California Free Press

Tackling California’s Budget Crisis: Raise Taxes, Cut Programs, or Form a Bank?

Posted on May 8, 2024 by Ellen Brown, from Web of Debt blog

In 2022, the state of California celebrated a record budget surplus of $97.5 billion. Two years later, according to the Legislative Analyst’s Office, this surplus has plummeted to a record budget deficit of $73 billion. Balancing the budget will be challenging. Unlike the federal government, the state cannot just drive up debt and roll it over year after year. The California Balanced Budget Act, passed in 2004, requires the state legislature to pass a balanced budget every year. 

The usual solutions are to cut programs or raise taxes, but both approaches are facing an uphill battle. Raising taxes would require a two-thirds vote of the legislature, which would be very challenging, and worthy public programs are in danger of getting axed, including homelessness prevention and funding for low-income housing. 

A third possibility might be to increase the income tax base and state income by stimulating the economy with a state-owned depository bank. The state-owned Bank of North Dakota, which has raised record profits for its state, is a stellar example. In a review of states with the healthiest budgets based on data from the PEW Charitable Trusts, U.S. News & World Report puts North Dakota at No. 1 in Budget Balancing and #1 in Short-term Fiscal Stability.    

California has an Infrastructure and Development Bank, which is already capitalized and has an established track record of prudent and productive lending, but it is not a depository bank and its reach is small. Transforming it into a depository bank would be fairly uncomplicated and could substantially increase its reach. 

But first a look at what happened to the state’s copious revenues.

Saga of a Budget Crisis

California’s record surplus was largely due to tax windfalls and to $43.5 billion received in American Rescue Plan money during the COVID crisis. Anticipating that these inflows would continue, the governor and legislature enacted a record budget for 2024-25 of nearly $300 billion, the largest of any state. Much of the surplus was committed to expanding an array of social and educational services, including extending universal health care coverage to undocumented immigrants. When taxes came in, the tally showed a revenue shortfall of $26 billion.  

Tech industry woes were a major contributor. The top 1% of earners pay nearly half of California’s  income taxes, and 20% of its GDP comes from the tech industry. The collapse of Silicon Valley Bank, which financed startups and attracted venture capital, speeded the sector’s decline. Massive Silicon Valley layoffs occurred and tech stock lost value, cutting capital gains taxes. And there has been a notable exodus from the state not just among the ultra-wealthy but by businesses, due to the combination of high taxes, stringent regulations, and elevated costs for labor, utilities, and energy.  

Another contributor to the budget deficit were huge payouts for unemployment benefits, which skyrocketed during the COVID lockdown and business shutdowns. The state’s unemployment fund was exhausted, requiring a loan from the federal government. Twenty-one billion dollars remains to be repaid, and the interest rate on the debt has gone up. To meet the unemployment burden, California legislators are considering quintupling unemployment taxes and nearly doubling benefits, but the result could be more layoffs and more businesses leaving the state.

Plagued by Homelessness and Unemployment

Meanwhile, the wealth divide in California is enormous, with the highest unemployment rate and homeless rate in the country. This is despite $24 billion being spent on the unhoused over the last five years. Thirty percent of the nation’s homeless live in California, and nearly nine million Californians are on the brink of being homeless. Housing is too expensive for low-wage earners and there is a lack of available low-cost housing. But well-meaning legislation to help low-wage earners has had unintended consequences. 

As of April 1, the minimum wage for fast food restaurant workers was raised by 25% to $20 an hour triggered by a strike by their union. But the move has negatively impacted many of the workers. Fast food restaurant owners operate on thin profit margins; and to cover these new costs, they have had to reduce workers’ hours, raise customer prices, engage in massive worker layoffs, move out of state, or close their businesses altogether. Almost 10,000 fast food jobs have been lost in California just since the $20 minimum wage law was signed. 

As a result of these and other efforts to help low-wage earners, many vulnerable workers are suddenly finding or will find themselves out of a job.

Off the Top of My Head

A Superpower in Decline

by John Lawrence

1) Rights taken away from women. The Arizona Supreme Court’s decision to outlaw nearly all abortions in Arizona will likely lead to an influx of patients fleeing the state to find care in California, abortion rights activists said.

2) The world's policeman can't police its own borders. The asylum law lets anyone setting foot on American soil ask for asylum. Court dates for asylum cases are, on average, more than four years out in the future, and even longer for final decisions. Over 3 million cases were pending before immigration courts near the end of 2023, with the backlog growing by 1 million since 2022.

3) The archaic electoral college has never been replaced by a direct popular vote for President. The result is that the winner of the popular vote has not been elected President. Gore won the popular vote in 2000, but Bush was elected President. The Florida Supreme Court sided with Gore, but Bush appealed to the U.S. Supreme Court, which ultimately voted 5 to 4 to reverse the Florida court’s decision and halt the recount. With Florida in hand, Bush won the Electoral College 271 to 266, while Gore ended up getting 500,000 more votes in the popular vote. As a result Gore's push for limits on global warming was lost as Bush promoted fossil fuels. Also Bush lied the US into a disastrous war in Iraq that resulted in Iraq becoming an ally of Iran.

4) 750 military bases in 80 countries are sitting ducks for an attack by Iran or its proxies. The largest U.S. base in the Middle East is located in Qatar, known as Al Udeid Air Base and built in 1996. Other countries where the U.S. has a presence include Bahrain, Kuwait, Saudi Arabia and the United Arab Emirates. The US spends more on its military than the next 10 countries combined. Three American service members were killed and dozens more were injured in an unmanned aerial drone attack on a base known as Tower 22 in Jordan on January 28, 2024. Now that the US is expecting an attack by Iran, which sitting duck will be next?

5) An insurrectionist with several dozen indictments is allowed to run for President. Last year, Donald Trump became the first former president of the United States to be criminally indicted. Over the span of five months, he was indicted in four separate criminal cases and charged on a total of 91 felony counts.

6) Futile wars in Iraq and Afghanistan. Bush lied us into war in Iraq. Osama bin Laden eventually killed in Obama administration by small Seal team, proving futility of invading Afghanistan

7) Wealth inequality. The United States exhibits wider disparities of wealth between rich and poor than any other major developed nation. There are now more billionaires than ever: 2,781 in all, 141 more than last year and 26 more than the record set in 2021. They’re richer than ever, worth $14.2 trillion in aggregate, up by $2 trillion from 2023 and $1.1 trillion above the previous record, also set in 2021. 

8) Housing unaffordability. San Diego families need an income of nearly $275,000 a year to afford a mortgage on a home, which is nearly double what it was before the pandemic, according to a new report from the real estate website Zillow.

9) Homelessness is an intractable problem. On any given night in the United States, more than half a million people experience homelessness.

10) The filibuster rule and the bicameral legislature. Nothing much can get done unless one party controls both Houses of Congress and the Presidency. President Biden looks stupid since he can't even keep his commitments to NATO because the Republican controlled House won't vote the funds Biden has promised. This means Ukraine will lose the war with Russia, and other countries cannot trust the US to keep its commitments.

11) The Second Amendment. No other country allows the uncontrolled proliferation of guns. More Americans died of gun-related injuries in 2021 than in any other year on record, according to the latest available statistics from the Centers for Disease Control and Prevention (CDC). That included record numbers of both gun murders and gun suicides.

By the Dawn’s Early Light: On the Fall of the Francis Scott Key Bridge

Posted on April 7, 2024 by Ellen Brown on Web of Debt blog

The Baltimore bridge that collapsed on March 26^th was named for Francis Scott Key, who wrote the lyrics to the American national anthem “The Star-Spangled Banner” in 1814. His inspiration was the British bombardment of Fort McHenry in the critical port of Baltimore during the War of 1812. The British had just burned the U.S. Capitol and the White House and had set their sights on the Baltimore port, with the guns from hundreds of British ships trained on shelling the American flag. If the flag were taken down, they would know the Americans had surrendered, and the British agreed the shelling would stop. But in the dawn’s early light, the flag still waved, held up by patriots who replaced soldiers who had fallen before them. Francis Scott Key observed all this from a British ship on which he had been allowed on board to negotiate a prisoner release. It is a quite moving story, dramatized here.

What the dawn’s early light brought on March 26, 2024, by contrast, were shocking news videos of the Francis Scott Key Bridge collapsing when the Singapore-owned cargo ship Dali slammed into it. It was “like something out of an action movie,” said Baltimore Mayor Brandon Scott. Several commentators are calling it a “black swan” event that will have catastrophic effects on global supply chains. Interestingly, the War of 1812 was also about disruptions to U.S. trade with foreign nations, in that case by blockade by the British navy. But more on that, and on how our forebears turned dependence on foreign manufacturers into economic independence, after a look at what went amiss with the Dali and the bridge.

An Unusual Stroke of Bad Luck

Before it fell, the Key Bridge was a pivotal artery for traffic, cargo and supplies across the country. The Interstate 695 running across the bridge connects to I-95, one of the country’s busiest and most important supply chain highways, running from the northern to the southern end of the Eastern seaboard. Shipping is expected to resume to full capacity by the end of May, but  rebuilding the bridge to appropriate standards could take five to seven years. That means this strategic artery will no longer be accessible for transporting hazardous materials, which Maryland law forbids to be transported by tunnel (including unleaded fuel, diesel, propane gas, and nitrogen chemicals for fertilizer), along with oversized cargo that cannot fit through roadway tunnels in the area (including tractors and military vehicles).

Observers contend there is still no plausible explanation for the direct hit to the bridge’s most critical support. The power went out on the ship about three minutes before the strike, yet multiple layers of security for maintaining steering control are mandated by U.S. and international regulation. Even without power, the Dali should have continued in the direction it was headed; but instead it veered to the right, for a direct hit into the key pylon supporting the bridge.

Engineering Professor Emerita W. M. Kim Roddis, a registered professional engineer with experience in bridge design, acknowledged in an interview in a March 28 article on GW Today that it was a “one in a million” occurrence. As reported in the George Washington University publication, she was asked how a 1.6-mile-long bridge that carried 31,000 cars per day could suffer such a complete collapse. She responded:

The container ship Dali lost power multiple times on its way out of Baltimore Harbor. The ship’s inability to steer resulted in it heading at an angle towards the southwestern major bridge pier—the pylon.

The navigation chart for Baltimore Harbor shows four protective devices called dolphins, one in front of each pier for outgoing and incoming ships. … They essentially serve as bumpers to deflect or slow boats and ships that are headed toward the pylon.

The [Dali’s] angled course allowed the ship to miss the dolphin and strike the pylon. When the ship collided with the pylon it exerted a huge crushing force on the pier, bursting the pylon apart. This pylon was the only support for the bridge on that side. … The continuity of the structure meant that all three spans came down when the southwestern pylon was lost. …

The angle the ship came in at was unusual. So, yes, this was an unlikely accident. …  [O]ne-​in-​a-​million is in the right ballpark.

Off the Top of My Head

What Biden Has To Do To Win

by John Lawrence

The two biggest issues are the economy and the border. Biden has to address these two issues effectively if he hopes to win the election. The way to neutralize Trump's appeal on these issues is essentially to co-opt Trump's positions. On the economy, Biden must come out for tax breaks for the middles class. He has already been talking about taxing the rich. Good, but this does nothing for tax relief for the middle class unless he explicitly comes out and say so. Americans are at least subconsciously accustomed to the fact that, f they elect a Republican President, they will get a tax cut. Problem is Republican tax cuts go mainly to the rich as they did during Trump's administration when he added $7 trillion to the national debt with his tax cuts. The fact that Biden wants to tax the rich should enable him to responsibly give tax cuts to the middle class without adding to the debt. He needs to simplify his messaging to the bare essentials as Trump does without getting down into the policy weeds.

Secondly, on the border, Biden's position is not strong enough. This vaunted "bi-partisan legislation" that Trump doesn't want passed is not strong enough. The correct position is that the goal should be not one illegal entry over the US border. This is the position of most countries after all. The US is spending too much money on 750 military bases in 80 countries being the world's policeman yet it can't control its own border! This is the height of ridiculousness. I hasten to point out that with effective border control the laws regarding amnesty would not have to be changed. Immigrants could still apply for amnesty albeit through legal channels. The ridiculous situation that anyone who sets foot on American soil illegally can apply for amnesty will have been effectively curtailed. This presupposes that enormous resources in terms of infrastructure and manpower will have to be redirected to the border. Well, how about closing some of those foreign military bases and using that money to beef up the border? The goal should be not one illegal entry, rather than hiring more judges. The bill entails: "The bipartisan Senate bill would add more than 1,500 new Customs and Border Protection personnel. Asylum Officers and Asylum Reform: Similarly, Asylum Officer staffing has remained stagnant over the last four years and there is an insufficient number of asylum officers to do initial screenings." This bill presupposes that immigrants will continue to enter the US illegally. It's the wrong approach, it's too complicated, the American people will not understand it. Trump will make that clear. Trump will state his case simply and directly in a way that a 12 year old can understand which is about the mentality of a lot of the American people. Biden has to out Trump Trump on this issue, but do it in a responsible way. If the goal is "not one illegal entry," then that can be coupled with increasing LEGAL immigration.

Thirdly, Biden has to end the two wars: Ukraine and Gaza. He is letting Netanyahu run all over him making him look weak. He has to demand an end to that war and impose a two state solution if necessary. He dos not need to state a lot of ifs, buts, whereases and wherefores. Simply state his position and what he intends to accomplish with all the might of US prestige and power. Trump will state his positions as if they will be fait accomplis no matter how impractical or unlikely they actually are in reality. Biden has to get a lot tougher and use the withdrawal of US resources from Israel if necessary. He is treating Israel with kid gloves. He has to be more evenhanded in his support for Gaza and Palestine. In Ukraine, the handwriting is on the wall. Biden's cold war mentality set up this proxy war between the US and Russia. He has to demand a cease fire with the lines being drawn between the areas that Russia and Ukraine now control. To be specific Russia would control Crimea, which they've controlled since 2014 without a peep from the Obama administration, and the Donbas region while Ukraine controls the rest. A plebiscite could later determine the eventual fate of the boundaries between the two countries. If Biden doesn't do something about a cease fire in each of these  two wars, it could doom his Presidency for a second term. Americans are tired of these meaningless wars and the inability of the all powerful US, the world's policeman, to do anything about them.

In short Biden has to get tough. He needs to simplify his positions. It's not enough to criticize Trump as being too extreme. Obviously, the American people aren't buying it. He needs to finesse the main issues - economy, border and 2 wars - by saying that he will 1) give tax breaks to the middle class, 2) prevent even one illegal entry to the US and 3) end the 2 wars. If he does all three things, he will co-opt Trump on these issues and win the election. If he continues to advocate for the Senate border bill, let Netanyahu make a patsy out of him and call for taxing the rich without a concomitant tax break for the middle class, he will lose.

AOC and Sanders aim to place public housing at center of Green New Deal

Proposal aims to decarbonize all of nation’s public housing units, with an investment of between $162bn and $234bn over next decade

Bernie Sanders speaks alongside Alexandria Ocasio-Cortez outside the capitol in Washington DC on 21 March 2024. Photograph: Win McNamee/Getty Images

from The Guardian

With a sweeping legislative proposal, Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders are attempting to place public housing at the center of the green energy transition, tackling the twin crises of global warming and soaring housing costs.

“Public housing should be the gold standard for affordable, environmentally friendly, and safe communities,” Ocasio-Cortez said in an email. “This bill is how we ensure that.”

The Green New Deal for Public Housing aims to decarbonize all of the nation’s public housing units – and build more of them – with an investment of between $162bn and $234bn over the next decade. In doing so, it would avert 5.7m tons of greenhouse gas emissions, the equivalent of removing 1.26m cars from US roads each year, while creating jobs and public health benefits.

The proposal is co-sponsored by a slew of other progressive lawmakers and supported by dozens of environmental groups, housing justice organizations and labor unions.

“We are going to provide decent-quality, affordable housing for millions of Americans, and at the same time, we’re going to create good-paying union jobs,” said Sanders at a Thursday press conference. “That is a win, win, win situation.”

It is not likely to pass, but supporters say it can help build support for the vision.

The bill’s reintroduction comes as the nation faces an unprecedented shortage of affordable housing. In 2022, a record half of US renters spent more than 30% of their incomes on rent, a January report from Harvard University found – and more than half of these “rent-burdened” Americans gave more than 50% of their earnings to the landlord.

Public housing remains an affordable option that 1.7 million Americans rely on. But amid a chronic lack of investment, it is often allowed to fall into disrepair, creating a maintenance backlog of $70bn.

In the absence of funds to mend these units, they are often demolished or privatized instead. As a result, the US public housing stock shrunk from 1.2m units to just over 900,000 between 2009 and 2022 – a 25% decline – according to an analysis from the progressive thinktank Climate and Community Project, which informed the policy proposal.

Instead of allowing the nation’s public housing stock to wither away, the bill seeks to transform it. Units would not only be repaired and freed of contaminants like lead and mold, but also made efficient and green.

Each would be insulated and weatherized to conserve energy, as well as outfitted with fossil fuel-free electric appliances. Renewable energy would be installed on-site. And developments would be made climate-resilient with increased green space and decreased paved areas, which can help absorb heat and soak up water during heavy rains.

In addition to slashing greenhouse gas pollution, the bill would come with “major health and comfort benefits”, said Kira McDonald, a researcher at Climate and Community Project who co-authored the report.

Removing fossil fuel-powered appliances would lower air pollution and therefore improve residents’ respiratory health. And insulation and heat pumps could cut energy bills, while making homes easier to keep at a comfortable temperature amid extreme weather.

The Green New Deal for Public Housing would not only improve the nation’s existing public units, but also “finally help build more”, said Ocasio-Cortez. Currently, the 1998 Faircloth Amendment in effect prevents the federal government from funding new public housing, but the proposal would immediately repeal that policy in order to erect more state-of-the-art, green units.

The policy would benefit the US’s most vulnerable residents. Public housing residents are disproportionately likely to be people of color, and 24% of public housing residents are living with a disability.

“The Green New Deal for Public Housing is going to change the game for those of us and our neighbors who are being hit hardest by the climate crisis,” said Saul Levin, legislative and political director of the progressive advocacy group Green New Deal Network.

The policy also would have knock-on effects for the entire nation, including by spurring the creation of about 280,000 jobs over a decade. The bill includes language to ensure those jobs are all unionized.

It could also help create a supply of efficient technologies for all residents. Last year, New York City’s public housing authority invited manufacturers to compete for a contract to create and install at least 10,000 induction stoves in New York City Housing Authority (Nycha) buildings, specifically calling for apartment-sized models that do not require electrical upgrades. The winning model will become available on the market for all US residents.

“Those models are available elsewhere, but not in the US because producers basically don’t see that there is a strong enough market,” said McDonald. “This can change that.”

Nycha has launched a similar program to bring small heat pumps on to the US market, and back in the 1990s put out a call for small, energy-efficient refrigerators that helped shape the green fridge market.

“There are gaps in green building technology and green appliance markets in the US,” said McDonald. “Public housing can help fill them … so this policy is also a form of green industrial policy.”
Public housing is the only form of US housing whose affordability does not rely “solely on the market and solely on billionaires”, Ocasio-Cortez said at Thursday’s press conference.
Jasmine Sanchez, a housing advocate who lives in a Nycha development, said many public housing residents face the “constant threat of privatization” and often feel left behind by the US government.
“Everyone deserves to be invested in and everyone deserves to live threat free,” she said.

Instead of allowing the nation’s public housing stock to wither away, the bill seeks to transform it. Units would not only be repaired and freed of contaminants like lead and mold, but also made efficient and green.

Each would be insulated and weatherized to conserve energy, as well as outfitted with fossil fuel-free electric appliances. Renewable energy would be installed on-site. And developments would be made climate-resilient with increased green space and decreased paved areas, which can help absorb heat and soak up water during heavy rains.

In addition to slashing greenhouse gas pollution, the bill would come with “major health and comfort benefits”, said Kira McDonald, a researcher at Climate and Community Project who co-authored the report.

Removing fossil fuel-powered appliances would lower air pollution and therefore improve residents’ respiratory health. And insulation and heat pumps could cut energy bills, while making homes easier to keep at a comfortable temperature amid extreme weather.

The Green New Deal for Public Housing would not only improve the nation’s existing public units, but also “finally help build more”, said Ocasio-Cortez. Currently, the 1998 Faircloth Amendment in effect prevents the federal government from funding new public housing, but the proposal would immediately repeal that policy in order to erect more state-of-the-art, green units.

The policy would benefit the US’s most vulnerable residents. Public housing residents are disproportionately likely to be people of color, and 24% of public housing residents are living with a disability.

“The Green New Deal for Public Housing is going to change the game for those of us and our neighbors who are being hit hardest by the climate crisis,” said Saul Levin, legislative and political director of the progressive advocacy group Green New Deal Network.

The policy also would have knock-on effects for the entire nation, including by spurring the creation of about 280,000 jobs over a decade. The bill includes language to ensure those jobs are all unionized.

It could also help create a supply of efficient technologies for all residents. Last year, New York City’s public housing authority invited manufacturers to compete for a contract to create and install at least 10,000 induction stoves in New York City Housing Authority (Nycha) buildings, specifically calling for apartment-sized models that do not require electrical upgrades. The winning model will become available on the market for all US residents.

“Those models are available elsewhere, but not in the US because producers basically don’t see that there is a strong enough market,” said McDonald. “This can change that.”

Nycha has launched a similar program to bring small heat pumps on to the US market, and back in the 1990s put out a call for small, energy-efficient refrigerators that helped shape the green fridge market.

“There are gaps in green building technology and green appliance markets in the US,” said McDonald. “Public housing can help fill them … so this policy is also a form of green industrial policy.”

Public housing is the only form of US housing whose affordability does not rely “solely on the market and solely on billionaires”, Ocasio-Cortez said at Thursday’s press conference.

Jasmine Sanchez, a housing advocate who lives in a Nycha development, said many public housing residents face the “constant threat of privatization” and often feel left behind by the US government.

“Everyone deserves to be invested in and everyone deserves to live threat free,” she said.

Though the bill is not expected to pass, Climate and Community Project says support to expand and improve public housing is growing. In 2021, the report notes, the House voted to repeal the Faircloth Amendment and most Democratic lawmakers supported including $60bn for public housing in the spending package that later became the Inflation Reduction Act, though both measures ultimately failed to pass.

“While just a couple of senators ultimately blocked these reforms, it was clear that there is already strong support for saving public housing that advocates can build on,” the report says.

The policy represents a “visionary future that will uplift everyone”, said Levin of Green New Deal Network.

“By lifting up the world we need,” he said, “we are building toward that vision”.

Off the Top of My Head

The World's Policeman Cannot Even Police Its Own Borders

by John Lawrence

The U.S. has about 750 military bases across 80 countries in the world and had deployed 173,000 troops in 159 different countries as of July 2021. Yet it can't patrol or defend its own borders. This is the height of ridiculousness. While Congress persons debate some Rube Goldberg solution to border security, the Biden administration should do this if it wants to neutralize Trump's stand on border security: the Democrat policy should be "not one illegal border crossing should be tolerated. We stand for increasing legal immigration while decreasing illegal immigration to ZERO." The US spends more on defense than the next 10 countries combined, and yet is willing to tolerate people entering the country illegally. What a joke! If Biden wants to defeat Trump, he should take this issue away from him by declaring that his goal is: NOT ONE ILLEGAL ENTRY INTO THE UNITED STATES.

This means that, instead of spending money on 750 military bases in 80 countries all over the world, the US needs to spend money instead on policing its own border including, but not limited to, physical barriers. In addition there must be electronic barriers, satellite surveillance, and other sophisticated means of surveillance. Why not use AI, the supposed cure all for everything that ails us. Why not put 10 or 100 of those military bases circling the world right on the US border? To be clear I am not advocating withdrawing from being involved in world affairs, but that involvement which is manifested in being the world's policeman has got to change. It has been of very little value if you add it all up. The US can effectively patrol the whole world anyway from the sky, from space and from the sea. It doesn't need land based military bases. The US should be involved in the world by expanding its Peace Corp, building infrastructure like China is with its Belt and Road Initiative and mitigating climate change in vulnerable countries. In other words the US should be a force for good in the world not just a force for preserving US interests or the status quo.

Three U.S. soldiers were killed on January 28, 2024 in Jordan, while more than 40 other service members were injured following an uncrewed aerial system attack at a military base near the Syrian border. Then of course the US has to retaliate to avenge the deaths of those soldiers. Soldiers on many of these bases are sitting ducks and are provocative to those seeking to damage US interests.Yet the role of the US as the world's policeman is not even debated by politicians and probably won't be as the election season heats up. Instead the border debate is a big deal as it should be. Biden needs to assert that his goal is that not one person should enter the US illegally, but that legal immigration should be expanded. He should outTrump Trump on border security if he wants to be elected, and, while he is at it, he should demand that at least 25% of the bloated military budget which amounts to about a trillion dollars a year be redirected to border security. There is no reason why the US should not have the most sophisticated border security system in the world.

Off the Top of My Head

Theatre of the Absurd: Trump and the US Legal System

by John Lawrence

The judge in the hush money case, Juan Merchan, placed a gag order on Trump barring him from commenting publicly about witnesses, prosecutors, court staff and jurors. Only thing is he didn't bar Trump from commenting publicly about himself or his family. Of course Trump commenced to doing just that. Trump said, “Judge Juan Merchan is totally compromised, and should be removed from this TRUMP Non-Case immediately. His Daughter, Loren, is a Rabid Trump Hater, who has admitted to having conversations with her father about me, and yet he gagged me.” So now Trump's lawyers want to litigate the gag order which Trump, theoretically, did not violate since the judge did not include himself and his daughter in it. It doesn't get more absurd than this. First of all how stupid is the judge not to include himself and his family and everybody else in the gag order? Trump's lawyers say that the judge is violating Trump's First Amendment rights. So now let's litigate that. Let's litigate the gag order, and, if it isn't decided in Trump's favor, his lawyers will appeal it to a higher court. And if that higher court doesn't rule in Trump's favor, they will appeal it to an even higher court. This whole strategy is aimed at befuddling and delaying any action that would finally find Trump guilty of anything. Trump is making a fool of the judge and his family, and will probably never pay any price for it.

In this Theatre of the Absurd, one might humbly ask why did it take three years for any of these dozens of indictments to result in a trial? Now they're up against the next election cycle. It didn't have to be this way. Why weren't these trials expedited in the first place? Why does it take forever to get anything done in the US legal system? This makes it pretty easy for Trump to delay, delay and delay. Why are these guys so negligent with respect to time and so tardy to get anything done? This makes a mockery of the legal system if nothing can get brought to fruition as long as some wealthy guy can hire a bunch of lawyers to delay the whole process. Ionesco had nothing on the US legal system. Neither did Kafka. Kafka's literary endeavors typically featured isolated protagonists facing bizarre or surrealistic predicaments and incomprehensible socio-bureaucratic powers. Sound familiar?

Not only is Trump making a mockery of the whole legal system, he is making a mockery of US capitalism as well. While Trump is slipping the surly bonds of the US legal system, he is laughing all the way to the bank with the help of Wall Street. How is it possible that, while pundits are salivating over whether Trump can pay his legal bills, all of a sudden his social media mouthpiece, Truth Social, is going public which could net Trump billions of dollars. So he may not have his First Amendment rights, but who cares as long as Trump can make billions of dollars by his rights in the capitalist system to have Wall Street do an IPO for him and get investors, many of whom are probably rich Trump supporters, to gleefully invest in something which will probably make him and them billionaires? So there is money in misinformation and disinformation and hate speech. What else is new and why is the US legal and financial system supporting it? After all First Amendment rights combined with capitalism can be a toxic stew which the American legal and financial system is only too happy to condone or at least condone while some pundits wring their hands decrying it. That's their First Amendment rights - to complain while Trump escapes punishment and laughs all the way to the bank. And he might get to be President too! Only in America.

Bernie Sanders Says US Must 'Fundamentally Rethink' Its Foreign Policy

U.S. Sen. Bernie Sanders (I-Vt.) speaks at a May 4, 2023 press conference outside the Capitol in Washington, D.C.

(Photo: Anna Moneymaker/Getty Images)

by Brett Wilkins, Common Dreams, March 18, 2024

"In this pivotal moment in human history, the United States must lead a new global movement based on human solidarity and the needs of struggling people."

U.S. Sen. Bernie Sanders on Monday called for a "revolution in American foreign policy" that replaces "greed, militarism, and hypocrisy" with "solidarity, diplomacy, and human rights."

In a lengthy piece published in Foreign Affairs, Sanders (I-Vt.) asserted that "it is long past time to fundamentally reorient American foreign policy," a shift that starts with "acknowledging the failures of the post–World War II bipartisan consensus and charting a new vision that centers human rights, multilateralism, and global solidarity."

"If the goal of foreign policy is to help create a peaceful and prosperous world, the foreign policy establishment needs to fundamentally rethink its assumptions," the democratic socialist senator wrote. "Spending trillions of dollars on endless wars and defense contracts is not going to address the existential threat of climate change or the likelihood of future pandemics. It is not going to feed hungry children, reduce hatred, educate the illiterate, or cure diseases. It is not going to help create a shared global community and diminish the likelihood of war."

"In this pivotal moment in human history, the United States must lead a new global movement based on human solidarity and the needs of struggling people," Sanders argued. "This movement must have the courage to take on the greed of the international oligarchy, in which a few thousand billionaires exercise enormous economic and political power."

Sanders' article examines U.S. foreign policy since World War II, underscoring commonalities between the many wars and acts of aggression perpetrated by Washington over the decades.

"Dating back to the Cold War, politicians in both major parties have used fear and outright lies to entangle the United States in disastrous and unwinnable foreign military conflicts," the senator wrote, noting the U.S.-led war in Southeast Asia in which as many as 3 million Vietnamese, Cambodians, and Laotians and more than 58,000 American troops were killed.

Sanders also highlighted the U.S. record of perpetrating or backing coups in Iran, Guatemala, the Democratic Republic of Congo, the Dominican Republic, Brazil, Chile, and other countries, "often in support of authoritarian regimes that brutally repressed their own people and exacerbated corruption, violence, and poverty."

"Washington is still dealing with the fallout from such meddling today, confronting deep suspicion and hostility in many of these countries, which complicates U.S. foreign policy and undermines American interests," he wrote.

Sanders then moved on to the 21st century, when the George W. Bush administration responded to the 9/11 attacks by committing "nearly 2 million U.S. troops and over $8 trillion to a 'Global War on Terror' and catastrophic wars in Afghanistan and Iraq"—the latter "built on an outright lie."

The senator continued:

The Iraq War was not an aberration. In the name of the Global War on Terror, the United States carried out torture, illegal detention, and "extraordinary renditions," snatching suspects around the world and holding them for long periods at the Guantánamo Bay prison in Cuba and CIA "black sites" around the world. The U.S. government implemented the Patriot Act, which resulted in mass surveillance domestically and internationally. The two decades of fighting in Afghanistan left thousands of U.S. troops dead or wounded and caused many hundreds of thousands of Afghan civilian casualties. Today, despite all that suffering and expenditure, the Taliban is back in power.

"I wish I could say that the foreign policy establishment in Washington learned its lesson after the failures of the Cold War and the Global War on Terror," Sanders wrote. "But, with a few notable exceptions, it has not."

"In the past decade alone, the United States has been involved in military operations in Afghanistan, Cameroon, Egypt, Iraq, Kenya, Lebanon, Libya, Mali, Mauritania, Mozambique, Niger, Nigeria, Pakistan, Somalia, Syria, Tunisia, and Yemen," he noted. "The U.S. military maintains around 750 military bases in 80 countries and is increasing its presence abroad as Washington ramps up tensions with Beijing. Meanwhile, the United States is supplying [Prime Minister Benjamin] Netanyahu's Israel with billions of dollars in military funding while he annihilates Gaza."

"U.S. policy on China is another illustration of failed foreign policy groupthink, which frames the U.S.-Chinese relationship as a zero-sum struggle," Sanders said. "For many in Washington, China is the new foreign policy bogeyman—an existential threat that justifies higher and higher Pentagon budgets."

Revisiting a major theme from his two Democratic presidential runs, Sanders contended that "economic policy is foreign policy."

"As long as wealthy corporations and billionaires have a stranglehold on our economic and political systems, foreign policy decisions will be guided by their material interests, not those of the vast majority of the world’s population," he said. "That is why the United States must address the moral and economic outrage of unprecedented income and wealth inequality, in which the richest 1% of the planet owns more wealth than the bottom 99%—an inequality that allows some people to own dozens of homes, private airplanes, and even entire islands, while millions of children go hungry or die of easily prevented diseases."

"The benefits of making this shift in foreign policy would far outweigh the costs," Sanders wrote. "The United States must recognize that our greatest strength as a nation comes not from our wealth or our military might but from our values of freedom and democracy."

"The biggest challenges of our times, from climate change to global pandemics, will require cooperation, solidarity, and collective action," he added, "not militarism."

The biggest contrast in the upcoming election (other than democracy vs. "blood in the streets" fascism)

Robert Reich

Mar 18, 2024

 

 

 

Friends,

One of my goals in this daily letter to you is to give you the facts and analysis you need to make informed decisions, especially political ones — and equip you to spread the word to others. So here goes on social security.

During a typically rambling and incoherent interview last week, Trump admitted he would cut Social Security and Medicare if reelected. “There is a lot you can do in terms of entitlements, in terms of cutting and in terms of also the theft and the bad management of entitlements.”

Trump has tried to walk back the remarks, saying that when he used the word “cutting” he didn’t actually mean “cutting,” and that Social Security has a lot of waste. (In fact, Social Security is well managed, and theft or fraud is rare.)

But there’s no question Trump and his Republican allies want to cut Social Security and Medicare.

Here’s why. At the heart of their economic agenda — at least the portion they’re sharing with their super-wealthy backers — is another giant tax cut for the super-wealthy and big corporations.

The problem is that this tax cut would cause the federal budget deficit to explode — as did their last tax cut for the wealthy — unless Social Security and Medicare are cut. (Remember that as president, Trump repeatedly included cuts to Social Security and Medicare in his official budget proposals.)

This is why Trumpers have been ramping up calls for cuts in Social Security (or raising the age of eligibility, which is the same thing).

Last week, Daily Wire founder and professional bloviator Ben Shapiro — oblivious to the fact that millions of Americans do hard work that takes a toll on their bodies — urged that the retirement age be raised. “No one in the United States should be retiring at 65 years old. Frankly, I think retirement itself is a stupid idea unless you have some sort of health problem.” Turning Points USA founder Charlie Kirk echoed Shapiro: “I’m not a fan of retirement. I don’t think retirement is biblical.”

I want to be clear with you about Social Security. (I was once a trustee of the Social Security Trust Fund, so I know about this issue.)

Even without another Trump Republican tax cut for the rich, America still faces a pending problem financing Social Security. (Medicare is less problematic because the rise in health care costs has slowed, probably due to the Affordable Care Act.)

That’s because the American population is aging, with a rising ratio of retirees receiving Social Security benefits to workers paying into Social Security.

 

Franklin D. Roosevelt signs the Social Security Act in 1935 (Secretary of Labor Frances Perkins, who devised the system, is just behind him).

The Congressional Budget Office expects that over the next 20 years, spending on Social Security and Medicare will rise by about 3 percentage points of GDP.

In their annual report, the trustees of the Social Security Trust Fund said that Social Security will be able to pay full benefits for another decade but thereafter faces a significant funding shortfall. Unless something changes, after 2034 it will be able to pay only about 80 percent of scheduled benefits.

But this pending problem in no way requires cuts to Social Security benefits or increases in the retirement age.

In sharp contrast to Trump, Biden correctly asserts in his new budget that Social Security (and Medicare) can remain solvent by raising taxes on high incomes rather than by cutting benefits.

The problem isn’t that the giant baby-boom generation is sucking up too many Social Security benefits. The Social Security trustees anticipated the boom in boomer retirements. This is why Social Security was amended back in 1983, to gradually increase the age for collecting full retirement benefits from 65 to 67. That change is helping finance the retirements of boomers (like me).

So what did the trustees fail to anticipate in 1983 when they raised the retirement age for collecting full benefits? Answer: the degree of income inequality in 21st century America.

Put simply, a big part of the American working population is earning less than the Social Security trustees (including me) anticipated decades ago — and therefore paying less in Social Security payroll tax.

Had the pay of American workers kept up with what had been the trend decades ago — and kept up with their own increasing productivity — their Social Security payroll tax payments would have been enough to keep the program flush.

At the same time, a much larger chunk of the nation’s total income is going to the top than was expected decades ago.

Here’s the thing: Income subject to the payroll tax is capped. Not a single dollar of earnings in excess of the cap is subject to Social Security payroll taxes. This year’s cap is $168,600.

Which means, for example, that Jeff Bezos finished paying all his Social Security payroll taxes due this year at around 7 minutes into January 1.

The Social Security cap is adjusted every year for inflation, but the adjustment is tiny compared to what’s happened to incomes at the top.

As the rich have become far richer, more and more of the total income earned by Americans has become concentrated at the top. Therefore, more and more total income escapes the Social Security payroll tax. 

 

The obvious solution to Social Security’s funding shortfall, therefore, is to lift the cap on income subject to the Social Security payroll tax, so the super-rich pay more in Social Security taxes.

To make sure it’s the super-rich — and not the upper-middle class — who pay, it makes sense to eliminate the cap altogether on earnings in excess of, say, $400,000.

As it happens, Biden’s plan does exactly this.

So there you have it: Trump and his regressive mouthpieces want to cut Social Security so they can give another giant tax cut to the super-rich.

Biden wants to save Social Security by having the super-rich — who have become far richer over the past several decades — pay more Social Security taxes.

The contrast couldn’t be more obvious or more important. Please help get the word out.

Off the Top of My Head

Will the Antiquated Electoral College Finally Bite Us in the Butt in 2024

by John Lawrence

Doesn't everybody agree that the President should be elected by popular vote? In more than half (65) of the world’s 125 democracies, the head of state – nearly always called a president – is directly elected by voters. Thirty other democracies are classified as constitutional monarchies, and in the remaining 30, including the U.S., the head of state is indirectly elected. Shouldn't the American President also be elected by popular vote? But that's not the way we do it due to an antiquated, sclerotic and archaic electoral system that was implemented over 200 years ago before widespread, mass communications. In those days the fastest way that information could be communicated was by horse and buggy or just by horse. That system may be responsible for the upcoming worst disaster in American history in which the popular vote would have elected Joe Biden but in which the electoral vote elects Donald Trump. Every State is allocated a number of votes equal to the number of Senators and Representatives in its U.S. Congressional delegation—two votes for its Senators in the U.S. Senate plus a number of votes equal to the number of its Congressional districts. Most States have a “winner-take-all” system that awards all electoral votes to the Presidential candidate who wins the State's popular vote. However, Maine and Nebraska each have a variation of “proportional representation.” So it comes down to an arbitrary game devised centuries ago which bears little if any resemblance to the result of a majority vote among American citizens. This is pretty bad for a country who champions democracy in the world.

The electoral college presages a race for President of the US which comes down to the outcomes in five battleground states. These states are Arizona, Georgia, Michigan, Pennsylvania, and Wisconsin. The rest of the states are reliably either Republican or Democratic. One of the pitfalls of the electoral college is that minorities of voters are not counted in most states. The majority of voters in these states determines who gets all the electoral votes from that state. This totally skews the vote for President. If a majority of voters in those battleground states vote for Trump, Trump will be elected no matter the results of the popular vote taking into account the votes of people in other states. Of course the minority vote of people in all states is discounted. This is democracy? Let's not kid ourselves. This is a foolish game. There have been five United States presidential elections in which the successful presidential candidate did not receive a plurality of the popular vote. In these cases, the successful candidate secured less of the national popular vote than another candidate who received more votes, either a majority, more than half the vote, or a plurality of the vote. The two most recent elections in which this was true were the 2000 election, Bush v. Gore, and the 2016 election, Clinton v. Trump. These arguably were the two most disastrous elections in human history because Bush led us into two disastrous wars and away from preoccupation with climate change, Gore's strong suit. Also the election of Trump gave us arguably the worst President in American history.

The problem is that Trump is poised to win again this year based on the electoral college while losing the popular vote to Biden. You have to give it to Republicans - they know how to manipulate what can only be called at this point a corrupt electoral system. The sclerosis of America is that it can never come to terms with something that is wrong when it is enshrined in the Constitution and then go ahead and fix it. They are committed to playing the same old game out of veneration for tradition and the past.This year it may be the final straw for democracy in the US if Trump is elected but loses the popular vote. It is unconscionable to many that a man who has dozens of indictments against him including one of trying to overthrow American democracy can even be allowed to run for President, but that in and of itself may be the downfall of American democracy. The outcome of the 2024 Presidential race comes down to an antidemocratic game in which Trump may well triumph.

Off the Top of My Head

What I Didn't Hear in Biden's State of the Union Speech

by John Lawrence

President Biden went on and on about taxing the rich, but he didn't make the concomitant declaration of "middle class tax cuts." Those are the words I didn't hear - TAX CUTS. These are the code words that Joe Six Pack wants to hear. Joe Six Pack could care less about "child tax credits." While those are probably the most responsible words and the most responsible way to handle tax benefits for the middle class and the poor, those are not the words that the majority of uncommitted voters want to hear. Those are the code words. Republicans always promise tax cuts period. Of course most of those tax cuts always go to the rich as the Trump tax cuts did, but the Joe Six Packs of the world do not make that distinction. All they care about is that they will get their tax cut no matter how paltry. That's why Biden should promise not only taxing the rich but tax cuts for the middle class. Trump will promise tax cuts for everyone. Biden should make the easily understood distinction of tax increases for the rich - as Biden has repeatedly said, those making more than $400,000 a year - and tax cuts for everyone else. Whether or not this makes economic sense or the best use of the saved money, this is politically the best way to neutralize the only economic policy Republicans have.

While taxing the rich makes good red meat rhetoric, it doesn't register on or resound with the naive, unsophisticated average voter's mind the way tax cuts does, and we must assume that the majority of voters are naive and unsophisticated based upon the fact that polls indicate that the majority of voters favor voting for Trump at this point. Any American citizen who has any understanding of what President Biden has accomplished would almost certainly think that he deserves a second term. Even if he doesn't finish it, his administration will give a push for the continuation of his policies which are far more in the interests of the average American than are Trump's. If it's up to Kamala Harris to finish Biden's second term, Biden's policies will almost certainly prevail through out that term.

The policy of tax cuts for the middle class will go a long way towards guaranteeing that Biden will be elected for a second term. Certainly some of the money gained from taxing the rich could be used for tax cuts for the not so rich in addition to child tax credits. The other policy that President Biden should espouse has to do with the border. It's not enough to blame Republicans for the fact that recent bipartisan legislation that would supposedly "fix" the border has not been passed. Biden should just come out and say he wants the border to be fixed in such a way that no one will be able to come across the border illegally. Certainly this is possible for a country that has 800 military bases around the world and a trillion dollar a year military budget. It's almost ridiculous that the world's most powerful nation that purports to be the policeman of the world cannot even police its own border. Taking a much stronger position on the border - in particular the illegal crossing of the border - will take that issue away from Trump who will promise that under his administration not one illegal entry will be permitted. Let's get beyond the trivial issue of whether those crossing the border are "illegals" or "undocumenteds." It's not about descriptive words; it's about policies. Use the words that most Americans use, not those that are politically correct. Take a page out of Trump's book. Biden's words should be much stronger on this issue. This is what the American people want, and Biden should take this issue away from Trump.

In summary, Biden needs to be much stronger on these two issues - tax cuts and illegal border crossings - taking these issues which are the only issues Trump has, away from him. Whether or not Biden or Trump can get anything passed in Congress on these two issues depends on whether or not either President ends up with a Congress, both Houses of which are composed of their own respective parties. No President has complete control of what gets passed by Congress. The average voter, however, thinks these issues are entirely in the President's hands. No one know this better than Joe Biden. However, when running for President, a person can promise anything and can fight for it if elected. Biden needs a second term if for no other reason than to deny Trump a second term which might presage the end of democracy in America.