Time to Pay the Piper

With the Washington Republicans once more pushing for tax cuts (which is about as unexpected as Democrats pushing for increased social program spending), we once again – or should I say “perennially” –  face the issue of increased budget deficits, gross overspending, and arguments over what is the right course for our nation’s economy.

Far be it from me to sit this one out.

Like any good armchair economist, politician, and red-blooded American who stands and/or takes a knee for the National Anthem (whichever you consider to be more patriotic), of course I’m certain I know what’s the right direction for our country, and I can sum it all up in a nifty catch phrase:

Somebody’s gotta take it in the shorts.

The problem as I see it is that we have lost sight of the idea of sacrifice in this country. Everyone looks to the government and sees one of two things: either a giant vampire sucking away all their hard-earned money, or a giant moneybag they can reach in and get whatever they want out. Ironically most people see the same thing at the same time. Frederick Bastiat put it best: “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” Nobody wants to pay, but everybody wants to play.

And that’s how we got where we are today: everybody wants the government to pay for roads, schools, police, military, healthcare (well, maybe not everybody…), social security, you name it. And everybody thinks their taxes are too high. Nobody wants to pay in, but everybody wants a payout. That’s what’s scientifically referred to as an unsustainable system, and sooner or later:

Somebody’s gotta take it in the shorts.

So here’s my proposal. I don’t expect it will make anyone happy, which in politics is usually a good sign. The first thing the Republicans (and the libertarians too; don’t think I’m letting you guys off the hook) need to do is give up the idea of “small government”. The United States has over 326 million people. It’s the third most populous nation in the world behind only China and India. We’re the third largest country in the world in land mass, ahead of even Australia, and they’re a fucking continent. The point I’m trying to convey here is that there will be no “small” government for our nation.

But we can have a smart government. Annnnnnd here’s where I start pissing off the Democrats and all the lefties.

We need to start being realistic about our needs and our priorities. I’m not saying we can’t have a “wish list” for national priorities, but they need to be just that: priorities. What comes first? What do we have to have, what do we want to have, and what are luxuries that are nice to have but can be jettisoned at the first sign of a downturn? How much government involvement is required at any given level, and how much is too much? Where can we afford to pull back and accept that, while we would prefer to have it, we just can’t afford it?

And this is part of what I mean by “sacrifice”. There are things we want but we can’t afford. In our everyday lives if we can’t afford things we want, we have to learn to do without. If we go around racking up huge amounts of debt, we eventually run out of people willing to loan us money. So instead we prioritize, we pay for the things we need, and we find a way to make do.

Now that I’ve antagonized the politicians, let me take a moment to antagonize the tax payers. Because the fact is regardless of how we set our priorities, we will never be able to cut back enough to support the lavish lifestyle Americans still desire at the bargain-basement prices they demand. Or, to put it another way:

Somebody’s gotta take it in the shorts. (Are you starting to see a pattern here?)

For starters, everyone needs to accept not just no tax cuts, but higher taxes. Yes, you heard me right. I’m asking Americans to suck it up and start paying higher taxes. “But Bob,” I hear you cry through your American Exceptionalism rage, “you claim to be a libertarian! By definition you should be opposed to taxation on principle!” Well, one, I don’t claim to be a doctrinaire libertarian these days, two, even if I was being a libertarian seems to mean being contrarian by definition, and three, I actually do believe I can be a libertarian AND support higher taxes.

Here’s why: a core tenet of libertarianism is personal responsibility, as well as a belief in the free market. As in “you get what you pay for and you pay for what you get.” And the simple fact is Americans have been getting a lot of stuff without actually paying for it for a long time now. Want proof? Here you go: http://www.usdebtclock.org/. The U.S. Debt is currently over twenty trillion dollars. That’s trillion with a T. That’s the debt, not the deficit. The deficit, for those of you who listen to politicians toss around the term so loosely, is how much we keep borrowing because we can’t be bothered to actually come up with enough money to actually cover the amount we spend as a nation each year.

Let’s put that in more simplistic terms, shall we? Imagine you owe $10,000 on your credit cards. Every month you borrow another $1,000 to cover your extravagant lifestyle. Your friends and family stage an intervention with you to try to reign in your spending and get you on the right path, and you promise to only borrow $500 dollars a month. You’ve cut your deficit spending in half! Aren’t you being fiscally responsible!

This is what politicians are talking about when they make a big deal about not increasing the deficit. They don’t want to borrow even more money every year just to cover the spending they themselves have already approved. And why do they keep approving it? Because they want to get re-elected. Because they know that if they make the tough choices they will get voted out by… us. We’re the problem.

So here’s what I’m calling for: We need to suck it up. We need to accept that it’s time to pay the piper. We need to accept that we can’t have it all. Tax the rich? Yes. But also tax the middle class, and the poor. Tax everyone, because everyone is part of the problem, and we all have to be part of the solution.

Everybody’s gotta take it in the shorts.

Here are a few proposals to consider for ways that everyone can take a hit:

• Raise taxes across the board. Yes, it’s unpopular, but people need to start deciding what they truly value and if you want it, pay for it.
• Get rid of the mortgage deduction. It’s already being baked into the price of houses anyway.
• Raise the eligibility age on Social Security and Medicare. As life expectancy and health outcomes improve into later age ranges, societal expectations toward the elderly need to change.
• Eliminate deductions for charitable donations. Yeah, I know this is a non-starter, but so is everything else on the list. The fact is the government should not be in the business of social policy. The government should be in the business of providing services and collecting money for those services. Either people want to support charities or they don’t; if they do they should do so because they believe in that cause, not because they want a tax break.
• Speaking of social policy, let’s get rid of any and all subsidies for businesses. I realize this is more budget that tax policy, but considering many elements of the tax code involve businesses getting tax write-offs for a variety of reasons, it qualifies on both counts. A tax deduction is a subsidy as much as a direct cash payment is, and if a business can’t survive without that kind of support, we need to reconsider how we do business.
• Finally, here’s one that’s going to hurt me personally, but like I said, everybody’s gotta take it in the shorts. Let’s get rid of the tax deduction for student loan interest. We can have a conversation about a better way to do higher education in this country, but for the time being we still have a huge bill to pay, and the better educated you are the better chance there is you have a job making enough money that you can kick in toward that bill.

Are there more deductions, loopholes, and giveaways we can live without? Yes there are. Are these the ones that need to go first, or at all? Maybe not. But the conversation needs to start somewhere. And “get your hands off my government money!” isn’t the right place to start it. A better place to start would be the words of one of our former presidents: “my fellow Americans: ask not what your country can do for you — ask what you can do for your country.”