"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Wednesday, December 21, 2011

The Payroll Tax Deal

The three main things that the Senate bill that the House rejected this week to much wailing and gnashing of teeth was supposed to do were:  (1) extend the payroll tax (read Social Security and Medicare tax) break for two months; (2) extend unemployment benefits; and (3) put in place a "doc fix" that will stall cuts in Medicare reimbursements to physicians.   The House wants its own bill, which does both (2) and (3), but also does (1) for a full year.   The transparent reasoning they're doing this is to push the next decision on the payroll tax past the next election, while the transparent reason why the Democratic Senate wants a series of two-month fixes is so they can keep harping on how Republicans won't raise taxes on the "rich," but want workers to pay more payroll taxes.

From the Regular Guy's perspective, this is all fiddling on the Titanic as it sinks.    None of the three things that either Senate Democrats or House Republicans are doing are good things, for the simple reason that WE DON'T HAVE THE MONEY!   Social Security is going bankrupt... why do we want to limit the amount of revenue coming into the program?   Unemployment benefits are costly and also disincentivize people from looking actively for jobs.   (Is there a connection to the steady increase in people who have dropped out of the workforce?   Of course there is, unless you have no understanding of human nature.)   Finally, we are going to have to come to grips with cutting Medicare reimbursements soon, so why not do it now?

Sheesh!  

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