Mathematically speaking, we need major tax increases. The only way to straighten out the federal books while keeping roughly the same government services and fiscal obligations is to reduce other expenditures and jack up taxes on everyone, not just the top earners.
Here’s why it won’t work, though. Even if we cranked the federal income tax rate up to 40% across the board, instituted a federal 15% VAT, and triple-taxed our gasoline like those enlightened Europeans do, we’ll still be in the same rut twenty years down the road. That’s because the government doesn’t have a good track record when it comes to stewardship of our tax money. Whenever we have a government program that actually generates a surplus, the money gets used for other purposes. (See Social Security, whose much-invoked “trust fund” contains of nothing but a big-ass file cabinet full of I.O.U.s saying “We borrowed the surplus this year to buy more nukes/food stamps/spaceships. Pay you back later. Love, the Feds.”) If you triple the flow of tax revenue next year, they’ll find a way to quintuple expenses and borrow the rest from China. That’s why I’m not terribly keen on paying more taxes…not because I can’t see that it’s a mathematical necessity, but because I know that the Fed is going to blow it all anyway. When your worthless slacker brother-in-law reliably blows every last cent of his paycheck every month, the initial approach to his problems is not to give him a salary increase, but to make his expenses match his income.
Problem is, we only ever demand fiscal accountability from our government when it spends money on things we don’t like. That’s why Gramps will rail against federal spending on frivolities like schools and space shuttles, but pitch a fit when someone proposes cutting back on Social Security and Medicare, even though they’re running in the red to a much greater degree. Everyone just wants theirs, and then kick the can down the alley for the next generation to worry about.
We’re all to blame, because we tolerate that kind of fiscal insanity as long as we get what we want from Uncle Sam. The way we’re electing the people who spend our money goes as follows:
Picture the United States as a family household. That household has a combined monthly net income of $3,000, and a combined list of expenditures running $10,000. The family writes out a job ad for an accountant/financial manager every four years, stipulating that he/she will have to run the household money, but also find a way to make the $1,200 payment on Dad’s Lexus, the $3,500 payment for the McMansion mortgage, $2,000 in groceries and restaurant expenses every month…oh, and the kids want new iPods and laptops every six months as well. We don’t want to take steps to increase our income, and we don’t want to hear that we can’t have all the stuff on our list. Say you can’t possibly find a way, and you don’t get the job. If you promise that you can do it, you get the family checkbook, with the stipulation that you can write checks that won’t come due until your successor gets the job.
Is it any wonder that only crooks and morons get hired for the job? The way our system is set up not only encourages fiscal irresponsibility and deficit spending, but practically guarantees it.