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Feb 23 2013

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Democrats, Taxes & Intentions

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The Net Result of a "Balanced Approach"

The Net Result of a “Balanced Approach”

Language is the mortal enemy of progressivism.

If you have wondered why the hosts on MSNBC always seem so angry, consider how difficult it must be to constantly mask your words from the freedom of plain English.

But what choice do progressives have?

To speak in plain English would be to advertise their unpopular intentions. So, an entirely new vernacular has been fielding to reconcile American sensibilities with progressive intentions.

Government spending has become  “government investments.” Excessive regulation has become “public accountability.” Lavish spending on public sector unions has become “aid to first responders.”  Illegal immigrants become “undocumented workers.”

And so it goes.

This language version of “three card Monti” is now at work with the sequester.

According to progressive pundits, all that stands in the way of a deal to avert the sequester cuts is steadfast Republican refusal to accept the latest progressive euphemism deployed by President Obama – “the balanced approach.”

Ah, the “balanced approach.”

Common sense and reasonable, yes?

For the President and Democrats, a balanced approach on the budget means that any policy effort to tame massive government shortfalls must include increased taxes; the soto voce premise being that America’s fiscal predicament is in large part due to under-taxation.

But is it true?  A few facts inform the situation:

In 2007, the federal government collected more revenue that at any time in the history of the Republic – $2.5 trillion.

The following factors were also present in 2007; the Bush tax cuts were fully implemented and in effect, the wars in Iraq and Afghanistan were at their high point ($124 billion spent on Iraq alone) and the Medicare prescription drug benefit was fully phased in.

The budget deficit for  2007  was $163 billion.

Now fast forward to 2012.  After the recession, revenues to the Treasury rebounded.

The federal government took in $2.4 trillion in 2012, or just a fraction less than the all-time record set in 2007. This feat was achieved with the Bush tax cuts still fully phased in (before POTUS’ recent income tax increase), but with a lower cost for the wars in Iraq ($10 billion) and Afghanistan ($111 billion). Yet the deficit for 2012 was: $1.1 trillion.

Indeed the deficit has exceed $1 trillion each year since 2009.  While revenues have historically averaged between 18-20 percent of GDP in the modern era (and have never exceeded 21 percent of GDP since 1930), federal spending has averaged 24 percent over the past four years (up from 19 percent in 2007).

Thus, the President’s seemingly reasonable policy presumption becomes a false choice.

Like a doctor prescribing the wrong medicine for a patient, the President and Democrats have intentionally misdiagnosed the problem and are insisting on a fiscal formula that, rather than solving the challenge, most likely exacerbates it by slowing growth and business and job creation and triggering capital flight. Indeed, it is well documented that taxing 100% of income from the wealthy would barely dent the national debt, while having a debilitating impact on the economy.

In light of this math, Democratic justifications for increased taxation are equally suspect. Time and again we hear Democrats  arguing that the debt is Bush’s fault  – that a combination of the costs of Iraq and Afghanistan, the Bush tax cuts and the Medicare prescription drug benefit  – are the cause for todays deficits. But that argument is not just unpersuasive, it is factually false.

Shame on the mainstreams who don’t call it straight.

Indeed, the entire cost for the Iraq war from 2003 to 2012 is less than the amount that the Democratic Congress approved in a single day in February 2009, in the colossally wasteful $860 billion Stimulus.

But none of the facts get in the way of Democratic arguments that the problem is with revenues alone, though they find the most unusual ways to say it.

Speaking of the sequester showdown, House Minority Leader Nancy Pelosi said, “So, it is almost a false wrong to say we have a spending problem. We have a deficit problem that we have to address.”

House Minority Whip Steny Hoyer  twisted this logic just a bit more when he said, “The country has a “paying-for” problem. We haven’t paid for what we bought. We haven’t paid for our tax cuts. We haven’t paid for the….”

It is left to unabashedly progressive Senator Tom Harkin to explain the real Democratic intention on taxation in light of the facts (emphasis added):

First of all, I want to disagree with those who say we have a spending problem. Everyone keeps saying we have a spending problem. And when they talk about that, it’s like there’s an assumption that somehow we as a nation are broke. We can’t afford these things any longer. We’re too broke to invest in education and housing and things like that. Well look at it this way, we’re the richest nation in the history of the world. We are now the richest nation in the world. We have the highest per capita income of any major nation. That kind of begs the question, doesn’t it? If we’re so rich, why are we so broke? Is it a spending problem? No.

By ditching conventional measures of debt, taxes and spending in favor of this new metric, Harkin is essentially correct.

The Federal Reserve estimates that total US wealth in 2008 (last year for which data is assembled) was $188 trillion.  By this comparison, the annual budget deficit is half a percent of US wealth, barely a rounding error. Indeed the national budget would be less than two percent, and the entire national debt would be a little less than nine percent. All easily dealt with if only we could tap that wealth.

But this is where Harkin’s benign premise belies the reassurance of his comparisons.

It is not a premise of limited government. It is not a premise rooted in the centrality of individual freedom and liberty as enshrined in the Constitution.

 It is rather an orthodox government-centric, collectivist outlook that updates an expression first written in Europe in 1848 – that the proper organization of society begins with government control of the “means of production.”

Personal wealth (and personal freedom) that is subordinated to serve the unlimited purposes of the state.

It is as unnerving as it is clear.

Hat tip to Harkin for at least being willing to man up and say what others of similar belief will not.

So when the Democrats are talking about a “balanced approach” with regard to the sequester or other upcoming fiscal challenges, dig deep and think hard. Question assumptions and check the facts.

Not everything is as it seems.

Cloaked language to mask intentions are no match for a well-informed citizenry. But at the end of the day, it is up to the individual to divine those intentions and act accordingly.

Failure to do so and we only have ourselves to blame.

 

 

 

 

 

 

 

 

 

 

 

 

1 comment

  1. grossyi

    Our spending problem or revenue problem is predicated by a leadeship problem. As bad as the Republicans have been in my life time, the Democrats have matched them tit for tat. I truely believe that the answer is a strict adherence to the plain language of the Constitution. Liberty has no party, freedom is never the problem.

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