Spending The U.S. Into The Poorhouse
From The Stakeholder (the website/blog of Democratic Congressional Campaign Committee Weblog) comes this tidbit of "then and now."
“I don’t like deficits, I don’t want deficits, and I won’t
pretend deficits don’t matter.” -Budget Committee Chairman Jim Nussle, CongressDaily, 3/12/03
“[Former New York Congressman] Jack Kemp worships at the altar of tax cuts. Jack has always said that deficits don’t matter. We think that deficits do matter.” -Majority Leader Tom DeLay, New York Times, 1997
“The Republican lockbox legislation locks away the entire Social Security surplus . . . Today, we are restoring Americans’ faith and confidence in the Social Security system. It’s a promise to current and future generations of retirees: Rest assured, your hard-earned money will be saved for you so that you can enjoy your well-deserved retirement.” -Majority Leader Tom DeLay, Congressional Record, 5/23/99
“This Congress will protect 100 percent of the Social Security and Medicare Trust Funds. Period. No speculation. No supposition. No projections.” -Budget Committee Chairman Jim Nussle, Press Release, 7/2/01
Now (the revolt):
"Republicans are in denial... they have been spending money like there is no tomorrow.” -Bruce Bartlett, former deputy assistant secretary for economic policy under President Ronald Reagan, Chicago Tribune, 03/09/04
“Enough deficit spending, my friends. Enough. We are mortgaging our children's futures. When does it stop? When does the Republican Party find its soul?” -Sen. John McCain, Congressional Record, 02/12/04
Dang it all, I hate it when liberal Democrats are right! And they are. Deficit spending is a major problem for the US. It would be for me and my family budget, for me and a company budget, many states forbid defict spending and yet, and yet, when offered the majority in congress by the American People, Republicans (both houses, don't get all uppity on me if you are a Democrat) have abandoned what they stood for for decades. And I don't mean just conservative Republicans, I mean all of them.
This is not something to sneeze at folks. Someday the bill will come due and someone (your children? grandchildren?) are going to fork over most of their pay checks to handle the cost of government.
I know, I know, you democrats out there are claiming Clinton eliminated the deficit but you know that that is done with smoke and mirrors. You can have a huge surplus if you take everything off budget such as Medicare entitlements.
The Democrats are not above blame either. For 40 years they preached deficits were not harmful, and now they gripe at the republicans for doing the same thing that they did. Of course, Democrats point to The Clinton “surplus” and say that we can do it again.
Democrats want to raise taxes, mostly on the rich. Noted economist Thomas Sowell who is also a Black Conservative, notes here (read the whole thing)
Congressman Patrick Kennedy, a Rhode Island Democrat, recently declared to fellow party members at a Washington night spot, "I don't need Bush's tax cut" and added that he had never worked a day in his life.
A number of other rich people have at various times likewise declared that they do not need what are called "tax cuts for the rich." But, whatever political points such rhetoric may score, it confuses issues that are long overdue to be clarified.
One of the most basic confusions is between income and wealth. You can have high income and low wealth or vice versa. We have all heard of athletes and entertainers who have earned millions and yet ended up broke. There are also people of relatively modest incomes who have saved and invested enough over the years to leave surprisingly large amounts of wealth to their heirs.
Income tax cuts apply to income, not wealth. So the fact that some rich people say that they do not need a tax cut means nothing because they are not getting a tax cut on their wealth, since their wealth is not being taxed anyway.
Looked at differently, high tax rates hit people who are currently earning high incomes -- usually late in life, after having worked their way up in their professions over a period of decades. Genuinely rich people who have never had to work a day in their lives -- people like Congressman Kennedy -- are unaffected by income taxes, except on what they are currently earning, which may be a tiny fraction of what they own.
In other words, soak-the-rich tax rates do not in fact soak the rich. They soak people who are currently earning the rewards of having contributed to the economy. High income taxes punish people for becoming prosperous, not for having been born rich.
Even estate taxes can be minimized by hiring ingenious lawyers and accountants. But people who have had to work all their lives may not be nearly as able to afford such expensive ingenuity. Someone who eventually works his way up to $100,000 a year will qualify as "rich" in liberal rhetoric but, by the time you reach that level, you may have a child in college and need to put some money aside for your retirement years. You are very unlikely to be able to afford a yacht.
The Democrats hammer “Tax Cuts for the Rich” but don’t tell you that there is a big difference between tax cuts and tax revenue. Tax revenue increased every year of the Reagan Administration as it did following the even bigger “tax cut” during the Kennedy Administration.
Back to the topic at hand which is not taxing, but spending. The Republicans bellowed for years for a reduction in spending as a method of lowering the deficit while at the same time the Democrats wanted to raise taxes. Now that the Republicans are in charge of both houses, you’d think that they would be cutting spending left and right. And you’d be wrong. Pork Barrel spending is at an all time high with tax dollars going to the most irrational boondoggles. It’s sickening to watch this process.
I float a modest proposal.
1. Cut Taxes on Corporations, because when you increase corporate taxes, the corporations only pass along those taxes to the consumers who do not need any more outgo of their own pocketbooks.
2. Tax Wealth, not Income. I would be willing to bet that the Soros and Kennedy types would squeal like stuck pigs then.
3. Cut the tax rate on income to a flat tax, but tax all personal income. For those below an agreed on poverty level will get a refund.
4. Abolish federal withholding. When each taxpayer has to make a monthly “tax deposit” to cover their income taxes, the outcry will go up demanding fiscal responsibility.
5. Abolish deficit spending and any congressional trick used to pass a spending resolution without having to do the work necessary for a real budget, tie specific deficit authorizations to national emergencies such as natural disasters (Florida Hurricanes, Terrorist Attacks, War, etc., etc.)
6. Abolish all federal spending on anything that is not in the national interest (this alone would eliminate 90% of the pork methinks, though I’m not sure of that).
7. Set time limits on entitlements and require a “sunset review” one year before the limit arrives. Only if the entitlement is truly needed may it be continued.
There are probably other things that could be done also, but this might be worth discussing.
I have one other suggestion; the organization of a national body called “Vote The Bastards Out.” Those joining would agree to vote for the member of the opposite party from the one currently holding office for each of the next 4 congressional elections, the next 2 Senate elections and the next two presidential elections. When the politicos realize that they have to then EARN our vote, maybe they would begin to work for America, not just their party or themselves.
UPDATE: Reader James R. MacLean has an interesting comment (third one from the top) with a link. Take a good look at the link noted here (the link in the comments section may or may not work). Now, Mr. MacLean states that Thomas Sowell is wrong and that increases after 83 are because we were coming out of a recession. Further that ascribing the issue to a political party is "noise." He may be right, but he may be wrong also. I'm not an economist. If there is an economist out there that can support or refute Sowell or Mr. MacLean I'd be open to hearing from you. At any rate, if I wasn't clear, the point of the posting is that I think we are spending entirely too much and need to take a good look at revenue vs. expendatures. There are lots of folk that think like me (and lots that don't as well). Thanks for your comment Mr. MacLean, hope you will come back more often.