Raising taxes will not solve the fiscal crisis, and Republicans who dumped their anti-tax pledges should know better.
Being just weeks away from reaching our debt ceiling and with frightening talk about a fiscal cliff, there’s much sympathy in Washington for tax increases. Even conservatives are wavering. A few Republicans have dumped their anti-tax pledges, and former Nixon official-turned-actor Ben Stein favors taxing the wealthy. He says that we can’t cut our way to a balanced budget and insists that the revenue end must be addressed. But I have news for him: he’ll have a better chance finding Ferris Bueller on his day off than fiscal sanity through tax increases.
Let’s get real. Federal revenue this year will be approximately $2.5 trillion.
How much, again? Well, updating some examples Rob Bluey provided at The Foundry lends the following perspective:
It is 2,500 billion
At $45.8 million per year, LeBron James would need to work 54, 607.5 years to earn it
Average life in the U.S. lasts 2.4 billion seconds
2.5 billion seconds ago = 1933
2.5 trillion seconds ago = 74,250 BC
Furthermore, a stack of 2.5 trillion dollar bills would reach a height of 169, 665 miles — more than two thirds the way to the moon. This brings us to the second part of the problem.
We’re set to spend this year $3,500,000,000,000.
Stacked up, that many bills reach to the moon. And that’s where we’re headed fiscally.
To the moon, Alice.
Now, let’s get back to calls for more revenue. Imagine you had a teenager to whom you gave $1000 a month, and he not only squandered it every time but also continually maxed out his credit cards. Would your solution be to give him even more money and/or secure him a credit-line increase? Or might you, outraged, cut up the credit cards and tell him he must live within his means? (In reality, you should cut him off completely.)
This may seem a ridiculous example, giving a teenager one grand a month. But is it any more ridiculous than giving the feds 208,000,000,000 a month and then entertaining the notion that they should perhaps get even more? Bueller? Bueller?
Listen, if the government cannot get by on $2.5 trillion a year, guess what!
Pull it up root and branch and start anew.
Root and branch.
Also note that the government did get by on $2.5 trillion as recently as 2005; thus, a balanced budget could be achieved simply by resurrecting the spending levels of 7 years ago. And if we returned to the 2004 budget, we’d run a surplus exceeding $200 billion with current revenue.
But it’ll never happen.
Part of the reason why brings us back to Stein’s belief that we can’t cut our way to a balanced budget. He’s actually correct — given the feds definition of a “cut.” I’m referring to Washington’s accounting trick known as “baseline budgeting,” a process by which the government labels any proposal to reduce the rate of spending growth of an already inflated budget projection a cut. Citizens Against Government Waste explains the warped thinking:
[I]f an agency’s budget is projected to grow by $100 million, but only grows by $75 million, according to baseline budgeting, that agency sustained a $25 million cut. That is analogous to a person who expects to gain 100 pounds only gaining 75 pounds, and taking credit for losing 25 pounds.
If liberal politicians were truly serious about fiscal restraint, they’d eliminate this sleight of hand. But they won’t because they’re not. Ronald Reagan learned this the hard way in the 1980s when he agreed to a budget deal that included three dollars in spending cuts for every dollar in tax increases. The taxes came first.
The cuts never came at all.
As Reagan later wrote, “The Democrats reneged on their pledge and we never got those cuts.”
So here’s a message for Republicans who think that liberals can be negotiated with on the budget. I’ll be blunt.
Hey, idiots, THEY’RE NOT GOING TO STOP SPENDING. CAPICHE?
Yes, I screamed that. How do I know they won’t stop? Ooh, maybe because they haven’t stopped for 50 years? Maybe because the best predictor of future behavior is past behavior? It’s also because a liberal is a liberal is a liberal. A scorpion stings, a cuttlefish expels ink, a skunk sprays mercaptan fluid, and a liberal spends. It’s what the species does.
Many conservatives don’t grasp this, however. They make a common mistake: they assume others think as they do. They’re largely rational, so they expect rational behavior from their fellow man. But as I explained recently, emotion prevails in people’s decision-making far more than you may think. What feels right often trumps what is right even when it’s downright stupid.
It’s as with an old friend of my father’s whom I’ll call Sal. Sal had a gambling problem and spent and spent and borrowed and borrowed until he could borrow and spend no more. Bankruptcy finally “cured” him. And such is the fate of the soon-to-be late, great United States. The dependency class will go over the cliff grasping at their freebies, and the politicians will take us over the cliff dispensing them. Hey, a civilization’s gotta die a’ somethin’, right?
This is one reason I’m adamantly opposed to tax increases. Like the reckless teenager or Sal, the federal beast will simply consume whatever ventures near its insatiable maw and then some. So my message would be: get by on what you have — or to Hades with you. Go over that cliff. Because like any addict, you can’t help yourself. And better it happens sooner, while Americans still have a bit more change in their pockets (for whatever it’s worth), than after they’re further impoverished in the name of balancing the budget.
So what’s the end game? First, our more than $16 trillion national debt increases by an average of $3.87 billion per day and amounts to $52,000 for every man, woman, and child. This will never be paid off.
Yet I do see one way out of our debt hole. When the profligates in government (and their sheeple voters) finally collapse the system, there won’t even be a common federal feeding trough to hold our culturally, ethnically, and ideologically balkanized land together. We then may dissolve as the Soviet Union did, with various states, or blocks of them, going their separate ways. And guess who’d be left holding the bag? Note: the $16 trillion we owe is federal debt, not state. And I’d just say, hey, Washington, D.C., you know that debt thing? Good luck with all that.
Of course, the Chinese would end up getting stiffed. But they only pony up the dough because they have a symbiotic relationship with us: they keep us afloat so we can buy their goods. Besides, anyone foolish enough to lend money to our government gets no sympathy from me. The only question is whether we’ll be foolish enough to believe that throwing good taxes after bad will change bad spenders into good shepherds.