Let me start off by voicing my opinion on the tax policy debates and the perpetual extension of unemployment insurance that are under way. My views on the big picture have fundamentally changed after attending the "Fiscal Wake Up Call" tour that was put on by former comptroller David Walker and The Concorde Coalition.
This nation is on an unsustainable fiscal course. The growing debt burden that is amassed will make our ability to retain our present standard of living impossible. With each increase in debt more interest payments must be made out of the present federal budget for debt servicing. At some point these interest payments will be the largest single line item in the budget. The situation with the states is not that much better.
The partisan extremes work to have "transactional advantage". Whereas the point of mitigation of the threat is achieved by a package of hard choices - they seek to disaggregate the issue - pushing toward the extreme that they favor on each point. All the while they struggle back and forth in their turf battle - the landscape that we reside upon is being irreparably trampled.
My baseline sentiments would otherwise have me to argue that the tax rate in question is merely a factor of the last successful legislation that raised it at the particular level that it resides. A higher tax rate is not more "justice". It just means that the majority had the votes to raise it commensurate to the increased government spending that they advanced.
In light of the problems that we face I am forced to agree that the government needs increased revenues if it is to remain fiscally solvent per the confidence that the rest of the world has in our economic system and our fiat currency. These increases in revenues, however, must not serve as the foundation for more expansionary government spending. Instead it must be used to pay down the national debt back toward a more sustainable level.
Of course taxation tends to suppress economic activity in the private sector. Why else would those who promote the "middle class tax cuts" be advancing a tax cut in defense of their base in the rank & file.
The Interconnectedness Of The Solution
There needs to be a course reversal against the growing of an all powerful, all caring central government. This attempt to nationalize a growing amount of our "standard of living" in America is one sure way toward fiscal collapse.
An deliberate drive toward pushing the productivity which supports our desired living standards back outward to the periphery is necessary. The increased revenues to the government is also a product of increased economic activity and the taxation of this income. This is how the Clinton-era boom in revenues transpired. Each of the "Internet bubble" inspired transactions meant more money for the government - regardless of the veracity of the underlying venture financing.
Labor is struggling right now with a 9.8% nominal unemployment rate and a 17% real unemployment rate. I am forced to support the continuing unemployment insurance extensions. The present $33 billion price tag of the legislation on the table and $65 billion annual price tag are an unfortunate consequence of the present economic doldrums but a necessary expense to prevent more massive economic collapse.
The Concorde Coalition noted that the one thing that all Americans would have to accept if we are to survive is that our present level of expectations placed upon the federal government must be reduced. Few people discuss how the "standard of living" that we have all come to expect as Americans is a function of the expectations from the government for such services.
When one's own personal or regional productivity fails to allow them to live up to this standard - the entitlement system from the government steps in to span the shortfall. Unfortunately we are forced to adjust that point of reference for that living standard downward so that the gap to be filled by the government is less.
Today we have a "virtual labor strike" as policies such as the minimum wage and government mandated minimums of health care and other regulations add to the costs of "consuming labor" in the context of the production processes. Simply put - if our goal is to make America more productive by returning idle workers into their productive capacity - the bundled costs for their employment must be lowered. Over time the labor negotiations that naturally occur will have them incrementally returning to the present compensation which is not sustainable in these market conditions.
As for "taxes on the rich" - this is all done in the names of political posturing and partisan advantage. The wealthy are going to have to pay a higher marginal rate of taxation in line with the sacrifices itemized above for the labor rank & file. Those who rally for these tax increases on the rich need to put aside their language of indictments by which they talk of socialistic "ownership" of that which presently sits in the private bank accounts of the wealthy where they can vote themselves a share of these proceeds.
The wealthy find themselves in the very same place that organized labor failed to see their own coordinates 40 years ago. If they choose to remain in their entrenched positions as they seek to maximize their present advantage - they will soon find that all of the institutions from which they have received their heightened positions from have collapsed and they are left with documents attesting to their heightened fortunes but a hollowed out void within which they are left standing.
Organic Development At The Periphery
Now is the time for the Black community to being mining the benefits that the control over the key local institutions had promised in the past. The days of "carrot scented" perpetual expansion - where the next election will improve our fortunes if we do nothing more than "stay ideologically united" and VOTE HARDER are over. We have seen the results that have transpired in places like Chicago and Newark where a favorable person occupies every possible seat of power and yet our interests remain unmet.
These institutions must be made to function as centers of coordination for the expression of the talents of us as "equal human beings" NOT as agents that forcibly shape our communities being forced to pick up the broken pieces that a failed cultural engagement model has left. We must stop turning our bodies over to the government for "scientific research". This outward expansionary model must be replaced by an internal "Human Resource Development and Management" model.
If you are not convinced then ask yourself - IF the United States' was to collapse and you were left all alone with nothing more than the systems within your community - how great would be the expanse between where your standard of living resides today versus the great drop off that would be the case with the subtraction of this external government from your domain?
Those who are wise will operate as if this was the case. If this event never occurs they will enjoy the advantage of discipline which their unconscious peers have thrown to the wind. If it does occur then they will find that their gap between now and then is smaller and they will still be better off as they can take these same processes that have been inculcated within their community and replicate them elsewhere - as their proximity to an external radiation source that provides them with the heat energy that made up the bulk of their past living standard was transitioned into an internal combustion engine.
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