The Tax Man Cometh!

With the federal debt rising to enormous proportions of our annual budget; with the Bush Administration still trying for enormous Defense Budgets [not even including the Wars] and Wall Street imploding despite their huge profits over the last decade, the time has come to decide why we pay taxes and to get back to those basic core values.

Taxes buy roads, bridges, commuter trains, parks [federal and local], clean water, sewers, fire and police protection, our judicial system, our corrections system, mortgage insurance [VA and FHA and rural homeloans], housing for those who cannot afford any, safe worksites, regulations of Wall Street, immigration management, border protection, search and rescue, the Coast Guard, education, medical care for the elderly and very poor, and so many other things. We all have our pet project that is supported by taxes but we also know that there are some core things that government must do for us. These activities have been attacked by the no-government types for so long, I sometimes wonder if the public really understands that they need government for many, many things in their daily lives. This help doesn't come without cost, but as part of working for the common good, we pay taxes to pay for these things, whether we as an individual uses all of the services or not. We cannot turn our backs on this common good. Yes, many programs in government can and should be improved - to work better, cost less, serve the people more efficiently and effectively - but we shouldn't just throw them out, but without taxes that's what would happen.

We desperately need to come to grips with our spending as a nation, and get to a point where our outgo is equaled by our income. The last 30 years have been mostly about cutting taxes rather than objectively setting priorities. This tax cutting mentality has been done without regard to the need to pay for a wide variety of services. No one wants to pay for government, but everyone wants the services government provides. This disconnect cannot continue. We need to face up to the fact that money must be spent to provide for the common good, and the only place that money can come from is through taxes.

At the same time, we must recognize that the vast number of people at the bottom half of the country have been screwed by unbalance tax burdens [see Social Security, sales taxes, and fees for previously free services]. We need to rebalance that burden. Obama is right to look to helping the middle class but he is not right in his narrow definition. He proposes to tax the rich, because that's where the money is, but eventually, the people who have an affluent if not rich life should bear more of the tax burden than they do now. This redistribution of the tax burden while improving basic government services will make for the common good. We cannot let our personal circumstances dictate our responsibility for sound public policy making.

Not the Great Depression - Yet?

Numerous experts have pointed out that this current crisis is not the Great Depression. They point to the much lower unemployment rate, the current economic doldrums but not chasm, the fact that millions are not living in tent cities, and other issues. They are right, but they miss the fact that this may just be 1928. All the very bad conditions from the GD were yet to come. The country was electing a President. The stock market was still booming and a Republican, Herbert Hoover was on the verge of replacing a silent Cal Coolidge in the White House. Although there were warnings of trouble ahead, the election campaign was upbeat. The trouble began in earnest after the election and by 1931 the meltdown was almost complete. It would take almost 20 years and a World War to reverse the downturn. The question to be asked now is not whether this is the Great Depression, but whether this is 1928?

Foxes Guarding the Henhouse

Well, I awake to a terrible churning in my stomach again. Not as one might expect about the 25% loss, including my house, in my net worth this year, but rather the idea of the rescue. As I understand it, the proposal is for Hank Paulson, former Chief Executive until 2006 of Goldman Sachs, says Treasury must buy $700 billion of bad debt from Goldman Sachs, et al on Wall Street and then hire Goldman Sachs, et al to dispose of this bad debt over time to try and recoup some of the $700 billion the tax payers are being saddled with. This must be done in a matter of hours and there must be no amendment of this proposal, it must be clean. Well, pardon me, but I really don't like this idea at all. Even if I accept we must do something to recapitalize the markets, it can't be done just totally on the sayso of one man with no strings attached.

One alternative, If everyone agrees, we must buy the debt it should be done outside the Treasury. Treasury has enough problems and they need to be managing the bleeding federal treasury, not bailing out wall street. A separate, independent entity must be in charge. I recommend that someone like Eliot Spitzer be put in charge. Yes, I know he fell from grace, but it was over his sexual problems, not his public trust. The Republicans have forgiven David Vitter R-LA, Larry Craig R-ID, and Dick Morris, the foot in mouth disease at Fox News, and many other transgressors. If Spitzer can give up call girls, he is a great champion of the little guy against Wall Street. If not him, then there are a number of state Attorney Generals who might fit the bill. Or Paul Volker who warned against it, or Warren Buffet who has been out of these crazy securities for five years or someone they recommend. This person can hire the laid off wonderkin of Wall Street at government salaries and let innovation reign for the good of the government this time, instead of Wall Street.

An other alternative was proposed by Paul Krugman of the NY Times
Cash for Trash.

I'm sure there are other alternatives out there, but this one either needs further contemplation or it needs to be rejected.