Progressive or conservative? No, “payday lender.”

I have been working on a three-part post about the math of “income inequality” which goes online tomorrow and over the next week. I think it takes an important and different tack from other viewpoints. Hint: the newest tax law will only make income inequality worse.

I am still banging my head trying to pin the “Tax Cuts and Jobs Act of 2017” to some point on the conservative-to progressive spectrum, and I just can’t do it. Think for a moment about the state of our economy. We have had nine years now of low inflation, improved job creation, record corporate profits and rising stock markets worldwide. Meanwhile, millions of Americans continue to struggle with poor wage growth, rising healthcare costs, excessive debt, etc.

The classic conservative approach to this economic environment would be to take the opportunity of a strong economy to “store up seed corn” for any future economic downturns. Reduce the federal budget deficit, trim some budgetary fat, and maybe even make some progress against the national debt. If you must spend money, invest it in long-term wealth like infrastructure (roads, public facilities, etc.). And if you are really a fiscal conservative, you know that no boom lasts, and this one has gone well past historical norms. Finally, you would bring the tax experts into any legislation debate to make sure you don’t add more complexity and unforeseen consequences.

Alternatively, if you are a progressive, you would still do the infrastructure part, but you would also take the opportunity to improve services to the people still struggling. Invest in healthcare for more people, education and training for less-skilled workers, environmental cleanup, and better housing opportunities.

Or third, you can take what I call the “Payday Lender” approach. You go even more deeply into debt with little tangible benefit, signing over $1.5 trillion of your (and your children’s) future paychecks. You then give most of the money you borrowed to the richest payday lenders themselves, and sign over your car title (i.e., your future Social Security payments) to them for good measure. In return, the grateful payday lenders will give you back maybe a $1000 one-time bonus (if you have worked for the company for 20 years; much less if not), which comes out to about $20 per week. And for good measure, they take your payroll deductions down by maybe $20 per week (check your most recent pay stub; your mileage may vary), but know they will get that back out of you in higher fees from somewhere else.

So why are you complaining? You’ve got $40 to spend. So, go crazy. And remember the payday lender store is open seven days a week, twelve hours per day, just to “serve” you.

I can’t see that word without remembering the classic Twilight Zone episode where the creatures come from outer space bearing a book entitled “To Serve Man,” exciting the people of Earth until they find out that “To Serve Man” is a cookbook.


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