Deficit Thinking



It has been a long hot summer and its not finished.  Someone pointed out a common thread in my recent blogs… my constant references to the low intellectual quality of a substantial percentage of Americans.

Its not that I hate Americans, but c’mon, its really not difficult to find a prominent story of someone whose capacity for stupidity is higher than their capacity for common sense.  One has to wonder the cause of the erosion of American intellect over the last 50 years.

Far from being a world leader, Americans are dragging the rear in almost every positive quality. But they are leading in the worst traits.

The era of looking to America for positive leadership is done. The fact that Barack Obama is immensely popular with Europeans, is certain to enrage Americans.  But that is because of their own worse qualities… stupidity, arrogance, xenophobia and racism. Pity.

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Finally Obama is taking the fight to the republicans.  But will he continue?  Along with his attack on the ‘Just say No” republicans, he has released a new stimulus infrastructure ‘jobs’ bill of over $50B, targeting the nation’s roads, airports, bridges, etc.  A good idea really, but some of his cowardly democrats have shown fear and whittled down the figures.

But timing might be everything, and putting both together might just work in November… even though I wouldn’t bet too heavily on it.  After all, this is America where stupidity is likely to reign, and the democrats have shown the ability to rescue failure from the arms of victory.

My problem is that the dems aren’t explaining the benefits of this new stimulus, and also not defending the president’s rejection of tax cuts for the rich.

Tax cuts for the rich don’t work.  Giving a multi-millionaire a couple extra thousands isn’t going to make him spend all that much more.  That’s researched, written about, proven fact.  More often than not, that money never makes it into the productive sector.

America’s economy is consumer-driven by the middle class, not the rich.  But those can’t buy if they don’t have money to spend.  We are just holding strain right now.   With the job market so tight, employers are exploiting workers.  Workers are being less productive.  What they earn is saved for the ever round-the-corner rainy day.  So, no spending, and the economy won’t grow without middle class spending.

Give them jobs, they earn, they spend, others earn and they spend and so on… and the country gets out of the recession.

What’s the effective argument for the spending. Firstly, America’s economy will only grow with middle class spending.

Next, America’s infrastructure does need fixing, if not today, then tomorrow… and tomorrow will be more costly.

It is natural for the homeowner to feed his family rather than fix his house (infrastructure), but more often than not, he will end both starving and without anywhere to sleep.   But government isn’t similarly constrained.  They can borrow at much better rates than we can.

The arguments about deficits are plain stupid.  A big deficit is tomorrow’s worry, eating is today’s.  A man dying of hunger can’t worry about tomorrow’s credit card debt when his children are starving today.

People need jobs, the infrastructure need repair.  Win-win.  People have money, they spend, the economy grows, they pay back their loans.  People with no money can’t pay back their loans.

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The democrats are hoping to tie the republicans to supporting the interests of the rich over the interests of the middle-class and poor. And they are hoping that this strategy works against the republicans come November.

Cases in point.  The republicans voted against a bill to resuscitate small businesses, while they are fighting tooth and nail to give billionaires tax cuts.

But the polls are not supporting the democrats.  Americans have a strange relationship with the rich. Understandably, they all want to be rich.  But the reality always is that most billionaires become rich by abusing the trust of others.

Yet Americans love the Robin Hood figure… stealing from the rich to give the poor.  That has to be a contradiction.

In truth, Americans and corporations (the super rich) are in a kind of domestic abuse relationship, the main difference being that corporations beat up on Americans and openly treat them with contempt.  And like the abused spouse, ‘He loves me because he beats me so bad’.

So Obama in trying to stimulate the economy, while still keeping an eye on the deficit, is opposed by the republicans because they want the rich to get tax cuts also… and to hell with the deficit.  To hell with the fact that tax cuts to the rich don’t have a major effect on the economy.

Here are the numbers.  Tax cuts for everyone will cause a loss of $4 trillion in revenue to the government.  The rich as defined by Obama, are those who make over $200,00 a year.  This constitutes about 3% of those targeted for tax cuts.  Cutting this 3%, will increase government revenue by $700B, or cutting the potential deficit as supported by the republicans by $700B.

But the republicans will support this deficit causing measure only if the full $4 trillion is thrown into the pot, or $700B more than the democrats are willing to support.

So if the minority of 3% doesn’t get its 17.5% of the pie, the republicans will make sure no one gets anything.  See, 3% getting nearly 20% of the pie.  That to the republicans seem fair and Americans are dumb enough not to see that.

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And speaking of timing.  Perhaps Obama and his political chessmasters are playing a brilliant game.  One can’t help but be impressed about the strategy that carried him to the presidency.  Perhaps something like that is at play again.

The tea party/republican relationship is combusting, big time.  The recent primaries (Sept 14) are proving that the republicans cannot control the tea party, as I had previously warned.

The teaparty, as senseless a group of people as there is, took the country by a storm.  Their only agenda was to ‘get rid of the black president by all means possible’.  The republicans saddled the dragon, thinking that they can always control the beast.  Now they are being eaten and don’t like it one bit.  They realize they have lost control.

This bickering probably won’t necessarily unify the democrats who are scared and foolish. Georgian democrat Jim Marshall says, “We should not be raising taxes in the middle of a recession,”.  Really.  So they think that not giving a tax cut is raising taxes, and they equate the rich 3% not getting a tax cut the same as the perilous plight of a middle class mom with three kids not getting one.  Interesting.

If they are senseless there, here is where they are absolutely stupid … thinking that pandering to the tea party will get them some mad hatter votes.  Not a chance in hell my friend.

With the tea party out of control and the republicans struggling to field their own candidates, the way might just be clear for the democrats.   But cowards that they are, they can’t hold their ground.

Trust me, if they don’t back Obama on this there will be a backlash from their own supporters. The rich still won’t support the democrats and the working man will be incensed enough to withhold his vote.  There is only one feasible direction for the democrats,… no tax cuts for the rich.

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I don’t know, but I can’t help being frustrated by the intellectual quality of this country.  So a dumb-ass preacher declared that he was going to burn some Korans.  So what?  That shouldn’t make more than the local paper. But no, everyone up to the president is chipping in, bringing attention and power to this glory hungry stuntman.  Leave them alone and they will… poof!

The media is complicit in this because they know it sells.  Stupidity is like crack to a crackhead.  Americans can’t get enough of either.

And what the hell is Obama doing speaking on this?  Will he never learn when to just shut up?  He has an agenda and from the first day he gets distracted.  Man, this stupid preacher is wallowing in his new power.  He was ne-eh-ver going to burn any Korans and even if he did, there are ways to deal with that.  Me, I would just electrify his pulpit the next Sunday.  Allah strikes back. That would stop all the copycats who are now about to come out of the woodwork with stupid attention grabbing threats like this.

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The Jamaica Labour Party no longer sees itself as viable as long as Bruce Golding leads the party. He is clearly dead weight and there will soon be a move to chuck him out.  If I were the People’s National Party, I would throw all my weight behind him.  Let the JLP be weighed down by his carcass. Consummatum est.