Friday, October 31, 2008
I got my tax stimulus check!
By Richard E. Noble
This whole thing got its start with FDR and the notion of government spending. Prior to FDR we had Hooverism. Hooverism was Reganomics without the huge federal debt build up.
The 1929 Great Depression came upon us. Money dried up and disappeared, we are told. FDR got a bright idea because "business" and the wealthy stopped spending and investing - at least here in America. If big business would not spend and invest in America for whatever reasons, then the government should start, so said John Maynard Keynes and FDR.
So Roosevelt started the Tax and Spend Democratic philosophy. Back in those days the Federal government thought that taxes, and tariffs were the only legitimate means of raising Federal government money - they didn't know then that they could sell America piece by piece to foreign countries. Roosevelt took money from the rich in every way he knew how and spent it employing the poor and unemployed. Of course this did not make the rich happy - the poor and unemployed thought it was fine.
Democrats today believe that this technique worked and Republicans do not. But the majority of the American people, whether Democrat or Republican, have accepted that it did work - and in practice so have the Republicans.
The modern day Republicans decided to stop fighting the notion of government spending and instead began spinning the idea their way - and it worked. They proffered that giving taxpayer money to rich Republicans was wise and proper economics. After all, they argued, the people who have lots of money are the people who know what to do with money.
Then came Ronald Reagan. Ronny changed the whole tax system. First he cut the tax burden on large corporations. Ronny gave his old boss General Electric so many tax breaks that for some years after, the American taxpayers actually owed General Electric money rather than General Electric owing America. After Ronny, corporations who once paid 35% of the federal budget now only contributed 12%.
Ronny cut the taxes of the wealthiest Americans substantially, also. If he would have cut Federal spending proportionately we would have been all right. But he spent more than all previous American presidents combined - mostly on a pet program that he called Star Wars but overall on military and the promotion of war and a strong defense.
Consequently taxes on the middle class and the working class rose substantially - along with inflation so that the poor wouldn't feel left out. But nevertheless everybody bought into Ronny basic premise - America loved Ronny. The more rich the wealthy get the better it is for everybody, folks thought. That's the American way! Reaganomics was really an update of Hoover's "trickle down" theory.
The Republicans then supported this tax cutting and revenue cutting notion by stating the basic theory that if rich people have more money they will spend it. They will make more investments, build more factories and hire more workers. So America bought the idea of tax cuts. Republicans sold this idea by claiming that John F. Kennedy did it and it worked. The only flaw in this propaganda was that when Kennedy did it, he tied the tax cuts to jobs. Only if the businessman hired more workers did he get any tax dividend. The Republicans thought that little twist was superfluous and they left that detail out of their tax cut bills.
So now we have a returning of federal income to the wealthy with no strings attached. This was done on the basis that all those poor little billionaires were being persecuted. What did any billionaire ever do to you?
This left us with the basic principle that giving federal revenue or income to rich Americans so that they can spend it is a good thing to do and a sound economic policy.
Well naturally, the Democrats then said: if it is a good thing to give money to rich Americans so that they can spend it, wouldn't it be just as good to give money to poor Americans who will most definitely spend it - and probably spend it quicker and right here at the corner store! Now were back to Keynes, Huey Long and FDR.
When Bernanke announced this newly discovered economic principle many Republican Senators and Congressmen nearly fell off their big, comfortable, leather, lounge chairs. One Republican even asked Mr. Bernanke if he would explain that economic principle one more time. He did. And just recently many of us regular people got a check in the mail from the U.S. Government.
The Republicans are still stuttering and talking to themselves. What just happened here? Well boys, what is good for the goose is also good for the gander.
I thought it was rather interesting. My government who for years had been telling me to get up off my lazy butt, pay my own bills and stop gripping was now sending me money in the mail and begging me to go out and spend it as fast as I could. I did. It is all gone. Can I have some more, please? I promise that I will spend it also. I will spend it as soon as you send it to me. In fact, if you just tell everybody that I'm good for it, I'll spend it before you send it to me. In fact, if you guys will promise to pick up all my debts like you do with the banks and the bomb and bullet manufactures, I'll spend until I go bankrupt. And you have my word on it!
Whimpy used to say: "I'll gladly pay you tomorrow for two hamburgers today." This is even better. Now Whimpy can say: "I'll gladly buy all the hamburgers that you will pay me to purchase - today, tomorrow and forever." What a deal!
If we put the Republicans and the Democrats together it would seem that we should simply stop collecting taxes from anybody. Then how do we build an Aircraft Carrier?
Richard Noble is a freelance writer. His latest book is a volume of poems and prose – “A Little Something.” It is for sale on Amazon along with Hobo-ing America, A Summer with Charlie, and Honor Thy Father and Thy Mother. If you would like to stock his books in your store or business he can be contacted at richardedwardnoble@gtcom.