“Tastes Great!” “Less Filling!” Those of us who were around in the 80’s surely remember the Miller Light commercials with people taking sides of this (at the time) seemingly timely and important argument. Today, we have Republicans and Democrats playing games and taking sides over the country’s future by pointing fingers about deficits and debt. Instead of “Tastes Great” v “Less Filling”, it is “We Spend Too Much” v “We Tax Too Little”. As it turns out both parties are right and both parties are wrong. With the looming August 2nd drop dead date to raise the debt ceiling, I thought I would not take all the speeches and policy papers for face value and do a little research on my own.
According to FactCheck, the non partisan website put together by the Annenberg Public Policy Center, U.S. government spending as a percentage of the nation’s economic output, or GNP is the highest it has been since WWII. Federal spending sits at 24.1%, down slightly from 2009. At the same time, federal tax revenues are expected to drop to 14.8% of GNP, the lowest since WWII. Both parties love to spend and both parties love to hand out tax breaks and every election vow to cut taxes.
While I hate to say the federal government needs to act like the average American family, there are some analogies to be considered when we talk about taxes and spending. The average person or family who wakes up one day to a fiscal crisis essentially does two things. They cut spending wherever they can and try to increase income, either by replacing the job they might have just lost, or by picking up a 2nd or 3rd job. Many families might even stage a garage sale to get rid of a few things they no longer use that are taking up space in the garage or basement.
Our so called leaders are only considering minor fixes to our system. Instead of picking up a 2nd or 3rd job and bringing in some money to help pay down our debt, there are those in Congress who actually think we should tax people even less and that will somehow bring in more money. As if cutting back on our hours at work would magically make our paychecks bigger. Really? How did that whole cutting taxes thing work out since the Bush tax cuts took effect? A glance at the chart on the left clearly shows revenue went down as a result of those tax cuts, while we increased spending.
This is not meant as slam towards George W. Bush. We can agree or disagree with the legacy of his Presidency another time. The point I wish to draw here is that if the shoe were on the other foot and a Democratic President had convinced his or her party’s Congress to pass huge tax cuts for the wealthiest while keeping spending going up, the Republicans would be screaming bloody murder about fiscal responsibility and fiscal equity. There was once a time in this country when the top peacetime tax rate was 90%. Even in the glory years of Republican’s idol Ronald Reagan, the top tax rate hovered at 50%. Today, the Republicans gripe that the 35% top rate is choking the economy. Really?
During this debt debate over the last few months Democrats have been doing some screaming of their own. Many don’t want to see any cuts to social programs and entitlement spending. We as a society commend those who try to help those less fortunate. Most of us would want to help the sick, the poor, the elderly. We want to give our children the education and opportunity to make the most of their lives. Over the years well meaning Congresses have put together programs hoping to do just that. I’ve read stories of how well individual Head Start programs first worked and how outcomes today are negligible between those who went through Head Start and those who did not, according to the Department of Health and Human Service. Yet, the Head Start program is about $7 billion a year. One more thing, why is the Head Start education program run by HHS instead of the Department of Education? This is an example of programs put together by talented well meaning people who care that have lost their drive, their creativity, their mission for success and have been to a certain extent turned into a bureaucracy churning reports and numbers instead of young students ready to take on the challenges that lie ahead for them.
Before you think me a Tea Partier, defense contractors have long broken up manufacturing weapons systems to multiple cities and states so as to protect their projects in a large number of Congressional districts. The Air Force’s new F-22 Raptor stealth fighter jet was built by Lockheed Martin with subcontractors in 46 states. Does anyone really think the best way to build an aircraft is with parts and service from 46 different states? Imagine how long and how stale your Big Mac might be if you had to get your 2 all beef patties from one place, your pickles from another, your tomato from another, your lettuce somewhere else, and every ingredient for your special sauce from 30 other places, let alone all those sesame seeds for the bun having to come through 20 other states… Lockheed Martin is filled with some of the best and brightest. From a business prospective they undoubtedly know they can build a plane more efficiently by consolidating materials and production in a limited number of sites. From a political prospective they also know they have to spread the wealth to protect their project. Who pays? We all do.
In Washington it seems it’s all or nothing. Why can’t they learn to compromise? Our federal budget is filled with projects and programs that mean well, staffed by people with good intentions, wanting to do the right thing. From HHS to the Defense Department, from the State Department to the Commerce Department. Sometimes however, programs grow too big, become too cumbersome, fail to achieve the success they were designed to. Half of Washington then wants to kill the program or even the entire department. The other half wants to keep things status quo. Just as in the private business sector, there is not a program or department that can’t be done better, more effectively, more efficiently. Why is it Washington can’t improve? Why is Washington can’t tweak? Why can’t some taxes go up and others go down? Why can’t successful programs grow and unsuccessful ones get cut? Why is it always all or nothing. Politics…
We are a nation “on the dole” as John Sununu recently wrote in Time Magazine. Just under 50% of Americans receive some sort of federal benefit, from Social Security to Medicaid, from farm subsidies to housing subsidies. Everyone is out for their tax break, for their subsidy, for their slice of the American tax pie. How can any reasonable person say it fair for hedge fund managers who make millions a year and sometimes even over a billion dollars to pay a lessor percentage of their income in taxes than their secretaries or receptionists who earn well under $100,00 per year? Maybe because those same hedge fund managers make larger and more frequent contributions to political parties and favored candidates than their receptionists and secretaries could ever hope to? Then there are the exemptions and tax credits. The Tax Policy Center says almost 50% of individuals and married couples had no federal tax liability in 2010. Once again…how is not paying anything fair?
We are a nation in decline because we have become so focused on winning for our ideology, our cause, and our party above all. We are a nation in decline because politicians care more about being reelected than they care about doing what is right for their country. The partisan bickering and showmanship of appealing to the outside fringes of our political party’s are quickly making us a 2nd rate country with a 1st rate headache of remembering when. The Greek philosopher Heraclitus once said “The Only Constant In Life Is Change”. Of course he said it in ancient Greek. Despite what we may remember as the “Good Old Days”, people then remember the “Good Old Days” previous to that. We are no longer a country that can just wipe away Social Security as if it never existed without throwing millions of people into the streets. We are no longer the country where a doctors visit costs $5 and health care was cheap and easy. We are no longer a country that can afford the be the world’s policeman and big brother. We have serious problems that need to be addressed by serious people who seriously believe the words in the 2008 campaign slogan of John McCain “Country First” as a calling and not a catchphrase. We need people in Washington who want to figure out how to do it better, faster, cheaper, with greater results for all Americans.
John Boehner last night had to pull his bill from being voted on as his own party in the House wasn’t prepared to vote for it. Over the last days, behind closed doors, Republican leaders have been twisting arms and horse trading to get their “party’s” bill passed that they know stands no chance of moving ahead in either the Senate or with the President? Why? Politics. It will play well with the party base that they can blame the Democrats. I have kids, now more grown up than most in Washington are behaving. They could hold their breaths till they were blue in the face about wanting ice cream for dinner. They learned all that posturing, breath holding and tantrums would not alter the fact that there would never be a dinner with ice cream as the main course. They of course learned compromise. They learned that on some special nights, if they cleaned their room, and ate their dinner, including their vegetables, there could be ice cream for dessert. They learned this at age 4. Why can’t our seemingly intelligent, adult, elected officials learn the same lessons that holding their breaths till they are blue in the face won’t change the facts and won’t win the debate. Why can’t Congress learn to work together and solve our problems….all our problems, from debt to deficits, from war to welfare, from education to nutrition, from pollution to poverty…why can’t they clean up their acts so they too can have ice cream after?
Too bad all our elected officials have to play politics instead of working together to fix our problems. Too bad they spend their years in Washington becoming “connected” with the power elite with whom they get work from either directly or as lobbyists when and if they lose reelection someday. Too bad they can’t learn from other countries around the world as businesses do with other businesses, taking the best ideas, and making them even better to solve our problems. Too bad our politicians sign meaningless pledges while running for office that prevent them from doing their job once they go to work in that office. Too bad they will let our country fall apart at the seams to keep from seeking compromise, to keep from being seen as weak by that fringe element of their selected party. Too bad our politicians seem to care more about “Party First” than “Country First”.
The answer seems so simple to most of us outside of Washington DC. On this subject, we spend too much and take in too little. We need to nudge taxes back up a bit, perhaps to where they were just a dozen years ago and we need to cut spending as well. We should also have a serious discussion about how we can both raise money and cut spending at the same time. What about legalizing marijuana and taxing it? A federal tax on legal sales of marijuana would raise billions of dollars a year and at the same time, free up tens of billions more in the costs of prosecuting and jailing users of the substance. What about legalizing and taxing online gambling? Yes, there are those who suffer from addiction and the legalization of either of these two activities will increase that problem. It’s all too easy to point out the analogy of the countless lives ruined by our other legal vices, both of which will continue to kill and injure far more people even if these two newer items became legal… alcohol and tobacco.
We do not need an amendment to the constitution that says “Stop me before I spend again”. We need people to do the jobs we elected them to do, or we need to find those who will. We need to leaders in Washington…not leaders of party’s, but leaders of our country. Men and women who will work hard to make things happen, not just for a select few, but for as many of us as they possibly can. Men and women who will earn not only our trust, but our admiration.
Ya, I know…..fat chance…. but a fella can dream, can’t he?
