For all those of you who have had the joys (or sorrows) of rolling the dice in a friendly game of craps, you're aware that it's perfectly OK to bet against the shooter. In some cases, it's even recommended that you put your money on "Don't Pass" or "Don't Come" and hope the guy with the cubes loses his pants, to say nothing of what's underneath.
The same kind of thing goes on in the stock market in the form of "short" sales and the classic "puts" and "calls" of yore. These days, there are also fantastically complicated ways to bet against something good happening, several of which are now being scrutinized by Congress, having been used by such successful operators as Goldman Sachs, Bank of America and AIG. Lots of very rich people got that way by buying up distressed property from even more distressed home owners. One man's failure is another man's success.
Getting money out of somebody's collapse has a faint odor of vulture about it, but doing things that make you richer at the expense of the country you live in smells a little worse.
How do you profit from the US's loss? First, you can put your money offshore. After all, almost half of all our foreign debt (close to a trillion bucks) is owned by Japan and China and putting US dollars into foreign funds is another way of saying you hope they're wildly successful. But, in our economic system, one country's gain is usually another's loss, so guess whom you're betting against.
There's another good way to slip the shaft to Uncle Sam - gyp him out of some income. Halliburton subsidiary Kellogg, Brown and Root (KBR) found this out the easy way. More than 21,000 people working for KBR in Iraq are listed as being employed by a couple of companies located in the Cayman Islands that don't seem to have any address or phone numbers, but only PO boxes. The Defense Department is aware that KBR is avoiding taxes by declaring its American workers as employees of Cayman Islands shell companies, but it's all legal. KBR claims it allows the company to do the work more cheaply, saving Defense dollars.
But the use of the loophole results in a significantly greater loss of revenue to the government as a whole, particularly to the Social Security and Medicare trust funds. Add this to the money that doesn't come into the treasury because of hundreds of mega-yachts flying the Cayman Islands flag and you get a nice one-two punch to the taxpayer - and the country. Although the Stars and Stripes doesn't fly from their bows, they all have at least one flag on their front lawns.
When the Deepwater Horizon drilling platform set off the worst oil spill at sea in American history, it was flying the flag of the Marshall Islands. Registering there allowed the rig’s owner to significantly reduce its American taxes. The owner of the same rig, which is currently screwing up the entire economy of the Gulf Coast, is claiming tax deductions of more than $200,000 a day by leasing the rig to BP. How come? The patriotic lobbying of the oil industry.
Nor can we squirm out of some responsibility. All of us with our flag pins proudly waving on this Glorious Fourth can ask, as JFK asked, what our country is doing for us and what are we doing for our country. If we're not too busy complaining about "the government," maybe we should wonder what we'll do if it goes away. Everybody knows that ducking taxes is as American as apple pie, but ducking responsibility isn't - or at least it shouldn't be.
With the world as it is now, it's also a tiny touch of treason.