Thoughts on the Deal

I would have much preferred raising tax rates at the original $250K like the president has been saying for over a year now rather than the one we got.  In the grand scheme of things, it makes little difference in terms of revenue.  It matters more because it's what the president said he would not budge nor compromise.  He did.

Other than that, I have no other disappointments in the Fiscal Cliff deal.  I don't see how the president's hand would have been any stronger weeks from now than it was on Tuesday.  There was no need to allow UI to expire.  Getting an extension for an entire year is a huge win for the president and not enough has been said about it.  He deserves credit and if it cost him $100 billion in revenue over 10 years then it was something he considered worth doing.

My take on all this is that Dems are just unhappy with the president moving on an item he claimed to be unmovable.  But that's what compromises are, that's what democracy is.  We just had a president that was said to be immovable on issues. He didn't compromise, it was his way or no way.  If you didn't do what his administration wanted you were with the terrorists.  He presided over the largest economic collapse in 80 years and created a $1.4 trillion deficit.  He never once had a majority approval rating his entire second term and left office the most disliked and unpopular president since Hoover.  We absolutely don't aspire to be anything like that.  I'll take Barack Obama's governing style any day.  The thing we need to do right now to help our deficit the most is to get people back to work. There are no more excuses.  People have to have jobs.

Hollywood Probably Got the Smallest Tax Break

It didn't take long before my Facebook news feed was full of crazy Republicans crying about all the secret deals Liberals put in the fiscal cliff bill to payoff their friends.  The biggest complaint on my feed has been the $75 million/year in exemptions film makers can use to produce features.  I even had one person state that they would never watch movies again because of it.

I've read everything from this exemption costing $450 million per year to $1 billion over the next ten years.  Whatever the cost, and yes it is a cost so I'm glad Republicans are finally admitting tax breaks costs money, it's pennies compared to others contained in the bill Republicans are probably not even aware exist.

I get it though.  I truly do.  Movies are made in Hollywood (even though the bill doesn't say anything about Hollywood and movies can be made anywhere and usually are) and Hollywood is full of America-hating Liberals.  It's also full of Obama pals.  Therefore, the Liberal terrorists are merely giving their buddies all sorts of tax breaks.  It's easy to connect the dots on this one.  You don't even have to try.

But why stop with the tax breaks for movie producers?  How about we complain about the $21.5 million/year of tax breaks for NASCAR.  Yep the big bad Red State ultra conservative tough guy Republican NASCAR fans and their industry with a huge tax break costing tax payers millions.  Will my friend stop watching NASCAR now?

Does anyone think the financial sector needs anymore free money?  Then why did financial institutions like Goldman Sachs get another tax break to build luxury offices.  Last year alone Sachs enjoyed $1.6 billion in tax free bonds to build a big fancy headquarters in New York.  That's more than 10 Hollywood tax breaks combined.

How about another $9 billion in loopholes for foreign financing?  This fancy loophole allows domestic lending institutions to lend money to foreign accounts and not pay taxes on any of the interest generated.  The result is billions in free money to very wealthy corporations that donated heavily to Mitt Romney and the GOP.  How's that for paying off your friends?

Anyone that actually might care about all the crazy loopholes and buddy payoffs would give Matt Stoller's list of 8 Corporate Subsidies in the Fiscal Bill a quick read. If they do, they'll just as quickly discover that 6 of the 8 are Republican.  Don't hold your breath though.  There's not a chance Republicans will believe anything that is not on Fox News or doesn't come from their Drug Addicted Leader.

*Update:

Goldman Sachs received $12.9 billion in 2008-09 in bailout cash.  They also donated $990,639 to Mitt Romney.  And gave another million to Republican Members of Congress in this election cycle.  $1.6 billion a year in free tax money to build super fancy offices in New York is absolutely nuts.  Yet I haven't seen one single complaint on my Facebook feed.  Nope they are all worried about the $75 million combined given to anyone who makes a movie costing more than $15 million because they think it smells of Democrat fraudism.

Quick History of Tax Hikes

You might have to click on the image to see it better.  However, this graph is rather pointless because the Bush Tax Cuts were extended permanently for about 99.3% of the population.  So the last three red lines never happened.  It's just a snapshot of what would have happened had Congress not passed the bill they did last night.

Also, as you'll notice, the tax increases included in Obamacare are the smallest tax increases since at least 1940 (as far back as the graph goes).  This didn't stop Republicans from calling it the largest tax increase in the history of the world, however.  Never mind the simple fact they were probably the smallest in history.

My point, however, is it strikes me odd that there are 5 rather moderate-sized tax increases throughout Reagan's tenure.  You mean to tell me that Ronald Reagan raised taxes to shore up his budget deficits and create revenue?????  Well, yes he did.  In fact, his tax increases added together would be the second largest tax increase since WWII.  Double factoid is that Ronald Reagan instituted the largest peacetime tax increase in the history of this nation.  Triple factoid is in addition to raising taxes, Reagan also instituted numerous fees to help raise revenue as well. Fees are taxes where I come from.

It's curious to note, too, that Reagan raised taxes to increase revenue.  Revenue that he desperately needed to alleviate his budget deficits.  But to Republicans this never happened.  When or if you get a Republican to admit that it did happen, it's in the context that Reagan was tricked by Democrats.  So even then, it all boils down to evil Democrats raising taxes.  It's how they sleep at night.  Again, however, the assertion Reagan was tricked is simply false and earns a maximum lie score on the Fact Checker site.

Pesky facts.  It's just so much easier to pretend it never happened.

Boehner Concedes: Rich Will Get Tax Increase

Barack Obama handily won reelection on a promise to raise taxes on people making more than $250,000/year.  And now the Speaker of the House has conceded it will happen.

"We have got to cut spending and I believe it is appropriate to put revenues on the table," Boehner told reporters on Wednesday. "Now, the revenues that we are putting on the table are going to come from guess who? The rich."

I'm one who supports all tax rates going back to Clinton rates.  I have no problems seeing my taxes go up in a time of desperate fiscal calamity.  An increase on the 2% of Americans who make a rather lofty sum is also fine with me.  But we also need spending cuts.  So that's the next round of debate between the two parties. What to cut, where to cut and how much.

The public, however, overwhelmingly sides with the president on the issues of increasing taxes.  One of the latest polls specifically focusing on increasing taxes for people making over $250K shows 48% of the people polled support it.  Forty-eight percent, as you'll recall, is more support than Romney got in the presidential election.  hehehehehe

Quickies- Delay Edition

Sorry for the delay in writing.  Had to take some time off to travel.  And then I took pretty much all of today off to get caught up on everything I should have been doing while I was traveling.  It's good to see I have plenty to still write about.

• John Boner released his rebuttal to the president's debt reduction plan.  The full report can be read here.

• Boehner calls for $800 billion in new revenue, mainly through closing loopholes.  

• He also calls for raising the Medicare age to 67.  As you'll recall, I'm not against raising Medicare's age requirement.

• Boehner's plan also keeps the Bush Tax Cuts in place.

Same Old Tune, Fiddle and Guitar

Remember when Republicans told us the Bush tax cuts would pay for themselves by creating such awesome economic growth?

• "You Cut Taxes And The Tax Revenues Increase."  George W. Bush, 2006.

• "The deficit would have been bigger without" tax cuts.  George W. Bush, 2002.

• 'The entire package the president does believe will lead to growth, which will over time grow the economy, create additional revenues for the federal government, and pay for itself.' Ari Fliecsher, 2003.

• In 2001, the right wing Heritage Foundation concluded Bush's tax cuts would be so terrific, so awesome and lead to such unprecedented economic growth that it would create large streams of revenue "and the national debt would effectively be paid off by FY 2010."

Yeah it wasn't that long ago when Republicans were telling us tax cuts never needed to be offset, never had to gain any serious thought about being paid for and actually increased revenue; and would magically pay off our entire federal debt.  No joke. 

Of course none of that ever happened.  

click to enlarge

There were years of rising tax revenue as unemployment fell, but there was never, ever, not one year of unprecedented growth.  At least not growth greater than the previous decade where taxes were at Clinton rates and growth was much longer and stronger.  Also, the tax cuts never created a surplus or came anywhere near paying off the entirety of the federal debt.  The Bush tax cuts did just the opposite.  They took the largest surplus in history and turned it into the largest deficit in history.  Some $600 billion of today's budget deficit comes from Bush's tax cuts.  No new revenue was created.  Only revenue lost.  In fact, massive deficits created a federal debt more than double the size the Heritage Foundation said Bush would wipe out by 2010.  They weren't just wrong about what would happen.  They weren't even close.  What we got was the worse economic collapse since the Great Depression.  That's called epic failure.

Why does this matter now?  Because, once again, as predicted, Republicans led by Mitt Romney are claiming tax cuts, cuts much deeper than Bush's, will create super awesome economic growth and we shouldn't worry about numbers, math or what if everything they are saying is nuts.

But let's get this straight.  Romney says he's going to cut tax rates an additional 20%, add over $2 trillion of new spending and unprecedented economic growth will magically appear that will pay for all the tax cuts contained in his budget plan for America.  We've been through this before America.  This is exactly what the Bushies promised us just a few short years ago and it failed miserably.

Moreover, there isn't one serious study out there that proves what Mitt Romney is trying to sell.  Fox News isn't even buying his crap when he talks about having 6 studies backing him.  That should tell us all something.

Most importantly, allowing the very same people who were so blatantly wrong then to speak candidly now like they've been right all along is a disservice to the whole country; and frankly asinine.

Paul Ryan and Social Security, It Doesn't Get Any Worse

Paul Ryan on Social Security, 2005: “Social Security right now is a collectivist system... It’s a welfare transfer system... Autopilot will bring more government, more collectivism, more centralized government, if we do not succeed in switching these programs and reforming these programs from what some people call a defined benefit system, to a defined contribution system.”

Paul Ryan, 2012, talking about his above comment: Asked about those words Saturday, Ryan said that did not represent his thinking about the retirement program.  "I don't think of it like that," he said, saying his concern about Social Security is that younger workers today will get a "negative" rate of return for their retirement on the money they pay into payroll taxes.

So what happened in those 7 years?  What has changed his mind so drastically?  The most obvious is he is now on a Presidential Ticket and calling the most popular social program in America a socialized, collectivist welfare system looks really, really bad.

What do we get from this?  Seriously, what can we assume from Ryan's two completely different comments about Social Security?  One, we could do what Republicans do and say that Ryan has a secret agenda that he doesn't want people to know, it being he wants to take Social Security away from people.  Or two, we can assume he is trying to have it both ways by calling it one thing in front of one group and an altogether different thing while speaking to a another group.  

Or we could just do this.  Let's look at what Paul Ryan has done or has tried to do while serving in Congress in regards to Social Security. 

2005 was a big year for Ryan and Social Security.  He pushed President Bush for a plan that would defund Social Security by allowing workers to invest their payroll taxes into the market, instead of Social Security.  Bush instead went with a slightly different privatized plan, which Ryan also supported, and the public hated it.

Additionally in 2005, he sponsored a bill that would have allowed workers to funnel an average of 6.4 percent of their 12.4 percent payroll-tax contribution to a private account.  The Social Security Administration concluded Ryan's plan would require $225 billion annually in new revenue to provide for current benefits.  In other words, Ryan's plan defunded Social Security.

In 2007 he proposed yet another a bill that would invest 50% of FICA into personal market accounts.

In 2010, he again promoted the idea of defunding Social Security by investing 1/3 of payroll taxes into the market.  Even way back In 2000, he voted yes on reducing payroll taxes that fund Social Security, or better said he voted to defund Social Security. 

His entire congressional career he has pushed to do away with Social Security.  In fact, that's the only record he has on Social Security.  And now we're supposed to believe he he doesn't feel that way anymore? 

47% and where they live

As Mittens Romney claims, the 47% of Americans who pay no federal income taxes are all Obama supporters.  They are freeloaders who are anxiously waiting at their mailbox for government checks to come rolling in.  As an Obama supporter myself, I must be missing out on free money somewhere.  Nonetheless, this map will help me find where all this free money and freeloading is taking place so I can go there and join the rest of my people. 

click to enlarge

Holy cow.  Obama won only one state where the largest freeloaders live.  Looks like I'm moving to New Mexico then. 

Jokes aside, any notion that Obama's supporters are the 47% who don't pay federal income taxes is a lie.  Thus Mittens is a huge liar.  It's obvious just from the geography that the 47% are not all Obama supporters.  In fact, millions voted for Bush twice and McCain once. 

Excellent Point

Spinner makes an excellent point in one of our many comment threads.  This one just so happens to be about tax increases, Reagan and modern polity. 

"I have no idea whether Reagan could get elected today or not. Sometimes I think no, and other times I think force of personality overcomes all barriers. Remember that he was very much opposed by the establishment party in 1976 and that even in 1980 the eastern elite wing supported Bush 1 until Reagan proved so popular with the middle class and swing Democrats in the early primaries. So he overcame the powers that be back then, too."

Very true.  Reagan was, if anything, a master of personality.  Unmatched except for Clinton in my opinion.  

Sorry, I just like to highlight comments that I agree with as well as the ones I think are insane. 

Those Tax and Spend Liberals

For decades there's been a right wing misinformation campaign aimed at portraying Democrats as nothing but tax and spend liberals.  Currently we are seeing this very misinformation campaign in full swing with President Obama and especially his reform of access to health care.

Since the Supreme Court has ruled the Affordable Care Act as Constitutional based on Congress' power to tax, Republicans have resorted to labeling the Act as the largest tax increase in history.  Notice they've moved away from calling it tyranny at the moment.  This is standard Republican ideology.  If it comes from a non-Republican president, it's unconstitutional-- or it's tyranny-- or it socialism-- or it will destroy the country-- or it's the largest tax increase in history.  Textbook Republicanism.

Luckily for those of us in the reality-based community, someone actually measured tax increases on the American people since WWII and ranked them in order from largest to smallest.  Crazy I know.

And looky what we get:

The president's reform isn't even close to being the largest tax increase in history.  Facts, though, are not what Republicans are interested in.  They're interested in the sensation of the slogan that will get repeated millions of times on hate radio and the mainstream media.  They really don't care if what they say is a lie.  Them saying it is all the proof they need to convince themselves that it's true.

But, there's more.  When I look at that graph I don't see a rank of the largest tax increases in history.  No I see 7 of the 15 tax increases coming from Republicans.  Of those 7 tax increases 5 are from REAGAN!!  In fact, Reagan increased taxes as a percent of GDP more than any president since Truman.  His 5 tax increases listed above more than triple all the combined taxes in Obamacare.

Surely 7 of the 15 largest tax increases in modern history is quite the stain on a party that prides itself as the small government fiscal conservative lot.  In a sane world such a history would be enough to squash any hopes of maintaining that label.  But sanity has nothing to do with post-George Bush America.

Perhaps while raising taxes Republicans also, oh I don't know...increased spending as well!! Yes they did!  That's right, in addition to issuing 7 of the 15 largest tax increases in modern American history, they also increased spending far more than any of their Democratic counterparts.  They also added over $10 trillion to the federal debt in the same time span. George W. Bush alone added over $1 trillion of new spending to the budget.  And these are our fiscal conservatives?  Well, only if you ask them that is.

It's laughable to imagine the audacity it would take to really think Republicans care anything about spending, deficits, debt or tax increases.  It's also a stretch of historic proportions to even begin to call the GOP the fiscally responsible party.  Conservative they may be. Fiscally conservative, not a chance.

A Fact Republicans Will Never Admit, Will Never Acknowledge and Will Go Out of Their Way to Cover Up

Taxes, federal spending, and the budget deficit are all lower today than when Barack Obama took office.

Yes, that's right.  Obama has shrunk spending, cut taxes and lowered the deficit.  This goes against the Republican narrative, however.  It's something they will deny until the day the world explodes.  They have spent the better part of three years creating a fantasy world where Obama created the fiscal mess we are in today and that what he inherited from George Bush was nothing that couldn't be fixed within a week of taking office.

*Update:

As a comparison, let's see what George W. Bush, the greatest president ever, who was a staunch fiscal conservative, did in 3 years time.

Sources are all from http://www.usgovernmentspending.com/spending_chart_1950_2015USp_G0f

Oh no way.  This can't be true.  George Bush and the Republicans increased federal spending, cut taxes and took a budget surplus to a deficit 4% of GDP?????

Yep.  That's their legacy.  The guy who has actually shrunk spending, cut taxes and lowered the budget deficit is the Big Government, Tax and Spend Liberal trying to bankrupt the nation. The people that created this mess are never to be spoken of again, unless we refer to them as Very Serious People who are Staunch Deficit Hawks that need to be listened to very carefully.

George Bush's Economy, Republicans Want More Of It

George W. Bush Two-Term Presidential Economic Record:

• 1.8% total GDP growth, worst ever since Hoover
• Zero net job creation, worst ever since Hoover
• Household income dropped $2,000, worst ever since Hoover
• Net loss of over 2,000 points in the Dow, worst ever
• Increased spending by 108%
• Grew federal subsidy programs by 30% (i.e., also what tea baggers call Big Government, unless it's Republicans doing it.)
• Took largest budget surplus in history and turned it into $1.4 trillion budget deficit, worst in history
• Accumulated $7 trillion to the federal debt, worst ever and still counting
• Begot America the Great Recession

So a man with that kind of record gives a speech about taxes and economic policy designed to give America advice for future economic growth and we're supposed to treat him and his policies as Very Serious Stuff?  Why, yes we are.  Because the Ryan Plan that nearly every Republican member of government has endorsed including their nominee for president is nothing but the continuation of Bush policies.  And the media fawns over it like it's some sort of magic blueprint that will burn and slash our way to epic awesomeness.

George W. Bush Finally Speaks, Begs For a Return to His Policies

Yesterday former President George W. Bush gave a speech.  The focus was tax policy and economic growth.  Bush's record in both areas is abysmal.

Bush reiterated his policies from his two-terms in office and suggested they be carried into the future all the while neglecting to mention that his policies left America in the worst financial crisis since the Great Depression.  A crisis, five years after it began, we are still reeling in.

He advocated for lower taxes on the wealthy and spoke out in favor of his signature 2001 and 2003 tax cuts saying, “If you raise taxes on the so-called rich, you’re really raising taxes on the job creators.”We believe that one of the clearest expressions of freedom is that the aggregate demand of the citizens determine that which is produced,” said Bush. “We trust people when it comes to spending their money, and so should our government.”

“If the goal was public sector growth, it’d be a short conference,” said Bush. “We believe that the best policy is that which creates a robust private sector.”

A robust private sector? Under his watch the private sector shed millions of jobs. He cut taxes in 2001 and 2003 to extremely low levels and by 2007 the economy was in the dump. No president since Herbert Hoover lost more private sector jobs than George W. Bush.

 

Bush's overall record on job growth is ZERO. He created not one single new job in 8 years. That means for every new job, one was lost.  It's the worst record since the Great Depression.

But then, as we all know, George Bush is a Very Serious fiscal conservative who believes in balanced budgets and disciplined spending so he couldn't give a speech without mentioning how to fix everything.

Bush said that the majority of the political debate today focuses on federal spending, and rightly so. “When you look at the debt to GDP it’s pretty high,” said Bush. “Or you think about entitlements – the overhang is daunting.” Bush said in order to reduce the debt, the focus of the federal government should be on increasing the private sector to broaden the taxpaying base.

Incredible.  Almost three-quarters of the federal debt we have today comes from Reagan and George W. Bush.  Nearly $7 trillion alone comes straight from George W. Bush.  He is the very reason why "debt to GDP" is high.  He did it.  His policies of huge spending increases, huge tax cuts, two endless wars and no job growth created the debt to GDP ratio we have today.  Take a look:

This is quite insane.  The debt ratio we have today is directly derived from Republican policies. There's no getting around it.

The very policies that tripled our federal debt (Reagan) and then more than doubled it again (Bush), that ultimately led to millions of job losses and doubling the unemployment rate, that created a $1.4 trillion budget deficit and sent us into an economic collapse not seen since the Great Depression, are the very same policies George Bush touted again yesterday as being the saving grace for our country.

It's absolutely absurd to think that George Bush has any credibility when talking about creating a robust private sector, or about solving debt ratios, or about how lower tax rates create a thriving economic engine for our future. Nothing in his 8 years of setting American policy demonstrates he knows anything about such stuff.

Bush Tax Cuts Still Largest Contributor to Budget Deficit

Republicans love to talk about fiscal responsibility, especially when they are out of power. While they are in power and have ample opportunity to prove to the world their fiscal astuteness they do things like create the largest budget deficit in history by legislating tax policies that cripple the budget for years.  In other words, today's budget deficits are not a result of this administration and instead come from George Bush policies.

 [Note to Republicans: none of the links above are Fox News approved]

A Republican Finally Admitted Reagan Raised Taxes

The thing about Jon Stewart's interview of Republican Grover Norquist isn't that his make-believe journalism is actually much better than anything you'll see in the mainstream media, it's the fact that he finally got a Republican to admit that Reagan raised taxes.

Of course, as is always with everything in the Republican Fantasy World, Republicans like Norquist claim Reagan only raised taxes because he was tricked by the evil liberals.  But as Stewart makes note, how does that explain his 10 other tax increases that had nothing to do with Congress.

Not to mention, even with Reagan's numerous tax hikes he still ran massive annual budget deficits, which we are still paying for today.  Could you imagine how much bigger those deficits would have been had he not raised revenue 11 different times?  That's the other part of this equation Republicans refuse, tax cuts do not increase revenue.

Budget Facts: Taxes Control Revenue

• Under Bill Clinton federal income tax revenues increased by $528 billion.
• Under George W. Bush federal income tax revenues decreased by $266 billion (the largest drop in revenue ever).
• Under George H. W. Bush federal income tax revenues decreased by $10 billion.
• Under Ronald Reagan federal income tax revenues increased revenues increased by $84 billion.

I wonder what it is that Clinton and Reagan have in common that caused them both to oversee an increase in revenue?  Oh yeah, they both raised taxes.  In Reagan's case numerous times.

Red States Are Welfare States

I'm so glad to see Talking Points Memo doing more and more graphs.  Their latest is a dandy.

Again, proving the supposed Super Tough Macho Conservative Small Government Republicans aversion to welfare and Big Government is a complete hoax.  It has to be the biggest hoax of the the last 75 years.

"The Fat-Cat Quotient" - How Many Poor Families Can Mitt Romney Afford On His 2011 Speaking Fee Income Alone?

Today's post is brought to you by guest blogger Mike from They'll Say Anything!  We are very glad to have him.

Mitt's definitely winning the class war. Based on the Department of Health & Human Services (HHS) 2011 Poverty Guidelines, last year he could have financed as many as 34 families of eight with his 2011 speaking fees income alone. These HHS poverty guidelines are used in various ways by the federal government to determine eligibility for certain federal programs - important ones, like Head Start; Migrant Health Services; the National School Lunch Program; and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). Although many federal programs do not use the HHS poverty guidelines to establish eligibility - for example, TANF (Temporary Assistance for Needy Families), and Supplemental Security Income (SSI) - the HHS poverty guidelines serve well as a standard of measurement of the national income inequality gap.

And that's what The Fat-Cat Quotient (FCQ) is all about! It's a new way to measure income inequality. The FCQ uses the official HHS poverty guidelines to visualize the income gap in our nation. No econometrics needed; the math is simple. I hope the FCQ gets around. It gives yet another answer to those who ask, "Why do you envious haters use the term 'class warfare'"? . . . . . .

CBO: Deficit Can Be Cut 75% By Congress Doing Nothing

Revising its numbers from August, CBO now says the current fiscal year budget deficit will hover around $1.1 trillion.  In August the budget office assumed the deficit would shrink below one-trillion for the first time since 2008.  Not anymore says CBO:

CBO projects a $1.1 trillion federal budget deficit for fiscal year 2012 if current laws remain unchanged. Measured as a share of the nation’s output (gross domestic product, or GDP), that shortfall of 7.0 percent is nearly 2 percentage points below the deficit recorded in 2011, but still higher than any deficit between 1947 and 2008. Over the next few years, projected deficits in CBO’s baseline decline markedly, dropping to under $200 billion and averaging 1.5 percent of GDP over the 2013–2022 period.

CBO also lays out some interesting facts.  The most effective way to deal with the deficit is to allow the Bush Tax Cuts to expire.  Their chart makes this very clear.

Let's get this as straight as possible.  The best thing for Congress to do is nothing.  Just sit back, allow current law to expire and the nation's budget will go from a trillion dollar deficit to a $200 billion deficit in two years.  In order to cut the deficit by 75% Congress needn't do one single thing.  This should be a no brainer.

Welfare Helps the Wealthy Says Ron Paul

I don't disagree at all with this from Ron Paul:

“So the middle class is shrinking and their [sic] losing their jobs and their [sic]  losing their houses, but Wall Street isn’t getting poorer. And they are the ones who are getting the bailout. So we have to address the bailout and the system that favors a certain group over another group. If you don’t have sound money and you have a welfare state, no matter whether the welfare state is designed to help the poor, you know, the welfare system helps the wealthy.”

Welfare does indeed help the wealthy. It helps the wealthy in many ways most people don't realize, and way more in terms of real dollars. Even in ways Ron Paul omits.  Or at least the American Welfare System does.  And that's because we have a system fundamentally designed to see that the rich are taken care of at much higher rates than the poor.

Since 2007 alone, the federal government has spent trillions propping up the wealthy.  This is nothing other than welfare.  For the last decade the federal government has cut taxes disproportionately to favor the wealthy, subsidized their professions, and allowed for very wealthy bosses to mismanage their companies into the ground all the while still receiving hundreds of billions in welfare payments that helped pay their bonuses and golden parachutes.  This is all welfare.  And we as a society have spent way more money subsidizing rich people than we ever have the poor.

I don't think this is necessarily what Ron Paul was saying, nor do I think he would necessarily disagree with it either.  But yes, welfare does help the wealthy.  That's the whole problem nobody wants to talk about.