A Holiday from Stimulus?

Rick Gibbs, Murrieta, CA

The Administration and the Congress, abetted by the press, are in a public debate over whether to extend the 2% tax holiday that was applied to social security last year. The line from the Administration goes something like this: “To quote Republicans, the last thing we should do in a recession is to raise taxes. This will take $1,000 away from every working class family in America.” The line from some Republicans is: “We have to find a way to pay for it. And it should come from reductions in spending … not tax increases elsewhere. To do the latter is merely redistributing the wealth.”

We should have learned our lesson with the original stimulus package in 2009. Simply put: Keynesian economic theory has not worked. Additionally, to take an estimated $240B from the Social Security trust fund, at a time when the long-term viability of Social Security is in question, seems ill advised.

Yes, we would all like to pay zero taxes … and we are prone to support those in the Administration and the Congress who want to “give us our money back.” However, there are items in the federal budget that we must support … and we must support with our taxes. One such item is defense spending. We are on a track to cut spending on defense by 20%. If the defense cuts are not changed, we will be at an all-time post World War II low in defense spending – a mere 2.7% of GDP. This comes at a time when we are at war in multiple places around the world. Further, cutting defense by 20% would throw several hundred thousand of our troops out of work. It would decimate the defense industrial base causing the loss of over 1 million jobs.

The Preamble to the Constitution says: “ … provide for the common defence, promote the general welfare …” It seems that our leaders in Washington DC, have mixed up the verbs to this phrase. Perhaps Presidents Kennedy and Reagan were not wrong in their decisions to stimulate the economy by increasing defense spending. Something to think about.