The words of John F. Kennedy's inauguration speech still echo forth today for those Americans who are willing to listen:
" . . . Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe to assure the survival and the success of liberty. . . . "
Beautiful stuff without a doubt. But is it still true? The 'Greatest Generation', Kennedy's generation, the generation that suffered the deprivations of the Great Depression, fought on the front lines against fascism during WWII and pioneered the Civil Rights movement is approaching their century mark and has nearly, if not quite entirely, departed the national stage altogether. How well have their Boomer and X'er heirs honored their legacy?
A Generation of Swine
Not too well at all it seems, if you've been monitoring the latest dust ups about the deficit reduction commission. Though I wouldn't blame you at all if you haven't; by and large it's been more of the same from Republican'ts. Just one long litany of proposed hatchet jobs, both to vital programs that support the working class and retirees and slash the tax load of the mega-rich. They're currently using refusing to renew unemployment benefits and threatening to make regular Americans work an extra 5 years in order to pay for yet another handout to their wealthy patrons*. Despite a roll call of high-profile economic experts and even business moguls warning against the damage that Republican policies will do to our national infrastructure, the middle class and the economy in general, the Right Wingers seem just about Hell-bent on the "Roadmap to America's Ruin".***
Wisconsin's own homegrown homunculus, Paul Ryan, will become House budget chief in January, which should be a profound shock to anyone with a working appreciation for morality or intelligence. Having thoroughly shit all over himself by begging for an $800 + billion bailout for his patrons, the atavistic bankster failures AIG and JP Morgan Chase, he not only had the cojones to run interference to prevent attempts to check their excesses, but now he claims the mantles of down-home populism and economic savvy. Oh yeah, and he's trying to repeal the law that allows parents to insure their college-age children and keeps insurance companies from denying coverage at will. Just one more chapter in the life of an American 'patriot'.
Seriously, though, Paulie's list of failures must loom large in the annals of the history of those of us born in the late '60s through the early '80s. Most social historians call these folks "Generation X". But Hunter S. Thompson, perhaps my favorite American writer of all times had a much more descriptive and apropos name for us, the "Generation of Swine", reflecting the utter moral and intellectual pollution of a generation, raised to be Reaganauts with the crude lack of self-awareness that is pleased to call cutthroat robbery "magic of the free markets".
We've already talked in this post about Ryan's shameless pandering to Big Money interests. Economist Paul Krugman calls Ryan's centerpiece fiscal plan a "sham" that leaves a $4 TRILLION budget deficit over ten years while increasing the tax burden of 95% of Americans. The chief economist at Moody's, Mark Zandi has warned of the major negative impact Ryan's proposed program cuts will have on GDP. And this blog itself has unmasked on numerous occasions Ryan's lack of analytical rigour and the utter falsity of his consistent rhetorical themes.**
At the risk of piling on, I thought it might be fun to once again quantify in actual dollars and cents the extent of the hypocrisy and stupidity of the Right Wing-friendly "Generation of Swine". Voilà: a high-level comparison of the likely annual impact of various tax policy alternatives being bandied about, plus three of my own Kennedy-inspired scenarios. Included are:
1. Let the Bush era tax cuts (often referred to by the legislative acronym 'EGTRRA') expire.
2. Renew the Bush era tax cuts altogether, à la Ryan and the Republican'ts.
3. Renew the tax cuts for all but the elite, as promoted by the Democrats.
4. Return to the tax rate regime of 1965, after Kennedy's historic reforms.
5. Return the elite to the '65 regime, let EGTRRA expire for everyone else.
6. Return the elite to the '65 regime, but renew EGTRRA for everyone else.
You'll never guess which of these policies turns out to be both least fair (i.e., increases income inequalities) and least effective in combating the deficit. I'm dying to tell you, and you can skip ahead to the conclusions section if you like, but you may want to cast an idea on the why's and wherefores, too.
The Technical Stuff
You may want a little background on the techniques I used to perform the calculations. I'm more than happy to provide additional detail upon request, but I'll keep it brief here and confine myself to a broad conceptual overview of methodology and reference to the workbook with the detailed calc's.
Historical data comes from the IRS, the Bureau of Economic Analysis, and Taxfoundation.org. ^ Where projections and allocations were necessary due to limits on historical detail available, they have been made upon well-established statistical correlations of no less than 60%. You'll find narrative comments, citations and hyperlinks to the relevant sources within the workbook.
You should know, however, that this calculation focuses on the tax liability before the Alternative Minimum Tax ("AMT") and tax credits. I don't think this limitation impairs the usefulness of the analysis much, given that the IRS requires calculation of AMT and tax credits AFTER performance of the basic tax liability calc I've done here. The intention of this analysis to focus on the broad, sweeping statutory RATE changes between the tax regimes--not petty discrete items like the myriad of arcane credits that pepper the tax code like specks of fly shit on the lamp shade of a crappy Motel Six room.
I also focused only on the three filing statuses that comprise over 98% of all federal income tax returns and tax--Married Filing Jointly, Single and Head of Household.
And you may find it interesting to know that the procedures I used to test this workbook included reconciliation to actual historical data. For 2007, the most recent year for which I have the most comprehensive information, the workbook varies from historical fact by less than 6/10 of 1%. Not too shabby.
In order to maximize memory utilization for the workbook I did not include a lot of tables for historical AGI information--which seems in keeping with the forward-looking orientation of the estimates the workbook was created for anyhow. You will be happy to know that the algorithms I've used to project the excluded data also seem to be pretty decent--I ended up within 4% of the total liability for 2000. Kinda all right, especially when you consider that most high-quality statistical studies have margins of error of +/-5% (i.e., an error range of 10%).
The Shocking Truth: The "Generation of Swine" Come Up $684 Billion Short
Table 1.
Wow. Can it really be that self-proclaimed fiscal hawk and lottery arbitrage advocate** Paul Ryan has backed the wrong pony once again?** That his plan not only fails to "pay any price, bear any burden, meet any hardship" in order to assure the survival and the success of the middle class or its economic liberty against the relentless market forces of plutocratic banksterism, but it also doesn't do shit to address the budget deficit. Hmm. How could that be? Maybe Ryan's an idiot or maybe he just doesn't give a damn about the American nation. It's all the more humiliating when you consider that unemployment was a lousy 4.5% in 1965 (see table #1 here).
Just for laughs, I've also included below a table splitting out the shortfall vs. the '65 tax regime attributable to the elites and one chart each graphically illustrating the billions of dollars and millions of jobs Ryan is throwing away and the ridiculously small income sacrifices expected from the uber-rich by even the most radical alternative.
Table 2.
Chart 1.
Chart 2.
Recommendation
Call and your representatives and senators immediately and often telling them that you know what a horrible idea Paul Ryan's budget plans are. And let them know that you know what you’re talking about. Send them a copies or links to the information available on this blog. Send them a link to the Senate testimony of Mark Zandi, Chief Economist at Moody's, to the effect that tax increases for the rich are tantamount to robbery of the middle class and that continued support of government programs like Social Security and Medicare is vital. Send them a link to the Congressional Budget Office's report that renewal of the Bush era tax cuts would add bring the national debt up to 100% of GDP by 2020. Email this stuff to your friends, family and acquaintances. Whatever you do, don't keep this information to yourself.
Footnotes
*During this last election cycle, Paulie boy was a big favorite of the banksters. His clients included not only Goldman, but CITI, Bank of America, JP Morgan and a host of other F.I.R.E. (i.e., "Finance, Insurance and Real Estate sector) companies and trade groups. In fact, he got about $246,000 or 25% of his total PAC money from these guys. See details here. Who knows how much else he got INdirectly through Orwellian-ly named PACs or individual contributions?
** Paulie's support, unwitting or otherwise, of banksters' counterfeiting operatins discussed here.
His inability to identify the sector with the highest fiscal mutliplier here.
His lottery-like fiscal program, costing trillions of dollars and millions of jobs discussed here.
***Ryan's good friend Grover Norquist just about announced his intention to destroy America over the public airwaves.
^ Yeah, these guys have a reputation as a conservative think-tank advocating tax cuts. But what I was looking at here wasn't their analyses, but their re-publication of historical statutory rates, which were not available in any convenient form at www.irs.gov/ .
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