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Thursday, December 29, 2011

The 3 Most Dangerous Retirement Lies Brokers Are Telling Americans Today

In the next few minutes, you could LOSE ALL FEAR of…
  • Outliving Your Nest Egg
  • Saving for Retirement
  • Having Your Hard-Earned Retirement Money

    Ravaged By Soon-to-Soar Inflation
There’s a simple first step to achieving your retirement dreams and more: Stop listening to the lies of brokers and financial advisors
They’re telling lies.
Brokers, financial advisors, Wall Street investment firms… 
They’re likely all perpetuating dangerous retirement myths. Sometimes it’s to sell more products and sometimes it’s just because they don’t know any better.
These three lies are costing millions of Americans big money every day.
Not just little white lies either… but lies jeopardizing the financial futures Americans are working (or have worked) so hard to build, threatening the legacy they plan on leaving behind for their kids and grandkids.
You may have even been victim of these ridiculous lies yourself!
But even if you have, there’s no reason you have to succumb to it. Or let it happen again…
So I’m blowing the lid off the most dangerous lies about investing for retirement in America today.
I’m doing this to save you from the fate that so many of your misled friends and neighbors may have succumbed to because of these costly lies.
Lies that could prevent you from ever reaching your dream retirement.

Fact is, that for lots of people in America, retirement is actually kind of sad …
Not only do people have to pinch pennies and be careful, but CBS News reports that a shocking 80% of baby boomers plan to “retire late,” working well past the age of 63.
Working longer than their parents and their grandparents did.
And that’s a shame. After all, you worked all those years. You sacrificed. You did the right thing.
So shouldn’t you have the freedom and the ability to enjoy yourself however you choose?
Maybe you want to travel the world, buy a fancy car or two, or a beachfront home in some exotic locale?
Or set up your grandkids with college funds or donate cash to charity causes close to your heart?
That’s a REAL retirement! And it could be yours; too… starting today… starting right now… it’s easier than you think… I’ll show you how.
I’m here to do more than just expose the lies the financial community is perpetuating on the American public.
I actually want to share with you wealth-building secrets brokers won’t tell their clients about since they don’t benefit or don’t even know exist.
Secrets that you can easily apply and give you the wealthy- thriving retirement you deserve.
A group of regular Americans are using them right now to make a fortune…
  • Allison Sloan in Miami, FL reports, “I have a $57,000 profit.”
  • James Hanson in Boston, MA says, “I’ve made $132,200.”
But before we get to the dirty details, let me introduce myself...
Hello. My name’s Chris Mayer and I’m a veteran market analyst.
Maybe you've seen me during my many appearances on Fox's Bulls & Bears, Forbes on Fox, or CNBC... Or heard my voice on CNN Radio... or read my popular book, Invest Like a Dealmaker: Secrets From a Former Banking Insider.

Perhaps you know one of the 44,000 Americans who’s recently followed my research to money multiplying gains of 137.6%, 127.34%, 101.64%, 107% and 115%.
I know the financial world — even the banking world — from the inside.
Fresh out of my masters program, I helped manage over $200 million for a major commercial bank... and even became their youngest vice-president... 
I mention it because that background — poring over the balance sheets of major and minor companies alike, looking for anomalies, mistakes, and even hidden value — was about the best stock picking training you could imagine.
After all, a company I’d feel comfortable lending to is one I’d feel comfortable owning shares of.
That’s how I spent years studying history’s finest analysts... compiling and testing their systems... until I had my own ruthless formula for testing the companies I evaluated, much more deeply than your average broker.
It was so effective that I’m proud to say I never lost a single dime on any of the major loans I made. The board even offered me stock options and promotions as a reward.
But that was just when lenders grew cocky and lowered their lending standards... putting America’s financial system on a dangerous path that would inevitably lead to crisis.
And devastate the retirement hopes of millions of innocent Americans.
So I decided to walk away to do my own 100% independent stock market research.
I have zero allegiance to any Wall Street investment firm, just to my loyal readers. To people just like you.
And to say I’m appalled by the nonsense that the financial community is feeding you about retirement today is a huge understatement.
You’re being directly taken for a ride… at a time when the stakes for most Americans couldn’t possibly get any higher.
That’s why it’s absolutely critical that you learn the REAL story about investing for retirement right now and what you must do if you want a secure financial future.
So let’s get right to the details starting with the first outrageous lie…
MOST DANGEROUS RETIREMENT LIE #1:
“Diversify! Diversify! Diversify!”
One of the biggest drums beaten today in investing for retirement is to DIVERSIFY.
It’s a time-tested method for reducing risk and maximizing an investor’s portfolio’s returns by investing in a variety of assets.
However too much diversification, or “diworsification”, can be a bad thing. In fact, some brokers have incentives to “diworsify” investment portfolios.
“Diworsification” is a term originally created by billionaire investor Peter Lynch to describe a conglomerate, a company made up of seemingly unrelated businesses.
Today it’s morphed into a buzzword meaning money-burning diversification of an investment portfolio.

It’s an easy trap to fall into and happens when people become “collectors of investments” as opposed to just investors.
Some people simply buy what they think they should own with little regard to how it contributes to their overall portfolio.
In the end you have a smorgasbord of investments not linked to any real purpose. 
Owning too many investments can be confusing; makes it harder to do the diligence, increases investment costs, and can take a big bite out of returns over the long term.
  • As Joel Greenblatt, author of You Can Be a Stock Market Genius, points out, “After purchasing six or eight stocks in different industries, the benefit of adding even more stocks to your portfolio in an effort to decrease risk is small.”
  • Billionaire investor Warren Buffett says, “Diversification makes very little sense for those who know what they are doing.”
  • And multimillionaire investor Jim Rogers writes, “Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued [for making bad investment choices for clients]. You can go broke diversifying.”
So what kind of schemes are brokers using today to manipulate their clients’ money?
Brokers are using new products to spread their client’s money called “auto-diversification” investments.
One example is a target-date fund – a mutual fund whose asset mix becomes more conservative as the target date (usually retirement) approaches.

Since it’s managed by a third party and not by the broker himself, it requires little work on his part and gives him convenient finger pointing opportunities if things go awry.

Brokers also overdiversify their client’s accounts to keep the “money in motion.”
Buying and selling investments that are packaged differently with similar risk does very little to diversify a portfolio, but these transactions often result in higher fees and more commissions for the broker.
And then there’s this ridiculous retirement lie…
MOST DANGEROUS RETIREMENT LIE #2:
“Bonds Are a Good Investment and Should
Represent a Large Portion of an Investor’s Portfolio”
It’s common for older clients to be pushed into a greater percentage of bonds in their portfolio.
An often-quoted rule is that investors should hold their age in bonds as a total percentage of their portfolios.
For instance, a sixty-five-year-old should hold 65% bonds in his portfolio.
In fact, many companies are redesigning their 401(k)s to funnel investors into the target-date funds I told you about earlier, which automatically steer older investors into bonds.
The reasoning behind this scheme is that financial advisors generally believe bonds to be a safer, less “plunge-prone” investment than stocks.
It makes a bit of sense because if the company goes bankrupt, bondholders will be paid before the stockholders.
But the reason I don’t like fixed-income investments as an alternative to stocks is that I believe they have much of the downside risk of stocks with little of the upside.
Let me explain…
In the recent downturn, we saw stocks of certain companies fall 75 percent, and their bonds are also significantly off, sometime in excess of 50 percent.
Likewise, in times of high inflation, we have seen bonds with long maturity dates (10 years or more) also do poorly. 
  • The Economic Times confirms, “In an inflationary environment, bonds do poorly.”
  • Smartmoney.com says, “Even a cursory look at the headlines shows it's a shaky time for bonds, with inflation fears rising and government finances in bad shape.”
So, both bonds and stocks have big downside risk if inflation takes off or a company’s earnings prospects decline significantly.
But what if things improve?
What if the economy gets better and a company grows faster than expected?
The bondholder has no upside.                                   
No matter how well the company is managed and how good its earnings prospects are, the bondholder simply gets his promised fixed rate of return.
But since the stockholder has an ownership stake in the company, if the company’s fortunes improve, so does the stockholder’s return.
In short, the bondholder is just going to get their money back in good times while the stockholder has real upside potential as the company’s earnings improve.
So if you are holding bonds, you may be missing a better alternative in stocks, while facing similar downside risk.
I believe people are fooled by the name “fixed-income securities” when in fact there is no such thing.
And there’s another crazy lie about retirement the financial community NEEDS you to believe…
MOST DANGEROUS RETIREMENT LIE #3
“Before Investing, Speak With
a Broker or Financial Advisor”
It is preached that before you invest, you should talk with a financial advisor whose long-term investing perspective will end up saving you a great deal of money over time.
But does it really?
While it’s difficult to track all the investment advice given by stockbrokers, academic studies have been done as to the quality of their research departments’ advice.
And it has been found that over time, buying the stocks that banks’ research departments recommend does not yield any superior performance in a portfolio.
Similarly, a study was done in which all of Jim Cramer’s investment advice was followed, and it was determined that he did not outperform the market either.
Finally a study of all the mutual funds shows that, as a whole, they also under perform the market by exactly the amount of their fees.
Therefore, it certainly doesn’t make sense to pay ridiculous 1, 2 or 3 percent fees per year to get worthless advice.
You may as well bury your money in the backyard – at least you won’t pay fees to do that.
Let's look at the shocking impact of fees, over time, on your nest egg.
The table below assumes $2,000 is invested on January 1st of each year and earns a 10% rate of return before deducting fees.
The Balance after 40 Years
Mgmt. Fee @ 0.02% $968,249
Mgmt. Fee @ 0.25% $907,762
Mgmt. Fee @ 0.50% $846,479
Mgmt. Fee @ 1% $736,584
Mgmt. Fee @ 2% $559,562
Mgmt. Fee @ 3% $427,219
Think about the numbers on this table...
If you have investments that are costing 3%, then your nest egg will be an astonishing $541,000 lower after 40 years than if you used low-fee investments and did your own investing!

As Ric Edelman, ranked by Barron’s as America’s #1 independent financial advisor, says,
“There's no greater pitfall than the one created by the retail mutual fund industry. [They] are ripping you off. You are incurring greater risks, lower returns and higher fees than you realize, and as a result you are in danger of not achieving your financial goals.” 
Bottom line: Even though a broker’s obligation is to act in the best interest of the client, most often this is simply not the case.
In a way, it’s like the more money their clients lose, the more money they make.
That’s because most brokers have incentives to sell certain types of products. They have interests in overdiversifying their clients’ accounts.
And the cumulative damage can be devastating to an investor’s long-term wealth. 
Up to $541,000 devastating!
It’s no wonder most investors in America think the game is rigged against them!
Frankly, You Deserve Better…
You’ve worked too hard to dump your life savings into some corporate black hole in return for mediocre performance, huge fees and arrogance.
Well it’s not too late to turn the tide on your financial future. Even better, you can do it yourself!
It’s still not too late to put yourself on the path to a wealthy and fulfilling retirement.
You can achieve the retirement of your dreams despite today’s scrambled markets.
All you have to do is be willing to make a few small, simple changes, if you’ve been duped into making these mistakes.
Even if you’re already retired, the secrets I’ll share with you today can give you a richer, more comfortable retirement... 
It all starts with this unique, little-known strategy for potentially amassing rich stock gains over and over again.
In fact, it’s perhaps the single most powerful wealth secret you’ll ever come across…
The Secret Behind America’s Wealthiest Empires And a Bulletproof Retirement
This investment technique is based on the secret that’s built some of America’s greatest corporate empires.
Allow me to illustrate this idea for you with a simple analogy...
Say there are two houses.
In one, the family who lives there also owns the house. In the other, the family who lives there rents it out.
Which house do you think will be in better shape after 10 years?
If you said the house where the people who lived there owned it, odds are you’d be right. 
In real estate, owners take better care of property than renters.
The same logic applies to the stock market, too. Not surprising, is it?
When the people who run the companies are also large owners — when they have their own skin in the game — those companies tend to deliver astonishing results over time.
I’m talking about some of the most successful, iconic S&P 500 firms over the last half century…
  • Like Wal-Mart under the leadership of its founder, Sam Walton. When Sam was at the helm, the stock delivered a stunning annual return of 20.5%. But after he stepped down, Wal-Mart returned only about 9% per year. 
  • Another example is IBM. Under the Watson family, IBM returned 6.6% more than the stock market. But after the Watson’s, the stock did only 1.7% better than the market. 
  • Or take Apple, whose IPO created more millionaires than any other company in history. Without Steve Jobs for over a decade, Apple returned 3.1% per year worse than the overall market. With him, the stock did 28% per year better than the market
Of course, the list goes on…
This is called the “Owner Operator” model.
It works so well because people like Walton and Jobs don’t focus on the company’s short-term share price like hired gun CEO’s tend to. CEO’s who just want to take their bonuses and run.
Since they own the business instead, they concentrate their efforts more on the company’s overall long-term health.
So their interests are exactly in line with common shareholders because they are in the same boat.
In short, this is a nearly bulletproof strategy proven by companies like Wal-Mart, IBM and Apple to lead to stronger stock performance and outsized gains for shareholders.
                                                                                                                              
The “Owner Operator” model is one part of my special 4-part stock-picking strategy that’s helped me pinpoint money-multiplying gains for readers like 108.9%, 114%, 155%, 165%, and 232%.
But before I tell you more about my unique strategy, let me share with you one of these little-known stocks you can buy today for life-altering profit potential even in this irrational market.
The same family has run this company since inception.
  • Barron’s says that there are “few Wall Street analysts covering [this stock].”
  • Forbes calls it a “cash machine.”
In just the last 2 years, this stock has returned 114%, more than 12 times the return of the S&P 500.
If you invest, you could own profitable stakes in energy, commodities, insurance and luxury property – in one single investment.
With a clever management team and unmatched financial strength, I believe that the upside for this stock could be virtually unlimited.

And it could be a reliable source of endless cash for your retirement nest egg. Cash you can spend however you like.
I give you the full details about this company inside your FREE report I’d like to rush you right away called Buy And Hold This Stock For Unlimited Upside Potential.
Just fill out the secure order form at the end of this presentation and I'll see to it that you get your complimentary copy immediately.
Of course, there’s a lot more I’d like to tell you about first.
I apply this ruthless 4 part stock-picking filter to every stock I recommend for 44,000+ retirement seeking readers of my 100% independent investment newsletter, Capital & Crisis.
In fact, I’ve put together this definitive strategy report that shows you my scientific stock-picking method step-by-step.
It’s called CODE: My Proven Four-Step Formula for Getting Rich In Any Market and its yours FREE just for giving my newsletter, Capital & Crisis a risk-free try.
I’d love for you to get the chance to see the “CODE” system in live action.
This unique four-point strategy I put every stock through is astonishingly simple and clear.

And it can make your every market decision much easier.
I’m certain you won’t find anything like it. Anywhere.
This strategy is so powerful that since 2004, when Agora Financial began publishing my newsletter, I’ve NEVER had a single losing year.

Here's a sample of some of those rich results...

*NOTE: These are actual results that readers could have seen following my recommendations. They are not theoretical. I told readers the best dates to buy and the best dates to sell.
Leucadia National 109% Orient-Express Hotels 109%
Brookfield Asset Management 115% Companhia Paranaense 121%
CNX Gas Corp. 44% Imperial Sugar Co. 145%
ABX Air 38% Catellus Development Corp. 24%
Walter Industries 44% FEMSA 29%
Gulfport Energy 115% Chiquita Brands Intl. 52%
Ameriprise Financial 77% Bandag 18.3%
Grupo Aeroportuario del Sureste SA 100.3% SJW Corp. 28.5%
Plum Creek Timber 28% Industrias Bachoco 19.75%
Goldkist 39% Questar 113%
Arch Capital Group 45% San Juan Basin Royalty Trust 144%
Presidential Life Corp. 65% Guitar Center 151%
Northwest Pipe 114.5% Sovran Self Storage 155%
Intrawest Corp. 72%  
And you can see, the list goes on.
I hope to start showing you these same results too. Results that can boost your nest egg higher than you’ve ever dreamed and give you the robust retirement you deserve.
Forget counting on the government to make things better. After all it was officials at the Fed who kept credit cheap for so long, helping to finance the bubble and the crash.
These authorities in Washington stood by while Wall Street speculators became more powerful than the agencies that were supposed to watch them, allowing them to invent dangerous investing practices that turned our financial world into a casino.

Now with record levels of corporate, public, and private debt, our nation does face challenges ahead – one of the most dangerous ones to your wealth being inflation.
That means every time the government prints money, the dollar is devalued. So every dollar you have saved and invested is worth less and less each day.
It buys less and less.
With the trillions of dollars the government has forced into the economy, we could see inflation take off pretty quickly.
Investors can be irrational and unforgiving in an inflationary environment...
Back in the 1970s, investors punished the greatest growth stocks of the time like IBM, Polaroid and Proctor & Gamble, even as their fundamentals remained strong.

Investments like CDs, bonds and money-market funds will turn into financial deathtraps when their modest rates of return fall terribly behind the soaring rate of inflation.
Retirees on fixed incomes could see their standards of living erode. Monthly social security checks buy less and less… stock dividends and yields… everything shrivels in the soaring cost of living.
And once investors realize they can get a better deal from hard assets, they will, once again flock, into oil, gold, and other resource plays, causing commodity prices to soar.
The gas you're already paying close to $4 a gallon for will get more expensive, and so will the groceries you buy at the store.
This is the cold reality of an inflationary market – a reality few on Wall Street (let alone financial advisors and brokers across America) understand.
As US News & World Report points out, “Even modest inflation can eat away a life's worth of saving.” 
That’s why I want to tell you about some outstanding alternative investments proven to benefit instead of suffer from the challenges facing the global economy.
These are some of the market’s best, recession-proof anti-inflation investments.
Opportunities most people don’t even know exist that you can buy as easily and as inexpensively as regular stocks.
Anti-Inflation Fortress Play #1:
Red-Hot Precious Metals
My first recommendation for inflation-proofing your retirement is to own precious metals. Specifically, gold and silver.
Right now, they’re both on fire… up over 300% in the past decade.
And I firmly believe that both metals have much, much further to climb.
Gold has gone up every single year for the past 10 years in a row!
And I don’t see it hitting the brakes anytime in the near future.
Of course, I’m not the only one…
  • Hedge fund legend Eric Sprott, owner of one of Canada’s largest securities firms with $9 billion in assets, says, “Gold will go north of $2,000 and the wind is at our back because the money printing is increasing at a very fast pace.”
  • Multimillionaire investor Jim Rogers says, “Gold should be well over $2,000 now.”
  • And Frank Holmes, CEO of US Global Investors, writes, “Gold would need to rise all the way to $7,931 in order to cover the outstanding amount of U.S. money supply.”
But what you may find even more shocking is that for 2010, silver actually BEAT gold… nearly DOUBLING in value!
And I believe that silver could easily quadruple from where it’s sitting today. The rising price of gold alone could be enough to launch it substantially higher over the coming months.
In short, I recommend buying as much gold and silver as you can reasonably afford.
That’s why I’ve put together the Gold and Silver Buyer’s Guide for you...
Inside, I’ll reveal some of the best, low-risk ways that you can own precious metals, if you choose to, including a secret strategy only a handful of savvy investors know about.
This is yours FREE and available instantly. I’ll tell you how to get your hands on it shortly.
Anti-Inflation Fortress Play #2:
The World’s Best Farmland
And there’s one more excellent (but little-known) investment I recommend for inflation-proofing your retirement…
It has to do with owning some of the world’s most arable farmland.
Because regardless of how high the rate of inflation climbs, everyone has to eat.
The production of 99.7% of our food can be traced back in some way to farmland.
Whether we’re talking meats, veggies or fruits.
Problem is quality soil for farming is rapidly becoming a scarce commodity.
We’re losing it not just to farming, but also to things like deserts and erosion.
In fact, it’s being depleted much faster than we can replace it...
The National Academy of Sciences says that cropland here in the U.S. is being lost at least 10 times faster than it’s being replaced.
And the United Nations says that on a global basis, the rate of loss is 10-100 times faster than that of replacement.
So food production will be unable to keep up with the world’s rapidly exploding population, which is expected to grow from 6.9 billion to 10 billion by 2050.
Add in the upward pressure on commodities from inflation and food prices are quickly heading one way… UP!
As the New York Times points out, “Food prices are soaring to record levels, threatening many developing countries with mass hunger and political instability.”
In short: Quality farmland is quickly becoming more valuable than ever before. And it could deliver you outsized returns for years to come…
As Lennart Bage, President of the International Fund for Agricultural Development, says, “Now fertile land with access to water has become a strategic asset.”
And I’ve uncovered a safe, unique way for you to invest in some of the world’s best farmland without having to own the land yourself or even buy agriculture stocks.
I’ve laid out the full details for you in your fourth FREE research report called The Most Important Asset To Own During the Coming Inflation Crisis.
All told, that’s four reports I’m giving to you for FREE just by agreeing to take a no risk subscription to my newsletter, Capital & Crisis.
I can confidently say that the value of each of them is PRICELESS.
Simply try my newsletter today and you’ll have instant access to:
  • FREE REPORT #1: Buy And Hold This Stock For Unlimited Upside Potential (worth $59, but yours FREE)
  • FREE REPORT #2: Chris Mayer’s Gold and Silver Buyer’s Guide(worth $59, but yours FREE)
  • FREE REPORT #3: The Most Important Asset To Own During the Coming Inflation Crisis (worth $59, but yours FREE)
  • FREE REPORT #4: Code: My Proven Four-Step Formula for Getting Rich In Any Market (worth $59, but yours FREE)
  • FREE GIFT #5: The Monthly Issue: Every month, you’ll receive a new issue of Capital & Crisis, delivered to you by email, then by regular mail too. Inside each issue, I’ll share my best ideas for preserving your wealth and making a fortune in the markets right now. 
  • FREE GIFT #6: Never Miss a Market Move With Our Members Only Model Portfolio Updates – Included FREE: Every week, I’ll e-mail you updates on what I believe are the most important market developments affecting the investments in our model stock portfolio.
  • FREE GIFT #7: Check Up on the Model Portfolio Anytime You Want, With Our Private Members-Only Website — Also Included at NO Charge: I also want to give you FREE access to my 24-hour Capital & Crisis website. This site is strictly members-only and password protected. I’m inviting you to use it whenever you like to look up my newest picks, latest news and more. Also yours at no charge. 
  • FREE GIFT #8: Subscriber Care Hotline: The Capital & Crisis subscriber care team is available five days a week. Any problems at all, simply give them a call and they'll be happy to assist you.
That's eight FREE gifts altogether. And again, everything you'll receive is yours to keep, no matter what and with no hidden shipping and handling charges or anything.

You can even download your reports right now and get my full research on all the opportunities we've just talked about immediately if that's what you'd like to do.

In fact, I'd like to simply give you 12 months FREE of my highly respected research letter, Capital & Crisis.

You heard that right! I want you to take a full year to decide whether my research is a good fit for you.

Why on earth would I want to do that?

Because I'm convinced you'll like what you see so much and you’ll get so many profitable plays, you'll want to sign on for more.

It’s really that simple.

Real Readers… Real Results
Just have a look at what some of my readers are saying right now about Capital & Crisis
  • “I am a long time and loyal subscriber of your newsletter. You have a superb service. I bought your recommendation at $4.04 and now it is up over 700%,” reports Greg Rose in Los Angeles, CA.
  • “I've tried a lot of newsletters in my 45 years of investing and yours is the best,” says retiree Will Foster in Miami, FL.
  • “I got in on your recommendation at $3.98 and sold at $21.44 for a gain of 747%. I have enjoyed your newsletter for several years now and am thankful for your investment advice,” says Jessica Morris in Detroit, MI.
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  • “I am up 1,083% on your recommendation,” reports Alan Cox in Baltimore, MD.
  • “After spending 24 years in the investment business (and building assets under management to $350 million), your insights are probably the best I have seen. Your study of the great money managers, past and present, and your ability to succinctly distill, explain and relate their philosophies to your specific recommendations is a true talent. I only wish I had been reading such thoughtful analysis 24 years ago,” writes Mitch Burns in New York City.
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It’s no wonder they’re thrilled.

And I don’t have to tell you, but I love delivering that kind of satisfaction.
Which is why I'd love a chance to send you 12 free issues of Capital & Crisis so you can see for yourself what everyone else is so excited about...
I’ve told my readers to close out winners like a British oil and gas drilling contractor for a 127.34% gain, a Texas oil and gas producer for a 109.94% gain, a U.S. phosphate producer for a 62.75% gain, and a gas storage equipment manufacturer for a 112.22% gain.
And we continue to post new gains, even now…
As of July 13, 2011, 17 of my 20 open positions in the Capital & Crisis model portfolio are showing a gain! We’ve got open gains of 140.24%, 200.28%, 180.75%, 160.67%, 204.35%, and more!

(I can't name those stocks for you right now. That wouldn't be fair to current readers. But I'll tell you how to find out about all of them, right after you finish this presentation.)

There’s just no better way of building nearly endless retirement wealth than by following my easy, consistent money moves.

Wealth that can fuel your wildest dreams.

Wealth that lets you do what you want to do, when you want to do it, for whatever reason you choose.

Because that’s what retirement is really all about!

And you can discover more of these explosive money moves every month, the moment you accept my special invitation to receive up to 12 free Capital & Crisis issues.

Plus if you’re not 100% pleased with your issues – and recommended stock plays – I'll send you a FULL refund of your subscription fee, and you can keep everything you've received. No questions. So you pay NOTHING, and keep everything.

That’s right: You can cancel anytime, right up until your subscription is over. And you’ll be issued a full refund straight away, no hassle, and no questions asked.

So how much does a subscription to Capital & Crisis cost?
Considering the amount of time and money I pour into researching these companies, I think it’s an absolute steal.
The fact is that just one of my recommendations could pay the entire cost of your subscription many times over.
And it’s not just me saying this:
  • “Made $5,000 in 5 days. Thank you!” writes Ellen Morgan in Santa Fe, NM.
  • “I made 261% on GPOR and would have made even more if I waited for your sell recommendation but I couldn’t help myself. It paid for my subscription and a cruise,” reports Mark Roberts in Cheyenne, WY.
Normally a subscription to Capital & Crisis cost $159 a year.
Others have paid that and were very happy to do so...
  • Chris Day in New York City says, “I’m a sophisticated investor as I’ve owned and operated a US Broker-Dealer for 30 years. Your newsletter is probably the best value of anywhere.”
  • Adam Hunt in Miami, Florida writes, “Your newsletter is way underpriced.”
But you can get started with a trial subscription to Capital & Crisis today for just $59. That’s an instant savings to you of $100.
Why so cheap?
Because I want to do everything in my power to get you to try my research and the best way to do that is by lowering the price.
It’s a drop in the ocean compared to the rich results I’ve delivered.
Remember, 17 out of 20 of the current open positions in my Capital & Crisis model portfolio are UP!
Since launching my newsletter in 2004, I’ve NEVER had a losing year.
Better still, cumulative gains total 3,975% so far!
Subscribe right now and you’ll receive the next 12 issues of my newsletter along with the 5 special reports, all of which are FREE and yours to keep even if you decide to cancel.
To quickly recap, here they are:
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Tuesday, December 20, 2011

Were big banks ’stealing homes’?

Monday, December 19, 2011
Posted: 10 am ET

Forget for the time being all the Three Stooges document-fumbling surrounding the housing collapse. Set aside the obvious malfeasance of robosigning and rocket dockets.

The question on the table now is, were America's largest mortgage lenders stealing homes?

The recent lawsuit filed by Massachusetts Attorney General Martha Coakley against five of the nation's largest banks for deceptive foreclosure and loan modification practices essentially accuses them of doing exactly that.

Coakley accuses Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial of the following:

1. Engaging in unfair and deceptive foreclosure practices by conducting foreclosures when the defendants lacked the right to do so and misrepresenting to homeowners their roles as mortgagees or as the holders of the mortgages.

2. Engaging in false documentation practices to facilitate their foreclosure practices.

3. Deceiving homeowners in the course of servicing mortgage loans by misrepresenting to borrowers regarding its loan modification programs, acting deceptively in implementing loan modifications and deceiving borrowers regarding foreclosure proceedings.

"The layman's term for that is 'stealing homes,' says Firedoglake blogger David Dayen. "Coakley is accusing banks of stealing homes. They didn’t have the proper proof of ownership to take control of the homes in a foreclosure, and they did it anyway, by forging documents and committing fraud upon state courts."

Coakley's suit also includes the Mortgage Electronic Registration System, or MERS, the epicenter of its "false documentation practices" charge.

Massachusetts isn't the only state that has grown frustrated with the Obama administration's year-long attempt to negotiate a let's-move-forward settlement between the 50 states and the banks. Others, including California, Delaware, Nevada and New York, have distanced themselves from the talks, which appear headed toward an agreement that some AGs say amounts to a hand slap for the big banks.

But as the first to break from the pack, Coakley's suit reframes the debate from a snipe hunt for sundry robo-shenanigans by underlings to some serious charges leveled at top management.

The 50-state agreement under construction looks like it would grant the lenders immunity from prosecution in exchange for a settlement of $20 billion to $25 billion, to be used primarily for principal reduction and loan mods.

Coakley says she'll consider signing onto any forthcoming agreement based on its merits but has made clear she won't be party to any plan that includes broad liability release regarding MERS and other issues.

What's next? Will other states follow Coakley's lead?

Only time will tell.

But her bold break certainly throws into question the attraction of that (now) 49-state work-in-progress, and perhaps the wisdom of attempting to collectively bargain away a national disgrace.

Read more: Were big banks ’stealing homes’? | Bankrate.com http://www.bankrate.com/financing/mortgages/were-big-banks-stealing-homes/#ixzz1h5FRUsSG

The sad fact of the matter is "We the People" have become too dependent on everyone and thing, but ourselves. We empower these people, than get raped by them. Banks cannot survive if “WE THE PEOPLE” simply, do not give them are business. The fact my bank is listed on this list tells me it is time to move my funds, and business to a credit union.
The Federal Reserve is a joke and is owned by the banks, they basically bailed themselves out, through T.A.R.P. (The WORST American Bill in its history) Long story short, and as Bloomberg reported earlier this month 7.7 trillion in U.S. bail out money went to the banks through what is being referred to as a government “discount window” so not only did these banks receive 7.7 trillion in money, they are also stealing homes. Yet none one is jail, or being prosecuted, and this is fair how? And “WE THE PEOPLE” tolerate this; why? I believe the answer to that question is more important than someone being able to answer how we all came to be to begin with.

Read more and comment in Finance and Investments Directory

Sunday, November 20, 2011

How the GOP Became the Party of the Rich by Tim Dickinson in Rolling Stone Magazine Nov.24,2011 issue

By Tim Dickinson November 9, 2011 7:00 AM ET
http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109 Matt Mahurin


The nation is still recovering from a crushing recession that sent unemployment hovering above nine percent for two straight years. The president, mindful of soaring deficits, is pushing bold action to shore up the nation's balance sheet. Cloaking himself in the language of class warfare, he calls on a hostile Congress to end wasteful tax breaks for the rich. "We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share," he thunders to a crowd in Georgia. Such tax loopholes, he adds, "sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary – and that's crazy."

Preacherlike, the president draws the crowd into a call-and-response. "Do you think the millionaire ought to pay more in taxes than the bus driver," he demands, "or less?"

The crowd, sounding every bit like the protesters from Occupy Wall Street, roars back: "MORE!"

The year was 1985. The president was Ronald Wilson Reagan.

Today's Republican Party may revere Reagan as the patron saint of low taxation. But the party of Reagan – which understood that higher taxes on the rich are sometimes required to cure ruinous deficits – is dead and gone. Instead, the modern GOP has undergone a radical transformation, reorganizing itself around a grotesque proposition: that the wealthy should grow wealthier still, whatever the consequences for the rest of us.

Modern-day Republicans have become, quite simply, the Party of the One Percent – the Party of the Rich.

"The Republican Party has totally abdicated its job in our democracy, which is to act as the guardian of fiscal discipline and responsibility," says David Stockman, who served as budget director under Reagan. "They're on an anti-tax jihad – one that benefits the prosperous classes."

The staggering economic inequality that has led Americans across the country to take to the streets in protest is no accident. It has been fueled to a large extent by the GOP's all-out war on behalf of the rich. Since Republicans rededicated themselves to slashing taxes for the wealthy in 1997, the average annual income of the 400 richest Americans has more than tripled, to $345 million – while their share of the tax burden has plunged by 40 percent. Today, a billionaire in the top 400 pays less than 17 percent of his income in taxes – five percentage points less than a bus driver earning $26,000 a year. "Most Americans got none of the growth of the preceding dozen years," says Joseph Stiglitz, the Nobel Prize-winning economist. "All the gains went to the top percentage points."

The GOP campaign to aid the wealthy has left America unable to raise the money needed to pay its bills. "The Republican Party went on a tax-cutting rampage and a spending spree," says Rhode Island governor and former GOP senator Lincoln Chafee, pointing to two deficit-financed wars and an unpaid-for prescription-drug entitlement. "It tanked the economy." Tax receipts as a percent of the total economy have fallen to levels not seen since before the Korean War – nearly 20 percent below the historical average. "Taxes are ridiculously low!" says Bruce Bartlett, an architect of Reagan's 1981 tax cut. "And yet the mantra of the Republican Party is 'Tax cuts raise growth.' So – where's the fucking growth?"

Republicans talk about job creation, about preserving family farms and defending small businesses, and reforming Medicare and Social Security. But almost without exception, every proposal put forth by GOP lawmakers and presidential candidates is intended to preserve or expand tax privileges for the wealthiest Americans. And most of their plans, which are presented as common-sense measures that will aid all Americans, would actually result in higher taxes for middle-class taxpayers and the poor. With 14 million Americans out of work, and with one in seven families turning to food stamps simply to feed their children, Republicans have responded to the worst economic crisis since the Great Depression by slashing inheritance taxes, extending the Bush tax cuts for millionaires and billionaires, and endorsing a tax amnesty for big corporations that have hidden billions in profits in offshore tax havens. They also wrecked the nation's credit rating by rejecting a debt-ceiling deal that would have slashed future deficits by $4 trillion – simply because one-quarter of the money would have come from closing tax loopholes on the rich.

The intransigence over the debt ceiling enraged Republican stalwarts. George Voinovich, the former GOP senator from Ohio, likens his party's new guard to arsonists whose attitude is: "We're going to get what we want or the country can go to hell." Even an architect of the Bush tax cuts, economist Glenn Hubbard, tells Rolling Stone that there should have been a "revenue contribution" to the debt-ceiling deal, "structured to fall mainly on the well-to-do." Instead, the GOP strong-armed America into sacrificing $1 trillion in vital government services – including education, health care and defense – all to safeguard tax breaks for oil companies, yacht owners and hedge-fund managers. The party's leaders were triumphant: Senate Minority Leader Mitch McConnell even bragged that America's creditworthiness had been a "hostage that's worth ransoming."

It's the kind of thinking that only money can buy. "It's a vicious circle," says Stiglitz. "The rich are using their money to secure tax provisions to let them get richer still. Rather than investing in new technology or R&D, the rich get a better return by investing in Washington."

It's difficult to imagine today, but taxing the rich wasn't always a major flash point of American political life. From the end of World War II to the eve of the Reagan administration, the parties fought over social spending – Democrats pushing for more, Republicans demanding less. But once the budget was fixed, both parties saw taxes as an otherwise uninteresting mechanism to raise the money required to pay the bills. Eisenhower, Nixon and Ford each fought for higher taxes, while the biggest tax cut was secured by John F. Kennedy, whose across-the-board tax reductions were actually opposed by the majority of Republicans in the House. The distribution of the tax burden wasn't really up for debate: Even after the Kennedy cuts, the top tax rate stood at 70 percent – double its current level. Steeply progressive taxation paid for the postwar investments in infrastructure, science and education that enabled the average American family to get ahead.

That only changed in the late 1970s, when high inflation drove up wages and pushed the middle class into higher tax brackets. Harnessing the widespread anger, Reagan put it to work on behalf of the rich. In a move that GOP Majority Leader Howard Baker called a "riverboat gamble," Reagan sold the country on an "across-the-board" tax cut that brought the top rate down to 50 percent. According to supply-side economists, the wealthy would use their tax break to spur investment, and the economy would boom. And if it didn't – well, to Reagan's cadre of small-government conservatives, the resulting red ink could be a win-win. "We started talking about just cutting taxes and saying, 'Screw the deficit,'" Bartlett recalls. "We had this idea that if you lowered revenues, the concern about the deficit would be channeled into spending cuts."

It was the birth of what is now known as "Starve the Beast" – a conscious strategy by conservatives to force cuts in federal spending by bankrupting the country. As conceived by the right-wing intellectual Irving Kristol in 1980, the plan called for Republicans to create a "fiscal problem" by slashing taxes – and then foist the pain of reimposing fiscal discipline onto future Democratic administrations who, in Kristol's words, would be forced to "tidy up afterward."

There was only one problem: The Reagan tax cuts spiked the federal deficit to a dangerous level, even as the country remained mired in a deep recession. Republican leaders in Congress immediately moved to reverse themselves and feed the beast. "It was not a Democrat who led the effort in 1982 to undo about a third of the Reagan tax cuts," recalls Robert Greenstein, president of the nonpartisan Center on Budget and Policy Priorities. "It was Bob Dole." Even Reagan embraced the tax hike, Stockman says, "because he believed that, at some point, you have to pay the bills."

For the remainder of his time in office, Reagan repeatedly raised taxes to bring down unwieldy deficits. In 1983, he hiked gas and payroll taxes. In 1984, he raised revenue by closing tax loopholes for businesses. The tax reform of 1986 lowered the top rate for the wealthy to just 28 percent – but that cut for high earners was paid for by closing tax loopholes that resulted in the largest corporate tax hike in history. Reagan also raised revenues by abolishing special favors for the investor class: He boosted taxes on capital gains by 40 percent to align them with the taxes paid on wages. Today, Reagan may be lionized as a tax abolitionist, says Alan Simpson, a former Republican senator and friend of the president, but that's not true to his record. "Reagan raised taxes 11 times in eight years!"

But Reagan wound up sowing the seed of our current gridlock when he gave his blessing to what Simpson calls a "nefarious organization" – Americans for Tax Reform. Headed by Grover Norquist, a man Stockman blasts as a "fiscal terrorist," the group originally set out to prevent Congress from backsliding on the 1986 tax reforms. But Norquist's instrument for enforcement – an anti-tax pledge signed by GOP lawmakers – quickly evolved into a powerful weapon designed to shift the tax burden away from the rich. George H.W. Bush won the GOP presidential nomination in 1988 in large part because he signed Norquist's "no taxes" pledge. Once in office, however, Bush moved to bring down the soaring federal deficit by hiking the top tax rate to 31 percent and adding surtaxes for yachts, jets and luxury sedans. "He had courage to take action when we needed it," says Paul O'Neill, who served as Treasury secretary under George W. Bush.

The tax hike helped the economy – and many credit it with setting up the great economic expansion of the 1990s. But it cost Bush his job in the 1992 election – a defeat that only served to strengthen Norquist's standing among GOP insurgents. "The story of Bush losing," Norquist says now, "is a reminder to politicians that this is a pledge you don't break." What was once just another campaign promise, rejected by a fiscal conservative like Bob Dole, was transformed into a political blood oath – a litmus test of true Republicanism that few candidates dare refuse.

After taking office, Clinton immediately seized the mantle of fiscal discipline from Republicans. Rather than simply trimming the federal deficit, as his GOP predecessors had done, he set out to balance the budget and begin paying down the national debt. To do so, he hiked the top tax bracket to nearly 40 percent and boosted the corporate tax rate to 35 percent. "It cost him both houses of Congress in the 1994 midterm elections," says Chafee, the former GOP senator. "But taming the deficit led to the best economy America's ever had." Following the tax hikes of 1993, the economy grew at a brisk clip of 3.2 percent, creating more than 11 million jobs. Average wages ticked up, and stocks soared by 78 percent. By the spring of 1997, the federal budget was headed into the black.

But Newt Gingrich and the anti-tax revolutionaries who seized control of Congress in 1994 responded by going for the Full Norquist. In a stunning departure from America's long-standing tax policy, Republicans moved to eliminate taxes on investment income and to abolish the inheritance tax. Under the final plan they enacted, capital gains taxes were sliced to 20 percent. Far from creating an across-the-board benefit, 62 cents of every tax dollar cut went directly to the top one percent of income earners. "The capital gains cut alone gave the top 400 taxpayers a bigger tax cut than all the Bush tax cuts combined," says David Cay Johnston, the Pulitzer Prize-winning author of Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich – and Cheat Everybody Else.

The cuts also juiced irrational exuberance on Wall Street. Giving a huge tax advantage to investment income inflated the dot-com bubble, observed Stiglitz, "by making speculation more attractive." And by eliminating capital gains taxes on home sales, the cuts fueled the housing bubble: A study by the Federal Reserve estimated that the tax giveaways boosted housing transactions by 17 percent through 2007.

The most revealing aspect of the tax cuts, however, came from a simple mistake. In a major blow to the inheritance tax – America's most progressive form of taxation – the GOP cuts nearly doubled the amount that the rich could pass on to their heirs tax-free. From now on, the first $1 million would be exempt from federal taxes – unless your estate was worth more than $17 million. In those rare cases, the superwealthy would have to pay taxes on their entire inheritance.

Then something strange happened. Due to a "drafting error," the final bill failed to include the exception for the superwealthy. Everyone in both parties agreed that it had been a mistake. But instead of fixing the error, Republicans blocked a pro forma correction to the law – meaning that even the wealthiest estates would pay no taxes on the first $1 million. The move effectively secured an $880 million tax cut for the rich – one that Congress never intended, and never voted for. Ari Fleischer, the then-spokesman for Rep. Bill Archer of the House Ways and Means Committee, exulted over the undemocratic tax cut for the wealthy. "When a mistake works against the government and for the taxpayers," he explained, "we're in no rush to correct it."

Republicans, abetted by conservative Democrats, passed the tax cuts with a veto-proof majority, and Clinton signed them into law. But for the remainder of his term, Clinton repeatedly blocked Republican demands for further cuts. "He vetoed one tax cut after another," says Robert McIntyre, director of Citizens for Tax Justice. In 1999, in a triumph for fiscal sanity, Clinton rejected a massive $792 billion cut to inheritance and investment taxes. The mood during the veto ceremony in the Rose Garden was festive. A five-piece band played "Summertime," and the living was easy. Unemployment stood at 4.2 percent, and stocks were booming. "Our hard-won prosperity gives us the chance to invest our surplus to meet the long-term challenges of America," Clinton declared. The Republican tax cuts, he warned with eerie prescience, would return America to a period of "deficit upon deficit" that culminated in "the worst recession since the Great Depression."

Then came the election of George W. Bush, the first president of the Party of the Rich.

Within months of taking office, Bush delivered a tax break to the rich that trumps anything he accomplished through the actual tax code. "The most important thing the Bush administration did in the whole area of taxes," says Johnston, "was to kill tax harmonization."

"Tax harmonization" was economic jargon for a joint project by the world's developed countries to shut down offshore tax havens in places like the Cayman Islands. At the time, such illicit havens were costing U.S. taxpayers $70 billion a year. For Republicans, going after big-time tax evaders should have been as American as apple pie. As Reagan once said of such cheats: "When they do not pay their taxes, someone else does – you and me."

But for Bush and other leaders of the Party of the Rich, blocking corporations from hiding their money overseas wasn't an act of patriotism – it was tyranny. Rep. Dick Armey, the GOP majority leader, railed against tax harmonization as an effort to create a "global network of tax police." One of Bush's biggest donors, Enron, was using a network of nearly 900 offshore tax hideaways to pay no corporate taxes – while reporting massive profits that later turned out to be fraudulent. In one of his first acts as president, Bush "basically vetoed the initiative," says Stiglitz.

The veto spurred a cavalcade of corporations – including stalwart American firms like Stanley Works – to pursue phony "headquarters" in Bermuda and other lax-tax nations. The move not only encouraged some of the world's richest companies to avoid paying any U.S. taxes, it let them book overseas-"expenses" that qualified them for lucrative tax deductions. In one of the most notorious cases, GE filed for a $3 billion tax rebate in 2009, despite boasting profits of more than $14 billion.

But Bush wasn't content to simply make the world safe for corporate tax evaders: He also pushed to deliver $1.6 trillion in tax cuts for the wealthiest individuals. On paper, at least, the federal government looked like it would soon be rolling in cash. Assuming the economy continued to grow as it had under Clinton, the Congressional Budget Office forecast a federal surplus of $5.6 trillion by 2011. Nearly half that bounty was already spoken for – the government needed some $3 trillion to shore up Social Security and Medicare – but that still left $2 trillion to play with.

Still, those numbers were only a projection. "It's certainly not money in the bank," Fed chairman Alan Greenspan warned incoming Treasury Secretary O'Neill over breakfast at the Federal Reserve. Yet there was no such note of caution in the White House. The month after Bush took office, the president's then-budget director, Mitch Daniels, suggested in an internal memo that $5.6 trillion was likely too small a figure. Daniels concluded that Bush's plan was "so fiscally conservative" that even after cutting $1.6 trillion in taxes, fixing Social Security and setting aside $900 billion in a contingency fund, the government would still have enough money left over to retire $2 trillion in debt.

"Everybody for a good while accepted that the surpluses were real," insists Daniels, now the governor of Indiana. When pressed, however, he also concedes that by the time Bush took office, "the economy was already unraveling." Indeed, a wave of layoffs at the end of 2000 prompted Dick Cheney to warn, "We may well be on the front edge of a recession here."

The conflicting forecasts – one of sunshine and surplus, the other of gloom and contraction – should have set off alarm bells in the White House. But instead of rethinking the prudence of its massive giveaway to the rich, the Bush team dreamed up a new rationale for cutting taxes: to provide a needed jolt to the economy. "It's a fair thing to say that the stimulus argument was added in the spring of '01, when it had not been there before," Daniels says.

The stimulus argument was lousy economics. The previous two decades, after all, had demonstrated that "trickle-down" tax cuts don't juice the economy – they create bubbles and balloon deficits. Proponents pointed to Reagan's original tax cut in 1981, claiming it had spurred economic growth. But that is nothing more than "urban legend," Stockman says. The economy "did recover after 1982," he says, "but mainly because the Federal Reserve defeated inflation."

In fact, Stockman insists, Bush's tax cuts for the rich represent a bastardization of Reaganism. "The Republican Party originally said that prosperity comes from the private sector," he says. "But today's Republicans have become Chamber of Commerce Keynesians – using tax policy as a way of stimulating, boosting, prodding the economy." The Party of the Rich, in essence, was offering up a twisted version of New Deal policies that laissez-faire Republicans like Reagan had long opposed.

Spinning the tax giveaways as a stimulus plan did serve one useful function: It helped obscure the true purpose of the Bush tax plan. In an internal memo written just days after the inauguration, O'Neill advised Bush that he had a "great opportunity" for quick action on his tax cuts if he framed the choice for Congress as tax cut vs. recession. "We can get this argument on our ground," O'Neill wrote, "and stop the drumbeat about a tax cut for the rich."

With no patience for the specifics of tax policy, Bush deputized Vice President Dick Cheney to push through his tax cut for the rich. Once a deficit hawk who confessed that he was "not convinced that the Reagan tax cuts worked," Cheney had emerged from his tenure as CEO of Halliburton as a leading advocate for rewarding big corporations and their executives – even as GOP moderates warned that Bush's tax cut would foreclose needed investments in education and infrastructure. "The vice president had no interest in what I had to say," recalls Chafee. "He ran the show right from the beginning, and he suffered no compromise."

As the economy worsened, even the president's Treasury secretary grew concerned about the tax cuts. O'Neill pushed Bush to include a trigger mechanism that would rein in the cuts if the projected surpluses failed to materialize. "The trigger was a good idea – having the foresight that if things turned bad, we wouldn't have to reverse course in a difficult time," O'Neill says now. "But there was never any serious interest in it" from the Bush administration.

To Chafee, the opposition to a trigger mechanism seemed to offer a clue about the real goal of the tax cuts: They were designed not to boost the economy, but to force the kind of spending cuts championed by Grover Norquist and other small-government activists. His suspicion that the starve-the-beast crowd was driving the cuts was confirmed, he says, by a conversation he had while walking the Senate corridors with Trent Lott, then the GOP majority leader.

"What's going on here?" Chafee asked. Why not safeguard the economy by adopting a trigger mechanism?

Lott turned to Chafee. "We're going to strangle the spending," he said. On the stump, Bush hyped the benefits of his plan by emphasizing how much in taxes it would save a single waitress. But the real action was at the top rung of the income ladder. Over 10 years, the bottom fifth of income earners could expect to pocket an extra $744. That waitress might be left with enough cash to change out the clutch on her Corolla. The top one percent, meanwhile, would receive more than $340,000 on average – enough to buy his and hers Bentleys.

To mask such glaring inequality, Republicans inaugurated the tax cut with an across-the-board rebate. The waitress would get a $300 check, along with everyone else from Warren Buffett on down. But in reality, the tax cuts were backloaded with benefits for the wealthy. In the first year of the deal, the top one percent would pocket just seven percent of the tax cuts – but by the time the cuts were set to expire in 2010, the rich would be reaping more than half of the windfall. What's more, the cuts were nefariously designed so that small-business owners and upper-middle-class professionals – primarily those earning between $200,000 and $500,000 a year – would see as much as three-quarters of their tax break eroded by the Alternative Minimum Tax, a levy Congress originally intended to keep rich people from cheating on their taxes.

Every year since the Bush tax cuts were approved, Congress has passed a multibillion "patch" to prevent this politically potent group of professionals from being denied their tax breaks. But at the time, Cheney used the money "saved" by the AMT claw-back to finance another favor exclusively for the rich: a series of cuts to the estate tax culminating in a one-year abolition, set to take effect in 2010. Rejecting a less costly bargain proposed by Democrats that would have provided a permanent escape from estate taxes for all but the richest of the rich, Republicans instead demanded a more expensive plan catering to the wealthiest 0.25 percent of all estates.

In May 2001, Republicans in the House voted in lock step to approve the Bush tax cuts, which cleared the Senate with the support of 45 Republicans and 12 conservative Democrats.

But then reality intervened. The bursting of the dot-com bubble, followed by the attacks of September 11th, tipped the economy headlong into recession. Rather than reversing course, however, Republicans rallied around another tax giveaway for the rich. That October, a bill passed by the House – and endorsed by Bush – not only called for eliminating a law requiring that tax-dodging corporations pay at least something in taxes, it ordered rebate checks to be cut to corporate giants for their past taxes. Under the bill, 16 companies of the Fortune 500 would have each received $100 million or more – including $1.4 billion for IBM, $671 million for GE and $254 million for Enron. Democrats in the Senate ultimately sank the bill, producing a stimulus package that extended unemployment benefits for the middle class and awarded tax incentives to corporations for new investments.

But Republicans kept their eyes on the prize. The following year, after the GOP regained control of the Senate and expanded its majority in the House, Cheney immediately pushed forward with an even deeper tax cut for the wealthy that O'Neill today describes as "an atrocity."

"We won the midterms," the vice president told O'Neill at the time. "This is our due."

By that point, any economic rationale for cutting taxes had vanished. September 11th, the recession and the 2001 tax cuts had plunged the nation $158 billion into the red. The mirage of the $5.6 trillion surplus had vanished – replaced with a forecast that America would rack up some $3 trillion in debt by 2012. But rather than put the brakes on tax cuts, as a trigger mechanism might have done, Cheney was determined to accelerate them, so the rich would get their money even sooner. To further reward the wealthiest, Cheney also wanted to slash taxes on capital gains and corporate dividends, with half of the money going to the top one percent.

To secure the new tax cuts, however, Cheney would first have to overcome opposition not only from Alan Greenspan, but from some of Bush's top advisers. The Fed chair had personally presented Cheney with a 20-page econometric analysis showing that soaring deficits caused by the tax cuts would sink long-term growth. Instead of communicating Greenspan's alarm to Bush, Cheney tasked a deputy named Cesar Conda to draft a memo disputing the study. Conda, a former tax lobbyist, blithely dismissed the projections of the Fed's senior economist as "completely wrong."

In November 2002, at a meeting in the White House, the president and his top economic advisers packed tightly around a mahogany table in the Roosevelt Room. With the administration's own forecasts showing that the economy had already regained its footing, one after another of Bush's deputies sounded the alarm about the dangers of a new tax cut. "This burns a big hole in the budget," deputy chief of staff Josh Bolten told the president. "The budget hole is getting deeper," added Daniels, "and we are projecting deficits all the way to the end of your second term." O'Neill warned the president that a "tax cut that benefits mostly wealthy investors" could imperil the budding prosperity. "With the economy already improving, this could cause an unnecessary boost," he said. "That's how you get a bubble." Entertaining the chorus of doubters, Bush himself voiced qualms about more cuts for the rich. "Won't the top-rate people benefit the most?" he asked. "Didn't we already give them a break at the top?"

But Cheney was having none of it. When O'Neill warned Bush that America was headed for a "fiscal crisis," the vice president, sitting at the Treasury secretary's right elbow, dismissed him midsentence by citing the ultimate champion of Republican tax cuts: "Ronald Reagan proved that deficits don't matter, Paul."

A true student of Reagan would have understood that 2002 was the moment for a tax increase. When his 1981 tax cut overshot the mark, Reagan had put aside ideology and raised taxes, putting the needs of the country above the desires of the wealthy. Bush's father had also raised taxes to avoid passing massive deficits on to future generations. Moreover, the Bush administration had already committed the country to a costly war in Afghanistan, and was on the brink of invading Iraq. Historically, Republican and Democratic administrations alike had met the financial burdens of war by raising taxes. But this was a new Republican Party, one determined to aid the rich even as it sent the military budget soaring. As House Majority Leader Tom DeLay would soon declare, "Nothing is more important in the face of a war than cutting taxes."

After the meeting, Cheney set out to remove anyone who stood in the way of the new tax giveaway. He phoned O'Neill and demanded the Treasury secretary's resignation. He also dispensed with economic adviser Larry Lindsey, whose frank assessment of the possible costs of the Iraq War had threatened to derail the tax cut.

Budget-conscious Republicans in Congress who opposed the tax cuts could not be disposed of – but they could be strong-armed. Voinovich and Sen. Olympia Snowe of Maine, who refused to go along with cuts of more than $350 billion, were summoned to the White House for a meeting with Bush and Cheney. "The president wanted nearly a trillion dollars when he started with us," recalls Voinovich. "They were working on us: We need more, we need more." The senators held out for a smaller bill – though in hindsight, Voinovich says, there shouldn't have been any tax cuts. "Just think where we'd be if we'd gone along with what the president wanted," he says, laughing bitterly. "Where would we be today? Oh, my God."

In the end, Cheney's voice was the only one that mattered. In April 2003, when the bill reached the floor, the Senate deadlocked 50-50. The vice president cast the deciding "aye" that moved the tax cut into law. The benefits were even more tilted to the rich than the first Bush tax cuts. When fully phased in, 53 percent of the new cuts went to the top one percent. Those making $10 million or more pocketed an average of $1 million a year – twice the haul they made from the earlier cuts, and every cent of it borrowed. "It was a deficit-financed tax cut," concedes Hubbard, who chaired Bush's Council of Economic Advisers.

The deal privileged gambling on stocks over working for a living: The tax rate the richest pay on their long-term capital gains was slashed by 25 percent, while their rate on dividends fell by almost 60 percent. The move not only fueled speculation of Wall Street, it further widened the considerable gap between rich and poor. "It was a very destructive combination to have a national economic policy that stimulated debt-financed capital gains and then taxed the windfall at the lowest rate imaginable," says Stockman. "That contributed, clearly, to the growing imbalance in household income and wealth."

But Republicans didn't stop there. The following year, they passed the little-noticed American Jobs Creation Act. Named in the same Orwellian fashion as Bush's "Clear Skies" and "Healthy Forests" initiatives, the 2004 law allowed corporations to bring home billions in profits they had stockpiled in offshore tax havens – the very flight of capital that Bush had blessed by torpedoing tax harmonization three years earlier. Under the tax amnesty, corporations repatriated $300 billion in profits they had stashed offshore. But instead of paying the nominal corporate tax rate of 35 percent, they were taxed at just 5.25 percent.

The title of the bill notwithstanding, corporations invested almost none of their windfall in new factories or other measures to create the 500,000 jobs that Republicans had promised. In fact, many companies that received the biggest tax break actually slashed jobs. Hewlett-Packard laid off 14,500 workers – one pink slip for every $1 million in profits it shipped back home from overseas. All told, according to an analysis by the National Bureau of Economic Research, up to 92 percent of the "jobs creation" money was handed out to top executives and shareholders in a frenzy of dividend payments and stock buybacks. And thanks to the GOP's cut on investment income the previous year, wealthy individuals who pocketed the offshore profits paid the same rate on their bonanza, 15 percent, that a waitress at a diner might pay on her tips.

When Democrats regained control of both the House and Senate in 2006, they temporarily halted the GOP's binge of borrowing from the Treasury to give tax cuts to the wealthy. But that didn't stop Republicans from finding other ways to aid the rich. As the economy collapsed in 2008, the Bush administration used the crisis to provide a stealth handout to the nation's banks – even those at no risk of failing. Under the TARP bailout, overseen by Treasury secretary and former Goldman Sachs CEO Hank Paulson, taxpayers were forced to give banks $254 billion for assets worth just $176 billion – a handout of $78 billion to the financial sector, including $2.5 billion for Paulson's cronies at Goldman. "Paulson pushed the money into the hands of the banks – no strings attached, no accountability, no transparency," Elizabeth Warren, then-chair of the Congressional Oversight Panel, told Rolling Stone last year.

As with the offshore profits, the banks used the money to line the pockets of executives and investors – while doing little to speed the recovery of Main Street. "We gave an enormous subsidy to these financial institutions, and they have not returned it to the American people," said Warren. "The administration could have said, 'All right, take this and multiply it throughout the economy.' But Paulson never made that a condition of taking the money."

Taken together, the Bush years exposed the bankruptcy behind the theory that tax cuts for the rich will spur economic growth. "Let the rich get richer and everybody will benefit?" says Stiglitz. "That, empirically, is wrong. It's a philosophy of trickle-down economics that's belied by the facts." Bush and Cheney proved once and for all that tax cuts for the wealthy produce only two things: "lower growth and greater inequality."

The GOP's frenzied handouts to the rich during the Bush era coincided with the weakest economic expansion since World War II – and the only one in modern American history in which the wages of working families actually fell and poverty increased. And what little expansion there was under Bush culminated in the worst fiscal crisis since the Great Depression. "The wreckage was left by Dick Cheney, Grover Norquist and the gang," says Chafee. "This was their doing."

By driving the economy into the ditch, Republicans left the next president little choice but to drive up deficits in the short term by launching a massive campaign of federal spending to ward off a global depression. But even the $787 billion stimulus engineered by President Obama was hamstrung by his predecessor's ongoing giveaway to the wealthy: Republicans insisted that nearly 10 percent of every stimulus dollar be devoted to financing the annual "patch" to the Alternative Minimum Tax – the off-budget legacy of Bush's tax cuts for the rich. This was a $70 billion handout that inflated the cost of the stimulus package without stimulating anything – other than the paychecks of wealthy Americans.

From the outset of the Obama presidency, in fact, Republicans have engaged in a calculated, across-the-board campaign to protect the tax privileges of the wealthiest Americans. Their objective was made explicit by Rep. Eric Cantor during the height of the stimulus debate: "No Tax Increases to Pay for Spending" declared one bullet point on Cantor's website. "House Republicans are insisting that any stimulus package include a provision precluding any tax increases, now or in the future, to pay for this new spending." Having racked up the largest deficits in American history, Republicans suddenly found it expedient to return to their old-school rhetoric of deficit-bashing. "Under Bush, they had a story about deficits not mattering," says Michael Ettlinger, who directs economic policy at the Center for American Progress. "Then, all of a sudden Obama becomes president, and deficits matter again."

The battle reached a fever pitch over health care reform. To truly understand the depth of the GOP's entrenched opposition to Obamacare, it's crucial to understand how the reform is financed: The single largest source of funds comes from increasing Medicare taxes on the wealthy – including new taxes on investment income. According to the Tax Policy Center, Americans who make more than $1 million a year will pay an extra $37,381 in annual taxes under the plan. The top 400 taxpayers would contribute even more: an average of $11 million each.

Rarely in American history has a tax so effectively targeted the top one percent. "It took Republicans about four months to figure out how much they hated it," says McIntyre, president of Citizens for Tax Justice. Republican rage over the president's health care plan has far less to do with the size of government or the merits of the individual mandate than the blow to the investor class. If Obamacare remains in place and the Bush cuts for the wealthy expire as planned, top earners will be paying a tax of 23.8 percent on capital gains – more than they have at any time since Clinton cut the capital gains tax in 1997. Health care reform, griped The Wall Street Journal, was nothing but a "sneaky way" for Democrats to wage a "war on 'the rich.'"

A key element of the GOP's war on the poor was cemented by the surprise election of Scott Brown to replace Ted Kennedy in the Senate in January 2010. As a candidate, Brown had made his high-mileage GMC pickup truck the star of his campaign commercials. "I love this old truck," he said. "It's brought me closer to the people." But Brown's real allegiance was to his wealthy donors: the billionaire Koch brothers, who bankrolled the Tea Party, and the financial interests who made a last-minute investment of more than $450,000 to propel Brown into office.

As soon as he was sworn in, Brown set about hollowing out the so-called Volcker Rule, which was designed to bar big financial institutions from using their own money to make risky, speculative bets on the market. By agreeing to provide Democrats with the crucial 60th vote on finance reform, Brown secured an exemption from the trading ban for mutual funds and insurers – a move directly benefiting Massachusetts-based financial giants like Fidelity and MassMutual. Brown also insisted that the Wall Street giants who caused the financial collapse – banks like Goldman Sachs and JP Morgan Chase – be allowed to continue using taxpayer-subsidized capital to gamble on hedge funds and private-equity deals. Former Fed chair Paul Volcker was furious: "Allowing a bank to invest in a speculative fund," he said, "goes against the very intent of the bill."

But Brown wasn't done. At the 11th hour, he forced Democrats to spike a tax on big banks and hedge funds that was designed to generate $19 billion to pay for the costs of financial reform. As a result, consumers and small banks had to pick up the tab. Brown, meanwhile, was richly rewarded for his efforts on behalf of Wall Street: During a three-week period at the height of negotiations, he raked in $140,000 in campaign cash from big financial firms, including Fidelity and MassMutual, Goldman Sachs and JP Morgan.

When Republicans won back control of the House in last year's midterm elections, they followed Brown's lead and moved swiftly to betray their Tea Party backers by running up more deficits on behalf of the rich. Within days of the election, Republicans not only secured a two-year extension of the Bush tax cuts for the wealthy, they also enabled America's richest scions to inherit millions of dollars without paying a dime in taxes. All told, the GOP's two favors for the party's biggest donors were secured in a lame-duck bargain that adds another $858 billion to the debt – an amount greater than the original stimulus plan the Republicans opposed so bitterly.

First, the GOP filibustered a Democrat-led effort to extend the Bush tax cuts on only the first $250,000 of income. The party leadership's hard-line stance – supported by barely a third of all voters – turned $90 billion over to the wealthiest Americans. It also set a precedent for further extensions that would cost nearly $1 trillion over the next decade. At the same time, the GOP drove through a deal that actually raised taxes for couples who make less than $40,000 a year – and then turned much of the extra cash over to couples who earn more than $200,000. Obama agreed to this massive transfer of wealth in order to retain the Bush tax cuts for the middle class – but the only other significant thing he got in return was a one-year extension of jobless benefits for the long-term unemployed.

But even the GOP's big payday for the wealthy pales in comparison to the handout that Republicans secured by gutting the estate tax. With the expiration of the Bush tax cuts, the inheritance tax was set to snap back to its Clinton-era standard: exempting the first $1 million of all estates from taxation, and stepping up the tax rate on the wealthiest estates to 55 percent. Instead, Obama agreed to raise the exemption to $5 million and lower the top tax rate to 35 percent – an apparent horse trade demanded by the Senate's second-ranking Republican, Jon Kyl of Arizona, who then allowed the president's nuclear-stockpile treaty with Russia to move forward in the Senate.

Shockingly, the deal actually sweetened the bargain the super-rich had received in 2009, enabling the heirs to the richest 0.25 percent of estates to pocket an extra $23 billion they would have otherwise owed in taxes under Bush. In fact, under the terms Kyl demanded, the federal government will spend more to eliminate or cut taxes for 100,000 rich people than it will to extend unemployment benefits for 7 million Americans.

In a little-noticed detail, the two-year deal also created a loophole that allows the wealthiest couples to pass on $10 million to a child today – while they're still living – without paying a penny of tax. That means the rich can offload their wealth to their children before it increases in value – evading higher estate taxes in the future. "In the next two years," one tax attorney crowed to The Wall Street Journal, "wealthy people have an unprecedented opportunity to push a lot of the value of their assets out of the estate-tax system." According to tax historians, the new rules create the most generous tax environment for wealth transfers for the super-rich since 1931.

And that was just the beginning of the budget-busting handouts the GOP demanded for the rich. In April, Republicans in the House passed a budget that would have slashed income taxes on corporations and the wealthiest Americans to just 25 percent – a $3 trillion giveaway that would have been financed by doubling out-of-pocket expenses for future retirees on Medicare. Top Republicans like Cantor have also pushed for a replay of the American Jobs Creation Act – endorsing a new tax amnesty that would allow corporate giants like Apple and Pfizer to bring home $1.4 trillion in offshore profits that would be taxed at just 5.25 percent – a favor for the wealthy that would generate another $79 billion in deficits. "At the same time they're talking about these big deficit problems, running around saying, 'We're broke,' they're contemplating one of the most egregious tax giveaways in recent memory," says Greenstein of the Center on Budget and Policy Priorities. "The potential windfall gains are beyond enormous – and the lion's share would go to shareholders of these big corporations and their executives."

Never mind that the previous tax amnesty in 2004 created virtually no new jobs, as corporate executives eagerly pocketed the windfall for themselves: Republicans are once again claiming that the tax amnesty will enable corporations to spend their repatriated wealth putting Americans back to work. Mitt Romney, the GOP presidential front-runner, promises that the flood of corporate cash will generate "hundreds of thousands if not millions – of good, permanent, private-sector jobs." That flies in the face of basic economics, given that corporate America is already sitting on hundreds of billions in domestic cash reserves. What the tax amnesty would do, however, is boost stock prices. According to an analysis by JP Morgan, as much as two-thirds of the $1.4 trillion that would be brought back into the country would go to stock "buybacks and dividends" rather than "new factories, new jobs and new equipment," as Romney claims.

JP Morgan has a big stake in the debate – as do fellow bank-bailout beneficiaries Citigroup, Bank of America and Goldman Sachs. Combined, the four financial giants have $87 billion in untaxed profits stockpiled offshore. That's similar to the combined offshore profits of drug giants Pfizer and Merck at $89 billion. Tech giants Cisco and Microsoft have more than $61 billion they'd like to bring home, while Big Oil companies Exxon and Chevron have $56 billion. The company with the most to gain, by far – with offshored reserves of $94 billion – is corporate America's most notorious tax scofflaw, GE.

Romney's rival for the GOP nomination, Rick Perry, has also endorsed the tax amnesty for giant corporations. But for Perry, the proposal doesn't go far enough on behalf of the rich. "Why not talk about how you are going to repatriate those dollars at a substantially lower rate than 35 percent?" Perry said recently, stumping in New Hampshire. "Like zero."

In September, Perry went even further, proposing a flat tax that would take a sharp bite out of the paychecks of the poorest Americans – while slashing taxes by more than 40 percent for the wealthiest. When confronted by a reporter over the fact that his plan would give millions to the rich, Perry replied: "I don't care about that." His plan is almost as regressive as Herman Cain's original 9-9-9 plan, which called for increasing taxes on 84 percent of Americans – squeezing $4,400 a year out of every middle-class couple to finance a $455,000 tax cut for millionaires. What's more, both Perry and Cain want to abolish the estate tax entirely and eliminate all taxes on capital gains. A similar plan by Michele Bachmann would enable 23,000 millionaires to pay no taxes at all – while allowing the top 400 earners to pocket nearly two-thirds of their income tax-free, and then pass those riches on to their heirs without paying a penny. "It's madness," says Stiglitz. "And it is dangerous to the fiscal order. The wealthy know very well how to convert normal income to capital gains income."
The Republican mania for rewarding the rich with tax cuts has become so warped that the normal rules of budgeting no longer seem to apply. Arguing for an extension of the Bush tax cuts, Sen. Kyl spelled out what could well serve as the Party of the Rich's credo: "You should never have to offset the cost of a deliberate decision to reduce tax rates on Americans." The same rule, of course, doesn't apply to spending for those in need: At the time he called for more borrowing on behalf of the rich, Kyl was also fighting to deny unemployment benefits to 5 million Americans. "Continuing to pay people unemployment compensation," he scoffed, "is a disincentive for them to seek new work."

In retrospect, the true victor of the midterm elections last year was not the Tea Party, or even Speaker of the House John Boehner. It was Grover Norquist.

"What has happened over the last two years is that Grover now has soldiers in the field," says Bartlett, the architect of the Reagan tax cuts. "These Tea Party people, in effect, take their orders from him." Indeed, a record 98 percent of House Republicans have now signed Norquist's anti-tax pledge – which includes a second, little-known provision that played a key role in the debt-ceiling debacle. In addition to vowing not to raise taxes, politicians who sign the pledge promise to use any revenue generated by ending a tax subsidy to immediately finance – that's right – more tax cuts.

Norquist insists the measure is necessary to force Congress to rein in spending. "I'm not focused on the deficit," he says. "The metric that matters is keeping spending down." But in the real world, the effect of Norquist's oath is to prevent the government from cutting the deficit by ending tax breaks to the rich. All told, tax breaks cost the government $1.2 trillion each year – far more than defense spending ($744 billion), Medicare and Medicaid ($719 billion) or Social Security ($701 billion). And most of the breaks – think of them as government subsidies delivered through the tax code – go to the wealthy. The richest one percent of Americans receive a 13.5 percent boost in their incomes from such subsidies – almost double the benefit the bottom 80 percent receives. Under Norquist's pledge, lawmakers are forbidden from ending any kind of tax break – mortgage deductions for luxury vacation homes, subsidies for giant oil companies, lower tax rates for private-equity millionaires – without using the money to pay for another tax cut. "If you can't get rid of tax expenditures – if old Grover is going to call that a 'tax increase' – it's not just ludicrous, it's deception," says Simpson, the former GOP senator.



Ludicrous or not, Norquist's intransigence on tax expenditures killed the "grand bargain" that President Obama proposed during the debt-ceiling standoff. In return for $1 trillion in cuts to social spending and national security, plus another $650 billion in reductions to entitlements like Medicare, Obama asked Republicans to get rid of $1.2 trillion in wasteful tax subsidies. "Democrats weren't talking about raising taxes – they were talking about eliminating tax expenditures, for God's sakes!" says Voinovich. "Many of them should have been eliminated a long time ago." But with so many Republicans committed to Norquist's anti-revenue pledge, Boehner was forced to walk away from the deal.

"Grover's got 'em terrified," says Simpson. "I always tell Republicans, 'Hell, Grover can't kill ya. He can't burn down your house. The only thing he can do to you is defeat you in re-election – and if re-election means more to you than your country, then you shouldn't be in the legislature.'"

The battle over the debt ceiling underscores the GOP's rapid evolution into the Party of the Rich. The budget savings projected from the compromise that Republicans wound up agreeing to – $2.1 trillion – won't even begin to pay for costs incurred by the Bush tax cuts. In their first decade alone, the cuts wound up depriving the Treasury of $2.5 trillion – with 38 percent of the money now going to the richest one percent of Americans. For all their talk of cutting the deficit in recent years, Republicans have spent far more of the public's money to subsidize the wealthy.

Indeed, since Republicans began their tax-cut binge in 1997, they have succeeded in making the rich much richer. While the average income for the bottom 90 percent of taxpayers has remained basically flat over the past 15 years, those in the top 0.01 percent have seen their incomes more than double, to $36 million a year. Translated into wages, that means most Americans have received a raise of $1.50 an hour since the GOP began cutting taxes during the Gingrich era. The most elite sliver of American society, meanwhile, saw their pay soar by $10,000 an hour.

America became a great nation with a prosperous middle class on the strength of a progressive tax code – one that demands the most of those who benefit most from our society. But the Party of the Rich has succeeded in breaking the back of that ideal. Today, says Johnston, "the tax system ceases to be progressive when you get to the very top of the wealthiest one percent." Above that marker, the richer you get, the lower your relative tax burden. "We have moved toward a plutocracy," Warren Buffett warned in a recent interview. "As people have gotten richer and richer, they have been favored by taxation – and have gotten richer to a greater degree."

Far from creating the trickle-down economics promised by Reagan, the policies pursued by the modern Republican Party are gusher up. Under the leadership of Majority Leader Eric Cantor, the House's radicalized GOP caucus is pushing a predatory agenda for a new gilded age. Every move that Republicans make – whether it's to gut consumer protections, roll back environmental regulations, subsidize giant agribusinesses, abolish health care reform or just drill, baby, drill – is consistent with a single overarching agenda: to enrich the nation's wealthiest individuals and corporations, even if it requires borrowing from China, weakening national security, dismantling Medicare and taxing the middle class. With the nation still mired in the worst financial crisis since the 1930s, Republicans have categorically rejected the one financial policy with a proven record of putting the country back on a more prosperous footing. "You hear the Republicans say that you don't dare raise taxes in a weak economy," says Stockman. "Ronald Reagan did – three times." Not even the downgrading of America's debt – which placed the world's only superpower on credit par with New Zealand and Belgium – has given GOP leaders cause to reconsider their pro-wealth jihad. In August, as the so-called Supercommittee began its work to complete the debt-ceiling deal by reducing future deficits by another $1.5 trillion, Cantor issued the Party of the Rich's marching orders, insisting that Republicans not buckle under the "tremendous pressure" to hike taxes and instead target spending cuts in "mandatory programs."


The composition of the committee offers little hope that Congress will hold the rich accountable for their share of the deficit burden. While Democrats appointed deal-oriented centrists like Sen. Max Baucus to the committee, Republicans stocked it with anti-revenue hard-liners, including Sens. Jon Kyl and Pat Toomey, who used to run the Club for Growth – an ally of Norquist's Americans for Tax Reform. "Your wallet is safe," Norquist tweeted after the Republican roster was announced.

In an interview with Rolling Stone, Norquist expresses pride that the GOP has been so thoroughly transformed since the days of Reagan. "It's a different Republican Party now," he says. Norquist even goes so far as to liken the kind of Republicans common in Reagan's day – those willing to raise taxes to strengthen the economy – to segregationists. The "modern Republican Party," he says, would no sooner recognize a revenue-raiser than the "modern Democratic Party would recognize George Wallace."

Norquist expresses no discomfort at the moral impact of his project – providing tax favors for the wealthy that are paid for by cutting services to those who truly need them. "I understand greed and envy," Norquist says. "The idea that somebody's making money and you want to steal some of it? That's an interesting idea. But it's not morality. It's certainly not justice."

Such extremist rhetoric – equating taxation with theft – is exactly the kind of talk that dismays old-line Republicans. Many of those who fought for years at the side of Ronald Reagan say they no longer recognize traditional GOP values in the new Republican Party. Fighting for the rich, after all, is not the same as championing the right.

"You can look up my record: On conservatism and taxes I was better than Jesse Helms," says Simpson, the former senator. "But whatever happened to common sense? People are going to look around in five or 10 years and say, 'Whatever happened to the things that made me comfortable? That made our streets and schools good things?' And they'll look, hopefully, at Grover Norquist. I can say to you with deepest sincerity: If this country and this legislature are in thrall to Grover Norquist, we haven't got a prayer."

This story is from the November 24, 2011 issue of Rolling Stone.

Read more: http://www.rollingstone.com/politics/news/how-the-gop-became-the-party-of-the-rich-20111109#ixzz1eJERwSQE

How The GOP Became the Party of the Rich