The Trick to Suppressing Revolution: Keeping Debt/Tax Serfdom Bearable

Parasites must balance their drive to maximize what they extract from their host with the risk of losing everything by killing their host. This is the dilemma of the parasitic partnership of the central state and financial Elites everywhere: to extract the maximum possible in debt payments and taxes without sparking rebellion and revolution.

I have often commented on the current class structure, which paradoxically unites the interests of the top 1/5% of 1% and their political-class toadies and the bottom 50% who are drawing transfer payments/benefits from the state: both support the status quo because both receive direct benefits from it.

The 20% who pay most of the tax and service much of the debt are in the middle, a political minority of debt/tax serfs who finance the status quo, i.e. cartel-crony capitalism owned and operated by the financial and political Elite

The numbers of Americans drawing benefits from the state are astounding: almost 11 million people drawing lifetime disability from Social Security (The Number Of US Citizens On Disability Is Now Larger Than The Population Of Greece); Social Security (SSA) has 61 million beneficiaries as of March 2012; Medicare had 49.4 million beneficiaries in 2012, and Medicaid has over 50 million beneficiaries (another source puts the current number at 58 million, but the Kaiser Family Foundation says roughly 7 million "dual-eligibles" receive both Medicaid and Medicare, so let's use the data point of 50 million Medicaid-only recipients.

This aligns fairly well with the 48 million drawing SNAP (food stamp) benefits: Food stamp Recipients Hit Record (Zero Hedge). Those qualifying for one program likely qualify for the other.

This means roughly 110 million people are drawing significant direct benefits from the Federal government (central state) while the number of full-time workers is 116 million--about a 1-to-1 worker-beneficiary ratio.

The problem is two-fold: the entitlement programs are running massive deficits even though the Baby Boom has barely started to enter the programs, and the number of workers earning enough to pay significant income taxes is remarkably limited

As I detailed in The Fraud at the Heart of Social Security (January 17, 2011), the program paid out $707 billion in 2010 and collected $631 billion in taxes, a $76 billion shortfall for 2010. The current program (2012) cost is $817 billion, a leap of $100 billion in a few short years as Baby Boomers flood into the program.

Of the roughly 142 million workers in the U.S., 38 million earn less than $10,000 per year, 50 million earn less that $15,000 a year and 61 million earn less than $20,000 annually. All these numbers are drawn directly from Social Security Administration payroll data.

100 million wage earners, or 2/3 the entire workforce, earn less than $40,000 per year.

Most of the heavy-lifting in terms of paying income taxes falls to about 30 million people, the top 20% of wage earners.

As for debt-serfdom, the status quo has widely distributed huge debt loads via home mortgages and student loans. A trillion here and a trillion there and pretty soon you're talking real money.






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commented 2013-05-19 14:34:39 -0400 · Flag
Spartacus writes:

‘trickle down nonsense’ people feel wealthy so they go to a restaurant
the chef has a job, the proprietor makes money the service staff pocket
nice tips and that is how economic prosperity is distributed and generated, ARE YOU Kidding Me ?