How different would things be?

How much different would the government look if it was understood that every dollar spent represents the hard work of another American? That no matter how important you think those programs are, or how helpful they may be, they come at a cost to someone else. This isn't to say the government is unnecessary, or to say we shouldn't help our fellow man. It's to say that in all aspects of government, the taxpayer should be considered and respected. The dollar spent has a name, it has a past, and while the government has a right to take it, it shouldn't take it halfheartedly.

How different would the debt arguments be if people realized that every dollar spent wasn't just the hard work of another American, but the hard work of our future generations? Some day the debt will reach a point where paying on the interest rates will no longer be sufficient. At some point the debt has to be paid down, and the government will have to decide between taxing the citizens more, or reducing spending on programs. Those programs may serve a great purpose, they may be needed, but far from achievable. It's now expected of my generation to support every poorly structured government program until it's collapse. To pay for the Social Security and Medicare of Baby Boomers until they bankrupt our country and then what? How long will it take to pay off the debts accrued? How many generations? What will they use to help the old or the poor? What will they get in return for a lifetime of paying into a system that no longer exists?

These programs are dangerous to America, and yet trying to confront them now brings out political statements that the right is trying to starve out the old and poor. Reform could make them sustainable, but it's political suicide to do so. It's a joke, but carries serious consequences.

The war on poverty has actually increased poverty. Not only are we losing the war, but for some reason the government wants to justify further growth of these programs. The suggestion of reform earns you the label of heartless, greedy, and/or racist. However, if we were to respect the taxpayer we would structure these programs to lift people out of poverty, to learn what skills they have, to educate them for jobs, and leave them in a financial situation that would increase the number of taxpayers in our country. I'd like to argue that an overwhelming majority of taxpayers would support a system that helped people out for a time, and put them on a path to success.

I'd argue that every government program, including the military, needs to be looked at. The desired goals need to be agreed on, and the necessary structures established. There has to come a point where enough is enough. How big do we need our military presence to be throughout the world? How many wars do we have to fight? How do we pick the ones we do?

How different would our country be if we created these programs to help out our fellow man instead of entertaining every political whim of our elected officials? How different would we structure our programs if we considered sustainability and functionality over next years election or good intentions? How often would we have to raise the debt ceiling? How often would we suffer through another financial crisis?

I'd like to see the day where these questions are answered, long before we are forced to answer them.

Wacky Claims, Hopeless Ideas, and Real Solutions

It seems like there is a lot in the news lately claiming different solutions on how to get out of this mess. Paul Krugman wants you to believe that the government should double their spending. Nancy Pelosi thinks that a massive increase in government jobs will reduce the deficit. For the most part, I disagree with both. First of all, government jobs won't do anything but add to the deficit, but adding them to the current government structure most likely wouldn't help economic issues at all. Assuming we can double our spending, and that it wouldn't be reckless, completely ignores how we got here.


It's odd, because these people, far more educated than myself, seem to want to use their skewed concept of history to say, here is an economic crisis, this is what we should do. This economic slump is due to people not spending, but it's not due to lack of money in the system. The argument from the left on revenues claimed that businesses were sitting on money. That the problem was people weren't supplying, because others weren't buying. So if people aren't buying, how is racking up another couple of trillion dollars a year going to fix anything?


So how did it start? The banks crumbled as a result of massive amounts of government backed, irresponsible loans. Many claim it had nothing to do with Clinton's push for affordable housing. They blame Bush and ignore attempts to squash it before everything went South. None of that really matters now, but for years banks were loaning to anyone with a desire for a new home. Everyone could get approved for homes they couldn't possibly afford. The banks could do this because Fannie Mae would buy those mortgages from them, it was nearly instant profits. As a result of this, housing prices skyrocketed. Neighborhoods were popping up at record rates. Toss into that out of control credit cards, enabling people to entertain lifestyles beyond their means, and you've got a ticking time bomb for the economy. The fact is, credit was handed out too easy, the value of housing and products were abnormally high, then one day the credit bubble burst.


So how do we get out? First, at some point people are going to start spending again. I would actually bet this happens soon. It won't be what it was before. Even if that credit is still available, the culture has now changed. Most likely we'll see the economy grow at a more healthy level, regardless of government intervention. When that happens companies will start producing, and jobs will be created.


What can the government do? In the Republican plan for job growth they call for tax reform. They want a maximum of 25% tax on anyone's income. While at first this looks like a tax cut for the wealthy. The truly wealthy pay 17.9% due to tax loopholes, throw in some lobbyists and you get the prime percentages granted to GE. So closing loopholes would increase the overall percentage to the super wealthy, while lowering it to smaller businesses that were paying the higher rates. It would also clean up the tax code, reducing the government burden to the businesses who's rates would rise.


It would also increase the amount a person actually sees on their paycheck. This additional income would either go to paying off individual debt, or add to an increase in spending. Either way, the economy ends up improving.


So why is the deficit/debt so dangerous? First of all, we have to pay it back eventually, but as the debt to countries like China grows, our power decreases. If you happened to have read my link attached to Pelosi's name, you read how important the subject of trade with China is, and continuing to give them the upper hand, will make it more and more difficult to get out from under their wing. Second, once we finally reign in spending we will have to pay down the debt. Even when Clinton had a budget surplus, it only stalled the growth of debt, it didn't do much to shrink it. As our debt grows, so do our payments, and those payments represent money that could be spent elsewhere. Money that could be helpful down the road. So, not only will increasing spending do very little right now, it will hurt us a lot later. We should be looking for reform, so we can maintain, while reducing spending.


It's not quite time to build, it's prime time to prepare for building, and preparation now will result in better growth for the future.