Saturday, June 19, 2010

The Progressive Answer to 'Deficit Hawks'


Tax the Wall Street Casino

by Chuck Collins

Common Dreams, 6/17/10

Angry about the greedy financial speculation that wrecked the economy? Got a deficit headache? Anxious about where the money will come from for long overdue investments in energy independence that will create good jobs in the new economy?   [1]

How do we spell relief? Try F.S.T., which stands for Financial Speculation Tax. 

A financial speculation tax is a modest levy on financial transactions such as the purchase and sale of stocks, bonds, derivatives, and swaps. England and Taiwan have such taxes on securities that encourage productive investment and discourage reckless trading behavior. 

Leaders in the U.S. Congress have introduced a proposal to collect a penny on every four dollars of financial transactions, a fraction of what people pay in broker fees. This FST would exempt retirement funds and the first $100,000 of individual investment transactions. So it would target the fast-buck flippers, the same financial gamblers who crashed the economy through reckless speculation.  

The financial speculation tax would raise an estimated $177 billion a year, which makes it the potentially biggest revenue raiser on the table right now. 

The deficit hawks should be thrilled about a financial speculation tax. Last week, President Obama issued a directive to federal agencies to propose ways to cut their budgets by 5 percent [2]. The Sustainable Defense Task Force identified $960 billion over ten years in wasteful military [3] spending that could be eliminated without compromising national security. Combine that military savings with a financial speculation tax and we have key components to a new budget and spending plan. 

As President Obama heads to Toronto on June 26th for the Summit of the G-20 leaders, he's going to find lots of other presidents asking about the F.S.T. German Chancellor Angela Merkel and French President Nicolas Sarkozy have renewed calls for a financial speculation tax. [4]

President Obama will argue in support of his bank tax proposal, which will raise an estimated $9 billion a year. The G-20 leaders may also debate a proposal from the International Monetary Fund to institute a "financial activities tax" on profits and employee compensation of all financial institutions. We estimate such a tax would raise $28 billion a year in the U.S. 

Yet given our national revenue challenges, why wouldn't we consider the biggest potential revenue raiser, a financial speculation tax? According to a new report that I co-authored, Taxing the Wall Street Casino [1] a financial speculation tax will raise 20 times as much as President Obama's proposed bank levy and six times as much as the IMF's proposed Financial Activities Tax. 

A financial speculation tax would have tremendous benefits. It would discourage the short-term investment outlook that lay at the heart of the financial crisis. And it would encourage a healthier marketplace in real goods and services. "We have lost the distinction between real investment in the real economy and short-term speculation," said [5] John Fullerton, a former JP Morgan Managing Director. "A financial transactions tax should, at the margin, shift investment horizons out to longer holding periods by making high turnover trading strategies marginally less profitable."   

Other leaders from business and finance have stepped up to talk about the value of a financial speculation tax. Wealth for the Common Good has initiated a campaign of business leaders and investors [6] who support the tax. John Bogle, the founder of Vanguard Mutual Fund, supports the tax as "a way to slow the rampant speculation that has created such havoc in our financial markets, but also for its revenue-raising potential in this time of staggering government deficits." 

Obviously what stands in the way of implementing such a common sense proposal is the powerful banking and finance lobby, the same interest group that tried to block and is now trying to water down financial reform. But while Wall Street lobby groups have formidable political and economic clout, a growing global "people power" campaign behind financial speculation taxes has a good chance of winning. 

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Tuesday, June 8, 2010

No End in Sight for Rising Battlefield Deaths

Afghan War: Shocking Rise in US

Casualties, Lack of Reporting


By Tom Hayden

Huffington Post

Despite rhetoric about military patriots and wounded warriors, the White House, Pentagon and mainstream media have minimized attention to startling increases in Afghanistan deaths and casualties suffered by American troops since 2008.

US death tolls in Afghanistan have risen by 273 percent this spring in comparison to the same period in 2008.

There has been a 430 percent increase in Americans wounded in Afghanistan so far this year compared to the same period in 2009.

The facts are these, based on Department of Defense data:

As of today, June 8, the six-month US military death toll in Afghanistan has risen to 156, surpassing the 155 total for all of 2008.

These numbers more than doubled in the January-May period between 2009 and 2010: 61 dead in January-May 2009, 142 through May of this year.


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