By David Beilstein

THAT tears it!

Of all the things to happen upon the American landscape politically, the ineffectiveness of Republican leadership in the House chamber continues. That appears to be the sure thing nowadays.

I believe I intimated some time ago it would get worse before getting better.

Today’s developments, including the repercussions that 77% of Americans will be paying higher taxes (meaning higher costs of living for those folks) means, essentially, the problems facing the people of this so-called free republic are ouch, again, not being addressed.

Both President Obama and Republican nominee Mitt Romney agreed in the macro the American people need a financial break. Raising costs through a myriad of economic policies and their effects upon the market place through a fiscal cliff “deal” reduce not a scintilla of American economic angst.

The question arises: how much value do men and women desirous of a free markets and minds governmental paradigm achieve having Boehner and company in the majority?

Roving National Review correspondent, Mr Kevin D Williamson chimed in:

But there is another possible headline:

“Democrats insist on raising taxes on poor to protect millionaires and billionaires.”

That is not how the New York Times put it, but it is true.

Of all the tax cuts of the Bush-Obama era, the income-tax cuts for the so-called rich (households earning $250,000 or more) were the least expensive in terms of forgone revenue. The Bush tax cuts for $250,000-plus were estimated by the CBO to deprive the Treasury of about $80 billion a year; the income-tax cuts for the middle class were estimated to cost $220 billion a year; the payroll-tax holiday, which disproportionately benefits the poor and middle class, cost about $120 billion a year.

Extending the payroll-tax holiday was on almost nobody’s radar during the fiscal-cliff debate. Why? The cynical answer is that nobody really cares very much about the interests of poor people, and there is something to that. But I think the answer is a bit more complex: Republicans believe (correctly) that temporary tax holidays are bad economic policy, contributing very little in the way of stimulus or long-term growth prospects but increasing uncertainly about future tax conditions. Democrats dislike payroll-tax reductions because they undermine the myth that Social Security is a self-funding investment (payroll taxes allegedly fund Social Security) rather than what it is: a deficit-expanding welfare program for the middle class. And everybody had a good reason to knock that $120 billion a year off of their CBO scoring.

The expiration of the payroll-tax holiday will reduce the real income of middle-class and working-poor households by around 1.5 percent on average. So while the fiscal-cliff deal raises taxes on those making $400,000 and up, it also raises taxes on workers in the bottom (0.00 percent) income-tax bracket, who do pay payroll taxes. Republicans would have been happy to extend all of those tax cuts into the future, but President Obama and his Democratic allies insisted on tax increases — knowing full well that would mean tax increases on the poor as well as on the high-income.

But not all the rich folks got a tax hike. As usual, well-connected special interest groups — from Hollywood to the booze lobby — secured sweetheart deals for their own narrow interests. So the industry that employs Sean Penn and Ed Asner gets a nice fat tax break, and poor people with jobs get the shaft. The people who rail against “corporate welfare” and “crony capitalism” took the time to cut a nice side deal for the rum industry. You will notice that the Bacardi family is not poor. That’s Washington.

Dr Milton Friedman used to argue everyone (since the collapse of the Berlin Wall) knows socialism does not work; the empirical data is not in dispute. Still, the tilt of the voting public is to enshrine more socialism into the DNA of the American republic. Consequently, as explained by big brained and beautiful Jew, Dr Friedman, socialism creates two distinct consequences: a greater impoverishment for the majority, and rising fortunes for the few – the, ah, well connected.

The kind of thing the occupy Wall Street hooligans were so torn up about. Needless to say, such reality is the exact paradigm the left constantly argues free markets and minds create. An error. Problem is, it is socialist progressivism that creates the economic and social climate the left uses effectively to argue for systematic change.

Obama is a fraud; the Republicans in the house are useless. The American ship now takes on more water. She’s made of iron, so she can sink.

The effective argument against Obama is a top to bottom explanation bigger government impoverishes more and more (diverse) groups of people. It’s not a Democratic Party problem, though they are large perpetrators.

It’s a statist addiction. It affects them all in the gilded halls of Washington, D.C.

As Samuel L Jackson said in Steven Spielberg’s Jurassic Park,

“Hold on to your butts.”


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