Not only is the OFA outfit still alive and kicking and flush with cash, it has pivoted from re-election mode to mass suicide pact mode. It's not enough that you re-elected the Manchurian Candidate to another four years of stealth Republican governance. He expects you to continue knocking on doors for him, to convince your friends and family to support his Grand Bargain of trillions of dollars of cuts to programs that benefit your friends and family.
Become an official Eyass* for Obama! Take the Fiscal Fledge Pledge. Spread those little deficit hawk wings of yours and fly like an eagle in the name of economic patriotism and allegiance to Your President. Strike while the afterglow of pretend victory is still hot. Spread the word far and wide: OFA now officially stands for Obama For Austerity.
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| Work Till You're 70.....Awwwwk. |
Delving even further down in my spam bucket, I discovered I had missed the chance to participate in a survey of Obama supporters about "where we go from here." Whatever. Because, although the campaign committee failed to publish any alleged results of this alleged survey, the president seems convinced he has a popular mandate to gut Social Security, Medicare and Medicaid, food stamps and heating assistance! And it is up to us to spread the Cat Food Gospel!
Of course, the email does not say this in so many words. It is simply full of pablum and cartoonish numbered graphics. The never-ending Obama campaign is devoted to "keeping you informed about how the President is fighting for you so you can continue to talk to your friends, family, and neighbors. So here's the deal".....
"There's a lot at stake. With your help we'll continue to move this country forward. Spread the word on Facebook and Twitter."
Hmm. Nowhere does he give the exact details of his "concrete plan", but based on what he said during the campaign. the so-called balance is heavily weighted toward cuts -- at least three times the amount of what might be gained from revenue. It's a concrete plan, all right. Kind of like what happened to Jimmy Hoffa. One day the New Deal is here, the next it's gone.
He still persists in the notion that cutting the deficit will grow the economy, too. President Obama does not want to believe in the Keynesian warning that austerity during a recession will only make the recession worse. You worry about the debt during boom-times, not during hard times.
You have to ask yourself why this "grassroots" deficit hawk campaign was officially launched right at the start of the Thanksgiving weekend, that most popular of all times for stealth news dumps. The New York Times, as far as I can tell, is not touching it. They were, predictably enough, live-blogging about the Black Friday flocks of consumerists. But in the U.K., where the overindulgence holiday is not celebrated, The Guardian has a piece on it.
The Guardian does offer an explanation of sorts for the OFA email campaign, which is actually sort of heartening: Obama is desperate!!!
It (the grassroots effort) comes after reports of no progress by the Republican and Democratic teams left behind in Congress over the Thanksgiving holiday period to start work on a compromise package.
(snip)
They (Democrats) have left staff members from their teams to begin work on the framework of a deal, but the initial negotiations have not been fruitful. Republicans and Democrats have accused one another just setting out their standard party policies, with little in the way of compromise being offered.According to The Guardian, House Speaker John Boehner has insisted that Obamacare, the president's signature achievement of a grand giveaway to private insurance predators, be put on the table, and he won't budge on the Bush tax cut extensions for millionaires. So, because there is simply no way that Obama can dismantle the New Deal without Republican collusion, he is seeking to hypnotize the starry-eyed masses into doing it for him. Be partners in your own destruction, proles. Show Barry you still have his back, even if it kills you.
So far, the only true grassroots supporters that Obama has are his millionaire CEO puppet-master rentier class at Third Way and their corporate media shills. As Paul Krugman laid out in a recent blogpost, CNBC has transformed itself into Austerity Broadcasting Central. The CBS Nightly News, too, has been running a feel-good Thanksgiving week propaganda campaign of how we will all die later unless we agree to die sooner. It featured such paragons of virtue as unindicted Goldman Sachs CEO Lloyd Blankfein, who offered the following cultured pearls of wisdom:
You're going to have to undoubtedly do something to lower people's expectations. The entitlements, and what people think that they're going to get, because it's not going to–they're not going to get it....And you can go back and you can look at the history of these things, and Social Security wasn't devised to be a system that supported you for a 30-year retirement after a 25-year career. So there will be certain things that the retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised.You're not going to get it. Get it, proles? This multimillionaire banker wanker and master of mile-a-minute Doublespeak thinks that working slobs retire at 40, and that your laziness is costing him your money. The sad part is that our so-called journalistic class seeks him out, panders to him and never once thinks of challenging his outright lies. But as interviewer Scott Pelley breathlessly informs the viewers, the Blankfein interview was a coup of sorts, a rare "get" in broadcast parlance, because Masters of the Universe rarely deign to pontificate in public. We should all be so honored to have a plutocrat of his stature telling us that suffering is good for us, and even better for the likes of him.
Get their backs, for the privilege of getting stabbed in yours. It's the Class War, and so far they are winning. They remain confidently convinced that the rest of us are assholes. But whether their flocks of potential eyasses will actually take flight only to commit hara kiri for the plutocratic cause remains to be seen.
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| Barry & His Blankie |
*Eyasses: raptor birds, such as hawks and falcons, still in that vulnerable downy stage.
17 comments:
@Karen--
A few articles ago, you made the following remark:
“This totally manufactured piece of disaster theater [the 'fiscal cliff'] was set up after the Debt Ceiling Kabuki a year ago by an unelected senatorial "Supercommittee" which stipulated that unless Congress cuts a budget deal this year, there will be horrible terrible cuts to Pentagon spending and the Bush tax cuts will expire. Sounds pretty good, huh?” --Karen Garcia, “The Slippery Slope of the Fiscal Cliff”
Well, I don't know whether it's a growing sense of nihilism, or just realism on my part, but driving over the fiscal cliff à la Thelma and Louise is starting to sound pretty good to me, too.
Though I favor a strong national defense, the Supercommittee cuts will only return the Pentagon back to a 2006-level of military spending, which is still a huge amount. This hardly strikes me as “devastating” the military.
Also, it has long been my humble opinion that taxes need to rise on the middle-class as well as on the wealthy. It's long past time for the people of this country to learn how much money it really takes to make the wheels of government turn, after getting a free ride that has earned a national debt of $16T+, and an annual Federal deficit in excess of $1T.
The only thing that I can see that will drive the President, Congress and the American people to finally decide how much government—and what corresponding levels of taxation—they really want, is a crisis in which they are finally forced to take the time to carefully examine how much each current element of government costs, and to decide which elements they ultimately want or need to keep without further increasing the debt and deficit.
I know, I know. Liberal economists such as Krugman, Stiglitz and Reich say “Damn the deficit and the debt, full speed ahead.” They say that the current debt and deficit have affected neither interest rates nor inflation thus far. Indeed, they say that because interest rates are currently so low, we should borrow and spend even more to stimulate growth while keeping taxes low on the middle- and lower-class.
Well, I'm not economist enough to knowledgably refute these arguments, but they seem to me to go against all common sense, and also to ignore the fact that the best laid plans of economists can go astray, too.
Even Chris Hedges, who seems to garner some respect in this forum, has fretted about the U.S.' current fiscal situation:
“The bullet to our head, inevitable if we do not radically alter course, will be sudden. We have been borrowing at the rate of more than $2 billion a day over the last ten years, and at some point it has to stop. The moment China, the oil-rich states, and other international investors stop buying U.S. Treasury Bonds, the dollar will become junk. Inflation will rocket upward. We will become Weimar Germany. —Chris Hedges, Empire of Illusion
http://www.tomhull.com/ocston/books/hedges-empire.php
“Tut, tut,” say Krugman, Stiglitz and Reich, “China needs us as much as we need China.”
But if knowledgable Progressives such as Hedges are as concerned about the debt and deficit as are knowledgable Conservatives, well, I'm worried too. Krugman, Stiglitz, Reich et al. just could be wrong. What then?
After all, back in 2003, even Paul Krugman was worried about deficits that are small in comparison to today's.
http://www.nytimes.com/2003/03/11/opinion/11KRUG.html
Bring on the crisis, and then sort it all out in the cold light of day.
My response to a Krugman blog post today:
The right keeps telling us we don't have a revenue problem, we have a spending problem. If so, then allowing the country to go "over the fiscal cliff" should be just what the doctor ordered. Seems to me this should be the opportunity the Republicans have been looking for. We could go back to Reagan era tax rates and Hoover era spending habits.
So why the hysteria?
I think it's because Republicans smell an opportunity to get both the historically low tax rates and still gut the safety net. Romney didn't win the election, but that's no reason to believe his policies still can't be instituted. There are certainly enough compliant Democrats - the Blue Dogs in Congress, not to mention the fellow occupying the White House - to do just what Romney wanted under the guise of compromise.
Watch. That's exactly what's going to happen.
Zee: Krugman, and other Keynesians, don't say, “Damn the deficit and the debt, full speed ahead.” They say damn the deficit right now. The time to practice fiscal austerity is when the economy is healthy.
And they're right. Fiscal austerity during slow economic times only exacerbates the problem of weak consumer demand. Keynes said the only truly worthwhile measure of economic activity is employment. Until we not only have people working again, but also have people earning a living wage and enjoying a measure of security that guarantees they won't be wiped out as a result of illness or financial chicanery, any attempts at deficit reduction will be meaningless.
Because you're right to this extent: There's no way we're ever going to be able to pay off a $16 trillion debt without increased contributions from both the wealthy and the middle class.
But just how is the middle class supposed to increase its contributions when the middle class is shrinking? How is the middle class supposed to increase its contributions while also providing the demand that drives the economy when their wages have been shrinking?
Austerity absent a strong, working middle class only drives more people out of the middle class, increases poverty, exacerbates the wealth distribution problem, and creates a downward spiral that's difficult, if not impossible to reverse.
Zee...always interesting reading your thoughts...but
"It's long past time for the people of this country to learn how much money it really takes to make the wheels of government turn, after getting a free ride."
You might want to rethink that one.
Bankers crash the economy....govt gives them Trillions. Massive unemployment, tight credit, massive often fraudulent foreclosure, rising cost of education, falling level of income, destruction of most pension systems....
That's a free ride? if that is a free ride, I would hate to see what a ride that charges is.
As for making the wheels of gvt turn.
Billionaires' income largely untaxed, greater military spending than the rest of the world combined, (this should never be called "defense")
huge subsidies to the wealthiest industries, huge subsidies to drug companies, criminal adventurist wars.
Yes, that all gets quite costly!!!!
But it is the new class of super rich...the multi-billionaires who have seen their wealth increase to proportional amounts of the total that are unprecedented who have gotten not only a "free ride" But a ride for which they are given huge bags of gifts at every stop along the ride.
The deficit is a "crisis;" massive unemployment, that is a fact of life. Global warming is not to be discussed in polite company, the destruction of our public services is something that affects other people, the crime of the prison system is a subject for an occasional tv special.
Best wishes to all here, and Thanks Karen for consistently great columns.
@John in Lafayette—
Think of my prior post more as a cri de coeur than a proposal based on economic facts or knowledge.
I understand the logic of Keynesian economics, and I actually agree with it—at least in economic times that are not so entirely “out of whack” as they seem—to me, at least—to be today.
I also understand that liberal economists are saying that the deficit and the debt need to be dealt with eventually, but not until this nation has recovered its economic heath.
And, of course, I understand the current plight of the shrinking middle-class, and the implications of any tax increases on us for economic growth.
So, I am agreeing with you insofar as past history is concerned.
But what we are experiencing today is, in my humble, non-economist, lay-person opinion, an economic oscillation that is outside of all prior experience, not only in the U.S., but globally.
I would genuinely love to believe that the liberal economists are right: That we can simply borrow and spend our way out of our current mess, and that eventually we will return to a healthy economy and a healthy middle class by hiking taxes on the rich only, and that we will reduce the deficit and the debt later. That would let me off Scot-free for the nonce, wouldn't it?
Unfortunately, I think—and this is just my opinion—that the world has changed dramatically since the last time that Keynesian economics was really put to the test, viz., during the Great Depression. The world is vastly more intertwined today than it was then, and I think that “globalization,” with all its unintended side-effects is a genie that will not be easily put back in the bottle.
Yes, the war effort that brought America out of the Great Depression was really just a vast, Keynesian spending project, after all. But the American people still sacrificed despite all that spending. Remember rationing and War Bonds?
If our economy and our middle-class are ever to return to health, I think that it will not happen without serious consideration on the part of the American people as to what they want and need—and are willing to pay for—from their government. Perhaps some cuts— i.e., sacrifices—will have to be entertained after all. The American people are no longer very good at thinking about “sacrifice.”
And I guess I naïvely hope that the temporary shock of across-the-board tax increases and spending cuts might finally focus the collective mind of the American people—and Congess and our President—on this problem. The tax increases on the middle-class don't necessarily have to stand for the long term. Just long enough to serve as a bucket of ice cold water on our collective face.
Please note that I am not proposing cuts to Social Security, Medicare, Medicaid, food stamps, unemployment insurance, etc.
I am proposing, however, that there are vast sectors of the Federal government that could, perhaps, be cut partly or in their entirety, along with many redundant government agencies that are nothing more than local pork-barrel projects for select members of our Permanent Political Class. (I think that there was a recent GAO report on this topic.) The non-weapons sector of the Department of Energy comes immediately to mind, as does the entire Department of Education and large swaths of the Department of Agriculture. These are areas where I believe gradual “sacrifices” could be considered, though I don't think it will ever happen.
Again, I would love to believe that the American economy can be saved by borrowing, hiking taxes only on the rich, and spending liberally. Perhaps it is just my natural pessimism that suggests otherwise, and I would love to be proved wrong in my lifetime.
I think that under Obama—just as it would have been under Romney—we are about to see the worst of “austerianism” without any reasoned decisions as to what could be sensibly cut without hurting the most needy among us.
Sorry for rambling so, and I hope that this makes some sense.
The 'defense' budget has always been a huge ripoff. Anyone with knowledge of it knows this. It has become such a honeypot that we have had to contrive enemies to justify it in slack times. Hell, Romney declared a Russian threat which probably scared the shit out of the Pentagon - that particular bear isn't going to take any crap from us and the brass know it. And when W made intention movements around Hainan Island, setting off a dangerous situation with China, he was quickly reigned in by the power elite. China is their leased factory - for now. Not to mention that it's one of our chief creditors.
Zee: You say, "Please note that I am not proposing cuts to Social Security, Medicare, Medicaid, food stamps, unemployment insurance, etc. I am proposing, however, that there are vast sectors of the Federal government that could, perhaps, be cut..."
But you also say you support a strong national defense, by which I assume you mean current levels of military spending (which goes WAY beyond the provision of a national defense, but that's another issue).
Look at the numbers. Social Security, Medicare, Medicaid, and defense account for about three-fourths of all federal spending. What's left to cut? Once the things you name are eliminated, there are no "vast sectors of the federal government." The Interior Department, for instance - which administers the national parks, among other things - represents less than one half of one percent of federal spending.
Absolutely there's a need for sacrifice. But sacrifice doesn't necessarily mean giving up benefits. Sacrifice can also mean paying a little more money.
But if we're going to ask people to sacrifice, we first have to ask who who's benefited most from federal largess? What got us into this fiscal mess? Was it spending on the poor? Or was it reduction of taxes on the wealthy?
I think the answer to that is pretty obvious. The top income tax bracket today is only 35%, when it was double that only 40 years ago. On top of that, taxes on capital gains (which is how the wealthiest make most of their money) have been cut by over 60% in the last 35 years. Capital is now taxed at less than half the rate of labor.
Why? Are the "job creators" really twice as valuable to society as the rest of us? And if cutting their taxes dramatically over the last 40 years has led us to this pass, how can one reasonably argue that doing more of the same will somehow reverse the process?
@d12345—
Thank you for your thoughtful remarks, but I think that I will respectfully agree to rethink only part of my comment that the American people have been receiving a “free ride” for too long.
As you say, the 1% have received nothing but “free rides” on the backs of the 99% over the past 30 years or so.
All this transpired without the 99% understanding what was happening to them—meaning me, too—until, perhaps, the crash of 2008 and the ensuing Great Recession started to bring some attention to what has really been happening.
But even as the 99% were being successfully hornswoggled
by the 1%, the former looked for—and received—free rides of their own. Certainly not free rides on the grand scale of those received by the 1%, but free rides—or so the 99% thought at the time—nonetheless.
During the Bush administration we disingenously accepted the notion that we could fight two large wars, spanning 11 years, with nary a thought of any sacrifice here at home.
As the U.S. launched the Iraq war, Mrs. Zee and I were on the 'phone and sending e-mails to the White House and our Federal legislators demanding that some sort of “war surtax” be imposed on the American people to pay for it, just as we paid for WW II by selling war bonds to ourselves.
Instead, we deluded ourselves into believing that borrowing was the “convenient” way to pay for those wars, while we at home continued with life as usual. Hey, our economy was going to grow forever, wasn't it?
Similarly, we happily accepted the huge addition Medicare Part “D” with nary a thought as to how “we” would pay for it. After all, “we” deserved it.
Indeed, we cut taxes during the Bush administration even as we increased borrowing and spending, starting us down the path to the huge debt and deficit that we have today.
I, at least, think that was a free ride for the 99%—illusory though it turned out to be—and whether or not we understood that we were being scalped by 1% at the same time.
The banks should have been allowed to fail back in 2008. Yes, the immediate pain would have been great, but perhaps the shock would have forced America to take a hard look at that corrupt system, and to rebuild it in a sane, regulated, manner.
Instead, thanks to the temporary band-aid that we stuck on, we are once again back to “too big to fail,” and the banksters are up to their old tricks.
That, I think, is why I am increasingly leaning towards driving over the fiscal cliff: the immediate pain may be great, but, perhaps, it will finally force us to take a realistic look at those things that government should be doing, those things it shouldn't, and those things that we just can't afford, however much we might want to do them.
My thinking is that it may be time to lance the boil, not just put another band-aid on it.
But as I admit, I am not an economist.
@John in Lafayette—
I think that what I said in my very first remark was:
“Though I favor a strong national defense, the Supercommittee cuts will only return the Pentagon back to a 2006-level of military spending, which is still a huge amount. This hardly strikes me as “devastating” the military.” (Bold emphasis added.)
I don't believe that necessarily implies that I think that, in the end, the current level of “defense” spending is about right. If I have conveyed that sense to you, @d12345, @James Traynor or anyone else out there, well, that's not the sense that I intended to convey.
The defense budget—let's call it “military budget” to get past the notion that we need that much spending for “defense” alone—could be cut by a lot, I think. Lacking intimate knowledge of the military budget, I won't presume to say exactly where or by how much. Such cuts would have to be identified by honest, independent analysts, if there are any out there. But I am pretty confident that the Pentagon's budget is still rife with R&D programs like the old, cancelled, XM2001 Crusader Howitzer, which could be similarly cancelled with no real loss of capability.
But that said, I still support a strong military, capable of projecting global force beyond “defense.” Why? Because anytime that something bad happens in this world, all the other nations wring their hands and look to the U.S.A. to step in and fix things for 'em, as in Bosnia, Serbia, Kosovo, etc. . When the U.S. chooses not to step in, as in Rwanda or Dharfur, nothing happens and the worst befalls. That's not going to change in the near-term.
Have we, in the past, overdone this willingness to actively intervene in the affairs of others? Absolutely. I think that we should have stayed out of Libya, and absolutely should stay out of the Syrian civil war. If Iran wants “the bomb,” we should let 'em have it rather than starting a war, and then contain them as best we can.
But when genocide or other bad things occur, I think that the U.S. should have the capability to intervene globally, because no one else will.
This ability to project global force also allows the U.S. to be first on the scene with humanitarian aid, too, as in Haiti after the earthquake, and Indonesia after the tsunami. The military also provided domestic emergency assistance in the wakes of Katrina and Sandy.
So. Can military spending be cut significantly, along withn other sectors of the Federal budget? I think the answer is “yes.” But is a very strong military capability still necessary as well as useful? I think that the answer to that is “yes,” too. But that's just my humble opinion.
More on taxes, next.
Re: all the arguments in the comments section as to where and how to pull in our horns budget wise, let me point out one hemorrhaging area as an example, that has to be changed basically which is the health care system.
In order to know how to spend taxpayers' money wisely, we have to have different approaches as to how the money for particular necessities is spent. The costs of health care which only covers a portion of the American people and in unfair ways, can be resolved with a national single payer system as in most of the industrialized countries of the world which offer better care for their people at lower cost. However, the stumbling block is the force of powerful vested interests that will not permit that change to take place. Private health care organizations, private pharmaceutical companies, high salaried doctors are doing too well to give up their profits and incomes to allow change as well as the wealthy who feel their entitlement to better and more personal connection with the health care system will be compromised.
As to expenditures for the military albatross which is supposedly keeping us safe - do we need an expensive drone system that creates more anger and terrorism in the world, as well as our foothold in Afghanistan and partial toes in Iraq as well as military 'representation' in practically every nation of the world?
Just check out the figures on what is being spent to keep the Pentagon going and how much of our personal taxes go towards the military expenditures of our country. You may be shocked.
In other words, nothing can be done intelligently until the whole approach to where and how money is spent by the government is exposed, attacked and changed basically. This requires a real political revolution from the base as Karen keeps writing about. How and when this will ever come about is the real million dollar question since even the current "win" over the Republicans is merely temporary as they will continue to create opposition to anything involving a system change especially with so many in Congress calling the shots.
Real political change is necessary and what we all have to aim and educate for down the line.
And as has been acknowledged, Obama is not listening to the necessity for looking beneath the surface as it will all be compromised cosmetic procedures during his tenure. Increasing changes in the ethnic and racial makeup of American citizens may have some hopeful influence for the future and where we go from here. Only time and tide will tell.
@Karen--
I was preparing some remarks on taxation in reply to @John in Lafayette's remarks, when your comment popped up. I would still like to submit it later today or tomorrow, but this won't wait.
When you said in one succinct sentence,
"...nothing can be done intelligently until the whole approach to where and how money is spent by the government is exposed, attacked and changed basically.
you made PRECISELY the point that I have been clumsily trying to make on this thread and in prior remarks in this forum.
Like you, I am doubtful that such thorough and careful examination will ever be made.
In pushing for a jump off the fiscal cliff, it was exactly this discussion that I hope might be launched.
Thanks for articulating what I seem not to have done very effectively.
@Pearl--
Sorry, in my haste to get my response to your thoughtful remark in, I accidentally called you "@Karen."
The one thing no one has mentioned in this discussion is the most basic of all issues. What is money? Where does it come from? Can we actually run out? The fiscal cliff, the deficit, these are all fake problems to fake issues. We are having a real debate about fake issues and staking the well being of hundreds of millions of American citizens on the outcome. We are a sovereign money power, we cannot go broke. But, our government chooses to borrow from the Federal Reserve instead of printing it's own money. Now ask yourself why. Who benefits from THIS arrangement, and not from one where we do not create money as debt? This is the real debate. The USA is only going 'broke' because it chooses to.
“War is just a racket…something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses. I believe in adequate defense at the coastline and nothing else. If a nation comes over here to fight, then we'll fight. The trouble with America is that when the dollar only earns 6 percent over here, then it gets restless and goes overseas to get 100 percent. Then the flag follows the dollar and the soldiers follow the flag…There isn't a trick in the racketeering bag that the military gang is blind to. It has its "finger men" to point out enemies, its "muscle men" to destroy enemies, its "brain men" to plan war preparations, and a "Big Boss" Super-Nationalistic-Capitalism.” - Major General Smedley Butler, USMC
The defense budget for 2012 exceeds $600 billion, nearly equaling the combined defense spending of the rest of world.
Despite the fact that citizens favor defense spending cuts, the military industrial welfare deficit complex will not be a part of the Grand Bargain. They are racketeers, gangsters for capitalism.
John Dizard, Financial Times, writes about the “booming market in US defense stocks” as the “fiscal cliff” approaches:
“For all the political fulminating, there really aren’t many industries that have a more secure future than the US defense companies. They don’t have to make excessive capital spending commitments to secure their future; much of the development money and cost of new facilities are picked up by the taxpayer. No auto manufacturer really knows what its sales will look like in the first quarter of next year, but the defense contractors do. When spending cuts come, they will be spread out and comfortably financed.”
Americans overwhelmingly approve of preserving Social Security and Medicare. Yet, they will not be spared from the chopping block of the Grand Betrayal, which will be foisted upon the hapless poor and middle class.
The gushing veal pens…“The elite press repeatedly quotes the commentary of the devoted opponents of social insurance retirement programs. But they appear unaware of how they are supporting a strategic attack on social insurance that has been going on for years.” - Theodore Marmor, author of Politics, Health, and Health Care
Tighter belts and earlier deaths. The sheep baa-baa-baaa all the way home.
“Learned helplessness was originally demonstrated in rats. When placed in ice water, they have no difficulty swimming around for forty to sixty hours. However, if, instead of being put immediately into the water, the rats are held until they stop struggling, something very different happens. Instead of swimming, these rats give up immediately and drown.” - Ellen J. Langer, Mindfulness
@John in Lafayette—
In my very first remark on this thread I said "...it has long been my humble opinion that taxes need to rise on the middle-class as well as on the wealthy.” (Bold emphasis added.)
So yes, I believe that taxes on the wealthy should rise, along with those amongst the upper middle-class like myself. Eventually, I believe that taxes will even have to increase on the middle-class, if and when it returns to “economic health.”
My impulse to drive over the fiscal cliff and raise taxes on everyone is more for its “shock and awe” value—forcing some kind of action —than an urge to punish the lower- and middle-class just now.
Moreover, I have looked at my earlier remarks on this thread, and I don't think that I ever suggested, anywhere, that I believed that the progressive lowering of tax rates on the wealthy over the past four decades has been any kind of “boon” to the economy. In fact, I don't think I said anything at all about it whatsoever.
But since you've brought it up, I agree with you: Lowering taxes on the wealthy has had no proven, long-term beneficial effect on economic growth, but it has drastically increased the concentration of wealth in the hands of the already-wealthy, at the expense of the rest of us. So it is logical to start with tax hikes on the wealthy, but not as some act of vengeance.
A change in policy is in order. But as I have said before in this forum—I think—our tax structure should be determined by a careful analysis of our actual revenue needs, and approached with some semblance of mathematical logic. I think @Pearl has reached that same conclusion.
Our current needs are unknown owing to the plethora of redundant and/or outdated agencies and programs buried within our Federal budget, not to mention the agencies and programs responsible for the creation of wasteful subsidies, loans and grants to private entities, which have cost taxpayers billions. See, for instance, Ch. 5 of the book Throw Them All Out in which the author, Peter Schweizer, documents the billions that Obama paid back to his supporters via grants, loans and subsidies to “green energy” startups, many of which are now bankrupt, though Obama's supporters are substantially the richer now.
And the current “logic” that applies to our tax structure is either, “Hey, we've taxed at that rate before so we should be able to get away with it again,” or “How high a rate can we charge before the peasants rebel and the torches and pitchforks come out?”
I say, debate and identify our needs, and then adjust our tax brackets to suit. Or, better yet, get rid of brackets and marginal rates altogether, and go to a “smooth tax” system such as I discussed in this forum back on July 27 (19th post down or so):
http://kmgarcia2000.blogspot.com/2012/07/monday-open-forum.html
It eliminates numerous problems associated with the “step-function” approach to tax rates, and provides at least some sort of mathematical logic to taxation, instead of making arbitrary moral judgements about what constitutes anyone's “fair share.” Because no one really knows what anyone's “fair share” is, and to say otherwise is complete nonsense.
It seems to be the attitude of both Conservatives and Progressives to throw up their hands and say “Cutting the little stuff just doesn't matter. It's the big stuff that needs to be cut.” And then they proceed to permanently disagree on which “big stuff” to cut.
I say, go through the budget with a scanning electron microscope—figuratively speaking— and eliminate/consolidate every redundant agency or program, slash just about every agency or program that provides grants, loans or subsidies to private individuals or entities, drive a holly stake through private-public partnerships, and then see where we are. Then we can debate the big stuff, because there truly will be nothing left to debate about.
Not that that will ever happen.
Everyone should have to have skin in the game?
Who really pays taxes?
Many Americans pay income taxes as well as federal payroll taxes, which are regressive. These taxes have made up a greater and greater share of federal revenues over the last decades. By contrast, corporate income taxes have fallen. Social Security tax and Medicare taxes apply only to wages and salaries, not capital gains distributions. Yet the rentier CEOs advocate austerity for America, saying the social insurance programs are unsustainable and must be cut.
So who has skin in the game?
As David Cay Johnston shows:
"One system is for wage earners and pensioners, whose taxes are withheld from their checks. This rigorous, efficient system taxes them fully. The other system is for business owners, executives, managers of hedge and private equity funds, name brand athletes and entertainers, and many others with huge incomes. Congress lets them put unlimited amounts of income in sheltered accounts and put off paying taxes for years or even decades.
“Deferral does not prevent these super rich Americans from spending their money. Hedge fund managers and others can borrow against their untaxed wealth, currently at interest rates close to zero. So long as their wealth grows faster than their borrowing their net worth continues to increase.
“The IRS report covers only the 400 highest incomes reported on tax returns, not the 400 highest actual incomes, which I am certain are much larger on average because of deferrals. That means the report overstates the tax burdens of the richest Americans pay.
“The issue we need to debate is not how much you earn - make all you can. The issue is that everyone should pay their taxes now, not in some far-off tomorrow, and as you go up the income ladder so should your tax rate.
“By what economic, political or moral standard should working stiffs be forced to pay their taxes immediately, while plutocrats pay their taxes by-and-by? And why should anyone who makes more than $200 million live tax-free?"
http://www.reuters.com/article/2012/06/06/us-column-dcjohnston-top-idUSBRE85500720120606
Do conservatives really desire a social Darwinist dystopia?
@Denis--
"Do conservatives really desire a social Darwinist dystopia?"
The short answer to your question, I think, is "no, not all conservatives."
As we have discussed many times, there there are thinking Conservatives, and then there are so-called Conservatives who seem to be either social antediluvians or shills for the rich, sometimes both.
David Cay Johnston, the very person that you cite for exposing the monumental tax breaks and benefits for the wealthy and super-wealthy, is, I think, pretty much a thinking conservative at heart, though I have heard him branded as a Progressive and a leftist—by the wealthy, super-wealthy, and their acolytes, of course.
Correct me if I'm wrong and he's really a dreaded “commie pinko socialist,” but what little I have read by him suggests otherwise.
In the book Free Lunch, he (1) seems to be pretty much "pro- (properly regulated) free market" and opposes government involvement in things that the market can do better; (2) is knowledgable and respectful of Adam Smith; and (3) expresses a veneration of the Constitution and the Founding Fathers that indicate to me that he is not a Progressive or leftist.
Johnston also expressed three principles that should guide us when making decisions about our economic policies, and I think that they apply just as much to thinking Conservatives as they do to Progressives:
"(1) A society that does not embrace a common purpose for its existence has no standard against which to judge itself, making it vulnerable to the corruptions of men who chafe at the limits of law.
(2) A society that does not address the needs of its members, especially the vulnerable, weakens itself from within while wasting its most valuable resource, the minds and talents of all its citizens.
(3) A society that takes from the many to give to the few undermines its moral basis and must in the end collapse." --David Cay Johnston, Free Lunch
Application of these principles would not, I think, lead to a “social Darwinist dystopia.”
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