Storm in a T-Cup

The bluster over Grover Norquist and the tax pledge that he forces all Republicans to sign is not over. The Master of the Conservative Universe is throwing his weight around once more. In the previous Congress, nothing was done to alleviate the Republican-induced recession, due to the intransigence and obnoxious behavior of the duly elected Tea-Party.

Grover Norquist

Grover Norquist

The Tea-Party refused to consider raising the debt-ceiling, which could have forced the United States into debt default. They also refused to raise taxes on anyone, regardless of the reason. The mastermind behind this increasingly anarchic behavior was the aforementioned Norquist.

The storm clouds on the horizon heading towards the end of the year relate to the inaptly named fiscal cliff. During the last two years, lawmakers agreed on a program of cuts in spending across the board and the expiration of the Bush tax cuts. The President has said unequivocally that he will not extend the Bush tax cuts unless the tax cuts for those earning over $250k are allowed to expire.

Allowing the tax cuts to expire for people earning many times the income of average Americans should really have been a simple proposition. Over the past three decades, income has stagnated for average Americans, certainly for the eighty or ninety percent of Americans that find themselves on the low income curve.

Americans finding themselves in the top one percent of earners have seen their income rise at a rate over ten percent a year, and more. Earners in the top 0.1% ahve seen income rise at a far greater rate. The gap between those at the bottom and those in the 1% has grown rapidly. The gap between the top one percent and the top 0.1% has grown at an even greater rate.

What this means is that the extremely wealthy have taken an ever greater share of income for themselves at the expense of their workers. At the same time, they have cut back on benefits, vacation days, and medical insurance. They have also increased the hours they demand from workers, and the number of days at work. They then claim a dramatic increase in productivity.

Despite what they have taken away from their workers, and that includes forcing them to train foreign workers and moving their jobs overseas, They claim that they deserve what they have because they worked hard. What really happened was that they forced their workers to work harder, benefitted from the increased productivity and profitability, and increased their own take home pay. To add insult to injury, they often laid off their workers by claiming that the workers were to expensive, even while making large amounts of money themselves.

Due to many of their excesses, the economy entered a severe recession in 2008. Average Americans lost their jobs, the mortgage market collapsed, which caused many to lose their homes, the stock market plummeted taking their savings with it. The wealthy naturally blamed the average worker for speculating in the mortgage market.

Banks were bailed out to the tune of a trillion dollars or so. Those same banks refused to lend to people who used credit to maintain cash flow, or needed credit to purchase homes. As the job market tightened, people were no longer able to find jobs, or pay their mortgages, or medical insurance. The banks who just a few months before were lending to anyone that had a pulse, closed their doors, despite the fact that they were being bailed out. In the years following this bailout, banks made record profits, on the backs of taxpayer bailouts.

This is where Grover Norquist comes in. The most important issue facing Americans, according to him, is the deficit. Americans are spending too much. Therefore, the only thing to do is cut public spending to the bone. In addition, he wants to cut taxes for those millionaires and billionaires. This is what he believes will spur economic growth in this economy.

The cuts that he wants to public spending will throw millions of Americans out of work just at the time that the job market is at its weakest. They will be unable to find work, which will only exacerbate the situation, and burden the unemployment insurance system with even more claimants. Those people will no longer be earning, and spending to help prop up the economy. The treasury will no longer be able to rely on receipts from those people, or the businesses that rely on their purchasing power.

The tax cuts Norquist wants for the wealthiest Americans will drain even more revenue from the treasury, creating an even larger deficit. The problem will not get better, it will get much worse. He likes to claim that if the wealthy are given tax cuts, they will create businesses, and employ more people. If unemployment is high, and people are unable to find work, they will not have the income to spend in those businesses that might employ people, so it does not pay businesses to hire people.

Business only hires when they have a reasonable chance that customers will walk through their doors and buy their products. If unemployment is high and people have no money, they will not buy. It follows that business will not create jobs because they do not have customers. The cutting of government workers has eliminated an entire sector of consumers that no longer purchase goods they cannot afford.

There is a simple way out of this conundrum, and it is something that conservatives here in America and in Europe have yet to understand and implement. You cannot cut your way to growth, there is only so much that can be cut, and at some point you have to create the conditions for growth or your economy will collapse.

The solution is quite simply to tax the money. There is a saying in cop shows on TV. Follow the Money and you will find your solution.  What conservatives want to do is broaden the base, which really means taxing people who already have nothing, in other words, those at the very bottom, who don’t pay income tax. Well, they don’t pay income tax because they don’t earn enough to pay taxes.

The people who have taken far more than their fair share are not the poor, those living in poverty or on a social security check. The greedy among us are the wealthy, and especially the super wealthy. They paid vast sums of money to finance the campaign of Mitt Romney because he was going to lower their taxes. Over the past three decades, they have taken far more than they are due, and pay one of the lowest tax rates in history.

The idle rich need to pay their due. They have lived the high life without doing the back-breaking, mind numbing work that far too many Americans are forced to do, or starve. They have accrued wealth beyond the wildest imaginings of the average worker, and yet many of these money grubbers deny their workers health care, or education, or decent living conditions, and they do it by financing candidates like Mitt Romney.

The president and Congress are going to start negotiating over a four percent tax increase on the wealthiest Americans,and you would think that he was proposing to take everything from them. They should be paying vastly more in tax, and they whine and complain over being asked, not told, to pay a little more.

The tax code should be even more progressive than it is. I would propose that those earning over $250k be taxed at 39%, those over $2.5m at 45%, over $10m at 50% and so on up to a maximum of 90% on incomes over $100m per year. This money can then be used to fund schools, bridges, roads, ports, airports, green energy, firefighters, police officers,teachers, and scientific research.

I would not be asking the wealthy to pay a little more, I would be telling them what they are going to pay. It is time that government stopped making life so difficult for the very poor, that they created, yes government created, jobs for the poor and middle class, good jobs, with the chance of advancement. It is demeaning for people to have to spend their twilight years, and often much of their adult life working in the hospitality industry when they could be working on good manufacturing jobs, or science, or teaching the next generation.

This will not happen. The President will bow to pressure and raise the top rate to 39%, and accept cuts to programs across the board. The poor as usual will be asked to shoulder the greater portion of the burden of reducing the deficit.

There are so many important things that need to be done, and reducing the deficit is not one that should be handled now. Jobs are important, getting people back to work, regardless of what they are doing. Keynes was right, bury money in mines and pay people to dig it out. It gives people work, a sense of purpose, a feeling of importance. How important do you feel slapping food on someones plate day after day, year after year?

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