Was Kool and the Gang’s first big hit, but before America gets to Celebrate overcoming its recession, some one needs to start singing it in Washington.
“I don’t know, I don’t know,” is the current answer, in both the song lyrics, and the discussion over the stimulus and bailout.
Underlying the vulnerability of President Obama’s plan is that uncertainty. As much as people would like an infusion of demand, there’s the looming prospect of when the bill comes due.
Economists are coming up with a plan which has the value of equity and scale. It is discussed by Ralph Nader in a blog this week.
An excise tax on securities trading would raise almost enough to cover even the spiralling deficit and have the advantage of slowing the speculative excess that created this mess.
Politically, it touches the same nerves that cheered when President Obama issued a $500,000 pay cap on executives receiving federal assistance. There will not be a big hue and cry to protect hedge fund traders from new taxes, except from the lobbyists paid by the hedge fund traders. Most of the tax burden would go on foreign purchasers of the securities, improving our balance of payments situation.
Because of the scale of commodity and derivative trading, a miniscule fee of 10 to 25 cents per hundred dollars traded could raise as much as $500 billion. With a 1 percent fee, Uncle Sam could end all its other taxes.