What a world this has become, we are truly through the looking glass. In what world would a country with four of its territories and 3 states leveled by hurricanes and fires pass trillions of dollars in tax cuts for the extremely rich? From World Socialist Website:
From hurricanes to tax cuts: The ruling class gets down to business
Even as the horrific destruction caused by Hurricanes Harvey and Irma is still being tallied, the US political establishment is moving rapidly to its main order of business: A massive handout for the corporate and financial elite.
Amidst this destruction, however, the US stock markets are on the rise—increasing significantly on both Monday and Tuesday. The reason is evident: the ruling elite is licking its collective chops at the prospect of a major cut in corporate and individual taxes for the wealthy.
Over the weekend, even as Irma was making landfall in Florida, Trump seized the moment to press for “dramatic tax cuts and tax reform.” With “what’s happened with the hurricane,” he said, “I’m gonna ask for a speed-up.”
Treasury Secretary Steven Mnuchin, the former Goldman Sachs banker and hedge fund manager (net worth $300 million), said on Tuesday that the White House is “super focused” on tax cuts, and that the administration is considering backdating these cuts to January 1 to provide a “big boon for the economy”—that is, for Wall Street.
So while the ruling elite are licking their collective chops” over the impending tax cuts, what is congress doing for Puerto Rico? The American territories of Puerto Rico, Guam, Virgin Islands and the Marianas Islands have been the victims of the GOP and Wall Street predators for decades. The Islands have been raped and savaged by the GOP with legalized slave labor, sex slavery and forced abortions, in what the ex-Speaker Tom Delay called “a petri dish of capitalism.” Now Puerto Rico is really hurting. FromLaRouche Pub:
Puerto Rico Faces Financial Disaster—There Is No Economy Left
Oct. 11, 2017 (EIRNS)—Puerto Rico’s Treasury Secretary Raul Maldonado told El Nuevo Día that the government will face a shutdown by Oct. 31 if Congress doesn’t intervene with additional funding.
In effect, there is no economy. Few businesses are operating, and therefore, people aren’t getting paid. Banks operate four hours a day. The official 12% unemployment rate will soar. McClatchy News Service also reports that the mainstay of the economy, agriculture, was devastated by hurricane Maria, with losses expected to top $2 billion, according to Agriculture Secretary Carlos Flores.
Nelson Morales, head of the Puerto Rican Electric Power Authority (PREPA), told El Nuevo Día that without aid from the Federal Emergency Management Agency (FEMA), the U.S. Army Corps of Engineers (USACE), or both, it will be impossible to restore full power to the island.
PREPA only has $500 million on hand, which is nothing compared to what’s required to rebuild the system. Yesterday, FEMA and the USACE said they had contributed $54.6 million and $115 million, respectively, to assist PREPA, which still a drop in the bucket. Sources told the daily that PREPA will need at least $3 billion, and that is probably a low estimate, given that the entire power system really must be built from scratch.
If the horrific conditions the Islands have been forced to live under weren’t bad enough, the GOP has now passed legislation to worsen their fate. Under the cover of “hurricane relief”, the package passed by the GOP is anything but. From The Intercept:
PUERTO RICO RELIEF BILL CANCELS $16 BILLION IN DEBT — BUT NOT FOR PUERTO RICO
HOUSE REPUBLICANS UNVEILED a $36.5 billion disaster relief supplemental package on Tuesday night, intended to pay for relief and rebuilding efforts for the floods, hurricanes, and wildfires of the past several months. It includes money for Puerto Rico’s ongoing struggle with the aftermath of Hurricane Maria, though only a fraction of that headline number. In fact, $5 billion of the funds earmarked for Puerto Rico comes in the form of a loan, increasing the amount of money the island will eventually need to pay back.
And in a cruel irony, the bill also contains $16 billion in debt relief – just not for Puerto Rico’s crushing debt…
The island will get an additional $150 million loan to cover its matching funds for FEMA grants. Cities and states are required to put a small amount of money into sharing costs for disaster relief. That brings the total of loans to the island up to $5.05 billion. The appropriations committee allotted another $29 million for administrative expenses for the loan…
This is critical for Puerto Rico, which has trouble borrowing from private credit markets because of its existing $74 billion debt. But instead of replenishing the coffers with a grant, this is a loan — one Puerto Rico will also need to repay.
What the F*&K??? While congress is passing trillions in tax cuts for Wall Street vultures, they have appropriated $5 billion that is to go directly to pay the hedge fund vultures via Puerto Rico. How could this get through congress? Don’t the islanders have representation in the House? From The Hill:
House GOP kills voting rights for D.C., Puerto Rico, other delegates
Along strict party lines, House lawmakers on Wednesday shot down legislation allowing delegates to retain certain voting powers.
The surprise vote — the first of the new Congress — surrounded a provision of the Republicans’ proposed rules package that would prevent the six House delegates from presiding over, or voting as part of, the Committee of the Whole — a mechanism used to expedite legislation by effectively turning the entire chamber into a committee.
Under the rules of the last Congress, the six delegates — representing the District of Columbia, American Samoa, Guam, Puerto Rico, the Northern Mariana Islands and the Virgin Islands — were allowed to cast votes and preside over the Committee of the Whole. The Republican rules proposal would strip that power.
This is truly through the looking glass. But this is just another case of Congress paying back their contributors. If Puerto Rico were a state they would have been able to file bankruptcy. That was not allowed by congress in this case, because Puerto Rico’s debt is held by the very vultures who fund their campaigns. From Florida Politics:
After taking donations from hedge funds holding Puerto Rican debt, Marco Rubio opposed bankruptcy
In opposing the bankruptcy filing for Puerto Rico, Republican presidential candidate Marco Rubio said he does not believe in a “silver bullet.” Puerto Ricans should tighten their belts, he declared.
According to Casey Tolan of Fusion, what Rubio fails to mention is that he received thousands of dollars in campaign cash from individuals – particularly hedge fund executives – who would lose big if Puerto Rico filed for bankruptcy.
Tolan reports on campaign finance reports that show Rubio’s campaign received contributions from a minimum of six hedge fund managers holding Puerto Rican debt. The junior senator from Florida has been the only presidential candidate openly opposed to bankruptcy reform for Puerto Rico.
The GOP tax cuts are a loser for America, they always were and always will be. Since the Reagan Administration the GOP talking points have been to push tax cuts as economic stimulus. The claim that “tax cuts pay for themselves” is been proven false over and over again. From Op Ed News:
How and Why Did the U.S. Become the World's Biggest Debtor, and What Are the Implications?
How did a nation that was until relatively recently (in historical terms) the world's biggest net lender become the world's biggest net debtor? More importantly, what implications does this situation have for the U.S. and for the rest of the world?
To answer the first question we need to go back a few decades in time to the Reagan era, when I believe the seeds of the country's present debt problems were sown. President Reagan inherited a nation that was not only one of the two great military superpowers on earth, but also by far the world's wealthiest nation and biggest net lender…
Reagan was also an economic monetarist, a Right-Winger who believed in low taxes and small government at home, but also in maintaining a strong military defense force both at home and abroad.
In response to criticism from many mainstream economists that his economic policies of reduced taxation and increased government spending would eventually bankrupt the nation, Reagan pointed to the so-called "Laffer Curve," named after the economist Arthur Laffer.
The Laffer Curve was interpreted by right-wing theorists to show that reduced taxation rates promote free enterprise and grow the economy, thereby, paradoxically, increasing, rather than reducing, Government revenue.
As things turned out, critics of the "Laffer Curve" were proven unambiguously right in practice. Massively reduced taxation under Reagan resulted proportionally in massively decreased Government revenue. This was just as most mainstream economists and common sense thinkers had predicted.
To make things worse, to go along with this sharp reduction in the Government's tax income, the Reagan administration simultaneously massively increased military spending--to levels the world had never seen. The combined massive reduction in Government income and massively increased expenditures overseas, and the consequent need for massive borrowing to make up the shortfall, transformed the U.S. virtually overnight from the world's biggest net lender to the biggest net debtor.
If there is one thing equally as scurrilous as the GOP tax cuts it’s the GOP budget. Even Fareed Zakaria is calling the GOP budget plans fantastical delusions. Trump’s right-wing GOP Budget Director Mick Mulvaney’s budget is looney tunes.
Fareed Zakaria slams Trump administration for smoke & mirrors budget
The number I want to focus on is three point four trillion dollars. At the end of May, the Trump administration released details of its proposed budget for the next fiscal year. And on July 13th the nonpartisan Congressional Budget Office released their analysis of President Trump's budget.
The CBO says the President's budget underestimated the loss in federal tax revenues caused by its proposed tax cuts by a whopping three point four trillion dollars. How could the smart Goldman Sachs guys on Trump's economic team, Gary Cohn, Steve Minuchin, make such a big basic math error. Actually, they did it intentionally.
The administration assumed that because of its tax cuts the American economy would grow by three percent a year for the next decade. The CBO instead says the president's plan would increase GDP growth to 1.9 percent which most economists agree is the sensible assumption. Note that the American economy has grown on average just 1.8 percent over the last years, no more.
This method of fudging the numbers is called dynamic scoring. Common sense would tell you that if the government cuts taxes it'll get less money in tax revenues. But sprinkle the magic pixie dust of dynamic scoring and you can project much higher growth rates and then the revenue numbers saw upwards in theory…
In fact, the national debt tripled under Ronald Reagan. And After George W Bush cut taxes the national debt increased again. Bill Clinton by contrast actually raise taxes and ushered in stronger growth and higher tax revenues. But the mountains of evidence have not stopped Republicans from using dynamic scoring.
Science, logic and reason never permeate the GOP psyche. Now they have passed the largest tax cuts in the history of the universe that will go directly to the top 1% with the “hope” that they will create jobs. The House and Senate are reconciling their individual “Frankenstein” bills and one thing is for sure, whatever comes out will be a horrible nightmare for the American people.
This is what America has come to, we have five ex-Presidents hawking for money on a telethon to repair damages from hurricanes. What a world this has become. What kind of people are these in congress? Are so they so sick and disgusting that they are unaffected by other’s grief. What kind of politicians in a country with four of its territories and 3 states leveled by hurricanes and fires passes trillions of dollars in tax cuts for the extremely rich?
By Patricia Baeten