December 08, 2010

Washington D.C. Jumps the Shark


The phrase is based on a 1977 episode of "Happy Days" where the Fonz, wearing swim trunks and his trademark leather jacket, water skis on a Los Angeles vacation and jumps over an underwater enclosure containing a shark. The concept seems to refer to some watershed development in a sitcom which forever marks its turning point toward fading out. I think I remember when that happened in "Seinfeld;" it was some episode late in the Seinfeld era (it may have been the last year) where Kramer is taking a test drive with a car salesman and they get into some silly plot point about seeing how far they can drive with the gas gauge warning light on. It seemed like an attempt at the Theater of the Absurd, and it didn't really work at all. It was tedious. Seinfeld had jumped the shark.


Thus, we now have the federal government, itself a kind of sitcom or running gag, jumping the shark with its "tax deal." Make no mistake, this is a major turning point in the history of the republic. Faced with mounting debts which it increasingly cannot handle, Congress and the White House have decided to go all in with their madness. While with one hand Obama has created a Frankenstein of a "deficit commission" headed up by the certifiable lunatic Alan Simpson, former Cowboy/Senator from Wyoming who is openly hostile to America's safety nets, on the other Obama has decided to cooperate with the Republicans in further decreasing America's income stream by perpetuating the "Bush tax cuts" and also decreasing the employee's FICA contributions from 6% to 4%.

These are truly insane ideas. It appears that young Barry has bought into the idea that if you just keep cutting taxes sufficiently, jobs will magically appear. This was Bush's cover story when the "temporary" tax reductions were enacted in 2001 and 2003, but that was not the mendacious former president's real goal. He just wanted to lower the top marginal rate for his plutocrat friends. Knowing how fiscally irresponsible the tax reductions were (and how unnecessary for the chief beneficiaries), Bush & Co. inserted a sundown clause of December 31, 2010 so that in "outer year" calculations the tax cuts would look more benign. Yet the goal was always to make them permanent, using what was assumed to be permanent Republican majorities to do so. What is truly amazing is that Obama and the Democrats are going to allow Bush to get away with his sleight-of-hand. They are going to make the tax cuts permanent for Bush, for no reason, and with disastrous fiscal results for the United States. The last thing this country needs is a deeper deficit hole. We're barely holding on as it is.

Similar concerns apply to the Social Security system. The mythical "trust fund" is cited far and wide as a reason that the system is in good shape, that $2.5 trillion in government IOUs that supposedly guarantee the solvency of Social Security for decades to come. For the last time: there is no trust fund; it is nothing more than the historical record of money stolen from the American people by its politicians and spent on other things. When the trust fund "pays" into the Social Security system to make up for what are already existing cash shortfalls, all that is happening is that the intergovernmental debt is transmuted into public debt, which is to say, the trust fund is "funded" by more borrowing. On a cash in/cash out basis, the Social Security system already does not take in enough money to fund itself. Against this reality, the federal government proposes to make the situation worse.

This is shark jumping, pure and simple. It is a picture of a national government so overrun by incompetence and bad faith that it has gone insane. There is not even a suggestion in any of this that anyone, any adult of good will, actually has a plan to deal with the looming threat of government bankruptcy. China is going to downgrade our bond issuance to junk status; interest rates on longer-term government obligations (such as the 10 year) are already beginning to rise sharply. And to deal with its deadbeat status, the federal government proposes to reduce its own income. As Arthur Fonzarelli would have said, "Wrongamundo."

3 comments:

  1. Thus, we now have the federal government, itself a kind of sitcom or running gag, jumping the shark with its "tax deal." Make no mistake, this is a major turning point in the history of the republic. Faced with mounting debts which it increasingly cannot handle,

    ReplyDelete