Democrats and Republicans Play Chicken on the Debt

It's probably a really scary time to be a Congressman.  The Federal debt has gotten to the point where they can't just talk it away for a little while longer.  Everyone with a brain knew we would get to this point eventually.  Sovereign debt is taking down countries in Europe....Greece, Italy, and Portugal are a harbinger of things to come.  China, holding massive amounts of American debt, is getting nervous, and if you're feeling really cynical/paranoid/depressive, the reality of the Fallout universe's Resource Wars and an invasion of Alaska is just a tiny bit less nutty than it was a few years ago.

What's going on in Congress right now should startle just about everyone.  House Republicans are ready to drive the country off the cliff just to prove their point.  Senate Republicans are ready to give Obama a blank check.  Democrats, to their credit, are coming around to reality just in time but running up against the House Republicans' line in the sand: tax increases.

In this deranged calculus, the House Republicans are the most wrong on one thing: closing tax loopholes and eliminating tax credits do not constitute a "tax increase", no matter how much they bleat about it.  Incredibly, they still seem to think that giving away the farm to wealthy corporate interests will magically turn the economy around, when it's plain to everyone with a brain that American corporations only see Americans as fit to buy their crap, not to work to make it, and so as long as the banks are insane enough to keep extending credit card debt to people, American corporations seem content to export all the manufacturing jobs to China and import all their cheap plastic crap for us to buy on credit.

GE is only the worst, most egregious case of absurdly twisted tax policy.  Earlier this year, it was revealed to the world that GE, in spite of making $3 billion in profit in 2010, paid no income tax on it, and additionally received $5 billion in tax credits.  They cleared $8 billion in takehome pay last year.  Let's see, if you made $60,000 last year, then 133,333 households just like you (about a half million men, women, and children) would have had their income covered by what GE took home free and clear last year.  Most corporations didn't make off like bandits this blatantly, but with $1.1 trillion in available tax credits in the Federal tax code, it's safe to say that many did.

It is not my goal to provoke class warfare or hatred of corporations.  Honestly, society doesn't need my help for that anyway.  And in a practically managed world, I would not bregrudge anyone lower taxes.  Taxes, after all, are one of the biggest sins against liberty in the government playbook.  But the world is not practically managed.  Only now, on the brink of economic disaster, is anyone questioning the wisdom of continually driving up the Federal debt.  Except the insane House Republicans.

What are we to do?

First off, the House Republicans must concede one plain fact:  Stop insisting that eliminating a tax credit is a tax increase.  A tax credit is a bribe.  No entity, whether it's a corporation or an individual, should be in a position to pay no taxes and receive tax credits, period.  If taxation is theft, then receiving more back in tax credits than one pays in taxes is theft from all of us.

Once that occurs, everything else will fall into place.  Democrats have already signaled that they will be willing to concede on social welfare spending.  Everything else that the Republicans want -- hard spending caps, a Balanced Budget Amendment, a real debt reduction time line -- is fine by me, so long as it's not bolted onto repressive, bigoted "social riders".  Let gay marriage and abortion go.  It's not important at this point.  To insist on anything more than that is to be irresponsible legislators who deserve to be voted out of office.  

The Tea Party has one last chance to get it right.  Personally, I think they'll blow it.  Then, in the words of Q from Star Trek: The Next Generation, "May whatever God you believe in have mercy on your soul."