In February 2021 I wrote a post titled "A crisis is...". To the list of problems plaguing the planet back then we can now add Russia's "special military operation" in Ukraine. It is true that the pandemic which was raging then appears to be in retreat allowing for relaxation of public health measures and millions of jobs have been created with the unemployment rate falling below 4%. On the other hand, we now have the highest inflation rate in 40 years. This post is not about allocating responsibility for the current mix of problems. Rather it is about what President Biden and Democrats can do to avoid the electoral bloodbath that everyone is predicting in November. To paraphrase Samuel Johnson, "nothing concentrates the mind like the prospect of a hanging". If true, this should have the Democrats thinking hard about election strategy. I have heard talk of a repeal of the gas tax to ease the pain at the pump. To this I say, why hold back? The bigger the crisis, the bigger the opportunity and the bigger the required response. After all, inflation is not affecting the just price of gas. A more effective measure, both for addressing the economic issue and improving the party's electoral prospects, would be a tax cut targeting the lower and middle classes - and make it retrograde to 2021 while you are at it. After decades of waiting for the benefits of tax cuts for the rich to trickle down to them, wouldn't it be nice if the lower and middle classes saw a real and immediate improvement in their financial situation? And it would not hurt for them to see which Party is really on their side. This would not be an ideological or knee-jerk act as tax cuts by Republicans tend to be, but a principled action to address a real problem. While Democrats may not resort to tax cuts at every turn, they should not hesitate to use this tool in a situation like this. Unlike other initiatives of this Administration which have been blocked in Congress, I do not expect significant opposition. No doubt Republicans will suddenly find fiscal responsibility and object to a tax cut excluding the rich. More likely their objection will be based on the effect of such a tax cut on their election prospects. Something tells me that they would however stop short of going on record and voting against it. It's true, this would add to an already huge national debt. But considering that this increase in the debt and ensuing inflation are at least partly due to massive government spending on bailouts to corporations and individuals and quantitative easing by the Federal Reserve mostly benefiting the well-off, should we withhold a hand up to the no-so-well-off?
- drrama7