Raising Taxes Might Help Democrats, But Not the Economy

Hunter, all you ever do is spew mindless uninformed rage. I don't think you've made a single intelligent, well researched comment the entire time you've been writing your highly obnoxious screed on this blog. Just because the left believes health care is a right doesn't mean that they believe that people should get a free ride. People here, like in Sweden and France, would contribute through payroll taxes or subsidized premiums; everywhere society bears the cost of providing health care as part of the social infrastructure. The important thing is that access to health care should never be based on one's ability to pay a market (or monopoly) rate for insurance and health care provision. People have more of a right to health care than do corporations have the right to gouge the public with outrageous premiums.

The reason that there is involuntary unemployment is that people hold money as an asset as they do other financial assets. Money's value is more fixed than that of financial securities which fluctuate due to speculative trends. In the current liquidity trap, money is being hoarded, not due a "bad business climate," but because the marginal efficiency of capital is lower than the rate of interest meaning that rates of return on real investment are lower than long term interest rates and highly risky given low levels of effective demand. Cash is preferable to investment because deflation is making cash more valuable and less risky. Cutting taxes for the rich and purchasing "toxic assets" to recapitalize commercial banks thus making loanable funds available is useless in a liquidity trap; sufficient capital already exists for investment but there isn't sufficient demand to purchase goods and services and hence investment will not take place in job creating enterprises. James Galbraith explains;

"The public deficit is just the obverse of net private savings. That is, when private credit is booming, investment exceeds saving and deficits tend to disappear. That's what happened in the 1990s. When credit collapses, deficits return. That's what's happening now. Large long-term deficits will occur, or not, depending only on whether we succeed in generating a new growth cycle..."

http://www.alternet.org/news/145401/why_progressives_shouldn't_fall_for_the_deicit_reduction_trap?page=2

This is point of fiscal stimulus. We must do more for job creation and worry less about deficits which tend to vanish anyhow during periods of economic growth which produce tax base that eliminate deficits on a solid, long term basis.

steve of IL 10:28PM August 04, 2010

Bill, the entire quote is full of lies. Not distortions or half truths, outright lies. The US government hasn't taken over a single industry. The banks are reporting record profits and are paying back the government with interest. Ditto for the auto companies although they took most of their bailout money and invested it overseas. Not to patriotic!! By the way, bailouts are old news; Nixon bailed out Penn Central and Lockheed; Carter bailed out Chrysler; George H.W.Bush bailed out the Savings and Loans; George W. Bush bailed out all of Wall Street plus the automakers. Obama merely continued the bailout policy.

As far as the health care is concerned it was NOT socialized medicine. The public option was merely a government subsidized insurance program to provide health care for those who can't afford insurance. It would lower costs by providing competition and negotiating costs with providers as the government currently does with Medicare and Medicaid. The cost of the program over ten years would be less than we spend a year on any of the long standing health care programs like Medicare and Medicaid or even the nearly $200 billion in tax expenditures for employer provided health insurance. Your contention is ridiculous. By the way, the bill as it currently exists, with the insurance mandate, is widely supported by the health insurance industry. Angela Braley, CEO of Wellpoint which owns Anthem Blue Cross, testified about the industry's desire to see such a mandate before congress in November 2008.

http://energycommerce.house.gov/Press_111/20100224/Braly.Miller.Testimony.pdf

The problem with Limbaugh's statement is that he blames "liberalism" for the mess we're now in after eight years of the most extreme conservative administration in our post-WWII history. We've also had free market conservatism for about 30 years leading up to the current situation. The Limbaugh remark isn't merely ahistorical; it is a deliberate attempt to deceive the GOP's largely uneducated, low cognitive political base and get them to create enough hysteria to catapult the GOP to victory. The idea is to keep corporate America in the driver's seat at the expense of the people regardless of how this harms the national interest. Limbaugh, like Hannity, Beck, O'Rielly and the rest, is a lying shill; none of them are actually professional commentators or journalists. They are hired guns so to speak for the GOP and the rich.

True, uncertainty does delay investment and spending. But it is the right wing media with its lies that is causing the uncertainty. Obama has cut taxes, not raised them. His intention to raise them 4.5 percentage points on the top 2% of the country, so that top marginal tax rates are where they were during the Clinton presidency when the rich did extremely well, should not harm investor confidence. Card check has long been scrapped. The health care reform will lower, not raise, small business costs. It is the GOP that is harming the economy.

steve of IL 3:50PM August 04, 2010

It was the Republicant members of Congress, and the Republicant President Bush, who set the 10-year timer ticking on those unnecessary, unwanted tax cuts for the rich.

Jim Finkler of PA 3:31PM August 04, 2010

Very well-reasoned and insightful commentary!

MGLoraine of NY 4:28AM August 04, 2010