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Follow Where You Tax Dollars Are Being Spent

Tyler Durden's picture





 

Earlier during the S&P conference call, one of the participants asked the brilliantly simple question: with the Fed monetizing debt, why should the US even bother to collect taxes? When one steps back from the apparent insanity of this rhetorical question, it does present a very good though experiment: after all what better way to stimulate the consumer part of the economy than to let 'taxpayers' no longer be that, and retain 100% of their cash. In the meantime, since nothing impacts bond yields, the statists will say, the Fed can continue to monetize debt indefinitely: after all we have a printing press and a reserve currency (an argument so asinine even the S&P laughed at it), until we get to a point where consumers have no choice but to lever up in the face of rampant inflation. And don't forget - the Fed can print an infinite amount of Treasury puts to where it alone pins yields to desired levels. While we hope to see much more discussion over this very simplistic yet so crucial question in the future, for all those (and at about 53%, it's not that many) in the US population who pay income and other taxes, courtesy of the White House, here is a schedule that shows where tax dollars are being spent. And don't forget: the Fed continues to match roughly one dollar for every dollar reimbursed back to the IRS.

From the White House:

In his State of the Union Address, President Obama promised that this
year, for the first time ever, American taxpayers would be able to go
online and see exactly how their federal tax dollars are spent. Just
enter a few pieces of information about your taxes, and the taxpayer
receipt will give you a breakdown of how your tax dollars are spent on
priorities like education, veterans benefits, or health care.

 


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Mon, 04/18/2011 - 14:24 | Link to Comment TheGreatPonzi
TheGreatPonzi's picture

Or as someone there put it, "should I donate to the Red Cross after, or before the BoJ prints $500 billion out of nowhere"? :D

Mon, 04/18/2011 - 14:28 | Link to Comment redpill
redpill's picture

Nothing quite kicks off a robust round of "every man for himself" like fiat ponzi.

Mon, 04/18/2011 - 14:40 | Link to Comment Obummer
Obummer's picture

Ladies and gentlemen, fellow Americans, good people of the world. Today one of the world's top ratings agencies told us that they had changed their outlook on the United States debt outlook to negative for the first time ever. This action has the potential to change our society profoundly. But what exactly does this mean for us?  Folks, let me be clear, this is a good thing for this country, and for my administration.

As we all know, debt is bad. In talking with our economic team we find that having debt with a negative outlook is positive for us, for this great country. You see, debt with a negative outlook is a double negative.  With a double negative things actually turn positive. And we know this is true because we see positive developments everywhere, from green shoots in the economy to value deflation in the dollar.  Once again we see hard-working Americans creating value for the world.  Once again we see the path before us, the path to win the future.

Some may try to disprove the double negative standard.  They may say that two wrongs do not make a right, that one should not throw good money after bad.  Rest assured that this will not happen, not as long as I am President. Honest, hard-working Americans deserve better than that. My administration will stand up to these forces of destruction, and we will win.  We will win the future for all Americans, old and young, black, white, brown, and yellow. This is our destiny as a great nation, and we go now to meet our destiny.

Thank you, good night, and God bless America.

Mon, 04/18/2011 - 14:43 | Link to Comment Bill the Cat
Bill the Cat's picture

Ack!

Mon, 04/18/2011 - 14:59 | Link to Comment WaterWings
WaterWings's picture

In the Age of the Printing Press, taxes have two functions:

1) perceived "equal" redistribution of wealth

2) price controls

That is all.

Mon, 04/18/2011 - 14:46 | Link to Comment Hugh G Rection
Hugh G Rection's picture

+1

 

You should write speeches for the sockpuppet

Tue, 04/19/2011 - 01:47 | Link to Comment StychoKiller
StychoKiller's picture

You so sure (s)he don't??

Mon, 04/18/2011 - 14:49 | Link to Comment AmazingLarry
AmazingLarry's picture

Oboy...

Mon, 04/18/2011 - 14:46 | Link to Comment DonnieD
DonnieD's picture

Good stuff, Barack, but I think Pete Stark disagrees on debt being bad. The more debt you have, the wealthier you are. Duh.

Mon, 04/18/2011 - 14:56 | Link to Comment sdmjake
sdmjake's picture

"No circumstances were ever so bad that a little human effort couldn't make them worse."
- Frederik Pohl, The Other End of Time, chap. 15

Mon, 04/18/2011 - 16:33 | Link to Comment SwingForce
SwingForce's picture

AWESOME! I could hear The Douchebag What's in Charge SAYING THE WORDS!

 

BRILLIANT!!

Mon, 04/18/2011 - 17:11 | Link to Comment A Texan
A Texan's picture

Yeah, but you need an "ahhhhh" or an "uhhhh" about every 5th word, plus at least one very uneasy 5-7 second pause as the DOTUS thinks about how his speech might affect his brackets, and how much Aunt Esther will yell at him for not putting down the seat.

Tue, 04/19/2011 - 00:24 | Link to Comment D1eeeeeNAHHHHH
D1eeeeeNAHHHHH's picture

Men don't every do it!  Women have successfully sued for child support after the donations! 

Don't believe these clinics' stories of never being known in court.  google it for yourself and find out!

Tue, 04/19/2011 - 07:19 | Link to Comment gall batter
gall batter's picture

i happened to click on the link and dr. lazar greenfield said:

 

"The editorial cited research that found that female college students who had had unprotected sex were less depressed than those whose partners used condoms. It speculated that compounds in semen have antidepressant effects."

Has nothing to do with child support--just semen as a mood enhancer. 

 

Mon, 04/18/2011 - 18:11 | Link to Comment morkov
morkov's picture

you jackass!!! you have spent "Chinese" lives making what you have customized...when life meets life, someone will make a call on yours...the only question is "did lives met yet, or is the US military still in control?" is it every man for himself or everyman for his mates...and another world war

Mon, 04/18/2011 - 14:31 | Link to Comment Hugh G Rection
Hugh G Rection's picture

transparency bitches...

 

liquidize everything, roll into PMs, and tell the the Feds to eat a dick.  South America is nice this time of year.

Mon, 04/18/2011 - 14:35 | Link to Comment redpill
redpill's picture

I'll buy the first round of cerveza in Santiago.

Mon, 04/18/2011 - 14:56 | Link to Comment Hugh G Rection
Hugh G Rection's picture

sounds good.

 

I got the first round of panocha. 

Mon, 04/18/2011 - 14:34 | Link to Comment Sudden Debt
Sudden Debt's picture

Donate your money or watch it turn worthless. In this democracy you get to make your own choice!

Mon, 04/18/2011 - 15:41 | Link to Comment Mark McGoldrick
Mark McGoldrick's picture

What happens to the value of the US dollar once the Federal Reserve absolves Treasury's debt? Remember, the Fed is our largest creditor.

Does anyone actually think the Federal Reserve would destroy itself?

Mon, 04/18/2011 - 21:11 | Link to Comment FEDbuster
FEDbuster's picture

Let's not forget the FED kicks any interest paid to them back to the US Treasury Dept. after they skim their 6% profit/dividend from the top.  It's just a glorified Three Card Monty game designed to confuse those who try to pay attention to them, most Americans don't care.

Tue, 04/19/2011 - 00:44 | Link to Comment rocker
rocker's picture

Most Americans care. They just don't understand it.  Afterall, most watch Glenn Beck and Fake News.  They are told how to think

Stupid is as Stupid Does.

Tue, 04/19/2011 - 09:10 | Link to Comment FEDbuster
FEDbuster's picture

Beck has done more to try and explain the FED to America than any other TV host (he recently had G. Edward Griffin author of "The Creature from Jekyll Island" on), but the average American could not tell you what the FED does, how it works and how QE is ruining the dollar.  Beck has actually tried to educate his audience about the workings of the FED, our unsustainable debt load, unfunded government liabilities, etc...  He of course is labeled a fear monger, crazyman, doomsayer, nut case, etc.. for the warnings he has issued.  So now S&P will join Beck as a fear monger, doom and gloomer for their downgrade of US debt status.  In fact, Turbo Tim just was on CNBS disagreeing with S&P telling the world the US's future is bright and politicians will come together to solve the debt problem.  Who are you going to believe?

Mon, 04/18/2011 - 14:44 | Link to Comment wisefool
wisefool's picture

One of the most macbre things I ever saw was an advert in the 1990s where Elizabeth Dole asked the american public to donate to the Red Cross. Either Blood or money. She earned a salary of over $1MM per year. And they chased nader out of the presidential race because, as a liberal, he had a net worth of $1MM

Mon, 04/18/2011 - 14:52 | Link to Comment ms1408
ms1408's picture

I wonder if they've listed interest payments to the private federal reserve in that receipt.

Mon, 04/18/2011 - 15:16 | Link to Comment csmith
csmith's picture

But that's the point...the Fed simply remits the interest back to the Treasury. That's the "Ponzi" part of this whole mess. And, as with all Ponzis, the problems begin when "investors" demand that principal be paid off. This is why we're going to have QE3, 4, 5, etc. 

Mon, 04/18/2011 - 14:28 | Link to Comment NOTW777
NOTW777's picture

does this result in tracking or obama spam? a subscription to steve liesman?

Mon, 04/18/2011 - 14:28 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Ohhhh. I hope both.  Goverment tracking me throwing shit at my TV when LIESman talks.  Fun.

Mon, 04/18/2011 - 14:26 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

In reality, isn't all of the tax receipts for the IRS going to the Federal Reserve?  Something about grace Commission Report - 1984?

Mon, 04/18/2011 - 14:29 | Link to Comment stretch
stretch's picture

In which field do I enter the amount of inflation tax paid?

Mon, 04/18/2011 - 14:30 | Link to Comment A Lunatic
A Lunatic's picture

Thanks for pissing me off again.

Mon, 04/18/2011 - 14:28 | Link to Comment InconvenientCou...
InconvenientCounterParty's picture

zero taxes...

I imagine the Tea Party would declare "mission accomplished".

Of course I can't claim to understand what the core values of that group are.

Mon, 04/18/2011 - 14:34 | Link to Comment NOTW777
NOTW777's picture

get help, just say no to koolaid.  ur on ZH - that is a start

Mon, 04/18/2011 - 17:09 | Link to Comment Creed
Creed's picture

what part of

T_AXED E_NOUGH A_LREADY

 

do you not understand? seriously, get a grip

Mon, 04/18/2011 - 14:28 | Link to Comment HamyWanger
HamyWanger's picture

To the great disappointment of bigot, libertarian, pro-gun, silverbug, anti-inflation, anti-Federal Reserve, anti-Semite rednecks, the global economic recovery is accelerating, and our President Dr. Barack H. Obama will get reelected hands down for another 5 years mandate. 

Mon, 04/18/2011 - 14:35 | Link to Comment Uncle Remus
Uncle Remus's picture

How's Walternate?

No, I didn't junk you.

Mon, 04/18/2011 - 14:44 | Link to Comment treemagnet
treemagnet's picture

I did.

Mon, 04/18/2011 - 14:47 | Link to Comment Financial_Guard...
Financial_Guardian_Angel's picture

So did I. Worth every second doing it.

Mon, 04/18/2011 - 15:03 | Link to Comment HamyWanger
HamyWanger's picture

Now, I'm accustomed and pretty much insensitive to bigots who hate me and my message of love.

I'll always repeat that haters of socialism, of gun control and haters of the economic recovery have no place in the XXIst century America. They are intolerant and lunatic dudes living in the past, such as this redneck family: http://www.youtube.com/watch?v=BGkRKT0Q-L4&feature=related

Mon, 04/18/2011 - 15:09 | Link to Comment redpill
redpill's picture

Don't let the racists get you down, Hamy

Mon, 04/18/2011 - 15:14 | Link to Comment Miles Kendig
Miles Kendig's picture

You musta got some sweet vinegar with the DouscheBank Monday staff mixer today Harry.  You're a bit sweeter than usual.  No wonder you're so edgy.  Realizing that most all Americans detest a door to door bible salesman that is only looking at his margin must put a big ? on your chances of making quota in a tougher no/low volume sledding environment.  Hope ya make mission and don't roll too many donuts Harry.

Tue, 04/19/2011 - 12:46 | Link to Comment Marla And Me
Marla And Me's picture

Miles, it's Hamy, not Harry.  There are way too many copy-cat jokster accounts for it to be a coincidence.  What a country we have... the Tylers' hard work and innovation makes it possible for paid trolls to make a living off their sweat equity.  Leaches abound!

Tue, 04/19/2011 - 13:02 | Link to Comment Miles Kendig
Miles Kendig's picture

Thanx for the quality check and timely observation.  Indeed.  Leaches everywhere following Bastiat's dictum that it is easier to live off the productive labor of others rather than suffer the pain of production oneself.  There is a difference between leaching and simply enjoying the tasty waves and cool buzz provided by the ever timely harvest of fine nugs of wonk-a-liciousness that abound in these articles.

Mon, 04/18/2011 - 15:35 | Link to Comment kingwallop
kingwallop's picture

You Sir are a full on NAZI

Mon, 04/18/2011 - 18:30 | Link to Comment Dexter Morgan
Dexter Morgan's picture

Don't feed the trolls.

Tue, 04/19/2011 - 01:05 | Link to Comment rocker
rocker's picture

Sometimes Hamy your just plain stupid. It depends what you call socialism and what you call economic recovery.

For most there is No recovery, unless your a banker or associate.  And it is not socialism if one who worked in a factory at a job of labor and paid in to social security to expect benefits. For what they slaved to providee for themselves.

The problem is, this is what the Pukes want to steal from their slave labor participants. The very money that they paid into the system.  They print for many things. The FED can refurbish these funds too. Just like they did for the undeserving Bankster criminals of Wall Street.   

But, I will say this, If your wages exceed 1 million a year or your assets are worth more than than 5 million, you do not need Social Security. It is suppose to be a safety net as it should be.  If you can not understand this, your just plain Greedy.  As greedy as Lloyd Blankfien, Hank Paulson, and Neel Kashkari.

Tue, 04/19/2011 - 01:11 | Link to Comment rocker
rocker's picture

Just another footnote. We can't take guns from honest people. Because it will be the dishonest who will have them and you will not. Would you take them from Cops or do you believe they are all honest.  LOL on that.

Tue, 04/19/2011 - 01:54 | Link to Comment StychoKiller
StychoKiller's picture

Look up the following word in Webster's:  "Sarcasm"

It'll save ya a lot of typing!

Mon, 04/18/2011 - 16:38 | Link to Comment NotApplicable
NotApplicable's picture

So you're saying that it's worth every second to demonstrate that you don't understand hyperbole?

LOL

You've been trolled. Hook, line and sinker.

Did ya even taste the bait? 

Mon, 04/18/2011 - 17:15 | Link to Comment kingwallop
kingwallop's picture

there was nothing poetic about it

 

Tue, 04/19/2011 - 01:53 | Link to Comment StychoKiller
StychoKiller's picture

Probably wanted to jump into the boat to get to know the fisherman better! :>D

Mon, 04/18/2011 - 14:38 | Link to Comment Mercury
Mercury's picture

Do you mean another four year mandate or another five year plan.

Or are they pretty much the same thing?

Mon, 04/18/2011 - 14:37 | Link to Comment redpill
redpill's picture

Hamy!!  How the hell are ya.

Mon, 04/18/2011 - 14:40 | Link to Comment gorillaonyourback
gorillaonyourback's picture

hamy you did sell all of your silver at 26 and your gold at 1300, wasn't that what you said? so where is your credibility?  oh yeah, lost in the empty space between your ears.  is your ignorance blissful and tranquil?

Mon, 04/18/2011 - 14:45 | Link to Comment HamyWanger
HamyWanger's picture

I did sell all my gold two months ago, indeed. I get more returns in socks anyway, so I don't mind if gold went up a bit after I sold. 

Mon, 04/18/2011 - 15:04 | Link to Comment gorillaonyourback
gorillaonyourback's picture

when printing commenced begining in 2009 m2 was about 800 billion now on its way to 3 trillion about 300% increase. gold  in begining of 09 was about a 1000/oz now 1500/oz. it shoud be 3000/oz by simple math.  so one day hamy study this and prepare.  like the guy in animal house said "thats no way to go through life son, dumb, fat and stupid"

 

 

n

Mon, 04/18/2011 - 15:10 | Link to Comment tiger7905
tiger7905's picture

Latest from Rick Rule. Thinks gold isn't so much in a bull market but that paper is in a bear market.

http://goldandsilverlinings.com/?p=710

Mon, 04/18/2011 - 16:55 | Link to Comment BigJim
BigJim's picture

Hamy != Harry

Mon, 04/18/2011 - 15:08 | Link to Comment SilverIsKing
SilverIsKing's picture

Sold your gold and bought Gold Toe?

http://www.goldtoe.com/

I didn't know they were a publicly traded company.

Mon, 04/18/2011 - 15:39 | Link to Comment aheady
aheady's picture

cha ching

Mon, 04/18/2011 - 21:27 | Link to Comment FEDbuster
FEDbuster's picture

Gold for socks??  I think food might have been a better choice (or ammunition), but to each his own.  A good supply of socks and nice pair of hiking boots may come in handy walking to  the FEMA camp.

Tue, 04/19/2011 - 12:37 | Link to Comment dugorama
dugorama's picture

we won't be walking to the FEMA camps, that's what high speed rail is all about

Mon, 04/18/2011 - 19:48 | Link to Comment Teamtc321
Teamtc321's picture

Hope, Hope and Change!!!!!

Tue, 04/19/2011 - 01:54 | Link to Comment StychoKiller
StychoKiller's picture

Are those socks cotton, or silk?  :>D

Mon, 04/18/2011 - 14:49 | Link to Comment faustian bargain
faustian bargain's picture

sublime

Mon, 04/18/2011 - 19:53 | Link to Comment Hugh G Rection
Hugh G Rection's picture

Ease up on Hamy, his sarcastic trolling is mildly amusing.

Mon, 04/18/2011 - 14:30 | Link to Comment Robslob
Robslob's picture

Warning: If you want to track wasteful spending by your masters then count on someone showing up at your door after visiting this website and have you explain where every dollar you spend goes too!

Mon, 04/18/2011 - 15:33 | Link to Comment Whoa Dammit
Whoa Dammit's picture

All of my tax payments were spent paying for the "follow where your tax dollars are being spent" chart.

Mon, 04/18/2011 - 15:44 | Link to Comment NotApplicable
NotApplicable's picture

Meanwhile, mine went for hookers and blow.

On the bright side, at least it wasn't wasted.

Mon, 04/18/2011 - 14:30 | Link to Comment truont
truont's picture

Great calculator.

Now, for the 47% of Americans who RECEIVE money from the USGovt, where is their calculator to show which of their neighbors they need to thank for subsidizing their lazy asses?

Mon, 04/18/2011 - 14:38 | Link to Comment Sudden Debt
Sudden Debt's picture

Don't look at it as subsidizing. Look at it like a long term investment enron style

Mon, 04/18/2011 - 14:54 | Link to Comment truont
truont's picture

What an amazing coincidence!!!

47% of Americans receive money from the USGovt, and 43% of Americans say that the Federal taxes they pay is "just right". 

http://www.gallup.com/poll/147152/Americans-Split-Whether-Taxes-High.aspx

Mon, 04/18/2011 - 15:20 | Link to Comment Whoa Dammit
Whoa Dammit's picture

“Just right” like in Goldielocks and the Three Bears.

Mon, 04/18/2011 - 14:55 | Link to Comment Crummy
Crummy's picture

I like to think of it as a hedge against revolt.

Mon, 04/18/2011 - 14:38 | Link to Comment tickhound
tickhound's picture

with the Fed monetizing debt, why should the US even bother to collect taxes?

And relinquish an established control mechanism? Governments do not participate in such nonsense

Mon, 04/18/2011 - 14:35 | Link to Comment Greater Fool
Greater Fool's picture

I am once again forced to conclude that the world would be a better place if we weren't ready to blow up quite so many square feet of it at any given time.

Mon, 04/18/2011 - 14:39 | Link to Comment Sudden Debt
Sudden Debt's picture

Where would the fun be in that?

Mon, 04/18/2011 - 14:54 | Link to Comment Greater Fool
Greater Fool's picture

I know, I know. We Americans do like our bombs bursting in air and all that. But do they have to be such expensive bombs? I say we let corporate America get in on the issue.

For example: Tomahawk cruise missiles are expensive, with state-of-the-art guidance systems whose ultimate purpose is to be disintegrated in a fiery explosion. That's wasteful.

Corporate America's version: The Chupacabra cruise missile, which is a bomb with wings and a Mexican sitting on the nose steering the thing. Cost savings: Several million per missile less incidental expenses (masa, Miller Lite, etc.). American ingenuity at work!

Mon, 04/18/2011 - 15:12 | Link to Comment Sudden Debt
Sudden Debt's picture

They tried that once...
Two of them flew into.a skyscraper and a third one went back to base to as what his directive was again and trashed the pentagon.

Mon, 04/18/2011 - 15:18 | Link to Comment Confused
Confused's picture

Well played! 

Mon, 04/18/2011 - 14:33 | Link to Comment tek77blu
tek77blu's picture

Outstanding video on the mortgaging of American's future generations: http://www.youtube.com/watch?v=5ODpilexa0M

Mon, 04/18/2011 - 15:13 | Link to Comment Sudden Debt
Sudden Debt's picture

Smart kid. 1 billion keeps 1000 prisoners in jail for 20 years. Money well spend. WHY DOESN'T THE GOV HAS MORE INVESTMENtS LIKE THIS?

Mon, 04/18/2011 - 16:47 | Link to Comment unnamed enemy
unnamed enemy's picture

It gets better than that, not only to you get to keep 1000 people in jail for 20 years, but the prison's owner gets to buy a new yacht with all the profits - so we all win the future \o/

Mon, 04/18/2011 - 14:34 | Link to Comment IdioTsincracY
IdioTsincracY's picture

Not all is lost ... remember all you need to do is get rich. Once there you'll have access to lower tax rates, international tax shelters, tax refunds just for being rich, etc...

so, c'mon, speed up that pursuit of happiness of yours ...

btw, ... that stuff 'trickling down' is not money ... I'm just peeing

Mon, 04/18/2011 - 14:46 | Link to Comment cxl9
cxl9's picture

Shouldn't you be out looking for a job?

Tue, 04/19/2011 - 01:59 | Link to Comment StychoKiller
StychoKiller's picture

I understand that the Obamatron administration is gonna create more jobs any day now -- being an EOE, the Govt will NOT discriminate against IdiotSyncracies! :>D

Mon, 04/18/2011 - 17:18 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

You really need to watch this short video. It should help you out.

It specifically references "trickling down" BTW.

http://www.youtube.com/watch?v=vgTFiMUF4kY&feature=player_embedded

Mon, 04/18/2011 - 21:38 | Link to Comment Gimp
Gimp's picture

There you go , business deduction - golden shower - fluid write-off from non-recoverable accounts receivables

Mon, 04/18/2011 - 14:35 | Link to Comment Stuck on Zero
Stuck on Zero's picture

Every time someone suggests a new tax revenue method that is fairer and more equitable the government imposes that tax, too! 

Mon, 04/18/2011 - 16:56 | Link to Comment BigJim
BigJim's picture

Didn't you know? Such fairnesses are cumulative.

Mon, 04/18/2011 - 14:39 | Link to Comment treemagnet
treemagnet's picture

Hawking would be required to interpret the possibilities - talk about the ultimate cosmic bunny-hole!

Mon, 04/18/2011 - 14:39 | Link to Comment Kickaha
Kickaha's picture

I posted a couple of weeks ago that instead of QE3 we should have a program where the money going to the TBTF banks should, instead, be divided pro-rata and mailed to each US citizen over the age of 18 in the form of a two-party check, with the second party being a local bank.   Citizen gets check, goes to local bank, and sits down with asst. manager.  Asst. Mgr. runs credit report.  If taxpayer is in debt, taxpayer endorsed check over to bank, which then distributes it to creditors as if it were non-exempt assets in a Chapter 7 bankruptcy.  If taxpayer is not in debt, then bank endorses check and gives it to taxpayer.

Banks get recapitalized on shoulders of govt. (which is happening anyways via QE) and debtors.  Prudent citizens get some money to offset the loss of purchasing power in their savings.  The banks who benefit by this program do the paperwork as an unfunded mandate.

Those savers who spend a little of their windfall stimulate the economy and maybe stop the downward unemployment spiral.

Let one of the big zombie banks fail and cause a credit contraction big enough to offset the increase in the money supply.

Politicians love it because every voter gets a check.

 

Mon, 04/18/2011 - 14:50 | Link to Comment blunderdog
blunderdog's picture

Whatever it takes to keep pouring money into all those underwater mortgages.  That's the real priority.

Mon, 04/18/2011 - 16:11 | Link to Comment Note to self
Note to self's picture

I was advocating that type of approach instead of TARP during the 2008 crisis.  Pay the banks by way of homeowner.  Get people out of debt, keep the housing market from tanking, keep the asshole banks alive - which they were going to do anyway.  People thaought I was insane - that would be . . . like . . . giving money away.  Yep . . . 

Mon, 04/18/2011 - 17:00 | Link to Comment cxl9
cxl9's picture

How about discounted principal buy-downs on mortgages? I prepay $25K on my mortgage and get $40K in principal paid off? A sort-of "matching-funds" for mortgage prepayments. This brings cash out of hiding, recapitalizes the banks, brings down LTV ratios, rewards savers, reduces foreclosures, and does nothing for overleveraged homeowners who can't afford their homes anyway. The buydown rate could be adjusted in stepwise fashion until the desired bank/GSE recapitalization level is reached and LTVs are good enough to keep people in their homes or allow them to sell (and move to where the jobs are...)

Mon, 04/18/2011 - 17:56 | Link to Comment twotraps
twotraps's picture

great idea, I agree.  Its just that its so reasonable, it will never see the light of day.  The hard part is trying to assess an upside down financial situation....but slowly accepting that the outcome will be equally as upside down, most likely due to rule changes and favorable 'risk sharing mechanisms' yet to be seen that will 'help us work out of this', in other words, whatever helps the banks and the fed maintain their overall position will be the answer.  We need to stop trying to figure out a problem where we really don't have all the info and never will.

Mon, 04/18/2011 - 16:52 | Link to Comment Stuck on Zero
Stuck on Zero's picture

The government does exactly what you have suggested, but with a little difference.  The bank is not involved and the checks range in size from zero for the middle class, to $1500 for the lazy and indolent, and the wealthy get billion dollar checks.

 

Mon, 04/18/2011 - 14:55 | Link to Comment bob_dabolina
bob_dabolina's picture

Wish I didn't partake in this exercise.

The amount I contributed to unemployment insurance  was more than what I contributed to all of Veterans benefits. 

Mon, 04/18/2011 - 14:50 | Link to Comment JollyRoger
JollyRoger's picture

Wow, the Gov't spends more on net interest than it does on law enforcement, space, science, technology, international affairs, natural resources, energy, and the environment COMBINED.  Brilliant!

Mon, 04/18/2011 - 16:15 | Link to Comment traderjoe
traderjoe's picture

Why does a sovereign country borrow its own currency from private corporations? At interest?

It's the scam of the century...

Mon, 04/18/2011 - 21:35 | Link to Comment FEDbuster
FEDbuster's picture

The "interest" is returned after a small skim for overhead and the 6% dividend to the FED's owners.  The idea is that politicians can't be trusted to "print" money, only knowledgeable banksters and economists can have the money creation power.  The whole system is FUBAR, hang on tight and buckle up the ride is going to get rough.

Mon, 04/18/2011 - 14:51 | Link to Comment digalert
digalert's picture

Here's one category you can cut right now:

Natural resources, energy and environment  2.1%

water and land mgmt.   WTF?

energy supply and conservation.  WTF?

pollution control and natural resources    WTF?

Why is the feral government involved in this stuff? The feral government owns the western US*

http://dean2004.blogspot.com/2008/12/federal-land-ownership.html     *

Look at NV for cryin out loud, 85% is feral land.

 

Mon, 04/18/2011 - 16:53 | Link to Comment Stuck on Zero
Stuck on Zero's picture

85% of Nevada is Federal land but the wealth of the land is given out for free:  grazing rights, dumping rights, and mineral rights.

Mon, 04/18/2011 - 14:52 | Link to Comment carbonmutant
carbonmutant's picture

How much of that National Defence is going to attorneys?

Mon, 04/18/2011 - 14:53 | Link to Comment disabledvet
disabledvet's picture

You will get the money from the Federal Government.  Can the same be said of Wall Street?  I say "Wall Street gives you nothing but higher prices, zero on your savings and a claim for something cheaper."  Has our government bought the Wall Street Kool-aid hook, line and sinker?  Isn't that obvious?  "Bailout nation" indeed.  So now is the time to slash those checks?  I say "if the only thing you're living on is a refund check then the only thing you're living on is a refund check."  if the point of voting is NOT to have these bastards thrown in prison for the rest of their lives then WHAT IS THE POINT?  Honesty?  Integrity?  A "values driven approach" to making money?  EAT PHUCKING ARMY DIVISIONS PHUCKERS!  In the MEANtime Standard and Poors DOWNGRADE IT TO PHUCKING JUNK ASSHOLES.

Mon, 04/18/2011 - 14:56 | Link to Comment Skeebo
Skeebo's picture

100% of my SS taxes go to the SS fund?  I call bullshit on this calculator.

Mon, 04/18/2011 - 14:59 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Exactly.  Your portion of SS Taxes went to pay for Lloyd Blankfein's work of god.  Thanks for paying, please come again.

Mon, 04/18/2011 - 15:49 | Link to Comment NotApplicable
NotApplicable's picture

Why sure they do, how else could congress spend them all if they weren't aggregated in a convenient location.

Mon, 04/18/2011 - 14:56 | Link to Comment JR
JR's picture

To that nation’s detriment, the Federal Reserve banking cartel doesn’t really need our money anymore.  It is creating its own—out of thin air – hence the negative low interest rates on savings.

It is a sobering thought that the government can operate, even at its current level, without levying any taxes whatever, except for the fact that it wants a redistribution of income.  As G. Edward Griffin said in 1994, “ All it (the government) has to do is create the required money through the Federal Reserve System by monetizing its own bonds.  In fact, most of the money it now spends is obtained that way.”

Griffin, in The Creature From Jekyll Island, wrote: “If the idea of eliminating the IRS sounds like good news, remember that the inflation that results from monetizing the debt is just as much a tax as any other, but, because it is hidden and so few Americans understand how it works, it is more politically popular than a tax that is out in the open.

Inflation can be likened to a game of Monopoly in which the game’s banker has no limit to the amount of money he can distribute.  With each throw of the dice he reaches under the table and brings up another stack of those paper tokens which all the players must use as money.  If the banker is also one of the players –and in our real world that is exactly the case –obviously he is going to end up owning all the property.  But, in the meantime, the increasing flood of money swirls out from the banker and engulfs the players.  As the quantity of money becomes greater, the relative worth of each token becomes less, and the prices bid for the properties goes up.  The game is called ‘monopoly’ for a reason.  In the end, one person holds all the property and everyone else is bankrupt…

“Unfortunately, says Griffin, “it is not a game in the real world.  It is our livelihood, our food, our shelter.  It does make a difference if there is only one winner, and it makes a ‘big’ difference if that winner obtained his monopoly simply by manufacturing everyone’s money…”

With America’s past innovations and increased production due to past free enterprise, the only reason the present generation has ceased to do better than its parent generation is that all advantage is now creamed off by the money managers.  Individual Americans are being reduced to “survival level”—all profit over that goes to those who manufacture the fiat currency.

Mon, 04/18/2011 - 15:00 | Link to Comment WaterWings
WaterWings's picture

+1

Mon, 04/18/2011 - 15:56 | Link to Comment Rick64
Rick64's picture

remember that the inflation that results from monetizing the debt is just as much a tax as any other, but, because it is hidden and so few Americans understand how it works, it is more politically popular than a tax that is out in the open.

 +100

Mon, 04/18/2011 - 17:58 | Link to Comment twotraps
twotraps's picture

+1

What do you suggest as far as protecting wealth in this situation?  Is there really anything that can be done or do we just hope for the best after the first of many Bnaking Holidays and potential revaluations of everything.

Mon, 04/18/2011 - 14:56 | Link to Comment Joe Martins Ghost
Joe Martins Ghost's picture

A Modest Proposal.

 

Reform the corporate tax code to create two-tiered system.

Level one: If your business income is derived from the manufacture, transport or sales of real physical goods you get taxed on that income at a very low rate. This would apply from the top to heavy industry all the way to the bottom where the mom and pop shop is selling gas and potato chips. There could be differentiations within this group depending upon what percentage of components or raw material goods are derived domestically and what percentage are imported. This would encourage the expansion of on shore business to produce or procure components or raw materials here at home rather than importing them. In other words a tariff by other means.

Level two: If your business income is derived from speculation, i.e. just moving money from one pile to another and not actually producing any real goods as exemplified by the FOREX carry trade, commodity speculation, trading in CDOs or CDSs, you get taxed at a much higher rate and have severe restrictions on what are allowable deductable expenses. This would not include the individual who trades within small accounts or their 401K or IRA to try and make a few extra bucks to put their kids through school or make their retirement a little easier. We’re talking large institutional speculators. Can you hear me Goldman Sachs, JP Morgan etc. etc. etc.?  This would not include the transactions wherein they make loans to businesses or mortgages or car loans and the like, provided they keep those loans on their books so as to maintain a real interest and indeed risk in how well you do. The very minute that they bundle those loans into CDOs (collateralized debt obligations) all previous and future income becomes taxed at the tier one rate.

Item three: Over a set period of time phase out and then ban all OTC derivative trade or at least tax them at such a rate as to make them completely unprofitable. Ban the issuance of CDSs (credit default swaps) to anyone other than the primary risk taker. Ban financial and securities firms from taking out CDSs on the securities they have sold to their customers.

Don’t hold your breath waiting to hear any of our politicians talking such common sense as long as the revolving door between Wall Street and the Treasury Department remains in operation. Even suggesting it would unleash a pestilence of lobbyists and under the counter campaign contributions to kill it like nothing that has ever been seen.

We have been suckered into believing the fixed pie theory. It’s a fallacy perpetrated by the left and the banks. The money exists, government policy, and in this case tax policy, must be changed to pull it out of speculative none productive applications and into manufacturing where real wealth and jobs are created, the economy expands and the pie gets bigger.

 

Mon, 04/18/2011 - 15:24 | Link to Comment Argonaught
Argonaught's picture

This isn't common sense.  It is trading one political (reward/punish behavior) tax scheme for another.

 

Common sense = Flat tax on all incoming where income is very broadly defined so basically everything you get is income.  For every $ of income, give Uncle $0.10.  Uncle does not care how you got the money or what you do with the other $0.90.  Just as long as you give over the 10 cents. 

Mon, 04/18/2011 - 15:34 | Link to Comment Greater Fool
Greater Fool's picture

Eliminate deductions that favor "preferred" behaviors.

Tax corporations and individuals the same way: on revenues / income.

Let tax rates float based on a measure of economic activity--GDP would be the simplest choice.

Mon, 04/18/2011 - 14:57 | Link to Comment dootyfree
dootyfree's picture

Your tax dollars are not spent on anything.  Govt spending is done by changing numbers in reserve accounts.  Taxes sole purpose is to regulate the amount of dollars(spending power) of the nation.  It slows down the economy(increase in taxes) or boost it(reduction in taxes).  It also creates demand for dollars in that you need dollars to pay your taxes.

Mon, 04/18/2011 - 15:03 | Link to Comment Bob
Bob's picture

Earlier during the S&P conference call, one of the participants asked the brilliantly simple question: with the Fed monetizing debt, why should the US even bother to collect taxes?

The question here, it seems to me, is why not monetize the Reserve Currency as an explicit resource per se?  Similarly to the fashion that ME nations use oil or Egypt uses the Suez Canal.  It seems a fair perspective, since the notes do proclaim "United States of America" on their faces.   And, somehow, taxpayers end up footing the bills.

Perhaps we should think this thing through entirely.  We might be able to contract the money printing out on much better terms than we get from the Fed.  Of course, the banks might not like it. 

Fuck 'em. 

Mon, 04/18/2011 - 15:00 | Link to Comment Miles Kendig
Miles Kendig's picture

(and at about 53%, it's not that many) in the US population who pay income and other taxes

WOW Tyler, if only 53% of the population pays any tax then why all the concern over the price of gas, food, clothing, telecommunications and all the rest of the things that are taxed?  (Heck, even "free" food stamp food is taxed plus heavy usage fees are tacked on to support JPM as primary servicer)  What's next, decrying the potential rescinding of the tax free corporate housing allowance since it would be negative for RRE?

Mon, 04/18/2011 - 15:06 | Link to Comment Bob
Bob's picture

Tyler certainly is an enigma wrapped in a whatthefuckinever sometimes, eh?  Some of this shit has nothing whatsoever to do with economics or macro-finance, it seems to me.  It's like the Japanese nuclear thing--are appropriate risk and appropriate action questions to be deferred to technicians?

Mon, 04/18/2011 - 15:27 | Link to Comment Miles Kendig
Miles Kendig's picture

Indeed Bob.

JR spit the classic a bit earlier that is even more fundamental to this discussion.

Griffin, in The Creature From Jekyll Island, wrote: “If the idea of eliminating the IRS sounds like good news, remember that the inflation that results from monetizing the debt is just as much a tax as any other, but, because it is hidden and so few Americans understand how it works, it is more politically popular than a tax that is out in the open.

I suppose that for some, the idea that paying no effective federal income tax means that the same folks are totally out of the economy all together, rendering pondering the effects of most subjects raised  here at ZH to society at large moot.  Perhaps this is the old school, (ZH is a blog for financial sector Wonks), who seem to have forgotten the reason for its broad based popularity is the simple fact that finance is THE crossroads of societal interaction.

Mon, 04/18/2011 - 15:29 | Link to Comment Bob
Bob's picture

Crossroads indeed.  But I guess we all carry our water, for better or worse. 

Dude, does ZH depress you sometimes?

Mon, 04/18/2011 - 15:53 | Link to Comment Miles Kendig
Miles Kendig's picture

Only when I really miss those that would fillet me just for the sport.  This is Fight Club after all and I enjoy a good fight as much, or more, than most.

http://youtu.be/Q1p_zB4fuuQ

Dude, does ZH depress you sometimes?

Now that fight club has all but disappeared?  You bet.

Mon, 04/18/2011 - 15:55 | Link to Comment Bob
Bob's picture

Good fucking answer.  I took a few days off ZH because I know it ain't good for me, but today I had to can work and settle in for a bout of beer and smoke.

Unfortunately, I don't get paid to not work.  But I guess money ain't everything. 

Mon, 04/18/2011 - 16:12 | Link to Comment Bob
Bob's picture

Dylan Ratigan is on a wild fucking roll every day.  He's got Ron Paul on the phone right now.  Ratigan is doing it almost every single fucking day.  Why is nobody talking about it here? 

Mon, 04/18/2011 - 16:21 | Link to Comment Miles Kendig
Miles Kendig's picture

Dunno.  The last time I really said anything about Dylan was when he had Phil Agelides on and I send a slammer via twitter over Phil punting to law enforcement.  Called it what it was, weak. 

http://youtu.be/P_NveBdxU8o

Now Phil is singing a different tune without actually using all those legal staffers to draw up the particulars.  Dylan is doing far more than most in the cable genre.  Props there.  One day i would like to see him do some real old skool 60 minutes rather than the not so old 60 minutes ..

http://youtu.be/tArmHN4j3qQ

Rather than the new fangled happy crappy that passes as a "news" show ..  A news show for Gerbervores that is

http://youtu.be/QPmmWe5iulQ

Mon, 04/18/2011 - 16:25 | Link to Comment Bob
Bob's picture

Thanks for the previous video hook up, btw.  I threw it up on the big screen.  That's what I'm talking about.  That's a new band for me.   Thanks.  

Mon, 04/18/2011 - 16:27 | Link to Comment Miles Kendig
Miles Kendig's picture

It's close enough to 4:20 somewhere .. Pax

http://youtu.be/hYzlQ4tVUXA

Mon, 04/18/2011 - 16:48 | Link to Comment Bob
Bob's picture

Pure instrumental.  Now that's communication. 

Mon, 04/18/2011 - 21:24 | Link to Comment Bringin It
Bringin It's picture

Pure instrumental???  'Mary Mary quite contrary ... how does your garden grow ...'

Thanks for the Franti, Miles

Mon, 04/18/2011 - 22:43 | Link to Comment Bob
Bob's picture

But the riffs begin at 4:20.  Great in any case, however. 

Tue, 04/19/2011 - 13:24 | Link to Comment Miles Kendig
Miles Kendig's picture

Pleasure.

Bare feet, tank top & shorts is all ya need .. be sure to bring your records 'cause I only gotta few .. Some for my partner, some for my crew, some for my ganga babes they need too

- The Disposable Heroes of Hiphoprisy

It's 4:20 somewhere -- :D

Mon, 04/18/2011 - 14:59 | Link to Comment Negro Primero
Negro Primero's picture

Where did my tax dollars go?

"Demystifying Federal Taxes and Government Spending"

http://www.wheredidmytaxdollarsgo.com/

Mon, 04/18/2011 - 15:03 | Link to Comment Übermensch
Übermensch's picture

The government: an organization that prevents injustice other than the ones it commits itself. Ibn Khaldun

Mon, 04/18/2011 - 17:04 | Link to Comment malek
malek's picture

+1

Mon, 04/18/2011 - 15:03 | Link to Comment BrobamaReds
BrobamaReds's picture

My favorite book:  "If I did it" by OJ Simpson.  Quite simply, a great read.

Mon, 04/18/2011 - 15:18 | Link to Comment the grateful un...
the grateful unemployed's picture

If I had done it, I wouldn't have any regrets, because they haven't caught them yet. Therefore I do regret it, because it's not me. 

Mon, 04/18/2011 - 15:05 | Link to Comment Eduardo
Eduardo's picture

Bloomberg's chart of the day 

Federal reserve holdings of us debdt at historical lows

http://www.bloomberg.com/news/2011-04-18/fed-s-treasury-holdings-are-historically-low-chart-of-the-day.html

when I saw this shit flashing on my tv screen I had to go and see it.

 

 

 

Mon, 04/18/2011 - 15:06 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

Speaking of the FED and the Dollar...

Ron Paul's Liberty Defined, releases tomorrow: 04/18/11
----
Take the United States, for example. Our country was established with the greatest ideals and respect for individual freedom ever known. Yet look at where we are today: runaway spending and uncontrollable debt; a monstrous bureaucracy regulating our every move; total disregard for private property, free markets, sound money, and personal privacy; and a foreign policy of military expansionism. The restraints placed on our government in the Constitution by the Founders did not work. Powerful special interests rule, and there seems to be no way to fight against them. While the middle class is being destroyed, the poor suffer, the justly rich are being looted, and the unjustly rich are getting richer. The wealth of the country has fallen into the hands of a few at the expense of the many. Some say this is because of a lack of regulations on Wall Street, but that is not right. The root of this issue reaches far deeper than that.

The threat to liberty is not limited to the United States. Dollar hegemony has globalized the crisis. Nothing like this has ever happened before. All economies are interrelated and dependent on the dollar's maintaining its value while at the same time the endless expansion of the dollar money supply is expected to bail out everyone.

This dollar globalization is made more dangerous by nearly all governments acting irresponsibly by expanding their powers and living beyond their means. Worldwide debt is a problem that will continue to grow if we continue on this path. Yet all governments, and especially ours, do not hesitate to further expand their powers at the expense of liberty in a futile effort to force an outcome of their design on us. They simply expand and plummet further into debt.

Since the beginning of the last century, many seeds of destruction have been planted that are now maturing into a systematic assault on our freedoms. With a horrendous financial and currency crisis both upon us and looming into the future as far as the eye can see, it has become quite apparent that the national debt is unsustainable, liberty is threatened, and the people's anger and fears are growing. Most importantly, it is now clear that government promises and panaceas are worthless.

http://www.lewrockwell.com/paul/paul734.html

Mon, 04/18/2011 - 16:33 | Link to Comment redpill
redpill's picture

Come on baby, we just need one more big hit of Keynesian fiat high, that'll be enough to get us through, promise.  Until tomorrow anyway.

Mon, 04/18/2011 - 16:44 | Link to Comment baby_BLYTHE
baby_BLYTHE's picture

Ben just wants a tiney tiny bit of inflation to stoke the recovery. He can shut it down in less than ten mins. He promised.

nothing bad can come of it

/sarcasm off

http://youtu.be/NkYj56LW4ag

Mon, 04/18/2011 - 15:14 | Link to Comment the grateful un...
the grateful unemployed's picture

Consumer A buys a car. He receives a credit offset which allows him to pay the taxes and drive off in a new car, without putting up any cash of his own. Instead of the automaker getting a down payment, the government gets a fat sales tax receipt, but the problem is its really borrowed money. Consumer A wouldn't have bought the car without 0 APR.

Whenever you use borrowed money to pay your employees, same problem. You can't tax borrowed money, but the government has been trying to do it for years. 

Mon, 04/18/2011 - 15:29 | Link to Comment blunderdog
blunderdog's picture

Borrowed money is taxed all the time--whenever it's used in any kind of consumption, and many kinds of "investment."  Get a heloc and dip into it for xmas shopping?  Taxed.  Fill the tank on your credit card?  Taxed.  Pay virtually any bill, expand your house, buy land...taxed, taxed, taxed.

They aren't just trying--they're doing it.  And very well, because apparently some folks still don't think it's happening.

Mon, 04/18/2011 - 15:26 | Link to Comment AboutAverage
AboutAverage's picture

Your money is being funneled from the IRS to the Treasury and then to the bankers to pay interest on the debt. 

Dah!  

Mon, 04/18/2011 - 15:27 | Link to Comment mynhair
mynhair's picture

Hey, it's a receipt!

Deduct the fucker on Schedule A.

Mon, 04/18/2011 - 16:00 | Link to Comment JR
JR's picture

A modern society simply cannot pay the increasing transfer of wealth bill and remain solvent. The overtaxed middle class will not be able to pay for it.

We have too many criminals in the ranks.  There are now too many people riding in the wagon and too few pulling the wagon. It’s one thing to have more than 47 percent of the population to tow - including the welfare recipients, the illegals and the pretenders - but now we have the nation’s largest investment bankers riding in the wagon. It's beyond depressing to look back at the multitude relaxing in the wagon and see the countenances of Jamie Dimon and Lloyd Blankfein.

The dwindling middle- and upper-middle class producers cannot pull the wagon with that kind of weight.

Steve Frank on capoliticalnews.com had a story today about EBT cards – an electronic benefit card that the welfare people in California use as a debit card.  You’re entitled to one if you earn up to 150% of the “poverty level,” or from around $33,000, if I heard right. 

GOP State Senator Dutton had a bill to prohibit use of the EBT cards for tobacco and alcohol; Democrats in majority said No. While current law does not allow recipients to use the food stamp portions of their benefits to purchase alcohol or tobacco, they can buy those items with the CalWORKS funds.

Mon, 04/18/2011 - 15:33 | Link to Comment 12ToothAssassin
12ToothAssassin's picture

Im not paying taxes for 2011, that 53% is shrinking by the day.

Mon, 04/18/2011 - 15:38 | Link to Comment I am Jobe
I am Jobe's picture

US is not broke. We just need to perfect our crooks to report better and loot better. Once again, ben has shown he is incompetant when it comes to printing.

Mon, 04/18/2011 - 15:49 | Link to Comment TheObsoleteMan
TheObsoleteMan's picture

I know where my tax dollars are going: banksters, the endless "War on Terror", Israel, illegal aliens, and the furtherance of bigger government.

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