Posted tagged ‘Paul Krugman’

Tax Shortfalls – Tax Shortsightedness – Right Wrong – Krugman

August 9, 2010

In a wonderful opinion piece this morning, Paul Krugman writes of “American Going Dark” – state and local governments forced into budget cuts that are destroying all those things government typically provides –street lights, roads, schools.  Although the Federal Government could help the states out, Krugman says it is strapped by deficit reducers and, worse, tax deniers – those determined to extend the Bush tax cuts for the top two percent of earners.  Krugman believes that  this is the natural result of a society that has decided (really since Reagan) that all government spending is bad; that it all just ends up in the pockets of “welfare queens.”  (A society that ignores, for example, the government spending that goes into the pockets of Halliburton Kings.)

Actually, that last parenthetical probably doesn’t support my point (or my oversimplification of Krugman’s point), which is that government spending is necessary for a decent community and individual life, and that, in addition, by imposing taxes that allow the hiring of more service providers, government fuels the economy in ways that allowing more money to stay in the hands of millionaires does not.

Palin and others on the right insist that the end of the Bush tax cuts will hurt the “job creators” and further ruin the economic situation.

Once again you want to ask the question “where have these guys (on the right) been for the last ten years?”  If the Bush tax cuts were so great for the economy, why was it in such a mess at the end of his tenure?

More importantly, the end of the Bush tax cuts will be the end of a rather special (and not distinguished for anything good) period of the U.S. economy.   Allowing the cuts to expire is not a forced march into the withering desert of socialism, but a return to the tax regime in place during Clinton’s era–a time, if memory serves, of prosperity, peace, relative deficit reduction, and better employment.

Peace is an operative word in the last sentence; as Bush failed to understand, an ongoing war is not a justification for lowering taxes.   The lowering of taxes in a time of two wars not only weakened us economically, it contributed to a certain blitheness about the wars, a notion that such wars could be maintained with no cost borne by the average American, but only by those GIs, reservists, and National Guardsmen (not usually among the group that profited from the tax cuts) who served tour after tour.

I don’t particularly like taxes.  (I also don’t particularly like electric bills or rent.  If we’re talking about lowering my financial burdens, I would put in a word for lowering the costs of fruits and vegetables, fine tea, and vampire novels.)

But I do like having subways that run on time, streets that are not infested with rats; an educated population; a national park system; culture which does not rely solely on high ticket prices; enforcement of clean food, water, air standards, and other environmental values; a medical system in which a health care provider will actually spend time with you; money that has a stable value; and protection, both at home and abroad.

Those on the “right”, and I hesitate to even give them that characterization, are simply wrong about all this.