Has Anyone Else Completely Lost Faith In The Government?

[NC_Skins]

Nothing is going to change until you get corporate influence out of our politician's pockets. Get rid of the corrupt politicians and get rid of the lobbyist (or put some serious reigns on it).

For too long, many of our policies and wars have been dictated by the money making machines, which has ultimately brought our country to its knees in debt.

I'm also in favor of bringing new parties out and steering away from the Republicans/Democrats. Too much bickering and grand standing is happening and it's causing serious problems in our legislation. You have parties stonewalling the others JUST so they can turn around at election time and say "SEE, he did nothing".

This quote by JR says it all.

The bottom line is, just like you can't create morality through legislation, you can't legislate or regulate an informed electorate into existence. You can regulate lobbiests, you can make term limits, BUT, if the voters don't take the time to investigate their governmental representatives (small "r"), then no amount of legislation is going to change things. Without the populous holding them accountable, lobbiests and corrupt politicians will simply find ways to manipulate and avoid the laws' and regulations' intent.

[mlmpetert]

Originally Posted by Chico23231

Pelosi fires back at '60 Minutes' report on 'soft corruption' - CNN.com

Good example of politicians taking advantage of their power and "insider" knowledge to gain monetarily. Truly sickening and the fact that they deny it and consider it consequence is humorous to say the least. This stuff happens on Wall Street everyday, but to think it happens on Capitol Hill is just bullsh*t. Surprised they dont have some laws to discourage it.

Im gonna quote you in this thread because I think this is so important and its going to get buried in the OWS thread. Hope that’s cool….

Unfortunately I didn’t catch last night’s 60mins. I work in the financial industry and ill say that Boehner’s statement is most likely true, not just for himself but also for the vast majority of representatives. People who have a lot of money are able to get top tier advice and have access to the best type of products to invest in. I’m certain that you would be able to find conflicts of interest for any member of congress that has a 1 million invested in a taxable account were multiple Separate Account Managers are used. Regardless I don’t think Boehner’s statement rings true for every member and I would also speculate that many or most multi term members likely acted on non-public info at least once in their careers.

The problem is that regardless of how hands off people are (like Boehner or maybe like Pelosi) with their investments is that some members may not be (Bachus buying options sounds shady), but also, and just as importantly to me, since there are conflicts of interest there is the perception of wrong doing. Plus members of Congress and their aides are expressly allowed to make transactions based off of insider knowledge, which is shocking when you think about it.


What so troubling with Pelosi’s response is that shes ignoring the issue and instead just talking about the positive she has done for consumers. It almost sounds like the rationalizing people make towards Paterno's inaction. In her eyes she’s done so much good for consumers who cares if she or others do wrong every now and then. Whenever the issue is brought up in Congress they ignore it, which is rediculous considering the crap that choose to get involved in and because its soooo easy to fix. All they have to do is hold lawmakers, judges and their aides subject to the exact same standards as financial representatives and corporate officers, why would that be so bad?

[mlmpetert]

I dont really think anyone expected the Super Committee to come up with anything, and i guess they techniqely have until wensday but this is still just sad. I remembering hearing about a month ago that the automatic defense cuts that would happen are actually just a ploy and a gamble by the GOP. They wrote them in such a way that they can be reversed in 2013 (when the cuts actually start taking place) on the idea that the GOP will win the white house in 2012. It has allowed the GOP to play “harder” since they think they are going to win 2012 and are not very concerned that the cuts will actually ever take place.

Also what I find hilarious in a very sad/unfortunate sense is that the mandatory reduction of 1.2 trillion isn’t really 1.2 trillion since it takes into the cost of interest of the over spending. They clearly are calling it 1.2 trillion to trick us into thinking they are doing more then they are actually not even doing.

By law, 18 percent of the automatic savings are assumed to come from interest costs the government would save from reducing the debt. If the Super Committee fails completely, out of the $1.2 trillion in automatic savings, $216 billion would be assumed interest savings.

Also just as “hilarious” is being reminded that our politicians cant come up with 1.2 trillion, which i actually is 984 billion, to cut from 44 trillion over 10 years.

Mind-boggling to many is the fact that the $1.2 trillion in cuts over 10 years is a fraction being applied against a budget that calls for $44 trillion in spending over the same time period.

No wonder the American people and rating agencies have lost faith

Congress May Try Blocking Cuts If Debt Panel Fails | Fox News

[saden1]

Originally Posted by mlmpetert

I dont really think anyone expected the Super Committee to come up with anything, and i guess they techniqely have until wensday but this is still just sad. I remembering hearing about a month ago that the automatic defense cuts that would happen are actually just a ploy and a gamble by the GOP. They wrote them in such a way that they can be reversed in 2013 (when the cuts actually start taking place) on the idea that the GOP will win the white house in 2012. It has allowed the GOP to play “harder” since they think they are going to win 2012 and are not very concerned that the cuts will actually ever take place.

Also what I find hilarious in a very sad/unfortunate sense is that the mandatory reduction of 1.2 trillion isn’t really 1.2 trillion since it takes into the cost of interest of the over spending. They clearly are calling it 1.2 trillion to trick us into thinking they are doing more then they are actually not even doing.



Also just as “hilarious” is being reminded that our politicians cant come up with 1.2 trillion, which i actually is 984 billion, to cut from 44 trillion over 10 years.



No wonder the American people and rating agencies have lost faith

Congress May Try Blocking Cuts If Debt Panel Fails | Fox News

The idea that the GOP really cares about budget deficits and national debt was laughable with their proposals from the get-go. Part of me wishes they gain control over everything so they can show us how they can right this ship by not cutting Social Security, Medicare, and Defense spending and not increase revenue.


Off the Charts Blog | Center on Budget and Policy Priorities | Blog Archive | Republicans’ Latest Supercommittee Offer: $181 in Spending Cuts for Each $1 in Revenue Increases

Republicans on the supercommittee have made a new offer that would reduce deficits by $640 billion over the next decade, according to news reports (here and here). The Republican offer consists of roughly $542 billion in spending cuts and $3 billion in revenues, meaning the ratio of spending cuts to revenue increases in the plan is 181 to 1.

These measures would also produce nearly $100 billion in debt-service savings. Democrats promptly rejected the new Republican offer as unbalanced.
When one includes the $900 billion in discretionary spending cuts already enacted in the Budget Control Act, the plan’s total deficit reduction rises to about $1.445 trillion, and its ratio of spending cuts to revenue increases rises to 481 to 1.

That's not a good faith negotiating, that's sabotage. And in light of their desire not to close carried interest loophole it is downright evil.

[H]ere’s how [carried interest] works. These fund managers are compensated mostly with a performance bonus of 20 percent or more of the profits they make. Under this carried interest loophole, that 20 percent is eligible to be taxed at the long-term capital gains rate (if the fund’s underlying assets are held long enough) of just 15 percent rather than the regular personal income rate of 35 percent.

This tax loophole is also intellectually vacuous. The performance fee is a return on the manager’s labor, not his or her capital, so there’s no reason to give it preferential capital gains treatment.

[mlmpetert]

Originally Posted by saden1

The idea that the GOP really cares about budget deficits and national debt was laughable with their proposals from the get-go. Part of me wishes they gain control over everything so they can show us how they can right this ship by not cutting Social Security, Medicare, and Defense spending and not increase revenue.


Off the Charts Blog | Center on Budget and Policy Priorities | Blog Archive | Republicans’ Latest Supercommittee Offer: $181 in Spending Cuts for Each $1 in Revenue Increases

That's not a good faith negotiating, that's sabotage. And in light of their desire not to close carried interest loophole it is downright evil.

You are absolutely right. It has been a fraud since the beginning, and both sides knew it the entire time. The republicans set this whole debt reduction thing up with the intent on not making any real concessions and then reversing any military cuts after they win the white house in 2012. Its ridiculous.

You know what would have worked. You make check points so each month they have to cut a tangible (not including interest) 75 billion or a tangible 100 billion in automatic cuts will happen, with the bulk of the cuts to come at the very end. Lets say at the very end there is still 500 billion to cut, well you make it so that if both sides cant come up with the 500 billion the automatic cuts are still the same as they currently are, the 984 billion. So at the very least they have to cut 984 billion, but if they dont work together they will be forced to cut a lot more. Theyre acting like kids so they should be treated as such.

And seriously do you really care about this carried interest “loophole”, I mean its maybe 2 billion per year in additional revenue. That’s 0.2% of the 984 billion they need to cut. Plus it actually sounds pretty fair when you look into it. It’s just a capital gains tax when selling the ownership of an asset someone received when they met certain performance measurements. Based on how the current capital gain system is set up that sounds pretty fair to me. The thing i would be for it that they dont get automatic vested 1 year long term treatment. So they acutally have to hold it for a year after they earn it or else its taxed at the short-term cap gains rate (income).

After getting our economy on track and balancing our budget (via cuts or new revenues) the most important thing to me is scraping our entire tax code and coming up with something that’s fair, transparent/simple and loophole free. Until that happens individuals can not be treated fairly.

[mlmpetert]

Also check this out. Ive heard a lot of things before from "conservitives" that say Obama never has meetings with much of his cabinet and that he doesnt ask anyone for their opinions or help except from yes men but this is Chris Matthews saying this:

Chris Matthews — Obama’s Not Happy in White House: ‘I Hear Stories That You Will Not Believe’ | TheBlaze.com

[saden1]

Originally Posted by mlmpetert

You are absolutely right. It has been a fraud since the beginning, and both sides knew it the entire time. The republicans set this whole debt reduction thing up with the intent on not making any real concessions and then reversing any military cuts after they win the white house in 2012. Its ridiculous.

You know what would have worked. You make check points so each month they have to cut a tangible (not including interest) 75 billion or a tangible 100 billion in automatic cuts will happen, with the bulk of the cuts to come at the very end. Lets say at the very end there is still 500 billion to cut, well you make it so that if both sides cant come up with the 500 billion the automatic cuts are still the same as they currently are, the 984 billion. So at the very least they have to cut 984 billion, but if they dont work together they will be forced to cut a lot more. Theyre acting like kids so they should be treated as such.

And seriously do you really care about this carried interest “loophole”, I mean its maybe 2 billion per year in additional revenue. That’s 0.2% of the 984 billion they need to cut. Plus it actually sounds pretty fair when you look into it. It’s just a capital gains tax when selling the ownership of an asset someone received when they met certain performance measurements. Based on how the current capital gain system is set up that sounds pretty fair to me. The thing i would be for it that they dont get automatic vested 1 year long term treatment. So they acutally have to hold it for a year after they earn it or else its taxed at the short-term cap gains rate (income).

After getting our economy on track and balancing our budget (via cuts or new revenues) the most important thing to me is scraping our entire tax code and coming up with something that’s fair, transparent/simple and loophole free. Until that happens individuals can not be treated fairly.

1. You want them to start pinching pennies from everywhere possible yet you don't think 2 billion is worth going after? This is the sort of mentality that got us to spend 2 billion here, 3 billion there and now we sit on 15 trillion debt. Make up your mind!

2. Did you fail to comprehend how the carried interest scheme works? When you and I take our money, invest, and hold assets for a year we get taxed 15% capital gains taxes for OUR gains. These fund managers getting paid 20% of the profits in their client's portfolio is fair. Paying themselves 20% of the profits and having to pay 15% capital gains tax rate on money they didn't invest themselves is complete and utter horse shit. With the way the game is currently rigged they can pay themsleves $1 and pay a flat 15% on a 4 billion yearly payday.

[mlmpetert]

Originally Posted by saden1

1. You want them to start pinching pennies from everywhere possible yet you don't think 2 billion is worth going after? This is the sort of mentality that got us to spend 2 billion here, 3 billion there and now we sit on 15 trillion debt. Make up your mind!

2. Did you fail to comprehend how the carried interest scheme works? When you and I take our money, invest, and hold assets for a year we get taxed 15% capital gains taxes for OUR gains. These fund managers getting paid 20% of the profits in their client's portfolio is fair. Paying themselves 20% of the profits and having to pay 15% capital gains tax rate on money they didn't invest themselves is complete and utter horse shit. With the way the game is currently rigged they can pay themsleves $1 and pay a flat 15% on a 4 billion yearly payday.

1) You make up your mind! When did i ever say anything about pinching pennies?? Although i do believe that when in a deficit (either personal or national) cutting spending is generally more responsible and realistic then increasing revenues. And always start with the big things (for both cuts and revenue increases) then get nitpicky and pinch pennies, otherwise youre just wasting time.

2) You have no idea what youre talking about! The "hedge funds" we are talking about are limited partnerships not 40 act mutual funds.

Investors are limited liability partners that make investments in a investment partnership, much like other investors make investments in more traditional type businesses. The industry standard compensation structure is 2 and 20. For the first part of this compensation the manager/general partner of the LP charges investors 2% of all the money they invest in his company, and this is taxed as income. For the second part he takes an ownership position in his LP thats equal to 20% of the increase in value (if any). So if investors give him 900k to manage and he turns it into 1 mil then he earns 20k of assets (20% of a 100k) by taking ownership of the underlying assets of the company, equal to 20% of the appreciation amount. In this example he increased the value of the business by 100k so he takes ownership equal to 20k, or more correctly, 2% (20k/1mil) of the business's total assets. At this point IF he sells his share of ownership hes taxed just like an investor would be because...... he is one!

And a 4 billion dollar yearly payday is just a ridiculous statement thats simply not true. The 4.9 billion referenced in the article was a one time thing by the year's most successful manager and was an all-time record for hedge funds. More importantly its estimated that 4 billion of the 4.9 billion was earned by his own personal investment already in the fund and had nothing to do with his compensation structure. So in reality the 1 billion he earned was from charging a 2% management fee on the businesses underlying assets with the rest related to the 20% carried interest rule. Furthermore there are normally stipulations that say the manager must meet certain hurdle requirements and that investors in the LP cannot have losses before a manager is compenstated by taking position of the amount he has ownership interest in. A lot of these big paydays are one time deals after years of hard work, kind of like an IPO of a business someone started. We also forget that the 2% management fee is used to cover most of the funds expenses and that the 20% incentive fee isn’t pocketed by one guy its split up amongst the general partners of the LP.

And although John Paulson apparently made 4.9 billion last year it isn’t worth anything until its actually sold, and word is that Paulson didn’t sell anything. His flagship fund was down 47% YTD ending sept 30. Apparently these hedge fund things and their managers can lose money too? Should investors that have losses that are recongized but not realized be able to deduct those losses in the same way you want to tax someone that has recongized but unrealized gains? Do we deduct loses against income or capital gains, if you want to tax carried interest at income levels?

Look im with you in that our tax system doesnt make sense. But just because someone makes a lot of money doesnt mean they should be penalized and taxed more so then you or me.

The problem is we have a tax code so complex that “loopholes” are inherent in it. Adding more complexity and rules to the tax code will only open up new and unforeseen avenues for more loopholes. That’s part of the reason I think a transparent, super easy, and fair tax code is so desperately needed. The current tax code has become a monstrosity because it was set up to eventually become one. Instead of continuing to add to the monster lets just scrap it and start over.

[saden1]

Originally Posted by mlmpetert

1) You make up your mind! When did i ever say anything about pinching pennies?? Although i do believe that when in a deficit (either personal or national) cutting spending is generally more responsible and realistic then increasing revenues. And always start with the big things (for both cuts and revenue increases) then get nitpicky and pinch pennies, otherwise youre just wasting time.

In light of your support for Contract with America I was under the impression that you hated wasteful spending even if it's a measly 2 billion a year. Given this one would think you are an advocate for penny pinching. Further more it isn't wise to assume cutting spending is necessarily the most prudent and realistic course of action to take and when it comes to solving complex budgetary issues you don't go after the big things first whether your are managing a personal or national budget. From a personal budgetary standpoint you first look to increase revenue first and if that isn't immediately feasible you don't cut the electricity before you cut the cable TV or Netflix subscription. Always start with small things because the big things are mortgage payments.

Originally Posted by mlmpetert

2) You have no idea what youre talking about! The "hedge funds" we are talking about are limited partnerships not 40 act mutual funds.

Investors are limited liability partners that make investments in a investment partnership, much like other investors make investments in more traditional type businesses. The industry standard compensation structure is 2 and 20. For the first part of this compensation the manager/general partner of the LP charges investors 2% of all the money they invest in his company, and this is taxed as income. For the second part he takes an ownership position in his LP thats equal to 20% of the increase in value (if any). So if investors give him 900k to manage and he turns it into 1 mil then he earns 20k of assets (20% of a 100k) by taking ownership of the underlying assets of the company, equal to 20% of the appreciation amount. In this example he increased the value of the business by 100k so he takes ownership equal to 20k, or more correctly, 2% (20k/1mil) of the business's total assets. At this point IF he sells his share of ownership hes taxed just like an investor would be because...... he is one!

And a 4 billion dollar yearly payday is just a ridiculous statement thats simply not true. The 4.9 billion referenced in the article was a one time thing by the year's most successful manager and was an all-time record for hedge funds. More importantly its estimated that 4 billion of the 4.9 billion was earned by his own personal investment already in the fund and had nothing to do with his compensation structure. So in reality the 1 billion he earned was from charging a 2% management fee on the businesses underlying assets with the rest related to the 20% carried interest rule. Furthermore there are normally stipulations that say the manager must meet certain hurdle requirements and that investors in the LP cannot have losses before a manager is compenstated by taking position of the amount he has ownership interest in. A lot of these big paydays are one time deals after years of hard work, kind of like an IPO of a business someone started. We also forget that the 2% management fee is used to cover most of the funds expenses and that the 20% incentive fee isn’t pocketed by one guy its split up amongst the general partners of the LP.

And although John Paulson apparently made 4.9 billion last year it isn’t worth anything until its actually sold, and word is that Paulson didn’t sell anything. His flagship fund was down 47% YTD ending sept 30. Apparently these hedge fund things and their managers can lose money too? Should investors that have losses that are recongized but not realized be able to deduct those losses in the same way you want to tax someone that has recongized but unrealized gains? Do we deduct loses against income or capital gains, if you want to tax carried interest at income levels?

Look im with you in that our tax system doesnt make sense. But just because someone makes a lot of money doesnt mean they should be penalized and taxed more so then you or me.

The problem is we have a tax code so complex that “loopholes” are inherent in it. Adding more complexity and rules to the tax code will only open up new and unforeseen avenues for more loopholes. That’s part of the reason I think a transparent, super easy, and fair tax code is so desperately needed. The current tax code has become a monstrosity because it was set up to eventually become one. Instead of continuing to add to the monster lets just scrap it and start over.

I understand perfectly how it works, I just believe it is the most vile tax loopholes out there. It is completely irrelevant how the profits are shared by the fund's managing partners or when they sell their 20% cut from the profit because ultimately when they do sell they will pay 15% on whatever they made.

Truth is no one would have a problem with them getting 20% or 50% or 80% cut from the profits if their clients choose to do so, what people such as myself have a problem is that this loophole allows these guys to double dip by first collecting a base 2% fee on managing the fund (puts these fund managers in 1 percentile of income earners) and then get 20% of the profit at a 15% tax rate without taking any risk with their own money. No one wants to deny these guys wealth and prosperity but they shouldn't have a tax advantage over the average Joe. It is not unreasonable to want them to pay a 35% marginal rate minus the deductions they are entitled to.

[mlmpetert]

Im not really all that familiar with the Contract With America, its a little before my time, however, i am a supporter of the Contract From America. The later doesnt really take a position on penny pinching, unless youre referring to earmarks. I am against earmarks in general and I am always against wasteful spending, even trivial amounts.

Not wasting money or penny pinching is different that nickel and diming people, even those disgusting rich people that we all hate. Its nickel and diming to me because we are talking about a trivial amount in relative terms, and not everyone sees it’s a loophole or fraud on the tax system. I truly understand your side but I mostly disagree with it.

This might be a question for a different thread but lets pretend everything a person “made” was treated the same, no matter if a long term gain, earned income or passive income. Do you think people who make more should be taxed at a higher percentage? If so why? And im not talking about the very poor so lets pretend they arent taxed (like now), so maybe everything under 15 or 20k is tax free.

Im going to revise my statement in the number 1 part, because frankly you are you are more right. Stopping all new discretionary spending and cutting all the easy and small bills should come before making cuts to the big things. But America’s deficit is a spending problem and not the reverse, so i still think revenue increases should be last. If it was the other way around then im all for increasing revenues.

[JoeRedskin]

mlmpetert, saden1 - interesting stuff. Thank you for the read.

[mlmpetert]

Perhaps there is a salvation for our lost faith?

Barney Frank To Announce Retirement | Fox News

[Chico23231]

I dont get it. So Boehner and the right are adamant not to raise taxes of the top 2%, but will play chicken with the lower and middle class and the payroll tax? So they are more willing to raise taxes on the middle class?

I had gained some respect for Boehner over the last year, all gone now. Really bad idea to pick this as a battle.

[GMScud]

Arrrrggggghhhhhh!!

Dr. Coburn Releases New Report on Wasteful Government Spending in 2011: "Wastebook 2011" - Press Releases - Tom Coburn, M.D., United States Senator from Oklahoma

[12thMan]

Obama to merge 6 federal agencies saving $3 billion over 10 yrs.

Obama to Propose Merging Agencies - WSJ.com