Donkey Con

On the Booker Rising site there was a debate surrounding the impending end of the Bush tax cuts. Being a site catering to those of conservative leanings, as expected many touted the party line that the tax cuts should be reinstated when they expire at the end of this year. The religious fervor with which this position was defended mystified me. I think society is best served by the proper level and distribution of taxation, commensurate with the obligations and ideals of the social compact. Since in our form of representative government the people are essentially taxing themselves, the issue becomes what ideals and obligations the people wish to tax themselves to address. Whatever tax rate the government is instructed to enact, the supposed goal is “to promote the general welfare”. If this is the case then the argument becomes, is the general welfare to be a subordinate consideration to the tax rate, or conversely, is the tax rate to serve the general welfare. If it is at all proper to ask this question it means that taxation is more than just a mathematical formulation in an economic abstraction or theory; it has social and moral implications as well. What those implications are, again, must be searched for and found in the meaning of “the general welfare” as inferred by the social compact.

From my perspective, the avocation for the continued tax cuts by some of the commentators at the above site, as far as I could discern, possessed little economic rationality and seemed cult-like repetition of a fairly frayed portion of the conservative mantra. I will state outright that in the broad experience of mankind, tax cuts are not always bad and are sometimes helpful and appropriate, but each situation must be evaluated in its own economic and historic milieu. There is no elasticity of correctness that fits all situations. In fact in this case, a non-ideologically invested objective observer might conclude that either the economic benefits of the Bush tax cuts were so offset by other factors as to be rendered moot, or they were conceptually ineffective at the least, and maybe even economically harmful. We can only consult the record for enlightenment.

If it is assumed that the tax level is an essential factor in the prosperity of our society, then we must conclude since Bush inherited a surplus from the Clinton administration, it is suggested that the higher (proper?) level of taxation in the prior administration did not retard, but did in fact, stimulate the economy. If we further speculate that President Bush acted according to his conservative lights and construed that the economy was running so efficiently and prosperously that tax revenues were bringing in more money than the government needed to function and operate (hence the surplus), it was warranted to lower the tax rate to match government needs and allow tax payers to retain more of their earnings. Under the tax cut theory an already prosperous economy should have become even more prosperous. Yet, the deficit tripled during his tenure and we were drawn into recession. Where is the evidence of a tax-cut boon?

Many will interpret the above remarks as an ad hominem attack on George Bush, but in actuality I am only reiterating a familiar theme, that being, that sometimes neither macro-economics nor life are amenable to the particular requirements of ideology. A useful analogy is that sometimes to win a race the decisions of the jockey are equally or more important than the horse. A sensible jockey will employ different tactics on a muddy track than those used on a dry one. A “one-way” rider is most often less successful than an adaptable one. And as to our discussion, what is more fluid and changeable than macro-economics? Decisions must be made contemporaneously and not as preordained by ideology. If I have an economic or political philosophy, that’s it. I will cross the bridge when I come to it. If it’s there.

So, in this instance I’m not interested in arguing conservative philosophy. My position is that public policy has only one proper template; the promotion of the general welfare. How can I or anyone make the prediction that in six months time it will be advantageous or propitious to extend the Bush tax cuts? If you think you can, you’re either stubbornly thoughtless or suffering from ideological psychosis.