



Thursday, April 26, 2012

A Plan for Debt

By Josh Sager

Debt, whether it originated from student loans, credit cards, healthcare or mortgage, has become a serious problem in the United States. The mortgage crisis, and by extension the housing crisis, was a debt driven catastrophe – the result of widespread inability of Americans to pay their debts in the face of predatory lending and high rates of job losses. In student loan debt alone, Americans owe over $1 trillion to lenders; when combined with the sum costs of mortgage debt, credit card debt, and personal debt incurred from medical expenses, we have a massive and rapidly growing debt problem in the USA, with no agreed upon solution. The USA is rapidly becoming, if not already, a nation of debt, where a large portion of the population is locked into a cycle of debt and repayment with no way out.

With the huge issue of debt, we encounter a debate over what should be done about this widespread problem. I would argue that there are several initiatives that could widely ameliorate the negative effects of debt in the USA: Adjustments of principle and interest rates for mortgage debt; punitive forfeiture of debt balance if the loaner has been proven to have engaged in fraud; federal assistance to students with loan debts upon graduation as well as making it possible to remove student loan debt through bankruptcy; and finally, increased regulations on interest rates in order to reduce the prevalence of predatory lending.

One effective way to mitigate mortgage debt, thus allowing people to remain in their homes, while allowing the banks to retrieve some of their money, would be to legislate a deal in which banks adjust the principle loan and interest rates to be in line with the actual value of the property. By reducing the principle loan and interest rates, more people will be able to afford to keep up with their mortgages, thus will be able to keep their homes; this will, in turn, increase the value of the surrounding houses and increase the general health of the housing market in the USA.  The federal government can compel such a deal by the banks by threatening to return the toxic mortgage assets to them, potentially swamping them, if they refuse to renegotiate mortgages.

In addition to renegotiating with banks which have not engaged in fraud, there should be consequences for any lender who engages in fraudulent activity: I support total forfeiture of both the remaining principle loan and interest in any case where the bank engages in fraud. Banks should not be allowed to benefit from illegal practices, and people should not have to bear the burden of the costs of fraud. Practices that could cause forfeiture include, but are not limited to, the intentional misleading of prospective lenders into high-risk mortgages, intentionally inflated interest rates, foreclosure despite up to date payments, and the use of robo-signing. By instituting severe monetary penalties to all fraud, it is possible to disincentivize the use of fraud, as well as to mitigate its effects on those who are defrauded.

Student loan debt is a crippling weight on many graduates today. Unless a student comes from a wealthy family or receives a scholarship, it is likely that any private university will cause thousands in loan debt – this debt is incapable of being removed through a declaration of bankruptcy, thus it is harder to get out of then other debt. In order to deal with student loan debt, I suggest several policies: First, student loan debt should be removed by bankruptcy, just like most other types of debt. Second, the federal government should create a national education fund in order to assist with the loans of all students who successfully graduate and qualify for assistance - this is similar to Pell grants, but on a much wider scale. Finally, student loan debt repayment should be capped at a percentage of annual income, so as to increase the ability of all students to afford their loans. By assisting those who desire an education and to be a productive member of society through becoming educated, we can all benefit, regardless of whether or not we receive debt assistance.

Banking institutions which give out loans must be heavily regulated in order to prevent abusive practices. Unfortunately, current laws are near-universally too lax, and require a review. Banks should not be allowed to charge extortionate interest rates, give out hidden fees, or intentionally mislead their customers for a profit. I believe that a complete review of banking laws by experts, not lobbyists, would allow our government to identify future trouble areas and prevent the continuation of our country’s debt crisis.

While there are numerous ways to deal with a debt crisis, some argue that debt forgiveness (or “debt jubilee”) would be the most effective way to deal with the issue of debt facing Americans today: These people are correct, in that the solution is immediate and direct, however, the side effects of such an action would likely be devastating. Indiscriminate debt forgiveness, legislated by the government, would certainly fix the problem of debt in the USA but it would destabilize the entire lending market to the point where future loan seekers would likely be unable to obtain loans. If those who lend money have no certainty that they will get their money returned, with a modest profit, they simply would not lend money – particularly to the poor or middle class who need loans the most.  This characteristic of the market disqualifies total debt forgiveness as a viable option to solving our country’s debt problems, for as long as we intend to maintain a lending system similar to the one we have now.

Debt is an issue that must be dealt with, and quickly if we hope to mitigate long-term damage to our country. A comprehensive plan, which prioritizes the economic health of the average person over that of the banker, is the only way which we will stabilize our debt situation in short-term, and avoid a long-term catastrophy.

Saturday, April 21, 2012

The Only Difference between a Mugging and Financial Fraud is Scale

By Josh Sager

For the last decade in the USA, we have seen two patterns emerge in our prosecution of criminals - more specifically, the increased prosecution of some while a free pass is given to others. Mass incarceration of non-violent offenders, who steal small sums of money or simply possess small quantities of drugs, has risen to untold heights in recent years; we currently have more people imprisoned than any other country than China (or potentially North Korea). At the same time that we are imprisoning people for small-scale theft, our authorities have essentially ignored the widespread fraud and theft perpetrated by bankers and investors; fraud which is not only illegal, but which caused an economic collapse and widespread misery. The only difference between a man who steals a car and a banker who defrauds a family out of their home is that the banker does not get arrested if they are caught.

-- Beilby Porteus –

Portus’s quote, when translated into our criminal justice system, describes the pattern behind the selective prosecutions of thefts in recent years: As the crimes get more severe and the victims more plentiful, the crime itself is seen as less of a negative thing. When a poor kid steals from the register of a store, they are unambiguously considered a criminal and prosecuted to the fullest extent of the law. When a rich banker uses deceptive practices to increase their own salaries at the expense of their investors, they are considered a successful professional.

Over the last decade, harsher sentencing laws, mandatory minimum sentencing and the increased number of arrests for minor crimes has exploded the number of people in jail. Recent studies have shown that approximately one in four (65 million) Americans has some form of criminal record. Many of these non-violent offenders are poor and simply stealing to survive, or minorities who were unfairly targeted by the police.

Despite the well document and widespread patterns of economic fraud that caused the collapse of the US economy, no bankers have been charged, or even arrested, for their crimes. It is not that we don’t know who committed these crimes, or that there is no jurisdiction for prosecution, but simply that our government has been remise in its duties to uphold the laws of the land. Not only has our government not punished those who were responsible for our economic woes, but they have since given the criminals over a trillion dollars of taxpayer money in tax free loans, deregulated what few rules the banks had yet to break, and are now discussing giving these bankers a massive tax break on future income.

People should take a step back from this situation, as well as their partisanship, to look at the situation objectively: Can you imagine, the police arresting a thief and instead of charging them, giving them police funds as well as working with them to change the law to make theft legal? No, nobody can fathom why this would happen, unless the police were hopelessly corrupt. What makes the bankers’ theft any less prosecutable than the simple thief’s, other than the fact that they did crimes of such monumental scale as to become untouchable.

“Steal a purse, and you are a thief. Steal a millions dollars, and you are a con-artist. Steal trillions of dollars, and you are too big to fail.”
--Josh Sager--

Thursday, April 19, 2012

What is a “Fair Share”?

By Josh Sager

The quintessential question surrounding tax policy in the USA today is simple on its face, yet complex when one actually gets into the issues: What constitutes a “fair share” for each and every American to pay in order to keep our government running each year? Should every American pay the same sum of money? The same percent? A scaled percent? A tax on consumption? In reality, there is no objectively fair way to decide who should pay what in taxes, as this judgment hinges upon a sense of personal fairness.

A Progressive tax code (ex. US income taxes) requires the rich to pay a higher percentage of their income than the poor – usually in the form of a stepped rate of increase, with an upper limit. Those with means, access and resources can better afford to pay than those who are less fortunate, thus it is fair to ask more from these people. As opposed to other tax codes (regressive taxation, consumption taxes, etc), progressive taxation benefits the poor and gives them the greatest return for their government, while delivering less to the wealthy in proportion to what they paid in.

A Regressive tax code (Ex. US payroll taxes) is a tax code where the percentage of taxes paid by an individual decreases as they make more money. The rationale behind this type of taxation is that, as people make more money, their taxes increase, even if the percent decreases (Ex. 10% of $100,000 > 20% of $25,000). Those who support this method of taxation believe that the rich should pay less into the system, as a percent, because it is “unfair” to charge them more than other citizens. 

In addition to percentage based taxation, there are consumption based taxes that are used to keep a government running. A consumption tax can be put on a good (or type of good), wherein the government gets a small amount of money each time the good is bought. These taxes are highly regressive, but only apply when an individual voluntarily enters the market. Sales taxes, the gas tax and sin taxes (cigarettes/alcohol/gambling) are probably the most common consumption based taxes in the USA, and ones that most Americans are familiar with. The idea of fairness that drives consumption taxes is that, while taxing income takes from everybody who is working, consumption taxes only take from those who buy things (regardless of how they made their money).

Ultimately, my ideal of fairness in taxation breaks down into a two part test:

  1. How much money is needed to keep the government running properly and to provide all necessary services for the health of society?

The funding of the government is not a static sum of money – the money necessary to run government programs fluctuates based upon the types of programs run by the government (adding/subtracting programs), the changing prices of goods (Ex. increasing healthcare costs), and any catastrophic event (Ex. war/natural disasters). Due to the constantly shifting costs of government operation, there is no empirical formula to calculate the money each person should pay in taxes in order to keep the government running. Despite the impossibility of determining long term governmental funding costs, the government must predict how much money will be needed to fund operations and, in order to prevent uncertainty due to tax rate instability, maintain relatively stable tax rates. Ideally, the government would set its tax rates to fulfill short/medium term funding predictions, allow for extra funding in case of emergency, and to pay down whatever debts the government has accrued in the past.

  1. What taxes and rates are necessary to provide the money calculated in part #1, and to ensure that everybody pays a rate which does not burden them yet ensures that they pay into the system.

I am a supporter of a very progressive style of taxation, where, when all taxes are taken into account, nobody pays a lower percentage of their income to taxes than anybody in a lower bracket. I would set the top rate at 75%, the rate where productivity begins to decrease due to decreased marginal returns from taxation, and scale all taxes based upon the top bracket: Essentially, the top rate is attached to the lower rates and cannot be lowered independent of all others (thus reducing the use of lobbyists to simply cut taxes on the wealthy). The rates of taxation under this plan would be applied to the sum of capital gains and income, so that those who invest must pay a proportional rate with those who work for a living (Ex. $50,000 income + $50,000 capital gains = $100,000 in income). Ultimately, I see the entire debate over tax rate fairness to be a relative argument, not an argument over actual tax amounts: tax rates are assessed in relation to other rates, and everybody pays their fair share to keep our government running


Monday, April 16, 2012

Why People are Angry about the Trayvon Martin Shooting

By Josh Sager

Evidentiary Irregularities

Investigative Irregularities

Public Relations Irregularities

Perceived Misconduct

Sunday, April 15, 2012

Progressive Wordsmithing V1.0

This article is still in my revision process and if anybody has suggestions or comments please send them to jsager99@gmail.com. 

Progressive Word-Smithing
By Josh Sager

In recent years, it has become apparent that the right wing in the USA has perfected the use of language to control the debate. By shifting language, and picking specific terms for use in debates, the right wing has framed their positions as favorable, while denigrating the other side. For many policies, there is a lack of specific knowledge over exactly what is being discussed by the policymakers, thus different wordings of identical policy choices often poll radically differently. An example of this phenomenon can be found in the 2009 healthcare debates, where the right wing reworded the “single-payer option” as “government run healthcare”; as many Americans are wary over policy which they consider a “government takeover” (another term abused by this tactic), the policy of “government run healthcare” is seen as far less favorable than when it is referred by its synonym of “single payer”.

Those who follow this situation know that this tactic is not accidental because right wing strategists, as well as the propaganda wing of the Republican Party (Fox News), have issued memos detailing the strategy when making arguments. Republican strategist Frank Luntz, a little known but very effective consultant, has driven much of the right wing wordsmithing for the past decade – unfortunately, there has been little to no left wing analog for this tactical movement on the right.

In order to fight back against the right wing wordsmithing, those who support the left must do one of two things:
  1. Educate the population on policy to the point where wordsmithing is ineffective --- This tactic is very difficult, if not impossible to achieve, thus it is not the best short-term solution
  2. Push back using left wing wordsmithing --- While many might see this as “sinking to the level of the right wing”, those in the left must play the game that the right chooses. If on party begins using a tactic, the other party can either stand on principle and let itself hemorrhage low-information voters, or push back using the same tactic (no matter how unpleasant that tactic is: IE. Super PACs).
I propose the following rewordings, which will begin to re-right the balance of our national policy discussions:

Negative → Positive Wording Shifts

“Government spending” → “Investment in the future”

All too often, the right wing portrays all government spending as “waste, fraud and abuse”, in an attempt to convince people that government is not necessary. In reality, government, when properly run, can do many things which would not have otherwise have been possible – public education, national defense, criminal justice, and the national infrastructure are all examples of areas where government spending is actually a form of investment. The government is the actor which exists to benefit all of society, not make a profit, thus there are things that only the government can do properly and equitably.

While the general public often has a cynical view of government operations, thus are unlikely to support the unspecific idea of “government spending”, these same people have a lay-understanding of investment, and are less likely to consider something termed as in investment as waste; an investment brings the future gains to mind when discussing policy, not just the immediate costs.

Taxes are a necessary evil, if we are to have a functioning government. In general, Americans believe that taxes are too high, and a very nervous about anybody talking about raising taxes – regardless of whether this aversion is rational. The facts show that the rich and corporations are currently paying a lower percentage in taxes (both as a function of their income and total tax revenue) than at any other point in modern memory; the trick to messaging the solution to this problem (tax increases in the upper income brackets, loophole removal, and the consideration of capital gains as income), lies in turning it into an issue of fairness.

Polling suggests that, while many don’t want to raise taxes, a majority block of the American populace does not believe that the wealthy are paying their fair share: this disconnect can be utilized by progressives through the use of the term “fair share” in substitution for simply stating that they want to raise taxes. It is far more difficult to argue against fairness, than to simply protest a tax increase, as it is difficult to create slogans against fairness (and much of the low-information voters are swayed by slogans). Many middle class Americans believe that any taxes raised could be their own, thus they are reticent to support the idea of tax increases - However, by making it clear that the rich are not currently paying their fair share (a widely held belief), and promising to fix this through increasing only their tax rates to a “fair rate”, the progressives can overcome much of the public dislike for tax hikes.

“Healthcare government option” → “Medicare for all”This rewording is very simple: Americans love Medicare, a single payer health insurance system, yet many Americans do not support a national single payer. This disconnect is due to a lack of understanding that Medicare is a single payer system, and a belief that all “government run medicine” is inherently bad or inefficient: by connecting the idea of government run healthcare (government option) to a well-liked and highly successful program, people are more likely to support the “new” idea of a “government option”, than if the same ideas were proposed as a new policy.

Ironically, the data which supports this wording comes from right wing strategist Frank Luntz - his polling and focus groups during the ACA fight found that, of all possible phrasings for the same healthcare policy (single payer), the term “Medicare for all” was the most positive (>70% support), and the term “government run healthcare” was the least supported (<50%).

“Government (or “job killing”) regulations” → “Restrictions on unsafe/illegal business practices”

Few people like government interference, whether on personal or economic issues, and the general public has virtually no understanding of how important government regulations are to protect the public; when combined, these characteristics have led many people to be very susceptible to the suggestion that all regulations are “job killing” and that the market can regulate itself.

By framing the regulations as targeting illegal or dangerous practices (as most regulations do anyways), the public is much less likely to consider them an overreach than if this qualifier is not made – after all, who want to let businesses endanger their workers or customers. All but the most libertarian/anarchist individuals support sane regulations on industry, and by framing the argument as a matter of public safety rather than arbitrary government action, those who support sane regulations can deflect some reflexive distaste from low-information voters. It is very difficult to justify allowing unsafe or illegal practices, even to low-information voters.

  • “Lobbyists” → “Big-Money Advocates”

Positive → Negative Wording Shifts

“Pro-Life” → “Anti-Woman” or “Anti Reproductive Freedom”

The term ”pro-life” is both deceptive and heavily biased in favor of the anti-abortion movement. Those who support abortion rights don’t actually like abortions, but believe it to be both a matter of women’s choice and public health; these people are just as pro-life (and often more so) than any anti-abortion protester. While this issue is very highly charged, and I seriously doubt that any amount of wordsmithing will substantively change the debate, I believe it necessary to push back against right wing messaging wherever it is purposefully deceptive.

By reversing the terminology from “pro-life” to “anti reproductive freedom” (or “anti-woman”, if appropriate), the supporters of abortion rights will be able to retake the language of “life” from those who seek to control other peoples’ bodies. Abortions are legal in the USA, this any attack on this right should be framed by its supporters as a reduction of the rights of large segments of the population. As Americans have a very adverse reaction to any perceived attack on “freedom” (real of imagined), this terminology is likely to garner more support than other pharasing of the same phenomenon.
For more on this subject: http://sarcasticliberal.blogspot.com/2012/02/pro-life-or-anti-woman.html

“Free Market” → “Unregulated Market” or “Anarchic Market”
One of the core beliefs for those on the right wing in the USA is that the market can regulate wide swathes of society and that the government is always worse than private companies (except the military) – The major problem with this belief is that it is absolutely false. As it is now, the market is corrupted by a lack of government regulation, corporatism masquerading as campaign contributions, and asymmetrical information available to the consumer and the producers. Put plainly, even if one believes that the market can regulate society, markets do not exist in the USA to the point where it can function in the way that the right wing says they do.

The American public idolizes the term “free” (or any of the permutations, such as freedom), yet they fail to understand that the “free market” is just another term for economic Darwinism. Currently, there is no free market in the USA, rather we have a form of corporatism: the rich have access and resources, thus they are able to stack the deck in their favor and crush those with less than them. By referring to the market as “anarchic” or “unregulated”, both terms accurately describing the current state of the markets in many sectors of the USA, progressives can communicate a more accurate description of the US economy, while at the same time removing the “free” buzzword that has been attached to the situation.

Any politicians who challenge the characterizations of the current markets of the USA’s economy as anarchic or unregulated should immediately be asked the requirements for a free market to exist – With the current state of the right wing in the USA, this is likely to result in numerous awkward pauses and misstatement that could be used to demonstrate the ignorance of the other side’s politicians of just what constitutes a “free market”.

“Job Creators” → “Millionaires and Billionaires”
The common buzz-phrase of “job creators” is used to justify tax cuts for the very rich, often at the expense of the public. The fact is, while some wealthy individuals create jobs through investment, the vast majority of the wealthy do not create jobs. In addition to this fact, tax cuts to the wealthy do not create jobs, as money which is reinvested into a company (thus creating jobs) is not taxed - only income and capital gains are taxed – thus cutting taxes actually disincentives reinvestment into a company. The so called “job creators” don’t create jobs, and should not be referred to as such. Progressives should make it clear that giving tax cuts to the wealthy, does not create jobs and that simply calling the mega-wealthy by another name does not change the effects of their actions.

In our tough economic times, it is easy to exploit peoples’ desperation to convince the low information voter that the rich create jobs. Progressives need to sever the idea of job creation from the discussions over the taxation of the rich, if only to make it less easy for the right wing to convince ignorant people to support their policy. It is far more difficult to argue that our tax dollars should go to millionaires than job creators, as there is an implied (and imaginary) benefit in giving money to somebody who will create a job; by simply promoting accuracy in labeling, the progressive movement can prevent the right wing from deceiving the ignorant into voting against their own interests.

“Tax Cuts” → “Tax Spending”
The recent push by the right wing to demonize government spending while cutting taxes illustrates an interesting disconnect in logic: Tax cuts for the rich are government spending as much as any industry subsidy. Put simply, giving $10 in tax breaks to a rich family is just as costly as spending $10 in education, and has none of the social benefits. Whenever people hear about tax cuts, they believe that they will get to keep more of their money and, unfortunately, unless they are wealthy, it is unlikely that this is the case. As the right wing has already conditioned much of the American population to dislike government spending, progressives utilize this rewording to attack the support of tax cuts through a simple wording shift

In addition to the characterization of tax cuts as spending, there are psychological differences between the reactions to different ways of describing redistribution. Studies have shown that people react differently, and far more negatively, to losses than to foregone gains: In order to reduce support for tax cuts to the wealthy, progressives must rephrase the discussion to argue that the government is giving to the rich, rather than not taking as much from them in taxes; this wording utilizes the above mentioned difference in reaction to portray the idea of tax cuts in a more negative light. While the difference in argument is semantic, the psychological effect of the perceived giving to the rich is far more negative than the psychological effect of simply not taking as much from them –regardless of the identical results.

Friday, April 13, 2012

Tax Sheltering Info-graphic

The following info-graphic, which was sent to me by one of my readers, is a very good analysis over the use of tax shelters to reduce the tax burden on the wealthy - Many thank yous to Sarah, who took the time to send me this graphic.

In addition to the information contained in this graphic, there are several important things to be added to the discussion over tax-sheltering:

  1. Whenever you hear the term "tax holiday", the speaker is proposing legalized tax evasion. A tax holiday, is when the government allows companies that offshore profits in the below mentioned tax havens to return the money to the USA, free of taxes. This practice sets up a powerful incentive for bad behavior by the wealthy, and allows for these tax evaders to remove all down-side to their actions.
  2. We can easily fix this problem by taxing corporate profits at the time that they are made, rather than when they are returned to the USA.
  3. As corporations are reducing their tax burden using these tax havens, one of two things happens (sometimes both): Option #1 is an increase on taxes for the middle class and poor (the slack needs to be taken up by somebody, and it likely won't be the groups with lobbyists). Option #2 is a decrease in services to the poor and middle class (Ex. proposed cuts to entitlements).
  4. Whenever you hear that "the USA has the highest tax rates, thus we must reduce taxes to become competitive", this is BS, as many of our corporations are already paying nothing (yet taking a great deal).

tax infographic
Source: http://coupons.org

Saturday, April 7, 2012

RICO the Supreme Court

By Josh Sager














Wednesday, April 4, 2012

April Fools Day with the Boston Occupiers

The April Fool’s Day Occupy March
By Josh Sager

On April fool’s Day, 2012, Dewey square was again host to Boston Occupy. At just before noon, on April 1st, over a hundred occupiers returned to the square, carrying signs, food, and banners - The goal of this gathering was not to re-occupy, but to have a shared meal at the site and then go on the April fool’s Day reverse march.
Food was brought by numerous individuals, music was provided as amusement, and the mobile sign tent allowed people to create their signs for the April fool’s march.

The Occupy movement, while it does not have specific demands, has always promoted accountability to those in power, whether in government or banking, and protecting the rights of the average person. However, on April fool’s day, they decided to give those they usually protest a break and finally promote their side of the argument. 

Chants, such as “Education is a right, only for the rich and white” and “Tax the Poor”, accompanied signs proclaiming “Profits before People” and “Protests Never Change a Thing” during this very special march. In the spirit of the ideologically inverted march, the route taken by the protesters was the reverse of a common route, taking them past Faneuil Hall, City Hall, and eventually Downtown Crossing.

At Faneuil hall, a statement was read to the shoppers, declaring the dissolution of the Occupy Boston group and the hiring of several key organizers by banks. Onlookers - including a street performer, on a tall unicycle while carrying bowling pins and a knife – clapped at the end of this statement.

The mood was generally light during this march, and the responses by onlookers were a combination of shock and amusement. While there was a large police presence, there were no incidents with protesters during the march itself – later in the day there were two arrests, but no large police actions.

See BostonOccupier.com for pictures/video from this march

Huffington Post Article - Black Police Officer Shot 28 Times and Charged


Howard Morgan Shot 28 Times
Howard Morgan.