You won't believe this! Bernanke wants to raise Taxes to cover his Butt.

Chairman Ben S. Bernanke
Current economic and financial conditions and the federal budget
Before the Committee on the Budget, U.S. House of Representatives, Washington, D.C.
June 3, 2009
Source

The increases in spending and reductions in taxes associated with the fiscal package and the financial stabilization program, along with the losses in revenues and increases in income-support payments associated with the weak economy, will widen the federal budget deficit substantially this year. The Administration recently submitted a proposed budget that projects the federal deficit to reach about $1.8 trillion this fiscal year before declining to $1.3 trillion in 2010 and roughly $900 billion in 2011. As a consequence of this elevated level of borrowing, the ratio of federal debt held by the public to nominal GDP is likely to move up from about 40 percent before the onset of the financial crisis to about 70 percent in 2011. These developments would leave the debt-to-GDP ratio at its highest level since the early 1950s, the years following the massive debt buildup during World War II.

Certainly, our economy and financial markets face extraordinary near-term challenges, and strong and timely actions to respond to those challenges are necessary and appropriate. Nevertheless, even as we take steps to address the recession and threats to financial stability, maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance. Prompt attention to questions of fiscal sustainability is particularly critical because of the coming budgetary and economic challenges associated with the retirement of the baby-boom generation and continued increases in medical costs. The recent projections from the Social Security and Medicare trustees show that, in the absence of programmatic changes, Social Security and Medicare outlays will together increase from about 8-1/2 percent of GDP today to 10 percent by 2020 and 12-1/2 percent by 2030. With the ratio of debt to GDP already elevated, we will not be able to continue borrowing indefinitely to meet these demands.

Addressing the country's fiscal problems will require a willingness to make difficult choices. In the end, the fundamental decision that the Congress, the Administration, and the American people must confront is how large a share of the nation's economic resources to devote to federal government programs, including entitlement programs. Crucially, whatever size of government is chosen, tax rates must ultimately be set at a level sufficient to achieve an appropriate balance of spending and revenues in the long run. In particular, over the longer term, achieving fiscal sustainability--defined, for example, as a situation in which the ratios of government debt and interest payments to GDP are stable or declining, and tax rates are not so high as to impede economic growth--requires that spending and budget deficits be well controlled.

Okay, make sure you read that statement thru and thru, two or three times before you comment.

First of all, can you believe the gall of this man? He's blaming first the tax payer then the baby-boomers for the government's huge debt and it's up n'coming money problems. Then he states a fact we all know is true about the government's spending being out of control. The final and most awesome statement yet is the only underlined part of the entire quote... Know what he is saying? I want to save the government programs, I dont really give a # about you. Actually let's raise taxes to make sure they get the point I dont care about them!

Karl Denninger of The Market Ticker puts it all into perspective if you dont see it just yet...

The problem is that Bernanke is enabling these sky-high deficits by intervening in the Capital Markets - that is, by buying both agency and Treasury bonds!

IF Bernanke was a true independent central banker, and IF he believed the first word that he was speaking, he would force fiscal restraint by refusing to buy any more MBS or Treasury debt.

Rates would move up, but this would put a 1990s-style bond market slam-hold on President Obama's and Congressional "drunken-sailor style" spending binge.

I only look at what people do - a good part of the time what people say is in fact exactly the opposite of what they're doing, because they are trying to goad you into doing something stupid so they can say "Sold To You!", sticking you with the bag.

I will buy that Bernanke is serious about his so-called "urgings" when he withdraws the idiotic attempt to support both MBS and Treasury issuance.

Perhaps - just perhaps - this speech is a warning - Ben has been reading some Tickers and listening to some Chinese folks, and is starting to get concerned that a bond market implosion may be in the offing - and he has no intention of being the one caught holding the bag when it blows up.

Funny how it only took Ben two years beyond when I started screaming about this in public to figure it out!

Here's my take on the whole situation...

All the government need do is: nothing
If they had done this to begin with the whole recession would have been just that. A recession. Not the full blown depression we have on our way. (You'll see it this fall, # is going to hit the fan!)
Back on topic here... The Government of the United States hates inaction. That is not acting, doing nothing, just watching, letting it ride itself out and because they have acted they have doomed us all to a Depression, the likes we have never seen before.

Bernanke shadow banking behind the fed are losing money they are losing because is barely any interest to be made from the government loans to the Fed.

So somebody is losing and losing big, but the Obama administration is not giving a darn yet to their problem.

This is making this shadow investors very worry.

So now he is been pushed to influence the government into stop spending and fix the deficit.

But when the Fed was asking the treasury to print money to bailout the financial institutions he was not worry about the deficit and the debt.

Now he is and the only way is through taxes, but guess what the one to be targeted with higher taxes are the wealthy as the working class is unemployed.

I see a weakness in the dark force

Back on topic here... The Government of the United States hates inaction. That is not acting, doing nothing, just watching, letting it ride itself out and because they have acted they have doomed us all to a Depression, the likes we have never seen before.

You know, this is typical

I remember an interview from a French programmer who made a successful video game. This game wouldn't sell in America and they discovered the reason and later corrected it.

They had to insert a few lines in their program to force floppy drive to turn from time to time and simulate working.

This because, they discovered, Americans like to see their hardware "doing something".

The game was so well programmed that once uploaded into the RAM there was no need to access floppy disk again.

This is crazy, the people didn't want all these trillion spent and now that they went against the will of the people he realizes they were right? Now he wants us to pay for a mistake that HE made, that we know was a mistake from the beginning?

You know if they would have just let these businesses fail we would really be on our way to economic recovery not this false recovery.

I think the gov't had no choice but to step in with regards to the failing sectors. The other alternative would have been far more devastating. That said, the administration is now doing too much. They should have gone in, made drastic moves early on, saving the system, sacrificing some along the way. Instead, Bush et al mangled the issue and then handed the slippery ball off to the new team. they want to hold the ball, coddle it and work it as much as possible and we're now way beyond that.

Raising taxes is necessary. They can't simply print money when they need it. They'll crush the economy if they don't try to bring dollars back into their coffers. Taxes is how they do it. They should try to avoid taxing the people, they should raise corporate taxes, raise taxes on foreign entities doing business here etc.


Or they can do what I think would solve the problem in the first full year.

Take anywhere from 1 to 5 cents on all sales over Ten bucks. Nobody will balk at a five cent change in the price of things. Even with the usual percentage of cheats who rip off the feds in the same manner that they now rip off the local sales taxing authorities, you will still have enough money coming in to solve the budget issues.

Vote Crakeur, no nonsense, no b.s.

reply to post by Crakeur


People will feel the pinch because you are forgetting that America have almost lost 7 million jobs since the last year and half and that doesn't count the jobs that never will be in statistics like illegal immigrant work.

Right now we in some states like my neck of the wood are paying already extra sales tax and many of us got our property taxes increased due to state budget problems, while they states don't want to cut their over inflated budgets they are taking it on the tax payer.

Remember when the federal government lost 44% of their tax revenue so the states did too.

A tax on the working class will cause a surge of complains and making things more expensive for the already strapped consumers will be worst for retailers.

reply to post by marg6043


I'm not forgetting anything. the sales tax in my state is increasing and they increased my state and local income taxes. I'm merely pointing out that raising the federal taxes is a given. the government can't keep printing money or a loaf of bread is going to cost hundreds of dollars.

reply to post by Crakeur


Yes they can not print money out of thin air, but that is what they have been doing for the last 8 years while borrowing from China.

Still you don't see any solutions to the real problems plaguing this nation, raising taxes is not the solution not when the working force keeps shrinking we are having a total job market collapse in our hands right now and nobody in government is doing anything about the crisis now in our hands, cutting on government spending is a solution, but what the last administration and this one has done, no only financing wars but financing bigger governments.

Because that is what is going on, we have morons in government and the so call geniuses that are managing the president financial team are nothing but lobbyist protecting their own agendas and we the people are not the priority in their list.

Bernanke was the one that pushed the bailouts knowing very well that our nation was already in deficit, we the tax payer has been forced to pay our part and now he wants to keep pushing again? how long will it take before the trust in government is broken and lost.

This nation is running out of time to find ways to start making money, and taxing the nations working class is not.

The U.S. government currently operates with a national debt that is well beyond $11 trillion. The Congressional Budget Office projects a shortfall of $1.7 trillion in 2009 for one year alone. If we accept the White House deficit projections for the next for years our national debt will top out at over $14 trillion by 2013. There is no way to pay down this rapidly accumulating debt if IRS receipts are declining from year to year.

www.economyincrisis.org...

The reason the government is not generating tax money is because is not taxing enough but because the taxable income is shrinking.





[edit on 3-6-2009 by marg6043]

[edit on 3-6-2009 by marg6043]

I will never understand why people think we need to raise taxes. They absolutely do not need to raise taxes. Taxes are higher than ever before in the history of the country, what they need to do is cut the pay and benefits of the people who are utterly failing at running the place, and stop these stupid government spending programs that are failures. Just look at how the government runs the budget to know it's a bad idea, if any program has money left over at the end of the year they are required to spend it or else they will lose it next year, what kind of logic is that? Your efficient so we are cutting your budget, but the people who didn't have enough money will likely get increases. Until we reward success instead of rewarding failure it is going to get a lot worse.

Also the government never needed to step in the worst that could of happened from them leaving it alone has already happened or is about to occur, it just took longer. We have had tons of banks fail, the car companies went bankrupt anyway, and now we are likely going to face huge inflation anyway. Raising taxes when people are already forclosed on or unemployed and struggling to pay for food and shelter would destroy the system. Business taxes are the same they just get passed on to the consumer, and worst case higher taxes would cause even more businesses to leave the country.

As a consequence of this elevated level of borrowing, the ratio of federal debt held by the public to nominal GDP is likely to move up from about 40 percent before the onset of the financial crisis to about 70 percent in 2011.

What the hell is he talking about?

Current GDP: 14,061 TRILLION
Current DEBT: 11.305 TRILLION

Current ratio: 80.39%

2009 Projected deficit: 2 TRILLION +

Debt at October 1, 2009: about 13 trillion.
Ratio on October 1, 2009: 92.45%

And that is not counting the 13 TRILLION +++ in bank bailouts, trillion in medicare, troops pensions, ect...

Worst case scenario: bank bailouts + current debt: 24 trillion debt VS 14 trillion GDP. Ratio: 171.42%...

So again, the FED is full of it, the debt is already at 80% of the GDP.

Why should be believe that scumbag? He stole trillions and did everything he could to destroy the US dollar! But of course when he opens his mouth it's to TAX people, because to them we are just slaves to be taxed into oblivion.

And ``we don't want to monetize the debt``... BULL! You ALREADY DID.

[edit on 3-6-2009 by Vitchilo]

They have to stop spending and stop the war!

It's the only way people!

They won't do it! Nothing has changed from the prior adminstration in this regard and it's completely sapping ALL of our wealth. It's all gone...the debt is too high!!

The middle class will be gone when this hits.

It will just be the rich...and the rest of us all poor with no choice but to continue to eat from the very hand that takes from us.

reply to post by marg6043


if the taxable income shrinks, the only means of quickly bringing the gov't revenue back is to increase the taxes being paid by the folks still earning money.

sure, finding jobs for everyone would be better but this isn't something that can be done overnight.

I'm not agreeing with the increase, just pointing out that it is necessary.

Originally posted by miraclerock
They absolutely do not need to raise taxes.

there really aren't too many other alternatives.

Originally posted by miraclerock
Taxes are higher than ever before in the history of the country,

might want to do a touch of research before making this claim.

tax rates were dropped by George W Bush. The highest bracket, at the time, was 39.6. The top bracket now is 35% Rates have been much, much higher.
www.truthandpolitics.org...


Once again, I'll point out that I am not for an increase in any taxes, other than my aforementioned pennies on purchases tax. I simply cannot see any feasable alternatives.

reply to post by Crakeur

Once again, I'll point out that I am not for an increase in any taxes, other than my aforementioned pennies on purchases tax. I simply cannot see any feasable alternatives.

But even with this alternative....all money we spend is still going out of the country on the very products we would be taxed on. Gas prices are rising and people are starting to cut back even more now that it costs them twice as much as it did a few months ago. Gas reached a low here this last winter of 1.44. I remember that day...vividly..lol. Today it's 2.85. ALmost doubled...in a few months...and has risen 45 cents in the last week alone.

Seriously I think there is no real solution. We're screwed no matter what happens now.

They're about to sink our battleship.

reply to post by Crakeur

The other option is to stop spending money you don't have and stop policing the world.
Taxes are higher there are more taxes than just the income tax, which seems to trick a lot of people. Sales tax, property tax, sin tax, payroll tax, gas tax, capital gains tax, gift tax, estate tax, when you register your car, now they want a tax on soda etc etc it goes on and on how many taxes do we need?

reply to post by Crakeur


I know but isn't that call oppression when only one small group in the nation is forced to pay while the rest doesn't pay enough.



Still Obama targeting the wealthiest while seems fair for those that do not make enough is actually very bad for those that fall in between and are the ones that still generate jobs in the economy.

Originally posted by miraclerock
Taxes are higher there are more taxes than just the income tax, which seems to trick a lot of people. Sales tax, property tax, sin tax, payroll tax, gas tax, capital gains tax, gift tax, estate tax, when you register your car, now they want a tax on soda etc etc it goes on and on how many taxes do we need?

at the moment, sales tax is a local thing, no federal sales tax exists. property taxes are local, not federal, capital gains taxes are part of the income tax structure, gift taxes and estate taxes only exist if you use up the unified credit and these are currently being phased out (die in 2010 and pay nothing), registrations for cars are local as well.

payroll taxes are withholding from your salary to cover your income taxes or your share of medicare and social security.

Marg, it isn't opression when one small group is forced to pay while the rest doesn't pay enough. ask the unemployed masses, I'm sure they would rather be working and paying and ask the folks still working and they will tell you that they don't think it's fair that they are carrying the nation simply because they have been fortunate enough to not pay taxes.

It's not an easy workaround but, if you think about it, if the whole nation was employed, is itto have different rates for people who earn more? If I pay more taxes than you, is it fair? if you pay a higher rate than me, is it fair?

reply to post by Crakeur


I'm sorry I mean when one side is forced to pay for those that doesn't pay enough due to jobs lost and the poor.

Still my point was that as the working force and tax generators keep shrinking this is going to become a burden to those that now are exempt of paying taxes.

But this actually to target the over 200,000 + income earners.

reply to post by Crakeur


When you are unemployed or about to lose your home you don't really care whether your taxes are going to Federal or State, the effect is the same it is money out of your pocket that means you have less to support your family. Raising taxes is just going to create more economic problems, it just creates a vicious cycle spend money bailing out the consumption economy->raise taxes to pay for bailout->people have less money to consume->spend money bailing out consumption economy. We have to actually fix the root causes of the problems taxing and spending is just messing with the symptoms. It really doesn't matter what they do anymore both printing money or raising taxes will both crush the economy it's time to pay the piper and start actually paying off the debt and making products in the country again only then will we recover.

reply to post by marg6043


not sure I follow your logic on the exempt portion.

miraclerock, the unemployed aren't paying income taxes unless they are collecting unemployment and they have investment earnings putting them in a taxable situation. As I said, I'm sure there are plenty of folks out there who wish they were paying taxes but, regardless, you said income taxes are the highest they've ever been and that is simply untrue. You cannot say that property taxes count in that equation, nor do estate or gift or sin taxes etc..

I guess I misspoke what I meant to say was that when you combine all the different taxes I pay together total taxes are higher than ever before. At least for me they are higher than I have ever paid in my lifetime, I can only imagine how bad would it be if I was a smoker too. Sure income taxes may have been higher, but at least in my state I have had at least 5 or 6 new taxes on random things that means I am paying more than ever before, sorry for the miss understanding.