I’m not a deficit hawk. The real question is: what are the things you do to move the country forward which justify running a deficit?

Giving more tax breaks to the top one percent of the people is not what I would call wise economic planning. The House just passed a bill that cuts taxes yet another $95 billion over five years–complete fiscal insanity. In particular, the bill cuts taxes on capital gains and dividends–that would be a provision that, experts, generally agree, is simply a gift to the top earner in our country. And, of course, the president is threatening to veto any bill that includes a windfall profits tax on the oil industry (The House and Senate are going to have to wrangle over that one).

One of the leading lights of the Republican majority had this to say: “Clearly, tax relief is part of the deficit solution, not part of the problem,” said Representative Jeb Hensarling, Republican of Texas and one of the mavericks. “More economic growth and more jobs means more tax revenue flowing into the federal Treasury.” Even George Bush the elder saw through that economic nonsense two decades ago when he called Ronald Reagan’s version of such a plan “voodoo economics.”

This debate does shine a light on the Federal Reserve Board, and the difference between being a political hack versus looking at the facts. Alan Greenspan has been quoted recently saying that new tax cuts should not be passed without spending cuts. This is the same Greenspan who endorsed the Administration’s huge tax cuts, which have made such the country a fiscal mess and increased the divide between rich and poor. In my view, the fact that Greenspan is being treated as the great economic oracle and savior by the talking heads and political elite shows how out-of-touch people are. As he leaves for retirement, I’m one who can’t wait for people to wake up and realize the lasting damage he did by going along with the Administration’s loony financial scheme.

On the other hand, as The Wall Street Journal pointed out today (subscription required), the people who are simply the number crunchers and aren’t political hacks, see things slightly differently. “But a recent report by Federal Reserve economists found that the cut in the dividend rates didn’t boost the stock market or lead to significant increases in the amount of money companies paid to investors as a proportion of their earnings. “We fail to find much, if any, imprint of the dividend tax cut news on the value of the aggregate stock market,” the Fed economists wrote.”

In other words, they point out what we should have learned in the 1980s–you can keep up the rhetoric of tax cuts being good for the economy and allegedly increasing investment but it is just a lot of malarky