• Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 1,287 other followers

  • Archives

Fiscal Cliff – The Republicans’ Fault???

Fiscal Cliff – The Republicans’ Fault???

Here we are in the United States hours away from being tossed over something called a fiscal cliff by our own government.  But, what is a fiscal cliff and where did it come from?

The truth is that this “fiscal cliff” is our congresses’ idea of a way to punish itself.   The idea is that going over this fiscal cliff is so unthinkable of an idea that if the congress failed so bad at doing their jobs that it comes to that, they would be forced to find a quick solution.

What will happen, to begin the New Year in the United States is that all of the various tax breaks that have been put into place over the past several years to help various groups for various reasons will all disappear at once effectively raising everybody’s taxes all at once.

So basically, our congress has devised an efficient way to deliver a high powered groin kick to all of our citizens just as we were coming out of the worst economy in recent history.

Here in our great democracy of the United States, the public blame will probably fall on our Republican Party.  While this is really the fault of a dysfunctional congress, I have to say that I am going to have to agree with those that place much of the blame on the Republicans.

Those that know me understand that I feel that anyone who runs in lockstep along with one party or the other, as if rooting for their favorite football team is an idiot.  With your favorite team, you root for them no matter what and when they are doing bad you make excuses and try to convince yourself and others they are doing good.  If your team cheats, there is always a good excuse for why it’s okay, if another team makes some minor mistake; it is some terribly egregious act worthy of the worst punishment imaginable (insert pause to let the Fox News logo pass through your imagination for a moment).

I do believe in our party system, I just believe that, just like a person, sometimes a party can be way out there or just have bad years and that you as a person in a democracy have a responsibility to not support and facilitate the crazy.

In this case, the Republican Party has been hijacked by its extreme wing.  The problem for the Republicans in government is that these extremists seem to have the power to make or break a candidate for office in places where republican votes dominate.  The problem for the Republican Party is that on the national stage this extreme wing is a great distance from what the majority of voters are thinking right now and these extreme views have been eating the party from within for about eight years now (including two presidential elections.

I say all of this, because one of the major sticking points for Republicans in congress has continuously been that they will not sign a bill that raises taxes on the wealthiest people in America.

This was on of the battle cries of their overwhelming loss in the recent presidential election where the vast majority of the voting public of this country publically shared their disagreement on this issue.

The truth is that the logic that the Republican party is using is terribly flawed and not likely to be accepted by the general public.

The tax breaks are basically to help people in need like welfare checks and government cheese.  So at some point in history, some pointy headed economist decided that helping the poor doesn’t really stimulate the economy; helping the wealthy actually creates more spending and the money might be used to enlarge their companies so we would be more productive if we give the welfare checks and government cheese to the wealthiest Americans.  Thus, “Trickle-Down Economics” was born.

Though welfare checks and cheese were not the way it was done, this “assistance” came in the form of tax breaks and other subsidies.

I totally get the logic;  If those that have more, have even more, they are likely to spend more.  Those that have less, if given a little more it is more likely to go into smaller bills, late bills etc. that should have been paid anyway and will not do much to boost the economy.

The fundamental difference is that one side is trying to help people (sometimes haphazardly giving money away to both those who desperately need it as well as those that take advantage of the free money) while the other side believes that if you help the rich, at some point the poor and needy will be helped in the long term.  The money will trickle down to them.

The flaw here is that when thought through, this will never fly with the voting populous as a whole.  Think of it as one party trying to get all of the homeless shelters to close their doors to the poor, and convert to buildings that collect cash to distribute to the Donald Trumps and oil companies of the world because you will get a better return on your investment.  Eventually, with this little bit of extra spending cash, these wealthy Americans will spend more because of it and create more jobs which will be jobs the poor that use these shelters would be able to get and the world will be a better place, birds will chirp again, roses will bloom and all will live happily ever after.

While I do see the logic, the idea of help for the wealthy is preposterous.  I did a piece recently named “Taxing the Rich? Not Taxing the Rich?” in which I discussed this in some detail, but some of the breaks we are giving are ridiculous.

No matter how you feel on this issue, the American voting public has already clearly stated it is absolutely a “no go”.  They general voting public does not believe in Trickle-Down Economics at this time.  But, yet the Republican Party is willing to fight to the death (by the death of every person in the country by tossing us over a fiscal cliff not their own) for this unpopular concept.

One thing that I have noticed about the current Republican Party and particularly the extreme wing of the party (often called “Tea Party Republicans” associated in my mind way more with tea-toting rich people and less with the rebellion of throwing tea in the harbor that was a part of starting our country) is that when the American public does not agree with them they always go back to this stance that we do not know what is good for us so they have to force it down our throats for our own good.

That’s all fine and dandy…

if you are a dictator in some third world nation.

For those of us who live in a democracy, this is the clear indicator that the Republicans in Congress are not interested in doing their jobs.  The job of representing the desires and needs of the American people.

The facts are that we have been doing the experiment of “Trickle-Down Economics” for many years and during the years when the computer industry was booming in the United States all was fine.  But, suddenly in the second term of a Republican president the economy went bad.  The first dominoes to fall were due to abuses and excesses of the same wealthy that these breaks went to.

We are all suddenly faced with a painful reality:  If you give extra money to wealthy Americans and wealthy corporations (who are now declared to be people also) they may use it to be greedy and destroy our economy instead of somehow bolstering it.

This is the main point that the Republicans are stuck on and much of the rest of the debate is simply fluff to attempt to appear to be trying to play nice.

The American People are not buying all of this and the republican Party is becoming more of a cult than a political party (I suppose that Bill Graham can put the Republican Party on his website as a cult in place of the Mormons who suddenly were removed from the list because the Republican Party had a Mormon candidate for president).

They have a following that cheers them on and backs their play more and more the crazier it is.  The more out of step with the national voting population, the louder the cheers are.  The problem with all of that is that; the more out of step with the national voting population, the less trust this population will have in them.

The Republican Party is imploding and it is as if they are screaming:  “If we are going to implode, we are going to take the whole country with us over a…  wait for it…  FISCAL CLIFF!”

Don’t get me wrong; the Democrats have their crazy too and are playing a bit of a game also.  The difference is that it is a game that the American voting populous supports.  The Republican Party has hijacked the American public, tied us up in the back seat and decided to play a dangerous game of chicken driving headfirst at the Democrats in the hopes that they will scare the Democrats into turning out of the way at the last minute.

The challenge for Republicans is that even some of their own party have jumped out of the car.  There was this “Plan B” (use scary horror movie narrator voice).  It was Speaker Boehner’s (pronounced bay-ner if you didn’t know) attempt at going nuclear.  He was going to ram a plan through the House of Representatives because the Republicans have a majority there and force the President to not sign it publicly.  The idea is that this would shift the blame off of the Republican Party and place the blame firmly on the shoulders of President Obama and the Democrats.

The words “EPIC FAIL” (use scary horror movie narrator voice) come to mind.  The Republican dominated house did not vote for this and The Speaker now looks like Boo-Boo the Fool.

It is the last day of 2012 and I can see the cliff ahead.  This must have been the actual day that the Mayan Calendar was supposed to end.  In truth, I suspect that if we actually go over this cliff, the Mayan calendar may have been pointing to the end of the Republican Party’s political might as they defiantly go down with the ship still ranting “Tea Party” slogans as the ship goes down like the band in the Titanic movie.

By Wednesday morning the Uncle Sam recruiting posters with Uncle Sam pointing which says “I Want You” may have the caption changed to say:  “Republicans, It’s Your Fault”.

Alethinos P.

Taxing the Rich? Not Taxing the Rich?

Taxing the Rich?  Not Taxing the Rich?

I’ve been pondering all of this taxation, fiscal cliff stuff and trying my best to have an open mind to both sides of the debate.  My views have been deeply changed and the reality of some of this is kind of astonishing.

I know I am seriously oversimplifying the debate, but a key question is if raiding taxes on those with astronomical amounts of money helps the economy and job creation or if giving them greater tax breaks empowers them to do a better job of creating jobs and thus creating a better economy.

I did this and have to force myself to think of the ridiculously rich people and ridiculously rich corporations as the same since the Supreme Court has declared corporations to be people.

The trickle down theory of economics implies that if they extremely rich have a bit more money to play with they will grow their empires which will involve creating more jobs to serve in the building and sustaining of these empires as well as growing their wealth more to lead to more empire building and more jobs.  With more jobs and more money there will be more spending and the more employees with more money will be spending and the economy will have more money moving around.

I encountered a few stories about tax breaks for big oil companies and I remembered being angry a few times over the past few years at stories of these companies making record profits at the same time that the American people were paying record prices for gasoline.  Then I was miffed by public statements from these companies that the record prices and record profits were not related.

Then when all of this conversation about tax breaks started, I found out that these companies were still getting tremendously large tax breaks (AKA assistance) while making record profits.

So in trying to open my mind, I thought, “Well, maybe in all of this more jobs were created and so on as I have been being force fed as an idea.”

I found nothing but evidence to the contrary (one of the clearest and well done articles http://www.americanprogress.org/issues/green/news/2012/02/07/11145/big-oils-banner-year/)

Looking at the evidence I have found in my admittedly casual research, it seems that nothing seems to happen with more money but more greed and a lust for more power to keep the fountain of wealth flowing.

Some who are old enough might remember back in the seventies when the OPEC folks slowed production of oil to raise prices and absolutely jacked up the economy to levels where gas had to be rationed and panic was a way of life.

Well, our big oil companies were doing the same thing when we were all dying at the pumps as we still are.  Now with us numb to the inflated prices that we pay for gas the profits over the past few years have been at levels never seen before and the tax breaks still remain in place.

It’s like a person who is on welfare (or some other government program) because he/she lost his/her job, getting a job that makes him/her absolutely rich (more so with each paycheck) and being able to still collect welfare.  As a matter of fact, there are people on Capitol Hill trying to say that because the welfare worked so well in helping this person get the job, we should make that persons welfare check even larger to make that job even better.

If confronted on this logic, then the argument turns to the idea that even though this person is getting rich right now, what if this person isn’t making as much next year or the year after?  In this example, what if this person loses the job?  We need to keep this person who is getting rich on welfare because he/she might struggle again later.  WTH!!!!

It seems that once the government steps in to help you out and you become rich, it might be time for you to start carrying your weight.  You know:  Like how others pulled the weight when you were struggling which allowed you to pay less.

Let’s look at the logic and the arguments specifically the ridiculous nature of these arguments.

Over the election season I heard a few arguments and debates on the idea of how the rich pay more money in taxes than the rest of the population and that means that they should be taxed less.

So let’s imagine that all taxes were ten percent of your income for everybody (because the math is easy).  A person making ten million dollars a year would pay a whopping million dollars a year.  A person making thirty thousand dollars a year would only pay three thousand dollars a year. 

The logic is that if we give the ten million dollar a year person a massive tax break, the economy will end up better.  In my research I found a few different numbers about percentages of taxes paid but it seems to be a pretty general consensus that the rich pay taxes on about 2.7 percent of their income.

Lets round that off to three percent (the math is easier and it gives them the benefit of the doubt point three percent) and run the numbers.  That means that my ten million dollar a year person only pays taxes on three hundred thousand dollars which reduces the taxes from being a million dollars a year to thirty thousand dollars.

So, the idea that the rich already pay considerably more than the rest of the population is absolutely true.  In fact, in this example the rich person pays exactly what the other person makes in the year (Numbers I picked by accident, but it is pretty cool numerically).

The problem is that the amount of responsibility each person carries is not proportionate.  In other words I think the logic of all of this is a terribly flawed system.

Picture our economy as a tug-of-war with the rest of the world.  On our side there are small, incredibly weak people, weak people, normal people, slightly strong people and a few massively strong giants that could probably do the tug-of-war match all by themselves.

What would happen if the massively strong giants decide that they do too much of the pulling and decided they should not have to pull so hard.  This few decide to pull using slightly more pulling power than the incredibly weak people are puling with when pulling with all of their might. 

Can you honestly say that the massively strong giants are doing their part?  If the team starts to lose the tug-of-war terribly and the massively strong giants refuse to pull any harder and as a matter of fact complain that they should be pulling less, are they really pulling their weight on the team?

The tug-of-war only works if every person involved gives their all.  If the weaker people are giving their all and the stronger people are just giving some because they are comparing themselves to the strength of the weaker people shouldn’t you look at the stronger people when you are losing?

The few, massively strong people in our economy are not pulling their weight and are refusing to.  We are losing the tug-of-war match and are about to fall over fiscal cliffs and back into recessions and this few is talking about how they already pull more than the rest of us why should they pull as hard as they can.

Now on to the idea that at least this extra money is creating jobs and building the economy, which assumes the giving nature of these people (and corporations) who are already not pulling as hard as they could.

In the case of the big oil companies, record profits (plus 2 billion is subsidies) led to, producing less oil.  The money didn’t go into producing more oil or new jobs etc. (they did do exploration and had some jobs come and go but not substantially more then when they didn’t have record profits) the money went into buying their own stock and into buying political power.

According to the article I referenced earlier, in 2011 the big five oil companies spent $1.6 million on campaign contributions and $65.7 million on lobbying efforts.  Apparently, the only jobs created were in politics.

I am becoming more and more a fan of the idea of a flat tax.  Then everyone in the tug-of-war would pull as hard as they are able and the whole group does its best.  I do believe that there could be tax breaks for groups that are somehow in need, but that has to be a break that is only in place during the time of need.  If you are breaking world records for income, I am not sure a tax break that was to help you when you were down is still a valid use of tax breaks.  I think your need is over and it is your turn to repay those that carried the weight when you were down by taking your turn to carry the weight.

I know the wording has been tweaked a bit to describe “raising the taxes on the rich” and having the rich carry the burden of the economy etc., but I have realized that all we are talking about is bringing things back to where everybody is giving the same amount of effort.  The stronger pull as hard as they can and the weaker pull as hard as they can even though that means the stronger pull with more strength than the weaker.

So, I am starting to realize that this idea of raising the taxes on the ultra rich that the Republican Party is probably the right idea especially when the economy is bad.  I am not saying that I am buying everything the Democrats are peddling right now, but I am starting to see how this one concept is just sensible.

The Republicans’ insistence on getting as close to this “Fiscal Cliff” as possible while sticking to the idea that they will never allow anything that raises taxes on the ultra rich is an astonishing stand on foolish grounds especially since the American people have overwhelmingly voted to show that this is what they want.  If the democratic process has clearly stated that this is what a large majority of the American public wants then why are they letting the extremist arm of their party direct them in this illogical direction that threatens to ruin their party and throw us over this “Fiscal Cliff” (which will raise taxes on everybody including the rich anyhow on New Years Day).

%d bloggers like this: