Do the Right Thing

Do the Right Thing

It is utterly amazing to watch the "debate" that is going on about raising the debt ceiling in what passes for the U.S. Congress.

Congress has raised the debt ceiling many times in the past. It is a sad, but true fact, that through most administrations and Congresses, there has not been the political or moral will to actually match expenditures with revenues.

Republicans, and their wing nut Tea Partiers, would have us believe this is ALL a spending problem. They ignore that the deficit is a product of over 50 years of government borrowing, though wars, other recessions, and yes, even "supply side" economics.

The truth is hard to determine, since both parties have done their share of borrowing. Democrats have started social programs but have not raised taxes nearly enough to pay for them. Republicans have cut taxes but have not cut programs near enough to pay for them.

In short, both sides are guilty of deception. However, their is a balance point of the deception. I would suggest about 2/3 deception Cons, about 1/3 deception progressives.

The engine that runs this deception is simple: Congress will not level with the American People about how much all this costs.

Americans are NOT taxed enough to pay for all the programs, wars, foreign aid, you name it, that we are constantly trying to accomplish. Republicans cut the taxes, Democrats fight for essential programs, but hold to the same fiction; ie., that cutting revenue is somehow neutral when you are trying to balance a budget.

It is the revenue almost all the time! You can go back to the Korean War, then Vietnam, then Iran/Contra, then Afghanistan, then Iraq, then Homeland Security; etc. These wars all cost money the government would not tax to fund. So, it borrowed. And it borrowed, again and again.

Progressives get angry, as President Obama did when he was a junior Senator, about spending on defense (war) by "charging it". Conservatives get incensed about almost everything; but particularly about a "crushing tax burden" while sponsoring the defense spending (and most other spending) that so upset the progressives.

And now, we are getting a "mia culpa", with both sides harping on spending cuts in the middle of a jobless recession. Of course, cutting spending and cutting taxes in such an environment is utterly ridiculous; we tried it in 1936-37 with disastrous results. In fact, many historians believe that by cutting spending then, and plunging the nation BACK into a depression, the nation turned inward, enabling Hitler to re-arm, and indirectly at least, enabling the aggression that led the world into war.

In short, there was NOTHING good about cutting spending and cutting taxes then, there is nothing good about it now.

Again, there is ABSOLUTELY NO EMPIRICAL HISTORICAL EVIDENCE THAT TAX CUTS STIMULATE ECONOMIC GROWTH IN ANYTHING BUT THE VERY SHORT TERM. In fact, the opposite may be the case.

By taxing with marginal tax rates (the rich don't get all their wealth confiscated by a long shot), the federal government can partially re-distribute the total wealth of the economy to the middle class, and re-employ millions. That is what was done in the thirties. And by the way, no rich people had their homes taken. In fact, many got richer because the economy picked up. The rich NEVER lose in America!

Yes, the revenue would be spent on government make work, called public works by some. But it does work to revitalize the economy in extreme times of recession (like we have now). It would only be a short term fix, not a long term one, to save what little respect the middle class has.

Cutting spending and continuing unfair and currency centralizing tax cuts, will NOT fix anything. In fact, it is making it worse.

So then, why the dance in Washington? Why won't they realize that they are playing with fire?

Because the myths have outgrown reality. Republicans especially are trapped by their rhetoric, few of them really believe the tax cutting mantra. But they don't have any other answers, so that is all then chant: cut taxes, cut spending! Democrats, who have been burned several times by being painted as the "tax and spend" party, ALSO cut taxes but won't touch entitlements. And this is for good reason. The "new reality" is that once taxes are cut they never can be put back to their former levels. Cons scream this is a "tax increase" by the tax and spend liberals.

So, a tax cut (like the Bush tax cuts) that were supposedly to stimulate in the short term economic growth, are slavishly continued even though they never worked. Do the wrong thing, then repeat it over and over, and expect a different result; Einstein called that "madness".

Look at recent history. President Obama foolishly went along with an extension of the Bush tax cuts, even taking a payroll tax holiday (directly reducing Social Security funds), with the goal of "stimulating the economy". Last month unemployment went UP, and it looks like we are close to a "double dip" recession. This very well could end President Obama's presidency. He got suckered into following the con, that tax cuts are sacred.

Here is how we get out of this mess. Read history! Raise marginal tax rates over a three year period to where they were in 1998. Shut down our efforts in Iraq and Afghanistan. End the middle class tax cuts over a three year period. Phase it out. Reform Medicare, along the new Health Care lines but with more savings, aimed at a health care industry that is quite frankly ripping all of us off. Do not lay off anyone in federal employment for at least a year, in other words stop the job cuts. Establish a commission that has authority to investigate all major federal expenditures for waste and fraud. If it is found, charge the guilty and save the money.

The additional revenue that is derived spend 70% of it on job creation, yes make work, on the nation's infrastructure and energy conservation. Suspend all union contracts that have to do with public spending of any kind, and freeze wages and benefits for everyone for at least two years; that means C.E.Os!

You see, the options are endless. The goal is to increase revenue from the unfair distribution of wealth in the country, reform entitlements so they save money (which will take money away from the Health Insurance Industry and Medical Industry that have shown double digit inflation rates for years).

But all the changes need to be phased in and monitored. If they have unintended consequences then change them.

Oh, and finally, ban all lobbyists of any kind from Washington and the surrounding countryside by at least 50 miles. If a public official is caught talking to any lobbyist, they should be impeached.

Will we do this? Maybe, as we sink further into a depression the People will get fed up with it...and start to do the right thing. Blindly following the Tea Party is the WRONG THING!

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