Tax Cuts Are Dumb

By ADismalScience

Barack “Shiny Tie” Obama today laid out plans to offer a $1,000 tax cut to 95% of Americans. Basically, all of America is now defined as the “middle class” except for the psychotically wealthy.  Yes we did invalidate demographics!

I like tax cuts.  I like the idea of getting two checks for a thousand dollars this year, and using them to purchase twice my weight in shiny objects.  The idea of direct economic stimulus in the form of broad-based consumer tax cuts is a pretty familiar one, though; that’s essentially what George Bush did after 9/11 and in 2007 as the economy de-hoped.

The first stimulus was lauded as an inarguable success as it and a hilariously irresponsible credit policy bloomed into the growth of 2003-2006.  The second stimulus has been largely panned after it was revealed that the money went, predominately, toward debt amortization.  The third is the worst idea of all time – the government essentially taking on debt so consumers can pay off person debts, all while planning to tax the rich.

If I got a grand, I’d go buy stuff.  Maybe I’d get a haircut, or go to dinner – the world is my moderately-priced oyster.  But for all those Americans out there with kids and boatloads of debt, the stimulus will essentially amount to a mortgage or credit card payment.  This does very little provoke long-term confidence in the market, the self-reinforcing mushroom of consumption and the associated jobs delivering stuff to consumers.  Worse, it’s an unwelcome distraction at a time when massive infusions are required into sustainable industries to keep them viable – like banking!

Banking will be around forever, largely because the US Treasury is issuing a billion in debt about as often as someone fawns over Barack Obama.  We’re going to need big-armed guys just to shovel all the paper into Chinese vaults!  But long-term prosperity requires the liquefaction of our national balance sheet, not the creation of massive debt obligations.

Besides, why borrow when the money for infrastructure is already here, domestically – but we’re paying it out as a wasteful “safety net” for aging boomers and tenuous political administrations in oil-producing nations.  Fuck the net and invest in the tightrope!  Irrespective of your sociofiscal belief system, Americans can’t have it both ways forever.  America’s debt load is starting to have long-term viability consequences.  Your share is approximately $34,835!