Wednesday, August 24, 2011

Just Hanging on the Porch Waiting for My Bailout

Story Book Cottage, Ashville
Republicans are finally talking about raising taxes, but unfortunately, they're talking about raising taxes on working folks who used to be the middle and lower classes.  These same folks are rapidly being reduced by the economy to the lower and the no-place-to-go-from-here classes respectively.  When asked to justify this, they will point to the enormous number of Americans who are paying no taxes right now, and say, "Everybody should be paying something."  Otherwise, the saw goes, it's too easy for those people to have the wrong ideological opinions about how tax dollars should be spent.  If it's your own money, you'd be more cautious.  When it's other people's money, not so much.

The thing is, all these people who are paying little or no taxes are paying something else.  It's just not in cash.  Instead of sacrificing money, the poorest are sacrificing medicine.  They are sacrificing food from their tables.  They are sacrificing new school clothes for their kids in September.  Those who used to be middle class are now sacrificing evenings out to dinner.  They are pushing that new car off a few more years.  They are taking a short sale on their underwater homes and a hit on their credit.  Followed by the humiliation of downsizing into a rental place and the despair of losing the most important of American Dreams - home ownership.

It is really easy to sacrifice a little money when you have it.  It is much more difficult to be asked to make the kind of choices many Americans are facing today.

Those proposing raising taxes on those who are hurting most are wrong-headed.   Because people who are financially disabled are also people who aren't making enough money to properly feed, clothe and get medical care for their families right now.  Not to mention, they contribute less to the country's economic engine.  What I mean by that is that demand fuels production.  If stuff isn't flying off the shelves - if you've been into a big box store lately you will have seen many empty shelves - less stuff gets made, less of us are employed.  It's a vicious circle.   And that's the vicious circle carrying America down the tubes right now.  While I figure we'll come out of it one way or another, in the meantime, real illnesses aren't getting treated, real children are going hungry, real lives are going down the toilet.  And when we do come out of it, I predict we will look much more like a third world country than we used to a couple of decades ago.  Those of us who have lost jobs, opportunities, savings - our lives will look permanently like something less than we had, something less than we'd dreamed or expected as citizens of the world's greatest country.

The same people who claim that we should be raising taxes - on folks other than themselves - also cling steadfastly to the "trickle down" idea.  For anyone who doesn't know what "trickle down economics" are - if there is anyone who still doesn't know, the likelihood of them being here, reading this blog post is probably nil - it's the concept that if we leave rich people with their money, they will do what they do best, which is invest it into new businesses, etc.  Which, in turn, will create new jobs.  Which in turn will spread some additional wealth.

The problem is, there is every evidence that trickle down will not help America.  First, for awhile now, it's been fiscally fashionable to start your businesses overseas.   All that trickling is creating jobs in India, China, Brazil, you name it - anyplace but the good old U.S. of A.  The boldest front for corporate growth is overseas, where trickle down has morphed into a water fall, and as a result, the standard of living in countries attractive to corporate investment is rising even as ours is falling.  Hey, I wonder if there's a correlation.   If you haven't bothered to click on any of the alternately-colored type - these are links that take you to sources that prove my point so you don't think I'm making all this up - please click on this one, which says U.S. companies are giving up on American consumers. 

I try to find my data, by the way, at conservative fiscal and reporting institutions so that my R friends don't get all caught up in attacking the source.

The second piece of evidence is that many corporations are simply sitting on corporate wealth.  These are the more cautious companies, afraid to invest even in the profit fields of China and India, because the entire world economy feels so shaky.  Even if you believe trickle down works, if the wealthy aren't investing, then trickle down doesn't stand a chance.

So, to get to my point.  The smart way out of this mess would have been to give the approximately $3 trillion dollars in bailout moneys so far distributed ($11 trillion committed) directly to consumers.

By the way, isn't $11 trillion the approximate amount of deficit this country is sporting??

Many consumers are hungry.  They want to put their kids in cool extracurricular activities.  They want to cruise the Bahamas or hike in Sonoma.  They want new pick-up trucks, new landscaping, new kitchen cabinets.  They  would have spent, spent, spent.   And think not only of the instant spending, but of the indirect ramifications of so much pent up demand being satisfied.  Jobs, jobs, jobs - particularly if we put some serious taxpayer dollars into a hard-sell Buy American campaign.

Or, just think if we would have given a one-time free pass to homeowners in trouble with their mortgages.  One million homes were foreclosed on in 2010 alone.   I don't have time to add up the entire number since 2006, when the mortgage crisis hit full tilt.  The banks wouldn't be holding a shocking number of foreclosures on their books.  Mortgage payments would have been made.  The housing market would have kept more of its value.  Hundreds of thousands of Americans would still have good credit, enabling them to continue to buy the things they want to buy.

But no, we bail out Wall Street, and the automobile industry, and the airlines and... and... and... all on the basis of trickle down.  Or the "too big to collapse theory," just another wrong-headed rationalization for supporting the mega-corporation instead of the human being.  Ok, if you must know, it's a theory resulting in taxpayers giving blood to prevent a domino collapse of overly interdependent financial institutions.  Bad news. Or necessary for economic correction.  Depending on who you ask.

I say, bail out the little guys.  I will be the first to sign a contract to use the money to buy American.  Do not raise our taxes.  That just hastens the demise of our economy....  If anyone asks where I am, please tell them I am hanging out on the front porch, waiting for my bailout check to arrive.  I've picked a pleasant spot to wait, because I'm gonna be waiting a long, long time.

No comments:

Post a Comment