Cut Social Security!

The conclusion always is: cut benefits and raise the retirement age. That's how Economists think, apparently. A self-described Economist, said, the way Economists do, that public employees were overpaid (i.e. paid "above the average" for private sector workers) and paid more "generous," hear 'over-generous', pensions. Those "golden years lifestyles" are going to have to change.

And yet, private pensions have become scarcer and scarcer, and remember what happened to retirees' IRA's and 501K's with the stock market crash? This is not progress. The retirement plans of public employees ought to be seen as a model to head for not to dismantle. Are we a humane society, or not? We should find ways to pay for those pensions, and for private pensions as well.

Furthermore, to say public employees earn more is to compare apples to oranges, and the economist knows it: government workers do not work in factories, or in the fields; very few are manual laborers, or work with heavy machinery; and most are more educated than the average.

But still, there is the assumption that benefits must be cut, not that taxes on the rich should be raised.

Why the rich? They have more money than they can spend, and tend to spend more of it abroad, or to speculate with it, thereby fueling asset bubbles. No, their money is not creating jobs. In fact, at the moment, capital is in the business of shedding jobs: when jobs are cut, corporate profits go up. Higher tax rates for the wealthy would create jobs, because they could fund government programs.

Many progressive economists point out something most Americans don't want to hear: Americans pay lower taxes than other developed nations, and the wealthy pay much lower taxes than they do in almost any developed country. Tax havens (i.e. places with even lower taxes) happen to be in poor countries, i.e. in countries with even fewer public services, but with private services westerners buy at low cost--for them, but not for most natives.

It is astounding how little play a mildly progressive politics has in the US. In "liberal" NY State, the highly popular Andrew Cuomo, a Democrat, concedes economic policy to conservative positions: cut public sector pay; cut pensions and establish a property tax cap, similar to the one in California. California's tax cap defunded their world-class education system built up even under Reagan. California's experience with the tax cap has been not just an education disaster, but a financial one, too, as their huge deficit demonstrates.

But few dare to propose a "millionaire tax," though the wealthy pay lower tax rates than everyone else; few propose rebating the stock transaction fee: both could yield enough for NY to pay its budget.

We have entered an era, when only the wealthy are allowed to win--the interests of ordinary people are dismissed as "special interests." That kind of society led to Rome's impoverishment and its eventual "fall" in 476. It's happening here.

Tax Madness

Any suggestion for raising taxes meets howls of resistance, not just from tea partiers in these dark times: states are going bust. Yet, Wall Street financiers pay themselves even fancier bonuses than they did last year, bonuses made possible by taxpayer money.

Financial firms oppose taxing hedge fund managers' income at the rates working people pay. The parallels are striking with the Roman Empire at the tail end of its history. Go to http://www.roman-empire-america-now.com/taxes.html. Roman wealthy didn't pay taxes, and hedge fund traders, some making as much as $1 billion a year, are taxed at a flat 15% rate, while most of us pay between 20% and 39%.

Hedge fund managers have also been part of the Wall Street lobbying onslaught to prevent financial reforms. They scream that regulation will cost profits, when it was their ruthless pursuit of fast profits that nearly destroyed the whole world economy!

NY's Governor Paterson, formerly liberal, has summarily rejected a "billionaire's tax," despite the huge state deficit he's desperately trying to close. And he and the US Congress, refuse to consider a stock transfer tax, a cent or two per share traded, despite the fact that the tax would not only raise very needed revenue (a state tax might make up NY's deficit), it would also discourage the kind of hyper-speculation that led to the near financial collapse.

Wall Street is practically apoplectic at the idea of either tax, and yet, they almost drove us off a financial cliff, and cost the US 15 million jobs it will take many years to replace. Both taxes would discourage the kind of antics that led to the collapse--and raise revenue where it is most needed to continue an economic recovery--for a state budget that otherwise requires drastic cutbacks, laying off even more jobs.

Liberals are scared shitless advocating for any tax, even if they know it would be good policy. Why? Because the right-wing media have whipped up a frenzy about raising any taxes, and Republicans have jumped enthusiastically on board.

The furthest Democrats in Washington dare go, is to let the Bush tax cuts lapse. Republicans scream, that's a tax increase! It is, but only for taxpayers earning over $250,000 a year. I'd be very comfortable on half of that: most people will never come close to it.

Does nobody remember? In the Eisenhower years, top tax brackets paid over 90% above a cutoff, but the 1950's were booming, and we weren't fighting two wars. Historically, more highly graduated tax rates correlate with higher growth as well as with greater economic equality, despite conservative economic theory to the contrary.

The hype about "raising" taxes is madness; raising rates on the higher brackets would reduce US inequality (worst among developed nations)--and restore the economy. Will that happen? Only if liberals find some cojones.