Archive for February 7th, 2009
The rhetoric that accompanied Obama’s election included much from the downsized Republicans about looking forward to working with the new president and coming to grips with national problems in the spirit of a fresh start. However, the stimulus package—which may well be too big—has forced the Republicans to declare themselves. We’re hearing a lot about wanting more tax cuts—almost exclusively tax cuts—in lieu of spending in the form of direct aid. This is a Republican mantra now. Tax cuts. The question, of course, is really this: what good are tax cuts when you’re already buried in debt? Granted, it frees up (theoretically) money for critical and immediate payments, but if the idea is to put people back to work tax cuts are not the solution. Because corporate America is mired in over-leveraged debt burdens that must be paid down before something mundane like hiring can happen. Tax cuts, therefore, won’t have any kind of immediate impact on the jobless rate.
In time it might, depending on several other factors, the most significant of which would be a newfound corporate sense of ethics which would prevent them from continuing the pillage of their own capital for all the things that have gotten us into this mess in the first place. Labor is at the bottom of the ladder of what they see as important—hence the tongue lashing Obama gave them for paying out bonuses while asking for federal aid. As for working people? What good does a tax cut do someone who isn’t paying taxes because he or she has no income?
But this was to be expected. It is an attitude born out of the mixed priorities of what has become the Right, one of which is fiscal responsibility (I used to support Republicans on this count) the other of which is the more Libertarian view (borne of the Grover Norquist faction) that government is always the problem and must be pruned back radically. Hence tax cuts, in order to curtail revenues in order to force the government to reduce its size and, one must realize, its influence.