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Tax Cut Voodoo
Magical thinking is the belief that facts can be changed by repeating words or phrases that are not based in reality. In this case it’s that cutting taxes will cure our financial problems. Ask any Tea Partier, tax cuts will solve the financial problems of the United States. Big businesses will use that money to expand and hire more American workers, money will be spread around and everyone will share in the wealth. All this if we just cut taxes.
Unfortunately, the reality is that big businesses have had tax cuts and still do have them and none of these outcomes are happening. Unemployment is still high, businesses are still shipping jobs overseas and citizens are losing their homes in record numbers. This is the actual result of tax cuts. Still, there are a lot of folks in Congress are sprinkling dried toad powder into bowls of stumpwater, chanting their magical spell: Tax cuts will save the nation.
In the past I have asked senators and congressmen who’ve contacted me for my support to explain the tax cut magic to me. None of them have answered me. And I’m not surprised because when you really start looking at the system, it makes no sense.
- The biggest employer in the United States IS the United States. If the Federal Government stops spending, jobs are lost.
- When jobs are lost, those who lose them are no receiving incomes.
- People without incomes are not getting tax cuts.
- If folks aren’t getting tax cuts (or incomes, for that matter) how are they going to spend?
Balance the Budget
Republicans and Democrats are fighting like dogs over a bone to have their way in the Great Budget War of 2011. Democrats agree that we spend too much and that cuts must be made to programs. Republicans are barking, “BALANCE THE BUDGET! NO NEW TAXES!” In a perfect world that would be wonderful and productive.
However, expecting to balance the US budget like we balance our budgets at home is just naive. It isn’t like balancing a checkbook. It’s much more complex. Our economy is a world-class and what we do affects markets worldwide. If we default, other countries don’t get their money.
Those countries are entitled to their money, so instead of the money they just take possession of that amount of the US. That’s how bankruptcy works. You default on your loan, the bank takes your collateral.
And that’s how China gets control of the United States of America. We give it to them.
Right now the US Dollar is the world’s currency. If you want to buy oil, you have to purchase US Dollars to do it. Asia, Europe, Australia and folks on all other continents must purchase dollars from us to buy oil, wheat, technology, and other commodities. This keeps us in a position of control in the world economy. This is determined by the International Monetary Fund (IMF).
Recently, though, Dominique Strauss-Khan the head of the IMF was arrested in New York on charges of sexual misconduct at his hotel. While this was being worked out, he was removed as head of the IMF and Christine Lagarde was put in his place. Will Lagarde be as staunch a supporter of the dollar as Strauss-Khan was? Let’s hope so. Because if our dollar loses it’s place in the world’s markets, our economy will plummet to third world country status. And just like that we’ll be buying Chinese Yuan to buy oil and gas. An prices will skyrocket.