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Is anybody listening?

One week before Christmas the White House floated the idea of providing a 1991 tax rebate of $300. The cost: $30 billion. The method: borrow.

It is a proposal which fits right in with the thousand points of lite in Congress and the Democratic presidential candidates, where the fever for cutting federal taxes has overwhelmed serious focus on how to convert the debt-laden U.S. economy to face the economic challenges of the nation's future.

It is a proposal far more likely to benefit Japan than the citizens and taxpayers of the cities and towns of America.

Maybe the reality will strike the President and CEOs of major American industries when they visit Japan later this month. When they see that Japan is debating raising taxes to balance its budget and to invest in public infrastructure, education, and job skills; they will understand why Honda is not closing factories or abandoning employees. Japan is positioning itself for the future.

In contrast, the idea floawted in the nation's capital, apparently, was that like visions of sugar plums, the concept of the tax cut would stimulate Christmas shoppers and perk up the economy. The idea came, after all, the day the White House reversed its position and conceded that the nation is still in a recession--not a recovery.

And the very next day General Motors announced it would be laying off 74,000 workers and shutting down 21 major manufacturing plants--permanently--in cities and towns across the country. GM was merely joining the ranks of many of America's preeminent, industrial giants who are in the process of laying off upwards of 2000 Americans a day--adding to a profound sense of uncertainty and apprehension in communities all across the nation.

A $300 rebate is simply not going to sell General Motors cars, nor provide General Motors with the access to capital or skilled employees critical to compete in a global competition.

Instead, it would do the opposite. It would increase the federal deficit and the national debt--taking more money out of the economy and leaving less to invest in the human and public infrastructure critical to assure that industry in the United States can compete against industry in a united Europe or Japan.

General Motors can see the writing on the wall. If the President and congress agree to a deficit-financed rebate, the most likely winners if and when consumers spend the money will be Japanese manufacturers of VCRs, video games, cars, and computers.

As for those left behind: what good does a tax cut or a tax rebate mean when you have received a pink slip that says 'thanks, but we don't need your services ever again?'

A federal tax cut is pretty meaningless if you have lost your job and you are not sure how you will meet your medical bills or how you will ever find another job.

Federal Reserve Board Chairman, Alan Greenspan, said the proposal would only add to the deficit without helping the economy out of recession. And Robert Reischauer, director of the Congressional Budget Office, warned that if the growing federal deficit is not confronted, economic growth will continue to deteriorate and make the stresses so evident in many communities even more severe.

Perhaps it is fortunate that official Washington is largely shut down. The Congress is gone. The president is leaving for Japan to observe a nation not bent upon instant greed, but on making a commitment to long term growth and excellence.

Hopefully, in little cities and big, on street corners and in cafes, members of the House and Senate will learn there are more important and wiser ways to invest $30 billion. Hopefully, they will learn that in city after city, town after town, and state after state, cutting taxes is simply not an option for local elected officials.

Maybe a little dose of reality will help.
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Title Annotation:In Focus; President George Bush's proposed tax rebate
Author:Shafroth, Frank
Publication:Nation's Cities Weekly
Date:Dec 23, 1991
Previous Article:New federal transportation act means more funding, flexibility for cities.
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