Taxes. For eight long years--actually since the Reagan administration--I have been hearing that if we just lowered taxes our economy would soar to heights never seen before! Somehow taxes were the anchor that had our economic ship stuck and pulling us under. Finally, over the last eight years the neo-conservatives (as opposed to true conservatives) got their way with the Presidency of George W. Bush. The "Bush"- tax cuts were put in and we all waited, holding our breath as the economy was ready to blast off. Sadly, it ended up more like one of those Three Stooges movie scenes where they light the fuse and run and hide behind a rock waiting for the rocket to blast off, the wick burns out; nothing happens, so they run over to see what went wrong and the whole thing blows up in their face!
With the Stooges it was funny, with a national and now an international economy it isn't so funny. A strange pall has descended over the land"-silence.
The silence is deafening. The anchor is still stuck and now the ship is taking on water; it's looking more like a submarine!
What happened? This isn't what was promised for all those years. What has happened is that reality has set in. The tax cuts are merely a Ponzi scheme in disguise. The traditional Ponzi scheme takes money from new investors to pay off long time investors. It works until there are no new investors, and then the scheme is exposed.
We've a similar situation with tax breaks for the rich. As long as the economy is humming along tax cuts go virtually unnoticed. More and more money can be taken out of the system by merely not putting it in (tax cuts). Tax cuts for wealthy people are substantial; where a cut for a lower middle class taxpayer might be three-hundred or maybe a thousand dollars, for the wealthy it can be hundreds of thousands or even millions.
Cumulatively these amounts, taken over many years "suck" money out of the system and into overseas investments (China comes to mind) and banks, such as the Cayman Islands and Switzerland. As long as peons keep paying into the system money can keep getting pulled out. Then one day something happens, there's a hiccup and working people start losing jobs--working people, both blue collar and white collar. We're not paying into the system like we were and programs suddenly don't get funded. There's a scramble to find money but it's gone. At first borrowing can fill the gap, borrowing from programs that were funded, such as Social Security. When that runs out the next to go are the poor and needy programs--after all, they're not reliable voters and as such don't wield much power. Next come "cuts," cuts in social programs (libraries, training, elderly assistance etc.), infrastructure--you name it.
Cuts work in the beginning because if nothing has been cut for a long time it brings some discipline into the system and things get some scrutiny. However, if you have a rose bush and you cut it, and then cut it again and again eventually it just dies. It needs to be nurtured, watered and fed. It can't be cut to health. What's left to cut in our system?
Ah yes, we finally, get to the sacred cow: military spending. Gasp, can we do that? No. It is just too sacred and there are too many military contracts that go to the wealthy who got big tax cuts. It won't happen, it might get lip service and a few pseudo-cuts will come about, but the reality is that the industrial/military complex which President Eisenhower warned us about is just too powerful.
Today I looked up what a B1 bomber costs. In 1997 it was around three hundred million, which means it must be around a half-billion now. The B2 was around eight hundred million, so let's say it's a cool billion now. The ironic thing about such weapons systems is that they're built for an enemy that doesn't exist! Don't believe me? You'd be surprised to see just how involved the B52 is in our current war efforts and that plane is approaching sixty years old! We're funding and building weapons for WWIII when the biggest threat to us is a bunch of guys running around in the hills of Afghanistan and Pakistan with Kalashnikov rifles. Iraq of course never was a threat. These new weapons systems often end up killing more civilians than enemies, how is that progress? How is that a good use of tax money? How is that conservative?
So, here we are today, tax cuts for the rich, massive military spending, government programs being shrunk to where they can be "drowned in a bathtub."-
You may think you've never invested in a Ponzi scheme, think again.
