"Handful of Senators Don't Pass Legislation": Tax Cuts, Unemployment Benefits, and the Post-2010 Dispensation

I gather that President Obama is opting for a compromise in which long-term unemployment benefits will continue, but so will the entire spectrum of Bush-era tax cuts. I won't criticize the president harshly for this compromise; I will instead do some simple-dino thinking out loud, set (if you like) to the background music from "Eve of Destruction." I opine that there are two ways to look at the matter -- which seems best?

1. Thanks to our predictably dim-witted, memory-free electorate, the GOP now has a much stronger hand and is essentially blackmailing the entire country to benefit its own prospects for 2012 and the tiny sliver of ultra-wealthy citizens that is the party's main purpose for existing at present. Faced with such prospects, the president might be viewed as having acted appropriately and compassionately. Sure, it adds to the deficit/debt problem to the tune or almost a trillion dollars and will eventually give the conservatives an even stronger hand when it comes time to ELIMINATE all those annoying social programs ordinary people need. But it's still what I called in an earlier post "keeping a declining republic going with baling wire and chewing gum." It's either that, one might say, or run with the prospect of letting the country fall apart right in front of the current generation's eyes.

In this view, all those brilliant so-called liberal or independent voters who stayed home last November "to send a strong message" have nobody to blame but themselves, the Blinking Idiots of America. If you're amongst that honorable assembly, I've got your message right here, channeled (as near as this dino can attune its liberal sensibilities to the appropriate frequency) straight from the Grand Old Party: "If you don't have a net worth of at least eight figures, we don't care what happens to you, now or at any other time. Go straight to hell, you twenty-first-century peons, and don't bother sending us the bill for the trip."

2. President Obama might have done best to let the cuts expire, then strongly and continually advocate the proposal and reinstatement of working-class and middle-class tax cuts and an unemployment benefits extension, all the while excoriating congressional Republicans when they resolutely refuse to help millions of people whose well-being is of no interest to them. This is a difficult and painful path, especially since, if I understand the process correctly, come January House Democrats will no longer be able to drive the legislative agenda. In that body, the Republicans will have the main say in what gets proposed and voted on. The most likely scenario is two years' worth of gridlock. The up side of this strategy would be, of course, that at least the GOP would come under intense pressure not to do the worst it is clearly meditating to do. What I'm describing is something like Bill Clinton's gambit against the shutters-down of government back in the 1990's. It worked pretty well for him, I recall -- the conservatives backed down because people rightly blamed them for their juvenile temper tantrums and stalling tactics while people suffered. The president's hand might be very strong in such a case: "Do something! Stop arguing about what did or didn’t happen last month or last year! Do something, you mean-spirited rotters!" It's exactly the sort of blinkered-historical-vision, short-term, bark-it-up strategy that Republicans themselves are so good at (as when they call liberals "whiners" for reminding us that Bush 43's mistakes are partly the cause of our current troubles) -- why not turn it against them for a change to do the people a good turn?

The Bush Tax Cuts vs History

The Trophy Wife is currently reading The Road from Versailles by Munro Price. Subtitled, in case you're a completist, Louis XVI, Marie Antoinette, and the Fall of the French Monarchy - you know, the French Revolution. We read stuff like that: her more than me, to be honest, but there you are. It's important to understand history.

Let me just quote a little from the first two pages of Chapter 3 (typed in with my own bleeding fingers, I'll have you know).

The monarchy that Louis XVI embodied at the opening session of the Estates was still a grand if somewhat dilapidated edifice...

Below the king and the royal family, French society, like that of all continental old regimes, was divided into a hierarchy of orders, known as estates. Each one was legally defined, and had its own rights and duties. The clergy ranked as the first estate... they were not taxed directly, but instead voted a don gratuit, or "free gift," to the crown at their five-yearly assemblies.

The nobility, too, the second estate, were subjects of the king... True, the nobility were exempt from the main direct tax, the taille, but from 1695 onwards, they had been subjected, along with everyone else, to a succession of income-based contributions...

Below the clergy and nobility stretched the third estate, composed of all lay commoners... the bulk of its members comprised the urban working class and, above all, the peasantry, who made up fully 80% of the French population. Socially, politically and economically, it was the third estate that paid the price of the unspoken bargain between the monarchy and the privileged orders. Its members bore the brunt of taxation...

Can we talk about the expiration of the Bush tax cuts for the millionaires now?

SHOCKING INCOME INEQUALITY REPORT DROWNED BY MEDIA NOISE

As our mainstream media continues to abuse us with nonsensical blow-by-blow accounts by blowhard headline-grabbing louts, this story received scant attention:

Scary New Wage Data

As millions of Americans lost jobs, homes, and life savings in the Great Recession of 2009, the highest-paid earners saw their average incomes rise more than five-fold in a single year. According to new data, the 74 highest income earners – the uppermost income bracket as measured by the Social Security Administration -- saw their average incomes skyrocket from $91.8 million in 2008 to a staggering $518.8 million in 2009:

These 74 people earned an average of $10 million -- per week. Meanwhile, half of all American wage earners, or about 75 million people, earned less than $505 per week.

An abrupt change in tax and economic policies started under the Reagan administration, conflated by Bush era tax cuts, made this possible. Three decades of Reaganomics have crippled the base of the income ladder while adding a burdensome weight at the top. The result is an unstable and unsustainable structure awaiting collapse.

Meanwhile the Republican Party and their tea party rabble are clamoring for more tax cuts and an indiscriminate dismantling of the social safety net for middle class Americans.  If our mainstream media had done a better job of informing the public, perhaps voters would be making more intelligent choices this November.  Fat chance!

Kill the cuts

There seems to be a difference between the ultra right as represented by Ayn Rand disciple and 'free markets cure all ills' cult leader Alan Greenspan, and the ultra right as personified by the rabble rousing opportunists who feed the vernacular conservatives of America. Dilatory though he may be in admitting that free markets are no more free or self steering than a car without a driver, he's none the less not as retarded as people who claim to see Russia over the horizon, staple tea bags to their hats and shriek about tax increases they didn't get. He does, albeit slowly, question the ad hoc axioms upon which he bases his theories and thus, through doubt, he thinks, he learns, he changes.

Amidst the tumult of irate e-mails calling President Obama a liar for personally having raised the cigarette tax ( a tax is a tax, after all ) and a communist for unleashing THE BIGGEST TAX INCREASE OF ALL TIME, which actually is nothing of the sort, it's refreshing to hear Greenspan utter:

"I am very much in favor of tax cuts but not with borrowed money."

What he's dismissing is the lifeblood of Republican economic policy and has been at least since the Reagan administration: tax cuts pay for themselves. It's policy that along with a huge increase in government agencies, military spending and a war now having cost more that World War 2 was supposed to be paid for by tax cuts, but failed. It was paid for by borrowing from foreign sources with our independence as collateral.

A rational person must have noticed by now that it doesn't work and never has worked and virtually always precipitates a recession. An irrational man, a Fox man, a Conservative man, even a Libertarian man, chants liberaliberaliberal, constructs straw stuffed scapegoats and tries to distract us with fairy tales about the President's religion and parentage.

"The problem that we've gotten into in recent years is that spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day that proves disastrous."

said the Former Federal Reserve Chairman on NBC yesterday. It's axiomatic in our new propaganda soaked world that fixing a problem is far less effective and more expensive than hiding it under foamy lipped hysteria, and so the tax cuts that were designed to expire this year by the Republicans who wrote them into law, become a surprise betrayal by Obama. Those liberals are betraying us by following the law we wrote!

The tax cuts, that if renewed will cost us $2.2 trillion to $3.8 trillion over the next decade and put us that much further in debt, since no, they will not pay for themselves as has been demonstrated but will further impoverish the nation but to the benefit of a handful of people and corporations. But that debt must be thought of differently than any debt incurred in extending unemployment benefits and the glaring hypocrisy must never be acknowledged. For are we not conservative?

"You don't agree with Republican leaders who say tax cuts pay for themselves?"

asked David Gregory on Meet the Press.

"They do not."

was the emphatic reply.

$108 MILLION INCOME … TAX-FREE!

Jamie and Frank McCourt made $108 million from 2004 through 2009 but paid no federal or state income taxes. The secret lives of the rich and infamous came to light when the couple filed for divorce in Los Angeles County Superior Court.  According to Michael Hiltzik of the LA Times:

The court papers indicate that the McCourts deliberately structured their business at least partially to allow them to live tax-free ...

According to Jamie, the McCourts employed two mechanisms to live tax-free. One was to claim enormous tax losses from their business, which was mostly commercial real estate before they bought the Dodgers. These could be carried forward, offsetting income year after year until they were finally netted out ...

Depreciation is a non-cash expense that can be applied against cash income, reducing your income taxes or creating a loss to show the tax man, even though you're making money. It's common in real estate, though it can also be applied to things like a sports team's player contracts ...

Another McCourt maneuver involves financing and refinancing their assets. The tax rules allow real estate owners to refinance properties with rising values and take out cash tax-free ...

The McCourts have also borrowed against future business income -- in 2007 they took out a $140-million loan against future Dodger ticket sales, of which $20 million went to fund their lifestyles, tax-free.

According to court papers files by Jamie McCourt, Frank manipulated business accounts to make himself look $670 million poorer than he is. Cheating the IRS may be legal, but ...

Heaven has no rage like love to hatred turned
Nor hell a fury like a woman scorned.

Perhaps our good friend and honorary cephalopod, AZRainman, should have the last word …

Credit: AZRainman