February 05, 2009

Tax Cuts or Government Spending? Here's The Answer...

Time and again as I keep my eye on the political scene, Republicans are touting tax cuts as the answer to just about everything ailing our nation. As they deride the Democrats for proposing a 'stimulus' package with government spending to address our economic troubles, the Republicans who call themselves "Conservatives" (read: conserve my money for me), keep saying that tax cuts will fix this.

Tax cuts will not fix this. Republicans keep saying that tax cuts will pump more money into our economy and therefore create jobs. They use buzzwords and evocative language like "… and the taxpayers keep more of their money…". I say that's a fallacy. Everyone hates paying taxes and of course tax cuts will allow people to keep more of their money, but it won't significantly stimulate the economy.

Tax cuts do not directly create jobs

If you're in the top 5% of income earners in this country, chances are you're making enough money to cover all of your living expenses and discretionary spending, so you're probably socking the rest of your earnings away for retirement and other things. If you fall into this category and got a few extra thousand dollars in tax cuts, will you create jobs with that? Will you even spend it? I believe the answer to that is a resounding - NO. People on the upper end of the income spectrum, who by the way have been the beneficiaries of the Bush wealth re-distribution policies of the last 8 years, have enough money to live on and will simply take this extra money and continue to sock it away.

If you're somewhat lower on the income scale and you received some extra money in the form of tax cuts, will you create new jobs with that? Well, let me re-phrase the question… will you create new jobs by paying your mortgage, electric, & telephone bills?

I believe that the vast majority of Americans fall into one of two categories when it comes to tax cuts. Either you don't need the extra money and will probably sock it away, or you've had trouble paying your bills and will probably do so with any extra tax cut money you receive. Either way, you're not going to be creating millions of jobs.

And that's the problem

Pumping money in to the economy in the form of tax cuts does not directly create jobs. It's effect on the economy are dependent on that 'trickle-down' theory to eventually create a scarce amount of jobs, if any at all. Meanwhile, implementing tax cuts DOES directly HURT the economy by ballooning the deficit and bloating the debt.

The question we must ask ourselves is this - Does the damage that tax cuts have on the economy outweigh the benefits that tax cuts will affect the economy? The answer to that is once again, a resounding - NO. After 8 years of Clintonomics this country was in the best economic health ever, with a strong surplus and paying down the national debt. After 8 years of Bush's revitalization of Reaganomics (call it 'trickle-down', 'supply-side', or anything you want), our country faces the worst economic disaster since the Great Depression. I don't need to tell you how bad the problem is - you hear it every day in the news.

Stimulate Me!

What WILL directly create new jobs is government spending. In fact it's been government spending that's kept this country afloat all along. Think about it. What brought us out of the Great Depression? The right-wingers will immediately shout out - "World War II"! And I agree - WWII did bring us out of the economic turmoil of the 20's & early 30's. But what was WWII? It was a massive government spending program. Let's take that a step further - isn't our military basically a government spending program of sorts?

So, let's recap. Our politicians, beholden to the military-industrial-complex, initiate conflict and start wars so that they can justify government spending to create jobs and keep our economy moving. They sell it with fear so they're really tickled-pink over 911 (although they won't admit it). And for the past 7 years, they've been bleeding us red to the point of economic catastrophe. Couple that military spending with the Bush tax cuts and deregulation, and you can easily understand why things are so bad.

Through all the military spending, tax cuts, and deregulation obviously a lot of people got rich (or richer) as the national debt piled up. But at the same time, the vast majority of Americans did NOT benefit from Bush's Republican/Conservative/Neo-con policies. In fact, the vast majority of Americans were severely harmed as Bush made his "tough choices" to keep the deficit and debt from bloating even further. Today, more and more Americans, who weren't previously harmed from Bush's "tough choices" are finding themselves out of work as the layoffs pile up.

Can Obama bring us out of this?

One of the elementary problems with military spending is that it doesn't result in infrastructure. When you manufacture a weapon, or pay Halliburton to do a soldier's laundry, you have nothing to show for it when it's over. All the while you still have a laborer in Pennsylvania collecting unemployment, food stamps, and/or welfare. On the other hand, if you built a bridge you'd put hundreds of people to work (who'll then pay taxes and spending money), AND further stimulate the economy with all the materials you'd have to buy. When IT'S over, you'll have a bridge. Perhaps motorists can drive over that bridge instead of using much more gas to get to another bridge 5 miles down the road. Or, perhaps you'll set up a toll and collect fees. Either way, you have a bridge to show for your efforts after putting hundreds (possibly thousands) of people to work.

Infrastructure spending is definitely the way to go, and Obama understands this. The problem is he's having trouble selling it because the Republicans have bigger mouths and keep insisting on tax cuts. That's what makes THEIR constituents happy. That's what got THEM elected. After all... the ignorant, right-wing, sheeple who listen to Rush Limbaugh & Sean Hannity don't care about a bridge in Pennsylvania. All they care about is paying less taxes. That's why they're Republicans, that's why they controlled our government for the past 8 years, and that's why we're in the debacle we're in now.

Obama and the Democrats are going to turn this ship around. You can clearly see the emphasis on diplomacy & peace instead of conflict & war. You can clearly see the emphasis on taking care of Americans instead of killing foreigners. You can clearly see the emphasis on building our infrastructure, lessening our dependence on foreign oil, and addressing climate change, instead of deregulation, denial, and cowboy diplomacy. This is the right way to go. It's not the right-WING way to go, but it's the RIGHT way to go.

My message to you obstructionists in Congress - get on board! This ship is turning around with you or without you, and then it will sail. If you're not on board, you'll be left behind, in more ways than one.