Human
Events
Budget
Insanity
By John
Stossel
7/11/2012
Last year,
Congress agreed to $1.2 trillion in automatic spending cuts, unless
politicians
find other things to cut. They didn’t, of course. So now, with
so-called sequestration
looming in January, panic has set in. Even the new “fiscally
responsible”
Republicans vote against cutting Energy Department handouts to
companies like
Solyndra and subsidies to sugar producers. Many claim that any cut in
military
spending will weaken America and increase unemployment.
It’s
another demonstration of the politicians’ addiction to spending — and
how we
are complicit. “One more infrastructure bill” or “this jobs plan” will
jumpstart the economy, and then we’ll kick our spending addiction once
and for
all.
But we
don’t stop.
For most of
American history, government was tiny. But since Lyndon Johnson’s Great
Society
and the promise that government would cure poverty, spending has gone
up
nonstop. This is not sustainable.
Progressives
say: If you’re so worried about the deficit, raise taxes! But it’s a
fantasy to
imagine that taxing the rich will solve our deficit problem. If the IRS
grabbed
100 percent of income over $1 million, the take would be just $616
billion.
That’s only a third of this year’s deficit.
It’s the
spending, stupid.
Even if you
could balance the budget by taxing the rich, it wouldn’t be right.
Progressives
say it’s wrong for the rich to be “given” more money. But money earned
belongs
to those who earn it, not to government. Lower taxes are not a handout.
That’s the
moral side of the matter. There’s a practical side, too. Taxes
discourage
wealth creation.
Even if you
think — despite all evidence — that government spends money more
usefully than
people in the private sector, there is a limit to how much government
can tax
before people work less or flee.
Progressives
claim a small increase in tax rates won’t stop the wealthy from
producing. But
some would stop. When the top marginal rate was 90 percent, actor
Ronald Reagan
worked just half the year. He said that woke him up to the damage that
high
taxes impose.
Higher
taxes give rich people and politicians more reasons to collude. The
rich make
contributions, and politicians pay the rich back by giving them tax
loopholes.
That’s a
big loss to America. That money and creative energy spent on figuring
out taxes
might have gone to build new products, make music, cure cancer or … who
knows
what?
Politicians
promise to balance the budget by getting rid of what is wasteful,
redundant or
unnecessary. There’s plenty of that, but they have promised to
eliminate it for
years. They cannot. It’s just in the nature of the beast. Centrally
planned
monopolies do things that are wasteful, redundant and unnecessary.
What will
bankrupt us first are the wealth transfers to my generation: Medicare
and
Social Security
When FDR
started Social Security, most people didn’t even live to age 65. Today,
we
average 78 — and we baby boomers demand all the cool new stuff that
modern
medicine invents: anti-cholesterol drugs, hip replacements, etc. And we
don’t
want to pay for most of it because we’ve been trained by government to
assume
that we’re entitled to these things for free, or nearly free. We paid
into
Social Security and Medicare for our entire working lives, and damn it,
we’re
entitled to get our money back!
Few of us
realize that most of us get back up to three times what we paid in,
that
politicians have promised Social Security and Medicare recipients an
impossible
$46 trillion more than will exist and that our sense of entitlement
will ruin
America much faster than foreign aid, subsidies for NPR or foreign wars
ever
will.
Amazingly,
we could grow our way out of debt if Congress simply froze spending at
today’s
levels. That would balance the budget by 2017. If spending growth were
limited
to just 2 percent per year, the budget would balance by 2020!
But the
politicians won’t do even that.
It’s
depressing writing this. But it’s not hopeless. There are examples of
fiscal
sanity we can follow — if we have the will.
Read this
and other articles at Human Events
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