The New York Times calculates that a large portion of the benefits in the tax cut deal will flow to the middle and upper-middle class. Because the Social Security payroll tax phases out at $106,000, those in the upper-middle class benefit as much from that as billionaires. And the AMT patch saves these families from paying a large tax. “And other provisions that benefit the middle class have gotten virtually no attention, including a temporary repeal of a limit on itemized deductions and repeal of the phaseout for personal exemptions,” they add. “Together, those tax breaks will cost nearly $21 billion.”

Setting aside the fact that the AMT patch always gets done – it was even in the stimulus – I think this makes the mistake of looking at raw dollars versus per-capita spending. Because on a per-person basis, clearly the rich make out better than anyone. That’s because Washington exists to pay off the rich so we can give a crumb to everyone else. It’s a model of a government captured by oligarchs.

That doesn’t mean you can’t make an argument that, as a result of this deal, a couple million people will stay out of poverty. The refundable tax credits in particular are extremely helpful to needy families. But that’s really a narrow view of this deal. After all, the Child Tax Credit was in the Pledge to America, and would certainly have been kept at the same level as current law in the next Republican budget. And the payroll tax cut does such potential damage to Social Security, and actually raises taxes above current law to the working poor, and provides more benefit based on income, that you have to see it as a Republican idea, as the Republicans did.

All that help for the rich that is the backbone of this deal will not go to create jobs, by the way. At least not in America.

According to a November 20 article in The New York Times,”Well-heeled American investors have been doing something lately that they resisted for decades – becoming more like their European, Asian and Latin American counterparts and substantially diversifying their portfolios outside their home country.”

The Times adds, “The people putting as much as 40 percent of their portfolios into nondollar investments are quite wealthy.”

Even if they invest much of their Bush tax cut windfalls in American stocks, bonds, and hedge funds, they are doing little to create jobs, although they are receiving a lot of profit. Much of today’s large corporate profitability comes from off shoring jobs to the cheapest labor markets and downsizing American jobs to the maximum amount.

Increasingly, American corporations that do sell goods have them manufactured overseas (the vast majority of consumer electronic technology is made and assembled abroad), making profits from domestic consumer purchase of items produced outside of the United States. In short, increased consumer demand in many economic sectors means more jobs abroad, fewer at home, and increased working- and middle-class debt in America.

You may think that this bribe to the rich is worth it, because of the short-term “boost” to the economy. I find that to be flawed thinking about the real nature of this balance-sheet recession. More likely you just turn public debt into private debt as people deleverage and pay off their bills. Those give real benefits to the consumer, but there’s a major cost involved as well.