Friday, September 10, 2010

Our limping economy

President Obama is proposing various tax proposals to try to pull the economy out of its funk.

Democrats in Congress are trying to shape any changes to protect their primary contributing constituency, unions and public employees. Republicans are trying to shape any changes to protect their primary contributing constituency, wealthy folks and big business.

None of the ideas anyone is floating seem to me to make much sense. The Republican notions that we should be cutting government spending is ludicrous - the modern day version of the old medical practice of draining blood from sick people. The democrats ideas seem misdirected - because they can't seem to find good ideas they are capable of defending in the chaos of modern political media.

It all seems pretty simple to me. The people that have money, wealthy individuals and businesses, are sitting on it because they don't want to risk losing it. The ordinary folks aren't spending because there houses are not worth as much as they thought, or they are in debt or they are worried about their jobs.

The logical response it would seem would be to lighten the burden on ordinary folks, and make it more costly for the wealthy folks to sit on their money. A significant temporary increase on taxes on corporate retained earnings and corporate dividends would make it more sensible for corporations to invest in creating jobs than sitting on their money. A tax cut for working consumers would help them feel better about their economic situation and be more willing to spend money.

I suspect what we will actually get will be the normal mish-mash of misdirected policies to hand some benefit to the politically connected. It is not ultimately Washington's fault. As voters, we get the government we deserve. If as voters we are lazy thinkers, going with what sounds good emotionally instead of taking the time to learn facts and evaluate the policy.....