This is Madness

Madness

This is crazy. I was watching a debate between a rich American and a progressive about a tax increase for the rich, to address the deficit. Of course, most progressives feel the Bush tax cuts should have expired a year ago when scheduled, and to maintain them now is adding to the deficit and damaging the economy.

The rich American came up with several defenses, including a statistic that "over 50% of Americans do not pay any income tax at all"; these are the poor, the elderly and college students. So, I assume, we should raise taxes on the poor while letting the rich off? Raising taxes on the poor means hardly any increase in revenues at all, putting tax rates back to what they used to be, will raise billions to offset the deficit...you choose!

The progressive opponent kept saying that a "tax increase" was necessary to deal with the deficit. The rich guy kept saying this would harm the economy, no tax increases during a recession was his chant; they are "job killers".

This is madness: First of all we are not talking about a tax increase, but a return to the tax rates that existed before the Bush Tax cuts. These rates had existed during the 1990s, an economic boom era for most Americans. And, these rates had been permanently reduced from New Deal era rates by the Reagan Administration. The days of a 90% marginal tax rate is long gone.

So, a resumption of the old tax rates is it. No net tax increase. None...no tax increase (repeat after me). There is no suggestion for a tax increase. No tax increase...it is a resumtion of the old tax rate.

Cons have been brilliant in getting us to use THEIR lexicon, calling a resumption of a tax rate after a cut as a tax "increase". There will be no increase. None.

This approach has been hugely successful for an increasingly minority Republican Party in California. California began the "tax revolution" with Prop 13, and has followed it up with one tax cut after another.

Now, the state is in perpetual deficit, making huge cuts to state spending, cannibalizing its eduational system, and is mired in a deep recession, fed now by cuts in government workers. Sacramento for example, is running an unemployment rate of over 10%, with thousands of unemployed state and local government workers.

Essentially, the private enterprise recession in the United States, has grown into a public recession as well, because we will not simply renew tax rates that were cut years ago. State cuts by conservative governors, have only fueled the recession, cutting local and state jobs.

In 2010 Republicans made large gains in the Congress, particularly in state races. Many conservatives were swept into office by an electorate made up of conservatives who bothered to vote while Democrats stayed home. People sent a message that they wanted the recession to end, and a lack of jobs was the problem. Republicans smartly chanted "jobs, jobs, jobs" and were swept into power. (Interesting because the same party caused the economic meltdown of 2007-08). Americans, tragically have notorious short political memories.

Tragically, the wrong party for this task was selected. Republicans talked a good jobs, jobs, jobs platform, but have done absolutely nothing to grow jobs either nationally or locally. In fact, state governors have taken a meat cleaver to public spending, because of the deficits in state budgets caused by the recession and mindless tax cuts; only adding to the unemployment rate and making the recession worse.

As more jobs are lost, less demand for goods and services is generated, and lower and lower into the depression we go. It is 1932 all over again!

And still, conservatives use the "tax increase" as a "job killer" and still the American public buys the lie.

Regardless of the lie, the conservative approach is not working; in fact, it never has worked. Much of our economic condition is a product of the global economy, which has nothing do with tax rates; nothing.

The global economy has cost millions of American jobs, simply because poor countries have work forces that will work for a fraction of what American workers make. Moreover, the profits that come for this "rise in productivity" are going to multi-national companies who have absolutely no allegiance to the United States worker. So, our people are fired, while Brazilians are hired. Conservatives and progressives have both been "free traders" in this madness, literally outsourcing us into a depression.

Other countries have at least tried policies to discourage out sourcing, or punishing it with taxes and other disincentives. The United States has taken a total free trade approach, leading to mass lay-offs and economic misery. There is no national economic strategy in the United States to deal with the global economy. Every other "developed country" on earth has one, we instead, rely on the "free enterprise, free trade system." Once again this lack of regulation and self interest has harmed millions of Americans, who have been thrown under the bus of the global economy, enriching multinationals and making the rich spectacularly richer.

The middle classes of the "developing countries", Brazil, China, India; etc., are growing while America's dwindles. Much of this may be unavoidable, but it seems conservatives are making it worse by insisting that tax cuts that are rolled back are "increases" are job killers. This only starves government, laying to even more layoffs, which leads to more layoffs.

There is little connection of a tax cut to stimulate the economy, because we are talking about national fiscal policies and actions on a global economy; their is minimal effect. A tax cut in America might stimulate consumer demand slightly, but when the middle class in China moves up 1%, the global economy stimulus is huge.

This is the same thing as when we talk about increasing our local drilling for oil, to "remove our reliance on foreign oil". The vast majority of American think when oil is pumped from off shore "American" wells, it is "ours".

This is nonsense! Shell Oil, for example, is not run by Americans. It pumps oil from Alaska, then refines it and sells it to the highest bidder. We could increase our pumping of oil by a hundred fold, and still there is no guarantee that gas will be sold at cheaper prices to Americans.

It is a global market remember, with emerging middle classes in countries with huge populations who are hungry for the same natural resources we have always assumed were ours by "divine right".

So, we are shooting ourselves in the foot, by refusing to renew the Clinton era tax rates, and not realizing that it is a global economy that is the root cause of our economic woes.

Americans have long been ridiculed by Europeans for being too provincial and not having a global view. These weaknesses are now killing our economy, because we can't see the massive paradigm change that has occurred.

We continue to cut jobs, cut spending, and cut taxes, and can't realize that this is killing our economy. We have no national strategy for economic survival, no strategy for energy, no strategy for national educational achievement. We have 1/3 at least of our political focus controlled by conservatives who actually want to roll back national approaches to problems to a "states rights" approach. Huh? States by themselves can participate in the global economy against nationalistic strategies of China, India, Germany and Brazil? This is madness!

It's a global economy, stupid. The more provincial we get, the less effective we will be in adapting to the global economy; and the more we will sink into economic defeat.

This is madness!