Wednesday, May 17, 2006

Fiscal Responsibility?

So President Bush signed a bill into law today that extends the 2003 tax cuts on capital gains and dividends. Outside of the provisions that raise the cap on the "alternative minimum tax" (which, because it is not indexed to inflation, has begun to affect middle class), I think they are a bad idea.

1. We have recently raised the ceiling on our national debt to 9 trillion dollars (it was at 5.95 trillion when Bush took office); it's not the time to be cutting taxes. The cuts lull people into a "something for nothing" mindset and are fiscally irresponsible. We are at war (the cost of Iraq is approaching $400 billion) and are dealing with record-breaking budgetary deficits. By failing to address this ballooning deficit and instead continuing to add to our mounting debt, we are mortgaging our children's futures (they will be the ones stuck paying this off). We're also taking considerable risks that include further devaluing the U.S. Dollar abroad and incurring significant and harmful levels inflation at home. (Note that as the President signs this bill, the House of Representatives is pushing to raise the debt ceiling AGAIN, this time by 653 billion to a grand total of 9.62 trillion).

2. Our economy is supposedly strong (the fact that median incomes for middle and lower class Americans have fallen when adjusted for inflation is another issue), so the "pro-growth" rationale here falls flat. If the rationale for the cuts three years ago was to spur growth in a slow economy and the rationale today is to spur growth in a strong economy, just when is the proper time to take accountability and seek a balanced budget? Contrary to what ideologues on the far right would have us think, tax cuts are not the cure all for everything.

3. The cuts overwhelmingly favor the rich at the expense of the middle and lower class Americans. Under the guise of reducing the deficit, Congress early this year cut student loan subsidies and funding for programs aiding the poor (see e.g., the so-called Deficit Reduction Act). It has also steadfastly avoided raising the minimum wage or implementing tax cuts primarily targeting the middle class. All this in the name of fiscal responsibility. It seems nonsensical to more than offset those "deficit reducing" measures with cuts that will significantly INCREASE the deficit even more.

In fairness to the Bush administration, both some tax cuts and increases in government spending were justified after 9/11 as the country struggled to prevent those attacks and the subsequent waves of chaos in they caused in financial markets from undercutting a slowing economy while we simultaneously began waging a war on terrorism. The problem lies with how that spending and those tax cuts were dispensed then and how Congress and the administration are continuing to handle them now. By implementing policies that cater almost primarily to the wealthiest of Americans, the administration has increased the disparity between the rich and poor in this country. While the administration should be commended for rightly focusing on job creation, it has failed to ensure that the quality of those jobs meets or exceeds the jobs that were lost. As a result the real median household income has fallen since 2001 and the poverty rate has increased to 12.7%. Meanwhile there has been a record increase in the number of millionaires in the country. In considering our economic policy, we shouldn't be preoccupied solely with the country's aggregate economic growth, but should be very mindful of what kind of growth we are encouraging.

Overall, I think we need a more balanced fiscal policy. One that doesn't ideologically embrace tax cuts as a cure all to everything, even when our economy is strong, our national debt is outpacing our GDP, and we're involved in an expensive war that is not likely to end soon. We also shouldn't extend tax cuts that almost exclusively benefit the richest Americans, especially at a time when we're cutting vital governmental programs (e.g., Student Loan subsidies) in the name of "fiscal responsibility."

18 comments:

Gargantus said...

"The cuts overwhelmingly favor the rich at the expense of the middle and lower class Americans."

I just skimmed the written article till i came to this... I support the tax thingy you are complaining about.

Marc said...

Garg... you have to be rich before this will benefit you. You're either going to have to start winning some races or come up with a great idea like the pet rock if you don't want to be a middle or lower class American. Otherwise your options seem limited. You're not related to anyone rich so you can't really inherit your wealth. You could marry a trust-fund baby, but that would require commitment and marriage. Looks like you're in between a rock and a hard place. Better start racing harder.

Gargantus said...

I am pretty sure i know some millionaires that may or may not be related to me. Wether they choose to share their wealth with me is another matter. A pretty face, superior charm, and beeming personality have gotten me this far. It is a good idea to find a trust fund baby though. I might give marriage a go if i met the right girl. I will race as hard as i can, but if it doesnt work out, sitting on a beach in the sun will work out fine as well.

Gargantus said...

ps. What are taxes? I mean i am familiar with them from the story robin hood, but i thought they were purely fictional.

woo said...

, m ...l.km, zΩÅ CV CV CV CV CV C

woo said...

Ruby posted that. She is learning the greek alphabet I guess.

I think maybe the whole subsidized student loan program should be reworked. Appears to be benefitting the upper and middle classes much more than the lower class. What do you think?

Marc said...

You have Ruby learning the Greek alphabet early. Pretty soon you'll have her working on HTML.

I don't see how federal student loans benefit the upper class. You have to financially qualify to receive Stafford loans. The trust-fund babies I know at GWU certainly haven't taken out any federal loans.

woo said...

BTW, where is exactly the dividing line between upper and middle class. I just want to know so that when I pass it I can try to screw the others.

It could be argued that if subsidized loans are helping the middle class to achieve the upper class, then that is still a problem. I hope nothing is changed though, I want my subsidies!

BA said...

This reminds me of some wise words once blasted over the radiowaves now reduced to playing on repeat on my ipod...

Little child wipe your crying eyes, how can I explain the fear you feel inside. You were born, into this evil world, where man is killing man, and no one knows just why.
When the children cry, let them know we tried, 'cause when the children sing, then the new world begins.

Tara said...

White Lion! love it!

Tara said...

Or is it tiger? I'm not positive, but I do think that song applies here.

Alice said...

Yesterday I passed a group promoting a book called “The Children of Satan”. The book had Dick Cheney on the cover. They were singing about the book in opera voices - making it difficult to understand - something about heaven and hell and burning and god knows what else. On my way back from lunch I passed the group again, but the opera singers had retired. A group of lovely granola looking ladies were in their place. One of them turned to me and asked, “will you use your ovaries to get rid of Cheney?” I can’t even imagine how I would go about doing such a thing.

Sue Ellen Mischke said...

And I got my hopes up that you'd be blogging more often now that you're on break, and this is what I get for it. 10 days sans post?! And no comments on mine? WTF? Where are you?

Gargantus said...

Yeah Marc! Blogging is the only thing i have.

Marc said...

Woo - (1) I think the line between the middle and upper classes is a little blurry (2) I don't agree with that characterization of subsidized loans. I think education raises the standard of living for everyone. It is an essential government investment.

BA - Wise words indeed... "Little child, you must show the way, to a better day for all the young. ´Cause you were born for the world to see that we all can live in light and peace."

Tara - It's While Lion.

Alice - We have those cooks out this way too. They're Lyndon B. LaRouche supporters. They've actually gone so far as to sneak into our Con Law classes to disrupt in protest of Bush. I've never heard to ovaries bit though... I'm still not quite sure what it means exactly. Does she want you to donate an ovary? Or does she want you to have a kid that will vote against Cheney (or his successors)?

Sue Ellen - Sorry :( I went on vacation a couple of weeks ago and then started work this past week. I hope to make amends. Please accept my profuse apologies.

Garg - No Tyson. You also have your rugged good looks to help you get by.

melbo said...

While Lion?
Hmm. Who knew?

melbo said...

I looked at that site and I've decided that Lyndon LaRouche seems kinda nuts. That mans not going anywhere near my ovaries and THATS FINAL!

Seven Star Hand said...

Hello all,

Now for the worst part of this horrendous equation.

Bush, Cheney, and the NeoCons are Vatican operatives hell bent on impoverishing and indebting the USA. Looks like their plans have worked like a charm while the brain-dead American public remains deluded and addicted to money, religion, and politics. Who says you can't fool most of the people, most of the time...

Pay close attention, profundity knocks at the door, listen for the key. Be Aware! Scoffing causes blindness...

Humanity has long been deceived and deluded into thinking that money is a positive means to manage life, societies and civilizations. Chapter 2 of Revelations from the Apocalypse, Volume 1: Here is Wisdom thoroughly exposes the foundational deceptions associated with the concept of money and how it is actually a severe hardship on every aspect of life and every endeavor that must bear the burden of its unnecessary overhead and resulting stifling complexity. Money severely impedes the quality of life, society, and civilization by spawning myriad horrendous side effects (poverty, crime, wars, pollution, waste, greed, stress, etc.) which are all traced directly to its presence, purposeful shortage, and imposed requirement.

Here's a real hot potato! Eat it up, digest it, and then feed it's bones to the hungry...

Money was conceived millennia ago by the priesthood of ancient Babylon to subvert the resources and energies of entire populations for the benefit of a rich and powerful few. Chapter 2 further pierces the ages-old smoke and mirrors surrounding the scourge of money, banking and credit (usury) by exposing their core logic and common denominator math. It exposes the purposeful and well-sculpted math and logic trap imposed upon humanity by the Vatican, its ancient predecessors, and their secret-society cohorts.

It is abundantly clear that imposing money upon the entire world and then forcing people to participate in usury, pay taxes, compounding interest on national debts, and then to struggle their lives away for the sake of money, is extortion and great injustice on a grand scale. To cause suffering and despair for profit on such a grand scale can only be described as abominably evil. The time has finally arrived to demand a full accounting from the Papacy, Vatican, and all of their cohorts and chief supporters. They have no right to cause such overwhelming despair and suffering for millennia. They have no right to deceive practically everyone on such a grand scale. Why do our national leaders conspire with them and participate in such great evil while pretending to serve the Creator? Why do people still have blind faith in such obvious deceivers and their deceptions while they continue perpetrating such widespread and horrendous evil and abominations?

The time has come to wake-up and prove to these duplicitous scoundrels that you are only temporary marks and dupes.

Money: The Greatest Lie Ever Told