Tuesday, September 23, 2003

Economics 101..... IN LOONY-LAND!
(My views on the current Jabberwocky) reports on Treasury Secretary John Snow's presentation to the annual meetings of the International Monetary Fund and World Bank. Surprisingly, they managed to report this without a hint of sarcasm or any bursts of laughter. Why do I scoff? Come down the rabbit hole with me.

...Snow told global bankers and economists worried about the tide of red ink in Washington that the massive U.S. budget deficit would be halved by the end of 2008... He called the budget deficit an "understandable" consequence of the recent recession, and told delegates from 184 countries that it would be tamed through "ample growth" and "disciplined spending," having earlier ruled out any tax increases as "counterproductive." ...He offered few other details on how the United States would reduce the deficit, which the Treasury department has said reached $400.5 billion in the first 11 months of the 2003 budget year twice the total for the same period a year earlier. IMF managing director Horst Koehler acknowledged that the "sharp swing" in public spending in the United States had helped stimulate growth after the slowdown a point Snow also made, calling it "Economics 101."

WHAT??? WHAT??? I haven't read nonsense this good since "The Hunting of the Snark". Am I missing something? Is the whole world in on some sort of crazy contrariwise drinking game? (While watching these international broadcast is someone supposed to tell me, "Okay, this is the part where Snow will say the OPPOSITE of what is happening and that means we all take a swig. Oh man, look at the British. I think they're buying his story!!")

My suspicion is that this is all supposed to distract us from what is really happening. The rich have been getting richer (and paying less taxes) for at least a decade, probably more, and they are getting tax CUTS now. Am I sure that the rich are getting richer? The IRS put out a fascinating little report on the most Fortunate 400 in the United States. Oh, the lucky few. These are not the SAME 400 every year, just each year's top 400 in AGI (adjusted gross income). So keep in mind that this isn't the list of top asset holders, but income earners. The report covers the tax years of 1992 to 2000. During those 8 prosperous years the people jockeying for the top 400 increased their take by a net $30 billion (adjusted to 1990 dollars for comparability) which was just over a 190% increase. Meanwhile, all returns increased by $2.1 trillion, about a 90% increase. Let's break that down. $30 billion divided by 400 is an increase $74 million per return. $2.1 trillion divided by 125 million (an approximate number - feel free to check out and to quibble) is an average of $17,188 per return.

Meanwhile, what was going on in tax land? The Fortunate 400 had a tax increase of of $7 billion while overall the taxpayers increased their payments by $504 billion. But what was the comparison of taxes against income? In 1992 the Fortunate 400 had 29% of their income eaten by taxes (~$4.6 billion divided by ~$15.7 billion) and in 2000 it was down to 26% (~$11.8 billion divided by ~$45.7 billion) which is a CHANGE of a 11.9% REDUCTION. Meanwhile overall as a Nation experienced an increase from 20% to 22% which although a 2% net increase means a CHANGE of a 8.6% INCREASE. From a CHANGE perspective that is quite a gap, don'tcha think?

I'm thinking that according to the Economics 101 that I took in college, we need to get the workers (i.e., taxpayers) of America BACK to work so that we CAN experience growth. Are you listening corporate America? Stop sending our jobs overseas or eventually we - the richest country in the world - won't be able to afford to buy our own goods anymore. (An economy is a system, remember? If you took Econ 101 certainly your professor demonstrated how all of this worked.) And we DON'T need to CUT taxes OR see such a widening gap in the portion of income paid in support of our country by the "haves" and "have-mores". (My logic is that if we can pay taxes we don't qualify as "have-nots".)

Unless your endgame ISN'T to have the American economy recover. For the Snark was a Boojum you see... If you'll pardon me I need to go polish my vorpal sword. Snicker-snack, snicker-snack.

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