With Massachusetts having just played "Pin
the vote on the donkey" at an Election-Day children's party,
let's see what grown-ups are doing in the rest of the U.S.A.
Republicans and tea partiers are preparing to
work with their new congressmen to address the federal
government's most serious problem: The borrowing of 40 cents of
every dollar it spends, which is creating a crushing debt burden
for future generations (if the nation lasts long enough to have
many of those).
Your own financial situation couldn't survive
this ratio of debt to expenditures, and neither can your
country's. Left alone, this can only get worse, as the massive
baby-boomer generation booms its way into Social Security and
Keep in mind that the United States is
borrowing from nations that may not have our best interests at
As the deficits and the national debt grows,
Inflating the currency, creating play money to pay down the debt
and hoping no one notices the money isn't backed by anything of
Defaulting on debt like Greece so no one will lend us more money
to pay our operating expenses.
Facing the fact that we can't spend money we don't have, which
will cause a deepening recession because so many people and
businesses have become dependent on uncontrolled government
raising taxes to pay for continued overspending and debt
Our own congressman has done his part. Just
this week John Tierney blamed George W. Bush for all the
nation's problems, then announced he will vote for Nancy Pelosi
for minority leader, because she has "presided over the most
productive Congress since 1964" — which, of course, spent a
whole lot more borrowed dollars.
Fortunately, Republicans are presently
objecting to the
Federal Reserve pumping new inflationary dollars into the
economy. And "responsible" people are recommending a combination
of spending cuts and raised taxes.
The co-chairs of President Obama's bipartisan
Deficit Reduction Commission — Democrat Erskine Bowles and
Republican Alan Simpson — have released their draft proposal,
which recommends various Social Security reforms like indexing
the retirement age to new longevity expectations, assessing the
payroll tax on higher income while decreasing benefits to these
higher earners, and downward-adjusting cost-of-living increases,
while adding a new minimum benefit to keep minimum-wage retirees
above the poverty level.
Along with these changes, the chairmen offer
some $200 billion a year in domestic and defense spending cuts,
including a three-year freeze in the pay of most federal
employees and a 10 percent cut in the federal workforce.
"Earmarks" would be eliminated.
On the revenue side, the proposal would
eliminate some of the mortgage interest deduction and the
deduction for high-level health insurance plans; and there would
be an additional 15-cents-a-gallon tax on gasoline.
Mostly, this all seems to be a trial balloon
to see how the public reacts before the rest of the Obama
commission members are asked to approve it and present it to
Congress. So far still-Speaker Pelosi has declared the spending
cuts "simply unacceptable." And the unions are already gearing
up to fight them.
I want to be one of those "reasonable
people." But after years as a political activist, cynical trumps
We have seen this movie before. If liberals
and public employee unions object to the spending cuts, and
taxpayers don't object to the tax hikes, then the tax hikes
happen, and the spending cuts do not. The tax hikes would then
become an incentive for even more new spending.
There is no reason to trust President Obama,
who has already broken his health care debate promises. Given
trust, the Social Security reforms could be done, in order to
give taxpayers who are paying for today's benefits a chance to
collect some, too.
Defense spending should be cut; that part of
the plan would make sense if accompanied by removal of U.S.
troops from places we should not feel obligated to remain.
Potential savings that might be yielded by "contracting costs"
are inadequate to the point of "ya gotta be kidding."
Certainly the federal government's payroll,
which pays more in salary and benefits than comparable jobs in
the private sector, should be cut. Let us know when that
happens, then we'll talk about the tax hikes.
Those who have supported the concept of the
"flat tax" should have no problem, conceptually, with getting
rid of various tax breaks that once compensated for once low
pay, like the tax-free benefits; or were meant as "beginner"
incentives for economic behavior, like the mortgage interest
deduction designed to promote home ownership. Now they just
drive up the cost of health care and housing for everyone.
Using the mortgage interest deduction not
only for basic starter homes, but for second homes and
McMansions, is ridiculous.
In return for giving up these benefits, we'll
be promised lower tax rates. No reason to trust this: Benefits
will be gone, tax rates may be temporarily lowered, but then
they will increase again.
I don't see any repudiation of the recent
bailouts and "stimulus" plans. According to
Americans for Tax
Reform, the proposal sets spending at the present 2010
The "spending cuts" are cuts in the rate of
increase. The tax hikes of course would be real.
Another name for "reasonable people" in
Washington, D.C., is "fools."