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Published on May 9th, 2010 | by Guest

7

Is “Think” Just an Old Bumper Sticker?

By Bill Fisher

Have you noticed that there seems to be a very high correlation between angry citizens in Arizona who favor a major seal-the-border surge to cut off entry for illegal immigrants, and the Tea Partiers who continue to grab the headlines by shouting at the government to get smaller and stay out of our lives?

But there’s also a major contradiction, to wit: Which small government does the Tea Party have in mind to hire and train the thousands of additional border guards and deploy all the new technology it will take to “seal” the border? Who’s gonna pay for all that?

Oh, those costs will be covered by “prudent fiscal management.” In Washington-speak, that means eliminating existing programs.

Well, OK, which ones? Social Security?  Medicare? Support for our troops? Health care for our returning veterans? FEMA help during the next disaster?

I have never seen or heard of any example of a credible U.S. government budget claiming to be able to run the country without these programs.

What I hear are old canards like abolishing the Department of Education. Or cutting taxes and doing away with the IRS. Or vaporizing the National Endowment for the Arts. Or privatizing Social Security and Medicare – because the private sector has done such a splendid job of leading our economy off a cliff.

What I hear are empty generalities, like those written by one Carla Howell of the Center For Small Government. She says, “When government gets too big, it won’t go away on its own. We must carve out pieces of it that don’t belong, that cost too much, or that do more harm then good. We must remove them the same way we get rid of a fallen tree: One piece at a time.”

And which are the pieces she says are bloating federal spending?

Requiring everyone to buy medical insurance (whether they want it or not);

Handing out taxpayer “cash for clunkers;”

Bailing out banks, auto companies, state governments, mortgage holders – and just about anyone who wants to be on the dole, or stay on the dole;

Handing out stimulus checks;

Driving up taxpayer liabilities and debt;

Building another overpriced, unnecessary school or library;

Raising the sales tax, property taxes, “sin” taxes, and meals and hotel taxes.

So where in this laundry list are any proposals to even so much as tweak the spending of our Defense Department. This year, DOD will spend $ 685.1 billion – a figure that’s doubled over the past decade. And Pentagon-watchers will tell you unequivocally that at least a third of that is total waste. That waste comes to a very large chunk of cash. And Bob Gates seems to be the only person around who’s concerned.

There is no doubt that our government is chockablock with programs that don’t work, with inefficiencies that drive up costs, with expensive “carve-outs” for this or that favored industry or company, and with thousands of “earmarks” that move stealthily through the system and have the enormous benefit of keeping their sponsors in office for another term.

Of course there’s a need for the kind of fiscal soundness commission that Senate Republicans proposed and than voted against. Where were all those dedicated small government devotees when the votes were cast? On the wrong side of history.

Fact is that our country is undergoing a huge demographic and cultural change, and change is scary to a lot of folks who need someone to blame and find Government a convenient scapegoat. That’s the wave being ridden today by crazy-as-a-fox demagogues like Sarah Palen and Glenn Beck.

Fact is it’s a lot easier to just rant at Big Government than to actually try to do something about it. Because doing something about it requires thoughtfulness, patience, deep knowledge of how government works, compromise, political will, and creativity.

I suggest these are not the attributes that spring to mind when you think of the Tea Partiers.

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7 Responses to Is “Think” Just an Old Bumper Sticker?

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  1. avatar Jon Harrison says:

    I doubt that 1/3 of the defense budget is “waste” in the sense I think you mean it. We might be able to save that much, but it would require closing most of our overseas bases and ending the campaigns in Afghanistan and Iraq. Unfortunately, a precipitous withdrawal from Afghanistan could create bigger problems than the current war presents. Closing out Iraq completely even looks problematical, assuming this administration doesn’t want to be tarred with “losing Iraq” by the GOP and Fox News. (Note that today over 100 were killed in bombings across Iraq. And this even though a series of heavy blows hit al Qaeda in Mesopotamia in March and April.) A big (and fixed) portion of the defense budget is for personnel costs (salaries, health care, pensions). You can start to make inroads on those costs by reinstituting the draft. All in favor, please raise your hands.

    A “fiscal soundness commission” will get us nothing but a little cut here, another one there. The fact is that entitlement spending is out of control. Demographics plus COLAs = bankruptcy. Social Security, Medicare, and Medicaid are approaching insolvency. Should my 11-year-old daughter be forced to pay 20% payroll taxes (or higher) when she grows up to finance my Social Security benefits? I don’t see why she should. But I don’t see many elders volunteering to take less so that youth may have its opportunity to thrive.

    The U.S. government projects trillion-dollar budget deficits into the far future. The U.S. taxpayer is on the hook for Fannie Mae’s and Freddie Mac’s debt as well–debt that exceeds that of the government. In 7, 8, 10 years we will see a U.S. debt crisis resembling that of Greece today. Who will be available to bail us out then–the Chinese?

    In the Eisenhower and Kennedy years defense spending was more than 50% of the federal budget. The explosion of social welfare and entitlement programs under LBJ and his successors is what ought to worry every American who is concerned about the strength of our currency, the soundness of our fiscal system, and social stability generally. Unless domestic spending, specifically entitlements, is brought under control, and fairly soon (within 10 years, maximum), there will be an economic calamity like nothing ever before seen in this country, followed by either the suspension of civil liberties and a command economy run from Washington, D.C., or class warfare (not rhetorical, but with real blood shed).

    Are the politicians going to act in any decisive way to reverse the trends? Certainly not, because the majority of voters (read: old people) don’t want that. In time interest payments on the debt will squeeze out all domestic spending except on Medicare, Medicaid, and Social Security. I hope people aren’t betting on my daughter’s generation quietly handing over their birthright to support
    a mass of drooling codgers.

  2. avatar scott says:

    Jon, the only way to control these costs, ironically is to socialize the health industry. I take it you don’t agree, however, I can point to EVERY single nation on Earth as a more efficient example. You arguments rehash tired maxims yet provide little insight.

    I argue with libertarians that there are 3 markets, not a free market. There is the free market where the customer is always right. There is ample competition and alternatives.

    The professional market has a monopoly on alternatives, there is only competition amongst the professionals. Ben Franklin said, “a country boy between two lawyers is like a fish between two cats.” In the pro. market the customer can’t be right, he’s buying advice after all. In professional markets the principal must be protected by the agent.

    Finally, we have monopolies. Monopolies are generally in utilities markets. These are essential goods/services for which there is no alternative. Water, sewage, roads, militaries, electrical, gas and gasoline are all classic utilities. Here the customer is totally powerless to boycott or express any other power over the producers. Further, substantial externalities are present as well as gov’t powers are needed to fully distribute these services.

    These differences are vital and none of these markets can be compared to another. Gov’t should avoid entrance into the free market. Hopefully, professionals will regulate themselves but where these are most common legal protections are common and perhaps appropriate. Lastly, professional markets are governed by fiduciary laws or laws of agency. The financial professionals should be bound by these limitations; it’s astonishing they aren’t familiar with those restraints.

    Utilities markets are special in that demand is essentially 100%. Gov’ts order or commission these services, finance them with bonds or by backing loans. Gov’t protects them with indemnification, and allows them easements and condemn lands via eminent domain. These “firms” produce a product that will bear any price, thus they must be regulated. They should probably be limited to 3 times their bond rates or 10% profit (assumes a 3.3% bond)

    Hospitals and health care and banks are two examples of special markets. These combine the features of professions with utilities. Here the professional accountability toward the principal get blurred. The market will bear any price once a man’s life hangs in the balance. These are terribly complex and complicated markets and pretending they bear any resemblance to the free market is sheer folly.

    I’ve never heard anyone articulate such a paradigm for where gov’t appropriately enters and should be avoided. These categories aren’t fixed and I’d encourage debate about what fits and why. But, when we privatize these complex markets they is ample opportunity for fraud.

    I love this wonky policy talk, we just don’t do it much in America. Food stamps are a terrific program with almost no fraud and little harm to the market. Whereas our farm subsidies, which go largely to ADM and ConAgra distort our market fundamentals, and in fact, makes agriculture a utility.

    Food is a tough category for my paradigm. Presumably food includes multiple alternatives such that consumer choice is still a powerful tool. Again, I believe in anti-trust action and ADM, ConAgra and Monsanto have unhealthy control over their markets.

  3. avatar Jon Harrison says:

    Obamacare dealt with the issue of coverage; it does virtually nothing about costs. Anyone who understands the economics of the issue knows this. I am willing to accept universal coverage, despite the loss of individual freedom, because I believe every citizen should be entitled to medical care. It’s unfortunate that the government got involved to begin with, but there’s no practical way to turn back the clock without “de-insuring” millions of people. The fact remains that the Democrats, as usual, are better at creating benefits than paying for them (of course, the Republicans have been just the same since Bush II came along). There is no political will — among either voters or elected officials — to pay for universal care. The whole system will collapse one way or the other, for the tax increases necessary to fund universal care would, if passed, wreck the revenue base. It’s a Catch-22.

    The Food Stamp program is a joke. We now have millions and millions of people receiving food assistance from the government — people who take a vacation every year, own cellphones, IPods, computers and all sorts of other gadgets. Why is the taxpayer helping to feed people who can afford these things? Why is money being taken from me so that other people can spend their money on non-necessities? 75 or 80 per cent of food stamp recipients have some discretionary income. I am, in effect, helping to subsidize their internet and cellphone costs. Why?

    The fiscal train wreck is coming. Maybe it’s ten years away. The Democrats will not be able to raise enough money to repair the damage. At some point you squeeze people dry. And you can’t solve the problem by bleeding the ultra-wealthy. They are too few; the revenue wouldn’t cover the problem even if you expropriated them. We are living beyond our means, and the size and scope of government will, eventually, have to shrink. We could set priorities and institute policies now that would cushion the blow, but we won’t. We believe we have a “right” to a certain standard of living, whether we’ve earned it or not.

  4. avatar scott says:

    I am, in effect, helping to subsidize their internet and cellphone costs. Why?

    Because these are luxuries, but necessary for citizenship. What I am interested in is that the money indeed goes where intended and the market is not adversely affected.

    The wealthy have historically been taxed at 22%, though currently they are taxed at 17%. That means taxes on the wealthy needs to be upwardly adjusted by 30%. So much needs to improve there.

    There needn’t be a conflict between universal healthcare and choice. What needs to be established is a universal floor of coverage. What you suggest is a prohibition of out of system medical care. I don’t support prohibition, as the rich will always get their butts powdered when they get their checkups. If they want to pay for that, I have no problem. Actually the cost of these private services will likely decrease under universal coverage.

  5. avatar Jon Harrison says:

    I suggested no such thing. I really have to wonder about your reading comprehension . . . .

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