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No Tax Rebate's Going to Fix This Mess

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There is, unfortunately, no free lunch.
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In fact, it’s worse than that. To the extent that the extra decline in the dollar puts pressure on the Federal Reserve to take some action to prop the Greenback up, we will see interest rates rise. Now at the moment, we’re in hock to the tune of about $25,000 on a home equity credit line—a result of living beyond our means that is the typical American family’s response to incomes that have failed to keep pace with inflation. While my mortgage is fixed-rate, my credit line is not. So if the fed raises interest rates by .25 percent to prop up the dollar from the effects of that one-off tax rebate, I’m going to be paying an extra $650 annually in interest on my credit line balance.

In other words, this rebate is putting me into the hole right from the get-go!

Thanks a lot George!

So how about we just forget this whole stinking rebate idea. It ain’t gonna work, folks. It might sound good in an election year, but if you look at it closely, you can see it’s really just smoke and mirrors.

There is a solution, though. How about if they end the war in Iraq and bring all the troops home. The government will save several hundred billion dollars a year that’s being spent overseas blowing things up—and that is helping to depress the dollar and raise our tax bills. Some of that saved money can help reduce the deficit. Other chunks of it could be invested in America’s badly decaying infrastructure—repairing bridges, building new schools, etc., maybe building some major levees to protect our coastal cities from the next Katrina or from the global warming flood that we know is coming. And all that will mean jobs for people who need them.

We might also try to do something about reducing that massive outflow of dollars that’s making our currency do a disappearing act. An easy way to do that would be to slap higher taxes on gasoline and to tax cars based on how bad their gas mileage is. Before long, most Americans would be driving less and buying smaller, fuel-efficient cars, and we could significantly reduce the single biggest item on our import bill: oil.

Don’t get me wrong. I’ll be happy to get that $1600 check George Bush is calling for. I’m certainly not going to return it to the Treasury! But let’s not be pretending that it’s going to jump-start the sick economy.

It might even end up making things worse.

_________________________________________
Dave Lindorff is a Philadelphia-based journalist and columnist. His latest book is "The Cast for Impeachment" (St. Martin's Press, 2006 and now available in paperback). His work is available at www.thiscantbehappening.net

 

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Dave Lindorff, winner of a 2019 "Izzy" Award for Outstanding Independent Journalism from the Park Center for Independent Media in Ithaca, is a founding member of the collectively-owned, journalist-run online newspaper (more...)
 

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