Obama: Class Warfare Against the Poor

Obama claims that his administration and his tax policy is not class warfare against the rich.

From CBS:

Taking a defiant tone against Republicans unwilling to raise taxes in order to close the deficit, President Obama today unveiled a $3 trillion long-term deficit reduction plan that relies heavily on raising taxes on the wealthiest Americans.

“This is not class warfare — it’s math,” Mr. Obama said from the White House Rose Garden, addressing GOP critiques of his plan head on.

“The money has to come from some place,” he continued. “If we’re not willing to ask those who’ve done extraordinarily well to help America close the deficit… the math says everybody else has to do a whole lot more, we’ve got to put the entire burden on the middle class and the poor.”

The policies of his administration are not class warfare against the rich. They’re class warfare by the Obama administration, the establishment, and the military-industrial complex against everyone else.

Let’s take his claim that “the money has to come from somewhere” — that’s correct. Paying down the debt requires that the money come from tax revenues. Americans commit almost 30% of their GDP to taxation.

From the Economist:

And where does that money go?

Now we know that America is currently running trillion dollar deficits and has almost $15 trillion in headline debt. So we know that in spite of taking more than $3 trillion in taxes per year, America is spending outside its means. Here’s a full breakdown of Federal spending in Obama’s first year in office:

Current Military
$965 billion:
• Military Personnel $129 billion
• Operation & Maint. $241 billion
• Procurement $143 billion
• Research & Dev. $79 billion
• Construction $15 billion
• Family Housing $3 billion
• DoD misc. $4 billion
• Retired Pay $70 billion
• DoE nuclear weapons $17 billion
• NASA (50%) $9 billion
• International Security $9 billion
• Homeland Security (military) $35 billion
• State Dept. (partial) $6 billion
• other military (non-DoD) $5 billion
• “Global War on Terror” $200 billion [We added $162 billion to the last item to supplement the Budget’s grossly underestimated $38 billion in “allowances” to be spent in 2009 for the “War on Terror,” which includes the wars in Iraq and Afghanistan]

Past Military,
$484 billion:
• Veterans’ Benefits $94 billion
• Interest on national debt (80%) created by military spending, $390 billion

Human Resources
$789 billion:
• Health/Human Services
• Soc. Sec. Administration
• Education Dept.
• Food/Nutrition programs
• Housing & Urban Dev.
• Labor Dept.
• other human resources.

General Government
$304 billion:
• Interest on debt (20%)
• Treasury
• Government personnel
• Justice Dept.
• State Dept.
• Homeland Security (15%)
• International Affairs
• NASA (50%)
• Judicial
• Legislative
• other general govt.

Physical Resources
$117 billion:
• Agriculture
• Interior
• Transportation
• Homeland Security (15%)
• Commerce
• Energy (non-military)
• Environmental Protection
• Nat. Science Fdtn.
• Army Corps Engineers
• Fed. Comm. Commission
• Other physical resources

The reality here is that a majority of government spending is going toward permanent warfare, “global security“, the military industrial complex, guns, bombs and death. Beyond that, money spent is often frittered away on crony capitalism, bridges to nowhere, and Washington’s largesse. That is an epic transfer of wealth from ordinary Americans. But not only that it is significantly weakening America — every gun built, every bomb dropped, every phoney war created is money, time, effort and skills wasted that could instead have been spent on creating infrastructure, starting enterprises, investing in new equipment, building schools, developing technology, opening factories, or hiring workers.

Alas, it is not only the permanent war that is transferring wealth from the poor to the rich — it is the drastic inflation of the money supply that occurs through the process of central banking, too.

From Ron Paul:

Though the Federal Reserve policy harms the average American, it benefits those in a position to take advantage of the cycles in monetary policy. The main beneficiaries are those who receive access to artificially inflated money and/or credit before the inflationary effects of the policy impact the entire economy. Federal Reserve policies also benefit big spending politicians who use the inflated currency created by the Fed to hide the true costs of the welfare-warfare state

The U.S. dollar has been devalued 96% since the creation of the Federal Reserve:

So the American people are struck with two hammer blows — the hammer of an ever-weakening currency diminishing their purchasing power and encouraging ceaseless consumption, and the hammer of an ever-greater military spending that strips wealth away from the working people, and hands it to defence contractors to build aircraft carriers, missiles, and tanks.

And what’s Obama’s recipe to get America out of this mess?

More taxes?

He wants to take more productive capital out of the economy so he can hand it to institutional investors, and authoritarian foreign regimes who bought U.S. bonds?

Is this a joke? Why doesn’t he address the elephant in the room — the absurd military overspending — instead of taking yet more productive capital away from the American people.

13 thoughts on “Obama: Class Warfare Against the Poor

  1. Two points – 1) please point out that the $ in Mg of Au is Log so it’s really so much worse than it looks. 2) Military spending is and has been Keynesian stimulus carried out by the Right. In that light, President Bush was perhaps the most Keynesian of Presidents in recent memory and he makes Obama look like a rank amateur on the spending front. Unfortunately I couldn’t understand this when I voted for him twice. I think we may be at the point where revolution is the only choice. Now if Ellen and the girls on the View will just call us to get up and do something about it… (I guess we are just doomed).

    • Bush drastically increased military/Keynesian spending over Clinton. Obama sustained Bush’s spending levels (just as Krugman would tell him to — we can’t have a dip in aggregate demand now, can we?). So Bush had a rapid increase. But the so-called-anti-war hopey changey Obama isn’t just bad — he’s a hypocrite.

      Then again, I guess Bush is a hypocrite too for calling himself a fiscal conservative.

      Who’s worse? Who knows?

  2. Everybody loves a free lunch, until they find out they paid for it!!!

    I recall when the 911 attack occurred and they said they were going to war. I said to a friend, this is the final straw for the USA. Like Rome 2000 years ago, they bankrupted the Treasury through war.

    Could you imagine that instead of Rome going on conquest, they created hubs of learning and commerce. They would have attracted the brightest minds in the world. They could have sent dignitaries to the far reaches of the planet, and offered assistance to the rulers. Instead they offered war. Look at the result. Decay and ruin.

    We are going to have a complete collapse of world banking and governments, and the solution will be Free Market Anarchy, Fascism or Communism. The air is ripe for revolutionaries to promise the world.

    I believe the Chinese model will spread around the world. It will be easy to offer a model to the public, based on perceived strength. I bet the rich are joining a “Communist Party” right now, so they can cement their power and privilege.

    It works for China!

    • If you start cutting military you stop taking money out of the productive economy and give the money back to the people for them to spend it on what they want and need. For the cost of the Pentagon every soldier could be given $100,000 to start a business.

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