Monday, 31 December 2012

The Fiscal Cliff and you

Happy New Year Middle Class: The Fiscal Cliff Is Going To Rip You To Shreads

30 December, 2012

The middle class has quite a gift welcoming them as the calendar flips over to 2013.  Their payroll taxes are going to go up, their income taxes are going to go up, and approximately 28 million households are going to be hit with a huge, unexpected AMT tax bill on their 2012 earnings.  So happy New Year middle class!  

You are about to be ripped to shreds. 

In addition to the tax increases that I just mentioned, approximately two million unemployed Americans will instantly lose their extended unemployment benefits when 2013 begins, and new Obamacare tax hikes which will cost American taxpayers about a trillion dollars over the next decade will start to go into effect.

If Congress is not able to come to some sort of a deal, all middle class families in America will be sending thousands more dollars to Uncle Sam next year than they were previously.  And considering the fact that the middle class is already steadily shrinkingand that the U.S. economy is already in an advanced state of decline, that is not good news.  

You would think that both major political parties would want to do something to keep the middle class from being hit with this kind of tax sledgehammer.  Unfortunately, at this point it appears that our "leaders" in Washington D.C. are incapable of getting anything done.  So get ready for much smaller paychecks and much larger tax bills.  What is coming is not going to be pleasant.

So what happened?

Weren't the tax increases only supposed to be for the wealthy?

Well, that is what the politicians always promise, but it is always the middle class that ends up getting hit the hardest.

In this day and age, the big corporations and the ultra-wealthy are absolute masters at avoiding taxes.

For example, Facebook paid approximately $4.64 million in taxes on their entire foreign profits of $1.344 billion for 2011.

That comes out to a tax rate of about 0.3 percent.

Overall, the global elite have approximately 18 trillion dollarsparked in offshore tax havens such as the Cayman Islands.

Keep in mind that U.S. GDP for 2011 was only slightly above 15 trillion dollars.
So the global elite have an amount of money parked in offshore banks that is substantially larger than the total value of all goods and services produced in the United States each year.

According to one estimate, a third of all the wealth in the entire world is stationed in offshore banks.  Our politicians are playing checkers and the global elite are playing chess when it comes to taxes.  Our current system of taxation is irreversibly broken and should be entirely thrown out and replaced with something else.

And of course under our current system those that are poor don't pay much in taxes because they are just trying to survive.

So who always ends up getting the painful end of the hammer?

The middle class does, and that really stinks.

Let us hope and pray that our politicians can come together and do something for the middle class.  In particular, we should all be screaming and yelling at our politicians about the Alternative Minimum Tax.  It was originally designed as a method to "tax the rich", but unless Congress does something the middle class is about to be ripped to shreds by it.  The following is from a recent CNBC article about the AMT...

In a cruel epilogue to 2012, roughly 28 million families would owe the IRS $86 billion more than they anticipated for this year should the country plunge off the cliff, according to the nonpartisan Tax Policy Center.

Those families would face the "Alternative Minimum Tax," which was introduced in 1969 to supposedly guarantee that wealthy Americans could not elude the taxman. But the AMT not only flopped, it was never indexed to inflation. So with each passing year, it seeps away from high society and into the wallets of Target and Wal-Mart shoppers. That sets up a disaster for April 15.

So how much money are we talking about?

According to that same article, many families are about to be socked by tax bills that will be absolutely huge...

On the whole, 98 percent of those with incomes between $200,000 to $500,000 would pay an additional $11,000 in AMT this year, according to the center's estimates. About 88 percent of those with incomes of $100,000 to $200,000 would need to fork over another $3100, and even the majority of Americans with earnings between $75,000 and $100,000 would have an AMT liability.

Most of the tax increases that will be coming as a result of the fiscal cliff will be for 2013 earnings, but the AMT tax hike will apply to 2012 earnings.  So if you end up falling under the AMT, you better get ready to write a very large check to Uncle Sam in just a couple of months.

And the AMT is only just one of the very painful tax increases that American families will be facing.  If no deal is reached in Congress, every single middle class American taxpayer will be dealing with significantly higher taxes.

A recent ABC News report entitled "Fiscal Cliff: By The Numbers" detailed some of the other tax increases that you can expect in 2013...

So why don't our politicians do something about all of this?

What are they fighting so bitterly about anyway?

Sadly, neither side is actually serious about substantially reducing the size of government deficits or about getting government spending under control.

During a recent interview on CNBC, Ron Paul explained that "they pretend they are fighting up there, but they really aren't. They are arguing over power, spin, who looks good, who looks bad; all trying to preserve the system where they can spend what they want, take care of their friends and print money when they need it."

Most in the mainstream media are making it sound like some kind of a "battle royal" is going on in Washington, but as Lou Dobbs recently pointed out, the U.S. national debt is going to end up in just about the same place no matter what happens.

According to Dobbs, if we "do nothing" the U.S. national debt will be approximately 25.8 trillion dollars in 2022.

If "Obama wins", the U.S. national debt will be approximately 25.4 trillion dollars in 2022.

If "Boehner wins", the U.S. national debt will be approximately 25.2 trillion dollars in 2022.

You can watch the entire analysis by Lou Dobbs right here...

So they are putting all of us through all of this torture even though nothing will really change in the long run no matter who wins?

What kind of a circus is this?

Meanwhile, the reckless spending continues.

Barack Obama has just issued a new executive order that ends the pay freeze for federal workers that had been in place.

So now all federal employees will be getting a nice hefty pay raise.

For example, Vice President Joe Biden brought in $225,521 this year.

Next year, he will make $231,900.
Not that our politicians really need the money.  Most members of Congress are millionaires anyway.  But if they can get us to pay for it, they might as well go for it, eh?

There are now close to half a million federal employees that bring homeat least $100,000 a year.  Plus, it is important to keep in mind that the benefits that federal employees get are absolutely outstanding, and it is close to impossible to actually fire a federal worker.

Life is good if you are working for Uncle Sam.

Meanwhile, our politicians seem determined to keep draining more blood out of the middle class.  Even if a "deal" is reached, we will still be hit by some categories of tax increases.  Let's just hope and pray that we don't get hit by all of the tax increases that are scheduled to go into effect.  That would be a financial disaster for millions of families.

So happy New Year middle class.  Your taxes are about to go through the roof and our politicians are too busy fighting with each other to do anything about it.

What else will 2013 bring?
Funny Baby

'12 Banks of Death'

The Truthseeker: 12 Banks of Death


A Nobel Laureate tells us chase out the moneylenders, Named and Shamed the 12 giant banks which feed on death, and 'hundreds' who should join Madoff in the slammer. Seek truth from facts with Nobel prizewinner Ed Prescott, Sen. Bernie Sanders, the world's top crisis economist Steve Keen, legendary investor Jim Rogers, bailout investigator Randall Wray, The Untold History of the United States co-author Peter Kuznick, and Rep. Ron Paul.

'The End Game'

Happy New Year folks!


30 December, 2012

Raoul Paul sent shock-waves throughout the financial markets in June in what Tyler Durden called the scariest presentation ever, when Paul predicted a complete systemic collapse of the financial system was merely 6-9 months away.  Is the Big Reset still imminent?

The world has no engine of growth with most of the G20 countries approaching stall speed at the same time.  The western world is about to enter its second recession in an ongoing depression…

For the first time since the 1930′s we are entering a recession- before industrial production, durable goods orders, employment, and private sector GDP have made back their previous highs. ‘

As to the timing of the collapse Paul states:

2012- 2013 will usher in the end.  We have about 6 months left…  Assume that no one and nothing is safe.  After that, we put on our tin helmets and hide until the new system emerges.

As to what the collapse will look like:

A global banking collapse and massive defaults would bring about the biggest economic shock the world has ever seen.  No trade finance, no shipping finance, no finance for farmers, no leasing, no bond market, no nothing…


The End Game

Clinton hospitalised

Hillary Clinton hospitalized with blood clot: Aide

US Secretary of State Hillary Clinton (file photo)
US Secretary of State Hillary Clinton (file photo)

US Secretary of State Hillary Clinton has been admitted to a New York hospital with a blood clot caused by a concussion she sustained earlier this month.
31 December, 2012
"In the course of a follow-up exam today, Secretary Clinton's doctors discovered a blood clot had formed, stemming from the concussion she sustained several weeks ago,” State Department spokesman Philippe Reines said in a statement on Sunday.

Reines added that the secretary of state was being treated with anti-coagulants at New York-Presbyterian Hospital, where she is expected to remain for the next 48 hours so doctors can monitor her condition.

"Her doctors will continue to assess her condition, including other issues associated with her concussion. They will determine if any further action is required," the spokesman pointed out. 
Reines, however, did not specify where the clot was discovered.

After returning from Europe earlier this month, Clinton, 65, fell ill with a stomach virus which led to her fainting and sustaining the concussion.

Clinton will step down from her post as the the secretary of state before US President Barack Obama officially begins his second term in January. 

Hugo Chavez's health

Hugo Chávez suffers from 'new complications' after surgery
Vice president Nicolas Maduro tells Venezuelan people the president's health is delicate following cancer operation.

31 December, 2012

Hugo Chavez has suffered "new complications" following his cancer surgery in Cuba, his vice president said, describing the Venezuelan leader's condition as delicate.

Vice president Nicolas Maduro delivered a solemn televised address from Havana, saying he had spoken with Chávez and that the president sent greetings to his homeland. Maduro did not give details about the complications, which he said came amid a respiratory infection.

"Several minutes ago we were with president Chávez. We greeted each other and he himself referred to these complications," Maduro said, reading from a prepared statement. Maduro was seated alongside Chávez's eldest daughter, Rosa, and son-in-law Jorge Arreaza, as well as attorney-general Cilia Flores.

The vice president's comments suggest an increasingly difficult fight for the ailing president. The Venezuelan leader has not been seen or heard from since undergoing his fourth cancer-related surgery on 11 December, and government officials have said he might not return in time for his scheduled 10 January inauguration for a new six-year term.

"The president gave us precise instructions so that, after finishing the visit, we would tell the (Venezuelan) people about his current health condition," Maduro said. "President Chávez's state of health continues to be delicate, with complications that are being attended to, in a process not without risks."

Maduro held up a copy of a newspaper confirming that his message was recorded on Sunday.

"Thanks to his physical and spiritual strength, Comandante Chávez is facing this difficult situation," Maduro said.

Maduro said he had met various times with Chávez's medical team and relatives. He said he would remain in Havana "for the coming hours" but didn't specify how long.

Maduro, who arrived in Havana on Saturday for a sudden and unexpected trip, is the highest ranking Venezuelan official to visit Chávez since the surgery.

Before Chávez left for Cuba, he acknowledged risks in the operation and designated Maduro as his successor, telling supporters they should vote for the vice president if a new presidential election was necessary.

Chávez said his cancer had come back despite previous surgeries, chemotherapy and radiation treatment. He has been fighting an undisclosed type of pelvic cancer since June 2011.

Maduro's latest update differed markedly from last Monday, when he had said he received a phone call from the president and that Chávez was up and walking.

The vice president spoke on Sunday below a picture of 19th century independence hero Simon Bolivar, the inspiration of Chávez's leftist Bolivarian Revolution movement.

Maduro expressed faith that Chávez's "immense will to live and the care of the best medical specialists will help our president successfully fight this new battle." He concluded his message saying: "Long live Chávez."

"Fiscal cliff' negotiations

'Fiscal cliff' talks stall in final hours
Senate Republicans and Democrats remain far apart in their effort to avert a year-end combination of spending cuts and tax increases that could trigger a new recession, Majority Leader Harry Reid said Sunday.

31 December, 2012

"There's still significant distance between the two sides, but negotiations continue," Reid said as Congress held a rare Sunday session in a bid to avoid the so-called fiscal cliff. "There's still time left to reach an agreement, and we intend to continue negotiations."

No votes will be held Sunday, but Reid said there may be further announcements when the Senate reconvenes Monday morning: "I certainly hope so."

With barely a day left to avert what economists predict will be a one-two punch to the U.S. economy, talks hit what a Democratic source called a "major setback" when Republicans insisted that changes to how Social Security benefits are adjusted for inflation be included. Republicans have dropped that demand, but "they never should have been on the table to begin with," said Reid, D-Nevada.

Using what's known as "chained CPI" would change the way Social Security benefits are adjusted for inflation, meaning that future Social Security recipients would receive less money over time. Democrats consider this prospect a "poison pill," the source said, and GOP senators said later it wouldn't be included.

"If that is a show-stopper for the majority leader, we will take that off the table," New Hampshire Sen. Kelly Ayotte told reporters after coming out of a Republican caucus meeting Sunday afternoon.

With the clock running down, Senate Minority Leader Mitch McConnell appealed to Vice President Joe Biden to help "jump-start" negotiations after complaining that he had received no response to an offer he put on the table Saturday night.

Reid said earlier that McConnell has shown "absolutely good faith" in the talks, but "it's just that we are apart on some pretty big issues."

As he headed home Sunday evening, Reid was asked about progress, and he responded: "Talk to Biden and McConnell."

Top-level sources on both sides of the negotiations said talks are primarily now in the hands of McConnell and Biden, and they are keeping Reid and House Speaker John Boehner, R-Ohio, informed.

If nothing gets done before Monday night at midnight, the expiration of the Bush administration's 2001 and 2003 tax cuts will increase tax rates, while $110 billion in automatic cuts to domestic and military spending -- the result of the 2011 standoff over raising the federal debt ceiling -- will start to kick in. The nonpartisan Congressional Budget Office predicts the combined effect could dampen economic growth by 0.5%, possibly tipping the U.S. economy back into a recession and driving unemployment back over 9%.

In an interview aired Sunday on NBC's "Meet the Press," President Barack Obama blamed Republicans for the stalemate that brought lawmakers back to Capitol Hill on a weekend. Obama urged the GOP to drop its opposition to tax increases on top earners and cut a last-minute deal.

"They say that the biggest priority is making sure that we deal with the deficit in a serious way. But the way they're behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected," he said. "That seems to be their only overriding, unifying theme."

Obama told NBC that could cost the average middle-class family about $2,000. He said the Senate should go ahead and vote on legislation to make sure middle-class taxes are not raised and that 2 million people don't lose unemployment benefits.

"If we can get that done, that takes a big bite out of the fiscal cliff," he said. "It avoids the worst outcomes."

During the interview, Obama said he was willing to consider using chained CPI to adjust Social Security -- even though it was "highly unpopular among Democrats" and opposed by the AARP, the powerful lobby for seniors.

"In pursuit of strengthening Social Security for the long term, I'm willing to make those decisions," Obama said. "What I'm not willing to do is to have the entire burden of deficit reduction rest on the shoulders of seniors, making students pay higher student loan rates, ruining our capacity to invest in things like basic research that help our economy grow. Those are the things that I'm not willing to do."

But the Democratic source, who did not want to be identified because of the closed nature of the talks, said members understand Obama proposed using chained CPI as an element of a larger deal that also would change how the federal debt ceiling is adjusted -- an element no longer included in the plans.

Most Democrats oppose chained CPI, but many were wiling to go along with it as part of a larger deal, the source said.

On taxes, meanwhile, Democrats are arguing that taxes should go up for those making $250,000 or more, though some discussions have involved the possibility of raising that figure to a $400,000 threshold.

Many Republicans have opposed any increase in tax rates. Boehner suffered a political setback by offering a compromise -- a $1 million threshold for the higher rates to kick in -- that his GOP House colleagues refused to support.

After Obama's NBC interview, Boehner said the president needs to stand up to his own party and insisted it was the president "who has never been able to get to 'yes.'"

"I am pleased Senators from both parties are currently working to find a bipartisan solution that can finally pass that chamber," Boehner said in a statement issued by his office. "That is the type of leadership America needs, not what they saw from the president this morning."

Sunday night, Boehner met with House GOP leaders and told them to sit tight and stick together as he awaits news on whether the Senate can strike a deal.

After the meeting, Oklahoma Rep. Tom Cole told reporters that Boehner said: "I've stayed out of those negotiations."

"Every time we get involved in them, we sort of get burned, so we're going to let the Senate work its will, see what they do and what they send us, and we'll act accordingly," he said.

Sen. Chuck Schumer, D-New York, told ABC's "This Week" he thought the chances of a short-term, last-minute deal brokered by Senate leaders were better than 50-50.

"I've been a legislator for 37 years, and I've watched how these things work on these big, big agreements," Schumer said. "They almost always happen at the last minute."

And Sen. Lindsey Graham, R-South Carolina, said the chances are "exceedingly good" that some type of deal will be reached by Monday night.

"I think, whatever we accomplish, political victory to the president, hats off to the president. He stood his ground. He's going to get tax rate increases, maybe not $250,000, but upper-income Americans," Graham said on "Fox News Sunday."

"And the sad news for the country is that we have accomplished little in terms of not becoming Greece or getting out of debt."

Other Republicans argued Sunday that Obama's plan hasn't done enough to limit spending.

"The president is doing nothing about the addiction that his administration has to spending. He's the spender in chief," Sen. John Barrasso of Wyoming said on CNN's "State of the Union."

Obama told NBC that he has cut more than $1 trillion in spending and offered another $1 trillion-plus in additional cuts "so that we would have $2 of spending cuts for every $1 of increased revenue." He said the majority of Americans have made clear they support his calls for "a balanced approach" that would increase taxes on the wealthy.

Sen. Dick Durbin, D-Illinois, warned that now is "exactly the wrong time to go over this cliff."

"We are in the midst of an economic recovery. We are seeing new job creation, businesses are seeing new growth, we are seeing the kind of economic indicators we've been waiting for for years. This going over the cliff is going to bring uncertainty to our markets, and with that uncertainty, a pullback in consumer confidence and a reduction, I'm afraid, of business activity and the creation of new jobs," he said.

But former Democratic Party chairman and 2004 presidential contender Howard Dean told ABC that heading over the cliff would not be so bad, calling it a "fiscal curb" instead.

"You go back to the Clinton tax rates, and you make some significant cuts. And you cut the Defense Department, which hasn't been cut in 30 years," said Dean, a former Vermont governor. Meanwhile, going over the cliff gives Obama more leverage, "because then all of sudden, middle-class people's taxes are going to rise, and that's going to be bad for every politician in Washington."

"Maybe they'll actually get something done," he said. "But I think, at this point, at this late hour, I think almost any deal they come up with is worse than going over the cliff."

Sen. Olympia Snowe, R-Maine, told CNN's "State of the Union" that she expects Congress will vote to extend tax cuts for incomes below $250,000 -- perhaps below $400,000 -- before midnight Monday. A Senate agreement "would build momentum" for the move in the House, she said.

"I think it would be horrific for the country if at this time, the final days of this legislative session that already has reached historic proportions of failure, that we would now culminate in failure to extend these tax cuts," said Snowe, who is on her way out of office.

Bird flu

Avian flu virus learns to fly without wings
Potentially fatal bird flu viruses can spread on the wind, a hitherto suspected but unproven route of transmission.

21 December, 2012

Usually, people catch bird flu through  close physical contact with each otheror, much more commonly, with infected poultry.

The newly identified capacity for wind to spread it opens up a potential route by which the viruses can spread between farms.

The finding came about after Dutch researchers studied an outbreak of the avian flu strain H7N7 in poultry on Dutch farms in 2003, which resulted in 89 confirmed human infections including one death.

Computer models showed that wind patterns at the time of the outbreak explain how different genetic variants of H7N7 ended up on different farms (Journal of Infectious

H5N1 is the most harmful strain of avian flu, having killed 360 of 610 infected people since it was discovered in 2003. The fact that a related strain can travel on the wind suggests that H5N1 can too, says Marion Koopmans of the Dutch National Institute for Public Health and the Environment in Bilthoven, who coordinated the research project. "You must assume that this same potential is there for H5N1," she says.

Other researchers agreed that by implication, H5N1 could spread in the same way. "Because we don't know, we should assume the worst case – and the worst case is that H5N1 travels on the wind as well," says John McCauley, a bird flu researcher at the MRC National Institute for Medical Research in London.

He says it's well known that the virus that causes foot and mouth disease in cattle and pigs travels many kilometres on the wind, but it's lighter than avian flu and is produced in huge amounts by infected animals. McCauley says the most likely scenario for bird flu is that the virus hitches a ride on airborne particles from farms, especially particles of infected faeces from poultry farms.

Violence and drne attacks in Pakistan and Yemen

At Least 41 Killed in Pakistan Militant Attacks

Mass Executions of Captives, Attack on Shi'ite Pilgrims


by Jason Ditz, December 30, 2012
A pair of extremely ugly militant attacks on two opposite sides of Pakistan have left at least 41 people dead, including members of the Frontier Corps (FC) and a convoy of Shi’ite pilgrims along the Iranian border.

The killing for the FC members caps a recent storming of a pair of bases around Peshawar, in which a large number of the soldiers were taken hostage. 21 of them were executed according to provincial officials. The other was critically wounded but expected to survive.

Taliban officials claimed credit for the FC executions, saying that their council of clerics gave the order, and that no demands for prisoner exchanges were considered when prisoners are caught in clashes.

The other incident took place in the southwest, where a car bomb targeted a bus full of Shi’ite pilgrims heading to Iran. 20 of the pilgrims were killed and 24 others were wounded in the attack.

US Drone Strike in Pakistan Kills Five, Injures Three

The identities of the people targeted are not known, as are most of the anonymous victims of US bombs


by John Glaser, December 29, 2012

US drone strike on a house in a remote area of northwest Pakistan killed five people and injured three others on Friday, although no information was made public about the identities of those killed and maimed.
Sources in the Pakistani government and local tribal sources said the drone fired four missiles on the house, destroying it completely.

report by researchers at the Stanford and NYU schools of law found in September that the drone program is “terrorizing” the people of Pakistan and that it is having “counterproductive” effects.

The US drone war in Pakistan not only kills and injures civilians, the report finds, but it traumatizes the population and has led people to keep their children home from school and to avoid any large grouping of people, however innocent. It also says the drone war has helped recruitment efforts of extremist groups like al-Qaeda.

A significant rethinking of current US targeted killing and drone strike policies is long overdue. US policy-makers, and the American public, cannot continue to ignore evidence of the civilian harm and counter-productive impacts of US targeted killings and drone strikes in Pakistan,” the report said.

US Drone Strike Kills Three in Yemen

Drone strikes have been increasing in Yemen, prompting a rise in local al-Qaeda membership



by John Glaser, December 29, 2012

Three people were killed in southern Yemen in a US drone strike on Saturday, the fourth such attack this week.

Yemeni security officials speaking to the press said the three killed were al-Qaeda militants, but – as The Washington Post reported earlier this week – the Yemeni government as a policy tries to conceal when US drones kill civilians, so claiming the deceased are al-Qaeda militants is merely an automated response.

Drone stikes have been increasing in Yemen, prompting anger among the local populations being subjected to the attacks and coinciding with a marked increase in the estimated al-Qaeda membership.

Our entire village is angry at the government and the Americans,” a Yemeni villager named Mohammed told the Post. “If the Americans are responsible, I would have no choice but to sympathize with al-Qaeda because al-Qaeda is fighting America.”