Friday, February 18, 2011

Congress and the White House battle over the budget but won't fight the real war

What do you do when, as a result of widespread economic malaise, your nation's tax revenue can't keep pace with your nation's expenditures and states' and the populace's need for federal government spending (impoverished and unemployed Americans) has exploded?  Would you address the root cause of the problem--your nation's economic malaise, or would you address a symptom of the problem--an exploding federal budget deficit?

Congress and the White House have decided to valiantly address the budget deficit while completely failing to even acknowledge the existence of our nation's fundamental economic problems.  By squabbling over the budget, they can fool the sheeple and the Tea Partiers into thinking that they are hard at work.  However, in reality Congress and the White House are blithely distracting the American people from our nation's real problems.

Of course, Congress wouldn't consider increasing tax revenue by raising taxes on the rich, a class of purportedly downtrodden folks who are enjoying all of the increased riches that have come from alleged productivity gains and who seem to own increasing percentages of the nation's wealth.  They wouldn't dare consider tax increases because it would be like cutting off their noses to spite their faces.  Why would you want to bite the hands that feed you with campaign contributions?  Besides, Tea Party morons and Joe-the-Plumber types would regard that as an assault against everything America stands for even though higher taxes for the rich would be in their own rational economic self interest.  (I might be poor working stiff today, but I'm planning to own a business if I ever get my plumber's license!)

If the Republicans and Democrats really wanted to address our federal (and state) budget problems they could start by resurrecting our nation's comatose economy.

(1.) Over the past several decades our government has allowed millions of formerly middle class jobs to be sent overseas, which increased domestic unemployment and social welfare expenditures.

(2.) Then Congress allowed businesses to further depress wages and to displace Americans from often college-education-requiring, knowledge-based jobs (the ones Americans are supposed to retrain and reeducate for) by importing hundreds of thousands of foreigners on H-1B and L-1 visas.  The resultant laid off, unemployed, underemployed, and student loan-ridden Americans also increased the need for domestic social welfare expenditures.

(3.) Then our government allowed corporations to further depress wages and displace Americans by allowing tens of millions of impoverished immigrants to enter the country (legally and illegally).  Aside from having to spend money on health care and education (Arizona, California, etc.) for imported poor people and their families, the government also needs to spend money on social welfare for resultant unemployed Americans and working poor Americans whose wages have been further depressed.

In other words, federal government policies have exposed the U.S. economy to an economic force called Global Labor Arbitrage.  In essence, our nation's economy and job market are being merged with the economies and job markets of billions of impoverished people in the third world (Mexico, India, China).  Anyone who understands basic economics knows that when you increase the supply of a good (such as the supply of labor) relative to a static demand (capital, jobs, the need for employees) that the price point (wages, purchasing power, standard of living) must decrease.  Basically, the U.S. standard of living is going to average out with that of the third world.  Lost middle class jobs are being replaced with poverty wage jobs.

What a brilliant economic policy!  Of course, it benefits the wealthy who own the businesses that can now purchase labor at much lower price points, allowing them to keep a larger percentage of the value of a worker's contribution to the act of wealth production.  Prices for goods and services haven't decreased in proportion with Americans' decreasing wages, so in a sense this is a wealth transfer from the lower and middle classes to the rich.

Consequently, tax revenue is decreasing or at least failing to keep pace with the increasing need for social welfare (and warfare) expenditures.  In response, Congress and the White House want to balance the federal budget deficit without acknowledging our underlying economic problems.  Ever heard of a tariff?  Has the thought of completely eliminating the H-1B and L-1 visa programs crossed your pea-sized Tea Bagger minds?  How about a moratorium on immigration and deportation of all the illegals?  Traitorously, instead of addressing our nation's fundamental economic problems, our Congressmen are going to accept that the U.S. is now impoverished nation.

It gets even better!  Obama thinks that the solution is for Americans to go to college.  This way Americans will be prepared to fill the knowledge-based jobs that were sent overseas or taken by visa holders.  Selling education to the American sheeple assuages a panicked and terrified populace and tricks them into believing that they are unemployed and underemployed because they either don't have enough college degrees and/or just aren't good enough to compete for work. What's sad is that Americans are imbibing this message like Kool-Aid at Jonestown.

White House?  Congress?  Republicans?  Democrats?  Genius!


Jeff Smith said...

Computers are going to replace are lawyers eventually. Its just a matter of time. But why risk 50k a year on law school when you can spend 4k a year. Read about it on my blog!
ABA NO Way! The NON ACCREDITED Law school racket is not a complete scam! :)

LSTB said...

Balanced Budget?
(3) Universal Healthcare + Gov't funded drug research
(2) Tax the rich
(1) Troops out now

Anonymous said...

"Computers are going to replace are lawyers eventually."
I think that you mean "our".
This seems unlikely. Rightly or wrongly, people view lawyers as exercising judgment and appear disinclined to rely on computers for that quality. My practice has not declined at all, even in the midst of the recession.

Anonymous said...

The basic problem is that you cannot simply cut discretionary spending without increasing revenue to offset what is called "entitlement" spending, and (of course) the bloated defense budget. That cutting of funds for WIC and NPR for example, does NOT translate into increased savings in the long-term according to the CBO.

What people don't seem to understand is that in order to reduce the deficit there must be a tax increase across the board. Or they can simply eliminate exemptions in the tax code. That seems like the easiest sell to me. There are also luxury taxes and increasing sales tax. For example, NJ has NO sales tax on certain items. Were they to employ such a tax, that would bring in a large chunk of cash for the state in dire need. Mr. Obama deciding to keep the Bush tax-cuts was a grevious error in my view. It simply shows that he is simply not the right guy for this job. He is too young and does not have the ability to cut the big deals needed. He relies to much on his senior Democratic counterparts who have their own agendas.

I digress. I have yet to meet a "teapartier" in RL. But if I did I would be keen to hear what they believe regarding the deficit without the media hyperbole.

Anonymous said...

My current job has just started importing people on H-1B visas. They are forced to sign a contract to work here for 2-3 years or they get deported. Why are they doing this? Because American's have voted with their feet and won't take the jobs we have here. The jobs pay poorly compared to enarby competitors, the hours are longer and they is way more work.

Anonymous said...

Anonymous, is the reason that the jobs pay poorly because the availability of foreign workers on H-1B and L-1 visas depressed the wages? If the wages were set by the American market either the wages and/or working conditions would have to increase or improve.

Anonymous said...

@1:49: Your practice may be fine, but statistically lawyers are doing very badly.

Remember, during the Great Depression some people did well, even great. The people that had jobs just worked right through it and weren't really impacted that badly.

That doesn't mean it didn't happen, we obviously know it did.

The law is a terrible field and right now many got caught in the scam. For most, they'd have had better odds going into another field or avoiding law school.

Also, depending on when you graduated, your loan debt is most likely considerably lower. If the loan debts were low and the opportunities were there, we wouldn't have an issue, but we do have an issue and just mentioning that you're doing well doesn't make your point valid, it just really makes you look like you're out of touch or even worse actively being an asshole.

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