Last Word, I Hope

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Most of the blogosphere continues to argue about the tax cut compromise. I’ve said most of what I want to say, but most of the argument for me boils down to these points:

One, the argument is that the payroll tax holiday is bad because if the lower tax rates became permanent they would eventually de-fund Social Security. I am skeptical the Republicans will be eager to extend the lower payroll tax rates this time next year, however, because —

  • The payroll tax holiday doesn’t help the wealthy as much as it helps the working poor. Republicans don’t give a hoo haw about tax cuts for the poor. I’m not sure Republicans even count FICA taxes as real taxes. Reagan raised payroll taxes considerably to make up for the shortfall in revenue caused by his other tax cuts, and Republicans didn’t mind at all.
  • Economists agree the payroll tax holiday will stimulate economic growth as long as it is in effect. The Republicans do not want economic growth stimulated in 2012, because that helps Obama.
  • If I am wrong about that last bulleted item, and the payroll tax is extended another year, this will help the economy and help Democrats get elected. Worse things have happened.

Further,

  • If progressive Democrats actually ever have anything to say in Congress, they can revise the FICA tax code to make it more progressive while it funds future Social Security payments. Those taxes are a real burden on lower-income people.
  • If Republicans continue to call the shots in Congress for the next several congressional cycles, we’re screwed anyway. Losing Social Security will be the least of our problems.

And that’s all I have to say about that.

32 thoughts on “Last Word, I Hope”

  2. In case you’ve been needing moral support, I’m with you 100% on this. If, as many economists expect, the stimulus spending in this results in 4.5% GDP growth, that should be enough to get to or below 8% unemployment, which should be enough to win 2012.

    Congressional D’s had their chance before the election and totally, completely utterly blew it. Striking dramatic postures now is just pathetic.

    • Congressional D’s had their chance before the election and totally, completely utterly blew it.

      Thanks, and exactly. If Senate Democrats had gotten their act together a week ago, we wouldn’t be having this argument now. Obama was handed a pile of crap — party of his own making, but only partly — and he choose to do what he could do for the unemployed and to stimulate the economy rather than do nothing. I guess time will tell how it turns out.

  4. “the stimulus spending in this results in 4.5% GDP growth, that should be enough to get to or below 8% unemployment, which should be enough to win 2012”

    I want my president to do what’s right, not what gets him re-elected, further bankrupting this country to the tune of over a trillion dollars for the benefit of the richest among us just aint the right thing. I supported Obama primarily because I perceived him as pro-union, he promised to end tax breaks for companies that ship jobs overseas. He also promised to make the wealthiest among us pay their fair share and return tax rates back to pre-bush rates. He has apparently abandoned both so……..

    Obama is having a joint newser with Bubba, now he’s left Bubba to answer questions on his own, bizzare, I think he’s lost it? He must have received his lesson in tri-angulation today.

  5. Have been listening to Bernie Sanders “filibuster” on the Senate floor, with help from Mary Landrieu and Sherrod Brown. I know it is pointless, but I am glad just to have the facts on the record. I know you can’t shame the shameless, but at least it is all out there.

    Now, will the Democrats be any better after their current debacle? And will they ever have even 10% of the party discipline of the R’s? I am dubious, which is not just a safe position, but is one tinged with bitter sorrow.

  6. The fact that Larry Summers says they put in the payroll tax cut because “republicans wanted it” tells me all I need to know about what it means for Social Security. If I had any trust in the President, I would be confident he will veto any attempt to extend the cut beyond the one year time frame. I simply don’t trust him anymore and maybe I was a fool to trust that he could learn from his mistakes anyway. Rabbi Lerner may be right…”There is no there there.” And believe me, I don’t want to be right on this…but I fear I am.

    • The fact that Larry Summers says they put in the payroll tax cut because “republicans wanted it” tells me all I need to know about what it means for Social Security.

      And you believe Larry Summers, why, exactly?

  7. Suppose we stand firm against the GOP. Taxes will go up for everyone and you can bet Fox will report that higher taxes for all was always the goal. Millions who depend on UI would be destitute. And the kicker is that the economy would likely still be flatlined in 2012.

    OK this isnt what I want, but is there a better strategy? Please, explain how that would work over the next six years. The satisfaction of ramming a total tax hike through would be momentary and it would be blamed for a slow economy.

  8. Unless the RepubliConfederate Party agrees to extensions, I received my last UI check today. Just in time for the Holidays!
    I’ve said about all I can say about any of this. I’ve bored everyone enough.
    A pox on both parties. One for being evil. The other for being stupid.
    Good night. Sweet dreams…

  9. uncledad – there’s $125 billion in there for the R’s priorities (rich people). The rest is all for D priorities. That’s a good deal.

    I am utterly flummoxed that 2 rightie talking points (deficits require immediate attention! SS can only be financed by payroll taxes!) have taken hold on the left.

    Deficits matter when they drive up interest rates. Interest rates are extremely low. So deficits are not an immediate concern.

    SS can be paid anyway congress decides. Payroll taxes were a concession to the right to make financing regressive, cause that’s the way they like taxes.

    • I am utterly flummoxed that 2 rightie talking points (deficits require immediate attention! SS can only be financed by payroll taxes!) have taken hold on the left.

      Exactly. It’s as if everyone’s brains shut down simultaneously. The payroll tax as it is is unprogressive and puts a disproportionate burden on low-income workers. 80 percent of Americans pay more in payroll taxes than they do in income taxes. This ought to be radically re-structured.

      If you pay attention to the young folks, you hear a lot of resentment of the FICA taxes as well as mistrust they will ever get any of it back. Why those sentiments aren’t identified as a threat to Social Security I do not know.

  12. Gordon brings up a good point on funding Social Security. Who says “SS can only be financed by payroll taxes!”

    Suppose the following 2 things become popular perception.

    1) The tax holiday has a stimulative effect because almost all the money goes into consumption and is magnified by the multiplier.

    2) Seniors become aware and afraid that conservatives DO want to sabotage Social Security (because they do).

    The ‘way out’ for politicians who want to keep the tax holiday in place AND satisfy the legitimate angst of seniors would be to completely fund SS by employers &/or taxes on the top 20%. This would be impossible under ordinary times, but if the worker demanded the payroll cuts stay – and seniors (and workers who will be future seniors) demand the funding of SS be stabilized … it’s no further a reach than HCR,

  13. uncledad – Obama has NOT endorsed tricke-down economics. Be honest, at least.

    He’s allowing taxes to stay low for the rich in order to keep taxes low for the middle and as a trade-off for a FICA holiday which is intended to jolt the economy and reduce unemployment. UI will be extended and will have the same effect of increasing domestic consumption, which will produce jobs. The more jobs get produced, the more THEY increase consumption.

    Some objective observers have said it’s a bad trade. Fine – be objective and make that point – but don’t say Obama has turned into RR. There’s a notable trend here I observed in HCR when the public option was dropped. Some people wanted to punish the insurance industry MORE than they wanted to help the uninsured. Today the same folks are angry because we are missing the chance to punish the rich. Bad priorities.

  14. Doug,
    Ah yes, the aspect of ‘punishing.’
    Recently, ‘some’ Democrats seem to have picked up a few personality traits from RepubliConfederates. I wrote about “Bush Envy” a few days ago, and how people on the left envy how Little Boots and Dick swaggered and manipulated Congress, and wish Obama could do the same.
    Now, it’s the punishment aspect. To punish the right like Bush punished the left. Yes, to “punish” the rich with a return to what they paid under Clinton, an additional 3-4%, they’re willing to also forego the middle class tax cuts, UI for 2+ million people, the SS tax holiday, and other stimulative parts of what’s been negotiated. Now, if it were to “PUNISH” the rich with an additional 10-20%, THAT would punish them. But 3-4%? Please!
    If I ever do get UI back, unless that’s renewed as part of the deal, I’ll lose the $25 extra that was added on to help people some more in these trying times. Based on what I get for unemployment, if I do get it again, that $25 represents a decrease of 12%. Nobody considers THAT punishment. Maybe because to be “punished” in this country, you can’t be poor and lose more, you can only be rich and receive less.
    Sure, I wish the Senate had followed the Houses lead and stuck to more a more progressive deal. But they didn’t. Punishing the rich with that 3-4% increase is counterproductive when you consider what else, more good than bad, is in what Obama negotiated.
    But Doug, don’t go to other sites to try to convince the commenters there. They want to punish all dissenters. See what I mean about picking up certain aspects of the RepubliConfederate personality traits?

    PS: I’ve started calling the Republican Party the “RepubliConfederate Party.” For obvious reasons, I hope. I like how the ‘Con’ in Confederate fits perfectly at the end of ‘Republic.’ Hence RepubliConfederate.
    If you don’t like it, let me know. I’m also using it in other blogs where I comment. I want to know if it sound stupid, or is overkill. Thanks.

  16. Way OT!
    FYI – I saw where the “Reverend” ‘Satan’ Phelps, of the Westboro Baptist “Church” and his evil and stupid incubi and sucubi, but no gayubi, minions will be “protesting” at Elizabethe Edwards funeral in Raleigh, NC today. You see, according to ‘Satan’ Phelps, her son died because she and John support gay rights. And that was also the reason she died so young.
    I wish I still lived In Fayetteville, NC, because I’d gladly travel 4 hours round-trip to be there to help heckle and ridicule them. I’m hoping that the motorcycle group that frequently shows up to help drown out their idiocy are there in full force. And, though I’m generally against vandalism, a few slashed tires and some molasses in the old gas tanks might not only help boost up my Holiday spirit, but reinforce my belief in Karma. Nasty, of me, I know. Oh well…

  18. Did somebody get a timeout? 🙂

    When I was in grade school I was made to stand at the back of the classroom and face the wall when my behavior became disruptive. I had another teacher who made me sit in a corner and wear a dunce cap made out of construction paper. It’s no wonder I so screwed up today…the trauma of wearing a cone on your head and being ridiculed as stupid can have life long effects.

  20. “You are being monitored until you calm down”

    Censored is more like it, it’s your blog Maha, if you don’t want dissenting views from a regular commentor, your choice. I think you know this aggrement sucks, and you can’t bring really defend it, so just scrub the comments and you get the last word, good enough!

    • I think you know this aggrement sucks

      It does suck, in a lot of ways, but your hysterical screeching that it’s all nothing but a right-wing plot to destroy Social Security — which other people here have debunked, and which you can’t defend except with more screeching — is tiresome. I’m not in the mood, and I don’t have time for this, so just cut it out until you have something new to say.

  21. uncledad,
    I hope that recovery from hip surgery is going well. My best friends Mom had the opertation twice, and said that BOTH times she could hear the tools and the surgical team talking. That gives me the shivers…

  22. “I hope that recovery from hip surgery is going well”

    It’s going fine, the second time around seems a little easier? It was a little strange to feel the tugging and hear the hammer and saw, I was having a conversation the anesthesiologist right in the middle of surgery, later my doctor exhibited some anger that I was awake at times, he said that usually does not happen, oh well I got a good story out of it and couldn’t really feel any pain so…

    Going to calm down now?

  24. I’m glad there’ no pain. But, Jesus, I can’t even imagine what it feels like to have a conversation with the guy who was supposed to put me under. I know me, I’d say something wise like, “Uh, I’m still awake. What did you tell the Doctor, that you could do this job ’cause you slept at a Holiday Inn last night?”
    And then, I’d probably wake up with my left hip on my right, and my right hip on my left.

  25. Uncledad, what in the hell did you do to deserve two hip replacements?
    ‘Hope you get better brother……….

  26. This tax will be looked back at as an important first step in changing Social Security to a welfare scheme for the elderly. A sad day.

    • This tax will be looked back at as an important first step in changing Social Security to a welfare scheme for the elderly. A sad day.

      Many outcomes are possible. That’s one, but it’s far from the only one.

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