Monday, March 29, 2010

Capital Control Provisions Tacked on to the Job Bill

and no one in the mainstream media has reported on it. Now the U.S. is ever getting closer to Zimbabwe before everything collapsed.

It is buried under Title V (last one in the bill H.R. 2847 which has just been signed into law by Obama) Offset Provisions. It is stupid enough to think businesses will hire people just to get a puny tax credit. But what does capital control has to do with job creation?

(Oh I get it. Duh. More job creation at the federal government, of course, just like the recently-passed health care insurance "reform" bill is a huge job bill for foreign countries as well as for the feds.)

Here's from Zero Hedge:

It's Official - America Now Enforces Capital Controls
(3/28/2010 Tyler Durden, Zero Hedge)

"It couldn't have happened to a nicer country. On March 18, with very little pomp and circumstance, president Obama passed the most recent stimulus act, the $17.5 billion Hiring Incentives to Restore Employment Act (H.R. 2487 [it is 2847; Tyler might be dyslexic]), brilliantly goalseeked by the administration's millionaire cronies to abbreviate as HIRE. As it was merely the latest in an endless stream of acts destined to expand the government payroll to infinity, nobody cared about it, or actually read it. Because if anyone had read it, the act would have been known as the Capital Controls Act, as one of the lesser, but infinitely more important provisions on page 27, known as Offset Provisions - Subtitle A—Foreign Account Tax Compliance, institutes just that. In brief, the Provision requires that foreign banks not only withhold 30% of all outgoing capital flows (likely remitting the collection promptly back to the US Treasury) but also disclose the full details of non-exempt account-holders to the US and the IRS. And should this provision be deemed illegal by a given foreign nation's domestic laws (think Switzerland), well the foreign financial institution is required to close the account. It's the law. If you thought you could move your capital to the non-sequestration safety of non-US financial institutions, sorry you lose - the law now says so. Capital Controls are now here and are now fully enforced by the law." [The article continues. Emphasis is original.]

Please go read the whole article at Zero Hedge. It cites the actual sections in the bill. The Zero Hedge article ends with:

"And so the noose on capital mobility tightens, as very soon the only option US citizens have when it comes to investing their money, will be in government mandated retirement annuities, which will likely be the next step in the capital control escalation, which will culminate with every single free dollar required to be reinvested into the US, likely in the form of purchasing US Treasury emissions such as Treasuries, TIPS and other worthless pieces of paper.

"Congratulations bankrupt America - you are now one step closer to a thoroughly non-free market." [Emphasis is original.]

First they discourage the formation of capital by encouraging debt. Then they severely restrict the capital flow. In a free society, money (capital) and information flow freely.

At this point, I can only laugh. Under this bill, our tax-cheating Treasury Secretary can decide who is a low risk for tax evasion.


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