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Cutting Benefits: Alice in Wonderland Economics

By       Message David Model       (Page 1 of 1 pages)     Permalink    (# of views)   1 comment

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Congress and the President along with all his merry men must have failed simple arithmetic in public school and never fully recovered.   They add when they are really subtracting and subtract when they are really adding. They obviously excelled in one subject, literature, given their understanding and applying the principles of one book: Alice in Wonderland.

Washington is not about real people and real lives but about the belief that economics is science, that market economics really operates in the real world, that tax cuts stimulate the economy, that cuts to benefits strengthens economic fundamentals, that wars serve American interests. Lewis Carol would turn green with envy.


When Congress subtracts from benefits to the unemployed, it is really adding to poverty, foreclosures, and hunger.   The bill under consideration in Congress regarding extending benefits to the unemployed while at the same time proposing tax cuts is lunatic economics.

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Such propaganda about salvaging the budget is as antediluvian as the horse and buggy.   Anyone with a basic understanding of economics and who accepts the axiom that economics is about people would instantly recognize that the best way to stimulate the economy is to give money to people who will not only spend it at the corner store but immediately.  Adding to unemployment payments, Medicaid and Food Stamps would be the quickest way to increase aggregate demand not tax cuts, which would probably wind up in some kind of speculative bubble-inducing investment that has no productive value.

When Congress subtracts tax cuts from its revenues, it almost exclusively benefits the rich and it is adding to the number of people living in poverty, the number of people who are unemployed and the number of people living in the streets.  

Reagan's trickle-down economics was always a transparent nonsensical ruse to justify tax cuts for those who didn't need them.   It defies common sense that giving money to people who might invest it productively will result in more jobs rather than giving it to people who really need it and would spent it triggering an increase in demand that would, at some point, result in more productive capacity.

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Now, many years of trickle-down economics have proven empirically that rewarding the wealthy only rewards the wealthy reflecting the growing chasm in wealth today.   Nevertheless, Congress and the President practice Alice in Wonderland economics.

Unfortunately, there is no economic system in theory or practice extant that offers solutions to the real problems confronting not only America but the family of nations.   Our economy is based on fossil fuels and in particular, food production today cannot survive without massive quantities of fossil fuels.   Some day in the not-to-distant future as the gap between the demand and supply of fossil fuels grows, the food people eat will become increasingly dependant on local production.   It is inevitable.

Notwithstanding this reality, Washington is operating on the assumption that force and ingenuity will preserve the status quo.

Such Alice in Wonderland economics is driving the planet to the edge of habitability.   The only arithmetic that seems to drive policy in Washington is that mainstream economics will add to their pockets and subtract from the pockets of everyone else's.



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I have been a professor of political science at Seneca College in Toronto. I have published five books the last of which "Selling Out: Consuming Ourselves to Death" was released in May/08. As well, I have been featured in CounterPunch, Z (more...)

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