But first . . .
Did you see Paul Krugman last week? ‘George Bush promised to bring honor and integrity back to the White House,’ Krugman begins. ‘Instead, he got rid of accountability.’
And did you see Tom Friedman Sunday? ‘The Bush team’s real vulnerability,’ he writes, ‘is its B.M.D. – Budgets of Mass Destruction, which have recklessly imperiled the nation’s future, with crazy tax-cutting and out-of-control spending. The latest report from the Congressional Budget Office says the deficit is expected to total some $2.4 trillion over the next decade – almost $1 trillion more than the prediction of just five months ago.’
What is $1 trillion? Here’s how Democratic Mississippi Congressman Gene Taylor put it on the floor of the House this past summer: ‘If you went all the way from the Revolutionary War to 1979 . . . the Revolutionary War, the War of 1812, the Mexican-American War, the Civil War, the Spanish-American War, World War I, World War II, Korea and Vietnam, built the interstate highway system, built the Golden Gate Bridge, the intracoastal waterway . . . we borrowed less than $1 trillion.’
And now we’ve added an extra trillion to the 10-year deficit projection in just five months.
But that’s just a projection. Taylor was reacting to what a Republican Congress and White House had actually borrowed. ‘In 25 months,’ he told his Republican colleagues, ‘you guys have borrowed $1 trillion.‘
The full text of his speech can be found here.
Congressman Taylor is actually more of a deficit hawk than I am. (I’m not one who thinks a balanced-budget amendment is a good idea, or that it’s unwise to run a large deficit – if it’s the right kind of deficit – in a recession.)
And to be fair, the not-quite-$1 trillion we had borrowed from 1776 to 1979 would have been higher if expressed in 2004 dollars. But still, it’s stunning to think that in the twelve Reagan/Bush years that followed 1979 we added another $3 trillion to the debt . . . and now we seem well on our way to adding $2 or $3 trillion more.
And is it to invest in our children? Our infrastructure? Our future? No, it’s largely to cut taxes – dramatically – for those who least need the help. Like my friend who gets $3.6 million a year in dividends from a stock he inherited. A very nice guy . . . I begrudge him not a penny of it . . . but why did we cut his tax bill by more than half, from a 39.6% rate to a 15% rate, saving him – and costing the Treasury – $800,000 a year?
So this brings us right back to the advertised question! What Should the Top 1% Be Taxed?
And look at that! I’ve run out of time.
But one final note: A few trillion in debt may not seem like much when the Treasury can borrow at 1% or 2% or 4% (depending on the maturity). But what kind of burden on the taxpayers will this be when all the trillions we have borrowed by then require interest payments of 6% or 8%? Those huge interest payments could amount to a quarter or a third of our entire federal budget, cutting deeply into the funds available to pay your parents’ Social Security, provide their Medicare, fund veterans’ benefits, pay a voluntary army, inspect the meat we eat, help kids pay for college, assist devastated families after natural disasters . . . everything.
Tomorrow: What SHOULD The Top 1% Be Taxed? (Thursday or Friday: your reaction to Jared Swecker’s comment on the Bush 9/11 video.)
Quote of the Day
We're not trying to outsmart the smart guys. We're trying to sell bonds to the dumb guys.~alleged remark of the head of a Wall Street mortgage-bond group
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