Sunday, August 7, 2011

If Eisenhower, Nixon or Ford Was President - We Would Have a Federal Budget Surplus

Or FDR, Truman, JFK, LBJ or Jimmy Carter, for that matter.  If the rich were paying the same percentage of their ample wealth in taxes as during those administrations, if the loopholes for offshore tax havens were eliminated, and American workers received the same kind of pay for their share of corporate and small business productivity they received up into the 1980s, we would have a budget surplus, and have enough left over to pay off the national debt in a matter of years.

Here is a table of historical tax rates during  the past 98 years:
Prof. Juan Cole has more:
The decision of Standard & Poor to downgrade the credit rating of the United States of America from AAA to AA+ was clearly based on uncertainty in two major areas. The first and least important was the wrangling on the debt ceiling, which took the US to the brink of not being able to meet its debt servicing obligations for as long as the impasse lasted. The second was the increasing refusal of the American business classes to pay their fair share of taxes.

If a couple borrowed a big sum from the bank and had debt servicing obligations of say $10,000 a month, and they were repeatedly late and had a series of big shouting matches in the bank lobby about whether they might not just skip this month’s payment, then the next time they went to that bank for a loan, it would be declined or higher interest would be demanded, since they were clearly acting as though they were a bad bet for the loan officers. Getting a loan has in part to do with reputation, and with the lender’s expectation of being paid back with interest regularly and without delay. When you delay making a payment, you are in essence costing the lender money. If the lender has lots of people asking for loans, why would she make one to the couple that seems flaky?

So the first reason for the downgrade was the irresponsible and flaky behavior of the Tea Party, which created an artificial crisis for the benefit of its Koch Brother patrons, so as to throw more government resources at the super-rich and fewer at ordinary people.

The second reason for the downgrade was Dick Cheney’s insistence on deep tax breaks for the ultra-wealthy, and the Republican Party’s refusal to revise them. Obama wanted to raise taxes on the multi-millionaires and billionaires, but didn’t have the votes in the Senate to do so, and the Republicans threatened to take the welfare of ordinary people hostage (as they just did with the debt ceiling mafiosi tactics). I thought at the time that Obama should have dug in his heels and just called the Republican bluff, since it was clear that they would use those tactics on him at some point anyway.


Anonymous said...

My retirement fund had just recently gotten back to the level it was at before the 54% dive from 2008.

Thanks to the Teabaggers (yes, I'm officially back to calling them by their original moniker), it's dropping again, and I'm wondering if we're ever going to retire.

I mean, they told us not to count on Social Security, that we needed to do the Stock Market. They told us to buy Real Estate. Then they de-regulated everything, created a housing bubble and a crash, took Wall Street down as well, then attempted to destroy our fragile recovering economy ON PURPOSE with the phony debt ceiling crisis, and all along claim that we can only solve our problems by doing away with Social Security and Medicare.

My question is, what exactly do these idiot Teabaggers plan to retire on? Do they all have fairy godmothers or something? A potful of gold stuffed under their rainbow mattresses?

Anonymous said...

Brita Palin just gave birth Phil. Three months after being married. Where's your post. Here's Gryphen's.
You're going to apologize to Gryphen for attacking his true story about the slut right?

Philip Munger said...

anon @ 12:19 -

I owe Jesse Griffin no apology. What do you think I owe him one for? Better yet, go back beneath that rock you came out from under.