Tuesday, October 4, 2011

Why Corporations are not the biggest problem that main street faces.

If the Occupy movement continues to believe that corporations are the root cause of hardship in the world, they may be missing the bigger picture.

People are struggling because they have too much rising debt. Rising debt is heavily influenced by onerous interest rate charges on credit cards, student loans, and home mortgages. Excessive interest rate charges dilutes the buying power of whatever income the consumer presently has.

Target Credit Card is a perfect example. At some point a few years ago I think Target rate jacked their credit card customers. Rate jacking involves significant raising of the interest rate on existing debt, overnight.  The customer might have been maintaining a certain level of debt, but once the interest rate is raised, their buying power drops dramatically. Additionally, the high interest rate charge makes it harder to pay off the debt as well.

In essence Target becomes a store that could be making more money off of interest rate charges than the merchandise they sell! At this point, Target becomes a jobs robber since money that could have been spent either paying down the credit card or buying necessary merchandise instead just goes into Target's pocket, the result is less product is sold or the consumer has less money to spend locally.

While one can say, "Aha, your Target credit card example provides proof that the corporations are the problem".  No, the problem is not Target, the problem is that existing debt cannot be restructured without defaulting.

If a Target customer desires their 22.90% credit card interest rate be lowered, Target customer service will do nothing to help. A customer cannot come up with a reason, no matter how pitiful or tragic their life situation, that will motivate Target to lower that 22.90% interest rate. The best Target will do is lower the monthly payment so that every month, the customer is basically just paying interest with virtually no money left over to purchase an item in the store!

However, Target's credit card tyranny can be over ruled by simply passing a law. Pass a law that Restructuring debt is NOT GROUNDS for a default, and Target can be beaten. Pass a law that restructuring debt is NOT GROUNDS for a default, and the individual regains a significant portion of their power back over both the corporations, the banking industry, and wall street.


2 comments:

  1. Get Money Out Of Federal Politics - Occupy Congress!

    Make Campaign Finance Reform the dominant political issue in 2012. Get the Fair Elections Now Act passed into law where political candidates for federal office would raise a large number of small contributions from their communities in order to qualify for Fair Elections funding. Contributions are limited to $100.00. Strictly voluntary by the candidate to avoid legal issues.

    Require new FCC regulations granting 100% FREE air time to all federal candidates who obtain sufficient petition signatures and/or votes to get on the ballot and participate in the primaries and/or electoral process.

    Once you start electing people that have voluntarily taken a maximum donation of $100.00 and are not tied to special interests, you will begin to get a more responsive federal government that will actually carry out the will of the people.

    You can begin to solve big problems in an open and rational way. Solutions like...

    End the "revolving door" of politicians and their staffs from ever becoming becoming lobbyists and prohibit all federal public employees, officers, officials from ever being employed by any corporation, individual or business that they specifically regulated while in office.

    Create a fair federal tax code. The marginal tax rate ought to be raised to 50 percent on income between $500,000 and $5 million, 60 percent on income between $5 million and $15 million, and 70 percent on income over $15 million. There should be a 2 percent annual surtax on all fortunes over $7 million. The estate tax should be 55 percent and kicks in after $2 million. Capital gains should be taxed at 35 percent. End the home mortgage deduction on all homes over $750,000. Corporations should be taxed by a variable amount based on the percentage of payroll going to US workers. A small business employing 100% US workers should be taxed somewhere between 15-20% while a company that has completely shifted its production overseas should be in the 50% range. Eliminate corporate loopholes, unfair tax breaks, exemptions and deductions, subsidies and end offshore tax haven abuse.

    Break up the biggest banks. Reenact Glass-Steagall. Abolish credit default swaps. Derivatives must be traded on transparent exchanges. Tax all Wall St. financial transactions at 1%. Damp down speculation and raise $400 billion a year.

    A ten-year federal program that involves a New Works Progress Administration (WPA) and Civilian Conservation Corps (CCC) to create millions of jobs rebuilding America that includes infrastructure banks run by engineers, not politicians to extricate ourselves from the Great Recession now and increase productivity later.

    Seriously address the housing crisis where one in four mortgages are underwater in America. The Congress should give bankruptcy judges the right to amend mortgages in order to pressure lenders to reduce principle owed.

    Increase upward mobility in an increasingly stratified society, the federal government should pay tuition and fees for all students, part and full time, who are enrolled in two-year public institutions in the United States.

    End the wars. Reduce the military budget by half ($275 billion).

    Medicare For All. Allow Medicare to purchase drugs directly. Give MEDPAC more authority to drive down medical costs.

    ReplyDelete
  2. Get Money Out Of Federal Politics - Occupy Congress!

    Make Campaign Finance Reform the dominant political issue in 2012. Get the Fair Elections Now Act passed into law where political candidates for federal office would raise a large number of small contributions from their communities in order to qualify for Fair Elections funding. Contributions are limited to $100.00. Strictly voluntary by the candidate to avoid legal issues.

    Require new FCC regulations granting 100% FREE air time to all federal candidates who obtain sufficient petition signatures and/or votes to get on the ballot and participate in the primaries and/or electoral process.

    Once you start electing politicians that have voluntarily taken a maximum donation of $100.00 and are not tied to special interests, you will begin to get a more responsive federal government that will actually carry out the will of the people.

    You can begin to solve big problems in an open and rational way. Solutions like...

    End the "revolving door" of politicians and their staffs from ever becoming becoming lobbyists and prohibit all federal public employees, officers, officials from ever being employed by any corporation, individual or business that they specifically regulated while in office.

    Create a fair federal tax code. The marginal tax rate ought to be raised to 50 percent on income between $500,000 and $5 million, 60 percent on income between $5 million and $15 million, and 70 percent on income over $15 million. There should be a 2 percent annual surtax on all fortunes over $7 million. The estate tax should be 55 percent and kicks in after $2 million. Capital gains should be taxed at 35 percent. End the home mortgage deduction on all homes over $750,000. Corporations should be taxed by a variable amount based on the percentage of payroll going to US workers. A small business employing 100% US workers should be taxed somewhere between 15-20% while a company that has completely shifted its production overseas should be in the 50% range. Eliminate corporate loopholes, unfair tax breaks, exemptions and deductions, subsidies and end offshore tax haven abuse.

    Break up the biggest banks. Reenact Glass-Steagall. Abolish credit default swaps. Derivatives must be traded on transparent exchanges. Tax all Wall St. financial transactions at 1%. Damp down speculation and raise $400 billion a year.

    A ten-year federal program that involves a New Works Progress Administration (WPA) and Civilian Conservation Corps (CCC) to create millions of jobs rebuilding America that includes infrastructure banks run by engineers, not politicians to extricate ourselves from the Great Recession now and increase productivity later.

    Seriously address the housing crisis where one in four mortgages are underwater in America. The Congress should give bankruptcy judges the right to amend mortgages in order to pressure lenders to reduce principle owed.

    Increase upward mobility in an increasingly stratified society, the federal government should pay tuition and fees for all students, part and full time, who are enrolled in two-year public institutions in the United States.

    End the wars. Reduce the military budget by half ($275 billion).

    Medicare For All. Allow Medicare to purchase drugs directly. Give MEDPAC more authority to drive down medical costs.

    ReplyDelete

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