This is what happens during times when people who know nothing about economics (like Tea Bigots and Most Republicans) try to reduce a deficit by cutting spending. And our dear demented representative is for this approach rather than creating jobs.
Cutting taxes when people aren't making enough to make a difference doesn't help the middle class. Think about it for a minute.
If your taxes go down less than 1% (which is the average tax cut of NON TAXABLE INCOME for those making over $75,000 annually - and virtually nothing for those making less! - 1% of $100,000 is $1000 they get in addition to other tax sheltering advantages the middle and lower classes can't take advantage of because they JUST DON'T HAVE THE MONEY, while 1% of 25,000 is $250 or the amount you get. If you think that's fair, you are being brainwashed by the Republicans) what happens when local municipalities don't get Federal Funding to clear your roads of snow, fix potholes or provide other "socialist" services? They RAISE LOCAL TAXES to make up the difference. Your tax break is gone but proportionately those in the upper brackets lose significantly less because they can write off more than you. Yep! Those who make a few hundred thousand per year get an extra large tax break and the middle class gets stuck with the local bills for fixing roads etc....again.
TEA BIGOTS! WAKE UP! You are supporting the wealthy, not yourselves! And the Republicans love you for it. You want another 8 years of Bush corruption and Wall Street billionaires? Vote Republican. You'll get even more than what Bush/Cheney did to this country...or have you forgotten? Or are you just ignorant and crazy?
From Robert Reich:
Former Secretary of Labor; Professor at Berkeley; Author, 'Aftershock: The Next Economy and America's Future'
The Fed's New Bubble (Masquerading as a Jobs Program)
The latest jobs bill coming out of Washington isn't really a bill at all. It's the Fed's attempt to keep long-term interest rates low by pumping even more money into the economy ("quantitative easing" in Fed-speak).
The idea is to buy up lots of Treasury bills and other long-term debt to reduce long-term interest rates. It's assumed that low long-term rates will push more businesses to expand capacity and hire workers; push the dollar downward and make American exports more competitive and therefore generate more jobs; and allow more Americans to refinance their homes at low rates, thereby giving them more cash to spend and thereby stimulate more jobs.
Problem is, it won't work. Businesses won't expand capacity and jobs because there aren't enough consumers to buy additional goods and services.
The dollar's drop won't spur more exports. It will fuel more competitive devaluations by other nations determined not to lose export shares to the US and thereby drive up their own unemployment.
And middle-class and working-class Americans won't be able to refinance their homes at low rates because banks are now under strict lending standards. They won't lend to families whose overall incomes have dropped, whose debts have risen, or who owe more on their homes than the homes are worth -- that is, most families.
So where will the easy money go? Into another stock-market bubble.
It's already started. Stocks are up even though the rest of the economy is still down because of money is already so cheap. Bondholders (who can't get much of any return from their loans) are shifting their portfolios into stocks. Companies are buying back more shares of their own stock. And Wall Street is making more bets in the stock market with money it can borrow at almost zero percent interest.
When our elected representatives can't and won't come up with a real jobs program, the Fed feels pressed to come up with a fake one that blows another financial bubble. And we know what happens when financial bubbles get too big.
