Amid all the political and media hoopla about the “fiscal cliff” crisis, a few facts are worth noting.
First, despite all the melodrama about raising taxes on “the rich,” even if that is done it will scarcely make a dent in the government’s financial problems.
Raising the tax rates on everybody in the top 2% will not get enough additional tax revenue to run the government for 10 days. And what will the government do to pay for the other 355 days in the year?
All the political angst and moral melodrama about getting “the rich” to pay “their fair share” is part of a big charade. This is not about economics, it is about politics.
Taxing “the rich” will produce a drop in the bucket when compared with the staggering and unprecedented deficits of the Obama administration.
No previous administration in the entire history of the nation ever finished the year with a trillion-dollar deficit. The Obama administration has done so every single year. Yet political and media discussions of the financial crisis have been focused overwhelmingly on how to get more tax revenue to pay for past and future spending.
The very catchwords and phrases used by the Obama administration betray how phony this all is. For example, “We are just asking the rich to pay a little more.” This is an insult to our intelligence. The government doesn’t “ask” anybody to pay anything. It orders you to pay the taxes it imposes and you can go to prison if you don’t.
Then there are all the fancy substitute words for plain old spending — words like “stimulus” or “investing in the industries of the future.”
The theory about “stimulus” is that government spending will stimulate private businesses and financial institutions to put more of their money into the economy, speeding up the recovery. But the fact that you call something a “stimulus” does not make it a stimulus.