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A single solution to the US Budget Deficit that works

Briefly –

There were $600 Trillion Dollars of Derivatives in 2008 – certainly, there are more now. These could not be included in the Gross Domestic Product. The money exchanging hands in derivatives does not have sales tax, nor the taxes normally applied to insurance products. They are not taxed as all other products are, nor are duties, customs, ad valorem, VAT nor export fees places upon their nominal values.

That is a lot of money.

A tax of even 20% on the total value of credit default swaps, credit derivatives, stocks, bonds, and other financial derivative instruments would put nearly every nation including and especially the United States, Great Britain and the European Union in the black instead of facing huge deficits.

That is over $120 Trillion dollars which would allow the entire debt to be paid off with its interest right this very minute. We would not have to pay another dime of interest on that debt which would make the money being paid for the interest available for other things.

Thank you for taking a moment to consider it.
Please consider letting others know of this option as a solution – a real solution to the deficit problem.

***

1 United States    $14,119,000 (millions)

Gross domestic product 2009

(from)

World Development Indicators database, World Bank, 15 December 2010

http://siteresources.worldbank.org/DATASTATISTICS/Resources/GDP.pdf

***

What is included in the Gross Domestic Product?

What is not included in the GDP? Financial Services? Stocks? Financial Derivatives? Off-Balance sheet instruments?

– cricketdiane

***

Gross domestic product (GDP) refers to the market value of all goods and services produced within a country in a given period. It is often considered an indicator of a country’s standard of living.[1].[2]

http://en.wikipedia.org/wiki/Gross_domestic_product

***

There were $600 Trillion Dollars of Derivatives in 2008 – certainly, there are more now. These could not be included in the Gross Domestic Product. The money exchanging hands in derivatives does not have sales tax, nor the taxes normally applied to insurance products. They are not taxed as all other products are, nor are duties, customs, ad valorem, VAT nor export fees places upon their nominal values.

That is a lot of money.

A tax of even 20% on the total value of credit default swaps, credit derivatives, stocks, bonds, and other financial derivative instruments would put nearly every nation including and especially the United States, Great Britain and the European Union in the black instead of facing huge deficits.

These financial instruments are traded, swapped, sold, bought, and used without being required to even pay the simple sales taxes that are in place in every state, nor the VAT that is the law in every part of the EU. They freely cross borders without fees. They are made and sold for hundreds of millions of dollars without being taxed, nor any fees paid for them to state and national governments despite being used as both a form of currency and a product manufactured of a tangible value.

Stocks, bonds and other credit products are made every single day. “Investment vehicles” are made every single day and sold without one tax being paid on any of those transactions despite being viable, real products which are being sold for cash of some kind – literally. Not even an airplane is sold without being taxed and in many cases, each and every part in the plane is taxed or subject to export or import duties of some kind as a part of doing business.

There wouldn’t be a deficit in America, in the UK or the EU, if this one set of products were treated in the fairest sense of the word to be included in the taxation schemes placed on everything else.

Are they even included in the GDP figures?

Wall Street is worth how many trades that are occurring each day? And, what total value of “goods” in stock transactions are literally going through that one exchange each and every day? On some days there are hundreds of millions of shares changing hands. Where are those tax dollars on each sale, trade or purchase?

Where are those sales tax revenues that should be in the budgets of New York City, New York State and the US Treasury? It is our infrastructure investments that support it. Why shouldn’t they put into the support of that infrastructure just as we all do when we purchase or sell anything – or own anything – or build anything – or manufacture anything – or re-sell anything?

Why do they get to trade, sell and purchase products every day in the hundreds of millions of units without paying any fees, sales taxes, ad valorem taxes, export duties on it, federal taxes or state taxes on any of it? There is the US and state deficit. It is a failure to include those products in the taxes and revenues that they should be generated to make a contribution to the infrastructure that has made their successes possible.

– cricketdiane

***

That is – A single solution to the US Budget Deficit that works.

We need $17 Trillion Dollars right now and Europe needs about $8 Trillion, the UK needs about $30 Trillion (no, not really – it is more like $$12 Trillion more or less) and some estimates are that the US actually needs more like $44 Trillion Dollars to be actually solvent. And, there is the money for all of these to be fairly and equitably accommodated with actual revenues which exist and have not been taxed fairly up to this day (as everyone else and every other thing created by any of us have been.) Now is the time to fix it.

And, doing it this way fixes it. That will restore our educational systems, it will be fair for a change, it will allow these financial instruments to be taxed in the same way that a gallon of milk is taxed, the pensions will be restored, the Social Security Trust Fund can be restored to its rightful solvency, our social safety nets can stay in place and our nations can be on a firmer footing which both parties politically and all parties of individuals want and need.

From my post yesterday – another solution to add to this one –

A Dance with Debt and an even better dance with the solutions for it

There was a point at which Japan decided to be tremendously better at something than anybody else in the world in order to fix the budget problems they had. The determined that quality excellence could not be matched if they simply focused on that. China decided that they could compete effectively by producing goods more cheaply in greater quantities than anyone else. For that to work, their government supported their workforce. They combined their efforts, educated their citizens and focused on an area at which they could win – in both countries.

What have we done? This is not 150 years ago obviously. We have revenues and wealth but it is flowing in massive circles only at the top of our society. It produces virtually nothing at this point except to breed on itself, thieve from the people it is intended to serve, and massively constitutes its own industry serving itself. It has become a beast. Even those in our government have been bought by it, serve it to their friends rather than back through the nation, and they have every intention of keeping it that way.

Well, we don’t have time for that. The stupid short-sighted games being played with the money in our Treasury and our State budgets will not serve the people of America nor our future as they are planned right now. If we leave it that way, an entire generation of our children will be lost to those years of education rather than a better job done with it. An entire adult generation’s potential will be lost and as much as I would love to invite you to the nightmare I’ve lived for my adult lifetime – it would be tremendous, if we just do something else. The Republicans are diverting the money from programs claiming to “cut” the budget while they pay Wall Street brokers fees larger than it would take to support these programs in order to “invest” the money from the state treasuries. Each time a trade is made, a fee is paid. For every four teachers on the payroll, it is the equivalent of one attorney in the army of attorneys that each state is employing in nearly every department, city, county and branch of the state government, including the governors’ office and legislature. For every five teachers (or six in some counties) – there is one financial manager’s salary that will be paid instead.

That is what they are changing. It is a diversion of resources to the wealthy and their friends again. After paying the banks for all of their losses and covering every single toxic asset they had bought, by purchasing those from them, now we will be supporting nothing but the banks and financial institutions. Just as the charts above show – there is a price for doing it that way. In every state, the interest being paid as the debt is re-capitalized and re-capitalized, means that the lion’s share of the budget is now going out to pay the interest, the bankers, the bondholders, the financial managers to invest it and trade with it, and the losses from those financial “investment” decisions that went horribly wrong when Wall Street played us three years ago.

When the financial crisis was just becoming a question of not whether it might be the “R” word, (a Recession), but rather a question of how long it might last, the experts said it might be a couple or three months of a downturn and certainly not over 6 -8 months long. I said that they needed to tell people it would be at least five years that they could be unemployed. And, that turns out to be the truth of it for at least a third of our population and maybe more. The unemployment numbers leave out so many categories of human beings alive in our nation that are not employed because the jobs simply don’t exist, that the concept of adding that many more homeless people, hungry to the point of desperation and hopeless beyond measure, to the total of our society is a choice that these Republicans have never experienced in their lifetimes.

It is just a matter of time and they will understand what it means when people have nothing to lose and no investment in the society to which they belong en masse. It will explain itself in terms they can understand.

I said it before, and it is worth saying here – not one of these Republican legislators that are choosing these cuts can actually do math (except maybe two of them), and unless someone does these budgets for them – they wouldn’t know how the money is moving around either. However, they do know this part –

What happens when the entire country goes on strike starting right here, right now?

Not one person in Washington DC or in the halls of state congresses can cut their own hair, mow their own lawns, cook their own food, teach their own children, drive their own cars, wash their own clothes, walk their own dogs, relax themselves, entertain themselves, shine their own shoes, do their own manicures, have sex without help or in fact, do any of a number of things that are required in their everyday lives for things to go smoothly either. Maybe its time they learn that they are not the most and only thing around.

– cricketdiane

***

I bet they could figure out a better way to work out balancing these budgets if they wanted to do that. Maybe their rich friends in the business world could be putting in their fair share instead of working every trick in the book to cheat America out of any of what they make here. There could be a simple tax put on businesses with no loopholes whatsoever.

If a company gets a dollar gross in revenue in the US, they could pay 25 cents of it to support the infrastructure where they’ve gotten it. No loopholes, no more corporate subsidies, no more tax breaks. No taxes after the net is calculated, and regardless of what is paid to whoever the jackasses are running the company, no matter what is paid to shareholders in dividends.

If they make a dollar in sales or revenue then from the gross, they pay America 25%. And, they can give another 1% on top of that gross to the states where they did business. If the sales were made in the US, then the sales and business revenues are taxed 25% with no deductions, no loopholes, nothing. And, every industry subsidy that is being paid out right now in the hundreds of millions of dollars can simply be stopped immediately this budget, this year, right now.

How about that –

The brokers that are playing games with our state treasury money and our national budget dollars can simply get a flat fee of $100 dollars per trade with a cap of no more than one transaction per day. Then, the salaries to those armies of attorneys can be stopped as well by getting the software which does the same thing and replacing the fifty attorneys with one – or two – neither of which are allowed to make more than our teachers make a year. And, the financial managers can work at that same salary as well. And, every four of them acting in the state and federal offices can be replaced with one who knows what they are doing.

That works.

– cricketdiane, 03-06-11

***

The next time one of them asks me a dumb computer question – I’m going to tell them the same thing they tell me, “you’ll just have to figure that out yourself.”

I won’t be looking up something while I’ve got a minute nor tell them how to do it. And, I won’t be checking the directions to explain how anything works to any of them for quite a while, nor looking it up in the nearby dictionaries and reference books. They can explain it to their own kids and they can figure it out without anybody doing it for them. No more.

And, I’m going to say, “well, I just don’t know who you can get to do that for you the same way they have explained it to me when I asked them,” instead of pulling from my mind how to find the best person that could help and figure out to find that person for them.

Not doing it anymore. I’m on strike.

Like my mother said some years ago about washing dishes and other housework – she went on strike and liked it.

We got to learn how to wash the dishes ourselves and do the housework and cooking. I wonder if those people in Washington know how to fix their own cars? Or “detail” their own cars and pump their own gas in the damn things? President Bush was out of his element when he tried it. Should be interesting to find out.

– cricketdiane

***

One other part from that post –

I’ve thought a lot about the dimensionality of debt, because it doesn’t stay in one place, nor in one level of the operation – not in a business, not in a nation or a state and not in one’s own family budgets. The facts is, debt has a way of migrating up, down and sideways into other places. It always affects something far removed from wherever it started and almost all of the options of punting that debt elsewhere have astounding consequences which also migrate up, down and sideways into other areas.

So, I looked at the US debt from a reference point of twenty-five years, which it honestly won’t ever be extended in quite those same terms because the debt is being traded. That makes it more of a game of chance added to the side-gambling that would occur on the eight-sided chess game or in the stock market / credit interest swapping that goes on in the financial products markets.

With the US debt greater than any of us will see in our lifetimes – the fact is that we are spending more on the interest for the debt than on most all of the domestic spending programs combined. That means – there is where the money is going and about to go instead of being available to help anyone. I would say that is the real problem.

We are actually financing out national debt at all kinds of different prices with a vast range of returns which means the interest we are paying exceeds that average on the vast majority of the debt instruments.

The problem with the idea that we could cut the budget and cut all the domestic programs to fix this debt burden is that it isn’t the actual problem. The only real thing our money is doing is to pay the interest on the debt, nothing else is actually going to get done.

– cricketdiane

***

If they make a dollar in sales or revenue then from the gross, they pay America 25%. And, they can give another 1% on top of that gross to the states where they did business. If the sales were made in the US, then the sales and business revenues are taxed 25% with no deductions, no loopholes, nothing. And, every industry subsidy that is being paid out right now in the hundreds of millions of dollars can simply be stopped immediately this budget, this year, right now.

This plan works. This plan works right now. These two plans together work even better (the one here and the one for taxing the financial products every time they change hands – bought, sold or traded). These work to pay off the debt that the US owes right now and then no interest would have to be paid on it any more as of right now. And, that would actually fix the deficits.

03-07-11

DCP

***

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Data and information on the Public Debt Moves to TreasuryDirect!

February 10, 2007 – Information on Federal Investments, State and Local Government Securities, the Trust Funds Program, the Federal Borrowings Program, Securities Liquidations and Proceeds and data on the Public Debt has moved to the government section of TreasuryDirect.gov. With this move, all information on our products and services for individual, institutional and government customers resides on TreasuryDirect.gov. Please visit our new site!

Our corporate site, www.publicdebt.treas.gov, provides information on franchising and procurement offerings, career opportunities, and other facts about our organization.

Treasury Securities Information and Auction Data Have Moved!

August 4, 2006 – We’ve moved auction data and information about Treasury securities to TreasuryDirect.gov and we have several links on this page to get you easily to the new site. Also, we’ve put redirects in place for our most popular pages that will take you automatically to their new location.

read more @ TreasuryDirect.gov…

http://www.publicdebt.treas.gov/

**

912810DP0 MK BOND 11.250% 02/15/15 136.656250 136.625000 0.000000

912810DS4 MK BOND 10.625% 8/15/2015 137.328125 137.281250 0.000000

912810DT2 MK BOND 9.875% 11/15/2015 135.343750 135.312500 0.000000

912810DV7 MK BOND 9.250% 02/15/2016 133.609375 133.562500 0.000000

(from today’s market charts found here – )

Prices For: Mar 4, 2011

(NOTE: These prices apply only to market-based Treasury special securities.)

CUSIP SECURITY DESCRIPTION BUY SELL END OF DAY

912828BA7 MK NOTE 3.625% 05/15/2013 106.171875 106.156250 0.000000

912828NC0 MK NOTE 1.375% 05/15/2013 101.203125 101.187500 0.000000

https://www.treasurydirect.gov/GA-FI/FedInvest/selectSecurityPriceDate.htm

03-04-11

**
My Note –

Loan Progress Chart –

on $1,000 at 11.250% after 5 years $951 still remains (on a 25 year term)

on every $1,000 @ 11.250% after 10 year $866 (on a 25 year term)

on every $1,000 @ 11.250% equals $456 remaining after paying on it for 20 years (out of 25)

$384 at 21

$304 at 22

$214 at 23

$113 at 24

and then paid at year 25 except that by renewing the credit on it to pay the credit on it – that compounds the interest and the principle being paid – ad infinitum

(from charts found in this book, that I carry in my purse. Everyone should have one – )

Loan and Mortgage Payment Table,

Dome Enterprises, Inc., Financial Publishing Company, Boston, MA  02215

Mine is from 1978, 1983 – (these facts don’t change much – they still mean the same things to the borrower.)

– cricketdiane

(my note also – every child in America needs to be able to read and understand the charts in that little book and so does every single adult – because that is information they will actually use in their lifetime and it can be the difference in being able to eat or not.)

**

On this page can be found the national debt – but it is misleading –

The Debt to the Penny and Who Holds It

( Debt Held by the Public vs. Intragovernmental Holdings )

Current Debt Held by the Public Intragovernmental Holdings Total Public Debt Outstanding
03/03/2011 9,571,009,627,588.32 4,611,076,571,468.69 14,182,086,199,057.01

See information on the Debt Subject to the Limit.

Daily History Search Application

To find the total public debt outstanding on a specific day or days, simply select a single date or date range and click on the ‘Find History’ button.

The data on total public debt outstanding is available daily from 01/04/1993 through 03/03/2011.

http://www.treasurydirect.gov/NP/BPDLogin?application=np

***

Total Public Debt Outstanding (United States March 2011)

$14,182,086,199,057.01

(and one penny.)

This is to reiterate (repeat, repeat, repeat) what I already said –

(so, skip this part if you want)

I bet they could figure out a better way to work out balancing these budgets if they wanted to do that. Maybe their rich friends in the business world could be putting in their fair share instead of working every trick in the book to cheat America out of any of what they make here. There could be a simple tax put on businesses with no loopholes whatsoever.

If a company gets a dollar gross in revenue in the US, they could pay 25 cents of it to support the infrastructure where they’ve gotten it. No loopholes, no more corporate subsidies, no more tax breaks. No taxes after the net is calculated, and regardless of what is paid to whoever the jackasses are running the company, no matter what is paid to shareholders in dividends.

If they make a dollar in sales or revenue then from the gross, they pay America 25%. And, they can give another 1% on top of that gross to the states where they did business. If the sales were made in the US, then the sales and business revenues are taxed 25% with no deductions, no loopholes, nothing. And, every industry subsidy that is being paid out right now in the hundreds of millions of dollars can simply be stopped immediately this budget, this year, right now.

How about that –

The brokers that are playing games with our state treasury money and our national budget dollars can simply get a flat fee of $100 dollars per trade with a cap of no more than one transaction per day. Then, the salaries to those armies of attorneys can be stopped as well by getting the software which does the same thing and replacing the fifty attorneys with one – or two – neither of which are allowed to make more than our teachers make a year. And, the financial managers can work at that same salary as well. And, every four of them acting in the state and federal offices can be replaced with one who knows what they are doing.

That works.

– cricketdiane, 03-06-11

***

When I go to buy something at the store, I am required to pay an extra 11 cents in some states, or seven or twelve – and for a gallon of gasoline it is even more, for cigarettes it is even more – but for millions of dollars in stocks which are an actual product changing hands – they don’t pay a single penny in sales tax on it? That is literally trillions of dollars in lost revenues considering how many shares are being bought and sold every single day and trillions more in how much value is being created, bought, sold, swapped and traded in credit derivatives, bonds, credit default swaps, financial instruments of every variety, financial derivatives and re-insurance on insurance. Most states charge a tax on car insurance, why shouldn’t these financial products and their credit “insurance” be taxed?

And, they can’t pay 15 cents on every dollar value they are selling, buying and trading? I don’t think so. I believe they can do just that, thank you.

***

Somebody will say, “they won’t do that.” Well, they will. They will have to do it because even cutting all the domestic spending won’t get there from here. So, they can do it today or they can do it tomorrow. But they will have to do it – there is no “or else” to it. This is what is required and this is what solves for x and completely eradicates the high cost of the interest being paid on the debt immediately. That has to be done and this will do it – and this will work right now this minute.

That’s it.

Oh yeah, except for one more thing –

Total Public Debt Outstanding (United States March 2011)

$14,182,086,199,057.01

(and one penny.)

Plus interest compounded upon interest again compounded upon the debt.

(see chart above on how that works out over 25 years on $1,000 and amplify that times the above numbers. America won’t be in business unless we do this now by taxing fairly everything being produced and sold in America – and the UK – and in the EU – because we are intimately tied together economically and their debt influences us and our debt influences them and all of it influences me and my fellow citizens and our families.)

Now, a note to Washington and our state governments – you’ve mismanaged this mess. You fix it.

Let’s do the math –

What is 20% of $600 Trillion dollars in credit derivatives?

$120 Trillion dollars.

***

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