, because they wanted out from under any government scrutiny on their payroll bonuses.

Meanwhile, the government is bragging now about how the TARP program is actually returning $25 billion profit to the government. Good, but they say nothing about the estimated 154 Billion dollar bail-out cost of AIG Insurance. Nor did they mention Fanny and Freddy at a bail-out cost of from possibly 221 Billion to 363 Billion

This bailout is what allowed AIG to pay off all the billions of dollars of insurance Goldman had bought from them on this crappy mortgage mess, by purchasing credit default swaps from AIG. Without the insurance being paid them, Goldman was in danger of collapse. But now, thanks to you and me, and the money we borrowed to rescue AIG; Goldman is in great shape, and has no supervision over how many billion dollar bonuses they pay.

What then, do I see as the answer? The tea party can make a real difference! It needs to continue to grow, and to organize and focus itself nationally, so that it will have real clout. It should not spend all its efforts on individual races. Then it needs to have a national convention, not for naming candidates; its sole purpose to prepare a slate of demands for the 2012 Federal election platform planks. It needs to divest itself of its Republican bias, and present to both major parties the opportunity to endorse its platforms and objectives, with the pledge that whichever party embraces the most points from the tea party platform, will be assured the support of the tea party across the board. Let’s hope at least one of the parties would recognize the threat and awaken to reality. There are more us of than there are of them, and to quote---we are mad as hell, and we are not going to take it anymore.

One more thing about the FAIR TAX and I am through. I truly believe the ultra rich are actually providing the money to support this movement because of the enormous benefits it will mean to them. Please stop and think about it. It makes no difference to the ultra rich whether the FAIR TAX is 23%, 29%, or 35%. They will save either way because it is only charged on what you spend. The average American will pay that rate on nearly every dollar he makes, allowing that he may be lucky enough to save 10% of his income. Do you think the average billionaire, making $1 billion per year, is actually going to spend anywhere near that much on consumer purchases, even including his multi-million dollar mansion? But he will be taxed only on what he spends, not his investments.

Steve Forbes had it nearly right. We need instead a flat tax, with no deductions, including church or home interest, so that everyone, including the richest and the poorest, does pay their fair share. And if the poorest, who are nearly totally subsidized by the government, knew they had to pay a fair share, there would be less demand for government services, and fewer votes could be bought by political parties with a promise to pay. I highly suspect if every one paid just 15% flat tax, we could fund a decent Federal budget, as opposed to a FAIR TAX of between 23 and 35 per cent on consumer purchases only.

We can not win by helping one party. Only by playing the two major parties against each other for election, will those of us who call ourselves patriots have any chance to really make a difference.

WHAT NOW?
There is an old stock market mantra, “Sell in May and go away.” It could not be more true this year. In the last 2 months, the Dow is down more than ten per cent, or $1,200. Volatility is increasing, up or down over $200 in a given day. The stock market is saying, look out below. If it goes as low as $9,600; look out below ‘til we reach $9,000 and possibly $8,700.
These are the reasons why. One, the recent recovery was paid for with borrowed stimulus money, over $2 trillion in government spending. Now the money is running out.
Two, despite everything Washington has tried to do, about ten per cent of normal workers are trying to get by without a paycheck. And our conservative Republican friends, who let Wall Street out of the corral without a whimper, causing a housing debacle; are reluctant to extend any unemployment benefits, saying we cannot afford it. What can we afford? And John Boehner, House Minority leader, says retirement age should go up to seventy, and means testing should prohibit Social Security checks to those who have been wise enough to set aside their own capital.
Three, while we were once the world’s largest producer, we are now the world’s largest consumer. And now we are failing in that, too. Our economy is now seventy per cent consumer spending, and they are becoming scared again and cutting back purchases.
Four, the housing debacle, first home values fall since the great depression, was helped somewhat by the promised $8,000 government check for buying. Now its over, and sales are down and foreclosures are going up.
Five, many states are drowning in fiscal deficits, and unlike the US government, they can’t print money. The fifty state cumulative deficit is about $127 billion. New York, California and a few others are about to sink. Not to mention the underfunding of their defined benefit guaranteed employee pension plans.
Six, the sovereign debt crisis of individual nations; beginning in Europe with Greece, is just a harbinger of what will happen when it finally reaches us. The dollar will lose its status as the world reserve currency, eventually to be replaced with the Chinese yuan. China has the world’s largest natural gold reserves, and yet has just made a deal to buy most of an American company’s gold production.
The only way I see the US is going to be able to repay our debts is devalue the dollar and repay with cheaper dollars. This means eventually, inflation is going to raise its ugly head with a vengeance.
What can you do to fight it? While it won’t help the economy, try to set aside some savings. Consider a purchase of gold or silver. If you have any long term loans, consider refinancing them now while interest rates are at a pretty good low. Send John Boehner a first class letter telling him what you think about his Social Security proposal. And be careful for whom you vote in July and November.