No one ever pooled their tax cuts to build a high speed railroad

[Tom Rinaldo]

The hidden cave in to Republicans,and perhaps the most far reaching in consequences, is Obama's surrender to Republican ideology; tax cuts as the cure all for all that ails us. With the nation in the grips of economic crisis, the predominate implicit message of the proposed tax cut deal is "get the government out of the way." The overt effect of a slew of across the board tax cuts in response to economic threats, including granting hundreds of billions of tax cuts to those who do not need them, is a concession that henceforth the road to increased prosperity must run through private property. No more Federal mass investments in job creating infrastructure, no major federal public works projects, and no direct government programs to directly employ the unemployed for socially productive ends. Not to mention no more federal cash grants to struggling state and local governments, to prevent the layoffs of or pay for the hiring of more teachers, fire fighters, and cops. Where will the money come from for high speed rail, for revamping our energy technologies to compete with government subsidized industries in Europe and China?

Under Republican ideology, that is "our" money the federal government wants to allocate to help tax payers and the economy, and "the feds" shouldn't have more than a bare bones minimum of it in the first place. Give cash back to the tax payers, shrink the federal footprint, and then the private sector will take care of the economy and us.

The compromise tax proposal redirects the federal role during economic downturns toward that of "give the people back their money" in the belief that "we" will use it more wisely than government ever could. And by directly massively cutting government revenues, two things by necessity would follow. One, the federal deficit will grow by almost another trillion dollars within two years, and two the pressure on the government to sharply curtail spending and eliminate so called individual"entitlement" programs will ramp up significantly. That pressure will come from Republicans no doubt, but sooner or later it might also come from this nation's "creditors" as in China for an obvious example. As the consumer market in places like India and Brazil continues to swell, China will become less dependent on the American consumer to buy it's products, and their need for us to stay "solvent" will begin to shrink.

We have already seen, before this latest "compromise proposal" a government controlled by Democratic majorities in both houses and by a Democratic White House that became intimidated against introducing any new measures to help our economy that could be described as increased federal spending. And that is before we add another trillion dollars of red ink to the deficit through further tax cuts. Government is being strangled of its life blood, revenues, and that begets a viscous spiral. As government on all levels become increasingly cash poor, current government services, let alone any new ones, will deteriorate. And as government services deteriorate, the screams to privatize them will become louder. This is the slippery path we are now descending. And the U.S. infrastructure continues to crumble while other nations race ahead of us in the 21st century.

[Crazy Dave]

1. Isn't the interest on the debt going to be about 30%....

....of the total government budget within 10 years?

That 30% will have to be cut somewhere. Education and medicare is always the first on the chopping block.

[dkf]

2. What if we did this by referendum?

Maybe people need to know how much they will pay for their benefits so they can make a choice.

[soryang]

3. It is business tax credits and deductions that stimulate growth

But they don't work without marginal rate tax increases on business and wealth. You need the carrot and the stick. Otherwise wealth is alienated from business commerce and tangible capital investment permanently. Without increases in marginal tax rates, wealth accumulates in rentier estates of the aristocracy where is hoarded or wagered in hedge fund speculation rather than finding its way into tangible capital investments. This was taught in tax law courses for decades until the Chicago School took over the theory of business and individual income and estate taxation. Use it or lose it!

Now the traditional theory of income taxation and capital investment is unheard of, an atavistic heresy. But it is still true. It just doesn't mesh with the unseen hand, laissez faire bs of the Chicago school hypocrites.

[Tom Rinaldo]

4. Yes, that makes sense.

As money keeps further corrupting politics, capital self serving economic theories and regulations flourish. The bottom line for those with money is becoming the defacto government policy bottom line. There is a growing disconnect between government policy and protecting the interests of the vast manority of Americans.

The ammassing of fortunes has become the predominent social value. The interests of those who have accumulated the most money becomes the mission of government to protect, they are annointed as economic leading lights because of their ability to compound money regardless of how they do it, regardless of whether they add or drain value to/from society, and regardless of whether it ultimately is America, India, or China who ultimately reep any benefits from those fortunes.

[soryang]

9. Well said! n/t

[killbotfactory]

5. The issue is about taking money away from people who need it

The more money in the hands of working people, the better the economy will get. If taxes are raised on the non-wealthy it will hurt the economic recovery, and in two years Obama will get the blame because, as many of his critics like to point out, the buck stops with him.

It is an extremely bad idea to take money out of the hands of people who desperately need it when the economy is in the shitter.

[Tom Rinaldo]

6. Yes, it is terrible what the Republicans want to do, isn't it?

The way they are on record voting against tax cuts for 100% of the American people for their first $250,000 of income The way Republicans are hell bent on hurting The vast majority of Americans if we don't pay their bribe of hundreds of Billions to their richest cat major donors. That's an extremely bad idea when that money is needed to prevent the layoffs of tens of thousands of teachers cops and fire fighters when state governments run out of the funds to pay them and the federal government has lost all ability to help them because they've let the rich loot the treasury. And that doesn't begin to speak about the pain that will soon become accute when the safety net keeping many of us afloat gets slashed to addresse the out of control and accelerating budget deficit, and that day is rapidly approaching as surely as winter after fall.

Who is going to get blamed in two years for that exploding deficit do you figure? The Republicans whose lust for tax cuts and unfunded wars caused it to explore, or Obama who signed his name to all of the deficit busting initiatives during his four year term? These no longer will be the Bush tax cuts, they well be the Obama tax cuts, just like all the federal bail out expenditures are now all "owned" by Obama in the popular mind.

Obama is changing the purpose and direction of the Democratic Party with his embrace of this approach as surely as Bill Clinton did with his embrace of NAFTA.

[killbotfactory]

7. This won't be a major issue in two years

People won't be effected in the next two years by rich people being rich. People will be effected by their taxes going up and the economy faltering.

[Tom Rinaldo]

8. Well, on that we will find out soon enough

The major thrust of this OP though is on the long term dangerous effects of taking this REpublican endorsed path now.

[Hannah Bell]

10. "faltering?" lol. look around you.

[killbotfactory]

13. Taking money out of the hands of the working class is bad for the economy

If this deal doesn't go through, that is what will happen. The economy will not improve. People will punish the democrats at the polls, just like they did before.

[Hannah Bell]

14. taking money out of the country is bad for the economy.

[Poboy]

11. This is the one thing I like about Chris Matthews.

He has a perpetual hard-on for big infrastructure projects and is always asking his guests why we don't do great building projects anymore.
A WPA style program on bridges, dams, roads. rail, etc.

[Tom Rinaldo]

12. I've noticed that too and appreciated it

Nowadays the U.S. Chamber of Commerse is more likely to worry about the future infra structure of India than about America's. And with The Federal coffers being drained into the accounts of America's top 1%, that is probably where that money will end up.

[Poboy]

15. also notice that he NEVER gets an answer. No matter who it is he asks,

they NEVER have a good answer. Our entire country's infrastructure is crumbing, and nobody addresses the question!

[Tom Rinaldo]

16. For all the so called concern for the fate of our children expressed by the Right

All that bemoaning about how we are selfishly running up the debt and leaving them to ultimately pay the tab. Meanwhile we are trashing the house we are living in that they will someday inherit. The roof is leaking, the plumbing has lead pipes, the wiring is sub code, it has not been retrofitted with earth quake support, and the walls are not insolated. So rather than upgrade their inheritance so that they can have a home as good or better than the one we live in now, we divert maintanance money into our personal checking accounts and buy super screen TV's and piss it away in high end restaurants. We throw some tar on the roof when we notice a drip, we risk burning down the house by running appliances it is not rated for, and we turn up the thermostat to compensate for the drafts.

If the Right really cared about the future facing younger generations, it wouldn't be demanding more tax cuts to party with while the house our children will someday inherit falls apart.

[Poboy]

17. They do what they do, say what they say. Absent any counter

people have no choice but to go along. More troubling is, why isn't our side making ITS case. The Dems have no appetite for promoting infrastructure either.

[Tom Rinaldo]

18. Most elected Democrats tiday run away from a fight over the proper role of government

The Right has succeeded in defining "government" as a negative term, just like they did with "liberal" before that. Althouogh the American Revolution was fought to establish a government accountable to the citizens, NOT the elimination of government, that now has all been twisted.

Now that the Right has virtually defined government as the enemy of a free market system, it has become which side are you on?" And one side has the money that most politicians, Democrats included, need to win elections.