I recently read a commentary by Paul Krugman, an economist and N.Y Times columnist. Please go on the net and read the column; it was a real eye opener. He discussed the Bush tax cuts and calls them a “poison pill” that will cripple the economic policies of the next administration, whoever that may be.
The Bush tax policies have been the major policy that has kept the conservatives in line with Bush. As Bush has dropped taxes on the rich, and spent money on a unpopular war, he has raised deficits that, according to the policy, should be covered by the increased taxes raised because of economic activity. The only problem is that, the economic productivity is going downhill due to housing and energy problems. So the economy goes down, taxes go down, the deficit goes up, which scares the financial markets, which drives the stock market down, which drives down the economy, which, well you get the idea.
McCain is walking a fine line, trying to keep conservatives in line, while at the same time, courting the middle and the environmentalists on the left. This is a very dangerous track to run. By keeping the tax cuts permanent, he is hoping to keep the Republican base happy and in his camp. As the tax cuts are helping that base McCain is hoping that they may cut him some slack on other issues. According to the Tax Policy Center, McCain’s economic policy will cost $600 billion in tax revenues. We’re already carrying a massive deficit. And apparently this policy is going to add to, rather than deplete, the deficit.
OBama’s policies, again according to the Tax Policy Center, will raise $700 billion in revenue. Of course OBama has plans to spend that amount, and even more, with Universal healthcare and other government entitlements. OBama’s tax policies go after the very rich and will probably raise incomes for the bottom 80% of the populace. OBama also wants to bring in a payroll tax surcharge on people making more than $250,000 a year. This would raise $629 billion over the next decade, which OBama wants to put in to Social Security. The question is, how much money is necessary for the Social Security trust fund? According to the Congressional Budget Office, the Trust Fund is solvent until 2046. If we have all these issues to address, should that money go there? I realize that saving Social Security is popular, but is it necessary today?
Let’s face the facts, we’ve all become used to tax cuts, but we all want the government to do more to help us in everyday life. These two philosophies seem to be at odds. Someone, somewhere down the road, will need to pay these bills that we’re piling up today. Do we really care? If so, it seems it’s time that we begin to face up to our responsibilities and ask our leaders to make decisions that will pave the way for a better future.