Mistake of historic proportions

Benjamin Franklin coined one of his most famous quotes upon the close of the Constitutional convention, "Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes."

The important questions are, who’s doing the taxing, who’s being taxed, how much, and what is it being used for? Libertarians and Anarchists will remind you that the War for Independence was fought to end taxes, but the real issue was who was doing the taxing, who was taxed and how much, and where the money went. If Iowan’s taxes went to Canada, we’d revolt too.

A political activist once told me that they thought that one of the main differences between Republicans and Democrats is that Republicans spend on physical infrastructure, while Dems spend on social programs. People or things.

In other words Republicans would spend our taxes on roads or street lights, Democrats on Driver’s Education programs. Case in point, the Iowa assembly, mostly Republican, want to offer money to school districts for building, but if they already have money to build, they may use the money for other things, like teacher salaries. The Teacher’s unions are frustrated with the legislature for not just offering money specifically for teacher salaries.

The old debate had always been, "guns or butter?" Somewhere in the middle of the twentieth century our Federal Government decided they should try deficit spending to try to stimulate the economy. Sometimes it helps a little, sometimes it doesn’t, but what are the long term consequences?

When I try spending more money than I have, the people I owe bills to start calling me on the phone. Don’t pay, they’ll report it and wreck your credit, right? Eventually things get repossessed.

If you were say, a hundred thousand dollars in debt, would that be a good time to quit your job? Of course not, but the Bush Administration and the Republican led Congress and Senate have decided to cut Federal revenues by at least $330 billion, even though they need to spend record amounts of money on Homeland Security, baling out the states and $50-60 billion war with Iraq.

Mind you, I love having my taxes cut as much as the staunchest Republicans. When I get my treasury check for our earned-income-tax credits- er, I mean children, we’ll probably use it to pay off some of our college loans. But I’m not sure how that’s going to stimulate the economy.

The theory behind Bush’s tax cut is the same old "trickle-down" economics of his father and Ronald Reagan. The hope is, if you give wealthy investors and corporations huge tax cuts, they’ll reinvest their savings into their infrastructure, creating jobs, producing more tax revenue from paychecks and simultaneously giving those workers money as consumers.

The fatal flaw is human nature. We don’t reinvest and create jobs, we spend on ourselves or we figure out ways to turn an even bigger profit. The rich get richer, the rest of us get poorer.

Do you deserve to keep your hard earned dividends and your capital gains? I suppose, but most of us barely know what those are and certainly don’t have any. And what about our future? Is that "class-warfare?" Then so be it. I am no communist and do not advocate any kind of socialism, but President Bush seems to see the world through millionaire’s glasses.

Some estimates suggest that the current Bush budget will increase the deficit by more than $300B over last year's $158B deficit. If you don’t remember your high school economics, the deficit is the red ink, the money you spend beyond your income, money you don’t have.

And what about our future? Will the Social Security fund still dry up by 2035? What about Medicaid and Medicare? I’m worried about health insurance and college tuition.

Annual deficits pile up and create debt. At the time I wrote this, the U.S. National debt was rapidly approaching six and a half trillion dollars! For all the reasons there are to dislike Bill Clinton, the debt was actually shrinking during his presidency. The National Debt has increased an average of $992 million per day since September 30, 2002!

Debt and deficit hurt our credit, they hurt the value of the dollar, and they hurt the economy. As bad as the economy is, is it really worth selling our future?

The estimated population of the United States is 291,066,701 so each citizen's share of this debt is over $22,000.00. That means my 1 ½ year old daughter Ellen owes $22,000!

I appreciate lower taxes as much as anybody, but I’m having a hard time enjoying this one. I think it was a mistake of historic proportions.
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