GiveItBackforJobs.Com: New Tax Cuts, New Website for Conscientious Objectors

Ten years ago, in a decision that both surprisingly declared itself to be one of a kind and since then has proved to be that, the Supreme Court of the United States handed the White House to George W. Bush. Within half a year the resultant administration, in league with a number of radical members of Congress, passed massive tax cuts for the wealthiest few Americans, depriving the public fisc of still badly needed revenue. The Bush-Cheney faction purported to justify its monumental redistribution of the nation's wealth by reference to the outgoing Clinton administration's unprecedented budget surpluses. These, they declared with hard-to-believe piety, should be “returned to the people.” What they studiously avoided mentioning in these pronouncements was that the national debt, which during the Reagan era had ballooned to transform the United States from the world's largest creditor to its largest debtor, could only be paid down with continuing surpluses. That was precisely what the Clinton administration had begun to do – for the first time in modern memory – and what the would-have-been Gore administration planned to do. The Bush-Cheney faction turned out to have other plans. And they neglected to mention these – their plans for adding to the national debt burden – just as they did the debt itself. Yet within less than two years these became manifest: A man who had ostentatiously denounced “nation-building” as an object of national policy during his presidential campaign undertook two extravagantly costly nation-building exercises, the most costly of which turned out to have been planned before the election. The federal budget began quickly to balloon once again, as did the federal deficit and the national debt. The Bush-Cheney faction embarked upon their debt- and deficit-growing nation-building projects, surprisingly, all while seeking yet more tax cuts for wealthy Americans than those they secured in 2001 – and while gutting once highly respected federal instrumentalities such as the Securities and Exchange Commission (SEC) and the Federal Emergency Management Agency (FEMA). They also did so while allowing the nation's critical infrastructure to erode at an increasingly alarming rate. The extent of the damage done the latter two began to emerge just a bit over two years after the fisc-bleeding invasion of Iraq, when “Brownie's” FEMA proved altogether incapable of managing the disaster wrought by Katrina first to the Pontchartrain levees, then to the great city of New Orleans. Hints of the damage done Harvey Pitt's SEC, for its part, emerged as early as 2002 in the immediate wake of the Enron, Worldcom, and like financial scandals. All the while that the federal budget, federal agencies, and the national infrastructure were deteriorating, an initially subtler form of decay, rooted in part in those others, spread through the nation's financial system: The Bush-Cheney tax cuts, combined with lax monetary policy, fueled the growth of a massive debt-levered sequence of asset price bubbles – first in the stock markets, then in the real estate markets, and finally in the mortgage- and other asset-securitization markets. As these bubbles steadily inflated, Bush, Cheney – who told us that Reagan had shown deficits not to matter –Fed Chairman Alan Greenspan, and others resisted calls to “lean against the wind” by tightening credit and money supplies, raising capital gains tax rates, or both. For asset price bubbles, many of these people declared without apparently intended irony, either are not possible at all, or are not capable of detection until after they have burst. Other, more ground-level financial regulators and former regulators – including Sheila Bair, Brooksley Born, and Arthur Levitt – were more sober-minded, but went unheeded by politicians who ensured that their agencies were underfunded. The shrinking American middle class is now living with the consequences of this final Bush-Cheney era blunder. The last of the sequential bubbles burst, fittingly enough, during the last months of the Bush-Cheney administration. A classic credit contraction inevitably followed, bringing growth in the real economy first into negative territory, thence into virtual standstill – a weak pulse – at best. A Japanese-style “lost decade” or more now looms before us as a real possibility. Individuals, none of whom individually can arrest such a process any more than they can a consumer price hyperinflation or asset price bubble, unwillingly take part in and thereby abet it, as consumers rationally “tighten their belts” while firms rationally cut or hold off incurring labor costs. In these situations – classic collective action problem situations (see my post of two weeks ago: http://www.benzinga.com/general/10/12/668325/is-the-fed-jimmy-stewart-is-it-the-worlds-central-banker.) – it is only through a collective agent that diffuse persons can address the root problem. That collective agent is, of course, the national government. Yet just when the “full faith and credit” and “pump-priming” capacity of this agent is most needful, and accordingly most in need of responsible financing, we have seen radical members of Congress yet again not only calling for, but abusing the legislative process itself in the name of … the Bush-Cheney tax cuts themselves, holding unemployment compensation and tax cuts for less wealthy Americans hostage to those for the ultrarich. And this they have done all while once again piously pronouncing upon the dangers of growing federal debt. The folly of this policy, which today finds itself made law, could hardly be more clear. At least this is so where those cuts for the wealthiest Americans – large numbers of whom neither want nor approve of the Bush-Cheney tax cuts – are concerned. The national debt will eventually become unsustainable, yet will grow both quickly and enormously if the government is deprived of long-scheduled and -booked revenue. That growth in indebtedness, moreover, cannot be avoided simply by trimming back federal spending. For federal spending in its current forms is critical to shoring up national infrastructure and stimulating real economic activity of the sort that generates income; while massive tax cuts for the wealthy few, who consume proportionally much less than do middle- and lower-income Americans, absent collective action will stimulate more speculation in financial markets – in all likelihood, this time around, those of Asia. (See my column from last week: http://www.benzinga.com/general/10/12/686580/taxes-stimulus-and-inequality.) Many wealthy Americans are cognizant of these truths. They opposed the Bush-Cheney tax cuts themselves – in particular, those for the wealthy – and now oppose their extension. Warren Buffet, Bill Gates Sr., Bill Gates Jr. – these are but the best known of those many who both oppose current radical efforts to risk national ruin for the sake of small sectional interests, and generously act to make more of their own wealth available to millions now suffering contracted opportunity and economic blight through no fault of their own. But wealthy Americans who care about their fellow citizens' and the nation's prospects are confronted, in their good efforts, with a cruel dilemma. For by giving generously as they do, and by seeking to enlist others to give with them, they are readily misconstrued by today's Bush-Cheney followers to be acquiescing in the very partisan politics to which they conscientiously object. The political significance of their actions, in short, can be commandeered by the very parties whom they oppose – radical anti-government politicians, who cynically cite the generosity of some heroic wealthy individuals as grounds for transferring public revenue wholesale to the wealthy as a class. In light of that dilemma, a group of fiscal- and tax-policy experts, including your humble author, have conceived, constructed, and now maintain, a website through which generous Americans of means can control the political meaning of their own giving. Visitors to the site can there calculate their benefits under the extended Bush-Cheney tax cuts by means of the calculator provided, then can direct those benefits immediately to any from among a growing sample of highly rated relief agencies to whose websites the site directly links. These agencies offer job-training, home-retaining, and healthcare services to once middle class Americans now suffering the ravages of the Great Recession. In availing themselves of the site, visitors will be able not only to act in solidarity with their fellow citizens, now unjustly suffering the consequences of over a decade of wrongheaded partisan politics and a consequent economic slump not of their own making, but in effect to say to the world – and to the more radical members of Congress – that this is what they are doing. The new site will shortly be accessible here: .