My Big Fat Tax Cut

My share of the federal tax cut has started showing up my paycheck. I'm getting about three dollars and fifty cents per week more. Wow! $3.50! Now I just have to decide whether I want to spend it (and on what) or invest it.

$3.50! Not that I'm complaining. Hell, I still stop and bend over to pick up pennies off the sidewalk. It's found money, and after all, I didn't even want this tax cut in the first place (read my earlier rants against the Bush tax cuts HERE and also HERE.


I know what George W. Bush wants me to with it. Go crazy with it. Buy me a little something I've been hankering for. As he explained it in Philadelphia the other day, "When people have more of their own money, they will demand a good or service... and it's much more likely someone will be able to find a job....When people get checks, it helps them with their lives."

There's just one little problem with Georgie Boy's tax cuts. He gave the greatest portion of them to the rich. Understand that fully two-thirds of the United States economy is driven by consumer spending. It is consumer spending that has been keeping the economy somewhat afloat through the past couple years despite stock market stumbles, terrorist attacks and bad government.

Consumers have kept buying not because their pay has gone way up (it is falling in relative terms), because the job market is booming (unemployment and underemployment continue to rise) or because the economy has been booming. No, they have kept buying because...Hell, I don't know why. Sheer perversity? Blind optimism? Total ignorance? Utter weakness before the consumer culture that exhorts us all to buy buy buy? (And God knows we've shared in this both through out credit card debt and through our credit card debt and our refinancing.

If you want tax cuts to stimulate an economy that is two-thirds consumer spending, then wouldn't it make sense to give the bulk of those tax cuts to the people who have a pent-up desire to spend? Give money to the people who have either been unable to buy things or to those people who have jeopardized their futures by buying on credit and blowing the equity built up in their homes?

But no. Instead Bush gave most of the tax cuts to the rich. And here's a news flash for you: The rich don't need the money. They don't have any pent-up desire to spend and buy. All along, if they wanted something, they just went out and bought it. If they wanted a bag of King-Size M&Ms, they just went out and bought one. If they wanted to eat at the most expensive restaurant in town, they picked up the phone and made a reservation. If their Shih-Tzu shit on their oriental carpet, they just replaced it (the carpet and maybe the dog too), and if their Jaguar got a ding on the fender, they just bought another one.

The rich have already been spending to their hearts' content, and thay have no pent-up desire. The wads of money being stuffed into their pockets by the Bush administration isn't going to go go into the economy and create jobs. It's going to go into tax-sheltered savings and investments, contributing to economic growth about as much as stuffing it under the mattress.

The Bush government is flipping pittances to the poor and the middle class, while the rich are laughing and laughing....