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The failure of the Congressional budget “super-committee” to address our geometrically expanding debt and deficits should surprise no one. From the beginning the committee was political theater designed to create the illusion of action when the will to act is missing. Unfortunately, this perennial bad habit of democracies to pursue short-time interests at the expense of long-term needs is now too dangerous to indulge.
The glory of constitutional government is its replacement of violence or coercion with speech and persuasion. But going back to ancient Athens, the primacy of verbal persuasion and processes makes it possible to substitute procedural words for actions when the courage or will to act is missing. The creation of committees, conferences, symposia, commissions of inquiry, and the like provides politicians with a ready answer to the citizens’ frustrated cry, “Why isn’t something being done?” Since few in government want to anger the voters by calling for the sacrifices and hard choices needed to put our fiscal house in order, creating a committee buys time and creates the illusion that “something is being done.” And we know where the reluctance to do anything comes from––making the hard choices necessary to deal with the impending fiscal apocalypse is attended by political costs that will have to be paid come the next election. Better to delay decisions until after November 2012, when the political stars will be better aligned one way or the other.
At this point many will be tempted into a “pox on both your houses” reaction, blaming Republicans and Democrats alike for the “gridlock” and “partisan politics” that are preventing a solution and letting us citizens down. But we should resist the lazy recourse to moral equivalency, which usually is a way to avoid making judgments about responsibility and culpability. Just look at the Israeli-Arab conflict, where a specious moral equivalency has let the Arab instigators of violence and disorder off the hook. So too with the current fiscal crisis, which is the result of overspending and the growth of the federal government. Thus the “fair and balanced” solution touted by the President––combining tax increases with cuts to federal programs––may sound good superficially, but will not solve the problem.
Quite clearly, the problem is spending, not revenues. When 40 cents of every dollar of GDP is spent by the government, when entitlement spending on Medicare, Medicaid, Social Security, and Obamacare will devour all of federal income tax revenue by 2050, when debt is near 100% of GDP, when the latest deficit has reached a historical high of 8.7% of GDP, confiscating all of this country’s personal and corporate wealth, let alone raising top rates, will not balance our books. In fact, the International Monetary Fund estimates that all federal taxes would have to be increased 88% just to keep entitlement spending at current levels and to keep debt from growing. Moreover, history confirms Milton Friedman’s observation that “Politicians will always spend every penny of tax raised and whatever else they can get away with.” Research by Richard Vedder and Stephen Moore shows that between World War II and 2009, every dollar of new tax revenue led to $1.17 in spending. Finally, most promises of spending cuts made to justify tax increases have not been kept, like the $3 of promised cuts that never materialized after Reagan’s 1982 tax increase, or the phantom cuts that sold George H.W. Bush on raising taxes in 1990.
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