"Tax the Rich to Cut the Deficit... Just Don't Tax Me"

What new thoughts for a Monday morning?

Corruption is not only at the top. Like a Christmas pudding steeped in rum, the whole economy – from top to bottom – reeks of it. Here’s the latest proof from Bloomberg:

Americans want Congress to bring down a federal budget deficit that many believe is “dangerously out of control,” only under two conditions: minimize the pain and make the rich pay.

The public wants Congress to keep its hands off entitlements such as Medicare, Medicaid and Social Security, a Bloomberg National Poll shows. They oppose cuts in most other major domestic programs and defense. They want to maintain subsidies for farmers and tax breaks like the mortgage-interest deduction. And they’re against an increase in the gasoline tax.

Let’s see, how does that work again? Yeah, balance the books…says the noble citizen…but make sure it’s at someone else’s expense. Make the rich pay.

That’s how corruption works. People want something for nothing all the time. But only some of the time are they able to get it. Now, Goldman gets free money from the Fed. The taxpayers expect free money too. And so, the whole society lives a lie – that each man can live at the expense of someone else.

But why CAN’T people live by taking money from the rich? Well, of course they can. For a while. Maybe even a long while. But not forever. And every time they spend someone else’s money, the less money there is left to spend.

The rich are just as self-interested as everyone else. Take away their money and they dodge. They feint. They play dead. They hire lobbyists, bribe Congressmen and play the game. If that doesn’t work, they hide their loot and flee.

The problem with trying to live at the expense of others is that others don’t like it much. They stop producing and try to live at someone else’s expense too. And pretty soon, you have a nation of poor zombies…feeding on the little living flesh still left alive.

Bloomberg continues:

…a spate of recent studies, including one by President Barack Obama’s debt panel…say reductions in Medicare, Social Security, military and other spending are necessary to curb a deficit that totaled $1.29 trillion in the fiscal year ended Sept. 30, or 9 percent of the gross domestic product.

“The idea that we can solve our structural-deficit problems merely by asking more of the well-off is totally unrealistic,” said David Walker, who was US comptroller general from 1998 to 2008 and now leads a group advocating against deficits. “The math simply doesn’t work.”

According to the Dec. 4-7 poll, taken days after Obama’s commission sounded an alarm over the nation’s “unsustainable fiscal path,” the public still believes it’s more important to “minimize sacrifice” than to take “bold and fast” action to pare the $13.7 trillion national debt.

The one place Americans are willing to see sacrifice is in the wallets of the wealthy and Wall Street.

While they say they strongly support balancing the budget over the next 20 years, when offered a list of more than a dozen possible spending cuts or tax increases, majorities opposed every one of them except imposing a bigger burden on the rich.

A majority backs raising the cap on earnings covered by the tax on the Social Security retirement program above the current limit of $107,000. Two-thirds would means test Social Security and Medicare benefits. Six of 10 would end tax cuts for the highest-earning Americans. And 7 of 10 favor a tax on Wall Street profits.


Bill Bonner
for The Daily Reckoning

The Daily Reckoning