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The Cascade Effect,
The Economic Destruction of the US by Bush and The Republican Party.

Since before the Iraq war I have been writing a series of articles, posts and blog entries about the ruinous economic policies of the Bush Administration and Republican Controlled Congress.

Most if not all of my predictions have come true, and
unfortunately we are now entering the end game of America's
Preeminence. The Cascade Effect has begun, and the longer
the momentum continues the harder it will become to stop and reverse.

Jobs are the economic engine of the US. Without well
paying jobs the economy will slow and eventually fall
into decline.

The number of well paying jobs in the US for the middle class
have been on the decline and accelerating. The jobs have
been exported to foreign countries with low wage workers.
In the past this was not an issue because the jobs exported
were the low wage labor intensive jobs.

Now, the previously high paying jobs involving high tech
assisted production have been exported. This increases the
profit margin of the US Corporations but at a long term cost
to Americans and America.

Let me explain.

For every High Tech job exported 7 Americans are effected
in a ripple effect. If enough Americans in a community lose
their jobs the following occurs.

The food vendors and restaurants in the community suffer
or close.

The suppliers to the closed industry suffer or close.

Service Retail Stores suffer and close.

Foreclosures of homes occur.

The Banking system becomes illiquid or reluctant to make

The community becomes a distressed blighted district
if no other commerce replaces the lost jobs.

This is the NEW micro economic situation.

Throw into the mix, the Doubling of the US National Debt,
The rising Annual Deficit, the Increasing Debt Interest payments,
the collapsing housing market, the crumbling financial industry,
the impending commercial real estate collapse, the retiring baby
boomers with the unfunded liabilities of Social Security, Medicare
and Medicaid attached to their retirement, core inflation increases
of food and fuel, the high personal debt, the coming credit collapse,
and the parts are in place from economic collapse.

This can be fixed, but because of irresponsible fiscal policies by
the Bush and Republican Party it will be painful to reverse.

Sunset the tax cuts, the US government needs the cash.

Cut ALL US Budgets by 1/4 of the deficit.
(example if the deficit (on and off budget) is 10% cut all budgets
by 2.5% for 4 years. Based this on the previous years deficit
not projected deficit. If the Deficit is higher than 25% do it
for 1/8 or eight years.

Means test Social Security, Medicare and Medicaid until the US
Budget has a surplus to pay back the loans from these agencies.

Extend the date individuals can begin to receive these benefits by
one month per year beginning 2012.

Give significant tax breaks to US corporations that bring back
exported jobs to the US that increase the net jobs within the US
for that Corporation.

Raise the Alternative Minimum Tax to exclude tax payers making
less than $75,000 and step ladder it to $125,000.

This is a quick and dirty explanation, but if this is not done the
economic slowdown will accelerate.

Originally posted to VirtualTruth on Fri Sep 12, 2008 at 11:00 AM PDT.


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Comment Preferences

  •  Cascade Complete (1+ / 0-)
    Recommended by:

    Best dishwashing detergent out there today!

    "People should not be afraid of their government; governments should be afraid of their people." --V

    by MikeTheLiberal on Fri Sep 12, 2008 at 11:02:56 AM PDT

  •  If people vote their wallets: (4+ / 0-)
    Recommended by:
    AnnCetera, karmsy, DWG, smellybeast

    Is everyone aware that seniors earning $50K or less will not pay income tax under OBAMA'S tax plan?

    Check out the last paragraph at this AARP website:

    Post EVERYWHERE every 5 minutes please.

    ..most profound moments of my life...the last few..

    by tristan57 on Fri Sep 12, 2008 at 11:03:55 AM PDT

  •  This is my opinion (7+ / 0-)

    I have worked on wall street for 19 years as a financial advisor. So view this post anyway you want.

    Time will Tell all the Truth VT, Virtual Truth

    by VirtualTruth on Fri Sep 12, 2008 at 11:05:32 AM PDT

  •  what you are describing (0+ / 0-)

    Is the shift from an industrial to a service economy. In a dictatorship of capital such as the US, this actually aids stability, since it destroys the working class, eliminates any chance of coordinated worker action and makes unions obsolete. Middle class jobs as we now know them are office jobs, professional jobs, which are not being outsourced because they don't produce anything to be outsourced.

    Going even deeper we understand that the middle class itself is a relic, its existence is valuable only because currently consumers serve a vital function in the circulation of capital, which role can be eliminated as the process is streamlined. 1 percent of the US population possesses the capital and another 10 percent or so are needed to do jobs that are actually necessary, pick up garbage, fix roads, lay cable, build buildings, grow food. Everybody else is unnecessary, if we had a more efficient system of captial circulation, we could all stay home and draw welfare checks since that would cost less than keeping us occupied in sending emails back and forth, as most of us are now essentially doing. The loss of jobs is irrelevant to this equation, only the loss of capital matters, and capital is still continuing to flow into the US. If the capital flow was reversed, that would be a true disaster, but that has nothing to do with plants closing, plants closing actually preserve capital.

    Law is a light which in different countries attracts to it different species of blind insects. Nietzsche

    by Marcion on Fri Sep 12, 2008 at 11:25:00 AM PDT

    •  I disagree with you, (4+ / 0-)

      The service jobs are also being exported. The Call centers for many companies are over seas. The office jobs tied the the manufacturing of goods are also going off shore. The Trade Deficit is growing and the US Debt is growing Both are indications that US Capital is diminishing.

      The economic model you wrote of existed PRE-China's economic expansion. It is no longer the case.

      Time will Tell all the Truth VT, Virtual Truth

      by VirtualTruth on Fri Sep 12, 2008 at 11:31:09 AM PDT

      [ Parent ]

    •  You assume neo-fuedalism is inevitable (0+ / 0-)

      I've heard that word for 28 years:  Inevitable.  The global economy is inevitable.  The service economy is inevitable.  China and India achieving a consumer economy is inevitable.  and on and on...I think you should check your assumptions, and ask yourself who wrote those books you have read.  This is like religion.  Nothing is questioned, everything is written on stone tablets?  The rapture is inevitable. Well, I haven't read your bibles.  I've merely functioned in various roles in an economy for 55 years.  I think the global economy is IMPOSSIBLE.  The service economy is IMPOSSIBLE.  China and India achieving a consumer economy is IMPOSSIBLE.  

      real democracy happens regardless

      by Started Smoking at 52 on Fri Sep 12, 2008 at 11:47:15 AM PDT

      [ Parent ]

      •  I base my views on experience (1+ / 0-)
        Recommended by:
        FundaMental Transformation

        Like I said I have posted what I expect will happen and it has. My views are based on intuition and experience.

        There are patterns and if you pay attention you can get a feel of the direction the patterns will take.

        I also have clients through out the country and in different industries. From them I get an overview of the country's economic health.

        I also have many contacts overseas and spend significant time in other countries.

        I do believe reading books help you in real life experience. Books can only take you so far.

        Time will Tell all the Truth VT, Virtual Truth

        by VirtualTruth on Fri Sep 12, 2008 at 12:15:08 PM PDT

        [ Parent ]

    •  I think you may be forgetting something... (2+ / 0-)

      ... Marcion (sorry if I sound pompous - your statements got me), when you say this:

      plants closing actually preserve capital.

      What I think you are forgetting is the reason money flows is because people have needs.  Bottom line.  If we didn't have needs, we would have no need for money.  If we had no need for money, we would have no need for 'jobs' outside of the tasks of our family lives.  We do have needs - physical, mental, emotional, spiritual, social, etc.  There is not an "efficient system of capital circulation" in a democracy - that prevents the majority of people from satisfying their needs.  If people are too dissatisfied for too long - they will revolt. That is not the most efficient way.  That is the crisis way.

      Plants closing down may preserve the capital of the organization, but what is the point of their capital - to satisfy needs - theirs and their customers'.  Theirs especially, but it is by necessity a two-way street.  I posit that over-focus on 'capital protection' and too little focus on 'system protection' is one of the main causes of the existential financial crises that we face today.

      Over emphasis on protection of capital neglects infrastructure, neglects innovation, neglects the purpose of the capital.  Think about it - one of the reasons the oil companies are doing so well is because of 'stock buy-backs'.  Instead of investing in the next wave of energy, they are creaming the top and giving it back to their shareholders.  It's wealth protection at the cost of innovation and system protection.  They feel confident that someone else will figure out what to do next, and they're socking it away for when that day comes - Instead of taking the lead and moving into innovation - the survival of the system. (Which of course is their right to do.)

      What good does it do to preserve billions only to have to write most of it down because the framers of 'the ownership' economy lost sight of the purpose of the whole dang thing - and it collapsed right below them.   All these attempts to protect capital (securitizing, hedging, market cornering, stock buy-backs, 'creative' accounting, etc.) have been their undoing.  Just like the bridges and levees and entire communities thanks to their clever attempts to protect not only current capital, but also future capital.  Finding ways to pick the pockets of future generations.  That's clever. By shortchanging and book-cooking they have protected not much at all.  The system is broken, and the rules need to be rewritten to protect the entire system, not just the folks at the top.

      Anyways, sorry to ramble.  And thanks Virtual Truth for taking this on.  These are the kinds of discussions we need to be having:  "What's the plan for the future of our economy?"

  •  You are correct - I've watched this coming (2+ / 0-)

    most of my adult life (Bush didn't start it, he just pushed us to the edge - and possibly over the edge.)  I don't totally agree with your solutions, but they would work if it's not already too late.

    My program would be 1) stop Iraqi occupation and reduce our military presence everywhere else, 2) get rid of all no-bid contracts and re-nationalize the privatized sectors (military, prisons, etc) of governmental responsibilities (cheaper to do it ourselves than hire a for-profit company to do it), 3) sunset all tax cuts - especially "corporate welfare", 4) medicare for all, 5) double taxes on corporations exporting jobs, 6) WPA & CCC to rebuild/retrofit infrastructure and restore forests/wetlands (extreme climate change has got to be addressed and this way you create jobs while addressing it), 7) double tax any company making inefficient anything, triple tax fossil-fuel industry, and 8) tax incentives to producers of energy efficient anything (including, of course, electricity and vehicular fuel).  Once all that is in place, start a serious "bond drive" ala WWII bonds to get our debt, like our energy, back home.

  •  Easy on the taxes (0+ / 0-)

    I think with the sunsetting of the tax cuts AND cutting the Budget with the job creation / tax revenue generators and the cost cutting to the social programs we should be OK.

    Health Care should be bottom up.

    $10,000 of health credits per tax payer for preventative care. The individual Must get a physical check up each year or lose a portion of the benefits. Give the Taxpayer a lifetime Budget of $250,000 for medical care of their choosing. Pro rate this by age 18 to 72 at the start of this program.

    The way to keep medical costs down is early treatment. If a person does not address a medical problem reduce their benefits.

    This is not to REPLACE medical insurance but to give a minimum level of medical care.

    Time will Tell all the Truth VT, Virtual Truth

    by VirtualTruth on Fri Sep 12, 2008 at 11:44:04 AM PDT

    •  Health care ideas; (0+ / 0-)

      Re-outlaw the advertising of prescription drugs.
      Outlaw high-fructose corn syrup and several other cyto-toxins
      Mandate nutrition education in grade school, with protection from food producers corruption.
      ..any more ideas?

      real democracy happens regardless

      by Started Smoking at 52 on Fri Sep 12, 2008 at 11:53:44 AM PDT

      [ Parent ]

  •  Hotlisted: I'm looking forward to reading your (0+ / 0-)


    "We, two, form a multitude." --Ovid

    by CanyonWren on Fri Sep 12, 2008 at 11:46:41 AM PDT

  •  Warning (1+ / 0-)
    Recommended by:
    Started Smoking at 52

    I am an amateur, so don't expect anything fancy!

    Time will Tell all the Truth VT, Virtual Truth

    by VirtualTruth on Fri Sep 12, 2008 at 12:16:47 PM PDT

  •  AIG, Lehman Brothers and Merrill Lynch (0+ / 0-)

    Read this again based on

    Again, there is a solution...

    It will just be very very painful.

    The tax cuts must be rescinded.

    Government spending must be reduced and pay/go instituted.

    The age at which retirees can claim benefits must be extended by one month a year and benefits will have to be means tested.

    The alternative minimum tax must be raised to exclude individuals who are single at $120,000 and Couples to $200,000. (middle class tax break)

    Social Security taxes need to be raised to 12.5% split between employer and employee and also raised to include the first $200,000. (I need to double check this percentage it may be less)

    Businesses will receive tax breaks equal to the gross expense of bringing US jobs BACK to the US for 7 years of continuous employment of the position as long as the net jobs of employed are increased by the same number of jobs at the job site.

    this is the medicine to get the country back on track

    Ending the tax cuts to the rich will lower the debt, which will strengthen the US dollar, which will mean oil will cost less, which means inflation will go down, which means core inflation including food and fuel  will diminish, which means the economy will become stronger because US workers will be able to afford to buy discretionary products, which will employ other Americans who will now have jobs so they will not lose their homes which means the housing market will stabilize, which means banks will be more solvent, which means money will once again become liquid which means loans for investments will once again become available which means industry will grow which means increasing GDP growth and more jobs

    Time will Tell all the Truth VT, Virtual Truth

    by VirtualTruth on Mon Sep 15, 2008 at 08:04:16 AM PDT

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