C'mon, John, Just Say it!

If you didn’t happen to catch House Speaker John Boehner’s summary of why congressional Republicans caved on their earlier demands to pay for the payroll tax cut with spending cuts, here it is.  His accusation that Democrats are playing political games isn’t at issue, rather it’s the insinuation that he and his cadre are taking the high road and not playing games.   

Really, Mr. Speaker?  Blech!

How refreshing would it have been to hear the Speaker say instead: “Look, everybody, we did our level best to force these spendthrift redistributionists to pay for their economically-ineffective-but-politically-popular, vote-buying tax cut with spending cuts elsewhere, but we failed.  And, in case you numbskulls hadn’t noticed it’s a rather big election year; it would’ve been political suicide for us to try to take the high-fructose corn syrup laden lollipop away from the diabetic toddler.”  

 

People love free stuff.  OK, the stuff’s not really free, but they don’t have to pay for it now and if we finance the purchase of the stuff with debt, chances are pretty good that eventually someone else will have to cover the tab.  Over time, people come to believe that the free stuff should always be free to them.  It becomes something to which they feel entitled.     

The Democrats clearly get that restoring taxes during a weak economic expansion won’t help anything.  But, surely, they also must know—deep down—how ineffective a temporary FICA tax holiday is, right?  I don’t know, maybe they’ve never been exposed to permanent income theory, but I'm inclined to give them the benefit of the doubt. Maybe that's too much to assume: our last president didn't seem to get that one and he was, a 'conservative'. Still, Democrats are always saying how much smarter they are than Republicans, so I think I'm safe.

Anyway, assuming Democrats do actually understand how silly tax holidays are, then we should expect them to propose a date or set of economic conditions as a trigger for restoring the tax to pay for Social Security’s obligations. 

On the other hand, when will it be politically feasible for Democrats to raise taxes on 'middle class families'?  Might the underlying strategy be a permanent shift of financial obligation for funding Social Security—from the beneficiaries to the 'rich'?

There’s one way to tell.  Someone should ask the Democrats at what point it makes sense to fully reinstate payroll taxes, and see what they say.  What kind of response would Rep. Boehner get if he asked that question?