Thinking about the economy

Now that Obama's actually in office, it seems like the Republican spokespeople spend most of their time bloviating about all the things that are wrong with the Democrats' economic stimulus plans. The two main themes seem to be that:

1. The evil socialist Democrats want to give money to people who don't pay taxes; and

2. Funding public works programs, like rebuilding infrastructure, or giving grants to people to do things like winterize their homes won't put people to work.

I can only conclude that John Boehner and the other right-wing wackaloons think the American populace as a whole is still dumber than the proverbial box of rocks, despite evidence to the contrary (e.g., Obama's in the White House, not McCain).

First, despite the ranting about low-income people not paying taxes, they do. Asses like Boehner always try to make it sound like lower income folks have some sort of wonderful free ride when the opposite is true. The poor pay taxes all the time, and, when all the taxes they pay are calculated accurately, they pay a much higher proportion of their income in taxes then the upper income brackets do. They may not pay a whole lot in federal income taxes, but they pay -- and they may not get it back in the form of refunds or earned income credit. If you don't have kids, that earned income credit cuts off really low on the income scale -- and there are a lot of childless, single people out there.

The working poor pay payroll taxes for Social Security and Medicare. They pay state and local income taxes -- and it's astounding how some states can manage to set tax scales that insure that everyone ends up paying something, no matter how miniscule their annual income may be. The poor pay sales taxes, which are particularly regressive (the lower your income, the higher the proportion of it that will go for sales taxes). In truly sucky states (like the one in which I reside) they even pay taxes on food. Every time they put gas in a vehicle they pay gas taxes, both state and federal. They pay the various fees the states have started tacking on to every conceivable transaction, like license plate fees that keep climbing, fishing license fees that keep climbing, and so on. All taxes thinly disguised with a name change.

And then there are the hidden costs of being poor, the stuff the low income people end up experiencing that those with more money are able to avoid but that could effectively be described as a "societal tax," the latent functions of poverty that benefit the middle and upper classes. Herbert Gans has written quite succinctly about the "uses of the poor," including:

because the poor are required to work at low wages, they subsidize a variety of economic activities that benefit the affluent. For example, domestics subsidize the upper middle and upper classes, making life easier for their employers and freeing affluent women for a variety of professional, cultural, civic and partying activities. Similarly, because the poor pay a higher proportion of their income in property and sales taxes, among others, they subsidize many state and local governmental services that benefit more affluent groups. In addition, the poor support innovation in medical practice as patients in teaching and research hospitals and as guinea pigs in medical
experiments.

The Tuskegee experiment wasn't an aberration -- the poor have always been and still are being exploited so the more affluent can enjoy better medical care. If you're comfortable financially you're not going to sign up for experimental drug trials or line up at the plasma "donation" center to earn a few dollars. It's true that some drug trials, especially for cancer, involve desperate patients hoping an experimental drug will save their lives, but more typically if the medication is being developed to treat chronic conditions (hypertension, Type II diabetes) recruitment into a study is going to involve cash inducements.

As for point 2, that public works programs won't either create jobs or stimulate manufacturing, that's when I start thinking that Boehner et al need to start wearing their tin foil hats in public. Even if it's just paying guys to shovel hot mix into pot holes, actual human beings do the work. One of Boehner's pet spiels has to do with winterization programs, which he denounces as being giveaways that won't produce any jobs or stimulate industry. Does he think winterization consists of just writing a check and a house magically acquiring attic insulation and new windows?

Right now the construction industry is hurting big time. Home building has effectively come to a screeching halt, business construction isn't far behind. Retrofitting homes and businesses with energy efficient windows, adding insulation, and related work could provide enough business to the construction industry to keep companies afloat that are otherwise going to go under. Granted, a contractor isn't going to make as much money from retrofitting a house or an office building with new windows as he or she would from building an entire structure from the ground up, but small jobs are definitely better than no jobs at all.

The S.O. is convinced (and I'm mostly there, too) that the major problem the Republicans have with the economic stimulus proposals isn't so much that it would go for programs they don't like (i.e., anything that focuses on the common good instead of private greed) as that the people who might benefit are the folks who make a living getting their hands dirty: construction workers, factory workers, etc. The Republicans love to give money to dudes in suits, but if you're blue collar you're on your own.