So it turns out that the cure for “epistemic closure” is great quantities of crystal meth. The things you learn from Grover Norquist.
In case you missed it, Norquist came down like a runaway gravel truck on Indiana governor Mitch Daniels, a favorite around these parts. Governor Daniels’s offense was declaring himself open to the possibility that a value-added tax might be an acceptable part of a wide-ranging reform of the federal tax system. Norquist replied, in a Politico interview:
“This is outside the bounds of acceptable modern Republican thought, and it is only the zone of extremely left-wing Democrats who publicly talk about those things because all Democrats pretending to be moderates wouldn’t touch it with a 10-foot poll. Absent some explanation, such as large quantities of crystal meth, this is disqualifying. This is beyond the pale.”
Here’s the problem: The deficit is, by my always-suspect English-major math, about 36.3 percent of federal spending ($1.29 trillion deficit out of $3.55 trillion spending). For comparison: Defense accounts for about 18 percent of federal spending. So you could cut out the entire national-security budget, and another Pentagon-sized chunk of non-military spending, and not quite close that deficit. You could cut the Pentagon to $0.00 and eliminate Social Security entirely and just barely get there.
Even great heaping quantities of crystal meth would not be enough to convince me that is going to happen.
Don’t get me wrong: In a perfect world, Exchequer would love to see the budget balanced and some tax cuts enabled through spending reductions alone. Exchequer would also like to be dating Marisa Miller, driving a Morgan Aero, and running a four-minute mile, developments that are about as plausible as Congress’s cutting 36.3 percent of federal spending. Not going to happen.
So, our choices are this: 1. Hold out for the best-case scenario, in which a newly elected Speaker Boehner gives President Obama the complete works of Milton Friedman and everybody agrees to cutting federal spending by more than a third. 2. Keep running deficits and piling up debt. 3. Raise taxes. My preferences, in order, go: 1, 3, 2. And No. 2 is not really acceptable.
Like it or not, taxes are going up: If not today, then in the near future. Even once the deficit is under control, that debt is still going to have to be paid down, lest debt service alone overwhelm the federal budget, necessitating even more tax hikes. If Grover Norquist thinks there’s a tax-free way out of this mess that is both politically and economically realistic, he is living in a fantasy. There’s an old joke that goes: Neurotics build castles in the sky; psychotics live in them. And Grover Norquist seeks tax protection for them.
Norquist’s outfit, Americans for Tax Reform, does a lot of good things. (And so has Grover Norquist, over the years.) But here’s how it describes itself:
Americans for Tax Reform (ATR) opposes all tax increases as a matter of principle.
That’s not a campaign against Big Government — it’s a campaign against math. As ye spend, so shall ye tax. Denying that is not a principle — it’s a tantrum. ATR’s pledge reads:
“I _____ pledge to the taxpayers of the __________ district, of the state of __________, and to all the people of this state, that I will oppose and vote against any and all efforts to increase taxes.”
And here is how it should read:
“I _____ pledge to the taxpayers of the __________ district, of the state of __________, and to all the people of this state, that I will oppose and vote against any and all efforts to increase spending.”
Spending is the issue, not taxes. Spending is the virus, taxes are the symptom. Norquistism, by focusing on the taxing side of the ledger rather than on the spending side, has for decades enabled Republican spending shenanigans of the sort that helped put the party in the minority and ruined its reputation for fiscal sobriety; it is of a piece with naïve supply-siderism. The Bush-era deficits, and the subsequent discrediting of Republicans’ fiscal conservatism, are the product.
Give me the grown-up despair of Mitch Daniels any day over the happy-talk daydream that says we’re getting out of this mess without paying for it.
If Republicans ever are a party to tax increases, they will be dead as a party. The Tea Party will become more than a movement.
Reply to this commentLinkReport AbuseWhy should we drink the "We have to increase taxes." Kool-Aid?
Congress does only one thing when we raise taxes . . . it increases spending.
Cut the spending first! Stop hiring new government workers. Stop replacing government workers when they retire. Stop propping up labor union workers at the state and county levels.
Show us two or three straight years of spending restraint before you even talk about increasing taxes.
Reply to this commentLinkReport AbuseSpending cuts are great. Just explain to me how a Republican Congress with Barack Obama in the White House is going to cut 36 percent of federal spending. Or explain to me why, based on history, I should believe that Republicans in Congress with a Republican president are going to cut 3.6 percent of federal spending, much less 36 percent. Cut less and you have deficits, which mean higher taxes tomorrow to finance today's consumption.
I'd love for the budget to be balanced on spending cuts alone. But I do not believe for one second that is going to happen.
Reply to this commentLinkReport AbuseHere is a breakdown of current spending:
External Link
Tell me how Congress cuts 36 percent off that.
Reply to this commentLinkReport AbuseCouple of things:
1) A VAT is pure evil as far as economic freedom. Hidden taxes are exactly the opposite of what makes good government and a clear understanding of the relationship between ruler and ruled. That alone should end the discussion for conservatives.
2) Who's this "we" you mention at the end? I'm thinking this is exactly what the word default is for. The boomers ran up the debts, let them pay for it. If they cannot, let them default even if that means the USA defaults.
I'm "open" to "out of the box" thinking as much as the next guy. How about a 50% asset tax on everyone over 50? They want their social security and medicare, let them pay for it.
I did not create this mess. I did not benefit from this mess. I'm not paying to fix it. Sorry.
Reply to this commentLinkReport AbuseDear Michael and Dave,
The Republican party and Republicans in general are in a state of denial. (note: Democrats are dangerously dysfunctional and completely out of control - insane).
Until the Republican party (or Tea Party movement) start openly demanding the dismantling of government then we are all in some kind of pretend state of fantasy. I'm not sure Republicans have the guts. Besides, a platform to dismantle the gov't significantly is not going to win a lot of votes today.
Therefore, like lemmings we all fall off the cliff together. Sorry to be such a downer on Monday but this is reality. It's mathematics pure and simple.
Reply to this commentLinkReport AbuseA "tax pledge" is indexed to the tax base; a "spending pledge" is not. Perhaps Mr. Williamson can explain how he would hold spending constant for a state or county where population doubles or triples?
The fear of tax increases - and resulting voter anger - is one of the very few motivating factors that successfully spur politicians to rein in spending. (Obviously the impact is more immediate at the state level due to balanced budget requirements.)
The choice is between Hope and Fear: hope politicians will restrain spending because it's the right thing to do, or make them fear tax increases so much they are forced to restrain spending.
Or join hands with liberals and raise taxes.
Reply to this commentLinkReport AbuseThe critical key to long term fiscal health is to reduce the rate of future spending increases. If we froze federal spending at current levels for a few years, it would eat into much of the deficit.
Future economic growth and future boosts in tax revenue can offset much if spending is capped.
Reply to this commentLinkReport AbuseWichita Lineman writes: "The choice is between Hope and Fear: hope politicians will restrain spending because it's the right thing to do, or make them fear tax increases so much they are forced to restrain spending.
Or join hands with liberals and raise taxes."
You left out an option, the one I expect is more likely: The bond market stops loaning Washington money to spend.
Reply to this commentLinkReport AbuseTo summarize Kevin's assumptions:
1. Obama has increased government spending by 24% in 2 years.
2. The only thing we can do about it is raise taxes.
3. Why?
4. Because even a Republican Congress with a Republican President can't be counted on to cut even 3.6% of government spending (and not until 2013 at the earliest).
5. Conclusion --- Obama wins big and we, the 10% of Americans who pay most of the taxes, get stuck with the bill.
Is that all you've got?
Why not pass the Hemlock Cup around and be done with it?
Reply to this commentLinkReport AbuseThere are lots of interesting and creative things that could be done, Mighty Fahvaag. But I very much doubt that they are politically viable. I can balance the budget today and cut taxes, too -- if I have dictatorial powers. But I don't.
The Northeastern Establishment now includes the governor of Indiana and a guy from Lubbock, Texas? Who knew?
Reply to this commentLinkReport AbuseI love a challenge:
- Move all "Unemployment/Welfare/Other mandatory spending" to the states (16.13%)
- Move Medicaid and SCHIP to the states (8.19%)
- Stop doing all the things that the Federal Government has no business doing below "Interest on the National Debt" (surely close to 10+%)
- Pass a Constitutional amendment specifically authorizing the Federal Government to run Social Security and Medicare (making the Government more Constitionally-compliant and cementing our support for those programs)
- Make a commitment to reduce US income tax rates to 10%. No one should ever have to pay more than 10% of his income in taxes. (God, himself, never asked for more.)
The federal budget ends up with Defense, Social Security, Medicare, Interest on the Debt and all the other Constitutionally-authorized stuff. Oh sure, state taxes go up, but the Federal Government is under control, and people are better able to fight taxing and spending at their state government levels.
Best regards.
Reply to this commentLinkReport AbuseI am so sick of these "realistic" Republicans popping up with the assertion that it is somehow impossible to cut 36% of our spending. The only reason it is "impossible" right now is because these "realists" refuse to see that it is their only choice. Spare me the "If history is our guide, it isn't politically possible..." appeals to yesterday. If history is our guide, their solution of raising taxes "just this once to fix things" wouldn't work anyways, as the government cannot stop spending.
I cut 50% of my spending when I was laid off in 2001. People all over the country are cutting their spending. During the 90's that all the Clinton-philes are so fond of, we got by on a budget significantly smaller vs GDP, so even liberals should agree that it is possible. My company has survived a 20% decrease in revenues by slashing costs by 25%- getting out of certain businesses, outsourcing others, freezing pay and laying off people. Here in Pasadena, CA, the schools did everything they could to increase taxes claiming that they couldn't make ANY cuts. Now, taxes rejected by voters, they are making tough decisions and closing schools. It. Can. Be. Done.
Besides, your "Find 37% of the budget to cut or raise taxes" choice is a false dilemma. First, much of that deficit is in "One time spending" that we merely need the backbone to prevent re-funding. Further, we can cut spending AND increase revenues by making economically smart reforms that allow the economy to prosper. (Remember how we actually increased revenues after the Bush Tax Cuts?)
Here is where we start:
1) Reform entitlements - Make Medicare and Social Security indexed to life expectancy. This will not decrease the deficit right now, but it will help counteract the growth in these liabilities.
2) Create savings incentives for consumers in targeted areas: Social Security (private accounts) and Health Care (HSAs). Personal Savings = Private investment and decreased dependence on our welfare systems = decreased expenses and increased economy.
3) Cancel all stimulus spending that hasn't been spent. Cancel the "make permanent" funding that was started under the stimulus and then continued later.
4) Cancel NCLB and Close the Dept of Education. Take 50% of the savings and offer it as a voucher to every parent in the country to get at any accredited private or public school they choose. (That's roughly $1,000 per student)
5) Stop extending the unemployment benefits.
6) Cut the Department of Homeland Security by 40%.
7) Let Fannie and Freddy fail
8) ...
9) Profit.
Seriously, I've done budgets before. Cuts seem impossible until you have no other choice.
Republicans: You have no other choice. I am sending you to Washington to CUT CUT CUT. If you even glance sideways at a VAT, you are done. And if you think the Dems are getting it bad for at least telling us they want to tax and spend, you ain't seen nothing yet. Tar and Feathers.
Reply to this commentLinkReport AbuseKevin,
The Wikipedia chart you link to shows how easy it is to cut at least 1/3 of Federal spending.
First, the Feds spend 19.63% of the budget on Social Security. So easy to fix - simply cancel the entire program and issue all those Federal savings bonds in Al Gore's lockbox (they are actually in a drawer in the bowels of some Federal building) pro rata to whoever has paid into the system.
Second, 16.13% of the Federal budget is spent on "Unemployment/Welfare/Other mandatory spending." Even easier. The Federal government doesn't have constitutional authority to spend on welfare programs, which simply transfer money from productive citizens to unproductive citizens (and non-citizens). Cut this entire aspect of the budget overnight.
Third, 12.79% of the Federal budget is spent on Medicaid. Medicaid is a pure welfare program. See above.
Fourth, 8.19% of the Federal budget is spent on "Medicaid and the State Children's Health Insurance Program." More pure welfare spending. Another programs that should be left entirely to the states. Cut to zero.
Just those four spending programs amount to 56.75% of the Federal budget. An outrage!!! That's before we get to eliminating the Departments of HUD, Education, Energy, Commerce, Labor . . . .
And if you think adding a new hidden tax is going to increase revenue to the Federal government, you are sorely mistaken. I thought you knew about the Laffer Curve. If we are to raise enough revenue through taxation to pay for the Baby Boomer's credit card spending binge, the only way to do it is to lower tax rates to spur economic activity (while cutting the spending programs described above), or print the money and inflate the currency.
Will Congress ever do this? If we keep spending like Obama and the Democrats are, eventually we will have no choice.
Reply to this commentLinkReport AbuseAre we to assume that revenues to the Treasury will remain constant or increase as taxes are raised? There are always guys that think the size of the pie is static.
Can't congress refuse to fund Federal spending programs without the approval of the president? It's safe to say Obama is not going to cooperate with a Republican majority in the House and/or Senate.
Isn't the government currently operating without a written budget?
I think most of us know we're not getting out of this mess in the next 2 years and the largest spending cuts will come after the 2012 election.
Reply to this commentLinkReport AbuseBen Pugh, if your idea of politically viable is canceling Social Security, we just don't see eye-to-eye on what is possible. I like your platform, but I wouldn't bet money on your winning an election on it.
Reply to this commentLinkReport AbuseThis is not about Republicans and Democrats, it's about the Ruling class vs the Country class. We can cut spending and grow revenues through the lowering of the corporate tax (35% - come on)and the tax on "S" corps, which is, in the end the individual income tax rate on small business owners, a la Reagan.
There are Ruling class R's but no Country class Dems - at least I haven't found any.
Look, there's over a trillion dollars sitting in individual and corporate saving accounts looking for a place to be invested and if we can begin to turn this economic killer behemoth called the federal government around by starving it, all of that money will flood back into the economy, create jobs and blow tax revenues through the roof!
Not raising taxes fool!
Reply to this commentLinkReport AbuseWOW. NR comes out for tax increases just before the election! And not just any tax, a sinister tax that hides the real damage it is causing to the economy. You are a complete idiot. Why would anyone who calls himself a conservative believe that tax increases will be used to reduce deficits?
Give government more, they spend more. Unbelievable idiocy. Look at anywhere on the planet a VAT has been instituted, the rate starts fairly low and is increased over time because it is hard for the electorate to track. I officially give up on this publication, you are now the enemy.
Reply to this commentLinkReport AbuseWhile I agree that tax increases will have to be made (I'm glad I converted to Roth IRAs), putting forth the VAT as something "on the table" at this point does nothing but throw fuel on the "progressive" big-government fire. The time, if any, to float this, is after Republicans prove they will do ALL they can to force spending cuts, including the elminating entire departments and "programs" even if it means putting large numbers of bureaucrats out of "work". Otherwise we'll never see an ounce of meaningful spending cuts until they're forced on the nation not by choice but by circumstances such as those seen in Greece, i.e. the collapse of the entire unsustainable system.
Reply to this commentLinkReport AbuseThis discussion is fascinating.
My $0.02, fwiw:
Taxes are going up. No doubt about that. That being said, conservatives shouldn't concede that point without a fight. The argument that increased revenue will always be offset by increased spending is very true. Its a real problem, and conservatives should not agree to ANY tax increases without reliable spending restraint, and I don't know how to do that without a Balanced Budget Amendment.
I find it curious that, in this political cycle, talk of the Balanced Budget Amendment rarely comes up. Seems like something the country might be ready for, now that we have been taken to the edge of the abyss and have seen what can happen.
Another idea that might be useful here is for Congress to pass a law requiring that the treasury only issue amortizing bonds. That would have the effect of automatically building debt (not deficit) reduction into the annual budget, without additional discretionary actions by congress.
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