A Question

Watching the news–and what passes for news–it’s hard not to wonder whether we’ve stumbled into an alternate university. The GOP is once again threatening to shut down the government, this time, apparently, over their insistence that funds spent for disaster relief be offset by other budget cuts. We still hear politicians insist that “austerity” will create jobs–despite a broad consensus among economists to the contrary, and despite the last jobs report which showed that private sector hiring gains were entirely offset by government layoffs.

You would think that the people who are trumpeting the need for cost reductions might be looking at long-standing boondoggles and expensive programs that are demonstrably failing to achieve their goals. I’ve written before about the monumentally expensive failure that is the drug war. Senator Lugar has long advocated cuts to agricultural subsidies (I’d start with the sugar subsidy that benefits a few well-connected producers while increasing costs to consumers)–there are plenty of places where we really could make significant cuts without damaging our already threadbare social safety net. (We might consider invading fewer countries…)

And I won’t even try to comprehend the mind-set that insists that “shared” sacrifices are those that fall exclusively on the people most likely to be hurt by them, so that millionaires and billionaires can be protected from returning to the historically low rates during the Clinton Administration. If Congress really believes that protecting millionaires’ pocketbooks leads to job creation, that they are protecting people who will invest in new jobs, why not raise their rates, but give them a generous tax credit for every job they create?

I could go on, but so could most of you reading this. We seem to live in a world where logic based upon credible information has become a very rare commodity.

So here is my question: what should reasonable people living in an unreasonable age do?


  1. We’re headed to year three of continuous unemployment benefits for some. For anyone fortunate enough to still have parents around, ask them if they perceive this as “threadbare” on behalf of those out of work. The percentages devoted to defense spending versus entitlements have roughly reversed since the 1960’s, per Robert Samuelson in Newsweek. This is “threadbare”? The Census Bureau from 2010 data says the typical poor American lives in an air-conditioned house or apartment in good repair, with cable TV, a car, multiple TVs, and many other appliances. 96 percent of poor parents report their children were never hungry at any time in the prior year. “Threadbare”?

    I don’t understand family logic in not spending money you don’t have, becoming patently illogical when it’s applied to government. Even if all parties concede cuts are a necessity, I likewise agree so are tax increases- if all Americans will federally contribute (roughly half of America doesn’t). Does anyone believe human beings don’t usually become somewhat complacent when they have no personal involvement or risk in an ongoing endeavor- no skin in the game? When you come home at the end of the week, do you put the money earned onto the kitchen table and let all present have a say in how it’s spent? Do some have more say than others?
    If we ask for 1% more from everyone, that’s roughly $220 a year for the poverty line and $10K from a millionaire. A different percentage? Tilt it differently? Fine. But, if we’re all equal enough to receive full-benefit, national health care, aren’t we all equal enough to contribute something nationally to pay for it? If we want to tackle our fiscal hole with across-the-board or select cuts, or tax reform including reforming corporate loopholes while lowering rates to better globally compete- Please! Start tomorrow. My guess is we don’t get better until small business is not scared to invest.

    We can’t afford our present foreign policy, off-shore corporate tax shelters, an SEC that sold America down the river, TIF-raiding for corporate expansion, or a corrupt CIB using money that should be fixing streets and keeping libraries open. But, we’re also not seriously competing with subsidized childbirth, abysmal parenting, education, and immigration, and no expectations of accountability and participation from the citizenry.

    Try convincing the Little Red Hen of the fallacy of shared sacrifice.

  2. KurtL, you miss the point, as do most liberals. Our nation does not have a taxation/revenue problem, it has a spending problem; just like Mr. Crutchfield stated. Increasing taxes on anyone will only enable our federal government to spend more of our money.

  3. Oh, you misunderstand my sarcasm. I was thinking more along the lines of “encouragement”.

    The increased taxes create the illusion that the person is being driven into the poorhouse.
    So, said person is driven to strive harder in order to make more money. That creates actual increases in economic activity.
    Allowing someone to “sit” on their wealth doesn’t incentivize anyone to go out and create more wealth.
    In effect, more taxes on the “rich” encourages the creation of more wealth (by those self-same “rich” persons), rather than less. See?

    In point of fact, I must conclude that it is apparent that most Republicans are just lazy, economically speaking. Now, isn’t that just too ironic?

  4. You make a ridiculous assumption that money not taxed is “sat on.” Not sure how you made that leap. Economics 101 is exactly the opposite of what you state. Taxing something causes less of it to exist. When businesses are taxed too much, they either shut down or move somewhere where they aren’t taxed as much. Taxing income causes less income to stay in the owner’s pocket, it doesn’t motivate them to work harder; if anything it causes them to work less (stay below the tax bracket that taxes too much).

  5. Ah well, perhaps my assumption is more rigorous than yours? Just how much investment have we seen from”sat on” money in the last ten years? Investment in the US, I should say. The results you purport don’t exist. Besides, if all Macroeconomics theories were so valid, why is it that so many economic policies derived from them fall so very flat? They are theories, not facts. And apparently not so very understood theories at that.

    Perhaps your understanding of Econ 101 is why you are incorrect? Taxing something does not cause “less of it to exist”. “It” is converted to another “state” (Chemistry 101, if you will), that being into public monies. Taking money away from person A does not cause said money to cease to exist. Perhaps in person A’s “pocket”, but not overall. Your second contention that businesses will close or move isn’t completely wrong I imagine, but it’s incomplete. Taxes are passed along to a businesses’ customers. That may cause a loss of business, or it may not. Depends how elastic the demand for the products of that business are. Increased taxes alone cannot be singled out as the root cause for business closure or flight.

    I will also have to disagree strongly with the contention of your last sentence. That a person will work “less” to avoid higher tax brackets is preposterous on the face of it. There is no evidence of that. Instead, what would happen would be that the person would be looking harder for loopholes and exemptions. Nobody is going to take less money (gross) in the hopes of remaining below a certain income threshold (that would be Psychology 101).

    Frankly, I would caution you against calling out other explanations as “ridiculous”. You may not agree, but your critique is certainly no more valid than mine, considering the extent of either of our “proofs” and/or “evidence”. The format of a blog almost excludes it completely, and “self-evident truths” have little place or standing here.

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