Friday, December 18, 2015

WHAT!? $680 Billion In Tax Cuts? What About the Damned Deficit?

The House Tax Cuts of more than $600b will only benefit special interests and blow another hole in the budget while adding to deficits.

On multiple occasions I've posted on the economic irrationality that pervades this country, which too few seem to process. For example, the daft two year interval during which the payroll tax (which supports Social Security),  was cut in half  - described as a "payroll tax holiday"  This despite the fact every manjack knew damned well the money was needed to support future retirees. But our politicos, including Dems, were more invested in near term political chicanery and pandering  than longer term fiscal rectitude. 

The same applies after the Dems helped to extend the Bush tax cuts multiple years,  tearing another hole in the budget and adding to the deficit - then leading to the same gaggle of Dems (and Reeps) calling for cuts to Social Security. (Recall the Obama "Deficit Commission" and the promotion of the "Chained CPI"). I argued at the time this was absolute nonsense, and was only done to appease the Neoliberal elites such as Alan Greenspan who years earlier had argued before a Senate Finance Committee it was more important to extend the Bush tax cuts than to protect Social Security from cuts.

I've also belabored - using the Sept. 15, 2010  Financial Times analysis of the Bush tax cuts -  that they don't improve the economy one damned bit. Indeed, they imposed a regressive effect, to wit, they unleashed:

"the weakest decade in U.S. postwar history for real, non-residential capital investment"

Now, however, we learn (WSJ, 'House Poised to Approve $600b in Tax Cuts', Dec. 17, p. A10) that the Repuke -dominated House is all set to pass at least $600 billion in tax cuts:

"resulting in a bipartisan agreement to play down concerns about  budget deficits and ...construct a package of tax breaks so large most lawmakers will find something in it to love"

WTF! So, in other words a monumental pork package disguised as a tax bill, which "plays down concerns over deficits".  So let me get this straight: then all the hoopla and huff and puff over the deficit and needing to cut it is all contrived political bullshit. It doesn't really matter how big the deficits are, because as the illustrious Dick Cheney once put it when asked: "Deficits don't matter."

So we are all being played every time some asshole politician or "lawmaker" makes noises about having to cut Medicare or Social Security because of "exploding deficits" or "unfunded liabilities".  Or is it that they don't regard over a half trillion of added deficits as anything to fret over?

We also learn, get this (ibid.):

"The deal would take popular tax breaks that expired in 2014 and make them permanent".

Ok, so every damned year than we will see another $600b or so in tax cuts? That's how it seems from reading the passage.

We also learn "Democrats won several policy victories"  - but it looks to me like they had to sell their souls to the Repukes to get that. As Rep. Steven Israel put it 9ibid.):

"This tax bill provides too much to people who need it least.  It's an unfunded increase in the deficit that favors special interests."

Who are some of these interests?

- Medical device manufacturers (e.g. the guys that make da Vinci robots and are making a killing with the tens of thousands of (often) sloppy surgeries done each year (See e.g. 'The Great Prostate Hoax' )

- Multinational Banks

- Manufacturers in general

- Small businesses which can now write off a half million in capital "costs" each year instead of $25,000

Oh, low income families do catch a bone in a $1,000 child tax credit but the Dems couldn't get it indexed to inflation meaning it'll be next to useless in five years.

Nancy Pelosi,  to her credit,  denounced the deal as "practically an immorality"

Well, of course, it will translate to a genuine immorality if the swine who passed it later next year call for cuts to Social Security, Medicare or the VA administration. But for now I think most of us can agree it is a very evident immorality! (Since the deficits will always then be used as a cudgel over our heads for future cuts.)

The multi-national bank provision in particular isolates the lawmaker swine given:

"it benefits companies such as Citigroup, Inc. and Morgan -Stanley Group, Inc. along with manufacturers like Caterpillar Inc" . that offer customer financing often with sky high interest bordering on the usurious.

We also learn:

"After it passes the $622 billion tax cuts will be merged with a second measure  ...which contains another $58 billion in tax cuts."

That amounts to $680 billion total in unpaid for tax cuts which will come back to haunt us (ordinary folk) at a later stage, mark my words.

Of course, the economic debauchery is in the eyes of the beholder. According to former tax aide to Obama, Lily Batchelder,  quoted in the piece:

"The deal is a historic achievement...the Democrats basically got everything they want."

Really? At what price? If this "achievement"  includes  backdoor  (or front door) cuts to social programs (which deficit hawks call "entitlements")  later they didn't get dog shit. And we can say Batchelder's take is typical of  the Neoliberal codswallop circulated every time a new spending or tax bill is passed.

See also:

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