The Budget Crisis - Too Many Americans STILL Don't Get It

Both the Federal government and most state governments face the same problem – how to keep from going broke. And contrary to the propaganda from the big-government-loving liberal Democrats and their media mouthpieces, the situation is not complicated – we spend too much. Way too much.

And we’re not spending it on law enforcement, the military, nor even on infrastructure improvement, all of which are legitimate tasks of government. Today, more than TWO THIRDS of the Federal budget, and similar portions of State budgets are for “social services” which are nothing more than “transfer payments” – taking money from one group of people to give it to another.

At the individual level, it can take the form of cash payments or “free” services like food stamps, housing subsidies, welfare, etc. At the corporate level, subsidizing such things as Ethanol, wind farms, and other “green” nonsense constitute an outrageous waste of taxpayer money, not to mention causing numerous negative side affects – like higher food and energy prices.

The borrowing-spending binge began in the 1930’s with FDR, and has been growing worse ever since, regardless of who was in the White House. But we simply cannot afford it any longer. We must get our financial house in order. And no matter how you run the numbers, that means we need to cut spending, and drastically. There is no way around it.

Democrats, of course, react to spending cuts like vampires who have just seen a cross. Because cutting spending is simply incompatible with their mission in life, which is to make as many Americans as possible dependent on government. Which in turn buys them votes from of all the people getting a government check, not to mention all the union government workers who manage those programs – and who coincidentally vote 90% for Democrats.

So with predictable monotony, the Democrats, whether at the state level or in the Congress, propose dealing with the deficits by, you guessed it, raising taxes. But not on everyone, of course, just on those “rich” people that they seem to hate so much. Yet almost half of Americans pay no taxes whatsoever, while those “evil rich” carry the overwhelming tax burden. Even the IRS admits that the top 10% of wage earners already pay 70% of all the income taxes collected.

But no matter. Even President Obama, in his latest press conference, trotted out the same tired old class warfare rhetoric, attempting to caste America’s choice as between “tax breaks for those who fly around in corporate jets” and “paying for our kids’ college” – despite the fact that one has nothing to do with the other. Besides, the rich pay for those private jets out of their own money – Obama flies in a $300 million aircraft paid for, in large part, by the enormous taxes paid by those very same corporate executives. But in their world, neo-socialists like Obama believe that if we would just raise taxes on those successful people, everything will somehow magically work out.

Here in Minnesota, Democrat Governor, Mark Dayton has adamantly refused to accept a balanced budget proposal from the Republican controlled legislature, in spite of the fact that it includes a $2 BILLIONincrease in spending. But Dayton wants even more, mostly for new social welfare programs, and he also wants to “pay for it” with a tax increase, once again on “the rich” – which according to liberals are taxpayers making $150,000 or more in taxable income ($250,000 for married couples), which includes thousands of small businesses, the very people who create jobs. Minnesota’s high taxes have already driven hundreds of companies, large and small, from the state – Delta Airlines just announced moving 700 jobs from Minneapolis to Atlanta. And now Dayton wants to make the business environment here even more unattractive.

Dayton is even willing to force the government to shut down to get his way – many have said that was his plan all along. It’s a great political ploy, because Dayton knows that his allies in the ultra-liberal local media will help him blame the Republicans for the halt in government services – they are already spinning the narrative to absolve Dayton of any responsibility. And a quick survey of people on the street shows that it’s working – most don’t even know that Republicans submitted a balanced budget to the governor.

Meanwhile, the press has also been remakably silent on the fact that Dayton’s own massive wealth (he is heir to the Dayton-Hudson fortune) is sitting in trusts, apparently located in South Dakota, the Cayman Islands, and other safe havens, protected from any of the taxes the Governor imposes on the rest of us. Like most “limousine liberals” Dayton believes in two sets of rules – one for him, and one for the rest of us.

Make no mistake, while the growth of the socialist nanny-state has been overwhelmingly the result of liberal Democrat majorities in the legislatures over the last 70 years, Republicans cannot hide from their own responsibility. Time and again, Republicans have been elected to reign in the spending by out-of-control Democrats, only to cave in at the last minute, especially when “sacred cows” like education or Social Security are involved.

Now, anyone who owns a business, or just runs a household for that matter, knows full well that while you have only limited control of your income, you have much more ability to regulate your spending. If a business has a downturn in revenue, they compensate by spending less. If the main breadwinner in the household suffers a cutback in pay, or if one of the income earners loses their job altogether, the family has to decide what is essential, and what needs to be cut, and then live within their means.

But there is on fundamental difference. Private businesses and families are managing their own money – government bureaucrats are spending someone else’s money. If you are in the top half of tax payers who are paying all the bills, you already understand this. Unfortunately, as pointed out, too many people pay no income taxes at all, and thus don’t care if taxes are raised on the other guy. Or they simply don’t understand why a tax increase on anyone affects everyone, not just the rich.

Because sadly, any conversation with the average American shows that a disturbing percentage of the public has no understanding of economic realities, nor the cause and effect relationship between taxes and growth – cutting taxes spurs economic growth, while raising taxes retards it. They have been so dumbed-down by the mainstream media that they continue to walk into the voting booth and vote for the very same Democrats whose policies have adversely affected them, from higher gas prices to the housing crash. They are simply clueless.

Think that’s an exaggeration? Consider this: a recent poll indicated that more than 60% of voters still do not believe that the floundering economy was Obama’s fault. Think about that. In just the first two years of his presidency alone, Barak Obama and a Democrat controlled Congress rammed through a staggering $2 TRILLION in new spending, much of it to create yet more government jobs, with concurrent increases in the national debt to over $14 TRILLION.

Yet a majority of voters still give Obama a pass.

But unless and until majority of the American people understand that we cannot tax our way to prosperity, and that private sector economic growth is the key to solving our deficits and our debt, we will continue to fall deeper and deeper into a financial pit. “Entitlements” like Social Security and Medicare cannot continue to grow unchecked. Regardless of the pain that will most certainly accompany any real spending reform, at some point the bloated government gravy train must be brought to a halt. If it isn’t, then economic disaster, with the ominous specter of social chaos, is virtually inevitable.

John Caile