Taxpayers: stuck in a swimming pool drain ... by gimleteye

A news report in The Miami Herald about a poor little girl whose arm was stuck in a drain and barely escaped brought to mind the swimming pool drain analogy, to describe the helpless feeling taxpayers have today in relation to the worst economic crisis since the Depression.

The effect of the recession/Depression is the draining of net worth for most consumers. To maintain the illusion that all is well-- that this is a crisis of liquidity and not solvency-- trillions of dollars are being pumped by the federal government into the economy. This has had the ironic effect of allowing the nation's major financial banks to declare profits out of the money they have borrowed or guarantees backed by taxpayers to operate their businesses, and, for the mainstream media to all but declare the recession over.

These copious additions from the printing presses is along the lines of keeping a leaking swimming pool full; its motors and filters operating at increasing velocity. Taxpayers are being pulled into the drains. Not only is the pool draining, but the failure of government statistics to truly account for Inflation is akin to the water level stripe around the pool being erased every night and repainted by morning, to pretend the pool is full. At the same time, the size of the hose refilling the pool is being widened: to balance the budget, in the absence of budget cuts, taxes have to increase. (This is the point I made a few weeks ago, in respect to news that the Property Appraiser is failing to fully account for the falling tax base by omitting from the tax rolls transactions incurred through foreclosure proceedings.)

It is also why hundreds of City of Miami employees are making six figure salaries, and why salary inflation seemed a reasonable choice in Mayor Alvarez' office at Dade County Hall: the illusion of prosperity requires certain accommodations --ie. double digit raises-- unavailable to common taxpayers.

In The Miami Herald, county commissioner Carlos Gimenez angrily responded to the mayor's salary imbroglio by citing the need "to starve the beast" of government. But hold on. That's the same litany as popularized by Republican strategist and presumed taxpayer hero, Grover Norquist, who famously said that government should be shrunk to the size it could be fit in a bathtub (and drowned). We see how well that worked out, then.

There is a lot of congratulations going around Washington these days, as Ben Bernanke is applauded for having averted a literal meltdown of the financial system last fall and the Federal Reserve chief prepares to accept his appointment by President Obama to a second term. But I'm not persuaded that being pinned to a swimming pool drain is what an economic recovery feels like. To be truthful, I didn't like what the boom years felt like either: with all the pool "improvements" and lifeguards stacked around the edges qualified by the Chamber of Commerce, the builders' trade associations, and the real estate industry.

Perhaps most of us will be able to keep our heads above water, like the little girl rescued on Key Biscayne. But there will be no release until the entire swimming pool is either filled with inflated dollars or drained. Then we will be free to climb out. But what will we do and where will we go, then, and what new tribute will be owed to the lifeguards?