There is, as there almost always is, considerable talk about taxes and plans to save money. I’ll offer a few rambling thoughts that wandered into my mind about these matters.
When it comes to taxes, most folks would rather not pay them. Most folks are, however, rather happy about what taxes provide to us. One interesting thing about taxes is that if some people to get more out of tax funded things than they put in, it follows that other folks must pay in more than they get. Of course, everyone can get out more than they put in, provided that the state is going into deficit spending (which we have, massively). In some ways the tax system can be a looked at a bit like how Marx looked at the notion of profit. To grossly oversimplify the Marxist analysis of profit, someone has to be underpaid in order for there to be a profit. For example, to make a profit on a $2 widget, that means that the widget must cost less than $2 to make, ship and sell. This entails that someone is either being paid less than what they contribute is worth (such as the laborer) or the customer is paying more than the widget is “really” worth.
So, if the government is providing goods and services to people beyond what they paid in, other people have to be paying more than they are getting from the state. Thus, some taxpayers, it would seem, are being exploited by the state.
Naturally, it might be claimed that the folks who are being exploited by the state are the folks who are often exploiting others to make profits. However, this would not seem to make the situation fair-it would be merely creating yet another case of exploitation.
Being a bit facetious, you might say that people can be divided into left and right by who they favor exploiting. If you think the rich should exploit the non-rich, welcome to the right. If you think the non-rich should exploit the rich, welcome to the left. If you like both ideas, welcome to congress.
Now, to ramble a bit on savings. Obama has been saying that we will be able to save money in health care and such by being more efficient and doing various other vague things that sound good. We have also been told that he will be creating more jobs.
The thing about saving money is that saving money is not like preventing a leak in your water pipes to save on your water usage. After all, the leaking water is wasted by leaking into the ground. But, it is not that the money is leaking away to be destroyed. Rather, it is going to pay people. Now, some of this money might not be warranted (that is, people might be getting money that they should not), but presumably some of it pays salaries and so on. So, when we talk about money being lost, we need to be a bit more careful about what we mean.
To use another example, consider when people talk about money lost after a disaster. True, money is lost due to businesses not being able to operate, but the money that must be spent rebuilding is not really lost. Rather, it goes into paychecks and material sales (plus plenty of corruption and waste). As Halliburton folks will attest, disasters can be a great economic boon and not as loss of money at all.
This is not to say that we should not be concerned about money being lost or wasted. But, we should consider what sort of savings are really possible and what the price of such savings would be.
1. How far will taxes go before it is too much?
2. We were told we would get savings in health care when they put big taxes on cigarettes. We are still waiting. Dems have problems with the economy and taxes. They like to go the wrong way.
I was listening to a couple “non-partisan” tea-baggers on the radio today. They seem to be oh-so upset by the direction government is taking recently, what with the increased deficit and all the taxes, etc. I could almost hear them choking back tears.
It occurred to me,as I sat at a stop light inhaling noxious clunker fumes, that I didn’t remember there being a “non-partisan” tea-party movement prior to this year (except of course during revolutionary war times–and I only remember that because I read about it), All I’ve read about over the past eight years are the too-frequent, poorly-conceived tax protests peopled,too often, by members of supremacist organizations who weren’t joined by many sane people.
So, the sign turned green and I moved on, still wondering why the tea-bagging started at about the same time Obama took office– almost before he could have been reasonably expected to have any beneficial effect on the economy as he inherited it. Why weren’t tea-parties organized as Bush left the low deficits of the Clinton administration in the dust?
Then the traffic bunched to a crawl, and the answer appeared as if out of some hellacious smog cloud. It’s not a “non-partisan” movement after all.
When I got home I found an article from 1997, authored by Larry Craig(!) 🙂 griping about the fact that Clinton was projecting a deficit for 2002 of $69 billion:
Yet by 2006, before a Democratic congress, and four years after Clinton’s $69 billion projection, Bush was knee-deep in a 4 trillion dollar deficit and spending was increasing yearly.
Even as President George W. Bush and his majority posse of senators and house members increased the national debt by $4 trillion those “sane” people were apparently unaffected. Even as he left the country in fiscal tatters, I saw no nationwide organized protests about government waste.The “sane people” were, apparently, mightily appeased to get a tax cut that amounted to pennies–except to stockholders–a cut that Bush’s spendthrift congress did not ,unfortunately, follow up with any control of spending at all. “We the people”–well some of us– sat around with our thumbs you-no-where because we were able to run up our credit, live “large”, and never worry about tomorrow. Then the crash.
No, it’s not a non-partisan movement by any means. It’s just the same partisan message, dressed up and manipulated to look like a purely grass-roots movement.
Yeah–there’s a tea-party. It’s conspicuously populated by grassroots people who have been attending the party wearing hats and whistles at least 4 years ago. But no party leader or radio host rallied them to the cause, so they didn’t go. The fact that they didn’t then tells me that they put partisanship ahead of purpose then, and they’re doing it now.
Correction: Last para. second sentence should read
” . . .who *should* have been attending the party. . .
Michael LaBossiere says
The various political grass roots movements that are not are on par with the business grass roots movements that are also not. I did an article a while back on corporate sock puppets and astroturfing. Sock puppets in this case are when people are paid by corporations to say nice things about their stuff online. Astroturfing is creating what appears to be a spontaneous mass movement via conscious manipulation (and then trying to hide this).
Since the same folks who try to sell us soda pop also try to sell us candiates and politicla views, it is hardly a shock that the same tactics are used to sell both.
That is crap. I know plenty of people that have attended these rallies that have never-ever done anything political before. Not to mention Democrats that are showing up in support.
I thought the deficit was only slightly over a trillion when Bush left office. No matter what the amount, the president cannot spend without the Congresses approval. Whoops, they were Dems then too.
My apologies. I was confusing debt and deficit. Clinton left office with a deficit of $100b or less. By 2004 the deficit had reached $412b with a Republican congress in power (’00 to Jan.’07). Where was the noise then?
“That is crap.”
Please read my last paragraph. I didn’t say baggers weren’t real. I’m asking where they’ve been for the last five years and giving credit for a lot of the heat they generate to partisan political hacks who know more about rabble-rousing than they do about what exactly is going to be in any health care reform bill that comes out of the congressional sausage factory (see the clairvoyants I allude to below.)
Given the financial situation that Obama was faced with when he entered office, it’s no surprise the deficit is blowing up. Just listening to some talking heads this morn on Stephanopolus, I got the impression there’s only one way to look at the minor improvements in the economy that we’ve seen in the first six months of Obama’s tenure. That view: The stimulus has helped a bit but not enough.
I do believe there’s at least one other view that’s not discussed often enough. No one, but the most ideologically blinded would claim to know what national and world fiscal disasters could still be ahead of us if major countries hadn’t taken steps to stimulate the economy. Who knows how bad it might be right now if nothing had been done? Those who profess to know are claim beyond-God-like powers of hindsight and clairvoyance.
So we have people who know (speculate) the stimulus package is not successful enough at this point to continue adequate economic improvements and they know enough about (speculate) a final health package that has a long way to go in Congress to go out on the town hall trail and kill it, but they can’t look back and see where things were 10 months ago and speculate where they might have been without a huge stimulus.
Hyper-selective Speculation I, First Semester,3 hours.
“Given the financial situation that Obama was faced with when he entered office, it’s no surprise the deficit is blowing up. Just listening to some talking heads this morn on Stephanopolus, I got the impression there’s only one way to look at the minor improvements in the economy that we’ve seen in the first six months of Obama’s tenure. That view: The stimulus has helped a bit but not enough.”
Whenever the government spends money to inject into the economy it only helps short term. Spending money by the government is worse for long term because the money is wasted in lending from foreign countries and general government inefficiency and waste. If the stimulus has only worked a little then that is bad as the money will have to be paid back with interest.
Now it is economy 101 that cutting taxes helps the economy. An easy pointer to this is how states, region etc. attract more business. Economies in these areas thrive.
Again though, congress spends money. If they say ‘no’ then no money gets spent.
“Whenever the government spends money to inject into the economy it only helps short term”
Paul Krugman emphatically states that the short term is the chief concern, and increased short term government spending is the best solution.
Well, he could be wrong. We are measuring successes as unemployment slowing down. Sort of like the state of Maine having a big press party when they paid the hospitals here 13 million of what was owed because of Medicare with Stimulus money. The truth is that Maine still owes over 100 million to all it’s hospitals. Guess what? These hospitals still have to pay all of their taxes. The truth is that tax cuts would help them at this point. They are drowning in debt because of unpaid debt by the state.
We are also at 40% of our GDP with debt. Actually I think we have passed 40%. Our debt is rising and our GDP is falling. More government spending is not the answer in this scenario as it automatically raises debt and lowers GDP by doing so.
Ben Bernanke in an interview stated that he would not monetize the debt.
The truth is that he is monetizing debt.
Where does this lead us? Well, it makes things stable for the moment but we will have to pay for it in spades. This will either come with skyrocketing taxes or incredible inflation. The recklessness with which how the country is being run is getting out of control. It was already estimated by the think tanks in Washington before Obama took office that it would take a 60% increase in taxes to pay off our debt in 10 years.
I just want someone to explain to me how spending more money by the government helps pay off our debt? That is what we are worried about isn’t it?
“Well, he could be wrong. We are measuring successes as unemployment slowing down.”
We’ve had a short term problem: The world economy experienced a credit crisis that was, by most reliable reports going to flush us down the tubes. Paulson’s TARP was objected to by some, but those same individuals had no alternative solution that anyone would buy into. So, during Bush’s last months tons of money $700B were injected into the system to solve a short term problem.
We have another short term problem–a serious recession. Opinions split on the $750B Recovery Act. I’m somewhat confused by the fact that some complain the money isn’t getting out the door fast enough. That seems like a pretty fair admission that those people think the problem is primarily short term, and if Krugman is right the answer involves , if you’ll pardon the mixed metaphor, the federal government stepping up to the plate until we can get the huge federal fiscal ship that’s been heading in the wrong direction for quite a while turned around.
Now, you could have the patience required to see the plan through. You could stick to a plan that seems to be making some progress already. You could show the ability to delay the need for immediate gratification. That’s hard with unemployment at current levels, but I have a gut feeling the Republican approach to that problem would leave
people unemployed for similar time periods. Unemployment is another huge ship to turn around.
Or you could just say no, no, no the Obama plan won’t work and offer up ideas (tax cuts, for example) that were put in place before the whole problem started and didn’t prevent it.
The way I see it: If Obama’s (and Paulson’s) plans don’t work, politically you’re gold, but the country is screwed. If it does work, politically you’re screwed for quite some time. No offense, but for the country’s sake, I hope you’re screwed.