Topic: The Economy
Americans love the rich. We want to be like them, so we indulge them, and dream of the day each of us will be rich beyond the dreams of avarice.
Paul Krugman has a good piece in tomorrow's Times. But he is quite wrong in thinking this matters as he thinks it does.
See Red Ink Realities
Paul Krugman, The New York Times, January 27, 2004
The opening is cool.
Krugman goes into some detail explaining that, except for farm subsidies - which help our large farm corporations like Archer-Daniels-Midland and really tick off Europe and the third world - there's not been a whole lot of new spending, at least in programs that cost money now. The prescription subsidies don't kick in for a few years. Most of the AIDS money pledged to Africa has not been authorized, much less spent. The No Child Left Behind funds are being held up, and they weren't much to begin with. (My teacher friends call it the No Child Left Alive program.) Krugman shows that while overall government spending has risen rapidly since 2001, the great bulk of that increase can be attributed either to outlays on defense and homeland security, or to types of government spending, like unemployment insurance, that automatically rise when the economy is depressed.Even conservatives are starting to admit that George Bush isn't serious when he claims to be doing something about the exploding budget deficit. At best - to borrow the already classic language of the State of the Union address - his administration is engaged in deficit reduction-related program activities.
But these admissions have been accompanied by an urban legend about what went wrong. According to cleverly misleading reports from the Heritage Foundation and other like-minded sources, the deficit is growing because Mr. Bush isn't sufficiently conservative: he's allowing runaway growth in domestic spending. This myth is intended to divert attention from the real culprit: sharply reduced tax collections, mainly from corporations and the wealthy.
Heck, he's an economist. He knows.
So what's the deal? How did we get this deficit, and why is it growing so fast?
Yes, part of the answer is big increases in defense and homeland security spending. But that's only part of the answer.
And most people won't believe that. Of course. They pay the same taxes they always paid.The main reason for deficits, however, is that revenues have plunged. Federal tax receipts as a share of national income are now at their lowest level since 1950.
Krugman shows that this decline in tax collections from the wealthy is partly the result of the Bush tax cuts, which account for more than half of this year's projected deficit. But it also probably reflects an epidemic of tax avoidance and evasion.And they're right: taxes that fall mainly on middle-income Americans, like the payroll tax, are still near historic highs. The decline in revenue has come almost entirely from taxes that are mostly paid by the richest 5 percent of families: the personal income tax and the corporate profits tax. These taxes combined now take a smaller share of national income than in any year since World War II.
Fine. The rich get richer and we pay for it. Yeah, yeah.
And Krugman get on his high horse again about why this is worse than ever.
But this is why we the people elected Bush in the first place. We love this stuff. We love the new Donald Trump reality show, "The Apprentice," where he fires folks who don't serve him well. The ultra-rich are our heros.What's playing out in America right now is the bait-and-switch strategy known on the right as "starve the beast." The ultimate goal is to slash government programs that help the poor and the middle class, and use the savings to cut taxes for the rich. But the public would never vote for that.
So the right has used deceptive salesmanship to undermine tax enforcement and push through upper-income tax cuts. And now that deficits have emerged, the right insists that they are the result of runaway spending, which must be curbed.
But let's assume, for the sake of argument, some, the Democrats, the opposition, don't love this stuff. What should they do?
Hey Paul, what if they don't CARE?While this strategy has been remarkably successful so far, it also offers a big opportunity to the opposition. So here's a test for the Democratic contenders: details of your proposals aside, which of you can do the best job explaining the ongoing budget con to the American people?
Yeah, it's a con. A good one. And folks love it.
After all, one day any of us could be ultra-rich, destroying others. What fun!
____
Note on the title:
AUTHOR: Samuel Johnson (1709-1784)
QUOTATION: "The potentiality of growing rich beyond the dreams of avarice."
ATTRIBUTION: Life of Johnson (Boswell). Vol. viii. Chap. ii.
Actually about beer, or more precisely porter, and then, finally, about stout:
"Johnson's oft-quoted remark arose from the immense popularity of Porter in the mid and late 1700s. A porter brewery was "not a parcel of boilers and vats but the potentiality of growing rich beyond the dreams of avaricee," remarked Johnson. He nursed a jealous passion for Hester Thrale, wife of a gentleman brewer. Johnson's memorably extravagant phrase was intended to help the Thrales sell their porter brewery, in Southwark, London. The brewery survived, latterly under the ownership of Courage, until the 1980s, and Russian Imperial Stout was made there."
... this from The Independent (UK)
... or ...
"I am rich beyond the dreams of avarice." - Edward Moore: The Gamester, act ii. sc. 2. 1753. [ ... not performed often these days! ]
Posted by Alan at 20:15 PST
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