Posted: Sunday, April 6, 2008 12:00 am
The federal deficit is way out of line. Our friendly puppy-dog, nanny-state is spending us, our children and our grandchildren into economic oblivion.
The Democrats have only one solution: increase taxes. They also want to be elected, so they advocate taxing someone else. This is fundamentally dishonest, and the leaders of the party know it.
The Republicans have no solution in actual practice. They have demonstrated that given the federal checkbook, they can and will spend like Democrats. They maintain that they can cut taxes and still spend like drunken students with their father's credit card. This is also fundamentally dishonest, and their leaders know it.
Thomas Sowell, who is able to cut through the muck of modern propaganda better than any contemporary American, reminds us that "? when liberals start being alarmed about the national debt, it means just one thing:
They want higher taxes. The thought of reducing spending would never cross their minds."
Fighting constantly against this mindset and the collapse of the Republican Party has led some to throw up their hands and opine for any solution, no matter how imperfect. Ben Stein, who is neurotic, brilliant, kind and generally correct, has finally thrown in the towel and now says that we must increase taxes on the rich if we are to have any hope of maintaining a viable economy.
Stein is wrong, and here's why. First, as much as we may want someone else to pay all of our taxes, reality will not allow that to happen.
Once I've stepped off a roof, I would love gravity not to work, but hoping doesn't make it so. I fall at the same rate as any other object placed in the same gravitation field.
All taxes must ultimately come from the production of wealth. If a person, or group of persons, produces little, they will pay little. The effects of taxation are also dynamic and nonlinear.
If the government wants more tax revenue, they should:
1) Reduce tax rates on the rich; and 2) raise tax rates on the marginally poor and middle-income earners.
You may not like that. I don't like it, but that is reality. You and I don't like falling off a roof either, but if we insist on increasing tax revenues, then we must live with the consequences.
This is an empty debate, however, because it is not the root of the problem. As the late Milton Friedman constantly pointed out, the problem with a deficit is in the spending, not the level of taxes.
Have you ever wondered how we can spend twice as much as all of Europe, Russia, China, and Japan combined on our military and still can't afford troop carriers and body armor, etc.?
The answer in less politically correct times was called special interests, graft, and corruption.
Cal Thomas recently reported, "Government auditors spent the past five years examining all federal programs and found that 22 percent of them -- costing taxpayers $123 billion per year -- fail to show any positive impact on the populations they serve."
Our governments keep saying that they cannot cut spending. This is simply not true, it is a matter of greed, both private and public.
Government greed makes Wall Street and corporate America look pious in comparison.
Simple test: Take any government that is running a deficit. Pay off the deficit and then ask how much they would want in income if they could have their "dream budget." Triple that amount and give it to that government every year as income.
Come back in four or five years. That government will be dead broke, and the "progressives" and the media will be crying "crisis."
There is no upper limit to government spending. There is no lesser amount that is acceptable to a government than what they have spent before. In other words, budgets can only go up, and there is no limit to "up."
Democrats accept the second part of that statement so thoroughly they never think of any alternatives. That is why their solution to a balanced budget always demands increased taxes.
The first part of the statement is recognized by socialists. To them, the government is society, so the upper limit of governmental spending is everything the society produces.
Ultimately, we will have to starve our governments. We should start that process before we all starve with them.