We’re all familiar with the way many high school and college football teams enter the field at the start of a game: Running in a pack from the sidelines, they crash through a big paper barrier inscribed with slogans such as “Go Termagants!” or “Smash the Wombats!” as cheerleaders and fans scream their support.
Keep that paper barrier in mind, because it is a highly appropriate symbol of the kind of wafer-thin resistance to bust-the-budget liberalism that has now surfaced in some purportedly right-wing circles.
As Rush Limbaugh said this week, we can apparently “no longer stand in the way of anybody getting anything.”
So, the argument I made last week on this site against tax hikes seems to be inoperative, and regardless of the stupidity of Republicans in the House failing to propose and pass an alternative to President Obama’s soak-the-rich rhetoric, it appears that no one in power in Washington will resist the urge to tax and spend more.
In fact, those who do resist it — like the four Republican members of Congress unceremoniously dumped from their leadership posts earlier this month because they told House leadership they could not in good conscience violate their pledges to their constituents not to vote to raise taxes — are on the outs with the powers that be, any promises to the contrary be damned.
But maybe deficit hawks are not on the outs with the American people. As Daniel Harper noted on the web site of The Weekly Standard on Dec. 10, “A new poll conducted by Politico/GWU/Battleground finds that 76 percent of Americans favor ‘Cutting government spending across the board.'”
Breaking that down, he cited the poll’s findings that “59 percent of Americans registered to vote strongly favor the ‘across the board’ cuts and 17 percent ‘somewhat’ favor the cuts. Only 13 percent strongly oppose ‘across the board’ spending cuts, and 10 percent ‘somewhat’ oppose the cuts. Two percent are unsure.
“And only 29 percent favor taxing small businesses that earn more than $250,000, while 69 percent are against these sorts of taxes.”
However, while this poll may comfort budget-cutters and point the way toward future campaigns, the actual vote on Nov. 6 left big spenders in control in Washington. So, there seems little hope those concerns will be heard, at least in the near future.
Meanwhile, there are a few points to ponder along the way down the slippery slope:
THE “TAX CUTS FOR THE RICH” LIE IS NOW EXPOSED: In a Dec. 4 column headlined, “The Left’s Flip-Flop on the Bush Tax Cuts,” Steve Conover, a recently retired businessman with credentials in engineering, finance and political economy, notes that all the liberal rhetoric during the Bush presidency has finally been left behind, since it is no longer politically profitable to liberals.
“If the Bush tax cuts were just ‘tax cuts for the rich,’ then their expiration couldn’t hurt the middle class,” he noted. “On the other hand, if their expiration would hurt the middle class, then characterizing them as ‘tax cuts for the rich’ was a false message all along.”
Gosh, who would have thought that? But, as Conover pointed out, “Opponents of the Bush tax cut have therefore done a silent flip-flop on whether the cuts helped the middle class. Sticking with their old mantra would risk shoving the middle class over the cliff.”
So, “suddenly there is near-unanimity that the Bush tax cuts were beneficial to everyone at all income levels . . .”
In addition, he pointed out that under Clinton-era tax rates, the top 1 percent of taxpayers were paying 64 percent of total taxes, while under the Bush-era rates, they are now (thanks to other provisions that removed many lower-income taxpayers from the rolls) paying 71 percent of the total.
And Obama has the chutzpah to sell more tax hikes on that group in order to “make them pay their fair share.”
How dumb does he think we are? Oh, that’s right. We answered that question on Nov. 6.
THE BUSH TAX CUTS DIDN’T BUILD THE DEFICIT: In addition to benefiting the middle class, present tax rates didn’t (despite Obama’s claims) either “cost the Treasury revenues” or “blow up the deficit.”
And the figures that show it come from the White House’s own economists, according to Paul Sperry, writing Nov. 30 in Investor’s Business Daily.
Sperry says that the assumptions made by the president and others “are faulty, based largely on political demagoguery rather than hard numbers . . .”
Instead, he said, consulting the 2012 Economic Report of the President (published by Obama’s Council of Economic Advisers), the post-tax-cut economic surge led in to a hike in federal income tax receipts “from $793.7 billion (in 2003 when the cuts were passed) to a peak of $1.16 trillion (in 2007 when the mortgage crisis began), a 47 percent jump.”
Indeed, even “spending on two undeclared wars,” as liberals put it (despite the fact they were supported by those liberals in multiple congressional votes), didn’t blow up spending. During the period mentioned, which included the Iraq “surge,” Sperry writes, “the budget gap plunged to $160.7 billion from $377.6 billion, according to the president’s report.”
The mortgage crisis that caused the recession was primarily due, as we know even though liberals deny it, to loosened federal standards for loans which banks were required to grant, which were then bundled by investment firms which regarded them as safe because they were secured by the government.
The recession caused by that bubble’s collapse putatively ended in June 2009. But the report shows that the “average debt-to-GDP ratio during the entire Bush administration — 2001 to 2009 — was 2 percent, which is well below the 50-year average of 3 percent. During the Obama years, in contrast, the same deficit ratio has averaged 9.1 percent.”
WILL HIKING TAXES LEAD TO SPENDING CUTS? I’ve only seen one argument for higher taxes that made the slightest bit of sense recently, and even then it fell short of being persuasive. Still, it’s worth mentioning.
It was contained in article in the Nov. 26 issue of The Weekly Standard in which the usually sensible Andrew Ferguson noted the historical pattern that tax cuts and spending hikes were often simultaneous — while spending came down at other times when rates were high.
Ferguson speculates that “starving the beast,” as the saying goes, doesn’t necessarily work because deficit spending is essentially invisible to the average citizen.
That’s why Obama’s $5 trillion in added debt didn’t hurt his re-election effort — with inflation still low, for a variety of reasons, there isn’t any impact (yet!) on most people’s lifestyles.
Indirectly, of course, such unsustainable levels are inevitably inflationary, and they cause businesses to fear the future and withhold investments that would create jobs. But a job that’s never created is also invisible.
So, Ferguson says, normal spending patterns don’t work because “the government has a credit card with no debt limit.”
Higher taxes, however, bring home the cost of government directly. Ferguson says, “When you make them pay for government benefits out of their own pockets . . . voters will want fewer of them.”
He quotes journalist Jonathan Rauch paraphrasing libertarian William Niskanen’s insights on the matter: “Voters will not shrink Big Government until they feel the pinch of its true cost.”
THE PROBLEM IS THAT tax hikes on “the rich” will not bring the cost of government home to taxpayers. About the only thing that would do that is actually refusing to extend the current Bush tax rates, including restoring the full effect of the Alternative Minimum Tax and letting payroll taxes rise back to their 2009 levels.
Of course, reliable economists say that would kick off a new and perhaps even deeper recession than the one of 2008 — which would only lead to more calls for deficit-funded “stimulus” programs.
Still, with only 50 percent of voters paying income taxes, there is a tempting aspect to having more and more Americans with “skin in the game” of financing our bloated government.
But that would be punishing taxpayers, and we do not need to punish productive people with jobs. We need to restrain those who promise what they cannot deliver, and who instead deliver what no one wants: fiscal ruin.
So we don’t need to be discussing what we need to do, as that is obvious. We need to begin doing it.
That starts with the House passing its own reforms and tying them to debt-limit legislation, and then sending them on for Democrats to do with as they will.
And let the people judge.
M.D. Harmon, a retired journalist and military officer, is a free-lance writer and speaker. He can be contacted at:mdharmoncol@yahoo.com.
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