Rick Hess hides several pertinent points in his appeal to how to handle the 'fiscal cliff': "Look, let's keep this simple. As a nation, we're spending vast sums we don't have. In every year of President Obama's first term, we borrowed more than $1 trillion. Today, the federal debt stands at $16.4 trillion (we spend $220 billion a year just paying interest on the debt.) If we extend the Bush tax cuts, once again prolong unfunded "patches" to avoid pain associated with the alternative minimum tax and Medicare physician payments, and fail to make the cuts dictated by sequestration, the debt is expected to rise to more than $22 trillion by 2020. (I'm okay with going over the dreaded "fiscal cliff," even though the tax increases and spending cuts are expected to trim next year's GDP growth by a half-point, largely because doing so would cut that projected debt down to only $14 trillion in 2020.) Who's to blame? All of us. We're enjoying services that we don't want to pay for--which means we borrow the money, then leave the bill for our kids (that's right, to the same children we claim to love so much). Our profligacy is not just an economic concern; it's a vast, disheartening moral failing on our part."
'We' do not have the funds because we have disastrously reduced tax revenue aggressively since the 1980s.
'We' enjoy services that 'we' don't want to pay for only when those who use the services are distinct from those who pay for them. With the increasing economic inequality society has experienced for the past generation, the haves (who do not need nor use these services) have more political power than the have nots (who, through wage stagnation; failure to reap benefits of productivity gains - going to profit rather than compensation; benefit loss through the de-unionization of workers). As long as this continues, those on top will rebel against spending for those on the bottom. The more they feel they deserve their success, the more they will assume the rest of society deserves their failures.
'Our' profligacy is a 'moral failure' precisely because economic and political considerations pay attention only to the current economic status of the wealthy. If a more conservative disposition were adopted, 'we' would recognize that our institutions are crumbling not because of economic and moral profligacy, but from a single-minded greed that forgets the role of society in individual thriving.
Hess adds later: " The solution is pretty straightforward. We need to get less and to pay more. When it comes down to it, there are only three real choices: raise taxes on folks besides the top two percent of households; reduce growth in the giant entitlement programs (Social Security, Medicare, and Medicaid); or cut other domestic programs. That's it. And given that most mandatory government spending now involves assistance for seniors, tackling Social Security and Medicare has to be a big piece of this."
Choice 1: raise taxes on everyone. Exactly, though this need not be income taxes. Carbon (among other Pigouvian taxes) and trade transaction fees (among other forms of a Tobin tax) would also raise substantial revenue. VAT and consumption taxes do fall regressively on the poor, though relief could come from lower their income or payroll tax deductions.
Choice 2 and 3 make sense only from the prospective of one not interested in admitting that a generation has seen wealth flow to the top <2 b="b">. As a smaller segment of the population has reaped enormous gains from the restructuring of the political and economy systems (see this book and this one and this one), that segment has willfully blinded itself to the effects on the overall society. Time to return to reinvest in the institutions, by reversing the gains. This is not Marxism, Socialism, nor a resentment politics. It is fairness and the conservative recognition that the economic changes of the past generation have not helped us but burdened us.
No comments:
Post a Comment