Friday, December 09, 2005

Tax Cuts and Spending Cuts? Strange Bedfellows.

I just don't get it. Just a few weeks after passing $49.9 billion in spending cuts, the U.S. House of Representatives has now passed $56 billion in tax cuts. The Senate has already passed big tax cuts and spending cuts, so it looks like these things are more or less a done deal.

Can someone help me out, because I'm a little confused - how in the hell does this make any sense, like, AT ALL?

This shouldn't be a political party issue. It should be basic common sense. If I owe a lot of money in credit card debt and have to reduce what I'm spending each month in order to pay it, do I then also quit my second job? Um, no. When one's credit debt is going up, one takes one's medicine and pays it down. And oh - does the U.S. have debt. To be precise,
$8.1 TRIIIILLLLLLLLLLION in debt, and that's according to the Treasury Department, not some spin doctor. Doesn't that deserve our attention? I know tax cuts are "good for the economy" and all, but you know what else is good for the economy? Not having mountains of debt. But hey, don't take it from me. Take it from, oh, I don't know, Alan Bleeping Greenspan.

And hey, if we need to cut Medicaid and money for farmers and college loans for a while so we can get back on track (as the spending cuts suggest), so be it. Wanna take it out of the poor peoples' asses? Hey - you gotta take your medicine. And it's nothing we haven't done before. But you know what? Take it from richer people, too, who are the ones who stand to benefit most from these tax cuts, which largely affect investment earnings. And why not take a look at cutting some spending in the Iraq war, too, on which America spends $177 million per day? Check out the
running total! And check out the government's own findings on its own spending for this war! These are real numbers - and the numbers don't lie.

I'm not saying end the war or keep it going - let's put that separate argument aside for a moment. I'm just saying, can't we cut some spending from it? The GAO seems to think we can. Do you mean to tell me that we are simply unable to look at that $177 million per day and find a way to cut some corners? We can boldly cut debt by reducing some money for college loans, but streamlining or eliminating war costs is simply not feasible? I guess this is a bit of a moot point anyway, since we're CUTTING FREAKING TAXES!

Not to sound saucy, but I feel like my argument is pretty unassailable here. What's the defense? Are we just intentionally robbing poor Peter to pay rich Paul, reducing money for farmers so people will have a few more coins in their pocket, at the expense of mounting debt that every single one of us, rich and poor, will eventually have to face, with ever-increasing peril? Are we not really serious about cutting debt? Do we not know what we're doing? Are we sticking our heads in the sand and refusing to face future economic demons so that some of us can be a little more comfortable right now? Are we just good, old-fashioned hypocrites?

And for my part as a middle-class American who could benefit from the tax cuts, I will stand here and say that, yes, I am willing to pay more taxes if it means helping other Americans and/or containing or reducing the national debt. Isn't that the patriotic thing to do, to borrow a jingoism? I can actually see beyond my own W-2 form and actually find a greater good for my country. As for the lawmakers behind these both-sides-of-the-mouth actions, I must say that they are either intellectually lacking, or intellectually dishonest, or both. Here's hoping some real progress can be made - either in restoring programs or reducing debt - in the future. Here's hoping. For now, both houses of Congress get a big, fat F.


ombudsman said...

This is a lifelong frustration of mine also. Remember when republicans actually stood for something cogent? Reaganomics didn't work the first time, people!

Gary Aiken said...

Public debt is a good thing:
1) financing american expansion across the world (faster GDP growth in US)
2) US debt provides a baseline for credit risk-free asset return which is important in financial markets, pensions, and insurance
3) the purchase of our debt gives foreign countries and other purchasers a reason to ensure our own success (they want us to pay it back at a later date)
4) cheaper than raising taxes when compared with effect on GDP
5) not that bad when compared on a percentage of GDP basis given historical averages

If we're really concerned about debt in the future, we need to take care of real future issues:
1) health care costs
2) pension costs

You can't put a price on National Defense. That's not a fair argument. Also, that's a constitutionally mandated appropriation (whereas some other spending is not)

MSH said...

Fair enough, Aiken - I see some of your points, especially with health care and pension. But while a little debt is good, too much is bad. Alan Greenspan's got my back on this one.

Also, you CAN put a price on national defense - $177 freaking million dollars a day! I'm not saying dismantle the military - but you're seriously telling me we can't audit that number and tighten up our spending a little bit? Pshaw. That sounds like party-line talk to me. What's not fair is dictating what can and can't be examined in a fair, unbiased, and clear-eyed way. But I see some of your argument, and you make some valid points. Thank you for commenting, sir.

ombudsman said...

It's debatable whether or not having other countries buy up our debt is a good thing. In this case, my understanding is that China is the primary purchaser, which effectively places us in a submissive position to Asia's most powerful economy. And then there's that whole business of spreading freedom: If you assume that much of our debt is tied to the war, then, in effect, we are borrowing money from one authoritarian government to finance the ousting of another.

Train Wreck said...

Aiken - Our trade deficit has grown to something unbelieveable amount. And this is the 29th year in a row that we've been running such a deficit. ALL economists agree that this is a bad position, despite the fact that GDP is up (though not really, when adjusted for inflation).

What is just NUTS is that the spending cuts aren't geared towards things like stopping the bridge to nowhere. No, it's cutting damn food stamps, medicaid payments, and help for student loans. It is actually HITTING the poorest. The tax cuts, on the other hand, are given specifically to rich people. It's not a decrease in the general income tax, it is a decrease in tax on cap gains - allowing rich people to invest in other rich people.

John Rawls said "Justice is Fairness" and this ain't fair AT ALL.