Bipartisan Decision To Go Over The Fiscal Cliff?

"The merely rich are not rich enough to rule the modern market. The things that change modern history, the big national and international loans, the big educational and philanthropic foundations, the purchase of numberless newspapers, the big prices paid for peerages, the big expenses often incurred in elections - these are getting too big for everybody except the misers; the men with the largest of earthly fortunes and the smallest of earthly aims. There are two other odd and rather important things to be said about them. The first is this: that with this aristocracy we do not have the chance of a lucky variety in types which belongs to larger and looser aristocracies. The moderately rich include all kinds of people even good people. Even priests are sometimes saints; and even soldiers are sometimes heroes. Some doctors have really grown wealthy by curing their patients and not by flattering them; some brewers have been known to sell beer. But among the Very Rich you will never find a really generous man, even by accident. They may give their money away, but they will never give themselves away; they are egoistic, secretive, dry as old bones. To be smart enough to get all that money you must be dull enough to want it." 

G. K. Chesterton  B: 1874  D: 1936

Dear Arthur,

Thanks for your email.

Your suggested solution seems plausible, even likely.

However, once we go over the cliff -- and "the reaction to free fall" is a "done deed" -- what's to keep Republicans from insisting taxes be brought down for everybody? (After all, the well-being of "the job creators" is at stake! Just think of the jobs they've created since the Bush Tax Cuts...)

According to Reagan Budget Director, David Stockman: "In 1985, the top 5% of the households, the wealthiest 5%, had net worth of $8 Trillion, which is a lot. Today after serial bubble after serial bubble, the top 5% have net worth of $40 Trillion. The top 5% have gained more wealth than the whole human race had created prior to 1980."  http://paxonbothhouses.blogspot.com/2012/01/politics-and-economics-101-curricula.html

My suggestion will not float, but how about a one-time-only tax (perhaps paid over a decade) that would raise $16 trillion from the top 5%?

When your laughter subsides, consider the benefits.

In a single stroke, we pay off the national debt, also eliciting the fringe benefit of convincing "the rich" to prevent a re-play of "irrational exuberance" and "loosy-goosey finance" so they don't get whacked again?

Furthermore, after exacting $16 trillion from the only demographic that will not be devastated by revenue raising --- the average American's net worth has declined 40% since 2007 - http://money.cnn.com/2012/06/11/news/economy/fed-family-net-worth/index.htm --- the top 5% of American families will still thee times as wealthy as they were under Reagan and twice as wealthy after adjusting for inflation. 

Admittedly, that's only a 5.9% annual "return" since 1985.

But what's your return now? 0.59%?

Plus, the economy gets a clean slate and "happy days are here again." 

Furthermore,, the robber barons will recoup their loss faster than you can say "Inside Job." http://vimeo.com/27292661

The alternative?

An indeterminate series of "lost decades?" 

What's not to like?

Pax

Alan

PS The Ungodly Rich have bamboozled "the rank and file" into a baseline expectation that fabulously wealthy people must never be saddled with singular tax contribution, chiefly because the results would be catastrophic for the health of the economy. On the other hand, our only incontrovertible knowledge of the economy that prosperity and consequent job expansion depend on consumers having adequate spending money to propel growth. In E.J. Dionne's essay, "Why sane bargaining looks strange,"  the WAPO columnist notes that "Raising taxes on the wealthy won’t damage the economy. A sudden drop in the take-home pay of the vast majority of U.S. consumers would." It's not "the job creators" stupid! Its ample spending money in the pockets of workers. http://www.washingtonpost.com/opinions/ej-dionne-why-sane-bargaining-looks-strange/2012/12/02/ae7c0928-3b48-11e2-b01f-5f55b193f58f_story.html?hpid=z2

 Sun, Dec 2, 2012 at 11:16 AM, AC wrote:

Seriously, I see only one way to have all winners, i.e. the Republicans avoid voting for a tax rate increase, while Obama gets the increase he wants on the top 2%:

1) Go "over the cliff".

2) After the first of the year congress passes a bill cutting taxes on all but that 2% and Obama signs it.

3) Everyone claims victory.