The New Tax Cut Debacle

Here's a breakdown of the Obama Tax Cut agreement worked out with Republican Congressional representatives last week. If you can't read this, click on the chart and it will display in readable format. Hold your breath and look at the numbers. They're not pretty.

http://www.thebuzzconnect.com/2010/12/breakdown-of-new-tax-cut-deal.html

The so-called "Bush Tax Cuts" for the rich were instituted in a time of budgetary surplus. Republicans, ever vigilant in keeping tight with their major constituencies--the rich and corporate sponsorships--refused to allow the deficit to be paid down by the well-heeled, and insisted on a "cut" rather than a responsible plan to eliminate the burden of a burgeoning overhang of debt. This cut was billed as a "job creator" but of course, the actual consequence of this tax relief was a dramatic hemorrhaging of American jobs--especially in manufacturing--across the board. Now we're hearing the same crap about "job creation" despite the dismal record of the last 10 years. Do Americans really believe that rich people "make jobs" with their surplus earnings? Has there ever been any reliable statistical evidence/proof brought forth to back this assertion up? Isn't it a fact that American industry and American investment has been steadily directed toward foreign opportunities, away from the American economy? Talk to any investment broker, and he'll tell you that the investment opportunities are all "overseas" where growth is strongest, that domestic investment is sluggish and unrewarding. This is a fact. So called "job creation" through tax breaks at the top of the economic spectrum is a myth. There is no direct correlation between allowing rich people and corporations to "keep" more of their profits, and any resulting gain in general employment. Write that on a piece of paper and tape it to your ice box.

Now, once again, we're hearing that Obama had no choice but to capitulate to Republicans in Congress, who insisted that, as a condition of allowing general tax cuts "across the board" to all Americans, the rich get to keep their lowered taxes for another two years.

We've been hearing dire predictions about our financial/economic future for the last six months. Financial experts and prognosticators are predicting that as our national debt rises higher and higher, we're headed for a disaster of unmitigated proportions. The collapse of the banking system. Junk bond status for our domestic notes. Widespread business failure. Unemployment of 30%. Bankrupt states. And there's good reason to believe these people. Toward the end of Bush II's term, the Republicans passed the Medicare Drug Bill. After Obama took office, rather than ending the Iraq and Afghanistan wars, he authorized continuing them, more or less indefinitely. The housing market crashed, taking the banking and mortgage systems with it. An enormous bail-out program (TARP) and an economic "stimulus" packet were passed. Obama pushed through an enormous (and clearly flawed, and compromised) Medical Coverage bill. Now, under pressure from mid-term elections that saw many Democrats losing seats in Congress, Obama agrees to an across the board tax cut which adds 990 billion dollars (actually estimated to cost around 1.3 trillion dollars) to our ballooning nation debt.

Does this make any sense? (About the only part of the agreement that makes any sense to me is the extension of unemployment benefits, since those folks are trying to live on nothing, if they lose their benefits. I think if we're separating the wheat from the chaff, this is where we should be extending a helping hand. After ten years of tax holiday, do we really owe the rich any more goodies?)

Obviously not. Congress, and the Executive Branch, have been spending and spending without regard for the consequences, for the last 10 years, and they show no signs of slowing down. No one accepts that any of the "stimulus" proposals are really working. Unemployment is at a 50 year high.

It's perfectly obvious that gifting a trillion dollars in tax breaks, across the board, diluted throughout the population, isn't going to have any significant "stimulative" effect on private spending, private investment, or domestic employment. We continue to lose jobs to overseas business, but the reasons that's happening aren't being addressed. Giving everyone a tax break isn't going to produce more jobs. And the jobs that are likely to be added over the next 2-5 years, aren't good, manufacturing jobs; they're service sector jobs, non-union jobs, jobs without pensions or health benefits or security. Lower-scale, temporary and menial jobs, for the most part. Jobs which illegals can do, jobs which kids without a high school education can do. Not jobs you need a college education for.

The jobs which Americans need and want are being sent abroad. Jobs which educated and qualified Americans are trained to do won't be available here. Will Americans need to emigrate to India and China to find work? Meanwhile, will we continue to import immigrants to do the jobs "Americans won't do" or jobs which cost American business less if they hire foreign trained workers who'll work for much less than qualified Americans?

There have been other times in history when America needed a strong President. Lincoln was such a man, FDR, Truman, Kennedy. That's the kind of leadership we need now, but we aren't getting it. Obama, like Jimmy Carter, is a one-term President, ineffectual and well-meaning. He had a chance to bring about some much-needed change, and he's failed. I was never much impressed with him during the campaign. All promise and vague optimism. And that's pretty much what we've gotten so far. Empty promises.

The alternative? There isn't any alternative. The Republicans want to hose us with more debt, just like the Democrats do. It's probably time to buy gold, and put a reliable gun in your closet.