Policy Repeats Continue - Image Joe Historian Wordpress.com
From the AP via CBS 3 Springfield, MA: “Obama to propose $1.5 trillion in new tax revenue”, which, in a nutshell “features”:
“-$1.5 trillion in new revenue, which would include about $800 billion realized over 10 years from repealing the Bush-era tax rates for couples making more than $250,000. It also would place limits on deductions for wealthy filers and end certain corporate loopholes and subsidies for oil and gas companies.
-$580 billion in cuts in mandatory benefit programs, including $248 billion in Medicare and $72 billion in Medicaid and other health programs. Other mandatory benefit programs include farm subsidies.”
When added to his proposed “Jobs Bill”which bill
(Huffington Post)
“would reduce payroll taxes on workers, cut them in half for most businesses and offer incentives for employers to hire. It would spend tens of billions of dollars on new public works projects, extend unemployment benefits for long-term jobless and help states and localities avoid layoffs of teachers and emergency workers.”
One understands that the old Carter playbook has been dusted off and taken off the bookshelf once again.
In his first year in office Carter enacted a “Jobs Bill” also called an “Economic Stimulus Plan” that invested in $4 billion in public works program that would net 160,000 public jobs. This was designed to cut the unemployment rate. (May 4, 1977 Sarasota Herald Tribune)
In a second attempt: Carter enacted a “Jobs Bill”, that pumped $11 Billion into training and the “poor” for higher paying jobs, suggesting that this move would reduce the unemployment rate and further reduce the rate of inflation. The Bill also linked reporting on unemployment for both public and private sector jobs for the first time. (October 28, 1978, Warsaw Indiana Times Union.)
In his final year in office Carter’s budget, which at the time, was the largest in history, at $618 Billion, included no tax cuts and relied heavily on the “windfall profit tax” this despite, what the administration referred to as a “mild recession” (Modesto Bee, January 28, 1980)
For perspective on that “Tax the Rich” populist call – read about “The Windfall Tax” at taxhistory.org where the ends result was a loss of revenue due to the increased costs to the Federal government in collecting taxes via the IRS among other factors.
Understanding the similarities reported upon between the 1970’s and this decade, one reads about election year politics, and the need to shore up the base, rather than the real need to move the country forward. If one understands that these types of economic policies did not work the first, time in a four year attempt that devastated the nation’s economy – how would it be possible that it might work a second time? Although there is always hope, one has to ask: Do they teach history at Harvard?
For perspective Carters budget in 1980 adjusted for inflation totaled: $1,775,544,726.36 trillion dollars (that was not the deficit at the time). Additionally, the 160,000 proposed jobs, for a price tag of $4billion in 1977, averaged $2,500,000 per job created. To illustrate, using the same calculator for inflation: the total Carter Jobs bill: $1,073,243,797.34 .
One has to believe that the current administration is “pandering to Obama’s base” in order to gain points for reelection, however, based on historical cause and effect, (this is not “class warfare” in economic terms), it is bound to have the same unintended effect of Carters stimulus programs, jobs bills, tax the rich, increase social programs economic plans.
Party politics, from both sides, being what they are, it would behoove both the administration and the “opposition team” to re-read all of Carter’s works in office, and then do the exact opposite, in order to save the system. Stop blaming, Bush, or Nixon, or Ford, or the guy who came before ye, and get to work on programs that might truly benefit the economy.
Start with a voluntary tax of 35% and send the bill to Buffett and anyone making over $1,000,000 and see how many donations the U.S. Government receives. Following, cut the corporate tax to zero for a limited period of time, to repatriate the employers, and institute an across the board tax structure, graduated in necessary by income levels, but across the board, so that everyone pays, a reduced amount.
Depending upon the state in which the taxpayer resides, a 10% tax rate on a Federal Level may be a 20% income tax rate. They should keep in mind those individuals in tax-happy states such as Massachusetts pay federal and state taxes on everything from fuel, to dogs, and telecommunications (Includes wireless, cable, landlines), etc., and ad nasuem.
This is not only a recipe for further financial disaster, but also, one might project, political disaster.
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