Myths of Deficits and Inequality

Cut taxes on the wealthy, the "job creators," so they can create more jobs, Republican "conservatives" insist.

Here is a direct refutation: the wealthy are hoarding their cash--the top 1% save 37% of their earnings. Rather than creating jobs, by their out-sized savings rate they destroy jobs.

We should cut corporate taxes argues the Chamber of Commerce incessantly, because (by one measure) US taxes are higher than economic competitors like Japan and Germany.

Corporations are also hoarding cash, again cutting jobs: money not spent on consumption or real (as opposed to financial) investments, is jobs not created and wealth not multiplied.

Higher taxes on the wealthy and corporations would capture some of this excess cash to build infrastructure, improve education and hire people in needed jobs.

The US is the fourth most unequal nation among wealthy OECD nations, having a Gini index of .36 compared to the most unequal nation's Gini of .50 (Mexico). 0 would be complete equality, 1.00 represents complete inequality, where only one person received all the income. According to the Nobel economist Joseph Stiglitz, and even the Economist, inequality is inefficient. Increased inequality drains consumption and investment spending: low consumption drives low investment, drives low job growth.

Repeal Obamacare. The Republican House of Representatives has voted to repeal it 33 or 34 times. Proponents of repeal claim that the program will increase deficits and cut jobs. It's likely that the reverse is true in both instances. While Obamacare will increase some taxes, mostly marginal, it will also save an astonishing amount of money not yet easily calculated. Health care costs, and costs to the government may actually go down, through lower hospital and emergency room costs, and a reduction in treatments needed as people get regular medical care, instead of only going to the doctor (or the emergency room) when a health crisis strikes.

The Congressional Budget Office (not a partisan institution) estimated cost savings from Obamacare that would reduce out-going deficits substantially. In fact, its most prominent recent caveat (reduction of the reduction) was the administration agreeing to a year's delay in the employer mandate (to provide insurance or pay a fee per employee), which CBO estimated to cost the government $10 billion.

So, what's going on here? The Mainstream Media emphasize the Republican message, even though it's the opposite of the truth and makes no economic sense. Higher taxes on the wealthy do not curb growth; they probably stimulate it, up to a point. Obamacare, while far from perfect, does not increase future deficits; it will reduce them.

Why are "conservatives" and Republicans against higher taxes for high incomes? They have high incomes, or are paid by people who do. Ditto the MSM.

Inequality is rising worldwide, in the US faster than most, and the "winners" want to keep it all. They are like Fifth Century Roman Senators, who chose the Fall of the Western Roman Empire, instead of imposing taxes on themselves.

What Is To Be Done?*

I despair the politics of this era, the lies and distortions that impel it, the money that drives it. Mitt Romney is its perfect symbol; Paul Ryan is the embodiment of its deceptive promises of reaction snake-oil.

The Economist asks, 'Who, really, is Mitt Romney?' I doubt he can answer, except: he's determined to win the Presidency; he has no goal, other than winning it. He's been both a moderate liberal as governor of Massachusetts, and an "extreme conservative," (his own words), while running for President, even after winning the nomination. He was pro-choice, and now, he'll run on a Republican platform in which even rape and incest are not exempt from its absolute ban. He insists, after Akin's blooper, that he'd allow abortion for either reason, but who knows whether he would, or could, given his party.

Romney even threatens a Gold Commission to investigate returning to the Gold Standard--presumably to mollify Ron Paul supporters.

Then Senator, George McGovern, wrote an awful forward to The Promise of the Coming Dark Age: McGovern touted the Khmer Rouge as a beacon! If Mitt is able to buy the Presidency--that's what it would be, a purchase, costing several billion dollars--then the Dark Age could be upon us: the Roman Senators of old couldn't match the callous disregard the elite bear today for the rest of us. Romney would cut services (Food Stamps, Medicaid) for the desperate and cut taxes for his (lightly taxed) class of multimillionaires and billionaires. He'd also increase Defense spending, possibly for fighting another war: Iran, probably, although he'd also start a trade war with China the day he's inaugurated.

Romney appears to have chosen "extreme conservative" over moderate liberal, although he's still claiming he lives in Massachusetts (there is a question whether he did, when he filed taxes and voted in Massachusetts, claiming residence in his son's basement, a possible felony). But Romney still resists political, as well as geographic, definition.

His party tries to rally natives against immigrants, whites against blacks, men against women--its absolutist anti-abortion position is only a small part of that--but all is subsumed in the general war against all who are not owners of significant capital.

Capital is the contemporary version of the gold, land and slaves controlled by Roman Senators in the fourth and fifth centuries. Unlike the wealth of old, however, capital is expandable, and radical. Roman Senators could do only a small fraction of the damage that can be done, is already being done, by our contemporary elites, from eviscerating the safety net, environmental pollution and impoverishing the non-rich, to global warming, global immiseration and buying this election.

Can sanity stop them? Even the sitting President, Obama, doesn't have the money to beat back their misinformation, smears, and outright lies: example, their claim that Obama is reviving welfare.

What is to be done?

*Lenin used the same title.