International Monetary Fund bullying the US: What should Obama do?

[bytor2112]

and the world did not end? the US is still here?

as far as we know.......

[Saintmichaeldefendthem1]

Some of us apparently aren't familiar with the story of the golden-egg-laying goose. But I digress.

The reason big corporations can get away from this, is that they get federal tax credit for taxes they paid to the governments of foreign countries.

If GE pays 30% of its income to the US, and 30% of its income to Mexico, and 30% of its income to Canada, and 30% of its income to France, and 30% of its income to Germany . . . you get the picture.

The tax code recognizes the problem here, and gives companies a break by crediting the amount of taxes paid overseas against their US tax liability.

The quote about GE didn't originate from me. I think that GE's inside relationship with the White House is part of why they get away with it. Crony capitalism.

[Saintmichaeldefendthem1]

No it won't. you attack the "wealthy" and you will be attacking the job creators and cause an economic collapse.

the "rich" all ready pay most of the income tax'

86% of all federal income taxes are paid by top 25% of earners. how are they not paying their share? the top 50% of earners pay 97% of the tax bill. that's up 84% from 2000 and that data is from the IRS

While 47% pay no income taxes, those same people are screaming that the rich never pay enough. How is it that we have come to this point where the job providers have become slaves to support the obscenely girthy recipient class?

[HoosierGuy]

Anybody care to take a guess on this?

Which Republican leader wrote the following? “Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt…, a few other Texas oil millionaires…Their number is negligible and they are stupid.”

And those words are from a great man, no doubt.

[rameumptom]

"More than anytime in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray that we have the wisdom to choose correctly."

Woody Allen

Freedom is the way to real change and to save the poor from poverty. The war on poverty that LBJ set up is just making more poor people that are dependent upon government. People give up their birth right of freedom for a mess of pottage. Why? Because the children will starve! That is the saddest remark, because it suggests that we can only feed the children via government programs. If that is the case, then my own children must be dead by now.

[Saldrin]

*cough*

[HoosierGuy]

Anybody care to take a guess on this?

Which Republican leader wrote the following? “Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt…, a few other Texas oil millionaires…Their number is negligible and they are stupid.”

And those words are from a great man, no doubt.

Courtesy of Juan Cole's site:

By the time US President Eisenhower wrote those words in 1954, Republican leaders had, as a matter of political necessity, accepted the institutions created by the New Deal. (In fact, taxes on corporations and the rich were even higher during the Eisenhower presidency than they had been under FDR.) As the great majority of Americans are assisted by programs such as social security, it should not be surprising, that when facts are understood, progressive government is popular. The moderate Republican trend of domestic governance continued under President Richard Nixon. While Nixon exploited the race issue to get elected in 1968, he “governed as a liberal in many ways: He indexed Social Security for inflation, created Supplemental Security Income…,[raised taxes,] expanded government regulation of workplace safety and the environment, and even tried to introduce universal health insurance.”

Rudolph: US Inequality Quiz | Informed Comment

[FunkyTown]

Hoosier Guy??????? Let's see. Taxes are RAISED on "multi millionaires" "Multi-millionaires" fire people like Hoosier guy. Why? Because business exists to make a profit...not to employ people.

And FYI....the Unites States has defaulted on debt before....like three times. Just sayin...

The last time the US defaulted on debt was, if I recall correctly, FDR and the war bonds scandal.

At that time, the US currency was backed by gold and the US backed out of commitments to repay war bonds with gold. As they had depreciated the currency, people were pushing to get gold. The US then passed a 'We don't have to give you gold no matter what the stupid bonds say' law.

A default on debt now, on the other hand, would depend entirely on how people reacted to it. If there was a panic, US funds on the international market would become all but worthless. The effects of losing international trade can be easily illustrated by a bottle of root beer.

Ingredients:

Molasses from the United States

Anise from Spain

Licorice from France

Vanilla(bourbon) from Madagascar

Cinnamon from Sri Lanka

Cloves from Indonesia

Wintergreen from China

Pimento Berry Oil from Jamaica

Balsam Oil from Peru

And that's just for a bog standard bottle of root beer. Forget things like chocolate(Cocoa beans overwhelmingly come from the ivory coast) and root beer - Think about where you get bits to make an aircraft carrier or nuclear power plant. Make no mistake, Bytor: Devaluing your currency with a default will be painful. Things you take for granted now will dry up overnight.

Without those international components, businesses will close. As businesses close, there will be a knock-on effect.

I understand the push for a debt default, and it may be the only way. But I want to make sure everybody understands the very serious implications of doing that in a confidence-based currency system such as you have now.

[Guest Sachi001]

I would call the IMF's bluff. They are just posturing to give the impression they have the upper hand. We are the worlds #1 consumer of goods. Do you think China would really be happy with the IMF if the USA lost it's buying power? The domino effect would occur and every country would falter.

We should be telling those troll bankers to restructure not ours alone, but every nations debt to an extreme low interest and deal with it or like prophetofdoom said. Go ahead and default. Better some interest money than none.

The USA still has plenty of gold and silver to mine in this country and lots of oil and natural gas underneath. Heck we let the Canadians and S. Africans mine, and take the precious metals and minerals out of our soil. The oil we are letting the Chinese have out of our own backyard in Texas. I say just take it back as a nationalistic policy. We can always go back to using such for trade. However the IMF doesn't want that. Hmm...I wonder why?

[FunkyTown]

I would call the IMF's bluff. They are just posturing to give the impression they have the upper hand. We are the worlds #1 consumer of goods. Do you think China would really be happy with the IMF if the USA lost it's buying power? The domino effect would occur and every country would falter.

We should be telling those troll bankers to restructure not ours alone, but every nations debt to an extreme low interest and deal with it or like prophetofdoom said. Go ahead and default. Better some interest money than none.

The USA still has plenty of gold and silver to mine in this country and lots of oil and natural gas underneath. Heck we let the Canadians and S. Africans mine, and take the precious metals and minerals out of our soil. The oil we are letting the Chinese have out of our own backyard in Texas. I say just take it back as a nationalistic policy. We can always go back to using such for trade. However the IMF doesn't want that. Hmm...I wonder why?

The problem with playing brinkmanship games comes when neither are willing to back down.

Those who are the heads of the IMF have very little to lose, personally, if the US and the rest of the world goes down the toilet.

On the other hand, they could personally stand a lot to gain if a foreign country decided to use them to cripple another country without sending a single soldier.

I'm gonna be honest. I don't like that a private, unelected group has so much power over the fate of nations. It makes me uneasy.

[Just_A_Guy]

Without those international components, businesses will close. As businesses close, there will be a knock-on effect.

I understand the push for a debt default, and it may be the only way. But I want to make sure everybody understands the very serious implications of doing that in a confidence-based currency system such as you have now.

Point taken, but never forget what Lieutenant Holden said during the air raid in Operation Petticoat: "In confusion, there is profit."

The US has elected not to produce a number of these resources because it can get them cheaper overseas. If those markets dry up, but demand remains, then domestic suppliers will crop up to fill that demand.

It will be a slow and painful process, and if we do not re-engage in the global economy at some point then I acknowledge the probability that the US (and the rest of the world) will not enjoy the same prosperity we've seen over the past sixty years.

But I don't think it needs to be the end of America or anything; so long as there remains a basic respect for law and order. What worries me is, I don't know that "law and order" will mean much to a people who lost everything because their government kept perpetrating a financial charade two or three decades after the writing on the wall had become clear.

[rameumptom]

What everyone is not realizing that the IMF would have to blink, because the IMF is largely funded by the USA. They end up collapsing if they play games that harm our economy. In reality, we need to change the relationship with the IMF so that our money we loan them is backed by our interests, and not just theirs.

While our dollar is "confidence based" it is actually based upon the overall value of American wealth and enterprise. Yes, we would have a difficult time for a year or so, but then we would recover. And it is still true that when the USA coughs, the rest of the world catches a cold. If we suffer, so does Europe, China, India, Russia, and everyone else. They'd much rather see Greece go belly up than to see us crash.

[AGStacker]

The dollar was "as good as gold". This is why our currency was strong. It was also strong because we were growing and at the forefront of the Industrial Revolution. The United States actually defaulted in 1971 when we told the International community that we would not redeem the Federal Reserve notes for gold any more. So how did the currency remain strong after this? We created the Petrodollar. Essentially the United States had an unlimited credit card, the Fed, while maintaining a strong currency but this is coming to an end shortly.

Remember the saying "can you spare a dime"? Well, I was definitely not alive during that time but I know we've all heard it. At one point in our history a day's wage was roughly a silver dime. That same dime can buy you close to a gallon of gas and a silver quarter can buy you close to two. You need to understand that silver and gold are the only real money. The Federal Reserve note is a debt based currency. The dollar will continue to lose value and all tangible items will continue to rise.

Your money is safe in metals. The IMF can go to you know where along with all central bank/bankers. It has become perfectly clear why and when we'll need our food storage. Accumulate food, silver and necessary tangibles and you will be able to weather the storm if you are not already prepared.

[NeuroTypical]

Remember that simpson's episode when Homer became the Sanitation Manager? Maybe Springfield's answer would work here.

Either that, or we start doing a bunch of "Who is this 'yoonited stadtes' of which you speak? This is the Associated Confederation of Northern Mexico!"

LM

[sorry, I'm trying to lighten my own mood with these dumb jokes, and it's not working for me either.]

[FunkyTown]

Point taken, but never forget what Lieutenant Holden said during the air raid in Operation Petticoat: "In confusion, there is profit."

The US has elected not to produce a number of these resources because it can get them cheaper overseas. If those markets dry up, but demand remains, then domestic suppliers will crop up to fill that demand.

It will be a slow and painful process, and if we do not re-engage in the global economy at some point then I acknowledge the probability that the US (and the rest of the world) will not enjoy the same prosperity we've seen over the past sixty years.

But I don't think it needs to be the end of America or anything; so long as there remains a basic respect for law and order. What worries me is, I don't know that "law and order" will mean much to a people who lost everything because their government kept perpetrating a financial charade two or three decades after the writing on the wall had become clear.

All very true. I have no particular disagreement with this. As long as people are aware of the difficulties inherent and how many people will be hurt.

I am, however, uneasy about people's reactions in general. Even on this thread, we've gotten everything from defaulting to metal-backed currency being a panacea to the woes.

Gold has no more intinsic value to a hungry man than a pretty bead. It has value because people agree it has value. You may as well base the currency on marble, which I personally find more pleasing to look at and touch.

I have this vague feeling that everyone thinks their solution is the best and whatever solution is tried, the growing pains will cause an uproar.

Beside that, I agree: the various countries(with physically larger countries having an obvious advantage) will begin the slow and painful development of their own items. This will definitely make the world less prosperous than it was for the past 60 years, but it'll muddle through.

[prophetofdoom]

The US financial system is a debt based ponzi scheme. Let's see...

1) US Treasury sends bonds to Federal Reserve for Fiat money to be printed

2) Federal Reserve loans the currency back to the government at interest

3) Banks receive Fiat currency at nearly 0% interest and then loan it back to people at 5%-30% interest.

People need to realize that our currency is not money. It has no inherent value. The Federal Reserve owns the printing press that prints the currency and "loans" it to the government to use.

The Central Bankers/Secret Combinations have destroyed the economy through greed. They create paper fiat bubbles and then implode the bubble....when the depression comes... the bankers buy all the REAL TANGIBLE ASSETS for pennies on the dollar... this fraud has been pulled many times in history.

[Just_A_Guy]

This will definitely make the world less prosperous than it was for the past 60 years, but it'll muddle through.

Not saying that an overall decline in standard of living is a good thing, but let us never forget how insanely prosperous the world as a whole has been for the last sixty years compared to even the preceding century--let alone any other period in recorded human history.