“I’m so bored. I hate my life.” - Britney Spears

Das Langweilige ist interessant geworden, weil das Interessante angefangen hat langweilig zu werden. – Thomas Mann

"Never for money/always for love" - The Talking Heads

Wednesday, November 23, 2011

Solving all our problems before lunch (U.S. edition)

Okay, okay. It’s time to solve the deficit problem, in one paragraph. Here goes: restore Clinton’s tax rates, save for capital gains (raise it to 45 percent), and the marginal rate on top earners (those making 500 thousand or more), which should slide between 50 and 70 percent. Shrink defense expenditures in total to 100 billion dollars a year. Stir, wait a decade, bingo.

Of course, many would disagree with this course of action – including myself. I think EITC should be raised to 50,000 per year, thus pretty much knocking out the lower 50 percent from any income tax, and I think all corporate loopholes should be closed and the corporate income tax should remain the same. In the meantime, I think the U.S. should transform the post office into a post office bank, with which people could open up tax free savings accounts for retirement, education and health that would take the place of 401ks. And I think the money so generated could be used, for one thing, to buy U.S. T notes. In the end, we should work to take sovereign debt out of the hands of the private financial institutions.

Now that all this is clear, let’s discuss the real deficit we should be attacking. The political illuminati (as Marx called them) have created a vast hallucination, which goes like this: the social insurance system created in the developed economies in the 30s-60s are such that “we” are no longer able to afford them. The reality, however, is that “we” were much, much poorer in the 30s through the 60s. After generations of toil, after factoring in productivity gains and Solow’s residual, we find that we are infinitely richer than our grandparents or great grandparents. So how is it that we ended up poorer?

Here’s how we get to the real deficit, the equality deficit. In the last thirty years, the political illuminati have operated under the hallucination that the political structure set up to allow the social insurance system, which progressively shrank wealth inequality, could be ‘reformed’ by encouraging the kind of growth that increases wealth inequality by leaps and bounds. In fact, there is a reason that the Gilded Age and the New Deal are antithetical: in the former, ‘we’ do become relatively poorer – in relation to the national wealth – even if we become, in absolute terms, richer – although not much. Eventually, the equality deficit is going to kick in and that means it is going to kick out all the struts that have underpinned the middle class for the last sixty years. We’ve reached this point. Absurdly, “we” are told, in the country of Fortune 500 fortunes, that we are too poor to retire, to be educated, or to go to the doctor.

This is the story as told by our political illuminati, and it is a fairy tale. In reality, we are wealthy enough to work less (35 hours per week should be the legal norm), to retire well, and to luxuriate in universal health care and universal access to education up to and including college.

How do we obtain this ‘utopian’ vision? By looking at reality. Rather than contending with the mind-forged fantasies beloved by the pundits, we look at the society made by all, and we begin to repair the equality deficit. We operate, in other words, as free human beings. Marx, one hundred fifty years ago, called for the workers to break their chains. The chains, now, have long been broken. We have simply to walk out of them. And in so doing, we can start to pay attention to what is really important, such as reconstructing our technological infrastructure so it is green and Gaia friendly. And writing poetry, painting pictures, singing songs, dreaming involved dreams, making love, etc., etc.

No comments: