Economic Stimulus: What To Do, What Not To Do

The depth and breadth of the current macro-economic cyclical trend has everyone's attention. Its saliency is marked by a spreading economic detriment that reaches into the upper middle class. The current economic trend defines the distinction between being middle and upper class--the degree to which you sacrifice your net worth to the capital owned, consolidated, by the upper class.

Since the effect of the boom-to-bust trend is to define class distinction, there is a tendency to trickle down the demonstration of power by the middle class with regressive tax policies to address burgeoning budget deficits. Exacting a regressive tax burden is a demonstration of power that gives a sense of parity with upper class status. The financing for the SCHIP program recently legislated is highly regressive, for example, providing a source of revenue for members of the upper middle class along with a sense of being powerful enough to politically apply their economic self-interest (regressive tax policy) in the name of the public good or the general welfare, just like the upper class does.

Regressive tax poicy is highly deflationary. It is the first thing NOT to do if we are to stimulate the economy out of the deflationary phase of the business cycle, yet it was the first thing to do once a new administration took power and a new congress sworn in.

Where regressive tax policy thrusts us into the depths of recession, a progressive policy will effectively pull us out. If, as a practical example, we want to fund health care for those that cannot afford it, a progressive burden is the pragmatic measure, but the cohort that is to shoulder the brunt of the burden do not occupy legislative seats at any jurisdictional level of government.

For the middle class cohort seeking to demonstrate power in the throws of class distinction, a regressive tax burden is not in its self-interest. Rather, it sustains and validates a tax policy that is the source of its detriment, giving false confirmation to economic policy that is otherwise not confirmed in the most salient way, becoming the willing tool of the upper class and its confirmably disreputable mode of systematic operation by pragmatic means of a regressive tax burden.