I think the West in general and Americans in particular have so bought into the fantasy that you can do all the good moral positive helpful etc etc things they believe in and that somehow, because of the correctness of these actions, the deeds will be paid - by someone, preferably not them. At the same time, since the Reagan era, Americans have come to the conclusion that no one should really pay taxes to pay for anything because the government is so inept with money. So two ideas that cannot coexist really, coexist mentally with the help of the politicians promising it is so, and the banks also promising you can have all the money you need now and pay it back cheaper later.
As individuals and a society we have not made any hard or realistic choices, since we havent had to and have been encouraged not to. In the old days, the West lived better than the rest of the world in large part because it was able to exploit the rest of the world, but that is no longer PC. We will have to rely on ingenuity and productivity, but in the last 40 years, the profits from productivity have been pretty much captured by the owners of capital, not the workers, and the limits are closing in. There is little wiggle room left.
America is almost unique in that it taxes the international income of its citizens. If it is worth being in America or an American, you accept that.
Saving California as is, is just like saving the big banks, but certainly no worse. They both reward past recklessness by taking the resources to do it from people who probably did not benefit from the recklessness. Drastically cutting services means hurting people in the future who may not have benefitted either. Similarly, renegging on Social Security is a betrayal of those who paid into it, believing the governments word. Any solution will be somewhat unfair.
The least unfair solution to me, is to suspend tax statute of limitations and persue every tax abuse from the past, to remove all of the new and tax loopholes and all tax grants to business, to reintroduce the progressive income taxes of the 1970s with a max of say 70% on income over 15 million per year, to adjust SS payments to inflation without limit on income assessed and to levy a scaled one time wealth tax on those with assets over 500 million. Yes President Obama, tax the millions earned by star atheletes, and maybe bring back income averaging again for people with erratic short-lived careers, since this is still allowed for "corporate persons".
Societies are only stable and democratic when there is a somewhat heterogeneous and solid middle class - what we have now is a marginalized middle class with segments played against each other, a huge underclass and an unprecedented small number who control most of the income, assets and power of the entire country. Meanwhile to avoid further California choices like this, we should make some constraints as to how much a state can go in debt, and move some responsibilities to the Fed - we have a very unusual federation, with states competing against each other and the fed - this can lead to bad results as we now see. and if we dont help california, the most troubled groups can just move to another state and bring their problems with them.
Edited by dasein, 11 February 2010 - 06:04 AM.
