There’s a massive amount of work that needs doing – weatherizing 100 million homes and commercial buildings to be 25% more energy efficient comes to mind as low-hanging fruit with a very high return on investment – and there are a great many people looking for work to do.
Finding ways to match the two would seem to be the obvious thing to do.
We don’t need to buy more TVs or build more yachts right now, which is the kind of spending that tax cuts encourage. But we really do need bridges that don’t collapse, which is the kind of spending that is funded by taxes.
Is our debt is so low and our infrastructure so sound that we can relax a bit and indulge in more consumer spending? Remodel our kitchens and buy more fashionable imported shoes?
Or would this decade and the next be good ones in which to restrain our personal consumption, especially among millionaires and billionaires, and to renew our infrastructure?
This is the central issue of our time.
The answer is beyond obvious.
And it means massive infrastructure spending funded by a return to Clinton/Gore tax rates.
(Please note that most of the actual work would be done by private enterprise, bidding for the jobs.)
Yet the mantra of all the Republicans in Congress and all those running for President is that taxes must be kept low. For (they say) if we made the grievous mistake of resetting them to the Clinton/Gore levels . . . well . . . what?
They never phrase it in terms of the Clinton/Gore tax rates, lest people recall that the Clinton/Gore years, with those rates, were magnificently prosperous – and fiscally sound.
After Reagan/Bush quadrupled the National Debt, Clinton/Gore – in large part because of their prudent tax policy – handed Bush 43 ‘surpluses as far as the eye could see.’
Bush 43 squandered those surpluses on the wealthy (and an unnecessary war) and doubled our National Debt yet again. And handed Obama an economic meltdown and a $1.5 trillion 2009 deficit.
The Republicans say that if only we keep taxes low, the economy will boom. But we tried that. How much proof do we need that unreasonably low taxes lead to crumbling infrastructure and crippling debt?
Were the Fifties really so awful? (Many think of them as the good old days!) I’m not suggesting we go back to those tax rates, but I would remind you that – in an effort to deal responsibly with the massive debt we had accumulated to win World War II – the top federal rate throughout the Fifties was 90%.
Were the Nineties really so awful? (Most of us were there: they were the even better old days!) They began with Clinton facing a recession and a bond market nervous about our deficits. He did the responsible thing – against unanimous Republican opposition – and raised taxes and got us back on track.
‘Ah,’ people will say, ‘but he was just lucky – he had the technology boom. There was the Internet.’ (Which grew out of a government-funded DARPA project, by the way; exactly the kind of thing the Republicans want to stop funding today.)
Well, Bush had it, too. We are still in the technology boom.
(You know what Ray Kurzweil says – not only will the next 50 years of technological progress be as dazzling as the last 50, they will be 32 times as dazzling.)
And it’s just idiocy to say that entrepreneurs and venture capitalists won’t bother to start or fund new businesses if they think taxes will go back to the levels they were under Clinton/Gore. Or, for that matter, the dramatically higher levels that prevailed when Steve Jobs started Apple or Fred Smith started Federal Express.
We should have had a much bigger infrastructure component in our 2009 recovery package, but the Republicans blocked it. It’s time for more – along with the taxes to fund it. There is a massive amount of work that needs doing and there are a great many people looking for work to do.
(One potentially exciting project to nurture, albeit no job producer any time soon: glass roads. Once we solve problems like how they can provide traction when wet. Come back tomorrow.)
Guru told us about this one a few weeks ago at 37 cents, about where it still is, and updates as follows: ‘These are the preliminary data presented at ASCO this weekend. MYG’s drug delayed further progression of the disease in most of the patients. There is no approved drug for gastric cancer, an especially lethal cancer, so these data are encouraging. However, my interest in MethylGene has nothing to do with these data and everything to do with its mechanism. They began enrolling more prostate patients this year and should have results later this year. THAT is the reason we are in MYLGF. I continue to expect the stock to trade towards $2/share over the next year.’
Quote of the Day
Every debt is ultimately paid, if not by the debtor, then eventually by the creditor.~Jim Grant
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