I keep getting email from Moveon.org and other liberal groups I belong to urging me to write letters supporting the big Democratic economic package. These emails carp at the Republicans and ask me for money and other support. That's not going to happen because I think this bill is as dumb as it gets.
I'm more in tune with the Republicans on the whole stimulus/bailout/tax cut issues. I think they are dead wrong too, but perhaps less wrong than the Democrats. Here's how I'd run the country if I could:
We may need to do some direct investment, but most of this should be done by incentive: tax rebates to encourage the things we need (solar energy, less polluting cars, insulation and so on). Direct investment can be wasted and subverted. Note that I have no more ideas than the next guy on WHICH things need incentives and which need direct investment but that may be less important than just doing something. If we all THINK that solar energy is the right choice, we'll move in that direction and it will help stimulate spending. Whether it helps solve other energy problems or causes its own slate of problems is almost unimportant right now: if we could convince everyone that growing 300 pound tomatoes would solve our problems, investing in technology to do that would help boost the economy. The "economy" is all psychological anyway.
Not that there are not things we really need to do. We need bridges rebuilt. We need to clean up our air, our rivers, our oceans. We need a decent medical system and a better safety net. I'm on board with that but again I'm hesitant to just throw a ton of money at it all at once.
The problem with direct money is that it is all too easy to boondoggle and it's all at once. Incentives and rebates are much harder to subvert and are doled out more slowly, giving us time to adjust if it turns out to be wrong. If you just throw a trillion dollars in the air, what's your next magic trick going to be when it doesn't work?
I'd cut taxes at the low end, including Social Security and Self Employment taxes. Just tear 'em out entirely for everything under $50,000 a year and index that so it can't creep back up again. Start taxing the incomes above that gently but ramp it up hard as we get toward mid six figures. Raise it mercilessly as we approach seven figure incomes and then start ratcheting it down and keep it going down until it disappears somewhere up in the stratosphere.
Call it a "tax cap" - the concept is just the inverse of things like the Medicare gap. Those making a pile of money would pay dearly for their success but they'd also have incentive to be even more successful. We do that with Social Security now for different reasons. I'd continue that, but tie SSN to the same figures so that it would keep going until it hit the cut off point. The purpose of this strange idea is to take away the argument that high taxes on the wealthy discourage effort - why work hard, why take risks if your rewards are swept away by taxes? True enough, so we put a cap on the taxes. Climb high enough on the income ladder and the rest is all yours to keep (again, indexed of course).
Speaking of taxes, this business with Tom Daschle and his taxes has me seeing red. If he's really so stupid that he doesn't understand that "gifts" like that are income, he's too stupid for the post. I'm happy to see him withdraw - he ought to go to jail!
Unfortunately, that's probably true for all too many of our duly elected representatives. I'm getting really angry about this stuff, but of course I, like everyone else, am impotent and they all know that. It does tick me off, though.
I just read this disgusting
www.boston.com/ news/nation/ washington/articles /2009/02/01/ap _investigation_banks _sought_foreign_workers/
(link dead, sorry)
AP Investigation: Banks sought foreign workers. I'm not an isolationist,
I believe people should be free to work anywhere, but this does show
that these banks deserve nothing but scorn.
I never would have given the banks a dime. As I suggested in an earlier piece here, I think the way to fix that was to pay the mortgages of those who can't pay them. That's easy enough for the IRS to calculate from tax return documents: the banks report the mortgage interest paid, you or your employer reports earnings and from that it's easy enough to see who needs help. The IRS then sends some mortgage payments - the homeowner doesn't lose their home, the bank doesn't have a dead mortgage.
The IRS would apply a formula and you and your bank would get a letter saying that they would be paying X amount of your mortgage each month over the next year. That might be 20%, 50% or 90%, all dependent on the calculations of your payments vs. income. Note that this would be recalculated every year, does not throw a pile of money up in the air and can be adjusted up or down at any time.
Of course there would be dangling strings: real estate investors are also caught with mortgages they can't afford. As distasteful as it would be to reward them by paying off their stupid investments, I think that's still better than just handing money to the banks.
And yes, some other people would get money they do not deserve. Tell me how the banks deserved anything?
But what do I know? I'm just a high school dropout crazy liberal. No doubt somebody with a pile of degrees can explain why I am naive, uneducated and unaware - a trifecta of ignorance. On the other hand, it was people with piles of degrees that got us into this mess, wasn't it? Oh, yeah, I almost forgot about that..
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