So a while back, the Democrats wanted to pass a tax break for "working families" (I'm sorry, I am a lifelong Democrat and I will stand up and cheer when someone, someday, kills off the phrase "working families". It just makes my teeth grate), and they came up with this kind of silly idea: they would lower the payroll tax.
It's a dumb idea because, first, the payroll tax is the funding mechanism for Social Security. This is the same Social Security that politicians like to claim is in "danger" when it isn't- though funding Social Security payouts long term has some fiscal problems... in any case, the way to keep Social Security solvent does not involve underfunding it.
That's okay, one can reply, because the Payroll Tax Cut had a funding mechanism in which the lost revenues are replaced by "general funds". This is usually called Robbing Peter To Pay Paul, or in this case, using tax receipts collected for one purpose to pay for other tax receipts that should have been collected but weren't, while borrowing money to make up for the shortfall.
This is really dumb. This is why department stores won't let you buy gift certificates, and then use the gift certificates to pay off your department store credit card bill.
Anyway, it's also a dumb idea to cut the payroll tax by a small amount because the small windfall most taxpayers receive is a) largely unnoticed, and b) probably not used to do things like pay down debt or improve savings. Because our economy is consumer driven, what they want people to do is shop. Which means buying things you don't need and probably can't afford. As opposed to taking some of your paycheck, and paying it into a savings plan that will pay out when you retire.
Oh, never mind.
The problem is that the payroll tax rteduction was put in place for a year, and it's now set to expire, and when it does, everyone will notice that their taxes went up. And Democrats - or more specifically, the President's reelection team - is worried that less money in people's paychecks will make them grumpy and grumpy people vote for Newt Gingrich. Or Rick Santorum. Or something.
Naturally, Republicans are in no mood to extend a tax break that makes the President look good (cue the natural segue into how Republicans Hate Working Families), and also are kind of mad about several other things, notably this plan to build a pipeline across the country north to south so that Canadian oil shale can be efficiently delivered to refineries in Texas. Oil shale is also a pretty dumb idea (slightly less dumb than fracking, but still), and the pipeline could probably be rerouted, but mostly, this "debate" is a lot of the smae thing we get these days of terrible, useless Washington politics. One dumb idea in exchange for another. None of which really addresses the problems we actually face.
I don't really care about any of this - which is why I don't write daily about the dramatic brinksmanship going on in DC - and frankly, I'd be fine if the payroll tax went back to normal and someone actually took brinksmanship over, and past, the brink. Perhaps then, something might change, a bit. I know, it's a foool's notion. But I remain optimistically foolish. Just for spite.
In any case, the payroll tax break is a dumb idea, but extending it is probably better than not extending it... but frankly, it's the fact that we're all standing around talking about this stupidity that just floors me. And also why I'd probably rather eat Christmas cookies, watch reruns of SVU, and hope the whole thing just goes away. Who's with me?