Thursday, January 24, 2008

The Bubble-Up Economy - Part One

Forget "trickle down/supply side" economics. That's so 80's, a means to get government off the backs of the most advantaged so they can really go to town. Sure it creates enormous debt and undermines social programmes but the rich don't give a dump about their Medicare benefits or Social Security cheques, do they, and you can always pawn the debt off on the working classes by deftly tweaking the tax code to shift the burden off the rich, the investment class, the rentiers, by cutting tax from investment income and shifting that burden over onto wages, earned income. But you can only take that so far, or can you?

Here's an idea! What about getting the taxpayers, i.e. the working folk, to bail out the investor classes? Take subprime mortgages. The investor class made a killing selling and shuffling bad paper. If it wasn't legal (more or less) it'd be criminal. But all good things must end and, right now, those investors are scared to death of massive defaults on those dodgy mortgages they spent the Bush years flogging to everyone who could sign their name. So, what do you do?

How 'bout the Fed maybe coming up with a $20-billion relief package? Better yet, why doesn't the White House and Congress come up with a $150-billion "stimulus" bill, sending tax rebates to the workers? Put a few hundred bucks in their pockets and hope that lets some of them pay their mortgages. The best part? It's all done with borrowed money. We'll pay the workers with money we borrowed on their behalf that they or their kids will wind up having to repay, with interest! We'll just tell'em we're giving them the money. They'll never know the difference.

See, the idea isn't "trickle down" any more. It's bubble-up. The investor class has long since invested their tax cuts into Asia but the working guy, he has to spend that money, and so it bubbles up right back to the tax-haven accounts of the most deserving or, as I like to call'em, the "Haves and the Have-Mores." Abe was wrong. You can fool all of the people all of the time.

1 comment:

rabbit said...

If it wasn't legal it'd be criminal.

I like it. Very Yogi Berra'ish.