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Basic Economics for the Tea Party – Balancing the US Budget

Posted in 1, economy, government with tags , , , , , , , , , , , on April 24, 2010 by Bitch Slap Poli

In honor of all those filing their taxes late, Bitch Slap Politics is going to dumb down information on how taxes effect our greater economy and analyze whether or not the Tea Party members made any sense with their Tax Day arguments.

It’s time for another installment of – Smart S*** Gets Stupid!

A Look at What the Tea Party Wanted Tax Day 2010

The New York Times recently polled Tea Party members. Two initiatives near and dear to their hearts are, of course, reducing taxes and reducing spending by the government.

They were also asked in the poll:

If you had to choose, would you prefer reducing the federal budget deficit or cutting taxes?

The results:

  • Cutting Taxes – 49%
  • Reducing Deficit – 42%
  • Don’t Know or No Answer -9%

To be fair, the general public that the NYT also polled, which consisted of Democrats, Republicans and Independents, said:

  • Cutting Taxes – 47%
  • Reducing Deficit – 45%
  • Don’t Know or No Answer -8%




Taxes and the Federal Deficit

 Let’s take look at history and see what it tells us about taxes and the federal deficit – two big economic factors that go hand-in-hand.

In order to reduce our deficit we need to both increase the GDP and reduce spending. (We should be saving money in Iraq soon so Tea Partiers will be throwing a party to celebrate that, right?)

Reduction of spending is possibly the only goal I see eye to eye on with the Tea Party, sort of.

We need to make sure that our money isn’t being wasted. That means cutting spending on programs and projects that aren’t narrowly focused on fixing the biggest problems in this country. But, as discussed during the 2008 presidential debates, we don’t need to simply hack away at the budget. We still need to invest some in ourselves and allocate our money correctly.

However, the cutting taxes goal, while good in theory, shouldn’t be a priority. It just isn’t logical.

The following video is a visual of the information in text below. Feel free to watch then read or just choose a preferred method of receiving your economic knowledge.

Really, we should be happy about how much we pay in taxes at the moment. Taxes have been much higher than they were in 2009/2010 and they will surely be higher in the future at some point.

For a comparison here are the tax rates for 2010, 2005, and 2000

2010 tax rate

up to $8,375  —  10%

$8,375-34,000  —  15%

$34,000-82,400 —  25%

$82,400-171,850  — 28%

$171,850-373,650  —  33%

above $373,650  —  35%

2005 tax rate

up to $7,300  —  10%

$7,300-29,700  —  15%

$29,700-71,950 —  25%

$71,950-150,150  — 28%

$150,15o-326,450 —  33%

above $326,450  —  35%

2000 Tax Rate

up to $26,250  —  15%

$26,250-63,550  —  28%

$63,550-132,600 —  31%

$132,600-288,350  — 36%

above $288,350  —  39.6%

2010 tax day is looking pretty good, huh? Show of hands for all of the Tea Party supporters and Republicans who protested about taxes in 2005 and/or 2000. No one, really? Okay, we’ll move on.

Now let’s examine the federal deficit over the same period:

As you can see, as taxes get lowered the federal deficit has expanded. This makes sense when you consider the fact that since the 1950s taxes have made up about 20% of our GDP. GDP means Gross Domestic Product, which is basically a measure of our worth as a country based on what we produce.

Since 2001 our country has been spending like crazy, not producing as much and lowering taxes. Add to that an economic meltdown brought about by unscrupulous money pushers who were de-ruglated by President Bush and there’s a perfect storm scenario going on with our federal deficit and national debt.

Of course, the Stimulus Package, which included money for tax cuts, made up the bulk of the deficit in 2009, though there was already a very high $455 billion deficit when Obama came into office on Jan 20. Hopefully, the federal deficit will be significantly improved by the end of 2010, there are signs of hope.

Interest is Crippling the Efforts to Balance the Budget

However, in the mean time since the beginning of 2010 our country has paid almost $202 billion dollars in interest on the debt we owe. That’s billion, with a B.

That’s more than the cost of the Legislative Branch, the Executive Office of the President, the Department of Commerce, Environmental Protection Agency, NASA (saving money on that soon as well), the Department of Energy and many more combined.

So no, cutting taxes isn’t nearly as important as cutting the deficit and diggin ourselves out of this hole. Even if that means more of us pay more in taxes or getting a little less in our tax returns.

I don’t think enough has been said about the recent wins in growing the GDP, especially given the economic circumstances. We just experienced the largest GDP growth since before 2006.

And, no Teabaggers, it wasn’t because of higher taxes on main street. A whooping 47% of the workforce didn’t have to pay any income taxes this year, thanks in part to 2009’s Make Work Pay tax credit.

In short, please Tea Party members do us all a favor and take up a cause that can do some significant good for our country. Be problem solvers, not problem creators. We got enough of those already.


FCC Chairman Julius Genachowski is Pushing for Net Neutrality, Bravo!

Posted in 1 with tags on April 8, 2010 by jwilhelmy

Update: The FCC lost the battle for net neutrality, so it seems the war must be fought by vocal customers. The court shot down the FCC’s attempt to regulate Comcast. It was defended by Michael Powell, a former FCC chairman and currently co-chairman alongside Comcast and Verizon over at Broadband for America.

“Well before the presidential election and the FCC’s new commitment to draft net neutrality rules, the broadband provider community had committed themselves to open Internet principles and were running their business consistent with their consumers’ wishes for access to content and applications of their choosing, as well as the freedom to connect Internet devices to their connections,” Powell wrote.
So, if we tell you we don’t want to be charged based on the amount of content we consume, which would affect many people’s access to content, then you won’t, right? Right?

On the table at the Federal Communications Commission is a proposal that will enact strict rules which will prohibit Internet Service Providers, such as Comcast and Time Warner, from blocking certain types of web traffic.

If this proposal passes, the companies will no longer get to choose which content or applications get top billing for the highest bandwidth. This is a very good thing.

Hulu is an Example

The Internet has been a great enabler of innovation and has helped countless businesses expand and achieve great economic growth.  However, when one of these innovators are burgeoning on success, sometimes their product or service may rest in conflict with the ISP’s business model.

Think about, which allows people to watch tons of on demand TV shows that they previously had to wait for the cable company to deliver.  That cable company is also an ISP can then strike back by throttling down the bandwidth available to traffic, thereby lowering the value proposition of the streaming video service.

Their Solution

This sounds like the ISP’s actions are also hurting their bottom line since the consumer or content provider would simply move to an ISP that doesn’t throttle their service.  Which might be the case if there actually existed competition in this service sector.  I live in a large city and Time Warner is my only option.

The large ISP’s will not be challenged by new offerings or advancements as they have the coffers to swallow up most anything that comes along and what they can’t they’ll lobby for new regulations that will put an end to any competition.

Tea Party Leader Can’t Give Reasons for Opposing Obama

Posted in 1 on December 10, 2009 by Bitch Slap Poli

NPR did a dozy of a report on the Tea Party organization which seemed to let off a lot of its steam this summer while spreading misinformation about health care. Now that they’re losing the lime light it seems Tea Party leaders have figured out what made them such a hot ticket in August.

Anger. Blind, egged-on anger.

If you listen to the report, pay close attention around the  8 minute mark. Dallas area Tea Party leader Lorie Medina couldn’t seem to come up with a real reason for why she opposes president Obama. Not one single thing about his policymaking.  (Bet tea baggers hate that the stimulus, though it has its flaws, is working to stabilize the economy.)

Her complaint was that he apologizes for our country when overseas. Apparantly though Medina’s Christian she doesn’t believe in apologizing when she’s done something wrong. That, or she doesn’t understand the tone and actions that our country’s leaders have taken with the rest of the world this decade and the ill will that it created world-wide.

Or that many of our previous political leaders cared more about themselves and their wealthy friends than her and their country when they passed tax cuts that added more than 2.1 trillion dollars to our debt and gave approximately half of the tax cut benefits to the wealthiest 5% of the population, or in other words them and their friends.

Which means those tax cuts cost the middle and lower class by way of added debt and loss of funding for federal, state and local programs in return for tax cuts that weren’t equally shared.

We got boned. Citizens for Tax Justice put it this way:

From 2001 to 2006, the typical middle income American has received a tax cut totaling $1,855 per family member. But that family’s share of the added national debt burden is $8,936 per person.

Do you recall what you did with the roughly $370 in tax savings each year? Me neither, but I do know it would be nice to have trillions less in national debt right now.

America Wins the Nobel Peace Prize – Thanks Obama

Posted in 1 with tags , , , on October 9, 2009 by Bitch Slap Poli

Today president Barack Obama was announced this year’s Nobel Peace prize recipient, a big surprise even to our commander in chief. It’s not unheard of for a U.S. president to receive the honor – both Franklin Roosevelt and Woodrow were Nobel Peace prize winners – however, Roosevelt and Woodrow were seasoned leaders at the time and president Obama in just breaking the 9 month mark in office.

Despite his short stint on the global stage, I feel Obama was an excellent choice for the Nobel Peace prize this year. In fact, it’s one of the reasons I feel he deserves it.

Obama’s Nobel Win is a Win for America

Obama’s Nobel Peace prize is further evidence that the U.S. has turned a page in its history that was badly needing to be turned. Throughout the last 2-3 decades our country’s experienced eroding social awareness, declining global support, corporate misdeeds that shame capitalism and government policies that weren’t focused on the majority of the American people’s well being.

We could have kept going along that same path, but in stepped a young, idealistic and driven man named Barack Obama. An underdog in even his own party up against Hilary Clinton in the 2008 Democratic primaries, Obama was able to win over many of those that doubted his slim track record. It was his call for bringing America back to what it once was, back to a country that’s the world leader for diplomacy and democracy in the world.

His Nobel Peace prize is a win for all Americans. It signifies that we are still dedicated to the ideals that this country built its foundation upon – liberty, peace and justice for all.

Obama has Proven Himself to be a Peaceful Uniter in Mere Months

As mentioned above the shock of the selection of Obama stems from the fact that he hasn’t been the president very long. Despite that, he has already changed the dialog at home and around the world in a decidedly positive way.

Changing the U.S. Focus

Here at home, even though major policy changes early on – especially the always controversial topic of health care – could harm his political standing, he dove right in. He did so because it was the right thing to do for the American people, even if it ended up being his “Waterloo”.

He’s proven himself to be a man of action set to right the wrongs that have been building up in the U.S., even steadily trying to reach out to an opposition that seems hell bent on breaking him. I would have told Republicans that after nearly a decade of bad, bad decisions their input really wasn’t needed in regards to policy making like health care reform, but hey Obama has more character than I do.

He kept his cool during the heated health care debates in August. When the country was splitting into political divides fueled by misinformation, uncertainty and for some real life or death concerns, Obama gave a speech to Congress and the public that ultimately calmed the rough waters enough to keep the cause afloat. We’re now closer to health care reform than ever before, closer to making good health care not a privilege for those that can afford it but a basic right for every American.

The Message Obama Sends to the World

Obama is also focused on bridging divides the world over. He’s begun the process of closing Guantanamo prison, is working towards nuclear proliferation, and repairing our ties with the Muslim world among many other things. His global impact has been nothing short of a phenomenon.

He’s lived up to the hype of being the first African American U.S. president – one his first, and most definitive steps towards making America a place that truly is an example of equality for all people.

Bitch Slap of the Week: Humana and Iran Tie

Posted in 1 with tags , , , , on September 27, 2009 by Bitch Slap Poli

Today is the first installmnet of Bitch Slap of the Week. As the name suggests, this is a designation given to the person, group, or entity that basically knocked humanity back down a notch during the week. These bitch slap recipients need some hard, stinging truth that will hopefully make them realize their misdeeds to the majority. Probably not, but you can’t blame us for trying.

This week is a tie between Humana and Iran. One is an internal threat and one is an external threat. Let’s start with Iran.

Bitch Slapping that Nuclear Facility Right Out of Iran’s Hand

Alright, already UN. This week news broke that Iran had a nuclear facility that had remained a secret up until now. But they’re just doing peaceful nuclear power building, right? The evidence of this nuclear facility suggests otherwise.

Iran is blatantly defying the UN and lying about their operations to inspectors. They need to be made an example of and fast. If the UN keeps allowing countries to break the rules then the rules don’t really apply, even those pertaining to uranium enrichment in a country that already begrudes the UN’s involvement in their country’s affairs.

Nuclear proliferation is a serious concern in this world, a concern the UN is supposed to be easing. But the recent actions of both North Korea and Iran serve as an example of the UN’s unraveling influenece. This is the time the UN needs to take back control and make some tough decisions.

Iran needs to listen up: the rest of us don’t think your secret nuclear facility is cool at all and we want some answers. Once we have those answers Iran can then expect serious reprecussions for trying to screw the rest of us over. Kind of how they screwed over their own citizens with a fradulent election.

Adding to the urgency is the fact that Iran is now testing short range missiles along with medium range missiles that have the ability to hit Europe and American military bases in the Middle East.

UPDDATE: The Associated Press just reported Iran has responded to concerns over their secret nuclear facility. Iran states that the nuclear facility was built to protect their nuclear production and avoid disrupting activities in case of an attack. However, as pointed out in the link above the size of that nuclear facility would not support production of nuclear power  for the country.

What’s more is it is located right next to a military base – again they say to protect their nuclear program. Um, yeah it makes sense that if you were creating a nuclear weapon you’d want to have it near an operable of the Iranian Revolutionary guard and you’d want to protect it if you’re attacked because that would be some powerful retaliation.

Of course, at this point everything is hypothetical until the UN inspectors get in their to do their thing, which Iran says it will work to do “soon”.

Moving on:

Humana’s Medicare Misinformation Scare

When some people shouted “Get the government out of my Medicare!” at town hall meetings about health care reform in August I thought it was a joke. Then I was sad, sad that someone could be that misinformed about their Medicare that they didn’t understand it was government program and always has been.

But it’s now been made clear some of those to blame for spreading misinformation among Medicare recipients are the health insurers that provide Medicare plans.

News broke less than a week ago that Humana had blasted an email campaign to all the senior citizens that have plans with them. The email was centered around the health care reform debate and suggesting to seniors that the health care reform proposals being debated could very well lead to a loss in Medicare services and benefits.

I’m glad to hear that the Department of Health and Human Services as well as Centers for Medicare and Medicaid Services (CMS) are already on Humana’s ass and making an example of them. We have got to put an end to big businesses taking advantage of the general public, especially our seniors. The  CMS already halted Humana email campaign and also sent a warning to other Medicare providers.

The Humana email included the following:




Members just like you want to know what these reforms might mean for their Medicare health plan and how they can get involved to help protect Medicare Advantage. We are working diligently to ensure that our nation’s leaders understand how proposed reforms might affect you.




Congress is considering significant cuts to Medicare Advantage now, and your Members of Congress will want to know why this program is valuable to you because these cuts could mean higher costs and benefit reductions to many on Medicare Advantage.

We’ve made it easy for you to have your voice heard. Just call (877) 698-9228 (toll-free) or visit for additional infonnation about this issue and how you can offer helpful input to your elected officials.

Leading health reform proposals being considered in Washington, D.C., this summer include billions in Medicare Advantage funding cuts, as well as spending reductions to original Medicare and Medicaid. While these programs need to be made more efficient, if the proposed funding cut levels become law, millions of seniors and disabled individuals could lose many of the important benefits and services that make Medicare Advantage health plans so valuable.

Amazing! Somehow Humana must have created a time travel machine to go forward in time and find out what will be in the final health care reform bill and have somehow discovered a reduction in Medicare and Medicade services that isn’t in the bills currently being debated.

 Legislators must slip that in when everyone else isn’t looking. If you’d like to read the entire Humana email here you go.

Head of FreedomWorks Has Public Health Care – Why Shouldn’t You?

Posted in 1 with tags , , , on September 20, 2009 by Bitch Slap Poli

Cracker jack reporter Bill Moyers has been shedding more light on the issue of health care reform. This time he’s exposing some of the leaders of the protests for what they really are – recipients of the same public health care they say isn’t a good option for the rest of America.

Dick Armey is a chairman of FreedomWorks, one of the key orchestrators of the Tea Party bus that went across the country and also the 9/12 march on Washington – all done in the name of stopping health care reform and letting angry voters (i.e. McCain / Palin supporters) repeat the misleading information that Armey and others have told them in hopes that the ideas would somehow catch on with the less angry, more rational population.

Bill Moyer has done a good job at pointing out how flawed and hypocritical Armey’s message has been:

Armey Also Wants to Privatize Medicare – But He Doesn’t Want Medicare Himself

If you watched the video you’ll note that Dick Armey liked his publicly supplied, tax payer supported health care so much he didn’t want to have to switch to Medicare, he wanted to stay on it. But at the moment he legally can’t so I assume he’s having to cover his own health insurance.

One thing Moyer didn’t mention is that Armey is trying to take this very same health care that many seniors do find to be their best option and turn it over to the private sector. Ah, hello that’s why the government stepped in and created Medicare, because private, for-profit health insurance providers didn’t provide an affordable option that covered the needs of seniors.

However, Armey does profit nicely to promote those ideas even if privatizing Medicare is better for the health insurers than American citizens.

But hey, as a lobbyist against health care reform we were just paying for his health care not his salary of hundreds of thousands a year to keep us from having what he’s now fighting to get back for himself – publicly provided health care.

Oh and BTW – the lobbying firm that Armey was a partner of until last month, DLA Piper, it worked for:

  • AIG
  • Lehman Brothers
  • Merrill Lynch

All big recipients of TARP funds which Armey now criticizes as a government hand out and has used as an example of out of control government spending. Even worse is his ignoring that it was the Bush administration who administered that government spending, not the current administration.

For-Profit Health Insurance Companies Have No Business Being in the Health Care Industry

Posted in 1 with tags , , on September 9, 2009 by Bitch Slap Poli

When it comes to someone turning a buck off of shipping a package or mailing a certified letter – okay. But when someone is making a PROFIT off of the health care they provide you there’s a real conflict of interest. A serious, sometimes life or death conflict of interest.

Just as FedEx or UPS is going to look at your packages in terms of revenue, expenses and profits, so the private, for-profit health insurance companies will look at your health care needs. It’s a shame that FedEx and UPS probably do so more ethically at times.

We have to ask ourselves, what is the driving force behind the decisions of private, for-profit health insurers at the end of the day?

How Much Could We Save if We Cut Out Their Profits

During a recent interview between NPR’s Steve Inskeep and Angela Brawling, CEO of health insurance company Wellpoint, there were some enlightening moments.

They worked out how much it actually is that private health insurers make in profit. Turns out they don’t make 1% in profit as many large for-profit insurers have lead people to believe. Yes, if you count all providers of health care – including the non-profit health care providers (medicare- government, medicade – government, non-profit health insurance groups, co-ops) then the total as a whole is only 1%.

However, private, for-profit insurance companies like Wellpoint currently make roughly 4% in profits.

Still doesn’t sound like too much, right? Then why the talk of 1%? Consider this: the top 10 private health insurance companies profits increased 428% between 2000 and 2001 while people’s premiums have risen at least 78% in that same time frame.

To put that in real perspective, profits went from $2.4 billion to $12.7 billion. That’s a nice chunk of money that could go towards covering the yearly cost of the proposed health care reform.

How Health Insurers Are Getting Their Profits and Why 2008 Doesn’t Count

Now, some in the health care reform opposition will point out that in 2008 there was a drop in profits. However, the drop in earnings is a poor argument to make. The explanation for the decrease in profits is partly due to the fact that the economy tanked in the last quarter of 2008.

That also led to more people losing their jobs and their insurance. It is worth noting that the number of insured increased in 2000-2007 from 38.4 million to 45.7 million. However that’s only a 19% improvement, which makes their profits during that time even more impressive. But that could be due to health insurers using less of our premiums for actual health care.

As Wendell Baker, former PR CEO for Cigna, points out on the Rachael Maddow show in 1993 roughly 95% of the premiums we pay went towards covering medical claims. Now that number is down to around 80%. So as our premiums have went up 78% the money going towards our health care has decreased approximately 15%.

They’ve also been weeding out competition, something they’ve been accusing the government of trying to do with a public health care option. There are approx. 1300 health care providers now in 2009.

A study on competition in the health insurance industry conducted by the American Medical Association, found that since 2000 the largest health insurers have been absorbing their competition.

“Over the five years since the AMA’s first study, the country’s largest health insurers have continued to pursue aggressive acquisition strategies. The largest insurer, WellPoint Inc. (formed from the merger of Anthem Inc. and WellPoint Health Networks), has acquired 11 health insurers since 2000. The second-largest health insurer, UnitedHealth Group (United) has also acquired 11 health insurers since 2000.

To put this in perspective, in 2000, the two largest health insurers, Aetna and United, had a total membership of 32 million lives. As a result of mergers and acquisitions since 2000, the top two insurers today, WellPoint and United, each have memberships, respectively, of 34 million and 33 million, totaling more than 67 million covered lives. Together, WellPoint and United control 36 percent of the national market for commercial health insurance.”

It’s good to know that as some people strain and even buckle under the rising cost of health care the insurance companies’ bank accounts have gotten bigger by providing less coverage and reducing people’s options.

Why a Public, Non-Profit Option Would Be Great

You know what would be super cool about public health care from the government that’s not an option with private insurers, if we really didn’t like it we would be able to vote and have it changed by way of the people we elect.

We don’t have that luxury with private health care. Not unless you’re a shareholder of your insurance company, and a major shareholder at that.

Now the counter for this would be that you have the freedom of choice and you can just take your business elsewhere in the private market. The thing is, if a dispute has arisen that has caused you to change health insurers you most likely have a medical issue. If you approach another insurer they’ll see what caused all the fuss and base your denial or premiums accordingly.

You get screwed over when you need health care the most and there’s nothing you can do about it if you don’t have the funds to pay for it.

Same goes for if you lose your job and the employer-paid health insurance that goes along with it. Having to pay the full price on your own may prove burdensome to those who aren’t use to carrying the full cost and no longer have income coming in.

For more facts on why health insurance companies need an extreme overhaul (i.e. no for-profit companies that gouge us for money for basic health care.) visit the National Coalition on Health Care.