A Millennial's View of the World

Category: US Politics

Locked Up At The Border

Locked Up At The Border

By Dan

Viva La Mexico

It was January 30, 2013, a cool, overcast winter day in Southern California. It was about two o’clock in the afternoon, and I had just left a brunch with a friend at a café in Oceanside, about 40 miles North of the Mexican Border. I was driving south in to Mexico to renew my work visa at the American border station in San Ysidro. The plan was to drive in to Mexico, turn around, file some visa paperwork at the border, get my visa and continue on with my life as an attorney in Los Angeles. As a Canadian citizen, I could only work in America with a work visa, and mine was set to expire on February 1, so this trip was necessary to keep my immigration status legal.

My previous two years were spent living in Los Angeles, working as an entertainment lawyer. When the time came to renew my visa, it became apparent that it would be much easier to renew at the Mexican border station than to fly all the way back to Canada just to turn around and return to L.A.

The last time I had been to Mexico was five years prior, in 2008. At the time, I was attending law school in San Diego. Some friends were visiting from Toronto and wanted to party in Tijuana. We had taken a taxi to the border and walked in to Tijuana for a night of drunken debauchery. On the way back to the border we were robbed by the Mexican police. Needless to say, I was not exactly looking forward to my return to Mexico.

My anxiety began to kick in as I arrived at the Mexican border. The car entrance in to Mexico was not heavily guarded. There were a couple of guards pulling over a few cars to search, but when they saw me and my new silver Ford Focus, I was profiled as a safe entrant, and was able to drive right through into Tijuana without an interview.

When I got into Mexico, I was extremely stressed and confused. The road signs were all in Spanish, and none were directing traffic back to the American border. The three options were to take the 1 highway to Rosarito/Encenada, the main road to El Centro, or a road to Paseo Centenario. I didn’t want to go to Rosarito or downtown, so I took Paseo Centenario. This road spun me around into a little traffic circle. I immediately realized that this was where the Mexican police had robbed my friends and I five years earlier.

After circling around the Paseo Centenario a couple times, I decided to take the road towards El Centro and try to turn around at the first place I could. As I took the main freeway towards El Centro, I noticed the traffic going the other way towards the border. There were cars backed up as far as the eye could see.
I got off at the first exit I could. The line for the border was immediately apparent. A huge line of cars greeted me along a main road heading towards a freeway. I found a small opening in between two cars and began my wait. The line was moving, but ever so slowly. Every couple of minutes I would move another car length towards the border.

In between the cars, all sorts of peddlers, vendors, buskers and beggars were wandering up and down, going car to car trying to sell their wares. A little girl stood on her mother’s shoulders and juggled for change.
I really had to pee, but there was nowhere to get out of my car. I just held it in, hoping that the time would pass.

The car in front of me was filled with a Mexican American family. They would rotate drivers, giving each family member an opportunity to take a rest.

I was too nervous to open my window after my previous trip to Mexico. Small children came up to my car and tapped on the window, asking for change. I just continued to drive, pretending that I didn’t notice. The family in front of me seemed very comfortable, getting in and out of their cars and talking to the locals. I didn’t want to take any chances, and continued to drive.

My satellite radio kept me busy while waiting. A call to my father in Canada to update him on my current situation also passed the time. It was a nice, pleasant conversation. Little did I know that it would be the last contact I would have with the outside world for two days.

The line of cars was five hours long. By the time I got to the border crossing, it was already dark outside. I pulled up to the border guard and gave him my Canadian passport.

“Canadian. Alright, go on through” he said.

“Actually, I need to renew my work visa.” I replied.

“OK, drive on to the parking lot to the right, and give them this piece of paper”.

He handed me a piece of paper, and I began driving towards an area where cars were being searched. It was difficult finding someone to tell me where to park. I looked over and saw a younger African American woman, and rolled down my window.

“Excuse me, where do I park” I shouted.

She directed me to a spot and I parked my car. I grabbed my law degree, as well as my visa paperwork, including my letter of employment from RK Attorneys, my visa sponsor. I got out of the car and started walking out towards her.

“We’ll need your car keys” she instructed.

She took my keys, walked them over to an older man sitting in a small booth about 20 feet away and handed them over. She then walked back towards me.

“I need to renew a work visa” I said when she returned.

“OK, come this way”, she replied.

She walked me around a few cars, back towards where I had driven in from. We walked into a brick building, with a large gray room with a white counter. Behind the counter were two agents, a man and a woman, both in their late 20s.

“Wait here, someone will be with you shortly” she said, and walked out of the room back towards the parking lot.

“Where is the restroom?” I asked the female attendant. She pointed me the way, and I was finally able to get some relief. I returned to the waiting area and took a seat, waiting for my turn.

The Interview

After spending five hours in my car, all I could think about was getting back home to Los Angeles. In front of me in the immigration room was a family of four of Mexican descent, and a Mexican American man in his late 50s. The family had to pay a filing fee for their visas, and were able to quickly leave the waiting area and return to the United States.

The Mexican man had been stopped with a pile of gambling slips. It appeared that he had taken gambling orders from his friends in California and had gone in to Mexico to place their bets. The female border agent behind the counter was reviewing his case, trying to figure out what to do. She was sitting at her computer at eye level with me. She never made eye contact while she was reviewing his case. She was a short Caucasian woman, with brown hair in a short pixie cut, narrow brown eyes, and an angry stare that never left her face.

I sat in my chair, calmly playing Angry Birds on my smart phone while waiting for my chance to talk to the border guard. It was about 10:00 pm on Sunday night. Once the male guard processed the visas for the family of four, he called me up to take my case.

The guard was about six feet tall, with brown hair and a gentle face. He reminded me of the sort of guy I would have seen at a bar in Pacific Beach, the area of San Diego in which I had lived for three years while going to Law School.

The interview went really well at first. I gave him my law degree from California Western School of Law in San Diego, and my letter of employment from the law firm that was sponsoring me. He asked where I was working, and what I was doing. I answered him casually, in a relaxed manner.

He then proceeded to take my fingerprints on an electronic scanning machine.

“Please place your right thumb on the machine”. He said.

“Alright”, I replied, placing my thumb on the machine. An awkward silence came about while he was taking my prints, causing me to interject with a casual comment:

“I actually have a lot of experience using these fingerprint machines. I had to give my fingerprints when I got my law license from the State Bar. I also got them done when I first got my work visa, and when I got my real estate broker’s license.” I said, just trying to make small talk while he processed my visa.

“Cool. That’s impressive. You’ve accomplished a lot” He replied, as he continued to process my prints.

All of the sudden, the female guard who had been sitting quietly got up from her chair and walked over to the counter where I was standing and looked me in the eye.

“Why do you have your real estate broker’s license?” She asked in an abrasive, inquisitorial manor.

“Well, I was working with a client in the real estate industry, so I got my broker’s license to be able to know more about the industry.”

“Have you sold any real estate?” She replied.

“Well, no, it’s not allowed on my visa” I replied, seeing where she was going with her questions.

“So, you just got your real estate license because you had a client in real estate? So what, if you had a client who was a doctor, you would get your doctor’s license?” She replied smugly.

“Well, no. I just thought it would be a good thing to have, to make me more marketable as an attorney. I never sold any real estate or anything.” I replied, starting to worry that this could become a problem.

“Please have a seat sir”. She replied angrily.

I returned to my seat in the waiting area. She walked back to her computer and sat down. She began typing on her computer. Again, I was looking straight at her, but she didn’t make any eye contact.

The first male guard had a slightly frustrated look on his face, like he had seen this happen before. He began working on something else, now that my case was in the hands of his colleague.

The agent’s issue with me was related to the work visa that gave me permission to live and work in America, called the Temporary NAFTA visa, or TN Visa. One of the peculiarities of the TN Visa is that the holder of the visa is only allowed to work for the company sponsoring his or her work visa. That means that the visa holder can’t take any side jobs, start any businesses, or do any work that is not for the company that is his or her visa sponsor. The agent suspected that by getting my real estate license, I was trying to do work outside of the narrow confines of my work visa.

All of the sudden the woman’s face changed. She looked over at me.

“I think we’re going to have a problem here”.

My heart began to beat faster. I looked at her with a puzzled look. Dealing with border agents was always a stressful experience, but this agent was particularly unfriendly.

“Why does your LinkedIn profile say that you work for MD Music, but your application says you work for RK Attorneys?” She asked, like she had just cracked a case that she had been investigating for years.

The agent had thought she had discovered that I was no longer working for my visa sponsor.

“My profile says that I’m Of Counsel for that company. It means that they are a client of the firm that I work for. They are my biggest client right now. My LinkedIn also says that I work for RK Attorneys, my visa sponsor.” I replied.

It had never occurred to me that a border agent would go to the extent of searching my on-line profiles. Fortunately, I had deliberately made sure that my LinkedIn profile listed me as “Of Counsel” for the music company that was my major client, just in case I might have to one day answer regarding my position there. A lawyer who is “Of Counsel” for a company is not technically an employee of that company, but provides legal services for that company on a regular basis.
“I think that you’re not working for RK Attorneys anymore. You’re working for this company now.” The guard replied.

She continued to search the Internet, trying to find more evidence to show that I was violating the terms of my visa.

This whole predicament came about because work at the firm I was working at had dried up. The partner had encouraged me to find additional clients so that I could keep my job. The music company was brought on by me as a major client.

She looked up at me again:

“Has this company been paying you or the firm?” she asked.

It hadn’t really occurred to me, but I had been doing so much work for MD Music that often I didn’t even get the firm involved in smaller payments. The owner of the firm didn’t care, as long as I did a good job working with his clients when he needed it. This turned out to be a big mistake.

“Well, sometimes I accept the checks I guess?” I replied.

There was no response. She looked back at her computer for about five minutes, and then looked back at me.

“You know we screen lawyers here all the time, that’s part of our job.” She said smarmily.

“Well, yes.” I replied politely, wondering where she was going with her questions.

She didn’t say another word to me after that. She continued to type on her computer, avoiding eye contact with me as much as possible. I went back to my phone, playing more Angry Birds to pass the time.

She dealt with the Mexican American man with the gambling slips, confiscating the slips from him and sending him on his way out the door and back in to America.

She and the male border guard spoke quietly to each other for a second, and then didn’t say a word to each other for another half hour. Various other guards were coming in to the office from their shifts, casually chatting with each other. A pretty guard with long, well coiffed dyed blonde hair came in and was chatting with a couple of the other guards. She said a casual, phony hello to the guard that was giving me trouble. You could tell that it was an insincere hello.

It seemed like many of the guards were heading home, as it was getting late. I sat waiting for almost an hour, feeling so frustrated that they had such little disrespect for my time.

It began to occur to me that I could be turned away and sent back in to Mexico to get my affairs in order and provide more proof of employment. This seemed like the worst case scenario at the time. Most likely my visa would be granted, I thought. I still had the two hour drive to L.A. ahead of me, and didn’t want to have to deal with this situation anymore.

The long wait was making me nervous, and it felt like it would never end. All of the sudden the female border guard stood up from her chair and gave a nod to her male co-worker behind the counter. She looked over at me.

“Please stand up Mr. Revich”. She said loudly.

I stood up from my chair and put my phone in my pocket.

The two guards began to walk up to me. The woman pulled out a set of hand cuffs. My jaw dropped.

“Please face the other way. You’re not under arrest, but we are handcuffing you for security purposes.”

“Okay.” I replied, in a state of disbelief. This would have been my first time in hand cuffs if not for being handcuffed by the Mexican police when they had robbed me the last time I had visited Mexico.

The guard put my hands in the cuffs behind my back. The two guards grabbed me and began walking me back to the door that I had entered through, out into the parking lot.

They didn’t tell me where I was going, or what was about to happen to me.

The Search

Rather than walk back to where my car was parked, the guards walked me around the building that we were in. We walked across several lines of traffic, towards another building. This building looked like a fortress, with beige concrete walls with vertical grooves running through them.

At this point, I had no idea where I was being taken, although I was hoping that I would have a chance to explain myself to someone higher up at the next location.
We walked into the next building. At the entrance was another guard station, with a tall, older white gentlemen with gray hair and a pot belly sitting at a desk.

He took my documentation from the guards. The female guard then proceeded to search me. She asked me to empty my pockets and remove my belt. I took out my phone, wallet and keys and gave them to her. She then asked me to take off my shoes. I gave them to her and removed the shoe laces. I was wearing a gray dress shirt and black Calvin Klein dress pants.

“Please put your hands on the counter” she asked.

I placed my hands on the counter in front of me.

She took my wallet, and started searching through it.

“Where is your driver’s license?” she asked.

My hand instinctively reached out towards my wallet to point out where my license was stored.

“Excuse me sir, keep your hands to yourself” she shouted. “I know you’re trying to be helpful, but you need to keep your hands on the table.”

I felt extremely nervous at this point. It started to occur to me that this was a serious situation. I was being treated like a criminal.

Once she finished searching me, she asked me to walk through a metal detector.  She put all of my belongings into a plastic bag, including the phone and watch, and gave me a small paper tag with a number written on it.

“You’ll need this to get your stuff back”. She said.

She also gave me the remaining cash that was in my wallet, all $7.

“Alright sir, you’ll need to walk over and have seat over there, someone will be with you shortly.” She walked me over to a set of seats past the entrance, and I sat in the front row facing a wall. She turned around and walked back out the door with her colleague, both never to be seen again.

Behind me in the waiting room was another guard, a middle aged black woman, sitting alone, chatting on the phone. I told her I needed to go to the restroom again. The stress of the situation was affecting my bladder.

The older male guard walked me to the restroom, and stood outside while I peed. I got out and sat down, waiting in the seats. About 15 minutes later, two Mexican men came out of a room and sat behind me. I sat there, staring at the wall, wondering what would happen next. About 20 minutes later, a guard walked in.

“Canadian” the armed border officer looked at me. He was a six foot tall, white male in his early 40s, dressed like a police office. He was in full uniform, with a gun in his holster. He had a Homeland Security badge on his chest.

I looked up at him to acknowledge that I was being called.

“Come this way” he continued.

“You guys come too”. The border guard signaled to the two men. They stood up and followed.

My thought was that we were being called in to speak to an immigration officer. The two Mexican men followed the border officer down the hallway, and I followed along. As we walked down the hallway, a second armed border guard who had been standing in the hallway joined along.

“You take them” the first border guard pointed to the two Mexican men. “I’ll look after him” he looked at me and continued to walk me down the hallway. The guard was about 5’9”, of Asian ancestry, with no distinguishable accent.

We suddenly stopped in the middle of the hallway. The guard turned to the right, where there was a pile of brown cloth blankets sitting on a ledge.

The two Mexican men and the second guard continued down the hallway.
“Here, take this” The guard grabbed a blanket from the top of the pile and threw it at me. I looked down at the blanket, wondering why I would need one.

The guard then turned to the left side of the hallway, grabbed a key from the holster in his belt and began opening a door. I looked inside, astonished by what was in front of me. It was a jail cell, filled with people.

“Are you serious?” I asked, completely flabbergasted at where my situation was heading. I had never been in a jail cell before, and was certainly not expecting to end up in one on this day.

“Well, you don’t have to take the blanket, but you’ll probably be cold without one” The guard replied, pausing from opening the door to look at me with confusion. He didn’t realize that I didn’t know that I was about to be put in a jail cell.

Up to this point, nobody had told me where I was going. Now it was becoming clear that I wasn’t going to be seeing an immigration officer any time soon.
The guard continued to open the door to the jail cell. This was really happening.

As I looked in to the cell, the terror immediately began to flow through my body. I walked into the cell and turned around to look at the officer.

“I’ll get you a floor mat when one becomes available. We’re all out right now”. He stated. He then proceeded to shut the door and lock the cell. The smash of the bolt locking sent another wave of terror through my veins.

The Cell

As I stepped in to the cell, I slowly turned my head to look at my surroundings.
My eyes wandered to my right passed the door. A pair of wide open deep brown eyes staring at me sent me into a state of shock. An olive skinned man of European descent, perhaps in his early thirties, wearing a brown puffy synthetic down jacket and skinny blue jeans was sitting on a stainless steel bench. His arms were crossed and his back hunched. He stared straight ahead with an angry gaze on his face. He continued to sit and stare, anxiously vibrating his right leg up and down, balancing himself on his toes. He didn’t acknowledge my presence.

My gaze continued to wander around the room. It was packed with sleeping bodies lying on the floor. About 12 men lay on every square inch of this tiny holding cell. Each was sleeping on a tiny floor mat, similar to a Yoga mat, but of much poorer quality. Each had a cloth blanket on top of him like the one I had received.

The floor felt like solid concrete with no softness or give.

The room was long and narrow, angling to a point at the end. The ceilings were high, about 12 feet tall. The room was lit by bright fluorescent lights, and there was nothing on the white walls. There was no clock to keep time and no television. There was no radio playing or books to read. Just a plain white room filled with people.

The room smelled of human waste and body odor. The sounds of two men snoring overwhelmed the buzzing from the fluorescent lights and ventilation system.

My cell phone had been taken, and there was no light from the outside to indicate what time it was. From this point on, time would carry a very different meaning.

Opposite from the door leading in to the cell was a nook, which housed two steel toilets, similar to those on an airplane, but with a built in seat. Both toilets were out in the open, only separated from the room by a body length steel divider.

There was a long, tinted glass window facing out towards the hallway. There was also a small, eye height glass window built in to the door.

I stood at the door in a state of disbelief for about a minute, coming to grips with my incarceration and figuring out what I was going to do.

There were three rows of stainless steel benches, one down the center of the room, and one along each of the walls to the cell. The European man was sitting on the bench next to the window, adjacent to the hallway from which I had been brought in. The middle bench had a jug of water on it, with several Styrofoam cups lying around it. The third bench was empty.

My instincts took me to the third bench, opposite the one in which the European was sitting. My journey there required tiptoeing around several sleeping bodies, trying not to wake anyone up. As I sat down, I found myself facing the European, trying not to make eye contact with him. He kept staring, not budging an inch.

The steel bench felt cold and uncomfortable and I lay my back across it. I unfolded and put the blanket over my body to stay warm.

A million thoughts began swirling through my head. How long would I be here? Was I every going to go back home to Los Angeles? When would I get a chance to talk to someone?

I covered my eyes with the blanket and pretended to be somewhere else. My mind began to wander towards all of the popular prison dramas that were in my memory. Was I going to be raped? Was I going to get into a fight? Who were my roommates? Were they Mexican drug smugglers with gang connections?

My appearance would make me look vulnerable to the other inmates. A 5’7” white, blonde, Jewish guy dressed in business clothes; an easy target.

All of the sudden the cell door opened again. A guard opened up the door.
“Here’s your mat” he said to me.

I got up from my bench and walked over to grab the mat. The European man sitting on the steel bench hadn’t moved an inch, and was still staring straight at the wall, rocking his legs.

The mat was thin and dinky and smelled like pee. I walked the mat back to my spot and laid it out along the bench. I lay down along the bench again and returned to my hibernation under my blanket. With the mat, I was much more comfortable, although half the mat was hanging off the bench.

Suddenly, one of the sleeping men lying below the bench pushed my blanket away, startling me. The blanket had inadvertently dropping on his face. I grabbed the blanket, adjusting it to make sure that it was on top of me and not dangling. The man didn’t say anything.

The loud snores of the people sleeping below sent vibrations through the bench. I lay awake, thinking about how long I would be stuck in this place, and wondering what would happen to me.

Was I going to be deported? Would I ever see my friends again? How would I deal with all of my belongings? Would my roommate have to sell everything? What would I do with the rest of my life in Toronto, my home town? My law license was only valid in California, would I go back to school in Canada and get my license there, or try a different profession?

My bladder was full again, but my situation left me too afraid to move.
About an hour passed. The door opened again.

“Sanchez and Garcia. Come this way please”. The guard shouted out. Two of the men sleeping below me opened their eyes and took off their blankets. They stood up, looking somewhat dazed and confused after being awaken from their slumbers. They were both of Mexican descent. One of them had been the loud snorer sleeping below me.

All of the faces around the room looked up to see what was happening. I was finally able to survey the people sleeping around me. There were several young black men, one red-haired young white man, and several Latino looking men, as well as the European, who by now was lying down on a mat on his bench.

“Grab your blankets and mats”, the guard shouted at the two Mexican men.

The men picked up their blankets and mats and began walking towards the door. They had a sign of elation on their faces, looking ecstatic that they were finally getting out of this place.

The two men walked out the door, never to be seen again.

As they left, the European man, still on his bench, perked up and talked to the border guard.

“ Excusa me… When can I make a phone call”. He asked, with a thick Italian accent. It was somewhat comforting to know that this strange man was from a familiar country.

“You can make a call after you’ve had an interview”. The guard replied.

“When can I have interview?” the Italian asked.

“We’ll call you when it’s your turn”. The guard replied. He closed the door and walked away.

The Italian sat back down on his chair. He suddenly got off his bench and walked to the spot in which the two Mexican men had been sleeping, taking up both of their spots. He lay down his mat, and passed out on the floor. Before long he was asleep and snoring.

Too afraid to try and squeeze in next to him, I resumed my position on my bench, closed my eyes, and waited for another spot to open up.

“This is great” I thought. “I’ve been here an hour, and two people have already left. It should only be a few more hours and I will be out”.


The time kept passing by, ever so slowly. The guards hadn’t been back in a long time. I was getting tired and really had to go pee. The snoring of the Italian man below me was driving me crazy. The bench was extremely uncomfortable.

A trip to the toilet was finally a necessity. It felt amazing to empty my bladder after holding it in for hours. I didn’t flush the toilet, afraid of waking someone up and getting someone angry. The water only trickled out of the push button sink. There was no soap. “How disgusting”, I thought.

After returning to my spot, a thin strip of space next to the Italian man opened up. It was just large enough to lay out my mat.

I grabbed my mat and laid it out on the floor, next to the man. At first I lay down head to toe, trying not to have to look the Italian man in the face. As I lay down, a young black man with braided corn rows who was sleeping adjacent to me opened his eyes and started staring at me. His head was right next to mine. My feet were under the bench, and my head was in the middle of the room.

The awkwardness made me decide to get up and turn around, so that I was lying down with my head underneath the bench. It was much darker here. The bright fluorescent lights were slightly dimmed by the shadow of the bench over my head. This made it much more comfortable.

There were no pillows, and my blanket would be the only thing between me and my floor mat. Bunching up the blanket under my head provided some neck support. Some of the other inmates were using their jackets as a pillow. Unfortunately, I didn’t have a jacket, as I was not planning on leaving my car for more than a minute to renew my visa. As uncomfortable as it was lying on this concrete floor with a thin mat, it was much better than trying to sleep on the stainless steel bench.

My eyes began to close and I began to doze off.

“BREAKFAST, BREAKFAST. Wake up gentlemen, it’s breakfast time.” The guard shouted at the door.

I hadn’t heard him come in to the cell. I had only been asleep for a couple hours.

“What time is it?” Someone asked the guard.

“5:30 in the morning”. He responded.

It had felt like the longest seven hours of my life. No one else had gone home since the two Mexican men. Everyone stood up, dusted themselves off and found their shoes.

“Leave your things in here. You’re going to leave the cell one at a time. Clean your hands with this sanitizer.” The guard had a squeeze bottle of hand sanitizer. I waited for the others to walk by and then made my way to the door. The guard squeezed some sanitizer on my hands as I walked in to the hallway outside of our cell. Instead of heading back to the waiting room in which I had come in from, we walked towards the other end of the hallway. There was a second guard in the hallway waiting in front of a cooler full of wrapped food.

“We’ve got burritos or sandwiches”. The guard said, shouting to the crowd. He was another larger white male.

The last time I had eaten was at the Café in Oceanside the previous day, about 18 hours earlier. I wasn’t very hungry because of the stress. When my turn came, I reached out for a burrito, as it looked warm. There were also Capri Sun fruit juice boxes.

We walked down the hallway and out a door to an enclosed outdoor area. It felt amazing to get some fresh air. The area had several picnic benches. There were solid concrete walls, and a semi-enclosed metallic roof. There was an echo of the voices of people talking outside of where we were eating. The cool morning air sent chills through my spine. I was only wearing my dress shirt and slacks. The inmates in jackets looked much more comfortable. I tried to sit at a bench, but felt too cold and stood up to get some circulation.

My burrito contained eggs, some stale pinto beans, potatoes, and some strips of cheap ham. It was nice and warm, and felt good to eat, even though it didn’t taste very good. After eating half of the burrito, my appetite was gone.

I looked around me and noticed an out of place face. A young man with long red hair stood eating his burrito on the other side of the room. He was wearing what looked like pajama pants and a tee shirt. He didn’t say a word.

No one said anything, except for a few of the young black men who spoke to each other in some foreign language that I had never heard before. They couldn’t have been more than twenty-one years old.

After surveying the crowd more closely, I began to feel more at ease. No one in the room looked like they were going to cause trouble. We were just a group of cold, unfortunate non-American men.

We finished up our food and were called back in to the cell. We threw out our trash, and on the way in, were greeted by a guard.

“Here is your tooth brush. The tooth paste is already in there. Please brush your teeth, then put the brush back in the package and give it back to us.”

Everyone walked back in to the cell and grabbed a toothbrush. I opened my package, and looked at the brush. It looked like a little square sponge on a straw. The sponge felt strange rubbing up against my teeth. It felt gritty, but it was slightly minty and fresh. I rubbed for a while, trying to cleanse myself, then packaged the brush back up and gave it to the guard, who was collecting the brushes in a trash bag. Everyone returned to their mats and lay down.

The guard at the front began to do a roll call. The first few names sounded French, and three of the black men responded. The guard continued;

“Fritz” the red haired man looked up and nodded.

“Junior” the tall black man with the corn rows nodded.

“Revich” I put up my hand.

“Rosetti” the Italian nodded.

There were two names of latino decent, the responders being a young and stylishly dressed man in his late 20s, and a plump man in his late thirties, with bald hair and a thin moustache.

After roll call, the guards left. Another group of inmates could be heard going for their breakfast from a different cell. Some of the other inmates in my cell stayed up, but I was still exhausted from the whole experience. I put my blanket on and went back to sleep.

The Italian

“FRITZ” the guard yelled, waking me up. Apparently he had walked into our cell while I was sleeping.

The young man with the long red hair stood up and walked out of the room. That would be the last time I would ever see him. I don’t know if he made it in to America, or was deported to his home country.

I slowly got my bearings, again realizing that this wasn’t a dream. I took off my blanket and sat up, finally waking from my slumber. The room was still fairly silent, although by now the four black men with French names were all on a bench talking to each other in some unknown language.

I sat there silently for a long time, biding my time, glad that another inmate had been released.

About half an hour later, the guard came back in the room holding a sheet of paper. He looked me in the eye.

“Are you Italian?” he asked.

“No, Canadian” I replied.

“I’m Italian” Rosetti replied.

“Come this way, sir. You can leave your blankets”. The guard directed him out the door.

Rosetti left the cell for about twenty minutes. He returned with an annoyed look on his face.

“What happened?” I asked him when he walked back in.

“I talked to the Italian Embassy”. He replied. “My friend in Los Angeles called them when I didn’t arrive on the train. They said I won’t be leaving until after midnight. This is Bullshit. They said I have to have interview, but I can’t have interview until midnight.”

“Midnight?!” I replied. It was probably about 10 in the morning. Since he was there before me, I knew that my interview would come after his.
The elusive interview became the focal point of everyone in the cell. It was the chance to explain oneself, get some closure, and get the hell out of that horrible cell.

“It’s stupid, I don’t know why they put me here”. Rosetti continued. “I’m on vacation from Italy. I was visiting my aunt in Mexico City and was going to L.A. for 5 days to visit a friend. I filled out my visitor’s visa at the border and got put in here, I don’t know why. I have a girlfriend and a job in Italy, I was just trying to go on vacation. I was in New York 5 years ago with no problems. I just wanted to visit my friend in L.A. and go back to Mexico”

He was still wearing his big puffy jacket. His vacation was just ruined by some overzealous border guard.

“I don’t even care about going to L.A. Send me back to Mexico, send me to Italy, is ok. I just want to get out of here. I didn’t think America would be like this.”

“That sucks, man”. I replied, looking away, not sure what to say.

His story made me realize that everyone in this cell thought that they didn’t belong there. Like me, he was angry, frustrated and afraid. These weren’t criminals, just unfortunate souls like me, caught up in the mess that is the United States immigration system. I looked over at him and continued,

“I’ve been to Italy before, it’s beautiful. Where are you from?” Some small talk seemed like a good idea. By now extreme boredom had set in.

“I am from Napoli. Why were you in Italy?”

“I went traveling through Europe. I stopped in Naples when I went to see Pompei”. There was a little apprehension in my voice about sharing too much of my background.

“Where are you from?” He asked.

“I’m from Toronto originally, but I’ve lived in California for five years. Now I live in Los Angeles.”

“Toronto is a very nice city. Why are you here?” He looked at me.

“I was just trying to renew my work visa, and got thrown in here for some reason. I really shouldn’t be here.” I didn’t feel a need to divulge all the details of my issue.

“At least you live in America. I don’t even care if I go in. Send me back to Italy, is ok.”

“Ya, that really sucks, I hope you get out soon.”

Our little conversation ended. One of the other detainees started talking to him in Spanish. I sat up on my mat, deep in thought, a little more comfortable now that I had a little bit more of an idea about who I was in there with and how long it would be before I would get out.

The Haitians

A couple hours passed after the Italian had come back from his phone call. At this point the Italian and I were conversing in brief spurts, usually complaining about our situation or talking about our home countries. Otherwise my time was spent resting, drinking water, or just staring off into space, thinking about my life and my future.

The guards came in and called us out for lunch. The same breakfast burritos and ham sandwiches were available to eat. This time I chose the sandwich. They also had a side of macaroni salad, which I ate with the straw from my Capri Sun juice box. By now I was starving and feeling more comfortable than at my previous meal. I ate my meal extremely quickly, and felt satisfied. It also felt great to get some fresh air, and it had warmed up, so I wasn’t freezing like I was at breakfast. A headache was setting on from not having my morning coffee.

We were again marched back into our cell, although this time there was no toothbrush. About a half an hour later, the guards came back and knocked on the door. They called out three French sounding names, and three of the trendily dressed young black men got up and started walking out of the room. One was much skinnier than the other two, with short hair, wearing a new plaid shirt, blue jeans and new Nike running shoes.

“It’s time to go gentlemen, bring your mats and blankets”. The guard said.
The men grabbed their mats and blankets and walked out. They handed their blankets to the guards and the doors were shut.

All of the sudden I heard one of the guards shouting from the hallway:

“Hey, get up!”

“I think he passed out” one of the other guards shouted back to his colleague.

“He’s not getting up”. The first guard could be heard saying.

“You take those two and get a paramedic, I’ll wait here with him.” The second guard replied.

It got pretty quiet for a few minutes. I could hear a couple other guards coming to check out the situation and asking about what happened. Ten minutes later, two new voices were heard outside as the paramedics had arrived.

“Has he had anything to drink?” The first paramedic asked.

“Yes, they have water and food”, replied the guard.

“OK, we’re going to take him to the hospital, get him on some fluids. How long has he been in here?”.

“About two days” replied the guard.

The paramedics carted away the young man.

The other inmates didn’t seem to be paying too much attention. They were all too concerned about their own situations to care about what was going on outside.

Not too long after the Haitians had left, some loud voices could be heard chatting outside the cell. I looked out through the little window in the door to the cell, and saw a group of children in their early teens going in to another cell.


Things began to stagnate in the cell. No one seemed to be coming or going anywhere. The Italian man started to get antsy, swearing and shouting about his situation every time the guards would come by.

“When will I get my interview!” He kept asking.

The guards would just politely reply “When it’s your turn”.
The fourth Haitian man, now the only Haitian in the cell, was sitting on his mat over by my corner of the cell. He was tall, black, and thin, but healthy looking, with braided hair. We briefly made eye contact.

“Were those your friends?” I asked him.

“No, we just met in here. They are from Haiti like me.” He responded, with a thick, but understandable French sounding accent.

“How did you get here?” I asked.

“I took a flight to Panama, then made my way to Mexico City on a bus. I have an auntie in Boston, I really hope to go live with her. I got to the border and they put me in here. Are you from Canada?” he asked.

He must have been paying attention when I had talked to the guards in the morning.

“Yes, from Toronto” I replied.

“Canada is a beautiful country. Beautiful country. Safe and free. Why are you here? I thought Canada and America are the same thing?”

“No, they are different countries. I’ve been living in California for five years now”

“Why did you leave Canada? It’s such a beautiful country”

“It’s very cold there. I wanted to live somewhere with warmer weather” I replied, feeling somewhat selfish about my first world problems.

“I would love to live in Canada. If I could live there, I would never leave. Maybe God will give me the chance. I’m in God’s hands now. He got me here. Do you go to church?”

“No, I don’t”. I replied, not feeling the need to let him know that I was Jewish and non-religious.

“I don’t either, but I know there is a god.” He replied. “I know it, I’ve seen a spirit before”.

“Hmmm” I replied, not wanting to show my skepticism. “So were you in Haiti for the Earthquake?” I decided to change the subject.

“Oh yes, it was sooo scary. Everything was shakin’ so hard. I was terrified. Thankfully, God was there for me. Now everything is bad, I had to leave”.

“Wow, that must have been scary, thankfully you survived. Your English is very good, how do you speak so well?”

“I taught myself. I speak Creole, French, English and Spanish. I learned from the tourists. I love the foreign girls”

“So you learned English to talk to American girls?”

“Haha, ya, so many beautiful women come to my country. I love the women. My auntie could not believe that I learned English. She was so proud of me. I hope I can live with her in Boston.”

“I hope so too” I replied.

My conversations with Junior and the other cellmates continued for a few more hours. Now that the cell was emptier, there was a more relaxed feeling in the air. Everyone had come to grips with the fact that they would be in here for a while.

Now in the cell it was just me, the Italian, Junior, a young Cuban man who only spoke Spanish, and the bald Mexican man in his late 30s with a moustache, who kept being taken out and brought back in to the cell. He said that he had a blood pressure problem (which is why they put him in the cell with the international inmates rather than one of the cells with the other Mexican nationals).

Dinner time came. The same food was served. Another sandwich and some macaroni salad. My caffeine withdrawal was terrible, and by now I was craving a cold beer too. The discomfort began to feel like the new normal.

Shortly after dinner, Junior was called for his interview, never to be seen again. Whether he ever got to see his auntie in Boston, I would never know.

To pass the time, I walked over to the door and hung out by the window looking out in to the hallway. A couple of guards walked by now dressed in street clothes, finishing their shift. They looked like people I would see in San Diego and not think twice. One of them caught my eye and turned to his friends.

“Whoa, it always weirds me out when I see a white guy in there. It just doesn’t look right” the shorter, bulky brown haired one said to his buddy.

“He’s probably got a warrant out for his arrest or something”. A taller, white man said.

They all looked at the window to sneak a peek. I nodded my head at them like a friendly neighbor saying hello. They quickly looked away, then walked down the hall towards the exit.

Later in the evening, the young Haitian man who had passed out was brought back in to the cell. He had a look of bewilderment on his face, like he couldn’t believe that he was back. He sat on a bench, staring forward.

As it got later we all began to doze off, returning to the comfort of our mats and blankets. It was now Monday night, a full day after I had arrived. Now there was more room, and we all spread out, no longer packed in the room like sardines.

No one had left or entered the cell for a while, and there was just an aura of calm now. We had realized that our 12:00 deadline would not be met, and that we would be in this cell for at least another night.


At about 2 in the morning I heard another inmate come in to the cell quietly. He was a white, European looking man in his early thirties with long brown hair and a moustache. He wore army surplus clothing, with large Doc Martin boots. He smelled like an army surplus store; a mixture of of shoe polish, leather and dirt. . He quickly saw everyone sleeping, laid down his mat on the floor, and passed out.

It seemed like I had just fallen asleep when my slumber was interrupted by some loud shouts in the hallway.

“Where are you fucking taking me! I didn’t do nothin’ wrong” the voice of an African American man could clearly be heard.

All of the sudden we could hear our cell door opening.

“I ain’t fuckin’ going in there. I’m gonna die in there. Let me the fuck out of here.” The screams continued.

“We’ll be back for you in a second. We’re putting you in the safest room here, you should consider yourself lucky.” The guards said to the man.

“I gotta get back to my kids. You can’t leave me in here.” He was brought in to our cell, but was looking out at the guards.

The man was short, about 5 foot 5, in his late twenties, with thin, stylish glasses and short black hair. He wore blue khaki shorts and a San Diego Chargers football jersey. The back of the Jersey read Seau. I knew the player, Junior Seau, one of the great Chargers defensive lineman, who coincidentally had just committed suicide a year earlier.

As the guards walked away, Seau began to run up and down our cell shouting and banging on the doors and walls.

“Let me the fuck out of here. I can’t be in here. I didn’t do nothing wrong” he shouted.

This was the first time in the cell that I felt somewhat in fear of my personal safety. This seemed like an erratic individual, and I didn’t know how he would react to being stuck in the cell for a prolonged period.

All of the sudden Art popped up “Excuse me sir, can you please keep it down, some of us are trying to sleep” he said, with a European accent, probably Dutch or German.

Seau realized that there were other people in the cell, and began to calm down a bit.

“I ain’t do no sleeping. No way. I’m claustrophobic, I can’t deal with this place. I gotta get out of here”.

He ran back to the door and started shouting at a passing guard.

“Why I am in here. I didn’t do nothing wrong”.

The guard walked up to the door.

“You could be charged with felony human trafficking. You don’t want a felony do you.” The guard then began walking away.

“Where’s your manager. I need to see the manager”. Seau yelled.

The guard walked away, and I assumed that we wouldn’t see anyone again. It had never occurred to me to ask for a manager or a supervisor. I had just accepted my fate.

I was now pretty much awake, and sat up on the stainless steel bench. Seau looked over at me.

“Awww, look at you dressed like a man.” He looked over at me, still dressed in my dress clothes. I had forgotten how I looked. In my mind I was now just an inmate.

“I can’t get a felony man, I’ve been good my whole life. I got four kids, man. I gotta go take them to school. I’m from the ghetto, and all my homies kept me out of trouble. I gotta get out of here.”

“What happened to you? I asked.

“Yo, real talk. My homie called me up and said let’s go to TJ” Referring to the slang name for Tijuana.

“I ain’t never been before. We walked over and went to get drunk and watch some strippers. One of the strippers tried to make me do some nasty stuff, I didn’t want none of that. Shit was whack. Real talk. We came back across the border and a friend of my homie’s from lockup came up to us and walked across the border with my homie and me. Next thing I know, they’re arresting me. The guy was an illegal or some shit. That fucker’s gonna get me a felony.”

“Don’t worry, I’m sure you’re not going to get a felony. It sounds like you didn’t do anything wrong.” I said to him, trying to calm him down.

“I better fucking not. I gotta get outta here man, I’m gonna die in here.”

He began pacing across the room, no longer shouting and screaming fortunately.
All of the sudden, our door opened. A white male guard, about five foot ten in his late 40s came to the door. He was slightly bald, with short brown hair.

“You asked to see the supervisor.” He said.

Everyone perked up and began to walk up to the door, other than Art, who remained trying to sleep in the corner of the room.

Seau walked up to him. “When am I getting outta here. I didn’t do nothing wrong”.

“Talk to him, he’s a lawyer.” He pointed at me. I hadn’t told anyone that I was a lawyer, it was somewhat embarrassing.

“You’ could be charged with felony human trafficking. You tried to bring an illegal across the border.” The guard said to Seau.

“I didn’t know none of that. I got 4 kids man, I got to get to my family.”

“Well, you should have thought of that before you trafficked someone across the border.

All of the sudden the young Hatian who had returned from the hospital popped up. “Speak Creole?”. He looked at the guard.

“Are you kidding me. Of course I don’t speak Creole.” The guard replied smugly.

Next the Italian took his turn. “I’ve been here for 30 hours. When am I getting my interview. Consulate said I would get interview before 12:00”

“Well, you guys are just unlucky. A large group of minors were brought in here yesterday morning. The law says that we have to process the minors first, so you guys take last priority. We would have gotten to you guys yesterday, but those kids had to go first. You should have your interview later this morning.”

It was now my turn. “Do you have any information on my case?” I asked. He seemed to know that I was the Canadian inmate.

“Yours is a real interesting one. I actually went to your law school, California Western. I think what they’ll probably do is give you a visa for 30 days to go back to L.A. and collect your things. If you overstay that, you’ll be in real trouble though.”

“Thanks”. I replied.

The supervisor shut the door and walked away. It gave me some comfort to know that I would be able to go back to L.A. to get my affairs in order. From what I had studied in immigration law, usually someone who was denied entry in to America was not allowed back in to the country for a 10 year period. My original thought was that if my visa was denied, I would never be able to see my apartment again. My roommate would have to clear away and sell my things and send them back to Canada.

It also struck me that the night supervisor at a border station went to law school; although he never said that he graduated.

Seau sat down and put his head in his hands.

“Man, I was always the good one. I ain’t never done anything bad in my life.”
He looked out the window, and the guards were walking a Mexican man with tattoos down the hall.

“That’s the mother fucker who got me in here.” He pointed out the window.

“Hey man, at least you’re not going to be here as long as we are, you’re an American, they can’t keep you in here. We’ve been here for 30 hours.”

“No way. I ain’t staying here for 30 hours.”

A few minutes later, we heard a knock on the door. The guards called Seau’s name and escorted him from the cell. His stay would only be about a half hour.

As he walked out of the cell, in walked a tall, thick man with olive skin and short brown hair in his early 50s, wearing a long sleeved t-shirt and baggy blue jeans. Shortly afterwards, a second middle aged man, tall and pudgy with lighter olive skin and a bald head also walked in to the cell. They walked over to one of the steel benches and sat down next to each other.

The Argentine

At first the two new middle aged inmates kept to themselves. My conversations with the Italian continued about how upset we were at the situation.

“This is fucking crazy”. The Italian said. “We’ve been here for 30 hours. I just want to go home.”

The first of the older men with the brown hair piped up and asked me a question. He had a very light Spanish accent, almost sounding American.

“How long have you been in here?” He asked.

“We’ve been here for over 30 hours”, I replied. “But a bunch of children came through while we were here, and they had to go first, so hopefully it won’t be as long for you guys” I said, referring to the two men. “Where are you guys from?” I asked.

“I’ve lived in Los Angeles, in the valley, for ten years” he replied, referring to the San Fernando valley, a suburban area of the city.

“I came from Argentina with my wife and started working as an auto mechanic” He said.

“My tourist visa ran out, and I stayed for ten years. My mother in Argentina is dying, so I went home to see her.” He continued.

“How did you end up at this border crossing?” I asked.

“On my way back from Argentina, I flew in to Mexico City, then took a bus to the border. That’s where I met this man. He’s from Chile.” He pointed to the guy next to him, who sat silently. “We tried to walk across the border this morning, but they stopped us and brought us in here. My wife must be so worried. She’s waiting for me to come home”

“I’m really sorry to hear that”, I replied. “I live in Los Angeles too” I proceeded to tell him my story, letting him know that I was going to be going back to Los Angeles to get my things.

“Well, I don’t think things will be good for me. I don’t have any papers.” He replied. “Ten years I’ve lived there. That’s my life. And now I’m going to have to start again. My wife is going to be so upset.” He looked down and began to gather his thoughts.

“If you do get in to California, please do me a favor.” He looked me in the eye. “I work for an auto shop in Van Nuys, it’s called California Auto Body. Please, I need you to find them when you get out and call my boss. Let him know that I am in here so he can tell my wife. This is very important to me.”

“I will try my best, but I can’t make any promises. I hope I can get out of here myself.”

Shortly after our conversation, we were ushered out of the cell for breakfast.
It was freezing cold again. I paced around the eating area to keep warm, shifting back and forth while I ate my burrito. By now the meal breaks were routine. I had gotten used to my predicament and my surroundings. The thought of getting out and being in the real world already seemed like a distant memory.

The terrible food was starting to taste delicious. I was starving, and quickly munched down my entire burrito.

We were again ushered back in to our cell, and brushed our teeth one more time, with the Styrofoam toothbrushes.

When the guards came to pick up our brushes, the Italian complained one more time.

“I have been in here for 30 hours. What is going on? When am I getting interview?”

The guard was a taller African American, probably in his early 30s.

“You’ll get your interview when you get your interview.” He responded, clearly perturbed, starting to raise his voice. “I don’t care how long you been in here. 30 hours? Try 2 weeks.” He started shouting. “There’s no time limit, we can keep you here as much as we want. So just relax and wait your turn and stop bugging me.”

He slammed the door shut and locked it.

It was at this point that the injustice of the entire situation really set in. There was no due process in this holding cell. There were no rights to a fair trial or bail. No right to be informed of your charges while being held. We were in there indefinitely, until the bureaucracy would pass us through, or send us to our country of citizenship. Our only crime was wanting to get in to America.

I vowed that I would do more in my life to fight against injustice. I wanted to to make sure that what happened to me didn’t happen to anyone else. How could I go from being an entertainment lawyer one day to an inmate the next? How could my Italian friend go from being a tourist on vacation to an inmate in a holding cell? This was not the America that I thought I knew.

My body began to feel bloated from the lack of exercise. I got up from my blanket and started pacing back and forth in the cell to get some exercise, walking from one end to the other for about 20 minutes. It felt good letting off some steam.

The two South American men and the bald Mexican man who had been in the cell for 3 days chatted to each other in Spanish, with the Italian listening on. The last remaining Haitian sat alone, silently, unable to communicate. Art had gone back to sleep.

After my workout, I laid down to rest, putting my blanket over my head. The Argentinean man followed my example and started doing some laps around the cell to get exercise. His footsteps echoed in my ear as he walked by.

The Exodus

It was about eight or nine o’clock on Tuesday morning when a guard came in and took out the last Haitian man away, never to be seen again. About a half an hour later, The Cuban was also given his opportunity.

It seemed logical the Italian would be called next, as he had arrived before me. All of the sudden, a woman guard came to the door.

“Revich, Dan” she shouted.

I almost broke down when I heard my name. This moment seemed like it was imminent for the previous 35 hours. By now it seemed like it was never going to come. I tucked in my shirt and tried to clean up my now disheveled hair to look respectable.

Outside the cell stood a short, Latina woman in her early 30’s. She had long brown hair in a pony tail, and a warm face. She wore a guard uniform, with a large badge, and carried a clipboard that she was looking down at. She closed the door behind me and we talked in the hallway.

“So, what are you doing in here?” She asked, with a somewhat puzzled look on her face.

I was nervous and shaking, but happy that I was finally getting some sort of resolution to my nightmare.

“She said that I was violating my visa, that I couldn’t have my real estate license.” I exclaimed, sounding rather ineloquent.

“She, being the border office?” The woman replied.

“Yes, the one who was interviewing me when I tried to renew my visa.” I said, trying to keep calm.

“Hmm.” She looked down at her paperwork. “Well, there’s nothing wrong with you getting a real estate license.” She kept looking through the profile.

“Well, she said I was trying to start my own business. I told her that I accepted checks from clients.” I said, not wanting the agent to find this out by her own means and get angry at me.

“Well you can’t do that. How many checks did you accept?” She looked at me, somewhat more inquisitively.

“I don’t know, about 6 or 7?” I replied. There were probably a few more, but I hadn’t really been counting. It never occurred to me that this was a visa violation.

“OK, well you can’t do that”. She said.

“I promise you, I’ll never do it again. Every check will go through the firm. I’ll never take a personal check again. It was a stupid mistake. I promise you, I’ll never do it again.” I begged.

“OK, well I’ll see what I can do.” She replied. She opened the door back to the cell and let me back in.

I sat down on one of the stainless steel benches. The Italian came over and asked me what happened.

“I just talked to a lady in the hallway. She said she’s going to try and do something.”

He nodded with approval.

About 10 minutes later, the door opened again.


The Italian, still wearing his puffy jacket, grabbed his shoes and walked out. He finally got his interview and didn’t return.

The Argentinian man came up to me one more time.

“Please, if you leave, I need you to call California Auto Body in Van Nuys. It’s on Google.”

“OK, I will.”

“Please, my wife needs to know. She must be so worried.”

Another forty five minutes passed in the cell. It wouldn’t be much longer. I just kept thinking about what I would do if I got out and how I would change my life for the better.

All of the sudden, the door opened again. It was the officer again.

“Alright Mr. Revich, you’re ready to go, please gather your things.”
I put on my shoes and walked out the door, grabbing my blanket and mat. Outside of the cell, I dropped them off on the counter. The guard locked the door behind me.

My heart was beating sensationally. I couldn’t believe that it was finally over. I took one last look back at the cell behind me; my home for the last two days.

“Alright, do you have your belongings tag?” The guard asked.

I pulled the tag out of my pocket and gave it to her.

“So… what’s going to happen?” I asked.

“Oh. You’re getting your visa.” She replied.

All of the sudden, she went from being another border guard to being my angel.

A giant halo appeared around her in my mind. By this point, I had already resigned myself to the fact that I would be moving back to Canada. I would have to start a new life. I would return to my parents’ basement, a total failure, deported from America and unable to return.

Now, it became clear that my life wasn’t over. There would be a second chance to do everything the right way.

The emotion didn’t quite hit me immediately. There was still a thought in my head that something would go wrong.


My “Angel” took me back into the room in which my belongings had been taken from me. She took my tag and walked into a hidden area to retrieve my things.
She returned a couple minutes later and handed me my bag full of my belongings. It felt relieving to have my cell phone, keys, and wallet back. I strung my shoelaces in to my shoes, and strapped on my belt and watch. The Canadian prisoner was now Dan Revich again.

“Alright, come this way”. The officer said, walking me back down the hallway full of jail cells. At the end of the hallway, she opened up a door that I hadn’t noticed when walking to the eating area. The door led outside, to an outdoor corridor and a building that I had not been in yet.

The five second walk to the next building felt great. The sun’s rays had never felt as beautiful as they shone across my face. The smell of fresh air and the feel of the wind on my skin was the most refreshing thing I had ever felt. The 36 hours in the holding cell had felt like an eternity.

She opened up the door in to the the next building. It was the border crossing station for pedestrians. There was a cheery, relaxed atmosphere, mostly with cross-border commuters going about their day on a Tuesday afternoon. There was a large, wide open room, with a series of counters in the center like a DMV.

The sunshine shone into the room through bright open windows. There was a seating area in one corner with a few individuals waiting for their turn to talk to a border agent.

My angel walked me to a counter which was shielded by a window, where I checked in. She then walked me over to one of the seats and told me to sit while she expedited my paperwork processing. She grabbed my passport and paperwork and walked over to one of the counters in the center of the room.

I was seated next to a middle aged Mexican businessman, going about his day.

He didn’t look at all nervous, likely just doing a routine border crossing.

As the officer walked away, numerous emotions began to flow through my body. It now started to feel like my nightmare was finally over. The entire time I was in the cell, I had kept my cool, simply thinking about getting out and trying to pass the time. I didn’t want the other people in the cell to think I was weak.

Now, I began to let it all out. I began to cry quietly, the tears running down my cheeks. It felt good. I cried out of happiness that it was all over and that I would have my life back, but also out of sadness, and the feeling that I had just been violated.

After a few minutes of crying, I gathered myself together and began to think about my life again. I hadn’t been able to make a phone call while I was locked up, and was worried about my friends and family members. I looked at my phone to see if it was still working. The batteries were still intact, and I was able to view my text messages.

Surprisingly, none of my family members had called. My roommate, who was also my cousin, had only realized that I hadn’t been home on Tuesday morning, and just assumed that I was staying at a friend’s apartment.

A few text messages came in that morning from a couple friends and the employees at the music company. I had told Craig, the Vice President of the music company, that I would be renewing my visa in Mexico that weekend. Jokingly, I told him to start worrying if I didn’t show up on Monday. When I didn’t show up on Tuesday, he started contacting my friends to see if they had heard from me.

I sent a text to Craig, letting him know that I was released, and that I would be heading back that day. I sent a message to my father as well:

“Just spent 36 hours in a holding cell. Getting my visa now!”

I put the phone away, as the emotions began to catch up with me again. After quietly waiting in my seat for another fifteen minutes, my “angel” border officer came back to me and walked me over to the counter to finish processing my paperwork.

The officer at the counter printed out my work visa and stapled it to my passport. He handed the passport back to me. My visa was stamped February 1, 2015, two years away. That meant two more years of living and working in California. My angel then walked me back the counter surrounded by glass, where I paid the cashier $58 for my visa.

She walked me outside, back through the corridor and towards my freedom. A thin African American gentleman in his late 50s with glasses was waiting for us in the corridor.

“I’ll get your car for you. Which one is it?” he asked.

“It’s a silver Ford Focus”. I replied.

“OK, why don’t you meet me in the lot that you came in on, I have to go get it from another lot.”

He started walking away quickly to get my car. I was alone with my angel for a moment.

“Thank you so much for your help”. I said to her.

“You’re welcome. Just make sure you follow all the rules.” She replied.

“I will, I promise. It was really horrible in there, I’m just so happy to be out.”

“Yeah, I understand.” She replied.

We stood in silence for a couple minutes. All of the sudden her Walkie Talkie went off with word that the car was ready. We walked around the building with the holding cells, and then by the first building I had been in for my interview. As we walked by the two buildings, chills went through my spine. I took one last look back at my hell for the past two days, never to look back again.

We walked to the parking lot where I had originally dropped off my car. My car pulled up, driven by the man who we had talked to earlier. He walked out of the car and handed me my keys

“Thank you” I said.

“You’re welcome, have a good day sir.”

He started walking away.

I looked over at my angel.

“Thank you so much for your help” I said to my angel. “What’s your name?”

“Officer Gomez”. She replied.

“Thank you Officer Gomez, you’ve really been amazing.”

“You’re welcome”. She replied.

I walked in to my car and turned on the ignition. I backed out of the spot, then put the car and drive and started driving out. Officer Gomez led me to a station down the road, where she talked to an attendant and swiped a card that opened a gate. As the gate opened, I finally started to feel my freedom.

Rolling down my window, I thanked the officer again, and then drove off. As I drove North on the 5 freeway, I felt like a police car was going to appear in my rearview to take me back to the cell. I drove past the tall, chain link fences on the way to San Diego.

I looked in my rear view one last time. No one was following me. It was finally over. I was free.


As I drove back towards L.A., all I could think about was getting a coffee. At the same time, I wanted to be as far away from the Mexican border as I could be. I continued along the 5 freeway, passing downtown San Diego.

While driving, I made calls on my speakerphone to the people important to me. Repeating the same story several times was exhausting while still in a state of shock. I called my roommate, my co-workers, my parents, my aunt in San Diego and my two friends who had called to make sure that I was ok. As upset as I was, I tried to look positively at the situation. At least I was out of the cell and had my second chance.

I pulled in to a Starbucks in University Town Center, an area of San Diego twenty minutes north of downtown, still wearing the dress clothes that had kept me warm for the previous two days. The taste of coffee had never been so delicious.

My nerves began to calm as the black goodness flowed through my veins.
Seeing the real world again felt strange. Happy, smiling people sat at the Starbucks, having no idea that I had just been through two days of hell.

I thought about the people I had just been with, and remembered the request of the Argentinean man, who wanted me to get in touch with the body shop that he worked at. I looked up the shop on my phone, and sure enough it was easy to find. I called the shop, and an American man with no accent answered:

“California Auto Body” he stated.

“Hello, this is kind of a strange call, but does someone named Juan work there?” I asked, wanting to make sure that I had the right place.

“Yes he does. Well, he usually does. May I ask who’s calling?” He sounded somewhat suspicious.

“I’m just leaving the Mexican border. I actually spent the last two days stuck in a holding cell at the border, and Juan was in there with me. He got in early this morning. He told me to call you when I got out, and gave me the name of your shop.”

“Oh man, that’s not good news at all. Someone was saying that they heard that he made it through. Are you sure it was him?” The shop owner sounded concerned.

“Yeah, I’m sure. He was in Argentina visiting his mom, and got held up at the border. I was granted my visa in the end; I’m not sure what will happen to him, I was just released.”

“Well, I don’t think he’ll be so lucky. He didn’t exactly have his papers. I’ll tell his wife. What was your name again?”

He took my name, said goodbye, and didn’t contact me again. His conversation with Juan’s wife was probably the hardest of his life.

I grabbed my coffee and got back in to my car, ready to make the two hour drive back to my apartment in L.A.

Along the way I stopped for some fast food. It was delicious. At about 2:00 in the afternoon I arrived at my apartment, choosing not go in to the office. I took my dog for a walk, and lay in bed for the rest of the day, gathering my thoughts.

The next day, I returned to work, and continued on with my life.

On Money, Wealth and Taxes

At the time of the writing of this article, there are several major protests being held in cities throughout the world under the “Occupy Wall Street” banner. In the midst of one of the greatest economic downturns in the past hundred years, citizens are taking to the streets to protest the gross disparity in wealth between the wealthiest Americans and the large majority who are struggling to get by. This movement has brought the issue of economic disparity to the  forefront of the mainstream media. As the Obama administration proposes a special tax on annual income over a million dollars, it is pertinent to discuss what money really is, how it is accumulated, and the effects of taxation on individuals, corporations, and the economy as a whole.

I remember first gaining an understanding of the existence of money as a child while shopping at a toy store. Learning that I could not have a toy that I wanted because it was too expensive was a harsh reality to take in. This was clearly a problem. There are all these amazing toys out there, but for some reason I can only have the cheap ones? Something was clearly wrong.

I thought that I had solved the problem of money not too long after my discovery of its existence. “Why doesn’t the country just give everyone a million dollars so that we can all be rich and have all the toys we want?” It seemed like a great idea.

Of course, we all know why this doesn’t work. If the country gives me a million dollars, then it must give the guy who works at the store a million dollars and the guy who makes the toy a million dollars. The worker will quit his job, and the toy maker will stop making toys. The price of the toy will have to go way up to make it worth it for the toymaker to produce the toy and the worker will demand more money to sell the toy. All of the sudden I’m paying 100,000 dollars for the toy that once cost 100 dollars, and before you know it, my million will be gone.

The principle that I learned is that the value of money is only related to the fact that there is a disparity in how it is distributed. The fact that only a select few have a lot of money gives money its value. This principle goes back to the first monetary economies.

Before money, economies were based on a system of barter. The hunter would give meat to the berry gatherer, who would provide the hunter with berries in return. Once additional products were demanded, the barter system broke down. If the hunter needs shoes, the clothier needs meat and the shoemaker needs clothes, the hunter will have to trade his meat for clothes from the clothier, then trade the clothes to the shoemaker for shoes. Every individual would have to carry a variety of goods to trade, depending on what was to be demanded by a trading partner. With the introduction of money, the hunter can sell his meat for money, and then purchase what he wants with that money.

The money that the hunter receives in exchange for his meat is the value of the hunter’s contribution to the economy. If one chicken’s worth of meat is worth one pair of shoes, then both will be worth the same amount of money. When the hunter makes a purchase with money, it is as if he is using a chicken, or a pair of shoes to make the purchase.

Even in a modern economy, this truth still holds. The value of all money is still based on the product of the individual producer at the bottom of the chain. The worker in a factory in China, the farmer on a mega farm in Nebraska, and the homebuilder in Orange County create the wealth that gets distributed up the economic chain. When I make a purchase at 7/11, it is as if I am exchanging the work that produced that money for what I am purchasing.

With modern technology, of course, it takes fewer and fewer workers to produce base goods. The worker at the bottom of the chain actually contributes a huge amount of wealth to the economy. In America, only 2% of individuals work on farms, but those individuals provide enough food for more than the entire population of the country. Fortunately, a new level of the economy arises once our basic needs are accounted for; the service economy. New products and services are demanded which go beyond the basic needs of the individual. Attorneys are required to settle disputes, doctors fix the sick and graphic designers create images. This new level of service providers takes the wealth that has been created at the bottom and redistributes it again at the next level of the economy. Individuals in the service economy only have this luxury, however, because of the money creators at the bottom of the chain.

Going back to our primitive economy, another phenomenon exists which affects the distribution of money. With the introduction of money, the rise of a middle man will likely occur. The shopkeeper collects goods from those who produce them, and provides the producers with money that they can then exchange for other goods. The  shopkeeper will sell goods for more money than he pays for them, thus making a profit. Once the shopkeeper has paid for all of his needs, he will likely still have money, which leads to savings, and the accumulation of wealth.

On his own, the hunter is limited in the amount of wealth that he can accumulate. He is limited by the amount of food that he can produce in a given day minus his expenses for himself and his family. The hunter can only increase his wealth by becoming a middleman. He can train several other hunters to hunt, then collect their spoils, give them money, and sell their meat to the shopkeeper at a profit. The hunter now has a hunting business, and is essentially operating like the shopkeeper.

The shopkeeper’s accumulation of wealth is only limited by the number of customers purchasing goods and suppliers providing him with goods. In the modern economy, the shopkeeper’s limitation has grown to an enormous extent. The shopkeeper can sell goods to billions of customers. Bill Gates became the richest man in the world by selling billions of copies of Windows at $100 a copy. Gates produced a product that was useful. Individuals purchasing a computer with Windows purchase that product with money that they have earned. The money they have earned has a value based on the initial creation of wealth by the producers in the economy. Bill Gates was able to accumulate his billions in profits because the producers at the base of the economy pushed their wealth up the chain, with billions eventually landing in his pocket.

Wealth is created based on a pyramid. The producers at the bottom of the pyramid push wealth up the chain, and the business owners at the top are the eventual benefactors. In essence, the rich can only become rich because of the contributions of the poor. In an economy with 10 individuals, the wealthiest individual can only accumulate a fraction of the money that can be produced by the other nine individuals. In an economy of 7 billion individuals, the wealthiest individual can accumulate a fraction of the wealth that can be produced by the other 6,999,999,999 individuals. The wealthiest 1% in America could only become wealthy because of the other 99%. Anyone who is wealthy got that way because other individuals gave them money in some way shape or form.

Many wealthy individuals would say that they became wealthy because of their own hard work, ingenuity, and perseverance. This is true, and the wealthy need to be commended for what they have done. Becoming wealthy is not easy, especially in a world with so many people who want to be wealthy, and so few who actually are. Even those who have inherited their wealth only did so because someone in their family line figured out how to accumulate wealth so that his or her heirs would not have to worry about doing so. This point, however, does not detract from the fact that the wealth was created because of the contributions of the poor and middle class, and this principle must be remembered when determining how wealth should be redistributed.

Going back to our primitive economy, there is another factor which arises that affects how money is distributed. The early shopkeeper accumulates his wealth, and stores it in his home. The jealous hunter breaks into the shopkeeper’s home, kills the shopkeeper and takes his wealth. The hard work of the shopkeeper has now been destroyed by one criminal act. Enter the King.

The King, or the Government in modern times, organizes society so as to allow individuals to keep their wealth. For the early shopkeeper, it is worth it to dedicate a portion of his wealth to the king, who will maintain order. If the hunter kills the shopkeeper, the king will punish the hunter with death. The hunter is thus detracted from committing a crime. If a neighboring village invades, the king assembles an army to fight them off. The king is the absolute protector, and is in charge of the general welfare of all in the kingdom.

Of course, the king is also responsible for wealth redistribution. If the shopkeeper loses his wealth, the king will provide him with food, so that he has the opportunity to rebuild his shop, and accumulate wealth once again. By providing for the poor, the king redistributes wealth from those who have accumulated it back to those who produced it, or will produce it in the future.

The issue then arises over how much in taxation can be appropriated by the king. If the king takes too much, the shopkeeper will lose his incentive to maintain the shop. If he can no longer accumulate wealth, then there is no purpose in continuing the process of shop keeping. He will simply resort to working. However, if the king takes too little, the shopkeeper won’t receive adequate protection, and the society will fall apart.

In modern society, the role of the government has expanded greatly. With more and more money being created by producers, citizens come to expect that more and more money will be spent by their governments on maintaining a good society. Economic downturns lead to situations in which society demands high sums from its government to maintain a decent existence. Government expenditures are needed to put money into the pockets of the producers, who will make purchases that allow the shopkeepers to accumulate more wealth. All of the workers who produced the wealth when times were good now require that the wealth be redistributed to them when times are bad.

There is no ideal rate of taxation. The rate should be high enough for the state to acquire the revenues required to provide the services that its citizens demand. Of course, there is also no ideal level of services that the state must offer to its citizens. The role of the government is to find this equilibrium. The state must redistribute money from those who have accumulated it to those who produced it in order to create more spending and producing. The government should not be afraid to raise taxes to meet the tax revenue equilibrium.

United States Taxation
A country that taxes 90% of the income of its wealthiest citizens would likely not experience a great increase in revenues by taxing 95%. At a certain point, incentives are lost, and the producers can no longer accumulate wealth because of the unnecessarily high tax burden. However, the tax burden in the United States is quite low for the extremely wealthy.

An individual earning over a million dollars a year should pay an additional tax on his or her income in order to pay for programs that will boost the economy and bring back jobs to the wealth producers. Of course no one wants to pay more taxes than they already do. The wealthiest currently pay 35% in Federal Government taxes on income above $357,701. On capital gains income, the wealthiest only pay 15%, no matter how much they make. Of course, there are also state taxes and payroll taxes that the wealthiest pay, but in the end those with high incomes take home a lot of what they make after taxes.

Total government revenues actually went up when the Bush administration lowered the tax rates that Americans pay. This phenomenon, however, coincided with a massive asset bubble in the real estate industry. Tax revenues increased because wealth was being created artificially. Rather than wealth being created based on production, it was being created based on an artificial increase in the value of real estate. Banks essentially used an increase in property values as an excuse to print money, which was then redistributed through the economy. As soon as the real estate bubble crashed, tax revenues began to fall again.

Increasing tax rates on the extremely wealthy would only lead to a decrease in tax revenues if it caused a significant slowdown in an economy. The argument goes that small business owners won’t make investments if their tax burden is too high, since they will have less disposable income to reinvest in their companies. I find this logic to be unsound.

Take an individual with a successful small business that gets $5 million in annual revenues. After expenses, the company makes a profit of $1 million. If the business owner takes out all $1 million as personal income, he or she will pay about $300,000 to the IRS and another $100,000 in state taxes. This individual now has $600,000 in disposable income. If the Federal tax rate was higher and the individual had to contribute another $50,000 to the IRS, he would now have $550,000 in disposable income.Will this 8% decrease in spending money really make any difference in whether the business owner decides to hire more workers for his company?

Now assume that the owner reinvests $500,000 in to the company to open another office and hire more workers. The owner now earns only $500,000 in pre-tax income. He takes home $300,000 at a lower tax rate or $275,000 at a higher tax rate. The 8% difference is not the factor that will guide the owner’s investment decision. Regardless of the tax rate, the investment decision is going to significantly lower his after tax income in the short run.

The owner is only going to make the investment decision if he thinks that it will lead to more revenues for his company in the future, which will give him more profits before taxes. If he anticipates $6 million in revenues in the following year due to his $500,000 investment, then he will make the investment. His after tax income will only affect the spending

decisions he makes with his personal money, not the spending decisions he makes for his company. If anything, a higher tax rate will encourage the owner to spend more on the company so that he makes more profits in future years and takes home more money after taxes.

The thing that is going to determine the business person’s investment is anticipated revenue. This revenue will be determined by the amount of customers that demand her product. The amount of customers who will demand her product will depend on the amount of people who have disposable income, and the amount of disposable income that they have. If the economy is bad and people do not have disposable income, then there will not be anyone to purchase the business owner’s products.

The government’s role in a recession is to create more purchasers of products so that businesses can expand. The government cannot create more purchasers without additional money to invest in creating those purchasers. The government cannot raise more money without taking more money in the form of taxes.

A minor increase on taxes for the wealthy should not be looked at as the government punishing the wealthy for accumulating wealth. Rather, it should be looked at as the government returning to the masses a small portion of the wealth that the wealthy have accumulated so that the wealthy can have more opportunities to sell their products and services to the masses and accumulate more wealth in the future. The wealthy can only become wealthy if the masses are producing money. The masses can only produce money if they have jobs and security. The masses can only have more jobs and security if the Government makes investments that give them more opportunities and gives businesses incentives to expand. The Government needs money to make these investments, and the wealthy have the money available. Increasing taxes is the right thing to do, and the government should not be afraid to do it.

Understanding the Debt Ceiling Debate

Anyone who has watched cable TV in America over the last few weeks has probably seen ads attacking the Obama administration and calling for an end to an increase in the debt ceiling. The ads point out several truths about the economy since Obama took over in 2009. The unemployment level has gone up and the federal debt level has increased by a large margin. The problem with these ads is they use true facts to lead to a false conclusion and an even worse policy prescription for America.


The Debt Ceiling

Regardless of who should be blamed for America’s economic woes, not raising the debt ceiling would probably be the stupidest thing that the government could do. The fact is that the United States government has not had a balanced budget since 2001. It has been running a deficit for the last decade, and with a deficit, the total amount of debt will inevitably increase.

The United States Congress has to approve of any increase in the total amount of debt that the American government takes on. This is the debt ceiling, which must be adjusted to reflect deficits. The ceiling currently sits at $14.3 trillion, but must be increased to reflect new deficits that the government needs to take on to function.

Obviously the size of America’s deficits is a problem that needs to be addressed. However, the fact is that there is currently a deficit and the debt ceiling needs to be increased to pay for the American government to run. If the debt ceiling is not increased, the government will not have the money to pay its obligations to employees, debtors and federal programs.

Imagine a guy who owns a house worth $500,000.00 and a home business. He has borrowed $200,000.00 and is making payments on the $200,000.00 debt. The bank is offering to give him another $50,000.00 in debt to finance his home business and make the payments on the debt. He refuses and decides that $200,000.00 in debt is too high, and that rather than taking the loan, he will leave the debt as is. However, his income is not enough to make the monthly payments on the loan and pay his business’s employees. So, he doesn’t make his interest payments or pay his employees. What will happen? The bank will foreclose and the employees will be out of work. The person will lose his home and business. Game over.

Rather than a home, the American Government has its economy as collateral for its debts. Investors have lots of confidence in the strength of the economy, and are therefore willing to lend money to the government. By not increasing the debt ceiling, the government is refusing to take on the debt that it needs to survive.

If the American government doesn’t increase the debt ceiling, we will see a financial crisis like the world has never seen. It will be even worse than the one that happened in 2008.  Investors and foreign countries will lose confidence in the US government. There will be a massive sell off of government bonds and treasury bills, which are normally considered the most secure instruments. Total Armageddon could ensue, especially with the world economy already in a fragile state. The Federal Reserve would likely use its reserves to delay the problem a little longer, but eventually the ceiling will have to budge for the economy to survive.


The Republican Strategy

Fortunately, the Republican Party is mostly filled with rational actors who are aware of the necessity of raising the debt ceiling. The Republicans, however, have used this opportunity for their own political purposes. They realize the power that they hold with respect to approving of the increase in the debt ceiling through their control the House of Representatives.

The Republicans are using the opportunity to starve the government, fire government workers, take health care away from senior citizens, and take away regulatory agencies that protect the environment and the general public. Federal government programs that help the poor and underprivileged are being cut.

The Paul Ryan plan for Medicare reform will certainly be a step in the wrong direction. This plan intends to pass off the costs of the deficit to the senior citizens of the future (i.e. people currently under 55). The Plan will take away insurance coverage for seniors and instead provide seniors with a voucher to purchase insurance from private companies. Of course, eventually the laws of economics will send prices for health coverage higher than the vouchers, and seniors will have to dig into their savings to purchase health insurance. Seniors without savings will end up with inferior healthcare plans, which will lead to deaths from treatable illnesses.

Of course, the Republicans would say that this is an opportunity to get deficits under control for the long term future of America. This comes after several studies have shown that at its current rate, the government’s deficits will keep on expanding, and eventually the country will no longer be able to afford to pay for government programs or make interest payments on government debt. This is scheduled to occur in the 2020s without any changes under the status quo. This obviously is a serious concern, which can’t be passed off to future generations.

The problem with the Republican solution to this issue is that they refuse to budge on the revenue side of the equation. With an increase in revenues, the government could afford to pay for its obligations like Medicare, Medicaid and Social Security, although these programs do need some minor reforms to save on costs.

Think about the U.S. government as a company. The company is operating at a loss. Revenues coming in are less than expenses. The company has to take on debt to pay its expenses. To balance its budget, there are two options: cut expenses or increase revenues. Of course, the company could do both and return to profitability.



So, how does the U.S. Government increase its revenue? Taxes! The government should be paying its expenses with tax dollars from its Citizens, not from money that is borrowed, right? Not necessarily. Debts can be good for governments, allowing them to expand at a quicker rate and increase ownership of the country by its citizens, who buy government debt. It can help relationships with other countries, allowing countries to invest in each other and become interconnected. Of course, debts do need to be manageable to prevent a default on interest payments.

So if the Republicans are really so concerned about the deficit, why don’t they just increase taxes? The answer is that there is a pervasive dogma that has infiltrated the Republican Party. This dogma states that any increase in taxes will actually lead to a decrease in total revenue. The logic goes that lower taxes allow the economy to expand, which will actually increase total government revenues.

A company or person that pays 40% in taxes with profits or income of $100,000.00 will pay $40,000 to the federal government. A company or person that pays 25% in taxes with profits or income of $200,000.00 will pay $50,000 to the federal government. Therefore, if cutting the tax rate from 40% to 25% will allow the company to double its total profits, then the tax cut will actually lead to more government revenue!

Of course, the major caveat with this theory is that lower taxes must lead to increased profits or income to compensate for the decrease in government revenue per dollar earned. The Republican theory has basically become that any decrease in taxes will lead to an increase in total profitability that will more than compensate for the decrease.  If the theory were really valid, then taxes should just be decreased to 1%, because with taxes this low, the economy would expand exponentially.

What is to say that the company’s profits will double if its taxes are cut in half? The truth is that with any economic principle, the results are inevitably parabolic. At a certain rate, you can cut taxes, but the effect will not increase the company’s profit to account for the decrease in revenue. There is going to be a tax rate at which total revenues are maximized.

The Republicans would make the argument that this rate is lower than the current rate, and that taxes must continually be slashed until the perfect rate is found. However, this would assume that the “incredibly high” taxes that companies and individuals are currently paying are keeping them from making money. The thing is, companies are making tons of money, even after taxes. Many individuals are also making lots of money, and even after taxes, are still walking home with a lot. Yet, the economy is still stagnant.

The federal government does need to make spending cuts as part of its deficit reduction plans, but the Republicans want to turn America in to a third world country to do this. Any nation that punishes its poor, elderly and unfortunate is not going to be successful in the long run. These are long term problems, and the government needs to come up with long term solutions, which must include increasing revenue by raising taxes.


The U.S. Economy

The U.S. economy is not stagnating because taxes are too high. Companies are making huge after tax profits, and individuals who do have jobs have lots of disposable income after taxes. The problem is that after a decade of insane consumption and borrowing, followed by an economic meltdown, businesses and individuals are still in a state of shock. Companies are reluctant to hire new employees, and people are more likely to save than to spend. Companies have become more efficient, and can make the same revenue with fewer employees. This problem will only be solved by an increase in confidence, technological innovation, and government investment.

The compromise made at the end of 2010 shows that keeping taxes low did not have a serious stimulating effect on the economy, at least not enough to compensate for the loss in revenue associated with the cuts. The compromise prevented taxes on the rich from going up to pre-Bush levels of 39.6% (from 35%). It also changed the estate tax so that heirs to multi-million dollar fortunes would no longer have to pay taxes on the first $5,000,000 of their inheritance (or $10,000,000 for estates of couples), and would pay a tax rate of 35% on any inheritance above that amount. There may have been a small effect from this cut, but it has not had the stimulating powers that the Republicans promised.

The US economy is getting better, but it is happening very slowly. The biggest lie being spread by Republicans is that the stimulus package failed. The U.S. has had 7 consecutive quarters of positive GDP growth. Employment has been trending upwards since March, 2010, and there hasn’t been a month with net job losses since September, 2010.

The Republican Party is trying to take advantage of the short term memory that people have and blame the US economic problems on the person who has been fixing them, not on the people who caused them. The bad economy that we are experiencing is still the result of the horrible catastrophe that was caused by the Republican Party’s deregulation of the financial sector. This is still Bush’s recession, even though Obama has been trying to make it better.

Many parts of the stimulus package kept the economy from getting worse than it did. For example, the extension of unemployment benefits in the package kept money in the pockets of the millions of unemployed. They were able to use that money to buy food, rent apartments, and generally remain consumers in the economy. Each expenditure within the stimulus package can be directly related to an infiltration of dollars into the U.S. economy.

When Obama took over, the economy was in a horrible downward spiral. Hundreds of thousands of jobs were being lost every week. After the bailouts and the stimulus package, the economy stabilized and things began going in the right direction. The stimulus worked. It will take a long time to dig out of this whole, but at least we are no longer in the bottom and are on our way out. Obama did all that could possibly be done. He’s a politician, not a God.

Of course, if the debt ceiling isn’t raised, we could go right back in to the hole. Hopefully an agreement will be reached that solves some long-term problems, doesn’t punish the poor too much, and increases revenues. Until then, we can only watch the farce go on and hope for the best.

The Post-Recession World

The world has changed. Many ideologies that were previously thought to be correct by many have now been debunked. We are attaining a new level of understanding of how our society should work, and when governments should intervene in private actions. However, the greatest change is yet to come.

The Profit Incentive
Many conservatives thought that corporations should be in charge of everything, and that the private sector will always operate more efficiently than the public one. They really felt that taking away the autonomy of the health insurance companies was akin to crushing the free market and leading America down a slippery slope to socialism. After all, if the government is controlling your health insurance, what says that they can’t tell you what work you can do or what business you can operate.

The reality is that there has to be a balance in society between private enterprise and public organizations. Our society has decided that fire protection, crime prevention, justice, delivery of mail, national defense, record keeping, education of our children, and several other services are best placed in the hands of the government. Meanwhile, the private sector is in charge of distributing consumer goods, food, professional services and real property, among others. Why is this?

There are certain services for which the profit incentive is fundamentally misaligned with the good of society, whereas there are other services for which that incentive allows more goods and services to be produced, allows society to progress, and gives us the sense of freedom that drives the democratic system.

Policing is a perfect example of this misalignment. Imagine if police would only protect you if you purchased crime insurance. The poor would be subject to murder and violence without any repercussion. Vigilante justice would prevail, and total anarchy would result.

Computers, on the other hand, are best controlled by the profit incentive. Computer companies are incentivised by profits to make newer and greater computers so consumers will buy them. Some individuals may be priced out of the computer market, but that can be considered acceptable by society. Not having a computer may be a disadvantage, but it would not cause pain and suffering like not having healthcare does.

The fundamental difference is whether society decides that something should be a right or a privilege. The privilege of owning a house, getting a computer or hiring an attorney puts those items in the private category. But the right of being protected from fire or crime, or of getting decent medical treatment if sick necessitates government intervention.

The Exchange System
Although I did not get my public option, the Obama health care exchange system will serve to realign the health care system in a positive way. With the public option, the government insurer would be able to bargain with health providers to lower expenses.

The exchange system simply keeps the insurer as a middle man. However, customers are able to collectively bargain with the insurance companies by making individual choices on a grand scale (by simply purchasing the cheapest and best health insurance). The insurance companies will be forced to bargain with the healthcare providers to maintain lower costs. If an insurer does not bargain, a different insurer who does bargain will get their customers. The government will subsidize insurance costs for the middle class, and therefore will be able to dictate which plans get subsidies.

The inevitable result of this exchange will be the emergence of a select group of extremely large insurance providers, possibly just one. The government will either control this one insurer, or break it up into two that would compete. Health care costs will be lower, and insurance will be available to more individuals.

The Regulated Private Sector
There are some categories in society that do not neatly fit into the public or private sectors. Hence, the regulated private sector becomes necessary.

The illicit drug market is a great example of the consequences of a completely unregulated, lawless market. When I say lawless, I realize that there are laws banning drugs. But there are no laws governing the sale, transportation, cultivation, or delivery of drugs, which means that any disputes in the industry must be settled through vigilante justice. Hence the large crime wave that emerged along with the drug wars of the eighties and early nineties. Gangs were fighting for drug selling territory, and since there was no legitimate mechanism for settling disputes, they resorted to violence and murder to do so.

The war on drugs demonstrates that even though society may have an extreme animosity towards certain goods or services, the fact that there is a demand for those goods will inevitably create a market. It is therefore the prerogative of government to provide a mechanism by which that demand can be satisfied through legal means. Otherwise, anarchy results. The government needs to legalize, regulate, and create disincentives for the use of drugs, not simply throw every drug user or dealer into jail or prison.

The Financial Sector
The financial sector is another example of a market that needs government regulation to succeed. The recent crisis has shown us that if left to their own devises, really smart individuals will make poor decisions if their incentives are misaligned. Why would banks take such risky bets on mortgage backed securities when it should have been obvious that the system would be crushed if housing prices fell. The answer is that banks, as public corporations, are incentivised by short term profits, not long term sustainability. Mortgage backed securities provided such great returns that bankers did not think about the risks that they were taking. It is for this same reason that Enron continued its fraudulent accounting practices until it became insolvent, or that Madoff kept taking new money into his Ponzi scheme even though he knew that it would collapse if new money stopped coming in.

The government has to step in to protect investors’ money from people who are investing it unwisely for current gains. The libertarian mantra of less government is always better is now a fallacy. Sometimes, government intervention is necessary. Monopoly busting was an early form of positive government intervention. Post-depression financial reforms kept the financial system relatively stable. It was when those reforms were reversed that this crisis occurred.

The Fed
I recently had a conversation with an individual who claimed to be part of the end the fed movement. He concluded that the Federal Reserve caused the great recession by keeping interest rates too low for too long, thereby encouraging too much borrowing, which led to the mortgage meltdown.

Although keeping rates low may have been a small factor in causing certain individuals to get mortgages who should not have, low rates did really not matter that much. Many sub-prime borrowers were given mortgages regardless of whether they could afford the interest payments. Banks gave out variable rate mortgages knowing that rates would eventually go up and that the borrower would not be able to afford his or her house. It was the banks, who were not properly regulated by the federal government, that caused the recession; not the Fed.

The Federal Reserve, led by Bernanke, has had just as much of an impact, if not more, than the federal government, led by Paulson, Geithner and Obama, in ending the recession and leading to the current turnaround. While the government was managing $350 billion in bailouts to artificially prop up the economy, the Fed was managing trillions. The Fed is like the great counterbalance in our society. It is independent from the government, so as to ensure that economically sound decisions are not affected by politicians judgment. It has to be, and needs to remain independent.

I have been thinking a lot about what this all means in the grand scheme of things. The truth is, the economy, law and politics are all insignificant when compared to the revolution that we are currently experiencing. Humanity is at the end of its 60,000 year reign as the most advanced species on earth, and is about to be the first species to be replaced by its own creation.

Recently, a 2,000,000 year old fossil was discovered showing an intermediary species between humans and apes. Although this species may not necessarily be a direct ancestor of modern humans, it provides even greater proof of our natural origins, providing evidence of an intermediary species between early hominids and Homo Erectus, the most successful hominid in the history of the world. Homo Erectus roamed the earth from over a million years ago to the time of early humans . The new species is just one species discovered among many that have already been unearthed. We lived alongside one of our inferior relatives, the Neanderthal, for almost 10,000 years in Europe, a period ending approximately 20,000 years ago. That is a period of time longer than human civilization has existed as we know it.

Humans have been continually evolving, even though from a physiological standpoint, we are probably not very different from our ancestors who lived alongside those Neanderthals. Through civilization and technology, we have been able to maximize the productivity of our earthly forms, providing ourselves with extreme amounts of knowledge and using technology to allow us to interact with the world in a more efficient way. We have created numerous ways to express ourselves, and have made the world smaller by creating efficient methods of transportation.

The Singularity
Unfortunately, we have reached the limits of our earthly forms. Futurists predict that within the next 50 years, computers will have matched and surpassed our level of intelligence. They call this the singularity principle, as the distinction between humans and computers will no longer exist, making us one singular being.

The logical conclusion is that humans will have to become one with computers in order to compete. Those of us that survive to that period of time will have to augment ourselves, becoming cyborgs. Those who cannot afford this augmentation will become an inferior species that will likely eventually die out, as the Neanderthals and dinosaurs did.

The only thing that will prevent this from happening is literally a global catastrophe like one never seen by humanity. Technology as we know it would have to be destroyed. Even the greatest catastrophes, the great world wars or global epidemics, could only delay the progress of technology, not halt it. In many cases, those catastrophes actually increased progress. Although an earth shattering event could happen, I would give it an extremely low likelihood, since economics, technology, diplomacy and science have allowed us to progress to a point where such threats are diminished. A great technological roadblock (such as the end of Moores law, which will happen within the next 20 years) may present itself, but it will be overcome eventually, as all technological roadblocks are.

We Become God

After thousands of years of looking to the skies thinking that there were invisible creatures out there more advanced than ourselves that crafted us into being, it is time to realize that we are in fact the creator creature. We will create life forms much more advanced and complex than our naturally occurring selves, and those life forms will create even more advanced life forms. The only thing we can be certain of is that we do not travel to the past to visit our ancestors, at least not in such a way as to make our presences known.

And So It Goes
We stand at the foot of the great turning point in humanity. We are about to experience the greatest global economic and technological boom that the world has ever seen. We have braved the storm of the great recession, and now will be passengers on this great ride to the end of humanity as we know it. Hopefully, we will maintain our health and life so that we can be a part of it. Otherwise, c’est la vie.

Re-examining tax exemptions for religious organizations in the aftermath of proposition 8

CWSL Scholarly Writing Paper
By Dan Revich

March 23, 2009


On November 4, 2008, the Proposition 8 ballot initiative was passed in California with a vote of 52.1% for and 47.9% against. The Proposition added to the California Constitution the statement “only marriage between a man and a woman is valid or recognized in California.” Approximately $39 million was raised by the campaign to support Proposition 8.

This paper will discuss how religious organizations influenced the movement to ban gay marriage, and more specifically how those organizations receive their funding. Federal tax law gives religious organizations tax-exempt status, and allows individuals donating to religious organizations to deduct large portions of those donations from their income taxes. The 1970 Supreme Court holding in Walz v. Tax Commission of City of New York found that tax exemptions for religious organizations are not in violation of the Establishment Clause of the 1st amendment to the United States Constitution , and gave taxing authorities the right to grant tax exemptions to religious organizations.

This paper will analyze the constitutionality of those tax exemptions, and re-examine whether they violate the Establishment Clause of the 1st amendment, using the test applied in Lemon v. Kurtzman as a framework for analysis.

Part I of this paper will provide a background to relevant issues, cases and laws relating to Proposition 8 and tax exemptions for religious organizations. Part II will analyze the legality of the religious involvement in Proposition 8. Part III will examine whether tax exemptions are in violation of the Establishment Clause of the 1st amendment using a Lemon Test framework as a basis for analysis.


Part A of the Background section will outline the federal laws governing tax exemptions for religious organizations. Part B will provide a background to the Walz case. Part C will provide a background to the Lemon test that will be used as a basis for analysis in Section III of this paper. Part D will outline the involvement that religious organizations played in the passage of Proposition 8.

A. Tax Exemptions for Religious Organizations

Section 170(c)(2)(b) of the Internal Revenue Code allows tax deductions for donations to “A corporation, trust, or community chest, fund, or foundation organized and operated exclusively for religious charitable, scientific, literary, or educational purposes…” Section 501(c)(3) of the code gives religious organizations tax exempt status, so long as “no part of the net earnings of [the organization] inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation… and [the organization] does not participate in, or intervene in… any political campaign….”

Under the current system, an individual in the 35% tax bracket receives 35% of any donation he or she makes to a charity as a tax deduction. For example, an individual who pays taxes at a 35% rate will receive $35 in tax deductions from the government for every $100 donated to charity. In the proposed federal budget submitted by the Obama administration, the maximum amount deducted would be reduced to 28% in order to raise money for health care reform. Once the law is in effect, an individual would only receive $28 in tax deductions for every $100 donated to charity.

B. The Walz case

In Walz v. Tax Commission of City of New York, the Supreme Court, under the opinion of Chief Justice Burger, upheld a New York state property tax exemption for property used exclusively for religious purposes. Walz, the owner of real estate in New York, sought an injunction to prevent the New York City Tax Commission from granting property tax exemptions to religious organizations for properties used solely for religious worship. Walz argued that the tax exemption indirectly required taxpayers to make a financial contribution to religious bodies in violation of the Establishment Clause of the 1st amendment, which states that “Congress shall make no law respecting an establishment of religion.”

The majority noted that to the framers of the United States Constitution, the “establishment of a religion connoted sponsorship, financial support, and active involvement of the sovereign in religious activity.” It discussed how the court had struggled to find a neutral course between the Establishment Clause and the Free Exercise Clause of the First Amendment, concluding that any judgment would turn on whether the “particular acts in question are intended to establish or interfere with religious beliefs and practices, or have the effect of doing so.” The court’s opinion will be discussed later in this paper.

C. The Lemon Test

One year after the decision in Walz, the Supreme Court decided the case of Lemon v. Kurzman. In Lemon, Rhode Island and Pennsylvania statutes providing state aid to church-related elementary and secondary schools were challenged as being in violation of the first amendment. The Court found that the subsidies were unconstitutional, in that they presented excessive government entanglement with religious institutions.

The significant aspect of this case is the three part test that the court created to determine whether government entanglement with religion is excessive. The court writes “we must determine the character and purposes of the institutions that are benefitted, the nature of the aid that the State provides and the resulting relationship between the government and religious authority.” I will use the Lemon test as a guideline to discuss the constitutionality of tax subsidies for religious organizations in section III of this paper.

D. Religious Support for Proposition 8

The full extent of religious support for Proposition 8 became public after the 2008 election. It is estimated that approximately half of the financial support in the Yes on 8 campaign came from Mormons. The Latter Day Saints (LDS) Church itself donated $55,000 in monetary and $134,774 in nonmonetary expenditures (mostly staff time by church employees) to support the Yes on 8 cause. Two weeks prior to the election, the Yes on 8 campaign issued an urgent appeal for donations. The campaign sent an e-mail to the 92,000 individuals who registered on the Yes on 8 website www.protectmarriage.com with an urgent plea for funds. It raised $5 million shortly after that appeal, including a $1 million dollar donation from Alan C. Ashton, a computer executive and grandson of a former LDS president.

It was not just the LDS church that gave money to the Yes on 8 campaign. The LDS church was actually the last major church to join the Yes on 8 campaign, according to the New York Times. The campaign was supported by the Catholic Church, Evangelical Christians, and a myriad of ethnic church groups. The full list of contributors to the Proposition 8 campaign is listed on a searchable website hosted by the San Francisco Chronicle newspaper. Entering a search of “Church” in the Contributor Name field for financial supporters of Proposition 8 yields a list of 75 supporters who made various financial contributions. The San Diego Rock Church, for example, which states “The Rock will be a global and highly trusted model of relevant and innovative evangelism” as its vision statement, donated $25,679.16 to the Yes on 8 campaign. The Grace International Church, based out of Texas, donated $6,301.63 to the campaign. These churches, funded by donations from their members, who in turn received tax breaks for those donations, funneled money into the campaign to end gay marriage.
Religious support extended beyond financial contributions.

It is estimated that 80-90% of the volunteers who canvassed door to door for the Yes on 8 campaign were Mormons. Canvassers were instructed to first determine if the voter believed that God created marriage, and then to emphasize that Proposition 8 was in conformity with God’s will if the voter did. If the voter believed that marriage was a creation of man, then canvassers were to emphasize that Proposition 8 was merely about restoring marriage law. The LDS Church announced its support of Proposition 8 in a letter that was read in every Mormon congregation, in which the church encouraged members to donate time and money to the Yes on 8 cause.

The impact that church sermons and rhetoric had on voters also likely contributed to the success of the ballot initiative. An acquaintance who attended the aforementioned San Diego Rock Church shortly after the vote claimed that the pastor gave a sermon about the importance of the passage of the law. The impact of numerous pastors, priests, and rabbis throughout California instructing their congregations to vote Yes was likely significant.

Finally, religious organizations have also played a role in the fight to prevent Proposition 8 from being overturned. The day after the passage of Proposition 8, a group of gay couples initiated a Petition for Writ of Mandate enjoining state officials from “enforcing, taking any steps to enforce, or directing any persons or entities to enforce” Proposition 8. The Petitioners argue that Proposition 8 is invalid, as it is not an amendment to the California constitution, but a revision.

Briefs in support of respondent (and intervener siding with respondent) were filed with the California Supreme Court by several religious organizations, including Kingdom of Heaven, California Catholic Conference, The United States Conference of Catholic Bishops, The Union of Orthodox Jewish Congregations of America and The Church of the Messiah.


A primary issue is whether the religious involvement discussed in the background section is in violation of current laws regulating political activities of religious organizations. Section 501(c)(3) of the Internal Revenue Code prohibits charitable organizations from undertaking in any political campaign activity, and requires that they only engage in minimal lobbying. There are three requirements that charitable organizations must meet in order to receive tax-exempt status: No part of the net earnings may benefit a private shareholder or individual; No substantial part of the organization’s activities may consist of lobbying or attempting to otherwise influence legislation, and; the entity may not participate in or intervene in a political campaign for any political office.

IRS regulations state that “the publication or distribution of written or printed statements or the making of oral statements on behalf of or in opposition to… a candidate” is prohibited. Organizations may participate in voter education, voter registration and voter encouragement, so long as they do not favor one candidate over another. Political candidates may speak to religious organizations, so long as the organization provides an equal opportunity for competing candidates to participate, does not indicate whether it supports or opposes the candidate, and does not use the event to fundraise. 501(c)(3) organizations can take positions on issues, so long as they do not favor one candidate over the other.

In Branch Ministries v. Rossotti , Branch Ministries Church challenged the IRS’s revocation of its tax-exempt status, which occurred after the church published an ad in USA Today and the Washington Times four days before the 1992 election. The ad urged Christians not to vote for presidential candidate Bill Clinton because of his views on social issues. The court of appeals for the District of Columbia found that the IRS’s revocation of the Church’s tax-exempt status did not violate the U.S. Constitution or exceed the IRS’s statutory authority. The court noted that withdrawal of tax exempt status only violates the first amendment if it is “…denie[d] … because of conduct mandated by religious belief, thereby putting substantial pressure on an adherent to modify his behavior and to violate his beliefs.” The Court stated that: “Although its advertisements reflected its religious convictions on certain questions of morality, the Church does not maintain that a withdrawal from electoral politics would violate its beliefs.” The court found that the burden of losing tax-exempt status was not constitutionally significant. It is clear that losing tax exempt status would place a burden on churches, as most of a church’s income is derived from donations.

A complaint was filed against the LDS church by Fred Karger, founder of the group Californians Against Hate, for violations of the California election law in supporting Proposition 8. California law requires that Churches disclose all contributions to political campaigns made by religious organizations. The complaint launched an investigation by the California Fair Political Practices Commission. The Church subsequently disclosed all contributions to California authorities, but claimed that “the filing is in no way prompted by an investigation by the California Fair Political Practices Commission.” Proposition 8 supporters also attempted to get an injunction to prevent donor lists from being made public, but U.S. District Judge Morrison England Jr. ordered that the names be released, arguing that disclosure laws are in place to protect the public.

Recent internet campaigns seek to file complaints with the IRS to remove the LDS church’s tax exempt status because of its support for the Yes on 8 campaign. However, as Barry Lynn, president of Americans United for Separation of Church and State asserts, “while the tax code has a zero tolerance for endorsements of candidates, the tax code gives wide latitude for churches to engage in discussions of policy matters and moral questions, including when posed as initiatives.” The LDS Church would only lose its tax-exempt status if a substantial part of the Church’s funds went towards political activities. Generally, charitable organizations that spend less than 10% of total revenues on non-charitable activities will not lose their tax-exempt status. The LDS church is so large that the amount spent on the Proposition 8 campaign would not meet the 10% threshold.

Thus, under current tax law, it appears that the involvement of religious organizations in the passage of Proposition 8 was within the confines of acceptable political activity, and was therefore not in violation the law. Supporting the Yes on 8 campaign did not amount to actually supporting a particular candidate, but simply supporting a political cause. I would argue that religious organizations are inherently political, and therefore attempting to stifle their political activities is inevitably futile. The free reign of religious organizations in their political activities would not be a problem but for the fact that religious organizations receive tax-exempt status. The alternative to attempting to control what religious organizations do in order to receive tax-exempt statues would be to simply remove that status completely.


This section will discuss whether tax exemptions for religious organizations satisfy the three prongs of the lemon test. Part A will discuss the nature of the aid that the state provides, examining whether tax exemptions for donations to religious organizations are equivalent to government subsidies. Part B will examine the resulting relationship between the government and religious authority, discussing whether tax exemptions for religious organizations serve to establish a state religion. Part C will examine the character and purposes of the institutions that are benefitted, discussing whether religious organizations are beneficial to society.

A. Are Tax Exemptions for Religious Organizations Equivalent to Government Subsidies?
“The nature of the aid that the state provides”

In the Walz case, the majority argued that “The grant of a tax exemption is not sponsorship since the government does not transfer part of its revenue to churches but simply abstains from demanding that the church support the state.” The court used the analogy of libraries, art galleries and hospitals to show that other organizations receive tax exempt status, but are not considered arms of the state.
In his dissent to Walz, Justice Douglas argues against the claim that a tax exemption is not a subsidy. He makes the analogy of giving a federal grant to a church to construct an edifice, and claims that a tax exemptions would serve the same purpose. Douglas refutes the majority’s argument that many other private institutions receive government subsidies, arguing that these organizations represent “social welfare programs within the reach of the police power.”

In Mueller v. Allen, taxpayers fought a tax deduction that was available for parents of children attending sectarian schools. In a 5-4 ruling, the majority, led by Justice Rehnquist, argued that “…financial assistance provided to parents ultimately has an economic effect comparable to that of aid given directly to the schools attended by their children. It is also true, however, that under Minnesota’s arrangement, public funds become available only as a result of numerous, private choices of individual parents of school-age children” . He continues “Where, as here, aid to parochial schools is available only as a result of decisions of individual parents, no ‘imprimatur of State approval’… can be deemed to have been conferred on any particular religion, or on religion generally.”

In his dissent to Mueller, Justice Marshall argues that “By ensuring that parents will be reimbursed for tuition payments they make, the Minnesota statute requires that taxpayers in general pay for the cost of parochial education and extends a financial ‘incentive to parents to send their children to sectarian schools’.” He continues that “it makes no difference whether the qualifying ‘parent receives an actual cash payment or is allowed to reduce … the sum he would otherwise be obliged to pay over to the State.”

When applying Marshall’s arguments to tax exemptions for donations to religious organizations, it is clear that the same logic applies. Taxpayers in general pay for the operating costs of religious organizations because of deductions, and individuals are given a financial incentive to donate to and support religious organizations.

The true private choice doctrine discussed in Mueller has been upheld by the U.S. Supreme Court as recently as 2002, in Zelman v. Simmons-Harris. In Zelman, The court stated that “…our jurisprudence with respect to true private choice programs has remained consistent and unbroken. Three times we have confronted Establishment Clause challenges to neutral government programs that provide aid directly to a broad class of individuals, who, in turn, direct the aid to religious schools or institutions of their own choosing. Three times we have rejected such challenges.”

In his dissent to Zelman, Justice Stevens argues that “the voluntary character of the private choice to prefer a parochial education over an education in the public school system seems to me quite irrelevant to the question whether the government’s choice to pay for religious indoctrination is constitutionally permissible.”

The private choice doctrine attempts to distinguish tax exemptions from government expenditures. However, even Justice Rehnquist admitted that those tax exemptions lead to the same effect that would arise if a direct government subsidy were provided. The only difference is that individuals are given the ability to dictate state expenditures based on their private decisions.

The government’s provision of a tax deduction for a donation to a religious organizations is financially equivalent to a government’s provision of a direct financial subsidy to that same organization. By refunding $35 for every $100 that an individual gives to his church, the government is essentially contributing $35 to that church for every $65 donated by the individual. By refusing to collect $10,000 in property taxes from a church that the it would otherwise collect from another tenant, the government is giving $10,000 to the Church to spend that the Church would not otherwise have. It is thus clear that the aid that the government is providing to religious organizations through tax incentives is economic in nature, and is functionally equivalent to the provision of direct subsidies.

B. Do tax exemptions for religious organizations establish a state religion?
“the resulting relationship between the government and religious authority”

In the Walz opinion, Justice Burger argued that “nothing in this national attitude toward religious tolerance and two centuries of uninterrupted freedom has given the remotest sign of leading to an established church or religion…”. The Court reasoned that the state law challenged in Walz did not single out any particular religion, and therefore the “federal or state grants of tax exemptions to churches were not a violation of the Religion Clauses of the first amendment.”

I submit that the majority in Walz is incorrect in arguing that the United States does not have an established religion because of tax subsidies. The United States government is subsidizing religious organizations with billions of dollars of taxpayer money. The government is giving far greater amounts of funds to certain religions because those religions already have greater numbers of practicing members who donate more money.

The court in Zelman affirmed the reasoning that “We would be loath to adopt a rule grounding the constitutionality of a facially neutral law on annual reports reciting the extent to which various classes of private citizens claimed benefits under the law.” To me, it would not be loath, but diligent to determine where money that would otherwise be in State coffers is being distributed to.

Donations to religious organizations accounted for approximately 35% of total donations in 2004 (down from 53% in 1985) . They account for between 45% and 53% of total household giving. It is estimated that households alone gave $83 billion to religious organizations in 2002 . If those households deducted those donations at a 35% deduction rate, it could amount to approximately $29 billion dollars in personal income tax deductions. That’s $29 billion dollars of funds going to religious organizations that would otherwise be in the hands of the government, or in the hands of other charitable organizations. Of the estimated $83 Billion, approximately $60 billion went to Protestant organizations (72%), $9 billion to Catholic organizations (11%), $3 billion to Jewish organizations (3.5%), $3 billion to non-denominational religious organizations (3.5%), $2 billion to LDS organizations (2.4%), and $600 million to Islamic organizations (0.7%).

The government has established Christianity as the religion in America via these exemptions. The figures above show that 72% of household donations are given to Protestant churches and 11% to Catholic churches. Billions of tax dollars that would be in government coffers if these tax deductions did not exist are being funneled to Christianity, allowing it to claim its role as the dominant religion in America.
The major exception to this is in Utah, where the Latter Day Saints Church is the established religion. Much of the hundreds of millions of dollars that the LDS church receives in government subsidies through tax exemptions are being funneled in to it in Utah, where the church is headquartered. This allows the church to maintain its power in that State, and have an abundance of control over state law.

In his dissent, Justice Douglas reframes the question presented in the Walz case. “The question in this case is whether believers organized in church groups can be made exempt from real estate taxes, merely because they are believers, while non-believers, whether organized or not, must pay the real estate taxes.” He argued that one of the best ways to establish one or more religions is to subsidize them with a tax exemption. He stated “government may not provide or finance worship because of the Establishment Clause any more than it may single out ‘atheistic’ or ‘agnostic’ centers or groups and create or finance them.” He concluded that the New York state-property-tax exemption treated believers and nonbelievers differently because of the articles of their faith. Since the Establishment Clause was intended to keep the government neutral not only between sects, but between believers and nonbelievers as well, he found the exemption to be unconstitutional.

The majority in Walz argued that by removing tax exemptions, the role of government’s involvement in religion would be expanded, because it would give rise to tax valuation of church property, tax liens, tax foreclosures and the conflicts that would follow. It argued that there is less involvement between church and state in foregoing taxation than there would be if the state collected taxes.

I would argue that if the government treated churches as any other private, mutual benefit non-profit, such as a country club, which does not receive tax exempt status, the involvement would be similar to what it is currently. There is no movement arguing that the government has too much involvement in taxing country clubs, and similarly there would not be too much involvement if the government taxed religious organizations, or collected taxes from donations thereto. Although the right of free exercise to join country clubs is not protected under the religion clauses, that right is protected under freedom of association. Yet there is no movement arguing that individuals’ right to freedom of association is hampered by the fact that their country club must pay taxes.

If a church cannot pay its taxes and faces a foreclosure, then that church does not have enough financial support from its members, and should be allowed to fail like any organization that is unable to raise revenue. Enforcing tax subsidies requires a lot of government involvement, including monitoring and registering religious organizations so that they maintain their tax exempt status, and distributing tax refunds to individuals who make donations to religious organizations. The amount of government entanglement necessary to tax religious organizations would not be significantly different from the amount of entanglement under the current system.

Under the current state of tax exemptions, the state is supporting one religion with billions of dollars, and prioritizing its financial subsidies to other religions based on the relative wealth of individuals who belong to those religions and how much money those individuals contribute. Through these tax exemptions, the law has established Christianity as the American religion, and has propped up religion in America.

C. Are religious organizations beneficial to society?
“the character and purposes of the institutions that are benefitted”

In Walz, the majority justified tax exemptions for religious organizations because the State considers religious organizations to be “beneficial and stabilizing influences in community life”. In his concurrence, Justice Brennan argued that tax exemptions for religious organizations served to carry out secular purposes and not “essentially religious purposes.” He claimed that the state encourages religious activities because religious organizations contribute to the diversity of the Nation, and that there is no non-religious substitute for religion. Essentially, he believed that religion is a good thing, and therefore that it is justifiable for the state to support it.

In his dissent, Douglas refutes Justice Brennan’s argument that religious organizations perform many secular purposes by arguing that a ‘church qua nonprofit charitable organization’ is so intertwined with the ‘church qua church’ that the welfare activities it undertakes may in fact “merely be a phase of sectarian activity.” “Its sectarian faith sets it apart from all others and makes it difficult to equate its constituency with the general public. The extent that its facilities are open to all may only indicate the nature of its proselytism.” In other words, religious organizations may undertake in beneficial secular activities, but the root of those activities is entrenched in the perpetuation of the religion and its religious dogma. He writes: “…Subsidies either through direct grant or tax exemption for sectarian causes, whether carried on by a church qua church or by church qua welfare agency, must be treated differently” from subsidies for secular public welfare institutions.

The majority and concurring writers in Walz tended to operate under the assumption that religion is in fact good for society. However, It is the same religious organizations that claim to be authorities on morality that made extreme efforts, and succeeded, in supporting the cause to convince a majority of Californians to vote for a law that limits the rights of a minority of individuals in Californian society. Based on religion’s effect on Proposition 8, it is apparent that religion may not in fact be good for society. Although some religious organizations may have actually been against Proposition 8, the facts indicate that the majority of religious activity attempted to support the Proposition.

Proposition 8 exposes some of the negative influences that religion has on society, but it only represents the tip of the iceberg. Many religious organizations make efforts to subvert science, enforce outdated and unrealistic moral viewpoints, and in extreme cases provide refuge for sexual deviants or even terrorists.

Although many religions may perform altruistic secular services, Justice Douglas makes a strong argument that many of those services are simply used as a method of proselytizing. Religions have self-preservation as their foremost goal, which is why they have been able to flourish for thousands of years. Part of maintaining their power involves gaining public support, which they do by performing altruistic acts. These same altruistic acts could be performed by secular organizations, or even by organizations like the Red Cross, which are affiliated with religious organizations, but are not formed for religious purposes. Non-religious services performed by religious organizations could be performed by these secular, religiously affiliated organizations.

Religion is becoming more and more irrelevant as science progresses, and the tenets of religious dogma are continuously being attacked for their lack of a basis in reality. Richard Dawkins’s 2006 best seller The God Delusion makes a strong case against the primary tenet held by most religions, that of the existence of an invisible, all-powerful god. Religions may have represented a stepping stone in the advancement of human civilization, but science has advanced to a point in which humans no longer need to resort to the supernatural to explain earthly phenomena. The existence of tax exemptions allows religious organizations to flourish, and prevents the advancement of viewpoints that can be legitimately supported by scientific knowledge.

The government should not be directly or indirectly supporting religious organizations with taxpayer dollars under the guise that they are promoting the public welfare. By subsidizing religion via tax exemptions, the government is prioritizing religious belief over atheistic or agnostic belief. Although atheists and agnostics could organize atheistic religions that also receive tax exemptions, this is antithetical to the beliefs of many atheists, who would not want to equate themselves with religious organizations. Atheist organizations do not have the ability that religious organizations do to convince members to donate to them in return for receiving advantages in the afterlife. They have less ability than religious organizations do to proselytize and gain more donations, as most religious doctrines are designed to recruit non-believers under a theory of future salvation, whereas the precepts of atheistic beliefs are much more difficult to use as a recruitment tool. It is thus apparent that atheist and agnostic beliefs are disadvantaged by the organizational structure that federal law demands in order to receive tax breaks.

Attitudes towards religion are increasingly swaying in favor of anti-religious sentiment. A recent study found that only 75% of Americans call themselves Christian, compared to 86% in 1990. The only remaining stronghold is in the evangelical religious sector, which has actually risen in popularity from 200,000 individuals claiming to be evangelicals in 1999 to 8,000,000 in 2009. This is probably attributable to the fact that religion is increasingly having to resort to fundamentalism in order to survive, as fundamentalist religions are better able to fight against secular, external influences. It is still likely that religion will continue to flourish, however, so long as the government is supporting it with tax exemptions.


Although it is important that individuals have the right to choose their religion, it is also important that individuals have the right to not choose any religion. The government prioritizes religious beliefs by giving religious organizations tax exemptions, dispensing a disproportionate amount of funds to Christian organizations, and funding other religions based on the number and relative wealth of their members. These actions have led establishment of a state religion in violation of the Establishment Clause of the first amendment.

The influence of religious institutions in the passage of Proposition 8 should give America a wakeup call. Religious organizations do not benefit the public, but rather serve their own interests, impede civil rights, and stifle scientific advancement. They should be treated as mutual benefit organizations that serve only their members, not as public benefit ones that serve society as a whole.

Accordingly, the law should not allow religious organizations to receive tax exempt status. Charitable organizations should be distinct from religious ones, and should be monitored to ensure that their actions are charitable and not religious in nature. Individuals and corporations should not be able to receive tax deductions for their donations to religious organizations. Finally, churches should be forced to pay property taxes like any other owner of property, and should face the same consequences for nonpayment.

Why America Needs The Public Option

The health care reform debate has been at the forefront of the national media spotlight since Americans got tired of talking about the economy. What amazes me is how few economic discussions are involved in assessing what should be done to fix America’s broken health care system. Instead, the discussions focus on hyperboles, emotions, and a whole lot of fear mongering. This is my analysis of the situation.

Part I: The Problem

Profit Maximization
Insurance companies are corporations. Corporations have one underlying goal: to maximize profits for their shareholders. This is not necessarily a bad thing, but it is a fact. Insurance companies are not in business to make sure everyone is insured, they are in business to sell policies and make money.

Think about insurance policies like TVs. If it costs you $50 to make a TV, but you can sell just as many for $100 as you would for $50, it would be stupid not to sell the TVs for $100. Let’s say you can sell ten TVs for $100. That’s $1000 in TV revenues and $500 in costs, with a profit of $500. What if you could sell eight TVs for $200, with two fewer people buying TVs because they’re too expensive? That’s $1600 in revenues and $400 in costs, with a profit of $1200. It would be stupid not to raise the price to $200. But what about those two poor suckers who don’t have TVs anymore? Well, they’re just TVs so it’s no problem.

Health insurance operates in the same manner. Insurance companies are incentivised to charge higher and higher rates, up to the point where profit is maximized and any increase in price will cause companies or individuals purchasing the insurance to drop coverage at a loss to the insurer. But, unlike with TVs, not having an insurance policy means risking sickness, death or bankruptcy. This makes health insurance highly inelastic, in that a large increase in price will cause only a few people to drop coverage. Letting people die by forcing them to drop coverage because costs are too high is thus built into the private system.

Market Power
In a purely competitive economy, insurance companies would not be able to charge rates as high as that which would maximize profits, because other companies would charge cheaper rates. Going back to the TV example, imagine if your competitor sold similar TVs for $100. Lets say that if you charged $200, you could only sell 2 TVs with a profit of $300, which is less than the $500 you would make if you sold them for $100. It would make sense to buy your competitor out so that you can jack up the price to $200 and sell just as many TVs. Or, you could talk to your competitor, and agree to both sell the TVs for $200. Or, even better, you could buy the factory that sells the TVs to your competitor, make that company stop selling to the competitor, then jack up the prices and watch your competitor fizzle out. This is called gaining market power, (monopoly power if you are the only seller).

Most of the health industry is not competitive. There are a limited number of health providers, and they collude on prices. Healthcare companies gain market power in a way that is similar to the third example in the previous paragraph. The factory producing TVs is like a hospital providing health services. Insurance companies often own hospitals, or have exclusive agreements with hospital operators. They make sure no other insurance companies have access to those hospitals, or make agreements with other companies to charge the same prices for access to those hospitals.

Insurance companies will charge rates that are as high as they possibly can, and squeeze people out of coverage. In a recession, more people and businesses are forced to drop coverage because they don’t have jobs. Insurance companies raise rates to compensate for having fewer customers, because they know that the remaining customers will fork over more money for an essential service like health care.

Pre-existing conditions
Insurance companies are also disincentivised from providing coverage to people with pre-existing health conditions, the people who need health insurance the most. Think about it like a life insurance policy. Would you sell a policy for $100 a month that paid out $100,000 to someone who was likely going to die in 2 months? That would be stupid, since you know you would lose almost $100,000 on the deal. Similarly, health insurance companies would not provide coverage to someone who has suffered from cancer, since that person is likely to rack up a lot of medical bills if their cancer comes back. Health insurers are in the business of risk, and sick people present too high of a risk.

Society loses
The result of all of these issues is that society loses. Health care should not be a scarce commodity like TVs. It should be a universal commodity available to all. Anyone who disagrees with this thinks that people should die because they are poor. This is a viable argument that can be made: if you can’t afford health insurance, then you should die if you are sick. We live in a capitalist system, and people who haven’t figured out how to manipulate the system to maximize their financial gain should die. This argument is completely inhumane, and I can’t understand the thought process of those who make it.

Many would argue that under the current system, hospitals are forced to provide emergency coverage, and therefore the poor do get care. But, many are forced to go into bankruptcy because of this situation, which prevents them from having an equal opportunity to participate in the capitalist system. Further, there is more than emergency coverage necessary to have proper health care. What about diseases or operations? What about checkups that can prevent or catch sickness early? What about insane deductibles and denials of coverage for those who do have healthcare? Everyone should have a right to a basic level of health care. Lack of money should not be grounds for receiving the death penalty.

Why has nothing changed? A problem that has persisted due to the current system is widespread involvement of insurance companies in spending money to sway people to support their companies and the current system. Again, this is just a part of the system. If your company is making $1 billion a year in profit, it’s worth $100 million to pay someone to make sure that you keep making that profit if you only will make $500 million a year in profit if you don’t make the payment. It’s worth $400 million in savings to spend that $100 million.

There’s no point in blaming insurance companies for spending hundreds of billions of dollars to fight the public option by giving money to lawmakers and spending money on expensive advertisements to sway public opinion in their favour. They are private companies, and those funds are a worthwhile investment. After all, it works. As of the writing of this article, the insurance companies have almost completely squashed the public option as a legislative solution to the health care problem. But, in reality, the public option is the only solution.

Part II: The solution

The Band-Aid
Any solution without a public option is essentially a band-aid. The current solution being sent through the senate serves to force insurance companies to take losses on people with pre-existing conditions and the poor who can’t afford insurance. The government would have to subsidize those losses in some way shape or form. Prices will keep going up, and inevitably the taxpayer will have to pay. These band-aid solutions are just another way of funnelling taxpayer money to shareholders of insurance companies. The poor will likely receive inferior and inadequate coverage.

Medicare and Medicaid are essentially band-aid solutions. Health insurance is provided to seniors or the poor with billions of dollars of government handouts. Medicare costs continually increase because basic health care costs continually increase. These costs put a greater and greater burden on the taxpayer, and lead to trillions of dollars in government debt.

The Public Option
A public health insurance provider would have a different incentive system from a private corporation. Rather than maximizing profits to shareholders, a public insurer would want to minimize profits, or even take losses, so as to make sure the maximum number of people are able to get the best possible coverage. A public organization’s incentives are directed towards pleasing voters. Thus, the more happy voters, the more support for the organization. The more people that have coverage, the more happy voters.

The public option is like a competitor selling TVs for $50, or even $40. What are you going to do if your competitor is selling TVs for $40 that cost you $50 to produce? Well, you either go out of business or build a better TV that you can make money off of.

The public option would force insurance companies to sell better and cheaper plans that would compete with the public plan. The public plan would slowly swallow up the cheap and inefficient side of the health coverage market. Many employers would switch their coverage to the public option to cut costs. Private options would be a premium service offered by certain employers. They would be forced to compete with public providers.

This scenario would be better for America. Employers would be able to see more profits because they can save money on giving health care to their employees. All Americans would be covered, and not be forced into bankruptcy to survive sickness. Medical costs would go down because the government insurer would be able to bargain with medical providers to lower medical costs. Doctors will still be rich, just not as rich.

Many people are afraid of this scenario unfolding because they think it represents socialism. Perhaps a complete government takeover of healthcare, hospitals, and the destruction of private competition as exists in Canada and other countries would be socialistic. But just providing a government option that competes with the private options is no different from a public school system, or a public parcel delivery system. Private schools have to offer an education that is better than the public system can offer. The public system thus encourages better education for all.

Some things are best done by governments, who serve the best interests of society, not their shareholders. Coming from Canada, it is astounding for me to hear the hell that Americans go through just to get health care. When I needed health care in Canada, I went to the hospital or doctor, filled some paperwork out, and showed my government insurance card. That was it. No bills, no questions, no deductible. Nothing. Just health care. Which is not to say that the Canadian system is perfect, but it is much better than a system where poverty is a death sentence.

Health care should be a right ensured by the government, not a purchased commodity like TVs. Americans need to stop listening to the rhetoric presented by the insurance companies. These companies are fighting for their lives. Fortunately for them, the people in charge of making the decision to put a public option in place are corrupt and ignorant, and will shift their position in return for kickbacks that will get them re-elected.

The only way things will change is if American support for the public option increases, and the only way that will happen is if Americans get educated about the issue, and realize that the public option will make life better for everyone except the shareholders of insurance companies.

How The Recession Happened

1. The Olden Days
Dave needed a place to live, had a job with a steady income, a good history of paying back any money he borrowed, and a little bit of money saved up. Unfortunately, he didn’t have enough money to buy a piece of property outright. So, Dave went to his bank and said “let’s make a deal. You lend me the rest of the money to buy this property, and I’ll pay you back in monthly instalments over the next 20 years, plus some extra money every month (interest). If I don’t pay you back, you can take my property and sell it, pay yourself whatever I still owe you and I’ll get the rest” The bank agreed, knowing that Dave was a good guy and would pay them back. Plus, if he didn’t, they could just take the property, sell it, and get their money back. The bank got their money from cash they were holding on to, and borrowed the rest from a bigger bank or the country’s central bank. Dave got his house, and was happy. The bank was paid back over 20 years, and made a nice profit.

Alice had no money saved up, a crappy job, and didn’t pay back money she borrowed. Alice wanted her own place too. She went to the bank, but was denied because they didn’t think she would pay them back.

2. Mortgage Backed Securities
One day, a bunch of investment bankers had a great idea. Instead of getting the money to give Dave to buy his property from money already in the bank’s hands, they would get a bunch of Investors together to put money into a pot. Dave would get his loan from the pot of investor money. Then, whenever Dave made his payments, the bank would take a chunk for themselves, and the investors would get the rest. These investments would be called “mortgage backed securities” because the investments were backed by mortgages.

This worked great for a while, except eventually the investors started to get angry because they weren’t making enough money. The bank had a great idea. They would give a loan to Alice so she could buy her property too. Because they were worried that Alice wouldn’t pay them back, they charged her a lot of extra money in interest on top of what she owed. If Alice couldn’t pay the full amount, they would just add what she couldn’t pay to the total amount she owed. If she stopped paying, they would sell the house, and hopefully it would be worth more. The bank then bundled a whole bunch of loans to people like Alice and made the bundles into an investment that investors could invest in.

The bank took their investments to a rating agency, and asked the agency to tell them how risky the investments were. The rating agency looked at the bundles of mortgages to people like Dave, and said they were not risky, and gave them a good rating. They looked at the investments to people like Alice and said they were very, very risky, and gave them a bad rating.

The banks needed more money. They decided to take a bundle of loans to people like Dave, and a bundle of loans to people like Alice, and put them together into an even bigger bundle. They then went back to the rating agency, and asked how risky these loans were. The rating agency thought that this big bundle would really spread out the risk, since there were so many little bundles in it, and gave the bundles a good rating.

The rating companies screwed up, because the risky investments were still risky, they were just in a bigger bundle. Investors flocked to these big bundles, thinking they were not risky, when they really were, and bought them in large quantities.

3. Credit Default Swaps
The investors were worried though. What if they lost money on their bundles? Insurers like AIG came along and had a great idea. The investors would pay money to AIG. In return, if the investors lost any money on their bundles, AIG would pay them back whatever they lost. This was called a credit default swap. AIG was confident that people could only lose a little bit of money on these investments, since they were all backed by hard, tangible, real estate. Historically, real estate prices had never gone down very much, and had a steady increasing price trend.

Banks all over the world bought billions of dollars of these big bundles of mortgages. They invested all of their money in them, and were so happy that they were getting so rich. Plus, if they lost money, they had insurance.

4. The Beginning of the Collapse
Dave started making more money, and decided that he was going to buy a nicer house. He sold his house and went to buy a bigger one. He found a house he really liked, and put an offer on it. But, it turned out that Alice made an offer on the same house that was $100,000 higher, and got the house. The investors gave the bank money to give to Alice so that she could buy the house.

One month later, Alice didn’t make her payment on the house, and the bank took it back. They put it up for sale again at the amount that Alice had bought it for to get their money back. But, no one would pay that amount. Dave came back in with his offer that was $100,000 lower. The bank did not get any other offers and had to give Dave the house.

Now, the bank had lost $100,000 that it owed to investors!

All of the sudden, the prices of houses everywhere started going down. Alices all over America stopped paying, and banks lost billions of investor dollars. Real estate prices started tanking. In the past prices had never gone down much because they never got too high. They never got too high because loans were always made to low-risk people like Dave. But prices got too high because anyone, including people like Alice, could get a loan for however much they wanted.

The investors asked for their money back from the banks, but the banks didn’t have it. The investors then went to AIG and said “I want my insurance money”. AIG started paying out insurance money.

By the end of 2007, this caused the American economy to stop growing. It slowly started to decline, but the problem got worse. Eventually AIG had no more money to compensate investors and banks, and the banks were losing billions of dollars.

5. Lehman Brothers
One of these banks was Lehman Brothers. Lehman had been in business for a long time, and lots of people put their money in Lehman thinking it was safe. Lehman realized that they had no more money because they had too many investors trying to get money back. Lehman owed billions of dollars to these investors, but didn’t have it . Lehman asked the government for help, but the government at the time (Republican) did not want to interfere with the free market, and decided to let Lehman fend for itself. Lehman realized that it couldn’t pay money back, and went bankrupt.

6. The Catastrophe
Banks and investors all over the world were terrified. If investments in a secure bank like Lehman were unsafe, then any investment could be unsafe. Investors decided that they wanted all their money in cash, and really safe investments, because they didn’t want to lose it. So they all started selling all their shares and bundles of mortgages. But, no one wanted to buy their investments at a regular price, so they had to sell them at a really low price.

These lower prices caused the stock market to start crashing. People started selling stocks in regular companies that had nothing to do with investments because they were worried about their money. This sent share prices crashing. People who were just regular investors saw their share prices crashing, and decided to sell before prices got too low. This sent prices even lower.

This could have spiralled into another great depression. If more banks went bankrupt, and more investors lost more and more money, then all sorts of companies would go bankrupt. Banks owed hundreds of billions of dollars and had no way to get that money. It appeared that civilization as we know it could come to an end.

7. How the world was saved
The federal government saw this problem happening and realized that something had to be done. They knew that if the banks kept making loans like they did in the olden days they would surely make money again. So, Treasury Secretary Paulson decided to loan money to all the big banks and to AIG to compensate them for all the money they lost in the crisis. Paulson convinced president Bush, and a majority of congress that this was a good idea. The media called this a bailout, but it was really necessary to prevent another great depression.

With the billions of government dollars in hand, the banks could pay their investors back, and pay for all the losses that were occurring. Countries all over the world undertook similar bailout plans to keep their banks from going out of business.

8. Why there was still a recession
Unfortunately, the damage done was already severe. The banks had lost so much money that they didn’t want to make loans to companies and lose more money. Companies were losing money, and realized that the only way they could save money would be to cut costs. They started laying off workers and shutting down operations.

People who lost their jobs stopped spending money, and lived off of unemployment insurance. People who did have jobs got paranoid, especially after losing so much of their investments when the market crashed, and started putting away any last penny they could. This meant that stores and companies were selling less stuff and making less money. Stores had to shut down and lay off more workers.

9. The Aftermath
Although the recession is/was the worst since the great depression, the new Obama government and the Federal Reserve have fought to end it. The reserve made it very easy for banks to borrow money to lend out to good customers like Dave, charging really low rates of interest to banks, and making lots of money available.

The federal government’s stimulus package was designed to give the economy a boost at the other end, by creating actual jobs, extending unemployment benefits, and spending money on government programs.

In the end, this recession will be looked at as a wakeup call in the history of modern human civilization. The free market works brilliantly when it is monitored and regulated. But, it has the capacity to spiral out of control when people make the wrong decisions. If it was not for secretary Paulson and the TARP bailout, the free market would have self destructed, and would have taken years to correct itself.

This recession has been horrible, and has negatively affected the lives of millions. However, it would have been much worse if it were not for the bold and swift actions of the responsible bodies, guided by hundreds of years of economic thought. Hopefully, we can learn from these mistakes, and try to make sure something like this never happens again.

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