Here’s what one of the biggest tax cuts in U.S. history is going to do: A single person making less than $75,000 a year will take home an additional $400 per year under the federal plan passed by Congress, and a couple making less than $150,000 would get $800. This means that the average American will take home an extra $25 in each paycheck. Anybody who thinks this is the sort of “stimulation” that will pull our economy out of its vertical nose-dive is either nuts or being held hostage by their own ideology. Basically, when Obama agreed to add in more tax cuts in order to gain Republican support for the bill (which he never got), he was taking much needed tax revenue from the Treasury and decreasing the amount he was spending on the infrastructure. That is the portion of the bill that will go to repairing our Third World-like infrastructure, including bridges, highways and schools and, in the process, create millions of jobs in the private sector. Government workers will not be doing that work. These will be citizens who would be out of work, not paying taxes, and on government assistance without the program.
Some may recall that last year the government sent out fat rebate checks to tax payers. Families got nearly twice what the tax cuts will net them. Those rebates did NOT go back into the economy, as the wishful thinkers in the Bush administration predicted. For all intents and purposes, the money may as well have been flushed down the toilet because it had no detectable impact on the economy. None.
There are many people who believe with all their heart that giving big tax breaks to corporations and the wealthy will result in expansion of businesses and more jobs. It’s a good theory, but it isn’t borne out by the facts. If anything, we’ve seen in the last 8 years that major corporations taking advantage of de-regulation and tax breaks have chosen to do exactly the opposite by laying off workers, restructuring, moving off-shore, and paying exorbitant bonuses to executives. In the meantime, over the last 15 years wages in the private sector have not gone up. It has been as if we were all background characters in Oliver Stone’s film, “Wall Street”. But, at least Gordon Gecko was good at what he did. The people running our big corporations, especially in the auto industry, do not appear to be cut from the same cloth as Lee Iococca. The Peter Principle is in full swing in corporate America.
The bottom line is that the ideology of the Republican Party, which is that government cannot be a solution to our biggest problems, ignores the severity of our predicament while showing zero compassion for those who are suffering most in this downturn. I don’t think they actually believe tax cuts will do anything more than give them a campaign slogan in the next election. It’s what they’re against that counts here. They honestly believe that the private sector can police itself and make the right decisions for America. They think that making the rich richer will ultimately raise up the bottom 95% of the country because rich people are the heart and soul of our economy (forget that wages haven’t gone up in this country for the last 15 years). They harp on the concept that only the private sector can create real wealth, when the country’s economy has just struck an iceberg. To clarify the situation for them, the stimulus bill was never intended to create wealth. It is intended to keep our nation afloat. A very small percentage of the population is worried about creating wealth right now. The rest of us are going to remember the way the Republican Party has handled this process.