Monday, August 8, 2011

Welcome To The New Reality.

It has been a while since I have posted but there have been so many things going on.

The debate in Washington about the "crisis" of the long term debt problem has everyone quarreling about how one side has let the other down.  That there will be no let up in the demand that we live within our means, that continue to grow more and more meager everyday.

The TEA Party and many of the Republicans state that we are a nation of people who should be self reliant who will rebuild our nation from the ground up.  Very many of those same folks cannot even feed themselves should the grocery stores fail to receive their truckloads of supplies. 

The American people have become more and more reliant on the Highway Trust Fund (HFT) to finance the road infrastructure in America and that Fund is reliant on the Federal Gas Tax.  Our demands that our car get better gas mileage and that we keep fuel prices low, and especially, the demand that we NOT increase the gas tax, have rendered the HTF insufficient to repair, much less expand, the national road system.

Now we hear that most of the 18.4-cent tax per gallon of gasoline set to expire Sept. 30th.  That is at the end of the Federal fiscal year.  If the wrangling over extending this is as rancorous as the debt ceiling issue, we may not have a gas tax this time next year.  The individual states would have to enforce their own increases and allocate for their own highways.  50 different ways of calculating the fees, 50 different methods of collecting it and 50 versions of allocating toward transportation projects.  This could have a devastating effect on the trucking industry.

States which currently have a sparse population could see their highways wither away and become dirt roads.  Parts of states with larger cities (think of the area from Washington, DC. to Boston) may get their roads paved but the paths to other portions of the state may be just that - paths.  Lexington, Louisville, Bowling Green and Northern Ky could see all the road growth - or we could actually see regional rail.

But what if we followed the lead of Mitch and Rand and did not raise the fuel taxes in any way?  The Federal government could then no longer help us, nor could the State.  Each individual would have to fend for themselves. Rugged individualism would have to be instilled in all of us.  Can't you just see it now, Mad Max right here in Central Kentucky?  No, somehow I think that we would all have to cooperate and pull together.

Melissa Lafsky has it right when she says that "our inability to raise the gas tax is at the heart of our economic decline" . We want to cut taxes on all the wrong things.  We only tax about 60% of the total tax base and that is leaving a lot of cash on the table. 

Today, the City of Williamstown granted tax breaks to the creationist theme park to the tune of 75% over thirty years in addition to the $40 million in incentives from the State.  If this project is not good enough to go it alone, then why do it at all?  I'm just saying that that is a lot of money for something which may be dated and faded in 30 years, then need new incentives to "freshen" it up - or replace it.

The hard liners on not raising taxes are adamant that they will not inflict higher taxes on corporations.  The same corporations who are sitting on $2.5 trillion in liquid cash and not expanding or hiring because they don't have local customers.  Those local customers are not showing demand for products because unemployed(or underemployed) folks cannot pay for stuff.  Nor can they borrow the funds to pay for things.

So, the final results are, private industry will not create jobs, the Government is not allowed to create jobs, the gas tax will not pay for transportation construction jobs, the social safety net jobs will be reduced and our rugged individuals will rebuild America. 

Welcome to the new reality.

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