Archive for July 8th, 2011
The news this week was dominated by the Casey Anthony verdict, which was a shame. I’m not surprised that an attractive white girl killing her beautiful young daughter drew so much media attention, but rather that the ongoing budget debt ceiling talks are not making more news. This story continues to intrigue and mystify me. I had the same reaction back in April when the GOP was threatening to shutdown the Federal Government over proposed budget cuts.
This time around Republican lawmakers are threatening to not raise the Federal Government’s debt limit without a series of major spending cuts and little to no tax increases. This is frankly the dumbest thing I’ve seen in modern politics. Seems like a perfect topic for this week’s Friday 5.
Top 5 Reasons Why Holding The Debt Ceiling Hostage To Prevent Raising Taxes Is Ridiculous
1. Playing chicken with the debt limit is reckless
Purchasing debt from the Fed is seen as an extremely safe investment since the Federal Government has never defaulted on any of its debt. Defaulting on this debt could have catastrophic consequences on the economy. And while the specific effects of a default aren’t known, it’s safe to say that they wouldn’t be good. World markets hit a state of panic when Greece recently threatened to default on its debt, and Greece’s economy is much smaller than the U.S. With the U.S. economy already hurting, a default could send the country into a tailspin similar to 2008’s crisis.
Up until now, the threat of a default has always seemed extremely unlikely. As Paul Krugman points out, back in December 2010 President Obama said he didn’t include raising the debt limit in his budget negotiations because he thought it was unnecessary. His quote was “nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse.” While that seems rather optimistic now, at the time it seemed reasonable because
2. Many Republicans have previously voted to raise the debt limit multiple times
During the Bush presidency, Republican lawmakers voted to raise the debt limit seven different times in eight years. And each vote was done with little to no fanfare. In fact, the four current Republican leaders in the House and the Senate voted to raise the debt ceiling a combined nineteen times. The fact that Mitch McConnell and John Boehner are able to rally against the debt ceiling with a straight face shows that they are very capable politicians.
And they are making this threat primarily to prevent taxes from increasing. The same taxes that are currently at a sixty year low. Current Republicans have repeatedly said that they oppose any and all tax increases, which is stupid because
3. Tax increases are always a sizable portion of deficit reduction packages
The two ways to reduce the Federal Government’s deficit are to cut spending and raise taxes. This is always how it is done. Check out this handy chart that I grabbed from the Washington Post that illustrates it succinctly:
And not only are tax increases always a part of deficit reduction, they’re usually a much larger portion than the one that President Obama is currently proposing. That Republicans are rejecting any tax increases is puzzling; even conservative columnists recognize that this is a good deal. The fact that Republicans are rejecting them is especially confusing considering that
4. A majority of people support raising taxes on the wealthy
Most of the tax increases that have been proposed affect the wealthiest 1% of the population. Ideas like ending tax breaks for corporate jet owners and oil companies are supported by voters from both parties. 74% of voters favor eliminating tax subsidies for oil companies, including two out of every three Republican voters. I can’t believe that Republican leadership won’t agree to end these obviously unpopular tax breaks.
And moreover, I’m surprised that Republicans are fighting so hard to keep the Bust era tax cuts for the wealthy. In my own lovely state of Missouri, recent polling has shown 67% support raising taxes on individuals making over $250,000 and 76% support raising taxes on individuals making over $1 million. And the numbers are similar in other swing states as well. But even if they are against raising taxes on the wealthy, they need to come up with a better reason than the one they are currently using. Simply put
5. The idea that raising taxes on the wealthy will hurt the economy is ridiculous
I still can’t believe that this is seen as a rational idea despite the mountain of evidence against it. First off, it’s widely known that wealthy Americans are better than the rest of the county at saving money. It’s a fact. Giving the rich more money doesn’t mean that they will turn around and spend it. Rick Ross is the only rich person I know currently advocating Blowin Money Fast. Taking more money from rich people only makes them have less money; that’s it. And the only people opposed to this are, coincidently, rich people.
Even worse is the argument that raising the tax rate on rich people will somehow give them a disincentive to make more money. That is absurd. Most wealthy individuals acquire money at any cost. Greed is greed, no matter what the tax rate. Income disparity continues to get worse, not better. The rich have been getting consistently wealthier for the past thirty years, so why would anyone be concerned that this might somehow stop?
So basically, Republican Congressmen are threatening to disrupt the US economy because a small minority of the population doesn’t want taxes raised on rich people. That’s fucking crazy, right? Then why isn’t this being discussed more, dammit!?