There are actually two third rails of politics -- Social Security and taxes. Income tax hikes have been off-limits ever since Ronald Reagan convinced a sizable chunk of the population that ALL Federal spending goes to welfare queens in Cadillacs. Ask your non-blogger friends about taxes and what they go for. You'll hear a litany of scapegoats -- shiftless black people. Hospital care for pregnant illegal immigrants. And of course, welfare mothers. They'll never mention the 9 billion dollars that mysteriously disappeared in Iraq
, or the huge sums of money paid to KBR to poison
American soldiers, or the bonus they got for electrocuting them
. They'll never mention the trillions of dollars we will have squandered in Iraq because George W. Bush had penis issues relative to his daddy and Dick Cheney needed lots of corpses to feed into the black hole where most of us have souls.
They'll never mention public education or food safety or any of the other things government does. Perhaps that's because under Republicans, government does these things so badly. I recall growing up in the 1960's under two Democratic presidents, and the hamburgers at your backyard barbecue could be relied upon not to kill you, enough schools had been built to accommodate the huge generation that entered them, and my mother was a neighborhood oddity because she worked outside the home at a time when comfortable suburban life could be had on one income. No one really talked much about taxes then.
Funny how after nearly three decades since of Republican dominance (or a brief interregnum of a Democratic president who often acted like the kind of Republicans we used to call "Rockefeller Republicans"), Americans no longer feel they get any bang for their buck.
It's like the town in which I live, which is a microcosm of the natonal Republican Party. It's been a one-party town for the same nearly three decades, mirroring the nation as a whole. We have no trash collection (we pay for private haulers that contract with the town). In a town characterized by old-growth oak trees, leaves are collected only twice, so that at times in the fall the streets are nearly impassable. Snow removal is a joke. The DPW employees sit around smoking cigarettes while private landscapers who are friends with council members are hired to maintain the town's fields and parks. One of these landscapers recently "mistakenly" sprayed Roundup over one of the sports fields. Funny how the Council had been wanting to spend $1.5 million on artificial turf before this conveniently happened. We had a big nor'easter a couple of years ago, and piles of carpeting appeared in front of people's houses, often sitting for weeks until the next monthly household debris pickup. We shlepped bags of ruined carpet and floor tile to the DPW yard three times a week instead, where the workers stood around smoking cigarettes and occasionally flipping the switch in the truck. This is what Republican rule looks like. They say government doesn't work because they are unable or unwilling to make it work.
And so here we find ourselves, drowning in a debt that the Bush Administration left us, in a recession which, while it may be bottoming out, is not going to see a significant rise in incomes or job opportunities for a long time to come, if ever. And the "T"-word is being mentioned
During last year's campaign, President Obama vowed to enact a bold agenda without raising taxes for the middle class, a pledge budget experts viewed with skepticism. Since then, a severe recession, massive deficits and a national debt that is swelling toward a 50-year high have only made his promise harder to keep.
The Obama administration has insisted that the pledge will stand. But the president's top economic advisers have refused to rule out broad-based tax increases to close the yawning gap between federal revenue and government spending and are warning of tough choices ahead.
Republicans are already on the attack, accusing Obama of plotting to break his no-tax vow, the same political transgression that cost Democrats control of Congress under former president Bill Clinton and may have cost president George H.W. Bush his job. Democrats say Obama is highly unlikely to break the pledge before next year's congressional election and observe that it would be safer to wait until his second term if a tax increase becomes unavoidable.
"If you rule out inflating our way out of the problem and defaulting on the debt, there are two ways: Cut spending or raise taxes," said William G. Gale, an expert on fiscal policy at the Brookings Institution. With more than 80 percent of federal spending devoted to politically untouchable programs such as Social Security, Medicare and Medicaid, he said, "it's going to be really hard to make significant headway on the spending side. So that means you've got to think about taxes."
Spending cuts were a big part of the solution the last time the nation faced such a towering debt. In the aftermath of World War II, with the debt exceeding the country's entire economic output, the government slashed military expenditures. Within two years, Washington was spending less than it took in. Fifteen percent inflation also helped by reducing the real value of the debt. When the country went to war again in Korea and then Vietnam, tax increases helped keep the budget largely in balance and the debt continued to fall.
Today's problem is more complex. Obama not only faces the fallout from the worst economic downturn in 30 years, but also inherited the debt piled up by his predecessor, Republican George W. Bush. Bush invaded Iraq and approved an expensive new prescription drug benefit for the elderly while pushing through one of the biggest tax cuts of the post-war era -- worth an estimated $1.6 trillion in foregone revenue by the time the provisions expire next year. This was the first time the United States had not adjusted its fiscal policy to meet its wartime needs, according to "The Price of Liberty," a book on war financing by Goldman Sachs vice chairman Robert D. Hormats.
After running surpluses in the late 1990s, the government began spending far more than it took in, forcing the Treasury to increase borrowing from China and other creditors. During the Bush administration, the portion of the debt held by the public jumped from just over $3 trillion to nearly $6 trillion. Federal rescue efforts in the face of last fall's financial meltdown have rapidly driven the debt higher. Today it stands at nearly $7.4 trillion, or about 52 percent of the overall U.S. economy.
"There's no question in my view that Bush was the most fiscally irresponsible president in the history of the republic," said David M. Walker, the comptroller general under Bush who now advocates for deficit reduction. Obama "was handed a bad deck," he said. "But the question is, are you making it better or not? And so far the answer is no."
Supply-side economics was sold to the American people as a kind of free lunch: You could cut taxes, increase military spending, and balance the budget. Forgotten is that the balance the budget thing never quite worked out the way Reagan said it would. But tax increases have been anathema ever since.
Ask Americans what they want to see cut, and they'll say "welfare." Ask them what they mean by welfare. Ask which of the following programs that comprise eleven percent of the Federal budget they want to eliminate:
- the refundable portion of the earned-income and child tax credits, which assist low- and moderate-income working families through the tax code;
- programs that provide cash payments to eligible individuals or households, including Supplemental Security Income for the elderly or disabled poor and unemployment insurance;
- various forms of in-kind assistance for low-income families and individuals, including food stamps, school meals, low-income housing assistance, child-care assistance, and assistance in meeting home energy bills; and various other programs such as those that aid abused and neglected children.
You already know what the answer is: It's #3. Because after the zygotes and fetii become actual children, no one gives a shit about them. But what percentage of the budget does that actually comprise? If the earned income and child tax credits and SSI are part of it, we're looking at perhaps 5-6%? That's not going to make much of a difference.
How about Social Security? That's 21% of the budget right there. Young people would love to see it eliminated. They feel they're going to get screwed. Well, guess what: So do we boomers, and we always have, ever since the FICA withholding increased in 1986 and it was used to finance debt spending. Medicare's another 20%. That's over 40% right there? Let's just elminiate these. Tomorrow. Right?
Ask these young people if they're willing to support their parents in their old age -- you know, the ones who did everything right in putting money into 401(k) plans (because we were only a few years into the workplace when pensions were largely replaced by 401(k) plans) and lost 20-40% of it when the bubble burst in the waning years of the Bush Administration. Or perhaps they want to put those parents out on the street. That'd sure take care of the need for Medicare too, then, right -- if Grandma is living on a subway grate?
How about defense? That's 21%. After all, what's the point of defending a country with no jobs and old people and the poor (which will comprise a sizable portion of the population that that point) living on the street, starving and dying of exposure? Oh yes, I forgot -- it's because the Bush family and their friends will still have plenty of money, as will the Chairmen of AIG, UnitedHealth, Citicorp, and other giant corporations that make their money out of sucking cash from the rest of us and giving nothing in return.
(Source of figures: Center on Budget and Policy Priorities
It's all worked perfectly for them, hasn't it, these three decades of Republican dominance? They've wanted to dismantle programs that help anyone other than corporations, and now their latest hero, George W. Bush, put us in eight short years into a position in which the New Deal and the Great Society will have to be dismantled, because there's no money to pay for them. The middle-class is going to scream bloody murder at paying more taxes, partially because they are struggling themselves, but also because they were told by Ronald Reagan and others that if they just worked hard enough, they too could enter the Kingdom of Rich Men, when said Kings knew full well that they had no intention of letting even the hardest-working schmoe into their little club. These men begrudge even the existence of a middle class, and so they set out to dismantle it -- and have largely succeeded.
Perhaps this is why George W. Bush decided maybe he wouldn't rather be a dictator after all -- because he didn't want to hang around to clean up the mess he made. Instead, he allowed the black guy to come in and do it. And while I have significant issues with the Obama presidency so far, I will at least give him credit for trying. But it will all be for naught, because by doing what may have to be done, he will open the door for a flame-fanner like Sarah Palin to succeed him.
And then God help us all.
Labels: economic death watch, rant, taxes