Time magazine reported today that after instituting a $1.5 trillion tax cut and signing off on a $675 billion budget for the Department of Defense, Senate Majority Leader Mitch McConnell said the only way to lower the record-high federal deficit would be to cut entitlement programs like Medicare, Medicaid and Social Security. Thus, as many have mentioned, the only people who’ll pay for the rich tax cuts are the poor.
This reminds me of my post from yesterday, Today We Campaign, November 6 We Vote. Holding true to form, The Atlantic reported last year that Republicans are hoping to use the deficits created by their own tax cuts to slash the social safety net—but they may end up setting the stage for tax hikes instead. So what would happen? Here’s a few thoughts:
- Massive homelessness — millions of the working poor use their paycheck to cover rent, relying on welfare for food. But hunger wins over homes. Within a few months, landlords would go broke across the country.
- Housing prices collapse — with a large percentage of houses and apartments are rented to the working poor comes mass evictions landlords will be unable to cover mortgages. Foreclosures soar and the frail housing market collapses again.
- Far Less Money — With far less tax money going to poor people. Let’s assume the government uses the cash to pay down debt instead of offering tax rebates. This drops interest rates and frees up capital for business loans. That would be stimulative, but with far fewer consumers, the economy is sliding into massive recession. Business will contract, not expand.
The Republican Methodology – The Ant and Grasshopper Parable
The ants worked hard all summer collecting food and preparing for winter. The grasshoppers ruled all who worked. When winter came, the grasshoppers felt they didn’t have enough. No worries. They elected themselves a hard line leader and took away 40 percent of all ant benefits and gave it to the grasshoppers.
Being naive, the following year, the ants decided that the new government would certainly care for them in the same manner as the grasshoppers. However, as winter returned, there were no more benefits and the ants starved.
That’s why this election is important.