Copyright © by Len Holman, 11/26/12
One guy threatened to stab someone for pushing his kids. People got into fistfights and shoved each other around like commuters being loaded onto a Japanese bullet train. People who have no acquaintance with nature except to go outside to put their trash in the cans by the curb camped out for days in tents a Sherpa might admire. People stood in various kinds of inclement weather, suffering the awful depredations of snow and rain and cold, armed with nothing more than their smart phones, MREs and insatiable greed for flat-screen TVs and Furbies. Merchants are already lamenting that their sales on this last Black Friday were not up to their expectations, even though the unruly and voracious crowds tore through stores like Attila tore through Asia. It was truly wonderful to see such rampant examples of consumer capitalism in action, especially on the eve of the impending “fiscal cliff,” which will impoverish even more people than the country now acknowledges.
For the lady who must decide whether to buy food or her meds, for the family living in a shelter because their home is now owned by a bank which refused to negotiate their loan, for the man earning minimum wage in a company whose CEO has more than two homes and earns millions per year, every day is a Black Friday. Our sagacious lawmakers—whose job is to represent the people and do good for the country—are talking about how to “fix” things, and the worry is that the fix will be like a kid fixing a clock by taking it apart, only to find she can’t figure out how to put the damn thing back together. Their so-called fix includes small tweaks (not so small for most of us), including eliminating the mortgage interest deduction. Now, in an economy where whole blocks of houses—not to mention whole neighborhoods—are blighted by boarded and vandalized homes, and by the depressed values such devastation visits on the homes still intact with people still living inside, this is as foolish and hurtful as one can imagine.
One of the main reasons that deduction is there is to encourage people to BUY homes. If people are buying, then builders are building. If homes are being built, people who want to live in them will want stuff to go inside these homes, like furniture, appliances, bunk beds, and rugs. If they buy homes, in short, there will be a growing need to have factories and workers to make the things homeowners will need, like lawns and plants and little cement porches and lawn gnomes and all the accoutrements of having your own place. Without that deduction, good-bye to the lawn gnomes.
There has been little to no mention of the preferential treatment of investment income. There HAS been talk of fooling around with Social Security and Medicare. These putative fixes are being bandied about by people who eat well, get the finest healthcare the taxpayers can buy, and who ignore the blindingly obvious: austerity (an old word used in a newer, more terrifying context) does not work so well. Ok, austerity doesn’t work at all. Austerity is what the Haves impose on the Have-nots. Austerity for Greece, Spain, Portugal, and Italy has not improved the lives of the people in those countries at all. It has impoverished their lives. All of which leads to another blindingly obvious fact: what is really needed in a weak economy is not austerity, but stimulus (another old word with terrifying and ignoble connotations). Capital gains taxes are cherished by the wealthy. According to the L.A. Times, in 2011, capital income accounted for 42% of all income collected by taxpayers earning more than a million dollars, and they receive two-thirds of the capital gains break. Nice work if you can get it, and those high rollers DO get it.
For people earning between 75 grand and 100 grand, that income chunk is a wimpy 3.6 percent of income. If I am earning a million dollars a year (which I do not), I don’t really have a problem with letting the Bush tax cuts expire. I might read about it in the paper, shake my head, and then go out for a game of squash and a nice whiskey and soda afterwards. All the talk about our tremendous debt is much of a lot of bull, since our deficit is about 7% of GDP today, and that percentage has declined from 10% after the 2008 crash. Why? Our economic growth, as sputtering and uneven as it is, has done that for the country. Economic growth works well. Very well. There is lots of evidence to support the idea that marginal tax rates have no correlation with lower economic growth, despite the dire warnings of loss of job growth by the people (and their fellow travelers) who worry that they will be forced to sell one of their yachts.
If Europe is any example, spending cuts imposed during a slump DO have an effect—a devastating one. So the misinformation juggernaut continues to roll on, which principle is that if you take a penny from the rich, you need (in all fairness, of course) to take a dollar from everyone else. Let’s not worry about those retirees living on Social Security, or seniors needing health care (babies, too, don’t forget), and the transfer of federal government programs to states which are already reeling from fiscal problems. Europeans must be looking on with a mix of horror and grim satisfaction that the mighty and arrogant and foolish U.S. government is about to experience a prolonged Black Friday of its own making.
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