... which makes this video about 30 minutes out of date. It's instructive, nonetheless.
This downgrade effectively means the price of most state and local public sector borrowing just went up.
Friday, August 5, 2011
U.S. credit rating downgraded by S&P
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This need never have happened had Congress being doing what the Constitution requires. Article I Section 8 Clause 1 says that Congress is to levy and collect taxes, pay debts and provide for the common defense and general welfare.
General welfare includes such items as Social Security, Medicare, Medicaid, food stamps, unemployment compensation and the Affordable Care Act. As such, these are constitutionally guaranteed rights under the general welfare clause.
These accomplish what our founders intended for the government to do. In Federalist Paper 45, James Madison wrote:
"It is too early for politicians to presume on our forgetting that the public good, the real welfare of the great body of the people, is the supreme object to be pursued; no form of government whatever has any other value than as it may be fitted for the attainment of this object."
What doesn't meet the requirements of the Constitution needs to be repealed. Those include the Bush tax cuts for the wealthiest few, tax payments, deductions, credits allowances, etc., for large corporations.
Items that are not currently being taxed need to be added to the tax rolls. Items such as OTC and foreign exchange derivatives, bank laundered drug money, the movement of money and foreign goods into the country and campaign contributions to name a few. These all should be subject to a proportional rate toll that tops out at 5%.
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