• Obama’s Blunder On Iran

We cannot listen to Iran’s Ahmadinejad posturing on the expansion of the Iranian atomic energy program, without recalling Obama’s dramatic reversal on the U.S. land based missile defense system in Europe only days ago. The blunder was not in the reversal, but in its timing and its process.

The degree to which Iran has advanced its uranium enrichment capabilities will remain an unknown factor, and the international community reaction will continue to be perplexed, and marooned in paralysis of fear. Iran will not let anyone into whatever enrichment facility exists. No one will see what the ayatollahs do not wish to make public, sending us into recollections of the disastrous outcome following a long hide-and-seek dance with Saddam Hussein seven years ago. This leaves the world, Israel and the U.S. in particular, with a conundrum of literally seismic proportions. Iran’s nuclear progress is not new, nor is it news. What is new is the loss of one very powerful strategic negotiating tool that could have been useful in addressing Iran’s dangerous belligerence – the land-based European missile defense system.

When Obama backed off the deployment of a missile defense system in Europe, he did so without gaining a single concession from Putin and Russia. Russia had long blustered and railed against the U.S. missile deployment plan. Putin claimed the missiles were intended to threaten Russian sovereignty in the region, and that they were not meant to defend against Iran. The hovering menace from the U.S. was a significant affront to Putin's self-image. Obama’s abrogation of such significant “stance” on behalf of the United States suggests that this Administration learned nothing from the Ronald Reagan approach to international negotiations. Reagan changed the world when he boasted of his Strategic Defense Initiative satellite based defense system. The long list of concessions extracted from Gorbachev by Reagan, as well as his brilliance throughout the process of negotiations, should be compulsory reading for any student of Presidential impact on history.

Disclosure that Obama has known about Iran’s second uranium-enrichment facility all along, and that he has supposedly sprung an international trap for Iran, as some media such as the Washington Post are now suggesting, is peculiar analysis, as well as it is pandering in the extreme. Obama gave up a major negotiating card that could have been used to push Russia toward joining the strengthening of sanctions against Iran. China cannot be counted on to assist any future confrontation with Iran, having taken itself out of the equation with investments in Iran to feed its own requirements for energy and natural resources. The only other power, whose advocacy is truly needed in the region for serious containment of the ayatollahs in Tehran, is Russia. China and Russia provide Iran with enough trade to successfully finance the Ayatollahs through many more elections no matter what sanctions Obama might think of adding to the existing limitations. Iran’s path to becoming a nuclear power appears unobstructed.

The alternative to the controversial land based system being mothballed, according to Obama, is cheaper, quicker and more effective. This means the decision to embrace the new technology is very likely a good one. If you had this information in hand, would you have run headlong into an announcement, given that the planned European shield had been a major thorn under Putin’s belly? The diplomatic clout that the West’s tension with Iran has provided Putin still remains, and no concessions have been extracted, nor are we likely to see any extracted in the near future. Russia’s response has been to provide more rhetoric, and more blustering. The Russian envoy to NATO, Dmitry Rogozin, said, “… Americans have simply put their own mistake right. And we are not duty-bound to pay for someone to put their own mistakes right.” Putin will continue to view Iran as an economic opportunity that will be exploited without interference from the West. The threat of crisis and instability in the region will also maintain energy prices at levels that Russia requires to finance its annual operating budget.

Adding to the confusion of signals emanating from the White House, Obama suggested that he could resurrect the European missile defense plan if Russia doesn’t help with the threat presented by Iran. This kind of accessory statement further weakens America’s hand. It suggests a lack of resolve on the initial reversal of the strategy, and it also infers apprehension about the new strategy and the underlying technology. Can America rely on the new capabilities and technologies or not? Are the interceptor capacities more flexible and cost-effective? Are the advanced sensor technologies capable of detecting and tracking enemy missiles, or aren’t they? Why would Obama even hint at such uncertainty?

The signals showered on Americans and their allies by this Administration’s decisions and announcements are confusing, but to Russia, they seem to be welcome and they reinforce its strategy of saber rattling. Sanctions have also not deterred Iran's ayatollahs. Now, with the loss of a major strategic and negotiating option against the Kremlin, the enlistment of the Russian bear’s assistance will undoubtedly be impossible, and will lead to a more belligerent Iran. We can expect an increase in its destabilizing activities in Iraq and Afghanistan, and its financing of terrorism. The violence we witnessed against the Iranian people after the recent elections should be indication enough that a strategy pursuing, "engagement that is honest and grounded in mutual respect," as Obama wishes it, is simply just that, … wishful thinking.

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• Health Care – What Are You NOT Hearing?

The lawyers and legal minds holding the joystick of politics in America’s White House and Congress, are afraid to make a move. The administration and legislature are staying away from confronting their friends, and former classmates, in the legal profession.

America is holding fast on its resistance to health care reform. The double talk and confusion from Washington is abundant, however the leadership is unwilling to implement changes that could dramatically reduce health care costs such as those that could easily be acted on pertaining to tort reform. We are provided claims such as those from the “nonpartisan” Congressional Budget Office report that malpractice litigation represents only 2% of health-care costs. This one is very “misleading,” since lawyers have always made up the majority of representatives sitting in Congress. It also purposely ignores the real costs burdened onto physicians, and the costly “actions” they take to protect themselves from being financially wiped out. Insurance premiums are just the beginning of the overhead. Defensive medicine has nothing to do with health care, but with doctors protecting themselves, and there is almost no viable measurement on the hundreds of millions that this truly mounts to.

You could extrapolate some numbers such as the 83% of doctors in Massachusetts who order tests they know are unnecessary in order to minimize their potential liabilities. When doctors already pay up to $250,000 per year in malpractice insurance, it is understandable that protecting themselves as much as they can, comes naturally. This is defensive medicine, … not the good kind, but the expensive kind. These tests are not preventive care defending patients against future illness. These defensive actions come from doctors protecting themselves against lawyers of the ambulance chasing kind. While some doctors can be accused of offensive medicine by ordering extra, not wholly necessary tests, don’t believe for a moment that there can be no agreement on what constitutes defensive medicine. You might also ask yourself on average, and in their general population, would you trust more of the doctor, or would you trust more of the lawyers?

Federal tort reform must be implemented, such as bringing under control the size of verdicts handed down by the courts, as well as placing serious caps on noneconomic and punitive damages. It is also critical that the fees taken by law firms in all such cases be reviewed and percentages controlled and capped. Let’s not submit to the bromide that lawyers are society’s first line of defense against private or civil wrongs. That claim is a virtuous and finespun abstraction on justice, no matter how much we wish it to be a truism. We have been witness to enough abuse of the legal system by lawyers over the past twenty years. It is time to close the open season trial lawyers have enjoyed on the medical profession, and bring the enormous judgments into the realm of reasonableness.

Obama refuses to support limits on liability. Does he really want reform of the medical care system? His words are delivered emphatically, but they are vacuous. He seems incapable of taking a specific stand against his friends and financial supporters in the legal profession. Congress is right behind him from both sides of the isle. Neither Democrats nor Republicans seem willing to launch a determined heads-on confrontation with the waste, although some of the reticence can be explained by the fact that the Democratic party took $47 million in contributions last year from the its benefactors in the legal profession. The lip service we are subjected to is easily dispensed, but accomplishes little. The White House and Congress would demonstrate more honesty if they would only pick a side, … address health care needs of taxpayers OR admit to supporting the very financially supportive legal profession.

There is much to be fixed before you ever get to a complete overhaul of the health care system. When there is a dearth of will to implement partial corrections, or controls, pertaining to waste and abuse in the existing system structure, there can be little hope for serious reform other than pursuit of ideological doctrine. Tort reform would be a start, though only a start, on the long road to an improved and sustainable system.

The American public is right to be suspicious of leadership that will not take immediate and specific action that would reduce an estimated $200 billion dollars from the Nation’s annual medical bill. How can taxpayers not be apprehensive of a program whose point person, Secretary Kathleen Sebelius, previously led the Kansas Trial Lawyers Association? This is more assurance that “change,” is not coming.

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• Political Campaign Funding – A Democracy’s Dilemma

Tomorrow, the Supreme Court will hear arguments on the constitutionality of the restrictions that have been placed on corporate money in politics. The ruling may be one of the Court’s most critical decisions in an age which has seen one Presidential campaign accumulate almost a billion dollars in contributions. When the constitutionality of any far reaching federal law is opposed, it is a matter of national relevance, however, when a law affecting the foundation of the Democracy is challenged, such event should be arousing everyone’s notice and should be at the forefront of all news media outlets.

The case in front of the Supreme Court, Citizens v. Federal Election Commission, revolves around a documentary called “Hillary: The Movie,” produced by Citizens United. Based on Hillary Clinton, the film was banned for violating the McCain-Feingold bill which requires disclosure on funding sources, and stipulates that neither corporate or union treasuries can finance any “ad” pro or con just before a primary.

The 2002 Bipartisan Campaign Reform Act (BCRA), also known as the McCain-Feingold bill, was the last major piece of legislation passed to control the source of financing for Federal political campaigns. The bill eliminated soft money donations to the national party committees, and restricted the funding of political pronouncements, ads, etc., by corporations, or organizations such as unions and non-profit organizations.

The arguments and presentations beginning tomorrow in front of the Supreme Court, will address a question all voters should take a stand on. Are your rights to free speech the same as the rights of corporations or organizations? Corporations and organizations are not individuals, they do not have the inherent rights of the people, nor do they have the same privileges. They are vehicles created and used by society for diverse purposes. Voters should seek to minimize their further influence on the political process and on the political landscape.

You will hear and read arguments whining that the government is treating organizations big and small, unfairly by prohibiting election advocacy, and is in effect imposing censorship. Some suggest that such treatment of organizations provides them less protection in the eyes of the law than is provided to individuals. The suggestion that organizations should be equal to individuals under the law twists the interpretation of the Constitution beyond common sense, and ignores the fact that current laws provide organizations with rights and privileges not available to individuals. Let’s not let anyone convince us that organizations are “persons.”

You will also hear that the media companies have no restrictions on their election leanings, or that restrictions do not apply to them and should therefore equally not apply to other corporate entities. While it is true that media companies have been given a pass on their ability to “manipulate” opinion, this is not a persuasive argument for overturning laws that in themselves do not go far enough in the restrictions of campaign finance.

The First Amendment of the Constitution explicitly prohibits Congress from infringing on the individual’s freedom of speech (other than inciting government overthrow), and as we long ago learned, free speech is a great freedom, but is not so “free.” While you may be able to shout your ideas, demands or wishes freely out your window to the extremes your lungs will allow without bursting, you will not achieve the reach that well financed organizations are able to affect as they shout at you through your invasive televisions.

This court decision revolves around financing free speech, but at its heart is the impact the decision will have on ability of organizations to influence voter perception. Organizations large and small already have too much influence on the electoral process. Corporations and labor organizations already impact election outcomes through such vehicles as Political Action Committees (PACs), or through the doors of political party organizations. We should note that the billion dollar campaign which carried Barack Obama into the Oval Office could not be audited by the Federal Election Commission (FEC) because the task was too onerous. Do not believe the pretense that the FEC is a watchdog, or does its job of monitoring campaign contributions, much less where and how the money is spent.

Allowing entities to finance the formation of perceptions, places a vast amount of power in the few hands at the helms of those entities, far overreaching the capacities of their “rank and file.” Politics have always been and will always be subject to self-serving influences. As wealth concentration continues unabated, effective control of the political process has already been skewed away from the average taxpayer. Simply put, the CEO of Goldman Sachs reaching into the company coffers has access to more money than you do to impact the outcome of an electoral campaign, and it’s not even his money. Neither shareholders, nor his employees, have any say on the candidate receiving the CEO’s largesse.

Some alternative legislation should be considered, including anonymity of donations, capping personal contributions and matching them with government funds, as well as eliminating all corporate and union political contributions and related loopholes. Beyond cleaning up the abuse of the process, this would bring campaign funding and spending within realms that might foster the advance of alternative parties to the political game on the national stage.

Should the Supreme Court overturn years of tested law in favor of corporate and union spending, it will relegate the taxpaying voter to that of second-class citizen, and insinuate a gigantic crack into the democratic process. No matter what the Supreme Court decides, the voter should take a stand at the poles with facts rather than with the prejudice of well-financed and influential rhetoric and advertisements.

High definition cameras bringing the drama into public consciousness should invade this upcoming Supreme Court hearing, and educate voters on the fundamental process none can take for granted. A Democracy is a very fragile environment demanding fastidious nurturing. “We the people,” was never intended to mean, “We the corporations and unions.”

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• America, End Your Fear Of Wall Street

Few Americans have the time to educate themselves on the operations of those who control the most critical elements at the heart of the Nation’s well being. The Kings of Wall Street have long coveted the absolute supremacy they now enjoy over the largest economy in the world. Their road to ascendancy has been long and methodical, but with the collapse of the mortgage and equity bubbles, the past year’s actions by those pillars of persuasive absolutism on Wall Street confirm that their dominance is unprecedented in American history.

A vast majority of Americans must have been astounded by Bernanke’s recent response to Congress’s request that the Government Accountability Office (GAO) audit the Federal Reserve’s financial transactions and assets. The following was the heart of Bernanke’s response, “… auditing ... would be highly destructive to the stability of the financial system, the dollar and our national economic situation.” The GAO is a legislative branch agency organized under the U.S. Congress. How is it possible that Bernanke would have had the guts to tell Congress to go fly a kite? This is the same Federal Reserve whose power Obama wants to expand? Does he really have a good grasp of the true nature of Wall Street and the functions of its insiders? Perhaps the $14 million he received from Wall Street bankers, investment firms and securities brokers during the election campaign are clouding his perception.

Bernanke not only screamed an emphatic, "no," but he had the gall to threaten Congress and the American people with economic destruction. How is such arrogance and power remotely possible? While it might be tolerated if coming from the oval office, it should not be tolerated from a banker. It is also, for anyone who is watching, an obnoxious affront to the Constitution as articulated in Article I, Section 8, “The Congress shall have power to … coin money, regulate the value thereof, and of foreign coin, and … to borrow money on the credit of the United States.” Does this resemble anything we have witnessed during the past year? Not remotely.

Through a century of market ups and downs, interest rate fluctuations, mergers, acquisitions, political influence, lobbying and positioning insiders to the most powerful government and government related institutions, the Kings of Wall Street have nurtured and advanced their isolated power to a point where they are responsible to no one. After the Fed created hundreds of billions in bailout dollars to purchase unaudited toxic waste from its “friends,” these same friends paid themselves billions of dollars in bonuses. These were billions more than the amounts they distributed to their own shareholders, and the rationalizations were as asinine as the bonuses. Obama’s wishful thinking and promises of “oversight and transparency,” over trillions of Fed dispensations, have long been attenuated by the dissonance of fear. Stating that the Fed and Wall Street’s autonomy is complete, would be a gross understatement.

When Bernanke told Congress and the world that if AIG was not bailed out, the international economic order would come tumbling down, did the majority of his listeners believe him? Absolutely. Panic was being incessantly pounded into the public’s consciousness. Unless a handful of senior players from the banking sector didn’t get their way, the underpinnings of the global economy would disintegrate, and the world as we knew it would come to an immediate halt. Paulson chanted the refrain, and shortly thereafter so did Geithner, whose performance made sure that the message was delivered with the requisite amount of perspiration and earnestness accentuating the urgency. Above all, he underscored the fear.

Individuals, who could not care less about the health of America, just as they never cared about their firms’ clients, control the economic engines of this country. Their egos dictate their actions, and satisfaction of abnormal greed is the compelling priority. The details of the business, and its legalities, … be damned. Have we forgotten that when Lehman Brothers collapsed overnight, no one knew there had been a problem? None of its executives were familiar with the extent of the calamity when it hit their firm, nor did their books indicate where assets might be hiding or what claims might exist against them. Transparency? Due diligence? Forget being a shareholder looking for information since the senior executives, the CEO and the Board of Directors were oblivious. Was there any conscious human being near the top of the Lehman ladder who cared enough to raise doubts? Would he or she have been listened to? Not likely.

When you are too preoccupied picking out the leather for your new executive jet, or refurnishing your third mansion in Cap D’Antibe, you don’t have time to spend on corporate incidentals such as the details of an audited financial statement. Even if there had been a spare moment, you’d have to fly to that Bridge tournament in Chicago, … or some other urgent pastime where your “friends,” or your ego expect an appearance.

There is a culture of omnipotence that has been very pervasive throughout all of Wall Street’s major firms during the past two decades. It has reached a level of absolute and supreme potency within a few of its more majestic mindsets like those at the top of firms such as Goldman and Morgan. These firms have by design created complex webs of interwoven corporate entities, crossing geopolitical borders with questionable practices beyond the boundaries of laws and oversight. Theirs has been a comfortable ride, since there is no will on the part of any government to provide intrusive oversight to the investment banking giants, therefore effective oversight is simply an ephemeral, wishful thought on the part of a cornered public.

The Morgan Stanley acquisition of Bear Stearns with a $30 billion taxpayer guarantee was a sweet gift handled between the boys, with little evidence of hard-nosed negotiating on behalf of American taxpayers. Obviously, reasonableness also never entered the room. Bailouts for Citigroup, AIG, Bank of America, Citigroup, and AIG were negotiated between friends, some friends only pretended to be working on behalf of the American taxpayers. When Treasury, The Fed and the heads of the major Wall Street firms, particularly Goldman Sachs and Morgan Stanley, came together to make deals, their actions were not “negotiations” as defined in any normal dictionary. Who really represented taxpayer interests? No one. The Third Side, the taxpayer who will foot the major risk, was not in the room. Not only were taxpayers not in the room, but they were also swindled. There is no other way to describe the one sidedness of the structures that taxpayers were handed.

Taxpayers recapitalized banks under insanely bad terms and conditions, where they unwittingly guaranteed toxic asset, as occurred in the Citigroup bailout or when B. of A. acquired Merrill Lynch. Did anyone question B. of A.’s use of TARP funds to “acquire,” competitors? No-one representing taxpayer interests seemed to care, and quite to the contrary, Merrill’s losses were purposefully concealed from both investors and regulators. Did anyone negotiate hard with these banks, B. of A., Goldman and Citi, when as creditors to Chrysler, they forced its destruction instead of allowing the government to provide it with deals as sweet as the ones they had received themselves? Not much. Geithner and Bernanke were evidently not close friends of any Chrysler executives or employees residing in Detroit. They were, however, friends and colleagues of Wall Street.

We have written elsewhere on this post about Too Big To Fail, however, with the taxpayer’s willingness (through inept government) the crisis has created ever-larger monsters on Wall Street. America’s vast banking system has become weak and remains weak other than for those at the top of its food chain. The controlling players have not changed, and the economic contraction will continue. We have become numbed to the fact that when banks fail, the public pays. A few companies, under the aegis of a small band of individuals created the perfect environment for the implosion of the banking system through massive risk taking. Congress cheered actively from the sidelines. The Wall Street hands that were in large part responsible for the crisis now dictate government actions, and have effective control over the public purse. In the meantime, the Fed, standing squarely on the backs of all taxpayers, is doing the job of large banks that still refrain from injecting credit into the economy.

While megabanks trade publicly, there is a dearth of verifiable, or incisively auditable value that can be placed on them since it appears none of their executives know the extent of the worthless paper lurking deep in their bowels, and none of them would tell you if he knew. Admitting the size of the toxic assets would require enormous write-downs, and would affect their bonuses as well as the values of the company shares.

We should not get swayed into believing that Too Big To Fail is simply a remote concept dealing with enormous corporations with global reach. Too Big To Fail refers to individuals at the top of these financial giants with all of the substantial power that the companies they manage can wield. Too Big To Fail encapsulates the stupidity that brought the world to the brink of collapse. We are just a couple of mergers away from a global financial power that will be impossible for any government to regulate, although regulation already seems nonexistent for any of the current top players on the Street.

The markets are technically driven and managed by systems that maximize profits for those who control them, using technologies that very creative talent produced. There is no ceiling to that creativity, and no end to what might be done to restructure the financial underpinnings and superstructure of the nation’s economy. The talent is available, and all that is required is willingness to do so. Constitutionally there are possibilities, but relinquishing control over money is not an alternative Wall Street will readily agree to, yet, reversing the process is within the purview of Congress.

The key to minimizing the future damage that the kings of Wall Street might further inflict on the Nation is to bring their power and influence into the realm of reasonableness. This means bringing their propensity for size to within reason for any organization involved in pure “banking,” and focusing their attention to providing large and small companies with the services, particularly credit, which they require to remain open for businesses.

There is a lesson to be learned from the current debacle, while the window remains very clear, and before time and retrospect blur the current reality into a distorted sequence of lies as the months advance. In order of priority, the following should be considered for a sound America going forward.

1. Take back control of The Fed. Humans will be human therefore there are no guarantees that the people’s representatives will act with foresight, however, they will accountably serve under the canopy of transparency, and due diligence, rather than submit to the beck-and-call of those whose billions in annual bonus money stagger the imagination.
2. Take back control of money.
3. Segregate “Banking,” from “Investment Banking,” and everything else that seems to attach itself to the once-upon-a-time credibility of banking. Reinstate the Glass-Steagall Act (except as it pertains to the Fed) that was for the most part repealed in 1999 eliminating the restrictions of affiliations between banks and “investment banks,” … and don’t listen to any bankers who tell you different with stories about diversification reducing risk, or banks being completely capable of regulating themselves. We have seen the evidence. One very intelligent provision contained in the act is section #32 that prohibits banks from having interlocking directors. Such decree could well be applied to other industries where “Board of Directors,” has simply become an incestuous and corrupt exercise.
In the same process, throw out that brilliant piece of Congressional ingenuity called the Gramm-Leach-Bliley Act.
4. Cap the size of banks so that their executives more naturally demonstrate concern for soundness of lending decisions, and the well being and success of their regional customers. Banking should be a service, and should not be a casino where the management can pilfer the till as has been repeatedly demonstrated wantonly by the major Wall Street firms.
5. Allow the FDIC to do its job, and instruct it to play serious hardball with the risk takers who come into its line of sight.

This is not minor tweaking of the system. This is also not a call for the establishment of a consumer protection agency to police all things financial from credit cards to mortgages. Common sense dictates implementation of a structural reconstruction. The proposed Consumer Financial Protection Agency would only be an ill-defined expansion of the government payroll, proliferating government reach into more corners of society. This make little sense since there are agencies already entrusted to protect consumers which are not doing their jobs. Proposing the launch of such an inappropriate meddling amoeba is evidence of government ignorance of the realities on Wall Street.

America, your government is lying to you. You’ve been had, and are being had. It has no idea what is going on with your money. Those few bureaucrats who have ensconced themselves in positions of unnatural power and influence, and who manage the joystick, won’t tell you the truth. Even more pathetic is the fact that neither Congress, nor the President, know enough about the mechanics of America’s economy to apply practical judgment decisions in the refashioning of the system, … nor, it seems, do they have the will to act. Considering the fact that the current administration continued the trend of installing those who had a healthy hand in packing the powder keg that ignited into the economic disaster now encumbering the nation, we cannot expect much change. The billions of dollars that politicians received from Wall Street over the past decade through campaign contributions and lobbying, was insurance on their continuing silence, and stifled any burgeoning ethics.

Taxpayers have become disillusioned by the abuse they have endured at the hands of special interests, and the lack of intelligent, common sense response from their elected officials. A broad swath of the electorate is wearied. Congress should pay attention to 2012, and the electorate should demonstrate a little selfishness. Taxpayers should look for some creative thinking instead of the tired old nursery rhymes dispensed from portable pulpits.

Banking is not a magical, abstract, or obscure foreign art, although some of the fringe elements have become complex by design, such as the proliferation of derivative financial instruments. Government is protecting special interests and is NOT forcing a restructuring of America’s financial system. Taxpayers should demand that capitalism be reinstated back into the banking system. They should demand that Wall Street’s power elite end its mortgaging of the American future. Taxpayers should ignore platitudes and bromides from Obama and Congress, and they demand a break-up of Wall Street’s major players.

Taxpayers should be lining up in the next elections to install individuals into Congress, no matter what party they might represent, who will take back control of the most important components of the economy, and ensure that the country has a chance at a sound future. The electorate should not allow the continuing concentration of financial power to accumulate in fewer and fewer irresponsible and egocentric hands.

Take control back from Wall Street, demand transparency, and quit bailing out firms that should be allowed to fail. Stop being mesmerized by the pretense and illusion that was perfected under Alan Greenspan. Take back control of the money supply before another crisis turns a struggling economy with escalating debt, into a long term depressed economy.

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• Obama & Middle Class Income Tax Increases

The recession is dealing a hard blow to government revenues with tax receipts expected to drop 18 percent this year. The big question being lathered across the Nation, but not being answered honorably by the Administration, revolves around tax increases. The double-speak and denials are only adding annoyance to the feelings surging around the stress already felt by the taxpayers. Not only will the “middle class” be saddled with fresh tax increases, but so will you and your neighbor if you live in America.

The strategy of repeatedly pretending that only the wealthy are going to pay for the massive spending increases is quickly getting old and not believable. From the mansions in Beverly Hills to the park benches of Central Park, all residents will be sending more dollars to the government in one way or another. This is not about new tobacco or alcohol consumptions taxes, or even about the massive tax-grab that will come from Cap And Trade, this is about new tax measures, and new taxes on everything that can be squeezed for cash starting with your income. Forget the campaign promises you almost believed about middle-class tax cuts, and forget Sunday meet-the-press equivocations by well-trained emissaries like Geithner and Summers. Your taxes are about to increase dramatically.

The Administration is very demonstrably building a government well beyond anything that national revenues will be able to support either in the mid-term, or the long-term. With the Nation stuck in a long-term economic quagmire hurting all taxpayers who are already feeling the weight of chronic tax-creeping, the imposition of obvious and visible new income taxes is politically dangerous. The sophistication of the speciousness will find new levels of creativity during the coming weeks.

The White House will no doubt launch a campaign to “talk-up” the economy in the hope that positive proclamations will make them so. Reality is that unemployment, well above the claimed 10%, is somewhere around 16% when you include “marginally attached workers” as well as those employed “part time for economic reasons,” calculated as the “U-6 rate” by the Bureau of Labor Statistics. Unemployment increasing is neither a turn around, nor a bottom to the recession, and is a far different reality from the “8% or less” predicted by the Administration when it launched its stimulus program. So much for rose-colored forecasting by economists.

Tax receipts are apparently down by 22 percent on individual incomes, and are down 57 percent on the corporate front. When you blend that with a deficit that will surge to almost $2 trillion this year, and a National debt accelerating past $11.6 trillion, your options are limited. We can assume that cutting federal spending is an ideological impossibility, leaving the government with two principal choices, and neither induces positive tingles up your spine. You can be asked to sacrifice and have your income taxes increased massively, or the dollar’s value can be allowed to drop significantly as more of them get printed. The likely path will be a less harmful blend of both of these alternatives. The key will be to allow the dollar’s value to slide gradually so that there are no sudden shocks striking at the heart of national and international markets. International creditors like China will be irritated, but will accede to the gradual process of easing down the dollar. Forget the doomsday scenarios, however, America will take years to work its way out of this recession, then pay off past and current government spending sprees, on its way to growing through the new financial demands on its treasury that will surface over the next decade from baby boomers, social security and healthcare.

In order to initiate an advance on the lengthy economic turnaround, the joy ride of debt-spending-with-wanton-abandon mindset enjoyed by Bush and continued by Obama must be brought to a close. Deficit growth cannot continue on a path exceeding the rate of economic growth. The Administration should surface out of its decision closet, and become resolutely emphatic on a course of action that will reverse the deficit's current trend. Obama’s next address to the Nation should be, “I know I promised that if you made under $250,000 per year, you would not see your taxes increased a single dime. Not your income tax. Not your payroll tax. Not your capital gains tax. No tax. I was wrong. I was hasty in forming that covenant with the electorate. We are a government living beyond its means, with currently no end in sight to the discrepancy. Here is my plan for an overhaul of the tax code, and what it will mean to every single one of you. You can expect your income taxes to increase an average of ten percent, for starters. Now, about a national sales tax, …”

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