More Blood from Turnips

As many of you know, there is a big debate in Congress right now about allowing the Bush tax cuts to the wealthy to expire on schedule. Conservatives, of course, are digging in their heels to oppose this "outrageous notion." The official line is that it will raise taxes on the well-to-do and this will adversely affect the overall economy.

Let's say I purchase an old clunker of a car. I lose my job and my nonprofit credit union (a commercial bank would never go for this) grants me a moratorium on my car payment for several months as I try to secure a new job. I luck out by getting a new job -- though it pays less than my previous position -- and so, at the end of the moratorium period, I again start to make my monthly payments on the car.

Is the credit union levying a new monthly charge against me? Of course not!! I'm simply resuming my monthly obligation (car payment). In this same vein, allowing the tax breaks to expire is not tantamount to raising taxes. The rich simply were granted a temporary reduction and now they must meet THEIR ongoing obligations -- federal taxes on their largess.

But this hasn't stopped conservatives with ranting and raving about the fictitious tax increase. They actually have their own plan to try to reign in the growing deficit. As reported this week in A World of Progress:

Washington is talking about cutting Social Security for working people at the very same time it is talking about extending tax breaks for the wealthiest people in history. This is a result of our country’s shift away from democracy and toward plutocracy. This post is about the astonishing change in attitude toward regular people that is the result of this shift.

There is a “Deficit Commission” that is supposed to be cutting budget deficits (that result from tax cuts for the wealthy and increases in military spending) but is instead talking about cutting Social Security. Get this: Social Security is a fully-funded program that uses no tax money. By law it cannot borrow so it cannot contribute to the deficit! At the same time, the huge military budget (we spend more than all other countries combined) is completely unfunded and faces a huge shortfall every year — but cutting that is off the table.

The real problem: Social Security built up a huge trust fund that was spent on tax cuts for the rich, and that money is coming due. Inside-the-Beltway thinking is to cut Social Security instead of paying back what was borrowed. One proposal under consideration is to raise the retirement age, recently increased to 67, to 70! This at the very time that every social indicator is saying that we should be increasing Social Security and lowering the retirement age. Increasing because people’s savings have been slammed by the financial collapse so they need Social Security as their fall-back position, and lowering because so many people over 50 can’t find work...

There you have it. That's the plan. Try to get more blood from the turnips (us), but don't touch the caviar!