Thursday, June 30, 2011


What's interesting in the GOP's opposition to all tax increases--including even closing loopholes in the current tax structure--is the unspoken assumptions in such statements.

The fundamental assumption is this: "Taxation is theft." Kind of like Karl Marx's "Property is theft" assumption. And of course if taxation is theft, government is the thief. The unspoken corollary is that government exists to take money from hardworking white people and give it to lower-class white slackers along with blacks, Mexicans etc.

A second corollary is that government is way too large--that nearly everything government does could be done more cost-effectively by for-profit private businesses. And that the average government employee is a lazy white slacker or a lazy black or Mexican--that the tern "dedicated, patriotic, hardworking government employee" is an oxymoron.

A third is that rank and file American Republicans will benefit more from reducing the size of government drastically than it will lose by the consequences of America threatening to default on its debt obligations--even though those debt obligations are to a great extent the consequence of a Republican President's two terms and a Republican Congress's eight years, 2000-2008, during which they spent like drunken sailors and cut taxes at the same time, incurring obligations that are now due.

These assumptions are supported by cherrypicking government expenses to "prove" the claim that government = bad government. Take America's infrastructure. The Republican Party's dream is apparently India, which has an abysmal, creaky, underfunded infrastructure.

This dystopian ideal is support by bogus examples, such as Amtrak. It costs more than it brings in. As do all passenger railroad lines in all other countries. What this "fact" fails to note, though, is that roads--most of them free--also take in far less than their zero revenues produce. Or that the airline alternative doesn't include the cost of the massive air pollution caused by airliners, or the air traffic control system's costs, or the infrastructure required to support every airport--or the fact that air travel is likely to become exclusively a luxury item as fuel prices steadily increase, due in part to declining oil resources, increasing cost of extraction as lower-grade sources are used, and competition for oil resources from China, India and elsewhere.

Typically business try to avoid paying for the costs imposed by their doing business--like, when's the last time a coal company put back the mountains it blew up to get the coal? Never. Nor do consumers pay directly-but they always do indirectly.

The Republican ideal, then, is the Potterville from "It's a wonderful life" (the Frank Capra movie starrring Jimmy Stewart magically visiting what his town would be like if he'd never been born and the greedy, soulless banker Mr. Potter succeeded in taking over the town). In Potterville everything's on an a la carte basis. You only pay for what you use--but when you need it you pay monopoly prices, because all unregulated business becomes a monopoly. Always.

And if you're so immoral as to not be able to pay, well, why should the immoral have a safety net? Go into the forest and die. Oh, wait. There is no forest. Well, a ditch somewhere will do.

This kind of cynical idealism fights the facts, though. Currently we have the lowest tax rates in America since 1950. In the 1950s and 60s the highest marginal tax rates were in the 70% range--and we had the highest rates of job growth and income growth. The lowest rates of job growth were during the Bush II which coincided with the lowest marginal tax rates in this period, and income for most besides millionaires and billionaires has been flat at best when adjusted for inflation, and has declined for blue collar workers who have to compete with illegal aliens for jobs.

Side note: the real benefit of illegal aliens for the GOP is that they have unintentionally destroyed blue collar unions in America--one of the main sources of funding for the Democratic Party, while the GOP's main source of funding--billionaires--are the one part of our demographics that have thrived.

We also have the second lowest tax rates in the industrialized world (after Japan).

And a keystone of America's leading position in the world is the underlying solidity of our economy. People all over the world buy our T-bills because they're so trustworthy. We have never defaulted on our obligations. And by even threatening to risk a default, the GOP risks degrading our position in the world--permanently. 

Every business has an intangible, "good will," that's hard to quantify exactly--but affects the business's ability to secure funds--sometimes decisively.

Other nations don't give a rats' patootie about our internal dogfights. They care whether they can depend on the stability of the dollar, our T bills...on the certainty that we always pay our bills. Always.

A business--and a country, in its business aspect--depends on its name being worth something. And that name, once tarnished, often never regains its former luster. Think of how you feel about a manufacturer once you've bought a lemon from that company.

It is unconscionable for the Republican Party to use America's name--its trustworthiness--as a bargaining chip, whether you agree with the goal of that bargaining or not.

If we go into default, it will damage our economy more than 9/11 did. But by even threatening to do so, other countries are already starting to look re-evaluate their business dealings with us.

What would you think about an acquaintance who singlehandedly drove your credit score from, say, 750 to 600? To 300? Would him saying it was for you own good in the long run change your feeliings about him?

Think about it.

"Taxes should be as low as possible--but not with borrowed money."
--Alan Greenspan, today


The 14th Amendment of the Constitution of the United States of America, section 4:
"The validity of the public debt of the United States, authorized by law, including payment for pensions and bounties for services in suppressing insurrection or rebellions shall not be questioned."

Meaning the President can judge the debt ceiling legislation unconstitutional and just go on, paying the debt, and tell Congress if it wants less debt, pass constitutional legislation that makes it so, instead of trying to welsh on debts already incurred.

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