Tuesday, April 26, 2011

Being As SImple As Possible

RealClearPolitics - The First Adult -- AWOL:

A good article covering the general shape that the discussion of the budget and debt eventually has to take:

- How big a government do we want? For four decades, federal spending has averaged 21 percent of gross domestic product. An aging population and high health costs mean that average spending, as a share of GDP, will rise by a third or more in the next 10 to 15 years if today's programs simply continue.
-- Who deserves government subsidies and how much? About 55 percent of spending goes to individuals, including the elderly, veterans, farmers, students, the disabled and the poor.
-- How much, if at all, should social spending be allowed to squeeze national defense?
-- If taxes rise, how much and on whom? What taxes would least hurt economic growth?
I'd modify the questions slightly:
1). What is the total tax bill that we are willing to shoulder as a nation in a given year? (Income)
2). How much do we want to pay down the debt in that year? 10% of total income ought to be the minimum ("savings")
3). How do we want to spend what we have left?
Adults start their budget with MEANS and end it with DESIRES, with RESPONSIBILITY in between. Caring enough to write someone a bad check is not really caring -- it is just wishful thinking. Writing someone a check on the backs of future generations is also not caring, it is financial child abuse. We as a nation have been doing a "teen budget" that begins with our wants, throws in whatever income shows up, and ends with a bloated credit card bill. It is no surprise we have ended up where we have.
#3 is a long but worthy discussion. #1 ought to be easy ... something less than 20% of projected GDP gathered as widely as possible, a "flat tax". America of all nations ought to completely repudiate the concept of "eating the rich". The fallacy of doing so is as old as killing the goose that laid golden eggs. The biggest problem with the "tax the rich approach" is that it is merely an extension of the "teen budget" -- "Mom and Dad will bail me out". That form of thinking assumes someone else has infinite resources (they never do), and it allows desires to run wild against an irresponsible and incorrect financial model.
The president keeps promoting an "adult conversation" about the budget, but that can't happen if the First Adult doesn't play his part. Obama is eager to be all things to all people. He's against the debt and its adverse consequences, but he's for preserving Social Security and Medicare without major changes. He's for "tough cuts," but he's against saying what they are and defending them. He pronounces ambitious goals without saying how they'd be reached. Mainly, he's for scoring political points against Republicans.
At some point, we as a nation will have to generally grow up so that BO style blather is seen as the juvenile wishful thinking that it is, and therefore unhelpful. Let us pray it is quick!

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