Time of Taxation

Mark Weisbrot has a good article in the International Herald Tribune Opinion section and another at the TPM Café (courtesy of Felix Salmon). The two Posts reflect one aspect of the situation, but portray the Period from 1970-2005 in a bad light, one which can be easily be explained by evaluating the Population Growth in Latin America throughout this Period. The Past in Latin America has been one of economic growth attempting to keep pace with the Population Growth. The new regimes remain utterly necessary to the reduction of Poverty in the area, but only in the sense of breaking the Traditional caste systems in the Countries involved. It is more of a question of breaking the Strangle-holds of the Past, than implementation of vital, vigorous economic policies. Chavez and his fellow travelers in Latin America will find the old economic policies of the Communist Left were discredited for sound economic rationale, and have not improved with transplantation or tweaking the mechanics. On the other hand, the IMF and other financial institutions supporting the Traditional castes were equally at fault (check this later Post of Felix’s).

Dean Baker presents a good Post which in a way validates my previous paragraph. Ben Bernanke, as spokesperson of the Traditional caste system in the United States, had suggested that Social Security should be restructured and Benefits reduced (Baker implies Bernanke is only following the Kirchner example in Argentina of defaulting on the Public debt, Our's held by American labor). Dean, though, goes on to say this default should be extended to holdings of the Privileged as well. I would say, and Dean Baker as well probably, that it is the Tax system which should be restructured, and that the funded Pension Plan be allowed to pay its Benefits until such time as contributions run out. The fact that the American Wealthy will be forced to pay Taxes, which they have skipped paying since Reaganomics, should not be germane to the Issue.

One might study this Post by Menzie Chinn which itself contends, though he might contest this statement, that the Wealthy in this Country should restart to pay those Taxes sooner than later, as the Public Debt has shifted to foreign Creditors. The Well-to-Do in this Country may be contemplating transferring their citizenship and residence to foreign shores, to leave lesser Americans to pay the Federal debt, but I suggest that We tax them now before they go. lgl