Greatest Hits: Yes There Is A Difference – Revisited

Please note: This article was originally published in July of 2011. Despite the facts that it is over five years old and the “events of the day” are history, the principles outlined in it are still the same. Without using the term maverick Donald Trump has tried to label himself as one; a man of the people, a populist. Interestingly, his taxation/economic policy (from what little he actually outlined) is one that favors the wealth by cutting taxes and regulations on them. In other words, traditional failed Republican economic policy.  

Today is the second session of the budget/debt ceiling meetings between the President and the congressional leadership. What exactly will come out of it is anybody’s guess at this point. I am betting on nothing final or definitive. One of my biggest sources of frustration is the common misconception that there is no real difference between the two Parties. This is born of disinterest on the part of the general electorate which leads to ignorance and apathy. The problem is that ignorance and apathy favors the Republicans. If Americans really knew the vast difference between the two parties the Republican Party would have long ago went the way of the Whig Party.

The Republicans, through economic terrorism and exploitation of the general public’s ignorance of how macroeconomics and the government’s budgeting process works, have succeeded in linking the raising of the debt ceiling to debt reduction. Their stance is to oppose any tax increases, including the plugging of any tax loopholes. In their minds, the only acceptable method of reducing the debt is to cut funding to programs they oppose. They refuse to even recognize spending through the tax code. That is that giving away potential tax revenue via a special tax break has the same net effect on the budget and the debt as any other spending.

A simple example is: you have $100 in your pocket. I owe you $10 but you forgive the debt. Net result you still have $100 in your pocket. Now we look at another scenario. Again you start out with $100 in your pocket. This time you accept my $10 payment and then you spend $10 purchasing a widget. Net result is that you still have that same $100 in your pocket. The real world problem occurs when you realize that the $10 widget must be purchased regardless of whether you accept the $10 from me, therefore since you excused the debt you now only have $90 in your pocket. The Democrats would have me pay the $10 that I owe and buy the widget for the country. The Republicans would let me slide on the $10 because I’m their contributor and have the needy of America go without the benefit of the much needed widget.

The Republicans have stalled the current negotiations because, among other things, they are defending tax loopholes that favor corporate jet owners, yacht owners, thoroughbred racehorse owners, and hedge fund managers. The tax break for the hedge fund managers is a plum snuck into the 2001 Bush Tax Cuts. It allows hedge fund managers to handle significant parts of their income as capital gains as opposed to ordinary income. This reduces the tax rate on that income to 15% from 35%. Think Progress recently released a report stating that the top 25 hedge fund managers alone saved over $4 billion in taxes in 2010. Admittedly some of these loopholes account for a relatively small portion of the debt, however if the Republicans are unwilling to close them how can we believe they are sincere about reducing the deficit? Most progressives feel they are not; their only intention is to achieve Grover Norquist’s goal of reducing government to the size that it can be drowned in a bathtub.

While Democrats defend the interests of the families of the 15 million unemployed Americans who are making decisions about basics like food and shelter – new clothing is a long forgotten luxury –the Republicans are defending the interests of those who are contemplating purchasing a new yacht.

Like many progressives, I would like to see the Democrats defend the interests of the least fortunate among us even more vigorously, but compared to the Republicans they are candidates for sainthood. Money too often talks in our political system and both sides chase big money in a game of political survival, but even the most jaded Democrats at least give lip service to the plight of the disadvantaged, the young and senior citizens. The Republicans defend subsidies to oil companies making record profits.

Yes Mr. and Mrs. America there is a huge difference between the two Parties. Unless you are at the very pinnacle of the income pyramid the one that represents your interests is the Democratic Party.

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