ofthisandthat Weekly Letter to President Obama |
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ofthisandthat.org. All rights
reserved.
ofthisandthat.org. All rights
reserved.
| Questions and Comments backfire@ofthisandthat.org |
INAUGURATION, January 20, 2009
Drunk in its stale air
For two hundred years.
Fettered in mind and body,
The soul, the safe escape
To let me breathe the cries
Of my heart singing
Tears of mel-an-choly.
Drunk in its stale air
For two hundred years.
Fettered in mind and body,
The soul, the safe escape
To let me breathe the cries
Of my heart singing
Tears of mel-an-choly.
The tears flow free today
Washing the stains of blood
And sweat in brotherhood.
Raise the curtain then an'
Let the world look in
On this promised land --
We breathe free today.... almost.
--- Arshad M. Khan
We will be known forever by the tracks we leave.
--- Native American proverb
--- Native American proverb
July 22, 2011
Mr. President: A civilized society is a caring society. It protects its weakest:
the children, the elderly, the sick. It does not jettison them at the first
sighting of an iceberg while the party continues in First Class. One trusts a
moderately proficient captain to steer past the trouble, not to try to lighten
his ship. The Social Security system is intact. The payroll taxes used to pay
current recipients are more than adequate to continue doing so for the next
two decades at least. So why propose breaking a contract with impending
retirees, and making them work another two years.
In 2001, there was a budget surplus of $5.6 trillion. By 2011, it had become a
total deficit of over $14 trillion -- two-thirds of it due to the Bush tax cuts,
wars and Medicare Prescription Drug Act. Each year half the deficit is due to
the tax cuts alone. It required no action on anyone's part to let these tax
cuts expire. So why the peculiar introduction of an argument for eliminating
tax cuts for the wealthy? The others, i.e. below the $250,000 cut-off, would
have hardly minded losing a couple of hundred dollars or so annually in
exchange for fiscal stability. Moreover, are tax cuts really the most efficient
way to stimulate our economy when the goods people buy are manufactured
abroad?
I am reminded of the 1993 bill President Clinton was persuaded to back. It
raised taxes twice as much as its spending cuts and the end result was 22
million new jobs -- more than the Reagan and Bush years combined. Our
major expenditure is the military; ending the wars would take a sizable chunk
out of it. Interest on $14 trillion is another substantial amount fast
approaching $100 billion every quarter. Sound fiscal policy (like letting the
Bush tax cuts expire) would have reduced enormously our borrowing costs.
There is no conclusive evidence that cutting spending or lowering tax rates
brings more jobs and higher growth rates than other alternatives. For
example, during the Reagan eight years, total GDP growth was 31.7%. It falls
far short of the 47.1% during the Kennedy/Johnson period, or even the
mid-1950s when the highest marginal tax rates were over 90%.
Given these counter arguments, why the surrender flag on social security?
And how is it that Mr. Cantor, the Majority Leader of the House, so
vehemently opposed to raising the debt ceiling now had no difficulty voting
to raise it under Bush II -- not once but four times? Or is it all Kabuki
Theater?
One wonders if a responsible government should extend tax cuts when it
has colossal debt and a ballooning deficit -- not unlike a bankrupt household
raising the children's spending allowance. The rhetoric is now targeting
entitlements (that is the old and the sick). So here is a sorry statistic: There
has been no increase in Social Security payments to match real inflation for
at least two dozen years. The current official inflation rate is 3.2%; a more
real rate based on the metric before it was "revised" and "improved" is
more than treble at 10.7%. The latter is, of course, the one experienced by
Social Security recipients in the grocery store and the gas station -- food and
utilities being items of major expenditure for the old.
That food and gas are no longer included in the so-called "core" rate of
inflation is thanks to the ever-attentive Bill Clinton who balanced his books
on the backs of the poor (welfare reform) and the old (Social Security
inflation adjustment). George W. Bush then gave away the surplus mostly to
the rich (his tax cuts) which you, Sir, could have let lapse. We are now back
to breaking the backs of the defenseless.
Mr. President: A civilized society is a caring society. It protects its weakest:
the children, the elderly, the sick. It does not jettison them at the first
sighting of an iceberg while the party continues in First Class. One trusts a
moderately proficient captain to steer past the trouble, not to try to lighten
his ship. The Social Security system is intact. The payroll taxes used to pay
current recipients are more than adequate to continue doing so for the next
two decades at least. So why propose breaking a contract with impending
retirees, and making them work another two years.
In 2001, there was a budget surplus of $5.6 trillion. By 2011, it had become a
total deficit of over $14 trillion -- two-thirds of it due to the Bush tax cuts,
wars and Medicare Prescription Drug Act. Each year half the deficit is due to
the tax cuts alone. It required no action on anyone's part to let these tax
cuts expire. So why the peculiar introduction of an argument for eliminating
tax cuts for the wealthy? The others, i.e. below the $250,000 cut-off, would
have hardly minded losing a couple of hundred dollars or so annually in
exchange for fiscal stability. Moreover, are tax cuts really the most efficient
way to stimulate our economy when the goods people buy are manufactured
abroad?
I am reminded of the 1993 bill President Clinton was persuaded to back. It
raised taxes twice as much as its spending cuts and the end result was 22
million new jobs -- more than the Reagan and Bush years combined. Our
major expenditure is the military; ending the wars would take a sizable chunk
out of it. Interest on $14 trillion is another substantial amount fast
approaching $100 billion every quarter. Sound fiscal policy (like letting the
Bush tax cuts expire) would have reduced enormously our borrowing costs.
There is no conclusive evidence that cutting spending or lowering tax rates
brings more jobs and higher growth rates than other alternatives. For
example, during the Reagan eight years, total GDP growth was 31.7%. It falls
far short of the 47.1% during the Kennedy/Johnson period, or even the
mid-1950s when the highest marginal tax rates were over 90%.
Given these counter arguments, why the surrender flag on social security?
And how is it that Mr. Cantor, the Majority Leader of the House, so
vehemently opposed to raising the debt ceiling now had no difficulty voting
to raise it under Bush II -- not once but four times? Or is it all Kabuki
Theater?
One wonders if a responsible government should extend tax cuts when it
has colossal debt and a ballooning deficit -- not unlike a bankrupt household
raising the children's spending allowance. The rhetoric is now targeting
entitlements (that is the old and the sick). So here is a sorry statistic: There
has been no increase in Social Security payments to match real inflation for
at least two dozen years. The current official inflation rate is 3.2%; a more
real rate based on the metric before it was "revised" and "improved" is
more than treble at 10.7%. The latter is, of course, the one experienced by
Social Security recipients in the grocery store and the gas station -- food and
utilities being items of major expenditure for the old.
That food and gas are no longer included in the so-called "core" rate of
inflation is thanks to the ever-attentive Bill Clinton who balanced his books
on the backs of the poor (welfare reform) and the old (Social Security
inflation adjustment). George W. Bush then gave away the surplus mostly to
the rich (his tax cuts) which you, Sir, could have let lapse. We are now back
to breaking the backs of the defenseless.