I was suprised when congress voted down the bailout Monday. But, the bill is back, and this time it's even worse! I'm pretty much a single issue voter on the matter of the federal debt, and this new package includes 150 billion in tax cuts for businesses and high income households (in the form of raising the alternate minimum tax). The fact that 70+ senators voted for this atrocity is a testament to who they truly serve. Hint: It's not you and me.
The house republicans will instinctively salivate over tax cuts. I'm hoping that a few democrats who voted for this bill will flip to opposition, but I doubt it... I suspect there will be high torque arm-twisting.
My congressman, David Price, voted in favor of the bill Monday. I've never voted for a republican in my life (well, except once in a sheriff's race), but Price has just pushed me to vote for his opponent, William Lawson, who opposes the bailout. I'm writing to let him know this of course. If we, the public, put these crooks back in office after this robbery, we deserve our impending bankruptcy.
Subscribe to:
Post Comments (Atom)
Posts
6 comments:
I would have little problem if the so-called bailout were a simple business proposition -- buy mortgage-backed securities, wait until the market stabilizes and sell them for a profit. But I don't think the federal government would know a good business deal if it bit it on the toe.
If buying these tranches was a good business deal, then private investors would be snapping these things up. This bill is the most horrifying action I've ever seen the government take. A handful of wealthy, well connected men are looting the American treasury by holding a gun to the head of the American public--give us this money, or we'll fill you full of great depression lead! This is both democrats and republicans coming together to line the pockets of their true constituents, the obscenely wealthy.
Compounding the despair is that both major presidential candidates are so gung-ho for this deal. They've proven their loyalties with this action. The next eight years are going to bring more of the same--government of the looters, by the looters, and for the looters.
Well, fear has an impact on perceptions of value. While mortgage-backed securities are probably worth more than people think, they're inherently problematic because one can't ascertain their fundamentals (e.g. the likelihood of repayment).
James, what's your thought on raising taxes in order to combat the deficit? I'm no fan of massive debt, but I also don't think that opening my coffers to the government is particularly good (or patriotic, for that matter).
My libertarian instincts are to support reduced taxes in almost all circumstances. Taxes just feed the beast, in theory. But, as much as I'm opposed to tax and spend policies, I'm even more aghast at borrow and spend policies. Americans are enjoying the benefits of wars, pork, and bureaucracies without paying for the actual cost of these things--rolling the cost forward to future tax payers. McCain says we can cut pork and fix this (for the sake of arguement, let's say this will save 20 billion a year). Obama says we can save 10 billion a month by getting out of Iraq, though, in his fine print, he's still leaving a large residual force in Iraq, and sending more forces to Afghanistan, so his actual savings would probably be more like 5 billion a month--60 billion a year.
So, let's do both--that saves 80 billion a year. But, before this bailout, we were running budget deficits in the neighborhood of 300 billion a year. Thanks to this bailout and the economic downswing, this year's deficit could be over a trillion dollars. 80 billion in savings doesn't solve this thing.
So... unless our plan is to eventually default on our public obligations, we need to collectively be paying taxes at a much higher level.
Tax increases that make sense to me:
The payroll tax for Social security stops at 102,000. So, if you make 102,000 per year, you pay roughly 6200 in SSI taxes. If you make 204,000 a year, you pay 6200 in SSI taxes. If you are Ross freakin' Perot, you pay $6200 a year in SSI taxes. Remove this cap! The justification for it is that the benefits max out at a certain point. I.E, Ross Perot is only going to be paid the same monthly benefit as the guy making 102,000 a year. Well, gosh, that sucks for Ross, doesn't it?
Tax marajuana at the same rate we tax cigarettes. Of course, to do this, we'd need to legalize this drug. Do it. Let farmers grow a crop that wouldn't require subsidies, let the closed factories around the US that used to make cigarettes start rolling joints, and merrily tax every step of the process.
Tax stock transactions. This happens nearly in all other markets around the world.
Remove the barriers to immigration and legalize every immigrant who can land a job: Right now, there's an underground economy of 10 million workers or more that could be paying much, much more in taxes than they currently do. The people are already in the same boat we're in. Let's give them oars.
This still probably wouldn't get us out of the hole, but it's a starting point.
And of course, none of this will mean a thing if we increase tax revenues 300 billion a year and increase spending 600 billion a year, which is what I fear will happen.
If this trend continues, at some point, America will be bankrupt. I don't know what the tipping point is. Let's scale the american economy down to the level of an individual. This year, American will collect about 2.6 trillion in tax revenues. Let's scale this down by knocking off 8 zeroes, and say that America is a guy working at Walmart making 26,000 a year. The federal debt is going to about 11 trillion after this bailout. That means our walmart worker is in debt to the tune of 110,000. This strikes me as a fairly high to have a debt to income ratio of 400%. It's not like the walmart worker can throw every penny he earns at his debt. If you knew this guy personally, you'd probably recommend that he look for a second job and cut up his credit cards.
So, I guess there is the option of having America look for a second job. I hear that Iraq is running budget surplusses at the moment. Let's make it a state!
I never *truly* thought that the overwhelming indignation of voters and the accumulated derision of academic economists would be enough to defeat this thing, and of course, it wasn't.
My congresswoman Debbie Wasserman-Schultz (D-FL) voted for this not once but twice, and despite the fact that I share many of her views on other matters, I must now carry out the threat I made to her that I would never vote for her again.
My Democratic senator, Bill Nelson, sent me an email praising the bailout, and repeatedly told his constituents that we needed to take action . . . then voted against the bill on Monday. Either he read his mail or simply thought the thing through; either way he gets credit from me for what I see as a courageous change of heart.
While I can (sort of) understand a Democrat voting for this package, I am absolutely incomprehending of any Republican voting for it. The GOP is after all the party that gives so much lip service to free-market forces. So that is why my Republican senator Mel Martinez' yay vote makes so little sense. Like McCain and Palin again last night, he betrays not only his constituency but his party on the matter.
This vote shows the true mismatch between what republicans say and what they do. McCain is out there running against bridges to nowhere and ethanol subsidies, but he's willing to vote for the single biggest boondoggle ever; not just vote for it, but champion it, working to get it passed! Last night, every time Sarah Palin called him a maverick I screamed at the television. He's about as maverick as a lemming. But, I was yelling at Biden too--he kept talking about the 4 billion McCain was giving away to oil companies, one day after he had voted on this trillion dollar mugging. And he also harped on all the Bush policies that McCain had supported--when with one single vote he and Obama had proven that they are as loyal to the same masters as Bush.
I'm just numb at this point. But, I know what I, personally, intend to do about it. I'll start a new post to announce my plan.
Post a Comment