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A Different Take On The "Fiscal Cliff"

Posted by MacZad
Nov 24 2012

The "Fiscal Cliff" is a current hot topic with CNBC even moving from news reporting to mounting a "Rise Above"advocacy campaign spreading fear about what will happen if the problem isn't resolved by 1/1/2013. Other media are equally concerned about the need for action prior to falling off the "cliff," and most of the suggested solutions call for "shared sacrifice" - some kind of a balance between spending cuts aimed mainly at social programs and tax increases.

Well, I think that the media is spewing a lot of propaganda favorable to the very wealthy. First, the "cliff" really isn't one. Nothing drastic is going to happen on January 1 if no agreement is reached; there will be adequate time to make changes after that. Second, and far more important, the real causes of the crisis are being obscured and the solutions being considered aren't equitable.

What is going on here is a rear-guard action by those trying to maintain their favorable tax and policy treatment at the expense of the less fortunate. My Rise of Inequality Since 1980 posting clearly shows the almost unbelievable increase in income and wealth share enjoyed by those at the top mainly because of the favorable tax and policy treatment that their K Street lobbyists have secured for them. Over the years this has drastically reduced federal tax revenue making it a very significant factor contributing to the "Fiscal Cliff."

Now, to maintain as much of their advantage as possible, those at the top are proposing "shared sacrifice" where they grudgingly agree to a small tax increase (means a 95 ft. Yacht instead of a 100 ft. one) and poor Joe Schmo, who has worked much of his life shifting pallets around in a warehouse, is asked to give up some of his SS retirement - or some other sacrifice. Unfortunately, the conservative media (Fox News, et al) have done much demonizing of folks at the bottom like poor Joe erroneously casting them, rather than the tax avoiders at the top, as the main reason for the federal government's poor fiscal shape.

I'm sorry but making sacrifice by Joe a first step in a solution just doesn't wash with me. I know that this is naive, but the first order of business needs to be drastic changes in the tax code to get those at the top paying much more in taxes (means only a 75 ft. Yacht instead of a 100 ft. one) so as to begin to reverse the inequality that has arisen since 1980. That inequality is very unhealthy for our society as Joseph Stiglitz shows in his perceptive book "The Price of Inequality." Joe Schmo isn't a "taker;" he has worked hard all his life to earn those benefits. He should only be asked to sacrifice if the tax receipts from drastic increases in the top tax rates, making the use of offshore tax havens more difficult and perhaps the removal of the cap on SS contributions fail to produce adequate revenue.

The wealthy and their many apologists will say that such drastic increases in the top tax rates will kill motivation, innovation, investment and growth, but that's just more Plutocratic propaganda as the links below show.

Except at a very basic level motivation and innovation are not driven by $$. Big monetary rewards are only incidental to successful innovation not its cause.

The Congressional Research Service reports that a 65 year study shows that better growth has come when the top tax rates were the highest and that cutting top tax rates doesn't spur growth. (GOP legislators tried to suppress this report.)

How about all that investment by the wealthy that creates jobs? Paul Buchheit's #1 pretty well debunks that; there are some other interesting statistics on Paul's page as well. Further, the slow growth in the economy and jobs today is not due to a lack of investment $ to fund business expansion it's due to a lack of demand for products because not enough folks have the spare $ to spend. See: Who creates jobs? Surprise- we do.

The common viewpoint is that business and economic growth do better under GOP administrations and GOP policies, but this Forbes article shows the reverse to be true.

So all of the Plutocrat's arguments favoring the GOP's support for low taxes on the rich are nothing but false dogma. The acceptance of these ideas as truths is very detrimental to the country for our legislators can't make intelligent decisions based on falsehoods. Much pressure needs to be applied to our GOP legislators for it will be very difficult to get them to abandon this long-held dogma and help craft a solution to the "Fiscal Cliff" which does not place undue burdens on Joe Schmo and his ilk and which begin to reverse 30 years of inequality.

Some good supplemental information in these links:

YouTube Straight talk from Independent Senator Bernie Sanders Terrific! (Updated 11/25/2012)

Chart - Simplifies the Fiscal Cliff Resolution Choices (Updated 11/29/2012)

5 Ways Most Americans Are Blind to How Their Country Is Stacked for the Wealthy

It's Simple: Cutting the Deficit Will Kill Jobs and Hurt Growth; Taxing the Rich Won't

The U.S. Does Not Have a Spending Problem, We Have a Distribution Problem

The Giant Lie Trotted Out by Fiscal Conservatives Trying to Shred Social Security

Why the rich guys want to raise the retirement age.

YouTube animation of the Deficits & the Debt


Categories: Opposing Plutocracy and Corporatocracy, Seeking Better Governance, Seeking Truth - Debunking Dogma