Shaking Up Congress
Posted by jfkennedy on 05/06/09 08:51 AM
Last updated 05/15/09 08:56 AM
Congress and the Federal Reserve have approved trillions to bail out privileged financiers and manufacturers for reasons ranging from incompetence to fraud. In so doing, they have disregarded overwhelming public disapproval.
Dr. Paul's bill in congress to audit the Federal Reserve (HR 1207) and Senator Sanders' companion bill in the Senate (S 604) address a big part of the problem, Federal Reserve secrecy and consequent abuse. Auditing the Federal Reserve would likely reveal accounting and investment practices to shame the Mafia, but the audit campaign remains aloof from plain folks. Without pressure from the little guy, the market value of the audit bills cannot compete with the buying power of big finance on the congressional trading floor. Alas, these bills are likely to be traded away in the hog markets of congress until activists find a way to inform and arouse ordinary citizens.
Occasionally the frustrations of rebels are shared by majorities, and now is one of those momentous times. The majority is angered over presumptuous looting by their overseers, hence, receptive to revolutionary ideas. Radical solutions like abolishing the Federal Reserve Bank and the Internal Revenue Service hold more promise than usual, but the average Joe trembles at the prospect of confronting sacred idols of public adoration and submission. To challenge these venerable relics in the past was to banish apostates to political deserts and social caverns. The boldest heretics have wound up in the hoosegow. For any chance of success, a new strategy must be delicate, uncomplicated, and popular.
Ordinary workers will not respond to confusing intellectual appeals. They answer pleas of the heart and belly. On that front, suspending income taxes briefly, say for one year, would attack the foundation which permits a misguided government to burden average Americans improperly, to wit, obedient taxpayer submission. If that could be done in a way that would not invite immediate IRS audits, it would reward taxpayers to cease their docility. For the bellies of workers and families it offers each a windfall of thousands in the midst of hard times. For their hearts it creates an opportunity to get even for having to bankroll the bungling and shady dealing of politically connected tycoons.
Strangely, income tax suspension is quite possible in congress at this auspicious moment, because bluntly, it can buy many more votes than bailouts can buy back home in next year's congressional elections. Is their any question that the average taxpayer would sign a congressional petition to keep thousands of his own earnings next year? Safety in numbers and anonymity would protect each signer from IRS clutches. Showing ordinary people how to chastise their political overlords and reward themselves in the bargain can generate mass support. Representatives who resist a petition with this much potential could loose their seats in congress as soon as the 2010 elections.
A one year halt to withholding would at once line the pockets of average citizens, stimulate the economy, and turn the tables on the powerful. Consumption of goods and services would increase widely and immediately, which in turn would boost production and employment. More deposits in neighborhood banks would increase credit as well throughout the economy all the way up to the big banks, but from the bottom up, not the top down.
The banks would get their bailout, but only after the people got theirs. The bailouts have encouraged bad investment by removing the risk and dumping the losses on taxpayers. The latter have a strong incentive to avoid high risk investments, for they are limited to using only their own earnings even when their taxes are suspended. That is why investing in the people by lifting taxes for a while would insure a much firmer and steadier recovery. It would also bolster bank assets indirectly in a way that would curb their appetite for gambling, because the money would come to them, not as political favors, but when they earn it in fair competition.
There would be tremendous savings in compliance and enforcement costs. Equally important, power would spread out from the center, creating less dependence on Washington and improving security by disbursing influence away from one exalted power center. That would make it difficult, if not impossible, for determined terrorists obsessed with decapitation to cripple the nation in one stroke, something which is quite possible now.
Greater trade and credit would prevent the need for future bailouts, so that funds already set aside for bailouts may be redirected in place of taxes to pay interest on the national debt and other government bills. In a well deserved turnabout, tax suspension would re-channel less than a third of unspent bailout commitments from proven compulsive gamblers to people who actually earned them.
For the government, voluntary alternatives to empire, war and forced redistribution might even gain cashet, and social entrepreneurs could better afford to initiate them.
Right now, however, it does not matter how the government pays for a tax holiday. What matters is that the public end the official presumption that they will continue to submit to income taxes without complaint to finance any scheme no matter how unsound, impractical, or dishonest.
An organized push to defer income taxes would show the people at once how to reward themselves and harness their so-called government servants, for it would strengthen the political connection to the government of the people who finance it, not as slaves, but as masters.
A drive to postpone income taxes would also augment the move in congress to audit the Federal Reserve. It would attack the same unrestrained banking power from a popular angle with very effective incentives. It would show ordinary citizens how their submission to income taxes allows the central bank to devalue their currency and benefit powerful financial interests. As well, it would weaken the government's ability to promote and enrich a financial oligarchy over the very people who pay for it.
There is no longer an excuse for taxpayers to whine about the bailouts when they have a way to end them post-haste. Nor is there any need to accept a long, slow recovery designed by a bank bought government when grass roots action can rejuvenate the economy sooner on sounder ground and reestablish who rules the roost.
Just as auditing the Fed might lead to abolishing it, so also might stopping income taxes briefly lead to ending them for good. Both goals are quite possible down the road, and a vigorous push for each will strengthen the drive for the other.