May Day 2013 – Honoring Labor Force

May 1, 2013

By Padmini Arhant

May Day is observed as an international Labor Day honoring work force – the invaluable resource to the economy.

Human capital being integral part of business contributing to economic growth requires acknowledgment and development for a nation to be strong and competitive within and outside the country.

Regardless of economic system – market economy or socialist structure, the workers represent productivity base in manufacturing and service industry while middle and senior management maintain organizational performance introducing ideas, research and innovation, policies and overall decision making process.

Capitalist and socialist economies with the former comprising majority private sector and latter public enterprise involving government or national funding dependent on skilled workers and ingenuity to produce required output maximizing available potential at any given time.

The foundation for this achievement begins with affordable quality education, training and technological expertise.

Additionally, expansion of knowledge through continuous learning and acquiring aptitude enhances qualifications in a particular or diverse field broadening the horizon.

However, the dilemma for highly qualified and those meeting relevant employment requirement is prevalent job insecurity with corporations prioritizing short term soaring profits over sustainability and stability.

In the contemporary setting, company expectation on individual capability far exceeds actual overhead costs with preference for competence on par or adjustable level.

The requisite allow businesses to grow quantitatively considering the options at their disposal marginalizing workers for primary shareholders substantial benefit in the organization.

Furthermore, neoliberal concept imposed in globalization framework facilitating multinational operations anywhere and accessibility to vast labor market plus manual functions substitution with technology poses greater challenges for job applicants having to compete at national and international front despite satisfying eligibility criteria.

As a result, new entrants lacking in job experience wait longer for a breakthrough and earn less besides burgeoning student loan debt in the United States also currently turned in financial institutions favor comparable to housing market ponzi scheme.

The late twentieth and dawn of twenty first century initialized global investments perhaps to boost international trade activity.

The implementation focused on venture capitalists profiteering with anticipation of Midas touch phenomenon.

Superficial indulgence contributed to economic boom followed by bubble burst amid Wall Street wild speculative explorations overshadowed by U.S. invasions of Afghanistan and Iraq costing trillions of dollars – the culmination led to status quo.

Subsequently, the dynamics of corporatism and socialist capitalism in the too big to fail frenzy anchored on big banks bailouts and insurance industry constricted liquidity withholding cash flow otherwise divested in banking sector acquisitions and mergers depriving economic stimulus in the United States and Europe.

Meanwhile, U.S. tax dollars divestments continue until today extending illegal occupation of foreign land beyond scheduled withdrawal date in Afghanistan, aggression in Mali and sponsoring terrorism to destabilize sovereign states Libya, Iraq, Syria and the entire region.

The current domestic and foreign policy in the United States and EU is predominantly responsible for inter-continental and global economic meltdown with massive unemployment having contagion effect.

Neoliberalism conceptualized to benefit top 1% at the remaining 99% expense under globalization auspice drastically affected blue collars and bulk employment in various industries with labor and environment laws undermined to suit corporate maneuver backed by political establishment.

Whenever working conditions and union disputes are brought to public focus – the typical reaction to critical matter is attributed to Marxism or Communism.

Inventing communism – the deceptive utopian theory in practice aligned with hegemonic goals i.e. reining political control over nation and territorial annexations aimed at foreign resources has been a convenient tool to justify wars like Vietnam and,

Consequently replicating model in the creation of al-Qaeda serving false pretext for the so-called war on terror to invade and occupy sovereign states in the world.

Reverting to workers related issues – even though there are variances in corporate treatment across the globe the common denomination leads to exploitation.

The recent incidents involve stalemate between Colombian workers and General Motors,

The miners problems in Latin America and South Africa ending in casualty.

In other instances Walmart, Honeywell job replacements and denial of health care benefits to United States staff with corporate record profits reserved for executives extravagance.

Likewise Walmart neglect of safety procedures in Bangladesh garment factory that claimed around 100 lives with no accountability.

France stifling pensions, teachers and nurses strikes expressing huge disappointment share United States counterparts sentiments in incumbent Presidency elected as Socialist government and in reality sworn allegiance to oligarchy.

France and euro zone members under EU governed strategy exacerbating people suffering with joblessness from severe austerity.

Notwithstanding U.S. present stance threatening social security, Medicare and lifeline programs with educational funding slashed citing budget constraints endanger citizens survival and future prospects under the guise of fiscal responsibility.

In comparison, Washington misplaced loyalty through multi billion dollars financial aid to Israel to oppress and persecute Palestinians as well as orchestrate terror in Syria, Iraq, Libya and throughout Middle East has no stumbling block in elevating debt ceiling or national deficit with generational impact.

Ordinary citizens as workers, consumers, taxpayers and electorate are consistently ignored with corporate earnings shared among core management and key investors widening economic disparity and social inequality in society.

Workers bear the brunt in the misuse of power either by Union leaderships sometimes betraying union with complicity in corporate mismanagement and discriminatory dealings or company failure in resolving crises effectively for common good.

In certain circumstances, union extreme demands upon employers taking undue advantage of dependability like in Australia generates loss of revenue with pervasive adversity.

Alternatively political imprudence and cavalier approach in relentless warfare whether conventional, drones or terrorism in proxy versions directing national assets to destructive purpose evidently a huge economic liability and devastating to nation at large.

Summarizing the importance of Labor Day – An occasion with a reminder for economic and political leaderships to appreciate the significance of labor force with investments in education, and jobs providing opportunity to excel in entrepreneurial, scientific and academic fields, arts and entertainment…or any discipline strengthening national achievements in every frontier.

Lastly adopting the principle – Work is worship and workmanship delivered with commitment and interest would guarantee success in all endeavors to mankind.

Wishing the world fruitful labor days all year around.

Peace to all!

Thank you.

Padmini Arhant

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India – Neo Liberalization Economic Policy is Anti-Republic Ideology

December 4, 2012

By Padmini Arhant

The Congress party led UPA (United Progressive Alliance) coalition government welcomed neo liberalization economic policy considering hegemony influence over the administration key members and party chief in advancing globalization evidently suitable to establish feudalism under the pretext of modern capitalism.

Notwithstanding the fact, the head of the state and main cabinet ministers held positions at World Bank prior to being nominated by hegemony to promote the debilitating neo liberal concept in India.

Hegemony agenda on world economy is redefining capitalism exclusively benefitting the multinational corporations at small medium enterprise as well as average citizens detriment.

Not only the term neo liberal is deceptive but also the hegemony distortion of liberal and progressiveness in economics and politics confirms steadfastness to legalize authoritarianism consistent with the trend to the White House latest action legitimizing arbitrary drone strikes generating massive innocent civilian casualty.

The genuine liberal and progressive characteristics pose impediments to hegemony extremism and ultra conservatism essentially the protectionism that guarantees financial security to corporate conglomerate on their terms and conditions worldwide.

Hegemony is strongly opposed to protectionism that ensures public and national interest like preserving natural resources and human capital from foreign exploitation.

However, the obstacle is maneuvered through hegemony nominees in political system among the ruling power along side weakening opposition to rein control on government legislation that governs the economic sector implementing policies conforming to conglomerate agenda – i.e. broader access to market share and profits divestment offshore preferably in tax havens evading scrutiny.

The neo liberal ideology targets nations exacerbating society endurance on pervasive corruption advising subservient political power to remain committed in declining anti-graft legislation despite national demand.

Indian government is currently engaged in passing Foreign Direct Investment (FDI) allowing Walmart and other mega corporations’ retail monopoly regardless of the measure proved counterproductive.

Similar trade policies introduced under Free Trade Agreement – FTAA, NAFTA and CAFTA in Latin America and Asia was responded with factory workers and manufacturing sector protests in Columbia, Panama, South Korea…and elsewhere.

FDI devastating impact on vast majority surviving as retailers and local street vendors is apparently not a major concern for the political leaderships sworn allegiance to external global power.

India is unfortunately subjugated through elusive economic proposals favoring hegemony goal to derail growth widening the existing gap between the rich and poor.

FDI implementation would cost small businesses and shop keepers livelihood even driving them to situation experienced by farmers forced to commit suicide due to corporations like Monsanto stranglehold on farming community at the national political power invitation.

Besides FDI facilitates foreign exchange inverse flight contrary to political misconception on Forex reserves advantage currently debated in Indian Parliament aiming to circumvent the matter by seeking vote on Foreign Exchange Management Act (FEMA).

The traders nationwide should demonstrate against the erroneous decision and scuttle the misguided economic strategy threatening India’s domestic prospects linked with appropriate income distribution.

Another contentious factor with FDI is subsidized labor with cheap overheads, a common attraction for foreign absorption of market holdings resulting in huge employment displacement largely affecting women and marginalized demography.

In this instance it is noteworthy that Muslim and diverse groups are potentially at risk given their involvement in commercial activity as the chosen and sometimes circumstantial profession.

Instead the government utilization of capital and foreign exchange reserves in export oriented technology and mechanisms from within and abroad to enhance infra structure modernization contributing to work force expansion rather than contraction could be beneficial to India and global economy reviving multilateral trade.

FDI in this context deprives fair competition with the premise disproportionately lucrative for big corporations predator instincts significantly affecting job market and economic viability.

Obviously, the political opposition is subjected to task in exemplifying prudence and diligence that would determine their commitment or the lack of in safeguarding economic future heavily compromised upon Parliament approval of the FDI bill.

Simultaneously, Indian democracy is challenged in foreign disguised control via proxy rule necessitating civil society activism and intervention to avert catastrophe.

The business associations across the country are required to come forward and assume responsibility in preventing history from repeating itself semblance with East India Company venture that led to imperialism two centuries ago.

Hopefully rationality would prevail in abandoning FDI used as political tool to undermine the legitimacy of largest democracy in the world.

Wishing small entrepreneurs and mainstream success against political collusion in disenfranchisement on economic opportunity.

Peace to all!

Thank you.

Padmini Arhant


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Russia – St. Petersburg, International Economic Forum 2012

June 24, 2012

By Padmini Arhant

International economic forum 2012 held in St. Petersburg, Russia focus on Russian economy and energy sector relevant for the BRICS member.

Russian market liberalization with incentives for investors might have led to high end deals at the meeting.

However, moderation prudent on all measures prior to overarching relaxation of rules based on expectations for lucrative returns.

Russia’s policy in unrestricted capital flight to domestic and foreign investors with a request to new venture capitalists to expand upon being successful in initial embarkation is anticipation not necessarily incumbent upon beneficiaries deriving gains from unlimited access to national resource.

The economies luring capitalism to stimulate growth would enhance opportunity in defining engagement process through legislation not only for local competition survival but also safeguard sovereignty.

Besides monopoly of market share undermining labor and taxation laws including environment standards are common experience among nations inviting foreign investment.

Another major factor being reciprocation in offshore trade often does not conform to terms and conditions with arrangement favoring one and not another.

Mutual trust violation in currency adjustments or trade imbalances also leads to unnecessary tension between interdependent partners in the otherwise resolvable disputes that are once again used for geopolitical agenda.

Capitalism providing fair income distribution contrary to status quo and abandoning practices to establish control on sovereign national assets such as oil, natural gas, minerals and various commodities among the products with human capital regularly exploited especially in developing nations would facilitate viable economic climate.

The contemporary invasions under false pretext evidently counterproductive and multinational corporations with energy sector, defense and finance industry in particular among others instrumental in cataclysmic warfare causing death and destruction alongside political instability urgently required to change course from adversarial role to honoring territorial integrity,

Capitalism in the new millennium reining control over political systems in national and international domain through campaign financing and legislative authority set dangerous precedence and predominantly responsible for democracy decline.

Russia receiving funds for discretionary spending from Middle East viz. Kuwait generous contribution $500 million to RDIF (Russian Direct Investment Fund) and U.S. initiated membership to international organization ITO with no strings attached would perhaps allow recipient to participate on equal footing without compromising UNSC veto right.

Furthermore entering into business contracts with profit sharing in both nations – overseas as well as partner domicile quintessentially end lingering uncertainty winning consumer support and investor confidence.

State capitalism on key programs such as health care for all with an option to seek private medical treatments,

Compulsory free education to poor and lower income category to boost literacy rates across the nation,

Adequate funding for quality higher education to prepare nation with skillful work force,

Subsidized housing with essential conveniences in exchange for involvement in community projects would eliminate crimes and social problems that are costing taxpayers more in penitentiary upkeep and running prison camps like in the United States.

Protecting retirement funds to guarantee financial security to retirees and baby boomers,

Veterans’ benefits extended to them and their families during and after national duty.

Periodic improvement with technology oriented civil services and infrastructure maintenance are core and integral part of public sector undertaking to ensure healthy, educated and socially integrative society.

Accordingly crackdown on bureaucracy and corruption posing impediments to genuine progress is an immediate priority.

Nationalization, privatization and quasi privatization would complement functionality wherever applicable.

The diversity would address deficiencies in areas vulnerable to fluctuations and unexpected events demanding intervention.

Regardless appropriate regulations are necessary for checks and balances to create long term growth.

The setup deserves due attention and action on individual basis beginning with banking and finance extended over to other areas of commerce.

Nations assuming direct power over money supply imperative exemplifying national ownership at present referenced in sovereign debt with constant monitoring aided by effective fiscal and monetary policy.

Simultaneously surplus allocation towards national reserves would alleviate austerity or tax increase in dealing with market volatility and economic or financial crisis in the global environment.

Liberating economies from private management under prevalent Federal Reserve or Central Bank with nationalization of monetary unit and core banking activities plus oversight on national and private financial institutions to avert serious meltdown would guarantee fiduciary reliability.

Sustainability premised on solid foundation accompanied by robust stimulants would provide steady and progressive trend.

Energy metamorphosis to contain carbon emissions and economic impact on natural gas and oil producing nations merits exclusive presentation.

Similarly euro zone analysis with pros and cons on recent developments will be a separate topic of discussion.

Russia – the host nation having achieved many business prospects at the consortium acknowledged for the International Economic Forum 2012 that brought more than 50 countries to showcase respective accomplishments and vision.

Peace to all!

Thank you.

Padmini Arhant

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United States – G8 Summit May 2012

May 19, 2012

By Padmini Arhant

Warm Greetings! To G8 leaders at the 2012 summit in Camp David, Maryland.

The exclusive membership represented by North Atlantic nations – United States, Canada, United Kingdom, Italy, France, Germany with the exception of Russia and Japan might have the opportunity to shed light on current events in Europe and the usual targets North Korea, Iran and Syria on the security context.

However, the organization validity would be poignant upon integrative approach rather than isolationism that are obsolete and redundant evident in the status quo.

Dissolving G8 and improving G20 forums in dealing with global challenges would be frugal in the contemporary austerity era saving time and valuable taxpayer dollars besides correlation with relevant geopolitical and economic dynamics contributing to global sustenance preventing catastrophic meltdown.

Economy – Euro zone objectives lacking in candor and specificity responsible for members precipitous decline not only in economic status but also political stability considering the latest instructions from dominant powers to Greece on austerity, referendum and general governance.

Similarly France and PIGS countries sharing the dilemma expected to follow suit severely undermines national sovereignty in exchange for membership demanding more and providing little or none to the manufactured crises in the region.

While rigorous measures implemented much to the population detriment in Euro zone rescue efforts,

The source causing the chronic problems for euro zone subordinates –

The central banks viz. ECB, Bank of England, the privately owned Federal Reserve in the United States, IMF, World Bank and prominent western financial institutions having emerged the real beneficiaries instead of being held accountable ironically protected from any potential financial calamity.

Governments hit with worst economic recession in Europe are subjected to massive layoffs in the conditional monetary proposals neglecting euro zone taxpayers money wasted in hiring European commission bureaucrats apparently appointed for life costing ailing EU economies billions of euros and raising credibility factor in fiscal treaty.

Credit rating agencies downgrading Spain and Greek banks for bad loans on the books generating major liquidity concerns contrary to treatment against western counterparts – the origin of subprime mortgage and hedge fund debacle exempt from such standards and rewarded with taxpayer funded bailouts in trillions of dollars since 2008 until now.

The discriminatory practices directly affect public depleting hard earned savings exacerbating financial woes for college students and small-medium business owners constituting the backbone of the economy as workers, consumers and taxpayers in the society.

Another G8 dogma consistently pursued benefitting the privileged despite negative returns for nations in Latin America and Asia like South Korea is Free Trade Agreement.

Free Trade Agreement unlike Fair Trade Agreement sought by nations across the globe deprives negotiations on equal footing subjugating partners for unlimited access to domestic markets, national resources and human capital exploitation at respective citizens misery.

Again at this G8 meeting, Canadian Prime Minister Stephen Harper enthusiastic pledge to promote Free Trade Agreement ignoring partner nations experience demonstrated in main street protests confirms the nexus group priority on global dominance.

Agriculture – G8 influential members in cohort with powerful corporations viz. Monsanto and agro based manufacturers behind farmers deteriorating conditions to survive and effectively compete in the globalized setting led to suicide and bankruptcies amongst farming community worldwide.

Politics and Global Security – Fundamental transformation with departure from U.S. led NATO military operations and provocative deployments adopting peace, diplomacy and economic development would clarify G8 commitment to humanitarian progress.

The political motives aimed at destabilizing West Asia through –

Arms supply sabotaging ceasefire in Syria,

Crippling sanctions against Iran even in the absence of nuclear capability per U.S. and Israeli military and intelligence reports,

Decimating Iraq, Afghanistan and Libya,

Authorizing Saudi Arabia with illegal annexation of Bahrain for strategic control is anything but democratic to intelligent minds in the international domain.

Environment – The trend continuity reflected in environmental goals with fossil fuel and nuclear industry financing political campaigns jeopardize climate talks from fruition.

More pertinently defense industry and Council on Foreign Relations (CFR) combined with Trilateral Commission driven foreign policy determination to establish one world government through permanent occupation and illegal invasions pose existential threat to humanity endangering life and habitat.

Transfer of power from oligarchy and monarchy with imperialistic aspirations to republic rule is the only viable solution for universal peace and prosperity.

The nation at the foothills of Himalayas – Nepal successfully dethroned monarchy rejecting feudalist system in modern age.

Western nations and allies in this regard maintaining medieval kingdoms and fiefdoms under ceremonial pretext but in reality wielding tremendous authority is a paradoxical trait for shadow powers envisaging space colonization.

Dreams for greater good could be an eventuality contradictory to narrow vision premised on self-interests remaining a mere fantasy.

People power is the imminent future for mankind with pervasive freedom, equality and tranquility.

Peace to all!

Thank you.

Padmini Arhant

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Greece – EU Bailout and Austerity

February 8, 2012

By Padmini Arhant

European contagion originated from the Mediterranean country – Greece.

Last year EU monetary assistance with €110 billion tied to untenable terms and obligations rendered the expectations beyond normal scope.

Accordingly, Greece is still struggling to overcome economic woes despite severe austerity and political reshuffle.

The earlier government under Prime Minister George Papandreou efforts to contain the rising debt and,

EU pressure to prioritize deficit trimming through rigorous spending cuts evidently led to GDP contraction by 6%, budget deficit at 10% and 18% unemployment respectively.

In the poor economic growth rate and looming financial liabilities, the creditors conditional offer demanding drastic expense reduction directly affects the core revenue base – consumers and taxpayers.

The attempt on deficit control without income is enforcing mandatory borrowing and,

Massive cuts in vital services cripples the economy to the point of diminishing return.

Tax hikes at any level could exacerbate the burgeoning crisis especially with unprecedented layoffs in both public and private sectors leading to industry workers as well as state employees nationwide strike.

Instead Greece and other economies like Spain, Portugal, Italy and Ireland in euro zone would enormously benefit from job-oriented investments incentivized with tax breaks, guaranteed dividends and equity enhancement to prospective investors.

European Central Bank, IMF and other international banks capital infusion with strict recommendations result in joblessness.

Funds directed towards economic sector for job creation would stimulate economy facilitating income source to meet budget and payments on borrowing.

Short term fund raising through treasury bills and bonds enables survival amid speculations on financial liquidity.

The propositions on Greek’s private debt write off up to 70 percent or more would provide relief in deficit management allowing appropriations towards economic recovery.

However, EU, ECB and IMF loan stipulations on €130 billion or ($171 billion) over and above cuts agreed to about 1.5 percent of GDP by current Prime Minister Lucas Papademos is the repeat of erroneous policy that precipitated economic and financial meltdown across Europe.

IMF’s similar strategy with Romania dependent on credit for state budget commitments contributed to economic downturn due to extreme lending criteria.

Financial institutions and monetary organizations purpose is useful in building economies applying generic and specific models to address individual requirements.

Greek economic surge and financial recuperation could be supported with job restoration via domestic and foreign investments qualifying the G-20 favored globalization concept.

Under same auspice, trade activities promoting exports would revive manufacturing, service and retail industry besides boosting small medium enterprise competitiveness.

Although financial assistance are necessary to restitute state solvency and credit rating,

Finance industry, corporations and wealthy entrepreneurs in Greece could ease the burden on the economy alongside government initiatives to salvage the situation.

The economic resurrection with prudent investments would need modification for a vibrant Market economy.

Market economy – 80% and Government managed programs – 20%

While the bulk of the economy would fall under free market system with oversight to prevent past mistakes responsible for the status quo,

Preserving core social programs under State purview are important for sustenance and they are –

Pensions, retirement savings or Social Security,

National Health Care with options

Veterans Affairs including rehabilitation and care,

State funding for affordable education, scientific research and technology,

Subsidized housing to accommodate non-qualifiers in the regular home finance.

Public services utilizing technology to the maximum potential and,

Environment protection agency to co-ordinate on national and international mandate.

Stringent laws against corruption within society beginning with government bureaucracy, finance sector and across the economic spectrum could yield financial savings.

Tax reform closing tax evasion loopholes and unaccounted funds or hidden assets retrieval from domestic and overseas bank accounts.

Market economy with life saving programs under government ambit could be a profitable and secure synergy complementing one another.

Greece in euro zone has shared gains and losses with euro fluctuation prior to economic recession.

The impact on Greek economy from euro volatility could not be discounted in the European trade.

The perception of Greece membership in euro zone as a liability could be transformed into an asset in reality with appropriate rescue package designed for economic progress than financial bailout.

Unlike the previous aid, EU approval of €130 billion to Greece in the interim could set the frail economy on trail with fiscal, trade and monetary policy restructuring for better economic performance.

With political elections on the horizon, Greece could experience economic productivity through local and foreign investors recognition of lucrative deals available at the present time.

Greek government relentless pursuits in energizing the economy would minimize ambivalence among creditors reversing the trend in capital provision.

EU, ECB, IMF and global finance to Greece on feasible conditions would deliver positive outcome strengthening euro zone and the member states economy.

The distinction between banks bailout and assistance to weak economy is the beneficiary with former was top 1% whereas the latter represented by 99% in the society.

Considering the predicament and inter-dependency in global economy,

Greece and other nations could not be abandoned or challenged with extraordinary conditions detrimental to euro zone and EU economy.

The leaderships and authorities at EU, ECB, IMF, International banks and euro zone are urged to kindly extend financial credit to Greece with a new opportunity to rebuild the economy and organize fiscal house in order.

Prime Minister Lucas Papademos , the opposition leader Antonis Samaras and all other elected members,

Notwithstanding, the economic leaderships in Greece are confronted with daunting tasks ahead.

The consensus in public and national interest would reflect the political will to resolve the persistent financial problem winning republic confidence and creditors trust in the capital market.

Good Luck! To citizens of Greece and the government in prevailing in financial and economic security.

Peace to all!

Thank you.

Padmini Arhant

 

 

 

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G20 and Global Economy – Fiscal Policy

October 9, 2011

By Padmini Arhant

Amid weak global economy largely contributed to United States and European sluggish growth compounded with other economic woes like high unemployment, inflation and,

National budget confined to austerity and controversial tax hikes or tax-cuts is a phenomenal challenge confronting the industrialized and developing nations.

Beginning with industrialized economies – the economic stimulus since recession onset was aimed at growth surge and job creation, facilitating liquidity to overcome credit crunch following financial markets reaction to derivatives discrepancies in the deregulated environment.

The steps involved Capital supply to salvage targeted high-end manufacturing industry from bankruptcy and banks bailouts in eliminating toxic assets from the balance sheets respectively.

Among the industrialized groups – the two major economies viz. the United States and Japan share mutual setbacks from overheating of the economy in two familiar areas – the stocks and housing market.

Both nations have struggled to jumpstart the economy with steady growth exacerbated by global recession and sovereign debt.

Speculations on European national debt and potential credit default overall impact on euro as the European Union currency and Euro Zone status in the globalized economy foment market volatility.

Economic forecasts and projections weighed in objectivity could avoid unnecessary market turbulence.

Japan is also burdened with U.S debt as the second largest creditor behind China – the primary creditor and the second largest economy.

In order to address various economic problems and avert possible Double-dip recession,

It is necessary to review public policies and economic tools that are available for short term and long-term objectives.

Fiscal Policy (Balancing the Budget), Monetary Policy (Controlling inflation and liquidity), Trade Policy (Growth and Investment),

Additionally Revenue and Spending for efficient government functionality and deficit reduction could broaden perspectives on this critical matter.

Fiscal Policy – Comprising government expenditure and taxation, non-tax revenue from government owned investments and utilizing government assets such as bonds and other suitable financial instruments for borrowing to meet government obligations.

United States and Europe focus is on budget approval with the dilemma on spending cuts along with taxation being contentious leading to opposition’s government shut down ultimatums causing political gridlock in the U.S,

Notwithstanding justified public frustration over fund slashing for education, health care, pension plans and most importantly lack of jobs triggering riots in London, Paris, Athens, Madrid and Lisbon…calling for government actions to deteriorating economic conditions.

United States citizens protest against Wall Street conduct premised on greed driven strategies responsible for the status quo is slighted with –

White House clarification on the issue as –

“Wall Street ill-practices are not necessarily illegal.”

The sub-prime mortgage activities having deprived more than million homeowners ownership and economies facing insolvency in the hedge fund debacle,

Financial institutions’ exorbitant fee on banking transactions and consensus to stranglehold consumers despite banking industry dependency upon them is a kamikaze effort given the flawed tradition proved detrimental to global economy.

Corporations and finance industry consumer-friendly approach would not only guarantee significant consumer base but also enhance good will – a valuable asset in the competitive setting.

Fiscal policy effectiveness is largely related to both spending and revenue trends with immediate requirement on tax reform.

They are summarized as follows:

Closing loopholes used in tax evasion,

Tracking funds in offshore tax havens for individuals and corporations.

Mandatory disclosure of financial assets for high profile and rank and file public figures on taxpayers funded income viz. legislators, Parliamentarians, Cabinet secretaries, Political party leaderships regardless of hierarchy, kickbacks donors and recipients in the private and public domain.

Easing tax burden on the middle class,

Tax exemption for the lower income groups and,

Tax structure readjustment – the bipartisan Super committee appointed for fiscal management in the United States could enforce repealing the Bush tax cuts to the wealthiest passed in 2010 and implementing the popular Buffet Rule in 2011 through legislation.

In a broader sense, consumption tax could be marginally raised with the exception of essential food items and reallocated to health hazard products as well as luxury goods.

Taxes being predominant revenue source for government operation and capital formation yielding future benefits through infrastructure investments, research and development with patent law protecting consumer and investor interests, the ultimate target is job growth.

Passing the jobs bill – beginning with small business, medium and large corporations, manufacturing and service industry incentivized with capital interjection in the form of commercial loans at affordable rates and/or various taxes like payroll taxes reduction, deferments where applicable is a top priority transcending political partisanships and myopic view on the economic problems in the near and foreseeable term.

Exploring non-tax revenue in government owned corporations or quasi undertakings (public and private sector ventures) and,

Central Banks monitored sovereign wealth funds (SWF) primarily invested in global equity markets maximizing long term return alongside Foreign exchange reserves typically held in international floats e.g. U.S. dollar, euro, yen and sterling pound facilitate short term liquidity flow for capital infusion.

Spending is the balancing act that requires eliminating wasteful expenditures, trimming or downsizing overheads costs, maintaining and restoring entitlements programs especially –

Social Security – Reiterating the fact as the only safety net for American families enduring tough economic situation and non-interference in this regard would continue to deliver the desirable result.

Privatization would seriously jeopardize the financial security sustained in the current profitable investment for continuous payments necessary to stimulate the economy via consumer spending and growth expansion.

Medicare – Senior citizens and low-income demography – the two key consumer categories would be forced to spend meager savings and income on expensive health care costs other than prescription drugs that could otherwise be diversified in retail consumption.

Norwegian model in this respect has successfully integrated essential social services like retirement, medical and disability benefits to all with capital investment in public trust.

As part of income redistribution the island nation with GDP per capita $53,269 ranked 3rd highest in the world consisting high living standards compared to European counterparts has managed against poverty, hunger and disease – the three survival factors posing impediments in progress for developed and developing nations.

Norway affected by European debt crisis is experiencing decline in high-end manufacturing similar to Germany with 40% GDP attributed to exports relying on global demand.

Defense Spending – United States Global Empire established far and wide with 737 U.S. Military bases and more than 2,500,000 personnel deployed overseas in different locations is astounding and,

Unfortunately escapes the fiscal conservatives attention preoccupied in terminating social security, Medicare, Children nutrition… and other vital provisions in the entitlements for vulnerable population at home.

Not to mention the no-exit strategy wars in Afghanistan, Iraq and Pakistan with extended proxy wars in Yemen and Somalia taking human and economic toll to serve the defense industry profitability.

It is high time to review and reevaluate the defense budget saving trillions of dollars by ending foreign occupations and military warfare.

Instead upgrading national security mechanisms and facilities with sophisticated forces would be a formidable deterrent to potential threats.

Simultaneously defense divestments in economic and social development achieved with political stability in war torn nations would be more effective in containing terrorism considering the military aggression thus far has failed to produce any positive outcome.

Furthermore, the prolonged military intervention has contributed to terror networks proliferation and instigated violence against fellow citizens causing regional tension and instability witnessed in Pakistan, Afghanistan, Iraq and Somalia.

Hence retracting military aspirations to accommodate all-encompassing domestic goals is desperately needed to expedite national and global economic recovery.

Discretionary Spending – Congressional discernment in appropriations act preserving job oriented and community enrichment projects would supplement remedies for economic revival.

Equilibrium in fiscal policy with spending streamlined and revenue boosted through fair taxation and,

Other avenues like penalties in environmental damage,

Hikes in licensing fee where appropriate – anything endangering life and economic opportunity without aiming at average citizens or natural endowments for direct public use could complement measures in economic meltdown reversal.

Macroeconomic, Monetary and Trade policy together with European Sovereign Debt Crisis centralized on (PIGS) Portugal, Italy, Ireland, Iceland, Greece and Spain economies will be presented individually for clarity.

Meanwhile, getting the fiscal house in order to promote jobs with government and business cooperation would prevent economic crises escalation.

Peace to all!

Thank you.

Padfmini Arhant

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United States – National Debt Ceiling, Deficit Reduction and Balancing the Budget

July 24, 2011

By Padmini Arhant

Leaders in Congress and White House held vigorous discussions on national fiscal crisis up until recent standoff disrupting political discourse.

The main focus was clarifications from each side in achieving the goal and winning congressional support for their specific agenda.

The White House request to raise debt ceiling by $2.5 trillion carefully analyzed by Congress.

Cut, cap and balance bill aimed at middle class, senior citizens and veterans from Republican majority in the House rejected in the Democrats controlled Senate.

Meanwhile the Gang of Six from the Senate presented their version highlighting tax reform alongside deep spending cuts creating a political puzzle with the legislative and executive branch struggling to arrive at a consensus urgently required to prevent national default portending serious ramifications upon failure.

Given the current national debt at $14.3 trillion extending credit limit by $2.5 trillion to facilitate borrowing for spending without revenues in the form of tax restructure and other sources exacerbates the debt situation.

Republican House bill targeting essential programs like Medicare, Medicaid, Social Security and Veterans benefits while demanding spending cap at 2008 level in the absence of revenues to accommodate White House $2.5 trillion credit increase is imprudent considering the prevalent economic conditions on unaffordable health care costs and high unemployment.

The Republican members’ mandatory requirement to balance the budget through constitutional amendment is an important strategy to restore fiscal order.

However the milestone cannot be reached on severe austerity alone.

Last year Bush tax cuts extension to the wealthiest individuals and corporations with extraordinary gains was overwhelmingly approved holding the optimistic outlook on job creation and economic revival yet to be realized a year later.

The agreement between Republican members and White House in 2010 on Bush tax cuts extension proved detrimental since the opportunity to rein in deficit then was missed with generous tax breaks to the top 10 percent thereby transferring the debt burden on the remaining 90 percent – the routine targets in fiscal management.

White House stance is claimed to be over trillion dollars in spending cuts i.e. domestic discretionary and defense spending combined in addition to $650 billion from entitlement programs such as Medicare, Medicaid and Social security.

The contention for the White House is revenues not measuring up to spending restraints from the Republican side.

White House determined to obtain debt ceiling increase to a tune of $2.5 trillion beyond 2012 elections.

White House expectation from Republican members is to raise $1.2 trillion income through tax restructuring that would lower tax rates by broadening base and eliminating tax loopholes plus deductions to maintain balance.

Republican House members on their part favor slash spending and no revenues especially tax related options not considered in the equation.

The pragmatic approach to the highly contentious issues – raising debt ceiling and taxes simultaneously with drastic spending constraints not sparing Medicare, Medicaid, Veterans benefits and Social security could be rationalized beginning with two major resolutions.

It would be economically sound to abandon impulsiveness when searching for practical rudiments to complex fiscal conditions.

Following precedence on debt ceiling extension is not suitable in the highly volatile global environment featuring promising gains and precipitous decline in individual and overall growth.

Similarly, compromising entitlement programs such as Medicare, Medicaid, Veterans benefits and Social Security – the only safety net for average Americans in the political bargain is best safeguarded than dismantled to attain positive returns through productivity and consumerism from healthy, able and economically stable citizens.

First and foremost, review and re-organize budget appropriations.

Budget financing for current expenditure already available in discretionary as well as defense allocations, tax reforms addressing tax evasions and deductions for luxury purpose rather than tracking the middle and lower income stimulus programs returning to the economy being the consistent consumer segment is a straightforward approach.

Exploring savings and revenues for government operation could begin with freezing salary increase and perquisites availed by Congressional members and federal agencies top management including the executive branch for two years.

Poignantly wasteful spending by Congress and federal organizations on travel and trimming bureaucracy with efficient technology could bring some relief.

Reviewing trade tariffs, levies and fees applicable on imports and providing incentives to corporations for local manufacturing and industrial expansion would trigger economic upward trend.

Selling or privatizing government owned buildings and tangible assets could assure cash conversion.

In an attempt to enhance the super wealthy income status – lowering tax rates for the rich and concurrently imposing taxes viewed negligible against the underemployed American work force tilts the scale higher again on the middle and lower income groups barely surviving in the harsh economic environment.

Corporations like General Electric innovative techniques to not only avoid paying taxes but also receiving tax refunds on zero tax payments are the kind to be blocked and dues collected retrospectively to fund legitimate services.

Protracted government operations and congressional offices replicating functions could be centralized to perform under single unit directives and supervision.

U.S. taxpayer bailouts of banking industry from 2008 to date – toxic assets removal from bank balance sheets with treasury intervention using taxpayer funds enabled banks to avoid bankruptcy,

Since rescue with taxpayer funds – banks have not eased the credit crunch experienced in commercial lending, housing market and small business stalling progress and economic recovery.

Accountability on interests owed and remaining principal balance from the bailout recipients could aid treasury from potential national default considering the banking sector’s record profits largely directed to CEO‘s extravagant bonuses and stock option distribution adhering to business as usual practice.

Eliminating tax subsidies to energy industry exempting clean natural resource energy production,

Nonetheless pursuing fossil fuel producers are some aspects of savings and revenue prospects to assist in debt reduction.

Environmental damages from gross negligence as witnessed in Gulf coast oil spill and repeat offences restoration costs collected from energy, pharmaceutical and agricultural chemical fertilizer companies…would supplement state and national income.

Without having to raise debt ceiling now or in the future, the unused budget allocations not excluding redundant expenditures could be identified for budgetary requirements.

Lowering tax rates from 35 to 29 percent to the top bracket could be incentivized for domestic investments and job creation instead of the reduction standardized that is otherwise held in offshore tax havens and Swiss bank accounts.

Again reiterating the fact that mortgage interest payments and other genuine deductions to middle and lower income groups representing the vast active consumer base and labor force routinely reinvested back in the economy.

Therefore any drastic initiatives to terminate essential services to Senior citizens, veterans and vulnerable demography notwithstanding economic stimulants to middle class America would fall back on the state ultimately affecting national GDP.

The House Speaker John Boehner and Republican House members’ position declining debt ceiling adjustment is relevant in light of alarming national deficit at $14.3 trillion and inevitably escalated with $2.5 trillion borrowing that could be procured from within the budget and monetary instruments at the treasury.

At the same time, Republican Congress in the house and Senate cannot avert default without meaningful and realistic fiscal solutions consisting revenues with tax reforms, levies and payments from Wall Street for causing economic and environmental adversity.

Although spending cuts targeting Main Street is the predominant component in every proposal not sparing the economically vital programs like Medicare, Medicaid, Veterans provisions and Social Security,

Republican majority in the House – Legislation titled cut, cap and balance primarily slashed and deprived significant population from basic existence.

White House plan extracting $650 billion Medicare, Medicaid, Veterans and Social security is in coherence with Republican strategy – streamlining funding for fundamental needs and tampering with robust Social security system.

Senate Gang of Six debt minimizing strategy admittedly contains 74 percent deep spending cuts and 26 percent revenue – the estimate cited as inadequate by the White House and,

Last but not the least –

Senate Republican minority leader Mitch McConnell offer yielding to White House on elevating debt ceiling generates a perception of political maneuver due to onus entirely on Democratic administration undertaking huge deficit hike likely to impact democrats in the 2012 election.

Hence ascertaining wealth in possession, income flow from taxes and other revenues juxtaposed to discretionary, defense and Congressional frugalities could provide for various government obligations.

In terms of deficit containment – ending the wars in Afghanistan, Iraq, Pakistan, Yemen and Libya and divestments in economy, health care, education and infrastructure repair and renewal is the only viable permanent remedy to rebuild the nation.

Constitutional amendment to balance the budget would not be sustained as long as the unsubstantiated unaffordable indefinite warfare remains the agenda for any administration.

The lawmakers and the White House passion to bring troops home from all corners of the world and sincere engagement in constructive dialogue leading to fruitful negotiations on all issues – fiscal matter in particular would exemplify congressional pledge towards national and public interest.

With the nation on the brink of financial insolvency communication breakdown and obstinacy for political reasons perpetuates the problem and adversely impact incumbents on both sides.

Esteemed members in Congress and White House are urged to resume talks by isolating political differences for bipartisanship on budget –

Without moving debt ceiling,

Preserving Medicare, Medicaid, Veterans and Social security funding,

Expeditious tax overhaul for ongoing legitimate income,

Exploring further income options on federal government activities and,

Finally concluding wars conducted on borrowed money from overstretched credit limits and external creditors viz. China and Saudi Arabia.

It’s time to halt the destructive course and steer the nation forward with thoughtful decisions relieving the present and next generation from burgeoning debt as long lasting legacy and tribute to the brave hearts for their sacrifice to the nation they defended in all frontiers.

Hopefully wisdom and rationality would guide leaderships in the peaceful reconciliation of fiscal and monetary policy.

When diverse ideas recognized and formulated to promote common cause that guarantees satisfaction to all then none left behind in their aspiration to rise to the occasion.

Good Luck! To all members for successful legislation on national debt reduction, adopting fair income expenditure methods in balancing the budget and diligently reverting to budget surplus than relying on enlarging unmanageable debt ceiling.

Peace to all!

Thank you.

Padmini Arhant

 

 

 

 

 

 

 

 

 

 

 

 

Written by Padmini Arhant · Filed Under Economy, Featured | Leave a Comment 

World Economic Forum 2011 – Davos, Switzerland

January 28, 2011

By Padmini Arhant

The world economic forum is currently held in Davos, Switzerland. Many issues apart from the economy are discussed at this large consortium.

Economy is the priority for the population struggling with high unemployment, housing market decline from foreclosures in addition to credit crunch experienced by potential home buyers and small businesses alike.

The bank bailouts to eliminate toxic assets off the balance sheet and facilitate lending has been mostly utilized for mergers and acquisitions with ‘too big to fail’ status intact – the precise factor that prompted taxpayer funds interjection into the crumbling finance industry.

Corporate profits across the industrial spectrum are exceedingly high not barring financial institutions yet the jobless rate and liquidity in the credit market is stagnant exacerbating the ordinary citizens’ plight.

Manufacturing sector is drastically affected in the globalized economy. The developed and developing nations are confronted with reviving blue collar jobs desperately required to ease suffering among the working class.

Corporations incentivized with generous tax cuts, taxpayer funded capital infusion and labor unions suppression continue to venture overseas in search of mega profits ultimately shared among top management through huge bonuses while depriving the hard working majority the livelihood.

The offshore dealings might be lucrative for the corporate shareholders and the respective governments with foreign exchange reserves, the labor force over there are marginalized in terms of comparable wages and employment benefits.

Again factory workers in poorer nations are often exploited under harsh economic and political conditions attributed to multinational dominance in the regions receptive to foreign investors.

Environment abuse in the globalization era has been catastrophic for the poorest people living near the industrial sites.

The weak environment standards maintained predominantly to accommodate energy, pharmaceutical…industries’ policies in the developing nations are proved detrimental to the local residents diagnosed with serious health problems.

In the industrialized world, the lower income groups are exposed to health hazards emanating from chemical industrial waste and oil spills witnessed lately with pervasive impact on all living species.

Therefore the corporate ethical conduct in the domestic and international operations deserves attention with effective remedies to restore meaningful capitalism and globalization pursuit.

Inflation is a legitimate concern without having to raise interest rates in borrowing given the real estate slump and limited credit availability having a stranglehold on the national economies.

In order to increase supply to the growing demands of any goods as an alternative inflation control measure – the businesses need finance in the prevalent restricted credit facilities and the banks with capital have responsibility to lend qualified entrepreneurs thereby promoting job growth, consumer spending and investor confidence – all relevant to stimulate the global economy.

The bankers’ claiming the existing credit control is the result of the regulatory imposition in the wake of sub-prime and hedge fund mis-management does not bode well,

Since they could not apply to all financial products that could otherwise paralyze the credit networks representing the fundamental economic source.

Sound monetary policy allowing responsible money circulation and the currency value determined by market forces rather than arbitrary means could prevent currency devaluation disputes and trade wars contributing to disproportionate surpluses and deficits among economic powers.

Fiscal policy is focused on deficit reduction through austerity mainly targeting programs like health and education for the most vulnerable demographics.

Denying affordable educational access to present generation is prohibiting better economic future made possible with qualified efficient workforce and taxpayers in the competitive global settings.

Spending cuts in alarming defense expenditure and redundant wasteful projects instead of life dependent programs and services could produce desirable results in debt containment besides a healthy productive society benefitting all.

Generating revenue in the absence of tax hikes on the extraordinary income derived from the collective input distributed within privileged members in the society is evidently counterproductive for it escalates national debt other than widening the gap between the rich and poor.

Economic activities for growth stimulus are largely related to melting the liquidity freeze to enable cash strapped small businesses, retailers and manufacturers create jobs.

Resuming lending services to home buyers upon satisfying the eligibility criteria and refinancing options to help default home owners retain their property instead of losing in foreclosures with a negative impact on the national housing sales including the construction industry is guaranteed to expedite recovery.

Transparency in derivatives with mortgage securities identified as the primary cause in the 2008 financial market brink of collapse would build trust in the international security exchange.

Interest rates, transaction fees on credit cards and regular bank accounts still remain exorbitant despite the regulation passed to curb practices that led to phenomenal debt accumulation and bankruptcies in the United States.

Failure in adherence to legislation on predatory methods has no consequences with the banks conducting business as usual delineating Wall Street from Main Street.

The reforms in general are circumvented due to loopholes in the legislation and the political clout displayed with industry lobbyists winning $19 billion tax exemptions in financial reform, no premium caps in health care law, offshore drilling permits…confirming Wall Street control over U.S. political election and legislation.

Investments in infrastructure, green energy, innovative research and development in science and technology is paramount in the protectionist aspect.

However, there is no momentum in expediting projects perhaps due to inadequate funding and/or political reasons.

The industrialized and emerging economies pledge to the developing nations has not been delivered in action on the economy and environment that could essentially alleviate poverty, hunger and disease endured by many across the globe.

Political instability arising from oppression i.e. lack of freedom and individual rights is prompting citizens’ protest against repressive governments sheltered until now with diplomatic ties and trade relationships by powerful ‘democracies.’

Civilian uprising in Egypt and Yemen reveal the breaking point in public frustration towards
authoritarianism. Political independence in these countries is long overdue.

The overthrown government heads of the state are provided refuge as seen with Tunisian former President Ben Ali received by Saudi Arabia.

These events are indicative of the established complacency to undemocratic elements disrupting political, economic and social progress.

United States, France and Saudi Arabia were reportedly involved in Lebanon’s recent political fallout disabling government services in the sovereign nation.

Reluctance to expand U.N. Security Council permanent membership in acknowledgment of twenty first century geopolitical dynamics is an impediment to world peace. The ongoing polarization efforts foment terrorism and militancy used as the perpetual warfare premise.

Hence international solidarity exemplified in rejecting the status quo is imperative for fair distribution of global resources, honoring individual liberty, political rights, social equality ultimately leading to universal economic prosperity.

World economic forum is a unique opportunity to resolve myriad humanitarian challenges through constructive dialogue and powerful strategies for a new peaceful beginning.

Wishing a successful economic summit in Davos, Switzerland.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Economy, Featured | Leave a Comment 

Unemployment Benefits, Tax cuts with Skyrocketing Deficit

December 17, 2010

By Padmini Arhant

The bill is passed in the Senate and currently making its way in the House of Congress despite the legislation’s long term repercussions on national deficit and social security.

In the deal struck between the current Republican minority and the White House – the deficit spending through tax cuts extension for the 1% wealthiest including estate tax concessions is hailed as a bipartisan victory against the overwhelming public opposition to the reckless compromise.

As stated earlier in the article titled Bush tax cuts, Unemployment benefits and National deficit, December 7, 2010 published on this website – the average Americans are burdened with the liability from the tax credit to the super-rich.

They are being punished for the unemployment benefits extension, child tax breaks and college tuition credits in the bill – the combined costs of these desperately required provisions is significantly lower than the over $700 billion expense from the tax cuts to the top 1% wealthy in the country resulting in the total spending of $858 billion added to the skyrocketing national debt.

The two year tax cuts to the affluent members in the society are expected to become permanent and the social security with payroll tax holiday targeted for privatization potentially wiping out the only safety net for the retirees while the retirement period prolonged to offset national spending.

It is a remarkable win for the Republican minority soon to be the majority in the House with further representation in the Senate.

Unfortunately the voices for the average Americans in Congress are drowned by the political agenda to implement policies aimed at gains in the short-run with no due concern for future ramifications on the fiscal irresponsibility.

The strange partnership with similar motives is a sheer betrayal having been elected with the overwhelming democratic base votes and thus far delivering to the campaign financiers in Wall Street and military industry complex.

Beginning with Health Care Reform – the mandatory health care subscription without reining in on the health insurance industry and Bigpharma protocol alone is a huge setback for the vulnerable majority – the sick, the middle income and the senior citizens.

Likewise in the financial sector regulation – the $19 billion tax exemption to Wall Street – the primary source for the global economic recession is a major boost to conduct business as usual weakening the regulatory impact.

The Republican vote favoring Wall Street sought by the White House against a democratic vote seeking robust measures blocking loopholes to avert repeat economic disaster is disillusionment and disappointment for the electorate anticipating real change that also in part contributed to the midterm election outcome.

In the areas of warfare and foreign policy – the Bush-Cheney hawkish strategies vigorously carried out tarnishing the national image and seriously jeopardizing credibility in the international domain.

Now with the Bush tax cuts agreement to protect the wealthy is an affirmation of the ideological priorities substantially affecting the national deficit in addition to widening the gap between the haves and the have-nots.

It is clear from these developments that democratic aspirations in terms of industry regulation, effective economic policy, peace and diplomacy against nuclear threats continue to remain far-fetched objectives when acceding to Republican demands and upholding oligarchy principles – profit by any means even if it is proved detrimental to vast population and national interest.

Considering the status quo the only hope to restore democratic values and pragmatism is the substantial public participation in the legislative process through various communication channels conveying the message not only to their elected representatives but also the executive branch for the evident complacency.

Only the citizens’ will to enforce change at the political, economic and social fronts could lead to desirable progress in a democratic system.

Democracy is functional when the government of the people committed to the electorate entrusting power for collective actions benefiting all rather than the privileged members in the society.

History is testimony to the fact that people power never failed in challenging any rule other than the republic.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Economy | Leave a Comment 

Bush Tax Cuts, Unemployment Benefits and National Deficit

December 7, 2010

By Padmini Arhant

The 111th Congress with Democrats still in control of the House and Senate is challenged by the White House capitulation to the Republican unsustainable deal on Bush tax cuts.

Fortunately the House passed the bill per initial democratic plan – allowing tax cuts to the wealthy expire and granting permanent tax cuts to the families with income $250,000 and below.

Speaker Nancy Pelosi leadership and the House representatives’ commitment to the middle class America is commendable.

‘Political Irony in Republican Congress Victory’ – Article published on November 18, 2010 under ‘Politics – United States’ category on this website highlighted the specifics on Bush Tax Cuts and Protecting Social Security for America.

There are different proposals from the majority and the minority in Congress.

Republican members unanimously dedicated to the top 2% wealthy Americans getting wealthier at the rest of America’s expense pushed tax cuts extension for the multimillionaires while disregarding their irresponsible claim’s devastating impact on the ballooning deficit – the primary political slogan that enabled Republican victory in the recent mid-term election.

Unlike the Republican minority, the Democrat majority are divided on this issue.

The Senate Democrats have laid few options – Some favor the House version which is the initial Democratic strategy outlined above. It is unequivocally a pragmatic solution to the status quo.

Other Senate Democrats are considering $1 million threshold for tax cuts redefining the middle class category that is contradictory to reality.

Yet another democrat’s perspective opposes any tax cuts alongside rising deficits.

“We can’t afford any of these tax cuts,” says Rep. Bobby Scott (D) of Virginia. “It is hard to imagine that extending all of the tax cuts at a cost of $3.7 trillion is fiscally irresponsible but extending $3 trillion worth of tax cuts [to families earning less than $250,000] is somehow fiscally sensible.”

It’s obvious that the opposition to tax cuts for middle class America stems from blanket assessment of the fiscal crisis without any consideration to the slow economic growth and rising unemployment predominantly affecting the poor and the middle class not the super-rich.

According to the latest reports the deal between the White House and Congressional Republican members comprises the following;

Bush tax cuts extended at all income level for two years – the cost of this compromise is estimated at $700 billion over the next two years.

Estate tax capped at 35 percent after $5 million exemption to each wealthy individual – This alone would deprive the economy of the desperately required revenue contributing further to the alarming deficit.

The Republican two year extravagant tax breaks to the wealthiest is in exchange for the jobless benefit to the long-term unemployed up to 13 months at the anticipated $60 billion cost and last but not the least,

Social Security payment is diverted from retirement savings and added to the present income through 2% payroll tax reduction for workers.

However, this detrimental step is substituted for the general tax relief provided to the middle and lower income groups in the previous year economic stimulus.

Otherwise the bill eliminates last year tax credit from the middle and lower income families’ paychecks and utilizes their only safety nest thus far – the Social Security for consumer spending in the payroll tax diversion.

It’s a dangerous precedence with the possible depletion of reliable income to the baby boomers nearing retirement notwithstanding the easier access to Republican goal in privatizing Social Security and increasing the retirement age similar to the unpopular Pension bill enforced upon the people in France.

The contentious issues are the disproportionate concession to the 2% with an extraordinary disposable income mostly invested in personal holdings against harsh imposition on the 98% hard working middle and lower income groups burdened with not only diminishing income, spending cuts on life dependent programs, savings replaced for tax credits but also expected to pay substantially towards national debt mainly accumulated from irrational economic and defense policy.

Above all the Republican members’ euphoria on the pending bill –

‘Not raising taxes on anyone in the country’ is ideological for it rejects the ramifications on national deficit. Again the issue presented as pivotal to the conservative agenda during the 2010 election.

If there are no tax hikes for two years, the essential unemployment aid up to 13 months in the provision combined with a magnanimous estate tax credits,

How do the decision-makers of this deal propose to trim the burgeoning national deficit?

Are the Republican members complacent to the Borrow and Spending concept that was targeted against the Democrats in the past two years irrespective of the Democrats Pay-go rule to fund the key economic legislations?

Given the undercurrent in the U.S and China relationship from currency devaluation to North Korea skirmishes – China the major U.S. creditor may not volunteer to be the Santa Claus.

Who is then expected to bailout the wealthiest Americans in the GOP sponsored –

Who wants to be a billionaire contest?

It’s imperative to dispel the myth surrounding the bizarre agreement that Republican minority have control over the crucial legislation when the Democrats are the majority in the legislative branch and the White House currently has the power to do the right for the suffering Americans as demonstrated by the House Democrats on this bill.

Republican legislators assuming cart blanche to steer the critical economic decision despite the catastrophic effects on their constituents and the nation at large is purely political besides betrayal of the electorates’ trust in the Republican action to protect self-interest over the average American interest.

In fact, Republican party awaiting House dominance and increased Senate representation is on national watch to deliver their campaign promise on containing the growing deficit, coordinate efforts in easing unemployment not excluding jobless aid to the millions who elected them in the fall election and transcend Washington partisan culture visibly promoted by special interests.

The Speaker-elect John Boehner emotional speech upon victory reminiscing the hard times experienced to achieve the American dream is a common factor in the contemporary society.

Relevantly, Republican lawmakers’ allegiance to the campaign financiers instead of the people they are elected to represent clearly revealed in their failure to address the American plight.

In the difficult economic period the GOP priority to undermine main street struggles is regrettable sending a strong message to the electorate to exercise diligence during election since Washington is not amenable to change.

Therefore the people power must exert pressure on the elected representatives with a reminder about the legislative responsibility towards the constituents and the nation they are elected to serve during their term in office.

The republic position in this matter is absolute and that being “No deals on tax cuts for the wealthy.” Overwhelming electorate disapprove the GOP reckless demand to shift the economic liability on the average Americans – the driving force of the economy.

Hence the Senate Democrats and moderate Republicans focused on fiscal constraints have a unique opportunity to exhibit bipartisanship in passing the House approved Bush tax cuts bill.

Ignoring public concerns is a political misstep and often realized in the electoral results. If GOP won in November 2010 then it does not take long for the political tide to turn against them and that is politics.

It is incumbent upon the esteemed Senate to acknowledge the American families’ hardships and the escalating deficit when casting votes on this particular bill evidently vital for national and global economic recovery.

Good Luck! To the Congressional members for a successful passage of the prudent economic legislation.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Economy | 7 Comments 

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