Taxes 2

  You have been hearing the elected Republican officials acknowleging that taxes will have to go up on the "rich"!  I  saw Democrat Howard Dean on TV acknowledging  that taxes will have to go up on the middle class as well!

In a piece in the Washington Post -  Yesterday’s tax revenues can’t support tomorrow’s America 

Ezra Klein of MSNBC states clearly and plainly that, if we are going to continue providing government services at the current level, then the amount of revenue taken by the federal government is going to have to go significantly above the historical level of 18-19 percent of GDP .

He also suggested that it couldn't be collected through the income tax.

He also suggested a value added tax

My, my!

These guys (other than some of the republicans) are not the players, but perhaps they are harbingers.

Is there, in our future, a serious discussion of our fiscal situation?

PS 11PM  I am referring to what may or may not happen after the smaller fiscal cliff thing is done.

the payroll tax cut

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Well I've been thinkin' for some time how odd it was that I hadn't seen anyone in the media who was noticing that the "payroll tax" that was just passed was being paid for out of the SS trust fund. That is all of that money that we are not paying in payroll taxes is money that will not go into the SS trust fund.

Finally though someone did mention it. I'm sure there were more, but to their credit the list included Tom Harkin D Iowa and Joe Manchin D WV who were willing to point out that this was reducing the time until SS does not have the money to pay the promised benefits. Benefits and taxes were supposed to be adjusted as needed to keep SS solvent for 75 years. That was so you could fix the problems way ahead of time which would make them relatively painless. According to the SS annual report it was good until the early 2030s before this tax cut. Let's see 2033-2012 = 21.

But the politicians (read we) have adopted a tried and true method of getting the people to steal from the future to put more money in our pockets today. They just took another huge chunk out of it with this taxcut. But not to worry. Someone asked Democratic Minority Leader Pelosi about it and she said that SS could handle it. Let's see, is 21 close to 75?

I guess, as they say, its close enough for government work.
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Reckless Endangerment 2

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The housing bubble mentioned yesterday has provided us with another example of the stasis fallacy. Again, we assumed that changing the rules (home mortgage regulations) would not have an impact on the individuals who were involved in the process.

My first encounter with the stasis fallacy was the flawed welfare system as described recently by Barack Obama : "Well, you know, here's what I would say. I think we should acknowledge that some welfare programs in the past were not well designed and in some cases did encourage dependency. As somebody who worked in low income neighborhoods, I've seen it, where people weren't encouraged to work, weren't encouraged to upgrade their skills, were just getting a check, and, over time, their motivation started to diminish. And I think even if you're progressive you've got to acknowledge that some of these things have not been well designed."

I am impressed by that straight forward acknowledgement.
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