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Here's an idea: Spend and DON'T tax

By Owen Paine on Wednesday January 21, 2009 09:59 PM

There's politics of unity and there's politics of division.

Right now, Obama -- far from needing a 'bring us together' moment -- needs to apply a very heavy but shrewd dose of blunt patent class wedge politics, in the form of a big payroll tax cut. Forget the goo-goo crumbling-this and -that, and cut cut cut -- but cut the correct class way.

Despite what the matrons of a better America claim, hacking away at taxes is not just the free-range oligops' better gambit. Isn't it obvious that after 30 years of bipartisan burden shifting from progressive income taxes to regressive payroll taxes, there's a job-class kick-back cutback aching to happen?

So I submit it's time to reverse the 30 year payroll robbery at the heart of the big shift. As of today, sweep through the past 30 years of hikes and other finger-fucks, and retroactively cut the social security tax rate back to a pay-as-we-go pathway. And yes, as a result, rebate to the actual payers-in, as close as possible, the nearly 2 trillion dollar trust fund swindle ripped of their labor all these years.

Oddly enough, the banks' latest calculations indicate they're in the process of losing almost the same amount -- two trillion -- in unrecoverable usury losses, thanks to the grace-of-God implosion of the lot mortgage pyramid scam.

So Obama ought to say -- in that kewl way of his -- "Sorry, fellas, you'll just have to it eat them losses just like you ate them gains. That's the free capitalist way, no?"

Now a goodly chunk of the returned 2 trillion in the SS trust funds might go to paying down some of our millions of potential credit-renegade householders' debt load, and thus might reduce the big boys' losses indirectly (and the little guys' "pension portfolio losses" too).

But let's be real clear: the return of the funds is not recovery nor relief; it's equity -- "you earned it, so you get it back."

Uncle has plenty more dollars in his limitless digital tender mine to bring off a full, in fact a hyper-full recovery, and still set up a debt recycling system to relieve our zillions of mortgage-crushed cottagers too.

At any rate, the best debt relief program for job-dependent households is always by definition a steady job and a few pay increases. So lets give em a pay raise of 7% right now, by suspending their side of the social-security payroll tax, retroactive to last January; and keep it suspended till real median wage rates exceed the present real rate by 15% -- after which we can gently taper back in the FICA fuck over 5 years or so.

The Social Security retirement system is sound and doesn't need its present obscene two trillion in trust-fund backup. In fact it doesn't need any trust fund backup at all, ever -- but that's another story.

So Act One oughta be the fair payroll tax restoration act -- and Act Two?

Well that oughta involve a health cost freeze -- more on that in another post.

Brash colorful obvious class politics first -- that's the Reagan way, that's the winning way. Reward the base you'll need to go where you want to go. Do it first, do it fast, do it big.

We progs will need the jobbled majority with us all the way if we are to rebuild America green. So a big string of direct in-cash benefits must form our first acts, benefits fought for and won against -- despite -- in fact, exactly because of all the inevitable vehement boardroom clamour against it ringing through the mass media.

So is this something Obama is likely to do?

I dunno. But I suggest we measure whatever prudent "class neutral" national recovery plan he devises against this standard.

Comments (4)

Al Schumann:
The Social Security retirement system is sound and doesn't need its present obscene two trillion in trust-fund backup. In fact it doesn't need any trust fund backup at all, ever -- but that's another story.

It may be another story, but it would put well-deserved socks in the mouths of the pecksniffian pseudo-intellectuals and their fellow traveler apocalypsarians. In some ways that's integral to the Great Anthropophilic Rebate.

Al Schumann:

Moreover, how 'bout George checks, starting at eighteen? I'm all in favor of the call of civic duty, grim, nagging and heartlessly gaseous though it may be, but good citizenship can't be anything but helped by a steady dividend. In fact I'd say our biggest civic problem has been well analyzed by our beloved right wing nutcake economists: it's a tragedy of the commons, where lack of a sense of ownership defaults to the benefit of scoundrels. A dividend check says "ownership" very clearly and, I might add, very eloquently.


Trouble is, there is no $2 trillion surplus to distribute -- it's already been spent. All there is are government bonds, and you have to stand in line with the Chinese and Arab oil states to get anything back from them.

Bush let it drop when he was pushing for SS privatization -- that the government might not be able to pay off all those bonds in the SS account. And that was six years ago, when the national debt was several trillion less than it now is.

Upon restoration, why not make the FICA uncapped and rate-progressive, and have it start only after the earner's income exceeds the federal poverty line?

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