I was at a big Christmas party last week. In attendance was a wide spectrum of people – young and elderly adults, democrats and republicans, religious and non-religious, etc. The topic of the latest round of tax cuts came up, and an amazing thing happened. There was not a single person who could understand how these tax cuts got approved. There was total agreement on this.

This is the tax cut legislation that extends massive tax cuts for the wealthy (nearly half a trillion dollars) AND that provides tax cuts for the middle class AND cuts social security witholdings by a third AND extends unemployment benefits for the long-term unemployed.

Everyone knows that the “tea party candidates” were elected in November with the goal of “stopping runaway government spending” and “eliminating the massive deficit”. All of those candidates, along with the republicans in general, along with democrats in general, should have been against anything that causes the deficit to balloon yet again. Everyone knows that Social Security is already on shaky ground, so cutting SS revenues seems suicidal to that program. Everyone knows that there is no credible evidence that tax cuts for the wealthy will stimulate the economy or create jobs, so there is no reason to extend those tax breaks. Every way you look at it this tax cut legislation seems irresponsible, and everyone agreed on that point. Everyone.

As this article points out, states are facing the same kind of problems but don’t have the luxury of printing money.

Is it possible that, politically, the United States has gone insane? That is what this article, written from a European point of view, is proposing:

America in Decline: Why Germans Think We’re Insane

The European Union has a larger economy and more people than America does. Though it spends less — right around 9 percent of GNP on medical, whereas we in the U.S. spend close to between 15 to 16 percent of GNP on medical — the EU pretty much insures 100 percent of its population.

The U.S. has 59 million people medically uninsured; 132 million without dental insurance; 60 million without paid sick leave; 40 million on food stamps. Everybody in the European Union has cradle-to-grave access to universal medical and a dental plan by law. The law also requires paid sick leave; paid annual leave; paid maternity leave. When you realize all of that, it becomes easy to understand why many Europeans think America has gone insane.

We get the worst of both possible worlds: Citizens of the United States pay the most but get the least. Or:

Pam Brown and her children were disturbingly, indeed incomprehensibly, allowed to fall straight to the bottom. The richest country in the world becomes morally bankrupt when someone like Pam Brown and her children have to pick through trash to eat, abandoned with a callous disregard by the American government. People like Brown have found themselves dispossessed due to the robber baron actions of the Wall Street elite.

Is there any solution to this problem. Is there any way to heal the patient and recover from the insanity?

See also:
- How Income Taxes Work
- Deficit reduction committee issues its final report

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