Wednesday, December 22, 2010

Extension of the Bush Tax Cut: Why measurement is important on the trade-offs with the Republicans

Many Republicans and their rich friends are celebrating the loot from the taxpayers from the extension of the Bush Era Tax Cut; with one of their rich friends thanking Republicans for the opportunity to fly first class, rather than second class, on vacation trips. Many Democrats who were apprehensive of the huge trade-off when the Whitehouse was informing us of the need to compromise for the sake of the middle class and the economy, are asking: what next? As one of the rich friends of Republicans indicated, the extension of the tax cut offers numerous opportunities to enjoy my wealth and play around with some entertainment dollars, courtesy of Uncle Sam!

Since the windfall for the rich, Republicans have agreed to a number of bills that have once languished in congressional committees for months with one or two of them considered initially moribund. Three of such bills have now been signed into the law of the land by President Obama, in a matter of three weeks; that is an average of one law a week! From the extension of the Unemployment Insurance Payment for additional thirteen weeks for the unemployed, to Food Safety law to Don’t Ask Don’t Tell and then, the START II Treaty Law, and probably another one! We must not forget those men and women who responded to the darkest of times in the history of the union, the 9/11 disaster. They deserve better health care provision than what is in place for them today.

Except for the unfortunate Dream Act, the current congressional lame duck session has been as productive as any one can get. For the past two weeks, the lame duck congressional session has become so accomplished that you wonder why all of a sudden the bi-partisanship fervor in congress since the signing of the extension of Bush Tax cut? If you were new to the country, or been away in the past two years, you would have wondered what a miracle bi-partisanship exist in American Congress? To appreciate the current follies of the bipartisan successes that the Obama’s Administration have been accomplishing lately, you’ve got to understand the name of the political game: “Rub my back, I rub your back.” This is why Washington DC will remain what it is: a wheel and deal enterprise. That is why, anytime you hear a new congressional office seeker tell you he or she is going to go to Washington DC and change the way things are done, you must tell him or her to tell that to the marines!

For the sake of accountability, one thing Republicans are known to often tout, but hardly adhere to, a few of us want to know, if the trade-off was actually worth it. We know that 850 Billion dollars of innocent tax payer’s money and loan was committed to the very difficult compromise, which I once referred to as an inconvenient compromise. While we defer to the President on the argument of support for the negotiated plan with the Republicans on the extension of the Bush Era Tax Cut, many of us are still apprehensive regarding what we got for our sweat and money; and, are interested in measuring the contribution of the trade-off for job creations, poverty alleviation and quality of life enhancements for the middle class; including what added benefits that are measurable or readily identifiable with respect to giving Republicans what they want during the negotiations for probably the worst deal for plain old folks. We are further interested in why this Whitehouse, rapidly succumbed to what may be considered, a Russian Roulette for the middle and poor classes in America, courtesy of the Republicans’ aggression.

Some in the Whitehouse and a few on the Capitol Hill must now educate us or inform us of the true cost of extending that Bush Era Tax Cut. They must inform us if the expectation for job creations by the wealthy, from investing some of their windfall in the economy, will materialize; and, whether the negotiated trade-off, was worth anything. Many of us would like to know if the extension can really change what has happened to the economy in the past decade. We will want to be educated about how many jobs the more than 500 billion dollars that went to the rich men and women brought some hope to the dimming times of our lives?.

Further, we will like to determine, whether a negative or positive experience is expected by the taxpayers from the negotiated plan with the Republicans. The tax payers consider the exhaustive eight hundred and fifty billion dollars cost of the negotiated plan, as investment in the economy and would want someone in the Republican Party and or this Whitehouse to tell us about the actual returns, not the expected returns, from the huge investment trade off? What did the ordinary American get for incurring huge debt on the nation, apart from the flimsy unemployment insurance payment, mortgage interest write-off and one other lousy benefit that is touted as new and worthy of appreciation by the middle and lower class Americans.

Some of us, who are unrepentant leftist, who are vehemently against the extension of the Bush Era’s Tax Cut to the Wealthy among us, will want to know the actual benefit(s) that will default to the middle class from this arrangement. We will also like to know how the extension will contribute to the improvement of the quality of life for the poor. We understand that a few Republicans and their chummy rich folks may be worried or in fear of finding out the possible results from measuring the contribution of the tax cut to job creation and quality of life for the masses. This group of privileged Americans are asking that the left and others who are apprehensive of rosy projection of the Whitehouse-Republican plan, to get over it, as they cart their loot to the bank and set on the sail in the yachts to the various sunny and pleasant destination, while millions of Americans wallow in poverty or the frustration of not finding a job. You may recall that this pronouncement is similar to the argument for bailing out the big banks and the insurance companies, like AIG. Till date, the billions committed to those enterprises have not yielded the jobs and better chancing for a performing economy.

Valuable measurements of the contribution of this huge investment of 850 billion dollars are everything, if we are to get a feedback from our investments in the rich class. First, we invested in the corporate entities, now we are investing in the huge fat human entities, many of whom are laughing behind our back and taking our money on vacations or storing them in their over bloated bank accounts. The fact is, and will always be, a rich man would seek the greatest returns to his dollars, if he has to invest it in an economy. Those, who have the illusion that the rich will re-invest in this economy, need to rethink again. This is the same ploy, Supply-side economics, President Reagan wroth on the nation, over three decades ago when I just got out of undergraduate school and there was the failure of the savings and loans.

The rich and Republicans, who are benefiting tremendously from the extension of the Bush tax cut, know it is going to be difficult to force the millionaires among us to invest in an economy they can hardly make maximum profit from, especially when the economic performance indicators are in the dumps. They would rather put their money elsewhere for now. America has moved away from the business of creating manufactured goods and are more into creating money for the sake of money. We are now a nation more interested in fashioning out dubious investment instruments that can hardly create wealth. We will like China, India and anyone else to manufacture the goods, while we determine how the goods are to be moved around the globe, while we undermine our own citizens in the name of creating money. We have totally forgotten that creating money is different from creating wealth. Money is just an instrument of exchange, wealth, is the development of the people, psychologically, sociologically, mentally and physically, while still recouping some profit and enjoying peaceful happiness. Creating paper in the name of money, is not the same as creating goods and services. We must figure out why the rich do not want to get back to what America has always known to be good at, innovation in the creation of manufactured goods and services. Until we realize this, no monetary policy or tax instrument will alleviate our current economic challenges. No tax write-offs waiver will save the old glory!

The nation must view the current initiative for the Bush era tax cut extension as a potential failure. The experience with the bail out of the big companies and buying up government bonds by the Federal Reserve are good indicators of this assessment. We must take on the task of reshaping our economy to benefit our citizens. We must perceive the process of change as essential to revolutionizing the economy. We must see the needed change to create jobs in the economy as a process and not a single event. We must model the needed intervention to turn around our economy not only on the basis of monetary policies but also on an approach that give access to Americans once again, creating innovative goods and services, within our borders. We must consider our economy as a work in process that requires innovation in jobs and goods creation. To do less, to pin our hopes on the rich to reinvest in this economy, is to be committing gradual economic suicide. We cannot rely on assumptions that the rich will reinvest once we give them a tax cut. History has shown and taught us that they hardly do. It is time to get on the business of the people, just as we have expended our fortunes on tax reliefs for the millionaires among us. It is a sad fact, but this is true!

One final word, can someone provide us a quarterly measurement of the investments in the economy in the next four quarters, so we can at least determine, if we are going to be in a hole in perpetuity; or, we are going to get out of the hole with the help of the huge money given to the millionaires among us; and or, have the unemployed enjoy a less stressful XMAS celebration? With the millionaires hiding some of their ill-gotten wealth in tax shelters, as the Republicans continue to bid their work, is there ever going to be a silver lining at the end of the tunnel, with the stagnant unemployment rate among the masses?

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