-The title is a citation of a quote frequently attributed to Benjamin Franklin, easily America's first true celebrity and one of the great minds of his time. The full quote (or something roughly to that effect): "The only things that are certain in this world are death and taxes."
-Right now, I cannot help but wonder if it had ever occurred to Mr. Franklin that death from taxes might be on that list as well.
-Not too long ago, President Barack Obama and House Speaker John Boehner appeared on national television to make their case for their individual ideas as to how this debt impasse must be overcome. Each has their arguments, but it seems to me that the President is taking advantage of the support he naturally receives from the media in baiting the Republicans as being "overly protective" of the rich. The solution, the President argues, is that the "millionaires and billionaires" have to pay their "fair share" in order to help the country shuffle through and to protect the middle class, as opposed to accepting a "cuts only" approach championed by the Republicans.
-The President is right about how a "cuts only" plan will not work. But he is right for the wrong reasons. The President supports the possibility of a tax increase, especially on the upper class, as a way to make up the money. Right now, the founding statement of National Review goes through my mind: "To stand athwart history, yelling "Stop!"-which, in a way goes back to a famous statement made by the American philosopher George Santayana: "Those who cannot remember the past, are condemned to repeat it."
-By now, I will assume that, based on my past writings, that I have made it repeatedly clear which side of the aisle I stand on, so I will drop any pretenses: The President-and a good chunk of Washington-is ignorant of their history (though that's not a surprise, given that that is the end result of the machinations of their ideological forefathers to whitewash real historical study in this country with banal and self-aggrandizing appeasements in the forms of (minority) Studies, the end result being that nobody remembers what important thing happened and why, only that an Inuit lesbian was somehow involved and that automatically makes her a hero and leader of whatever the movement was-but I digress, that's besides my point). But, on second thought, perhaps I shouldn't insult their intelligence and should perhaps focus on their character-they're perfectly aware of what they're doing, and could care less because it benefits them now and the hell will only rain down after they're gone.
-We have to cut spending on all fronts-that our entitlement spending is out of control is acknowledged, if not fully understood. One significant alteration that is not necessarily a cut would even work at this point-stop using Social Security money to pay for things other than Social Security. Then we wouldn't have to worry about this pension crisis that's staring us down right now. We would have a lot of programs that are suddenly sans budget, though. We have to ask ourselves-what's worth keeping? And we have to come to grips with the answer that we're going to have to get rid of a lot of things we're not necessarily eager to dispose of: the National Endowment for the Arts; ethanol funding; PBS; NPR; sugar subsidies-somewhere in this country, there are whole voting blocs who's ballot box decision will hang entirely on whether or not a politician will whore for those votes. It's time someone other than the fringees who haven't a shot in hell anyway take the courage to say: "Pound sand. There are more important things Uncle Sam's supposed to be spending his money on."
-The other half of the equation will be to let business grow. Note the word choice: Let business grow, not let's grow business. The government does the latter, and it is a stupid idea every time it's tried. Think of government spending public largesse to stimulate the economy as being like a man who has been taking testosterone pills-initially (ignoring for the sake of convenience that it takes a couple of months for the effects of these pills both to be felt and to wear off), the build is excellent; energy abounds, development accelerated. But the pills eventually run out-just like the cash runs out. And the doctor-the lenders-will not give more. The end result is that you are left flabby, flaccid, moribund; worse off than when you started. No-the solution is to get government the hell out of the business. Needless to say, the left will scream bloody murder about this, and would inevitably play on middle class fears about another Enron or another Bernie Madoff to justify keeping or strengthening the regulations. Let me remind you-we had plenty of regulatory oversight and plenty of regulators when the aforementioned two occurred. The unjust will truly exploit every loophole to evade the law. In the end, all the regulation does is stymie the legitimate and create dependency-and to say this is what the President or his allies on Capitol Hill want, while callous, might not be far from the truth.
-There is huge political advantage to that system: Washington gets to create a hybrid of a free market and a command economy. It gets to pick winners and losers, and it gets significant largesse from the corporations looking to get back a little more wiggle room, and because of their size, Washington manipulates and works with them to allow them to control their sector of the industry, effectively shutting down competitors who don't have the financial wherewithal to keep up. And the politicians get to paint these corporations as the sole offenders the next time the economy takes a dive.
-The other key aspect of freeing the market is taxes-which are precisely what the President states is missing from the Republican plan-specifically, taxes on the upper class. I've gotten onto high horses about this "pay their fair share" nonsense before, but having read a transcript of the President's speech, I find that it bears repeating.
-I know quite a few people-perhaps not the "millionaires and billionaires" the President refers to-but people who are independently wealthy nonetheless and-usually-the owners of their own business. These people-not the vieux-riche hamming it up in Newport or The Hamptons or Malibu who almost always come to mind when we think of the upper class-are America's upper class. Their bank accounts may not be at Bill Gates or Derek Jeter or Marshall Mathers (aka Eminem) levels-but they live a good life and worked hard for it. (I also note that there is a reason these people make up a vast majority of of the wealthy in this country-not everybody has the cunning to make goldmine business deals or a world-class flair for marketing showmanship or the artistic skill to make money in sport, art, film, or music; it's a select few, which is why they make the money the make and what a lot of the liberal-arts majors are slowly starting to awaken to as they look at their friends who opted to study engineering, business, or law instead). But stop thinking about how nice the things he or she has are and start thinking about the costs he or she must endure: there's the house(s), the accompanying utilities, automotive upkeep, groceries, clothing, college tuition, personal entertainment. Now add to it: business expenses-and there are many: property maintaining costs, utilities again, advertising, equipment, vending, supplies, employee salaries, employee bonuses, covering for lost labor when an employee cannot show up for work, matching employee contributions to Social Security and the employee pension and healthcare plans. Now add to it that, more than likely, this person is paying anywhere between 26 to 28 percent minimum, in either an income tax or the Alternative Minimum Tax, of whatever they're making to the Government.
-All of this is before factoring any other taxes (payroll taxes being the most prominent) that come with all this.
-Now ask yourself-#1. If you had to pay that much money away after having done so much to earn it, wouldn't you want the finer things with what you've got left? If I made $100,000 a year, I would not be content to live in a tenement in Spring Valley and drive a 1986 Honda hatchback-I'd have at least a decent apartment downtown with an Audi (though part of me is tempted to find the combination that would enable me to avoid having to pay for either over the course of the next five years-A Jetta or a Passat would easily suffice). Then ask-#2. If you had all that, and then some self-important, over-inflated talking head who is trying to win votes amongst the Rust Belters came up to you and told you "you have to pay more, it's the only way the economy will survive", what would you say? Especially if you knew that this man and his working buddies are going to do nothing to make it easier for you to make more money to cover those new losses or to file those tax returns and, secondly, you get the strange sensation that this extra money they're going to take from you probably isn't going to be spent wisely. Personally speaking, I think that the most likely response would include that one word in the English language that is equally easy to communicate with a finger as it is verbally.
-So what am I getting at, after my Milleresqe rant? Don't increase taxes, especially on the rich-it's fiscal suicide. It has been shown repeatedly in the past that increasing taxes does not correspond with an increase in revenue. Why is that? Because when those tax rates hit, those with the ability to get their money out of the filthy hands of the Treasury will do so, and those who can't will put up with it for about fifteen seconds before they start finding ways to cut the amount of money they spend and the amount they report on their 1040s. If you give the idea thought, a tax raise on the rich is in fact the best way to increase taxes on the middle class: because the rich, as I said before, will either move their assets out of U.S. jurisdiction or will be taxed into the middle class tax brackets. When that happens, all the government will need to do is simply redefine "rich" and hope that the public doesn't notice that rich suddenly starts at $78,000 a year this year and will start at $60,000 a year three years after that. Their next gambit would be to exploit the confusion as millions of middle-class Americans wonder to themselves, with their wardrobe from Kohl's, their half-paid-off home in Dubuque, Iowa, and their 2001 Ford Taurus they suddenly became "rich."
-So what is the solution? Shrink government, pure and simple. Cut spending across the board-if We the People want something so bad, We the People should spend our own money to get it, rather than our neighbors (and, in the form of Social Security and Medicare deductions from Millenials who are in the workforce, our children's) money. Maybe then we will regain fiscal sanity and ask ourselves if something like, say, a nationwide, federally-subsidized high-speed monorail, or federal study on the psychological effects of stimulating oneself with battery-powered devices is really worth the debt. Secondly, we eliminate government interference in the marketplace and let it-and the people with capital who drive it-do their work. You'd be surprised how quickly prices can drop when companies no longer have the stupid shield of federal regulations to protect them from consumer demands. Yes, the market will go through downtimes. But we're better off if we have to deal with losing 10 jobs for a year instead of letting the government try and "fix" things and magically make 100 jobs disappear. As a case in point, everybody thinks of the 1950s as a time of great prosperity in this country. Nobody remembers that there were three economic recessions during that decade. Three. And the reason why that is is because the President at that time, Dwight D. Eisenhower, left the economy the hell alone. He understood that it was more than capable of sorting itself out. If Herbert Hoover and Franklin Delano Roosevelt had that same understanding-or that same sense of respect for American self-reliance-the odds are the history books would not have a Great Depression to refer to.
-But that's not going to happen in the short term. The Republicans are in a bit of a civil war over it themselves-the much-maligned Tea Party faction being largely in the right, so to speak, on the matter. The Democrats, and President Obama in particular, seem to have the understanding that the solution is unacceptable: sanity will come at the cost of their political careers, since many of the current class of leftist leaders in the country (and more than a few of the older ones, namely those who cut their teeth as part of the New Deal coalition) have built their electoral standing on populist appeasement and pandering to anti-wealth sentiment and sanctimonious federal handouts to anyone who can claim to be poor. So, we are at a stalemate. A compromise is obvious. In which case, I suggest that the President be willing to demonstrate the diplomacy he has buit his public persona on and show some bipartisanship by allowing Mitch McConnell, the Kentucky Republican who is quite possibly the most competent parliamentarian in the Senate, to help broker a deal until the time comes to fight the main battles. The big brawls and the need to fortify your side will come in full blast next year. For now, at least, let's work together to ensure the United States keeps AAA credit at least until then.
Originally published on 26 July 2011.
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