the 99%’s deficit proposal - how to create jobs, reduce the wealth divide and control spending

8/3/2019 The 99%s Deficit Proposal - How to create jobs, reduce the wealth divide and control spending

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The 99%s Deficit Proposal: How tocreate jobs, reduce the wealth divide

and control spending

ByKevin Zeese- Posted on17 November 2011

Prepared by Occupy Washington DCFreedom Plaza, November 2011

Link:http://october2011.org/blogs/kevin-zeese/99-s-deficit-proposal-how-create-jobs-reduce-wealth-divide-and-control-spending

The disconnect between Congress and the people is vast. Fordecades, Congress has been passing laws that benefit the 1%,their campaign donors and big business interests, rather thancreating a fair economy that serves all U.S. citizens. With thisreport Occupy Washington, DC shows that Congress is out oftouch with evidence-based solutions, supported by the majority

of Americans that can revive the economy, reduce the deficitand wealth divide while create millions of jobs.

OccupyWashingtonDC.org seeks a major transformation to aparticipatory democracy in the economy as well as ingovernment. For forty years, concentrated corporate interestshave acted with intent to take over government and otherinstitutions. We seek an end to the rule of concentrated wealthand corporate power by shifting control, wealth and ownership

to the people.This report puts forward evidence-based solutions that will re-start the economy and avoid placing financial burdens on futuregenerations. For the most part these ideas are not new. Theyare well accepted by economists and are consistent with theviews of super majorities of Americans on key issues. Further,
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more than three-quarters of U.S. citizens say the countryseconomic structure is out of balance and favors a very smallproportion of the rich over the rest of the country. They areright. The solutions to our economic crisis are evident but they

are blocked by those who profit from the status quo andcontrol elected ofcials through the corrupt U.S. politicalsystem and its money-based elections.

The elites in Washington, DC seek to erase deficits that werecaused by increases in war and military spending, tax breaksfor the wealthy and corporations, the increased cost of healthcare, as well as bank bailouts, and increased costs and lostrevenue from the economic collapse. The bi-partisan elites seek

to cut $1.2 trillion in deficits even though there is no outcry forsuch cuts or evidence in the economy that they are urgentlyneeded. They are proposing cuts in services to seniors,students, the poor and middle-working class households whodid not cause the crash but already suer from itsconsequences. This report shows that we can get the economymoving, reduce the wealth divide and control governmentspending while helping the 99%.

This report should not be considered the demand of the OccupyMovement. It was prepared[1] by one Occupation, FreedomPlaza in Washington, DC and it does not reflect even thatOccupations full demands. Most of this report providessolutions to the deficit questions the Congressional SuperCommittee is attempting to address while also re-starting theeconomy. The dierence between the Occupied SuperCommittee report and the Congressional Super Committee

report will be stark and further demonstrate the corruption anddysfunction of government. While this reportsrecommendations would benefit the 99%, the report that willcome out of the congressional Super Committee will benefit the1%.

Creating a Fair Tax System That Shrinks the Wealth Divide
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The United States does not have a lack of financial resources; ithas an intentionally unfair distribution of resources. The federalincome tax has become less progressive and the rate paid bythe wealthiest has been cut dramatically in recent decades.

From 1944 through 1951, the highest marginal tax rate forindividuals was 91%, increasing to 92% for 1952 and 1953, andreverting to 91% for tax years 1954 through 1963. In 1964, thetop marginal tax rate for individuals was 77%. From 1965through 1981 the top rate was 70%. The top marginal tax ratewas lowered to 50% for tax years 1982 through 1986 and todayit is just 35%.

The tax on investment income, capital gains, has also been

dramatically reduced. The maximum statutory rate on long-term capital gains was 28% in 1991, 20% in 1997 and has beenmerely 15% since 2003.

The wealth divide has become extreme over the past threedecades and tax policies have exacerbated this trend; much ofthe tax code exemplifies policies for the 1% at the expense ofthe 99%. The wealth divide is one of the foundational reasonswhy the economy no longer works and is in steady decline for

most people in the United States. The tax code inadequatelyfunds government, but that is the result of unfair tax cuts, notbecause America is broke (it isnt). As Andrew Fieldhouse oftheEconomic Policy Institute testified Income per capita hasjumped 66% over the past 30 years, and is projected to growanother 60% over the next 30 years. The country needs to putin place policies that reduce the wealth divide and share wealthfairly so that when the economy grows it benefits all citizens,

not just the 1%.The recommendations below begin to correct the unfair policiesof the last three decades, but these are only first steps to thetransformational changes that are needed.
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Tax the highest income households: From 1960 to 2004,the top 0.1 percent of U.S. taxpayers the wealthiest onein one thousand have seen the share of their incomepaid in total federal taxes drop from 60% to 24.3%.

Americas highest income-earners the top 400 peoplewho have wealth equal to 154 million Americans haveseen their federal income tax drop from 51.2% in 1955 to18.1% in 2008. If the top 400 paid as much of theirincomes in personal income tax as the top 400 of 1955,the federal treasury would have collected $50 billion morein revenue from just those 400 taxpayers. If the top 0.1%of taxpayers Americans with incomes that averaged

$4.4 million had paid total federal taxes at the samerate as the top 0.1% paid these taxes in 1960, the federaltreasury would have collected an additional $250 billion inrevenue.

Merely not extending the Bush tax cuts would add nearly$500 billion each year in tax revenue. Thus in just overtwo years the goal of the deficit committee would be met.This would be insufcient to correct the wealth divide and

does not go as far as Occupy Washington, DC advocates.

A tax of a half of a percent or less on Wall Streetspeculation could raise over $800 billion in a decade. TheSpeculation Tax on the purchase of stocks, bonds andderivatives would be a tiny tax with a big impact. Peoplein the U.S. pay much higher taxes on purchases of foodand clothing; it is only fair that the wealthy pay taxes on

purchasing wealth instruments.

A fair tax on capital gains, treating it as ordinary incomewould raise $1 trillion over a decade. Wealth-basedincome and work-based income should be treated equallyunder the law as it used to be. Warren Buet has received
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a great deal of attention for pointing out that he pays alower tax rate than his secretary or anyone who works forhim. The reason for this is that investment income is taxedat a much lower rate than income from labor. The United

States needs to tax wealth more and work less.

Congress should enact a pure worldwide tax system, inwhich all profits of U.S. corporations, whether they aregenerated in the U.S. or abroad, would be taxed by theU.S. This would end deferral, i.e. where taxes aredeferred until money is brought back into the UnitedStates. U.S. corporations would continue to receive a credit

against any taxes they pay to a foreign government (theforeign tax credit) so that profits are not double-taxed.Under a pure worldwide tax system, corporations wouldhave little or no tax incentive to move jobs oshorebecause the U.S. would tax profits of corporations nomatter where they are generated. The Treasury estimatesthat deferral of U.S. taxes on oshore corporate profitscosts close to $50 billion each year, and many expertsthink this estimate is substantially understated.

Ending deferral does not even address the hundreds ofbillions lost through tax havens. Tax havens should beshut down through the passage of the Stop Tax HavenAbuse Act. In fact, the U.S. Treasury estimates this costs$100 billion each year. In 2006 the U.S. Senate PermanentSubcommittee on Investigations reported that Americansnow have more than $1 trillion in assets oshore and

illegally evade between $40 and $70 billion in U.S. taxeseach year through the use of oshore tax schemes.

Closing corporate tax loopholes would return the fairshare of taxes paid by corporations to the funding ofgovernment. Declining corporate taxation is another primefactor in increasing deficits. Corporate income taxes have
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fallen from roughly 4.8% of GDP in the 1950s to only 1.8%of GDP over the past decade. Ending just two large breaks,deferral of overseas revenue and accelerated depreciationwould raise about $114 billion over a decade. The

Treasury Department lists $365 billion in corporate taxbreaks being gifted annually thats $3.65 trillion overthe next 10 years. Due to tax loopholes, corporations payrecord low tax rates they actually pay 21% on average.Indeed, a recent report by Citizens for Tax Justice foundthat Wells Fargo received $18 billion in tax breaks, whileboth Verizon and General Electric paid negative taxes.Earlier Citizens for Tax Justice reported that 12 major

companies which together made $171 billion in profitsfrom 2008-2010 paid a negative $2.5 billion in taxes,thanks to $62 billion in tax subsidies.

The taxes described above would generate at least $600 billionannually. The goal of the Joint Deficit Committee of $1.2trillion over ten years could be met in two years. The UnitedStates has more than enough wealth to meet the needs of itspeople.

Cutting Spending for Economic Security Military spending, found in the Department of Defense and

other departments, has increased dramatically during eachyear that George W. Bush and Barack Obama have beenpresident, roughly doubling during the past decade bothas measured in real dollars and as a percentage share ofdiscretionary spending. Military and related securityspending is now at over $1 trillion per year and comprises

well over half of federal discretionary spending. It is alsovery nearly equal to the military spending of all othernations on earth combined.Ending our two most costlywars in Iraq and Afghanistan before the 2013 fiscal yearbudget would save $1.8 trillion, as compared with ending
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those wars on the currently planned schedule, with savingsof $108 billion per year.

The U.S. should only spend what it needs to defend itself.The military budget can be cut significantly by replacing

private contractors, closing some of the more than 1,100foreign military bases and outposts and eliminatingweapons systems many of which the Pentagon says it doesnot need.

The Sustainable Defense Task Force recommended modestcuts of $1 trillion over the next decade, not countingsavings from ending the current wars. U.S. militaryspending could be cut by 80% and still be comfortably well

ahead of any other nation's military spending.SeeCreating Jobs and Restarting the Economy below onhow these funds could be used to create jobs, restart theeconomy and provide much-needed services andinfrastructure to the country.

Corporate tax subsidies through tax breaks and giveawaysare a form of spending that needs to be cut.[2] The U.S.needs to end corporate tax subsidies and repatriateoverseas funds. According to Citizens for Tax Justice, the280 most profitable U.S. corporations received taxsubsidies amounting to $222.7 billion from 2008-2010.These companies sheltered half their profit from taxes.The result: 30 companies paid less than 0 taxes despite$160 billion in pre-tax profits; 78 of the 280 companiesenjoyed at least one year in which their federal income taxwas zero or less; weapons makers paid a mere 10.6percent rate in 2010; financial services received the largest

share (16.8 percent) of all federal tax subsidies over thelast three years.

Negotiating better prices with Big Pharma would save morethan $200 billion over ten years in pharmaceutical costs.Reforms of Medicare could oer much larger savings.Expanding to an improved Medicare for all system would
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control the cost of health care spending while covering allin the United States reducing significant financial burdensoften resulting in bankruptcy and foreclosure.

Creating Jobs and Restarting the Economy

One in six people who would like a full-time job are unable tofind one. The unemployment rate of 9% greatly underestimatesunemployment. If the pre-1994 measures were used, e.g.including discouraged workers who want jobs, as well as part-time workers who want full time jobs the underemployment andunemployment rate would be 23%. The measures listed belowwould eectively create jobs and restart the economy. Job lossmeans less tax revenue and more expenditure by the

government. A critical ingredient to reducing the deficit is jobcreation.

One million jobs could be created annually by writingdown all underwater mortgages to market value.Correcting housing mortgages to the real value of homeswould inject $71 billion per year into the economy andsave families $6,500 per year on mortgage payments. Thiswould also fix the housing crisis which is an anchor

holding back any recovery, according to a new report byThe New Bottom Line. One in five mortgage holders owemore on their mortgage than their home is actually worth.Banks should not continue to be able to profit fromhousing bubble prices a bubble they created with theirpoor and unethical lending practices. Adjusting mortgagesto the real value of homes is a fair way to fix the housingmarket.

Failure to stop the foreclosure crisis will ensure a stalledeconomy. It is an essential step to economic repair. Thiscould be done without Congress as Fannie and Freddietogether hold $1.5 trillion in housing loans or mortgage-backed securities which could be directed to fix themortgages. The Federal Reserve has just under a trillion
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and could unilaterally correct loans to reflect real value.And, the banks could be pressured. Last year, the nationstop six banks paid out more than twice the cost of re-writing mortgages to make them fair ($71billion per year)

in bonuses and compensation alone ($146 billion in 2010).The nations banks are sitting on a historically high level ofcash reserves of $1.64 trillion.

A fundamental reason for job stagnation is relying on theprivate sector to create jobs and refusing to engage indirect government job creation in the public sector.According to Business Week, Since the end of the

recession, government employment--including federal,state, and local jobs--has fallen by roughly 600,000. Stateand local governments have particularly felt the pain,according to a report released this week by the CensusBureau, which shows that there were over 200,000 fewerstate and local government jobs in 2010 than in 2009.The most recent jobs report shows a continued downwardtrend in government jobs. State deficits and federalinaction ensure these job losses will continue.

In addition to our need to rebuild the nations physicalinfrastructure, there is an even more urgent need torebuild its human infrastructure. The drastic rise ininequality and joblessness has torn apart the social fabric,destroying countless individual lives, families, urbanneighborhoods, and rural communities across our country.For more than a generation, the major growth industry in

impoverished communities has been the illegal drugindustry. Persistent, trans-generational poverty is directlyresponsible for the fact that the U.S. now leads the worldin imprisoning its own people: 2.5 million, by the latestcount, with more than 5 million more under some form ofcourt supervision. (China, with its 2.5 billion people, runs
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a poor second.) Although most of the prison population iswhite, people of color are disproportionately represented,leading many analysts to declare that the massincarceration of African-Americans and Latinos has

created a new caste of unemployable "untouchables." Onlya massive public works, community development, and jobtraining program can end the destruction of Americancommunities and stop the shameful criminalization ofpoverty.

As public sector jobs are created, the country must alsostrengthen the public sector in ways that will require newdemocratic reforms to put publicly owned or financed

enterprises under popular control. A long-term goalshould be to democratize the economy so the people ofthe United States share in wealth and ownership as well asinfluence over the economy. See below Democratizing theEconomy, Shifting Economic Power, Wealth andOwnership to all in the United States. There is adesperate need for a mass public works program, not onlyto create jobs, but also to meet the urgent needs of thecountry.

The American Society of Civil Engineers estimated thatfailure to fix the nations infrastructure has created seriousdamage so extensive that $2.2 trillion will be required by2014 just to meet current demands. The ASCE gave thenations infrastructure an overall grade of D. Its reportcited cracking levees, a quarter of the nations existingbridges sagging, leaking pipes losing billions of gallons ofdrinking water per day, aging sewers releasing human

waste into rivers and lakes, horrendous trafc congestionand air and water pollution. This is not make work buturgently needed work. A public works program modeledafter the depression era Works Progress Administrationwould create 15 million jobs and build the infrastructure
http://itsoureconomy.us/2011/07/put-15-million-back-to-work-fixing-2-2-trillion-in-infrastructure-the-works-progress-administration/http://itsoureconomy.us/2011/07/put-15-million-back-to-work-fixing-2-2-trillion-in-infrastructure-the-works-progress-administration/http://itsoureconomy.us/2011/07/put-15-million-back-to-work-fixing-2-2-trillion-in-infrastructure-the-works-progress-administration/http://itsoureconomy.us/2011/07/put-15-million-back-to-work-fixing-2-2-trillion-in-infrastructure-the-works-progress-administration/http://www.drugwarfacts.org/cms/node/64http://www.drugwarfacts.org/cms/node/64http://www.drugwarfacts.org/cms/node/64http://www.hrw.org/sites/default/files/reports/us0309web_1.pdfhttp://itsoureconomy.us/2011/07/put-15-million-back-to-work-fixing-2-2-trillion-in-infrastructure-the-works-progress-administration/http://itsoureconomy.us/2011/07/put-15-million-back-to-work-fixing-2-2-trillion-in-infrastructure-the-works-progress-administration/http://itsoureconomy.us/2011/07/put-15-million-back-to-work-fixing-2-2-trillion-in-infrastructure-the-works-progress-administration/http://itsoureconomy.us/2011/07/put-15-million-back-to-work-fixing-2-2-trillion-in-infrastructure-the-works-progress-administration/http://www.drugwarfacts.org/cms/node/64http://www.drugwarfacts.org/cms/node/64http://www.drugwarfacts.org/cms/node/64http://www.drugwarfacts.org/cms/node/64http://www.hrw.org/sites/default/files/reports/us0309web_1.pdfhttp://www.hrw.org/sites/default/files/reports/us0309web_1.pdf


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needed to create a sustainable economy.

Spending on the military is a drag on the economy, notjust because it makes up 55% of federal discretionary

spending, but because more jobs would be created byspending on education, infrastructure, green energy, oreven on tax cuts for non-billionaires. Converting afraction of current military spending to other industriesand tax cuts could produce 29 million new jobs, one forevery unemployed or underemployed person in the UnitedStates, even after finding new employment for everyonedisplaced during the conversion.

Putting in place improved Medicare for all would provide amajor stimulus for the U.S. economy not only bycontrolling the cost of health care and reducing deficitsbut by creating 2.6 million new jobs, and infusing $317billion in new business and public revenues, with another$100 billion in wages into the U.S. economy.

Erasing student loan debt would have an immediatestimulating eect on the economy. As Mychal Smith writes:[C]onsider the potential impact on the economy if all of asudden 35 million people were able to add to theirmonthly budget anywhere between $400 and $1000 thatthey no longer needed to satisfy exorbitant student loanrepayments. . . . Debt free degree holders would allow formore risk taking and innovation. As Robert Applebaum,an advocate of forgiving student loans writes: the

educated poor are not buying homes, not startingbusinesses or families, not inventing, investing orinnovating and otherwise engaging in economicallyproductive activities. And, as Cryn Johannsen of AllEducation Matters points out, this would be a long termstimulus because college debts are multi-decade in length.
http://alleducationmatters.blogspot.com/2011/09/presidents-speech-on-jobs-and-my-call.htmlhttp://www.salon.com/2011/11/04/forgive_student_debt_fight_the_recession/singleton/http://forgivestudentloandebt.com/content/my-article-saloncomhttp://www.thegrio.com/specials/education-nation/why-we-need-student-loan-debt-forgiveness.phphttp://www.thegrio.com/specials/education-nation/why-we-need-student-loan-debt-forgiveness.phphttp://www.prosperityagenda.us/node/60http://www.prosperityagenda.us/node/60http://www.prosperityagenda.us/node/60http://warisacrime.org/content/i-just-found-29-million-jobshttp://www.ips-dc.org/reports/071001-jobcreation.pdfhttp://alleducationmatters.blogspot.com/2011/09/presidents-speech-on-jobs-and-my-call.htmlhttp://alleducationmatters.blogspot.com/2011/09/presidents-speech-on-jobs-and-my-call.htmlhttp://www.salon.com/2011/11/04/forgive_student_debt_fight_the_recession/singleton/http://www.salon.com/2011/11/04/forgive_student_debt_fight_the_recession/singleton/http://forgivestudentloandebt.com/content/my-article-saloncomhttp://forgivestudentloandebt.com/content/my-article-saloncomhttp://www.thegrio.com/specials/education-nation/why-we-need-student-loan-debt-forgiveness.phphttp://www.thegrio.com/specials/education-nation/why-we-need-student-loan-debt-forgiveness.phphttp://www.prosperityagenda.us/node/60http://www.prosperityagenda.us/node/60http://www.prosperityagenda.us/node/60http://www.prosperityagenda.us/node/60http://warisacrime.org/content/i-just-found-29-million-jobshttp://warisacrime.org/content/i-just-found-29-million-jobshttp://www.ips-dc.org/reports/071001-jobcreation.pdfhttp://www.ips-dc.org/reports/071001-jobcreation.pdf


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Johannsen describes a crisis that is aecting millions ofeducated Americans. We are indebted for life. Most of uswill never be able to pay oour loans for college.Education is a critical building block for the economy and

going forward the United States must develop a system ofhigher education that does not require students to go intodebt just to receive an education. Rather than a loan-based system the U.S. needs a system based on grants,scholarships and public funding.

These recommendations would create millions of jobs and getthe economy moving again. As the economy develops andexpands, programs need to be put in place so that new wealth

is shared more fairly; workers have greater control over theirwork through employee ownership and protections forcollective bargaining; and so some of the profits created bypublic investment (i.e. by tax dollars) are shared among all U.S.taxpayers. See below Democratizing the Economy, ShiftingEconomic Power, Wealth and Ownership to all U.S. Citizens.

Protecting and Improving Social Security

Saving Social Security is not a traditional left-right battle. Polls

consistently show that people across the political spectrumoverwhelmingly support Social Security and do not want to seeit cut. Even the vast majority of Tea Party Republicans supportthese programs. Cutting Social Security is a Wall Street agendaof the 1% that opposes the interests of the rest of us. As DeanBaker writes There is a bipartisan consensus among the elitesthat these programs should be cut. The guiding philosophy ofthis drive is that public money that goes to programs for

middle income and poor people is money that could be in thepockets of the wealthy.

Social Security does not contribute to the deficit. Social Securityis financed by a designated Social Security tax and there ismore than $2.5 trillion in the Social Security trust fund. Theeorts to cut Social Security to fix the deficit are a fraud
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designed to enrich Wall Street financiers by forcing people intothe private retirement market.

The temporary payroll tax cut will create some jobs, but not

enough to get the economy moving and is not the mosteective tax cut stimulus. Further, it unnecessarily puts SocialSecurity injeopardy by reducing taxes designated for SocialSecurity. The Congressional Budget Ofce estimates the cut willreduce federal revenues by $112 billion over the next twoyears. The government will have to borrow to fill that hole inthe Social Security trust fund, giving opponents of SocialSecurity another argument against the program.

Social Security faces no immediate threat of insolvency. TheCongressional Budget Ofce just released new projectionsshowing that the Social Security trust fund is fully solventthrough the year 2038. Even after that date, the program wouldhave enough money to pay 81% of scheduled benefits for therest of the century. Below are recommendations that wouldstrengthen social security.

The funding of Social Security is easy to fix. Currently, the

tax on wages subject to the tax is capped at $107,000.The upward redistribution of income over the last threedecades has caused a large share of wage income toescape taxation. If all wage income were subject to thetax, then it would leave Social Security fully solvent for its75-year planning period.

The Social Security tax has not kept up with the wealthdivide. In 1983, the Social Security tax ceiling was set sothe tax would hit 90% of all wages covered by SocialSecurity. That 90% figure was built into the 1983Greenspan Commissions fix of Social Security. Requiringthe ceiling to rise with inflation was expected to result inthe Social Security tax continuing to hit 90% of totalincome. But, in 1983 no one predicted the extreme wealth
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divide that exists today. The richest 1% of Americans got11.6% of total income in 1983. Today the top 1% takes inmore than 20% of total income and as a result the SocialSecurity payroll tax hits only about 83% of their total

income. The tax should go back to covering 90% ofincome. That would mean the ceiling on income subject tothe Social Security tax would need to be raised to$180,000.

Social Security should be strengthened in ways thatincrease the retirement security of people in middle-andworking-class. Particular attention should be paid to

improving the living standards in retirement of workers inpoorly compensated jobs, who typically have little or noretirement savings outside of Social Security. The averageSocial Security benefit of $14,000 is only about 30% abovethe poverty line. Indeed, 21% of Social Securitybeneficiaries receive Social Security benefits that fall belowthe poverty line. In 2011, the Commission to ModernizeSocial Security proposed increasing benefits for all retireesby a uniform amount equal to 5% of the average benefit,

about a $700 annual increase for beneficiaries today; thatworkers who have worked at least 30 years should receivebenefits equal to 125% of the poverty threshold when theyretire at the full retirement; providing at least five yearsofdependent care credits through Social Security aswomen (and some men) spend part of their working yearscaring for children and elderly parents; reinstating thepost-secondary student benefit that existed until 1983

and allowed students who were receiving Social Securitydue to a parents death, disability, or retirement tocontinue until they were 22 years old if they were incollege; and increasing the survivors benefit for widowedspouses to ensure that they receive at least 75% of the
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benefit amount they received when their spouse was stillalive.

Improving Medicare and Expanding it to Provide HealthCare to All in the United States

Former Labor Secretary Robert Reich writes Medicare isntthe nations budgetary problems. Its the solution. The realproblem is the soaring costs ofhealth care that lie beneathMedicare. Theyre costs all of us are bearing in the form ofsoaring premiums, co-payments, and deductibles.Medicare oers a means of reducing these costs.

Medicare bears the burdens of existing within aninsurance-based health care that fails to control costs andcreates tremendous bureaucracy. While there are short-term fixes to Medicare, what is needed is an end to thecurrent insurance-based approach. The United Statesspends the most per capita per year on health care yet athird of the population is either uninsured or underinsuredso that they face financial ruin if a serious accident orillness occurs. Health care spending in the U.S. is rising

2.5% faster than GDP. Expanding and improving Medicare so it covers all in the

United States is a key component to controlling health carecosts and government spending; as well as ending thedeficit problem of state and federal budgets. Estimates ofhow much would be saved on administrative costs aloneby extending Medicare to cover the entire populationrange up to $400 billion a year. This savings plus theinherent cost-controls of a single payer health systemwould oset the cost ofproviding everyone in the UnitedStates with access to lifelong, comprehensive, qualityhealth care. Controlling health care costs would sharplyreduce the long-term budget crisis, as well as foreclosuresand bankruptcy.
http://pnhp.org/blog/2009/07/02/only-in-america-medical-bankruptcy-homelessness/http://pnhp.org/blog/2010/07/01/improve-and-strengthen-medicare-by-expanding-it-to-all/http://www.pnhp.org/facts/single-payer-resourceshttp://itsoureconomy.us/2011/07/why-medicare-is-the-solution-%e2%80%94-not-the-problem/http://pnhp.org/blog/2009/07/02/only-in-america-medical-bankruptcy-homelessness/http://pnhp.org/blog/2009/07/02/only-in-america-medical-bankruptcy-homelessness/http://pnhp.org/blog/2010/07/01/improve-and-strengthen-medicare-by-expanding-it-to-all/http://pnhp.org/blog/2010/07/01/improve-and-strengthen-medicare-by-expanding-it-to-all/http://www.pnhp.org/facts/single-payer-resourceshttp://www.pnhp.org/facts/single-payer-resourceshttp://itsoureconomy.us/2011/07/why-medicare-is-the-solution-%e2%80%94-not-the-problem/http://itsoureconomy.us/2011/07/why-medicare-is-the-solution-%e2%80%94-not-the-problem/


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Even without improving and expanding Medicare to coverall, the program is not in crisis. The Medicare Trustees saythat the program faces a modest shortfall over its 75-yearplanning horizon. The projected shortfall is around 0.3% of

GDP or less than one-fifth of the amount that annualmilitary spending was increased since September 11th,2000.

EconomistJack Rasmus points out that all it takes to coverthe Medicare shortfall is a mere 0.25% increase in theMedicare share of the payroll tax for the next ten yearsand another 0.25% starting in the eleventh year. The

Medicare tax rate is currently 2.9% for the employee andthe employer. These tiny tax increases would makeMedicare secure.

In fact, the Congressional Budget Ofce (CBO) calculatesthat the Medicare system in its current form is far moreefcient than the privatized system advocated by a bi-partisan consensus of political elites. CBOs projectionsshow that switching from Medicare to a privatized system

would add $34 trillion to the cost of buying Medicareequivalent policies over the programs 75-year planningperiod.

Medicare provides efciency. Reich reports: Medicaresadministrative costs are in the range of3%. Thats wellbelow the 5% to 10% costs borne by large companies thatself-insure. Its even further below the administrative costs

of companies in the small-group market (amounting to25% to 27% of premiums). And its way, way lower than theadministrative costs of individual insurance (40%). Its evenfar below the 11% costs of private plans under MedicareAdvantage, the current private-insurance option underMedicare.
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Democratizing the Economy, Shifting Economic Power,Wealth and Ownership to all Citizens in the United States

Big finance corporate capitalism is failing. It is concentrating

ownership and wealth as well as domination of the economy inthe wealthiest Americans. New approaches are needed to sharewealth, ownership and economic power more fairly. The grassroots protests, whether from the Occupy Movement or theanger from the conservative Tea Party, are based on the samerealities: economic insecurity and economic unfairness. A fulldiscussion of these issues is beyond the scope of this reportbut it is time for the people of the United States to be askingcritical questions:

What is the next evolution of the economy?

What can be done to reduce economic insecurity andeconomic unfairness?

How can it be reshaped so that people gain greater controlof their lives and greater influence over the economy?

What new forms of ownership can be developed to shifteconomic power to the people?

The answers to these questions lie in the conflict of our era participatory democracy vs. concentrated wealth. There isgrowing evidence and experience that shows a democratizedeconomy is the fairest, most sustainable and eective approachwhich results in a shared prosperity.

Democratizing the economy would move the United States awayfrom concentrated corporate capitalism and create an economyin which wealth is more equitably shared. This change is

already happening under the radar of U.S. media coverage. Ademocratized economy already has a foothold in the UnitedStates. There is a lot of experimentation going on regardingworker ownership, democracy in the work place and sharing inthe profits of corporations; with communities working togetherto control development through non-profit land trusts; with
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public banking, democratizing money and community banks;with public utilities and democratizing energy; and withparticipatory budgeting.These are a few examples of thedemocratization of the economy that is building a new

economic model of more widespread ownership of assets andparticipation and wealth. As one of the witnesses of theOccupied Super Committee, Gar Alperovitz writes:

Over the last three decades, for instance, more workershave become owners of their own companies than aremembers of unions in the private sector; indeed, 5million more. Simultaneously, there has been increasingexperimentation with unions within such firms, and with

new ways to increase participation and control. There arealso more than 4,500 nonprofit community developmentcorporations that operate aordable housing and otherneighborhood programs. Approximately 130 millionAmericans are members of co-ops. InCleveland, aninnovative group of linked cooperatives has set newstandards for community-building economic change.Social enterprises are developing in communities

throughout the nation that transform the ownership ofcapital into businesses, the sole purpose of which is toprovide community services.

One form of new ownership is cooperatives. There are130 million Americans who are members of some typesof co-ops, most commonly credit unions. Anotherwidely shared experience is joint-ownership is EmployeeStock Ownership Plans (ESOPs) which give employees

ownership of companies through stocks, while these donot usually include management by employees they doprovide a share of the profit. There are more than 13million people who are part of ESOPs meaning there aremore employee stock owners than there are members ofprivate unions. Worker-owned co-ops go further and
http://www.nceo.org/main/article.php/id/2/http://www.nceo.org/main/article.php/id/2/http://www.nceo.org/http://www.ncuf.coop/http://www.thenation.com/article/cleveland-modelhttp://www.garalperovitz.com/2011/11/capitalism-fading-in-the-evolutionary-revolution/#more-538http://www.garalperovitz.com/2011/11/capitalism-fading-in-the-evolutionary-revolution/#more-538http://www.garalperovitz.com/2011/11/capitalism-fading-in-the-evolutionary-revolution/#more-538http://itsoureconomy.us/2011/08/participatory-budgeting-for-your-community/http://itsoureconomy.us/2011/08/democratizing-the-electric-grid-innovative-financing-for-local-renewable-energy/http://www.nceo.org/main/article.php/id/2/http://www.nceo.org/main/article.php/id/2/http://www.nceo.org/main/article.php/id/2/http://www.nceo.org/main/article.php/id/2/http://www.nceo.org/http://www.nceo.org/http://www.nceo.org/http://www.nceo.org/http://www.ncuf.coop/http://www.ncuf.coop/http://www.thenation.com/article/cleveland-modelhttp://www.thenation.com/article/cleveland-modelhttp://www.garalperovitz.com/2011/11/capitalism-fading-in-the-evolutionary-revolution/#more-538http://www.garalperovitz.com/2011/11/capitalism-fading-in-the-evolutionary-revolution/#more-538http://itsoureconomy.us/2011/08/participatory-budgeting-for-your-community/http://itsoureconomy.us/2011/08/participatory-budgeting-for-your-community/http://itsoureconomy.us/2011/08/democratizing-the-electric-grid-innovative-financing-for-local-renewable-energy/http://itsoureconomy.us/2011/08/democratizing-the-electric-grid-innovative-financing-for-local-renewable-energy/http://itsoureconomy.us/2011/08/democratizing-money-community-banks-are-a-great-tool-to-take-money-from-wall-street-bring-funds-to-your-local-community-and-get-control-of-your-money/http://itsoureconomy.us/2011/08/democratizing-money-community-banks-are-a-great-tool-to-take-money-from-wall-street-bring-funds-to-your-local-community-and-get-control-of-your-money/http://itsoureconomy.us/2011/07/report-public-banking-can-democratize-the-economy/http://itsoureconomy.us/2011/07/report-public-banking-can-democratize-the-economy/


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give workers a say in the management of the company.Worker owned co-ops are at the cutting edge ofdemocratizing the economy and provide some of whatwe need to transform the economy.

At a national level, despite comments of some in the corporatemedia and some elected ofcials who speak for big businessinterests, the truth is that national programs like Social Securityand Medicare have worked well. As described in previoussections of this report, these programs can be improved andexpanded but they are also models on which to createprograms that respond to national needs. Further, the bail outof the automobile industry, which included some public

ownership, has succeeded in saving that industry and returningit to profit. However, more could have been done to serve thepublic good by continuing public representation on the boardsof automobile companies, requiring taxpayers share in theprofit as investors and directing those industries to build masstransit and create jobs.

The Occupy Movement seeks a radical transformation to a neweconomy and political system. A close examination of what is

happening in the United States shows that this transformationis already underway.

The Lessons of the Super Committee: Corruption RulesDysfunctional Government

The proposals in this report show that it would not be difcultfor the so-called Super Committee to achieve the requirementof at least $1.2 trillion in savings over the next decade. And,

that it can be done in a way that corrects wealth disparity andre-starts the economy. But, in many ways, the super committeeis occupied by corporate interests and cannot act for thepeople. The make-up of the committee and the tens ofmillions of dollars members have received from entrenchedcorporate interests ensure that the committee will exemplify


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the corruption in Congress which is why people are occupyingpublic spaces across the country.

The Occupation of Washington, DC at Freedom Plaza expects

the commissions recommendations, if they are able to makerecommendations, to reflect the interests of their donors. Weurge the public and the media to review their recommendationswith these political donations in mind.

The twelve Members of the Joint Committee on DeficitReduction have received $41 million from the financial sectorduring their time in Congress, according to a report by PublicCampaign and National Peoples Action, Wall Street and the

Supercommittee: The $41 Million Question. At least 27 currentor former aides for the super committee members havelobbied on behalf of financial firms.

The 12 members of the super committee have received atleast $41 million from the finance, insurance, and realestate (FIRE) sector during their time in Congress.

They have received nearly $900,000 from three of the topU.S. banksJPMorgan Chase, Bank of America, and Wells

Fargo Since 2000, the industry has spent over $4 billion lobbying

elected ofcials.

Nearly 30 former aides to the 12 members work aslobbyists for financial industry interests.

The ten biggest contributors to the super committee membersinclude:

Club for Growth $990,066

Microsoft Corp. $810,100University of California $629,495Goldman Sachs $592,684EMILYs List $586,835Citigroup Inc. $561,081JPMorgan Chase & Co. $494,316
http://itsoureconomy.us/2011/08/getting-what-you-pay-for-super-committee%e2%80%99s-super-close-ties-to-banking-and-finance/http://showdowninamerica.org/files/WallStreet-SuperCommittee.pdfhttp://showdowninamerica.org/files/WallStreet-SuperCommittee.pdfhttp://showdowninamerica.org/files/WallStreet-SuperCommittee.pdfhttp://showdowninamerica.org/files/WallStreet-SuperCommittee.pdfhttp://itsoureconomy.us/2011/08/getting-what-you-pay-for-super-committee%e2%80%99s-super-close-ties-to-banking-and-finance/http://itsoureconomy.us/2011/08/getting-what-you-pay-for-super-committee%e2%80%99s-super-close-ties-to-banking-and-finance/http://showdowninamerica.org/files/WallStreet-SuperCommittee.pdfhttp://showdowninamerica.org/files/WallStreet-SuperCommittee.pdfhttp://showdowninamerica.org/files/WallStreet-SuperCommittee.pdfhttp://showdowninamerica.org/files/WallStreet-SuperCommittee.pdfhttp://itsoureconomy.us/2011/09/the-41-million-question/http://itsoureconomy.us/2011/09/the-41-million-question/


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Bank of America $349,566Skadden, Arps, et al. $347,356General Electric $340,935

The largest donor, the Club for Growth, opposes any new taxeson the wealthiest in the United States. As a result, despite theabhorrent wealth divide, the committee is unlikely torecommend the obvious, fair taxes on the wealthiest peoplewho fund their campaigns.

The members of the committee received more than $3 milliontotal during the past five years in donations from politicalcommittees with ties to weapons contractors, health care

providers and labor unions. They received more than $1 millionoverall in contributions from the health care industry and atleast $700,000 from weapons companies. This presents aproblem for the super committee because if they fail to find$1.2 trillion in savings over the next decade it will result tomandatory cuts that will impact health care and weaponsmakers. This means the committee is likely to make a bad dealfor the United States, in order to avoid cuts to their majordonors.

Throughout the time when the committee has been meetingthey have been holding fundraisers across the country. Thisopen money-taking while making decisions that aect thosewho are giving money is the kind of open corruption that hasled to a loss of faith in government.

It is not only donations that will impact the committee, but amajor lobbying onslaught by 400 groups who report lobbying

the Super Committee. About 30% of these organizations 118groups in total were from the health sector. The financeinsurance and real estate sector ranked third, with 40companies within that sector reporting lobbying activity duringthe third quarter that targeted the super committee. And 39groups in the energy sector reported lobbying the super
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committee. Both the communications and electronics sectorand the general business sector saw 26 companies andorganizations explicitly mention the super committee in theirthird-quarter lobbying reports. These are many of the same

concentrated corporate interests that have funded thecampaigns of super committee members.

Conclusion: Revolt against Economics for the 1%

Once again, the people of the United States will see corruptionreign supreme. Despite evident solutions to the deficit and theeconomic collapse, the Congress will show its corruption anddysfunction and be unable to put forward real solutions.

We issue this report to alert everyone the political system isbroken. It is corrupted by the power of concentrated wealth,campaign donations and corporate power. The job of theoccupations across the country is to build an independentnonviolent movement that replaces this corrupt system withone in which the people rule. The battle between concentratedwealth and participatory democracy will be heightened by theevident corruption of the Super Committee which will not

challenge the unfair policies of the 1% while requiring austerityfor the 99%.

The economic and political elite should expect protests togrow. We are at the beginning of what will be seen as a historicrevolt against status quo elites that will transform this economyas well as how the United States is governed.

[1] The evidence-based solutions in this report come frompeople who are experts in the fields addressed as well as theviews of people aected by the policies. We relied on a rangeof sources and have provided links to those sources in the on-line version of this report. In addition, Occupy Washington, DCheld a public hearing on Wednesday, November 9th. You can
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see the public hearing at: CSPAN Coverage of Occupied SuperCommittee Hearings. Participants included: Kevin Zeese anorganizer ofOccupy Washington, DC and co-director ofIts OurEconomy and co-chair ofCome Home America; Andrew

Fieldhouse of the Economic Policy Institute; Carl Conetta of theProject on Defense Alternatives; Kenneth Peres is an economistwith the Communications Workers of America; Dean Baker ofthe Center for Economic and Policy Research; Margaret Flowersan organizer ofOccupy Washington DC and congressionalfellow for Physicians for National Health Program; GarAlperovitz is a founding principal of the DemocracyCollaborative and with the National Center for Economic and

Security Alternatives.[2] This is commonly known as corporate welfare. All corporatewelfare should be stopped until the Congress passes lawstransforming corporate welfare into taxpayer investment.There are reasons for government to invest in building theeconomy, for example there is a need to invest in a new energyeconomy, but the profits from these investments should notonly go to the 1% who own energy companies, they should be

treated as taxpayer investment and all taxpayers should sharein the profit from the investment. Such a system could bemodeled after the Alaska Permanent Trust which has existed foroil exploration on state lands in Alaska since 1980. Such asystem could develop into a guaranteed national income thatwould lift people out of poverty and provide a safety net to all.This is a critical part of a democratized economy. See: Agendafor a Democratized Economy, http://itsoureconomy.us/issues/.
http://itsoureconomy.us/issues/http://itsoureconomy.us/issues/http://www.ncesa.org/http://www.community-wealth.org/http://www.ncesa.org/http://www.ncesa.org/http://www.ncesa.org/http://www.community-wealth.org/http://pnhp.org/http://occupywashingtondc.org/http://www.cepr.net/index.php/biographies/dean-baker/http://www.cepr.net/index.php/biographies/dean-baker/http://itsoureconomy.us/issues/http://itsoureconomy.us/issues/http://www.ncesa.org/http://www.ncesa.org/http://www.ncesa.org/http://www.ncesa.org/http://www.community-wealth.org/http://www.community-wealth.org/http://www.community-wealth.org/http://www.community-wealth.org/http://pnhp.org/http://pnhp.org/http://occupywashingtondc.org/http://occupywashingtondc.org/http://www.cepr.net/index.php/biographies/dean-baker/http://www.cepr.net/index.php/biographies/dean-baker/http://www.cwa-union.org/http://www.cwa-union.org/http://www.comw.org/pda/staff.htmlhttp://www.comw.org/pda/staff.htmlhttp://www.epi.org/people/andrew-fieldhouse/http://www.epi.org/people/andrew-fieldhouse/http://comehomeamerica.us/http://comehomeamerica.us/http://itsoureconomy.us/http://itsoureconomy.us/http://itsoureconomy.us/http://itsoureconomy.us/http://occupywashingtondc.org/http://occupywashingtondc.org/http://october2011.org/blogs/kevin-zeese/cspan-coverage-occupied-super-committee-hearingshttp://october2011.org/blogs/kevin-zeese/cspan-coverage-occupied-super-committee-hearingshttp://october2011.org/blogs/kevin-zeese/cspan-coverage-occupied-super-committee-hearingshttp://october2011.org/blogs/kevin-zeese/cspan-coverage-occupied-super-committee-hearings

the 99%’s deficit proposal - how to create jobs, reduce the wealth divide and control spending

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