Thursday, December 8, 2011

Spend Less and Tax More - Published in the Centre Daily Times, December 2011

In my formative years, I was a regular reader of the comic strip Bloom County, which spawned Opus the Penguin, a hapless microcosm of the American middle class.  In one strip Opus, who is perpetually out of shape and overweight, searches for a quick diet fix.  He’s told the answer is simple – he should eat less and exercise more.  This is precisely the way we need to handle our bloated budget and exploding debt – spend less and tax more.  However, like Opus, our congress is unwilling to accept the obvious.

Our biggest eating problems are our entitlement programs – Social Security (which is somewhat paid for with payroll taxes), Medicare (woefully underpaid for), and Medicaid (not paid for at all).  The Democrats refusal to consider major, or even minor, changes to these programs is unconscionable.  The math cannot be denied – within 30 years, 1 out of 5 of our population will be on Social Security and Medicare rolls, thanks to the wave of aging baby boomers.  The rest of us simply cannot pay for this without massive, unacceptable tax increases.  Reform is a necessity.

However, it is also clear that our government isn’t bringing in enough income.  Here, the Republicans are to blame, with their refusal to consider any adjustments to increase revenue in future budgets.  While we clearly shouldn’t raise taxes until we see improvement in the economy, there are certainly innovative ways to adjust our tax codes to increase revenue in the future. 

If we continue to do nothing, eventually Medicare, Medicaid, and our debt payments will swallow our federal budget entirely, leaving nothing to pay for defense and everything else.  Well not nothing – we could always continue to borrow trillions more, until we fall into an economic death spiral and implode.
Here are two simple messages.  First, to the Republicans:  you cannot eliminate or gut our entitlement programs.  Your older constituents will not stand for that.  Also, please look closely at the budget numbers.  Really look at them.  You’ll see then what economists everywhere see – we are not bringing in enough revenue, nor will we in the foreseeable future.  Tax increases or tax code changes must happen.

To the Democrats:  we cannot afford to sustain Social Security, Medicare, and Medicaid at their current levels, particularly as the baby boomer enrollment explodes.  Your constituents will not allow you to raise taxes to the point where we can afford them.  Please look at the projected budgets and see what everyone can clearly see – entitlement programs will break us if you don’t scale them back.

What has happened to compromise in our country?  No sane business could survive like this.  No American family could either.  There must be give and take for the greater good.  Spend less and tax more.   There are no miracle solutions you can order online (as Opus surely would) that avoid this simple principle.  For once, the politicians should stop their ridiculous posturing, lock themselves in a room, act like the grownups they’re supposed to be, and work together to find a compromise.  The solution won’t please everyone, but no solution is not an option.