Voodo Economics

As I write this, Treasury Secretary Snow is on the Jim Lehrer News Hour, saying that Bush’s tax cuts will stimulate the economy, provide jobs and generate enough tax revenue to cover the deficits. This sounds like a variation on Bush’s statements that “taxes take money out of the economy.”

Let me tell you what “takes money out of the economy.”

The tax cuts go primarily to the rich. They rich ALREADY spend all the money they want to spend – because they’re rich – and aren’t going to spend MORE. How do I know they aren’t going to spend more if they get tax cuts? They already CAN spend more if they have ANY DESIRE to spend more. They’re not going to spend more, they’re going to lock up the additional money in the bank. And the bank they are going to put it in is in the Cayman Islands or somewhere else offshore, so even THAT won’t help the U.S. economy. Tax cuts for the rich take money out of the economy.

The resulting deficits cause the government to cut spending or not increase spending that might have increased. GOVERNMENT SPENDING creates jobs. The government HIRES PEOPLE, or it BUYS THINGS FROM COMPANIES or it sends money to people who PURCHASE THINGS WITH THE MONEY. And before the right wingers took over, the government did all of this with policies designed to benefit Americans – higher wages, purchasing American goods from American companies, or truly helping the poor and elderly. Now they contract out the work to the lowest paying companies (who pay their execs millions), and try to cut our benefits. And now, because of the deficits, the federal government is not assisting the states with their deficits, so the states are laying off teachers, police, and thousands of other workers. Cutting government spending takes money out of the economy.

The government is supposed to be US. Our economy is supposed to be for US.

Also, see this piece, Tax Cuts Don’t Raise Revenue.