“The Age of the Unserious”

C.M. Phippen

Our president claims that he is making an honest effort to negotiate with Republicans to avoid the fiscal cliff. He wants us to believe that they are the ones who simply won’t budge on their positions and won’t allow him to fix the horrific fiscal issues we face.

This is the president whom Tim Geithner claims is willing to go off the fiscal cliff if the Republicans don’t agree to his plan to raise taxes on the richest 2% because, in Geithner’s words, “remember, it’s only the top two percent.” Doesn’t unequal treatment under the law become a civil rights issue at some point!? Anyway . . .

This is the same president who has had his past two budgets shot down in Senate votes of 99-0 and 97-0, one of which looked an awful lot like Obama’s current proposal from which he is negotiating. He apparently expects Republicans to support the plan that his Democrat allies in the Senate refused to support?

In addition to major entitlement spending cuts, the greatest priority our government should have is that of allowing/encouraging/stimulating economic growth, which will in and of itself lead to the President’s desired revenue increases.

In fact, Bill Whittle recently made the point that “if you destroyed the entire government, burned every [public] building, fired every government worker, sank every aircraft carrier, even with no government to pay for – none – we’d still pay the same taxes that we’re paying today and still have to borrow or print money just to pay for entitlements.”

I would argue that if we do indeed have a shortage of money for schools, teachers, police and other government services, it is entitlement spending that is draining those resources, not tax cuts or wars.

Even Austin Goolsbee, former president of Obama’s Council on Economic Advisers, recently stated that any solution to America’s economic ills “cuts on discretionary and entitlement spending.”

In addition, Peter Orszag, former OMB director, recently came out urging his fellow Democrats to support reforming entitlements and putting “crucial programs on a sounder footing.”

I must assume that our president is well aware of the fact that nothing in his rejected budget plans or spending priorities will stimulate growth. And he has made it very clear that, despite his repeated declarations to the contrary, he is never going to cut any real spending.

Thus, his only plan to decrease the rate of growth of our historically unprecedented federal deficit seems to be an increase in revenue coming from the already over-burdened taxpayer. Unfortunately, the proposal on which he is willing to risk our entire economy, that of increased taxes on the top 2%, leads to enough revenue to cover expenses for about eight days! Brilliant!

Even the Obama-touted Buffet Rule, if implemented, would pay for about 28 hours of government spending. If you want to close the deficit through increased taxes on the two highest tax brackets – 33% ($178,650 – $388,350) and 35% (over $388,350) – it would be necessary to hike those rates to 159% and 166% respectively. I’m assuming most liberals would tell us that such rates would have absolutely no impact on economic growth or the willingness of those individuals to work!

AEI economists recently looked at the effect of tax increases v. entitlement reforms on fiscal crises management over the nearly three-decade period of 1970-2007. They found that countries that were able to successfully reform did so mainly with spending cuts; in fact, on average 85% of their budget gaps were closed this way. On the other hand, those with failed reforms were the countries that, on average, relied at least 50% on tax increases.

Just ask Jim Sinegal, co-founder of Costco, if those tax increases will most likely lead to greater or reduced revenue next year. He’s a supporter of Obama who preached the moral imperative of Obama’s tax plan, and of businesses large and small all “following the same set of rules . . .” while risking Costco’s credit rating to take on an additional $3.5 billion in debt in order to pay out dividends this year before Obama’s tax hikes kick in. Oh, and he is apparently the biggest beneficiary of this move.

Or ask Great Britain how a plan of tax increases worked for them last year when they raised rates on those making over £1 million (about $1.6 million) to 50%. The result was that they saw a £7 billion treasury loss as nearly two-thirds of the high earners were suddenly missing from the country or finding ways to shelter income.

Funny though, that even after the manifestation of the result of such policies, political supporters of the increased tax are now calling any reduction a “tax cut for millionaires,” as though resentment toward the wealthy is more important than the amount of money the government actually has for programs which benefit the less well-off.

Yes, Mr. Whittle, I think you’re right; this truly is “The Age of the Unserious.”

4 Responses to ““The Age of the Unserious””

  • Kelly Francis Says:

    It’s beyond ridiculous that it has come to this point. If Republicans are really “serious” about getting the country on the right track again, why the allegiance to Grover Norquist? Since when do politicians care about breaking pledges? The #1 thing they can do right now is get out of the way of business. Why are politicians so egotistical as to think that they control the spigot on jobs and revenue? Right now, businesses don’t even know what the ground rules are. If I buy a piece of equipment, how much depreciation can I take this year? What are the cuts (if any) to discretionary spending? Is the corporate tax rate going to be lowered? We don’t know!!! Individual income tax rates have proven inconsequential during the past two decades. Most millionaires and billionaires aren’t affected by the “top 2% tax increase” anyway. Both Mitt Romney and Warren Buffett freely admit they pay a 15% to 18% effective rate. Ideally, we should have a flat tax system, but this “tax on the wealthy” is a real laugher. Republicans should concede it to Obama and, in turn, use it as capital for pursuing temporary pay cuts to EVERY federal employee, a moratorium on pensions, and reforms to Medicare. If federal employees don’t like it, they can go work in the private sector (yes, there was a time when private sector jobs USED to pay more than public ones). Instead, Republicans look foolish and will no doubt take the blame if January comes with no deal. They appear to have learned nothing from Newt and his government shutdown.

  • Carolyn Says:

    Putting aside the “politics” (personal attacks), the principles you espouse are right on. Love to hear liberals spouting conservative ideology. Hooray!!!! And, by the way, Obama plans on closing off all kinds of deductions and loopholes at the same time that he effectively increases the top rate to 44.5%. Great point about Romney and Buffett not paying the top rates because yes, their incomes are based off of capital gains which our dear president plans to tax at a rate of 25%. That’s why the attacks on the “wealthy” are so laughable when the solution is to tax work at higher rates. On the other hand, I know a number of people with overseas businesses, some 7 figure incomes, who will not be taking those salaries and will instead opt for saner tax policy before bringing the money home.

  • Kelly Francis Says:

    I love that you think I’m a “liberal”. No wonder you can’t stand Obama.