5 REASONS WHY THE US ECONOMY IS SCREWED REGARDLESS

5 REASONS WHY THE US ECONOMY IS SCREWED REGARDLESS

INTRODUCTION by HAZ:

Even international observers coincide that regardless whatever Democrats & Republicans do, the economy is destined to fail. The correction suppose that the root cause is removed and they cannot do it, they are part of the cause of the economic disaster (crook bankers and wars profiteers who drained the economy so bad) Democrats and republicans knew it but they servants of Wall Street bankers and big corporations who finance both parties. American face two traps: evil bankers & corporations associated to them and the bipartisan system (they are a real mock to democracy). Is the working and middle who will provide a solution to both traps if they manage to get political autonomy from both parties and open the chance for a real democracy in America.

http://rt.com/usa/columns/namenotfound/us-economy-collapse-inevitable/

Published: 03 August, 2011

WHAT DID THEY ACHIEVE BY MANAGING TO KICK THE CAN DOWN THE ROAD – JUST ONE MORE TIME?
Well, the short and honest answer is 'nothing'. And here are 5 reasons why.

1. Reason Number One: Wishful Thinking

All US debt reduction plans assume that the US economy will grow at a steady pace in the next decade. Will it? The latest growth figure is a dismal 1.3 % and nobody is currently predicting that things will get any better any time soon. Here's an opinion that seems to summarize it all: “Plans to solve the U.S. budget and the debt ceiling standoff are ''astounding'' in their presumptions of consistent GDP growth”, co-founder and Chief Operations Officer of ECRI Lakshman Achuthan told the Wall Street Journal.

2. Reason Number Two: Going "Double Irish" and other wonderful games rich play. Doom and Gloom?

Not everything and not for everyone. Just look at the big transnational corporations with US roots. They are doing better than ever – thanks to "open border" economies and creative accounting techniques.
Headlines this week:

The US Treasury officially has less liquidity than Apple Inc.
As of Wednesday, July 27, the balance sheet for the US Treasury dipped down to $73.768 billion. That compares to the $76.156 billion Apple has in its deep coffers — a difference of $2.388 billion.

Bill Gates: Richer Than The Government.

How come? For one thing, by being what the Brits call "cheeky" and in the colorful language of economists by doing a "Double Irish".

Here's Google’s way of doing it, according to Bloomberg: Thanks to the international tax strategy, which assigns income to countries with lenient tax rules and expenses to countries with higher taxes, Google's overseas tax rate is just 2.4 percent, compared to the U.S. corporate income tax rate of 35 percent…
There is another way of maximizing profits – by parking the money made abroad – abroad.

Back in 2008, USA Today estimated that ExxonMobil had $56 billion, drug giant Pfizer – $60 billion, General Electric – $62 billion in "undistributed earnings" parked offshore.

Not that all the corporations’ bosses are happy to eternally have their earnings hidden from a taxman. They are patriotic Americans, are they not? They want a tax amnesty, of course!

Matt Taibbi from Rolling Stone writes: “…the tax laws say that companies can avoid paying taxes as long as they keep their profits overseas. Whenever that money comes back to the U.S., the companies have to pay taxes on it. In 2004, the corporate lobby got together and major employers like Cisco and Apple and GE begged congress to give them a “one-time” tax holiday, arguing that they would use the savings to create jobs. Congress, shamefully, relented, and a tax holiday was declared. Now companies paid about 5 percent in taxes, instead of 35-40 percent. Money streamed back into America. But the companies did not use the savings to create jobs. Instead, they mostly just turned it into executive bonuses and ate the extra cash."
Get the drift?

3. Reason Number Three: Jobs are (not) coming back.

Sorry, Barack – you really wanted to create a better world. Here's him on the election trail in 2007: "We can end tax breaks for companies that ship our jobs overseas and give those breaks to companies that create good jobs with decent wages here in America."

There was even a bill, like four years ago, that would reward patriotic employers for not shipping American jobs abroad.
Big business had other ideas. Microsoft CEO Steven Ballmer threatened to ship employees to other countries if Obama raised taxes on corporations. The bill still languishes somewhere in Congress and Obama largely stopped talking about ending tax breaks.

The latest news? America's Last Major Athletic Shoe Manufacturer Says It Can't Survive A Free-Trade Agreement With Vietnam (link).

4. Reason Number Four "The political system has, by its behavior, already declared its bankruptcy."

Political repercussions? Huge. Approval ratings are dropping for all the players – Obama, the Congress, the Republicans and the Democrats.

John Ellis, Wall Street Journal veteran, puts it bluntly: “It's no longer clear that the "August 2nd deadline" and "technical default" really matter any more. The truth is the political system has, by its behavior, already declared its bankruptcy. And since it is the political system that has stewardship of fiscal matters, it follows that The United States' government is bankrupt politically, and as a fiduciary.…My guess is that the United States of America begins to untie, unravel. Truth is, the unraveling is already well along. The question is whether it accelerates or reverses itself with renewal."

5. Reason Number Five. The world is watching in horror.

Here's Bernd Debusmann, a Reuters columnist. “No matter how the wrangling over America’s national debt is resolved, it will leave lasting dents in the international image of a country that prides itself on its can-do spirit and its competence. “The entire whole world is watching,” as President Barack Obama put it, and parts of it are dismayed by a monumental display of dysfunction.
if you noticed a lot of quotes in this pieces – that's not a coincidence. Just a month ago, the situation with the US economy was akin to that of somebody farting at a fancy ball – everybody noticed but nobody was willing to comment on it aloud. Suddenly, everybody is talking – and the mainstream media is giving them a chance to vent.

There is lot to vent about …a $1.3 trillion deficit for the current year. That's a whopping 12 percent of America's total economic output. Or very close to the entire GDP of Canada.

The rot of consistently living beyond one's means simply went too far.
Nobody seem to be willing and able to untie that Gordian knot – or to cut it.

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