Monday, December 26, 2011

Barack Obama: Bush-Reagan-Kennedy Tax Cutter?

One of the amazing arguments last week in the ludicrous fight over continuation of the 2 percent so-called payroll tax cut came from President Obama. Such a tax cut, the President said, was necessary to stimulate the economy.

I couldn't believe my ears.

Cutting taxes stimulates the economy? Mr. President, we thought you'd never come around!

That was George W. Bush's position in favor of his famous tax cuts. It was the argument Ronald Reagan made that resulted in a great quarter-century economic boom. It was also part of President Kennedy's effort to pull the country out of the sluggish economy that spilled over from the waning Eisenhower years.

But, alas, the President's new economic insights evaporated. Within a day or so, another story came out of the White House. It's almost as if the President or his advisors realized that it was not in his interests to be talking like Bush-Reagan-Kennedy. As a result, Obama trotted out the old Democratic demonstration of victimization: the family that couldn't buy pizza or visit an ailing relative because mean, evil Republicans wouldn't give them a tax break.

Looks like it worked --again, Lucy moved the football and the Charlie Brown Republicans fell for it and caved.

But it was ironic and fun to hear President Obama torpedo Democratic and Keynesian dogma by saying tax cuts stimulate the economy.

For the record, this whole nonsense over the continuance of a 2 percent tax reduction is ridiculous. Especially when the reduction extends for all of two months! Not a lot of pizza to buy in that scenario.

First of all, the payroll tax should never have been cut in the first place. Because, as we are told, that money coming out of our paychecks is technically not a tax -- it has traditionally been called a "contribution."

We are "contributing" money for our Social Security. And, as Al Gore told us, that "contribution" then goes to a "lockbox," waiting for that wonderful day when we receive a pension from it.

I know, I know -- but bear with me, Alice, we're in the federal wonderland for the moment.

So reducing the amount we "contribute" to Social Security is no more in our interests than reducing how much we put into a 401k or IRA.

Which means this was not an argument about a tax cut; rather, it was a smoke-and-mirrors game about how much we would be contributing to the federal retirement program -- a program designed to personally benefit us.

Of course, we all know Congress regularly breaks the lock on the lockbox and raids the Social Security funds for its own purposes. But given the realities of Social Security underfunding, there's no need that We the People should take part in the looting, too. Better to skip the pizza today in order to take care of our needs for tomorrow.

I realize this is all theoretical -- that the Social Security Trust Fund is a myth, as is the lockbox, and you'd better not scrimp on your "contributions" or people with guns and no sense of humor will show up on your door.

But for some of us, unlike people in federal government, words mean things. Humor me, if you will, in my beliefs in the myths, but continued underfunding of Social Security is not in our interests.

Thus, the payroll tax cut was a mistake, it never should have been continued, and the fact that the extension goes only two months shows what a silly, cynical game this is.

Even when you throw in pizza...

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