Tag Archive for: Budget Deficit

Is Our Nation’s Future in Jeopardy?

Nation’s Future 10.13.11DetroitJewishNews-1 (Column appearing in Jewish News – 10-13-11)

Is Our Nation’s Future In Jeopardy?

Ken Gross

October 13, 2011

Many of us marvel at and are frustrated by the troubling economic problems of the era. Without question, these are serious problems and the prospect of a short-term solution is dim. We have suffered horrific losses to our net worth — by virtue of the real estate freefall and a recession that, for all intents and purposes, is starting its third year. We wonder and debate — what should we do as individuals and as a nation?

In recent weeks, I’ve pondered the future of our nation as I witness a deploable commitment to partisan politics and deadlock among our elected representatives. I say to myself,“As a nation we are only 235 years in existence. The Roman Empire lasted more than 2,000 years before its arrogance claimed its lifeline. What chance do we have?” At first blush — my conclusion — “It’s not looking good.” Last week, I happened to watch the newly released miniseries The Kennedys and gained a different perspective. I was reminded of the turbulent ’60s — the fight against communism, the battle over civil rights, the Bay of Pigs, the Cuban Missile Crisis, Vietnam and our loss of cherished leaders who stood for principle beyond economics — Jack, Bobby and Dr. King. I realized that other than the era beginning post-Vietnam and abruptly ending on Sept. 11, 2011, we have been at war, on its verge or just beyond its conclusion, or in the midst of some form of economic trauma or civil rights controversy for our entire history. Ultimately, we face and overcome these problems, and it is usually because leaders emerge that have the guts to stand for what is right and are able to overcome those who seek to perpetuate the mistakes of the past.

As we age, we gain the benefit of experi-ence, as well as the knowledge that our insight and what we know is limited by our experience — which also applies to our elected representatives and pro-claimed political leaders. So what do these revelations mean and how to they bear upon the financial crisis? Since controversy is part of our American way of life, we should embrace it rather than fear it. We must question those in authority that demonstrate an unwillingness to seek new solutions and simply continue to preach unsupported claims of the past. We need to take such action that we can to improve our situation — and we need to take such action based upon the current times without regard to what others think is the right thing to do. Individually, this means looking at opportunities to recoup the losses sustained as a result of the economic disaster that has ensued, by shedding debt and seizing opportunity. As a country, the time is now for leadership — for someone to emerge that fears not what to say because of political expediency — a leader who can reach to our nation’s soul and carve a path that addresses what is best for our future.

Ken Gross is an attorney with Thav Gross and host of the Financial Crisis Talk Center, a radio program that airs weekly at 10 a.m. Saturdays on WXYT 1270 “Talk Radio.”

Don’t Balance the Budget on My Back – Ken Gross

We all understand we have a massive deficit. The Iraq War was costly – but the rescue of the banking and financial industry from the economic recession along with the Economic Recovery Act and the trillion dollar bailout of Fannie Mae and Freddie Mac are, without question, the major causes why our country is so far in the red.

Having the benefit of over 2 years since the Great Recession tumbled Wall Street and our country in the latter half of 2008, it is commonly accepted that the cause of the debacle rests with the greed and avarice of the banking and financial institutions. Had President Bush and President Obama not rescued the banking industry at the pinnacle of the crisis, most economists agree that the world economy would have totally unraveled. So on this point, let’s give credit where credit is due and compliment our government for having the guts and willingness to take dramatic action in a short term  urgent situation.

That being said, let’s roll the clock forward to today. We just witnessed over the last two weeks Congress bogged down in gridlock on approving the budget so that a shutdown of the federal government could be avoided. In the end, they were fighting over $40 Billion of funding and the biggest event that occurred was Washington D.C’s right to spend its own funds on abortion funding was blocked in a compromise between the Republicans and Democrats to avoid the shutdown. Immediately after, the focus has now shifted to the fight over raising the $14.294 trillion debt ceiling and arriving at an acceptable agreement to resolve the budget deficit, which is currently estimated at $1.5 trillion for 2011.

So far – whether the discussion is about a State’s economic woes or the Federal deficit – every proposal I hear has one common thread. The cost of deficit reduction is to be borne by the U.S. citizen – through higher taxes (assuming the Bush tax cuts are not continued), Medicare, Medicaid, Social Security, Health Care and on and on. Now don’t get me wrong – somewhere and somehow you have to either increase revenue (i.e. taxes or and expanding economy) or cut spending to restore fiscal integrity to the system.

My question is this. If the Great Recession was caused by the greed of the Financial Industry, which was saved from economic death by the Government and the taxpayers and the recession is the cause of the deficit problem we now face, shouldn’t those responsible for the problem be called upon to bear the expense of resolving the problem? After all, as reported in The Wall Street Journal on March 25th, U.S Finance Profits are soaring and have jumped back to $426.5 billion in the 4th Quarter – nearing their high levels in 2006. Isn’t that nice? They get bailed out, saved from falling off the face of the earth – and now they are back to where they were before the recession. At the same time, the Administration and the Republican platforms are advocating budget restraints on the backs of the U.S taxpayer. My question is why us – and not them? Whatever happened to the notion of laying blame where blame belongs and making those at fault bear the cost of their actions? It doesn’t seem that difficult to me. The corporate profits of the Financial companies are presently running at an annual rate of $810 Billion. Here lies a simple solution. For the next 10 years, impose a 30% financial sector “Get Well Tax.” Assuming growth rates of 10% annually for the financial sector, the revenue increase would be $3.868 Trillion over 10 years. As a measure of protection so that the financial wizards that rule our great nation cannot weasel out from the tax, Congress needs to assess the tax on financial institution profits before officer compensation in excess of $250,000 per officer.

So what do you think – is it reasonable to make those responsible pay for resolving the problem – or should we just let our representatives continued to be influenced by the greed of Wall Street and saddle the U.S Taxpayer with the cost of resolving the problem created by the financial sector?

Ken Gross is an attorney with THAV GROSS PC (www.thavgross.com) and hosts The Financial Crisis Talk Center (www.fctalkcenter.com), a radio program that airs weekly at 9 AM on Saturday mornings on WDFN “The Fan” 1130 AM.