By Jack E. Lohman
Isn’t it strange that today we need a tax break for the middle class — a “stimulus” plan — to reverse the downward spiral caused by George Bush’s “other” so-called stimuluses in 2001-03?
Earlier we needed a tax break for the wealthy… today it’s a tax break for the middle class to reverse the negative results. Both ostensibly to do the same thing. One will work, a little, when the other didn’t at all.
Economy.com reported that, for every dollar spent extending unemployment benefits, our economy would grow by $1.73 — and that same dollar tax cut for low-income earners would increase the GDP by $1.34. When giving money to high-income folks, however, a dollar increases the GDP by only 59 cents, and by phasing out the taxes on stock dividends, it rises just 9 cents.
Doesn’t that tell us anything about where tax breaks really provide a stimulus, and should have been applied in the first place?
But even this will not have the total effect desired, because while low and middle income earners will have more cash to buy product for their family, much of that product will stimulate foreign manufacturing instead.
It used to be that tax breaks for the wealthy translated to investment in U.S. manufacturing. Today that money goes offshore, if not to foreign tax havens then to foreign manufacturing and other foreign investments. Who today would want to invest in the U.S. dollar?
What America really needs is our jobs back. We need the one-sided trade agreements modified to eliminate the advantages companies receive when off-shoring manufacturing and services.
At the very least we need a single-payer health care system that removes the heavy burden from manufacturers, just as competitor countries have done. And we should also add tariffs to imported products. Yes, those tariffs add to product price, but they would make U.S. manufacturing more competitive and our economy stronger.
But let’s look at why we are here in the first place. Our doldrums are all — 100% — due to the campaign money politicians have taken from special interests who wanted laws changed to benefit their industry. In any other country we’d call it political corruption; in the U.S. we call it free speech.
The trouble is, it’s always to the detriment of the public and our economy. It’s got to go.
The free trade agreements have gone too far and must be scaled back. The free marketers want the government out of it, except when that government is dishing them subsidies or controlling their competitors.
The very thing Mitt Romney criticizes John McCain for – campaign reform – is the very thing this country and this state needs to decrease spending and taxes. Even conservatives should love that. We complain about subsidies and pork barrel spending, but ignore that those recipients have paid dearly for them… in campaign contributions.
Better regulation would have avoided the sub-prime mortgage disaster, the savings and loan fiasco, and even the Enron collapse. But cash transfers to politicians blocked needed regulation.
The state legislature has a chance to solve the problem at the state level, but will they? They can reduce taxes with the swipe of a pen, but are campaign contributions going to prevail?
Here’s an interim solution to the health care crisis: Open the Medicare system to the people and let them decide. Allow any employer or employee to opt into Medicare at actual cost!
If Medicare is too expensive, as conservatives charge, they’ll get no takers. If it is indeed more efficient, it will prevail.
As a current Medicare beneficiary, I’ll put my money on WPS, Wisconsin’s Medicare administrator.