Before I start, some Notes:
Nov. 19th 2000
The Y2K Presidential election drags on, I just wanted to say, the Republican Candidate George W Bush, is not my idea of a conservative politician,
But… he'll do in a pinch.

A word on the Electoral College.
Don't let people sell you the spiel about the Electoral college being out of date, you know, the old "it was designed for the horse and buggy days" bullshit. The design of the Electoral College parallels the design of the Federal Legislature, (the House and Senate). It does so for a reason, with the legislature we operate as a Republic, (on the federal level). With the Electoral College we elect our president as a Republic.
Reference the Constitution, Article 2, Paragraph 2.
Don't you remember the pledge of allegiance? "and to the Republic for which it stands."
And besides, your dreaming if you think that a amendment to abolish it is ever going to pass, so you might as well just get used to it.

On with the Report:

The purpose of this report is to address two challenges to previous reports, in that, I had claimed that the Government has never made a payment on the debt. Also the fact that I omit mention of the employer contribution to Social Security in "The Curse Of The Rock Report".

Here I will try to show that:

• The Government does make payment on the debt, except, it really doesn't.
• That your employer does contribute to your Social Security, except, he really doesn't.

And that, in both cases it's the middle class tax payer that gets the shaft.

Disclaimer:
As I stated in previous reports, I am not A well-educated man, (does it show?)
However, having paid off two mortgages in the past fifteen years, I do know a just a ity bity something about managing a debt.
This report is intended to reflect common sense, and I hope Provide a logical analysis of our current political and social systems.

Two Faces of the National Debt.

First: The payments to the National Debt like any debt function within three options:

Option #1 Payment is made for the interest, and also some portion of the principle. In this mode you can watch the debt balance diminish year by year. This is a graph of what your home mortgage looks like, if you were to take the time to plot it out.
Option #2 Payment is made for the interest, but nothing is paid on the principle. In this mode debt neither increases nor decreases.
Option #3 Pay nothing to either interest or principle. In this mode the debt just increases year after year. It grows because the unpaid interest is added to the principle account.

How the National Debt HAS to work:
When any holder of Government bonds decides to cash them in, the payment of both the interest and principle is made. This fundamental truth about Bonds contradicts my claim that the government hasn't made a single payment on the debt for decades. Because of the requirement to pay both interest and principle when a bond is redeemed, you might assume the National Debt functions in option #1.

Well, as long as we're talking about contradictions, the actual chart for the government's debt is that of Option #3.

The data is taken from: Statistical Abstract of the United States 1999," U.S. Department Of Commerce, Economics and Statistics Administration, Bureau of the Census, Section 10, page 348, table 542. And is available on the web at, http://www.census.gov/prod/www/statistical-abstract-us.html

The only reasonable interpretation of this quandary is that the Government is always borrowing money to payoff the debt of previous years. It would be like using your Visa card to make your mortgage payment, (not very smart). Wise men of ancient times called this, “borrowing from Peter to pay Paul” and it is usually associated with debt mismanagement, (for good reason).

Second: What are some of the consequences of constant borrowing?

Somewhere/sometime, back during World War Two, a new jeep was delivered to the battlefield, and destroyed that same day. All references to the jeep in this section are for that very same jeep, not a new jeep in present times, but that one jeep built in 1942 and destroyed shortly there after. Bought by the U.S. government in 1942, but, as I will try to show, not paid for, at least not yet. Not by our fathers, back then, but will be by us, now, in the present. I hope we pay for it now, because if not us, then our posterity will be paying for it. And boy will they be pissed.

The Billion Dollar Jeep.
That’s right, a Jeep, a plan old World War Two army jeep, you know the little car army men drove around in. These vehicles were produced en masse during the Second World War, so it is safe to assume that the mass production brought the price down considerably. Say about a billion dollars or so. As much as a B-2 Bomber costs today. Don’t worry we are not going to pay one billion dollars for just one Jeep. However, we will be paying a considerable higher price than what ever a Jeep did in fact cost in 1942. And, if the debt is not controlled by us, then in the future, late in the next century the cost for one jeep can easily exceed one billion dollars.

In the following example there are several variables that cannot easily be accounted for. I will plug in some standard numbers just to show how the process works.

• Let's say the cost of our Jeep was $1000.00, I can only hope they weren’t really that much, but it’s a good round number.
• A bond that has an interest rate of 10% will reach 100% maturity in seven years. Again a nice round value. Interest rates vary considerably both with the types of bonds and also the situation with the economy, bond rates tend to go up along with inflation.
• This example also ignores the factor of inflation.

WAR BOND. 1942	Our Jeep is purchased with War Bonds. ($1,000.00 borrowed money). The owner of the bond, some guy named Paul.
SAVINGS BOND, (or some other kind.) First Iteration: 1949	Seven years later the war bond matures. The Bond is paid off with newly purchased bonds. (Borrowed money). One for the original bond, and one for the interest dividend of the original bond. In order to pay Paul, the Feds. borrow from Peter. Cost of the jeep now owed by Tax payers =$2,000.00
T-BILL, (or some other kind.) Second Iteration: 1956	Another seven years and the Bonds from the first iteration are paid off (along with the interest dividend), with newly purchased bonds. (Borrowed money). In order to pay Peter, the Feds. borrow from Patrick. Cost of the jeep now owed by Tax payers =$4,000.00
Third Iteration: 1963	Another seven years, The Bonds from the second iteration are paid off. (along with the interest dividend), with newly purchased bonds. (Borrowed money). In order to pay Patrick, the Feds. Borrow from Phil. Cost of the jeep now owed by Tax payers =$8,000.00
TIME TRAVEL. After Patty,(16K) and Phillip,(32K) and Phank,(64K) and Phred,(128K) and Phanny,(256K) and who knows who. Multiply these times “ten”. Eighth (or so) Iteration: Present Day The Bonds from the previous iteration are paid off (along with the interest dividend), with newly purchased bonds. Cost of the jeep now owed by Tax payers =$256,000.00 You can reduce this number if the Jeep did in fact cost less than our starting $1000, also the bond interest rates were probably less than 10%, so reduce it a bit more. On the other hand these numbers are 1942 dollars, so factor in inflation and the values go back up, how far? You guess. Whatever the actual value, it is now many times the original price from 1942. That is, if we now proceed with paying down the debt. If we do not…
Time Travel, Circa the year 2080. ---Well, let's just say more than you can Imagine. Nth iteration: By continually borrowing from peter to Pay Paul the accumulation of debt for our single little Jeep, (now nothing but a rust stain), that Jeep now costs as much as a B-2 Bomber does today. This is why the process of borrowing from Peter to pay Paul has always been associated with debt mismanagement. Of course you don't have to worry about paying off the debt, just keep on doing nothing and let your children pay for it, or your grand children, or your great grand children. After all your parents stuck it to you, know you can stick it to your children. What a wonderful opportunity for you, although, personally, I would prefer A alternate solution.

Next Section:

The Hidden Factors of Socialist Taxation in America.

How many times have you heard that big business does not pay a fair share of taxes?

By law, Corporations and smaller business's pay income tax just as individuals do.
Here are three simple facts about business, and taxation:

• Thriving businesses generate lots of income that can be taxed.
• Struggling businesses (on the other hand), do not.
• High taxation prevents businesses from thriving.

Because of these three simple facts, there is a functional limit on how much the government can tax business income. There are no limits for individual income tax, like you and me, but on business income there is, and the government will not violate that limit. I don't mean that as a conscious decision on their part, they won't violate the limit, even when they don't know about such a limit.
Example:
Congress raises the tax rate on business, afterwards two things happen.

• While lobbying for tax reduction, corporations donate to the congressmen's reelection.
• The economy (local, or national), begins to drop a bit.

Bewildered (and also, well paid), the Congress or the President comes out and state they need to stimulate the economy. In order to stimulate the economy they either lower the tax rate, or put in more business loopholes into the tax code. In this fashion the functional limit for business income tax is restored, and the requirement for additional taxation is transferred, (almost automatically), to the individual's income tax, that's you and me.

As I stated this process can occur without the politician's conscious actions.

Now, let's say there is a piece of legislation for a program that has great public support. Let's say it has that support because we are told the business taxation will pay for it.
This is what's going to happen: (reference the chart below.)

• Prior to the starting the program, business income tax is running at the functional limit,(First column).
• When the program is started business income tax is increased, (second column). The new program taxation is indicated by the red block.
• After some time, the economy begins to be affected, and per the previously mentioned process, the tax code is altered in order to reestablish the functional limit, (third column).

The taxation for the new program is still there, but the overall tax is brought down to where it had always been. And, since the Government still needs the extra tax money, the balance is transferred (unconsciously), to the individual's income tax, which, as I said, has no real limit.

There are many social programs on the books, some were touted as being funded by business taxation, and others were not. In either case business income tax is not paying for them. I concede that Congress will tax business as much as they can get away with, but they can't get away with all that much. Funding for all such programs past and future will fall on us, the average middle class taxpayer. It will never be otherwise. The next time your politician promotes such A idea for a new program, don't believe him, don't trust him, and for Gods sake don't vote for him.

Above all else you must understand that what I have described is true for Social Security. It has been from day one of that program. Your employer isn't paying squat for Social security. Social Security is paid from individual's taxation alone (in one form, or another).

There is a similar process that involves business taxation, pork legislation, and the debt. I won't go into it because it concludes the same way; the middle class taxpayer gets it in the end. (Geographically speaking.)

I am stating things as absolutes, and I know it's not really that cut and dry. However the process I just described does occur with variations. You may wonder why I am not stating any facts or statistical data to support my claim. I have no doubt that I could find such data. I also have no doubt somebody wishing to counter my argument could, just as easily find data to disprove what I say. The system is so complex, so convoluted that you can find data to prove, or disprove ANY conclusion.

Or as the wise man once put it:
"Facts can, and do, function as mere pawns in the arsenal of unscrupulous debaters".

So for practical purposes, all I can offer you, is what I hope is a logical, common sense viewpoint, and you'll have to judge whether it's valid, or not.
When all is said and done, as voters, our common sense is all we really have.

America, I know that you desperately need someone to blame for the mess that I just described. There are people who hold the ultimate responsibility for all this. I found one of them in my mirror, try your mirror, there may be one in there also.
Our sin, they told us we could have something for nothing, and we believed them. What were we thinking?

So now you have read yet another report... Thanks.
If you agree with it pass it around for comment by others.
If you disagree with it then write your own damn report and submit it for comment.

Submitted for your review by.
Mr. Eric (Rock) Andersen
A citizen 0f the USA.
Thus given the Right to have and express an opinion.
Also:
A taxpayer of the USA.
Thus given the Right to have and express an attitude.