Let’s Stop Kidding Ourselves

The 2012 political campaigns for President of the United States are both painfully vacuous. We have Mr. Obama bribing people to vote for him while his minions diss Mr. Romney. (Gee, what happened to “hope and change,” and “the first post-partisan President?” Mr. Obama plays the American voter for a chump.) Mr. Romney, for his part, talks in generalities I presume designed to mollify a sufficient number of “swing” voters to garner a majority. No one is leading.

Have you noticed that we have unsustainable entitlement programs that Mr. Obama insists we add to without any way to pay for them? Oh, sure, we can raise taxes on everyone earning over $200,000 or couples earning over $250,000 a year. That will have two impacts. First, it will mollify the resentful. Second, it will delay the day of reckoning on our $16,000,000,000,000 in Federal debt by less than 1%. Instead of spending $1,000,000,000,000 more a year than we collect in taxes, we would be spending $900,000,000,000 more than we collect. This assumes a steady state economic circumstance. The reality will be uglier because that $100,000,000,000 in higher taxes will not be spent or invested in the private economy, it will be transferred to people who have become dependent on receiving it or used to pay interest as rates increase (and they will increase). And yes, if you haven’t observed reality (that is, you only read the New York Times) the multiplier effect of that social spending is less than one. It is an economic loser. One final thought for all you people willing to work hard. That $200,000 or $250,000 base on which higher taxes would be paid is NOT indexed for inflation. Hello middle class! Guess who will be paying for most of those dependent on Federal handouts in the future if Mr. Obama and a democratic Congress are elected in November?

Have you been hearing about the financial problems across Western Europe? Can’t figure out why European bureaucrats keep talking and do little or nothing for years now? It is because few are willing to assume responsibility for the problems. The tradeoff is made to appear to be between more borrowing to “stimulate” the economy of various countries or “austerity,” that being to stop paying salaries and benefits with borrowed money of people who don’t work. (By definition, employed people who don’t add value aren’t working.) Perhaps, just perhaps, the answer is to lower tax rates and reduce regulation and reduce government interference in the private economy. Perhaps, just perhaps, it is economic freedom that creates real jobs, providing products and services people are prepared to voluntarily purchase, leading to real economic growth, that increases the tax base that can pay for government services with current real revenue.

Which brings us back to the 2012 election for President of the United States.

Our current entitlement state is on the way to bankruptcy and Europe is our reflecting pool. Raising taxes will not fix the problem but many would be willing to accept some tax increase in exchange for a real solution, one where entitlement programs are fully funded across generations without more borrowing, meaning growth in entitlement spending would need be zero or negative for several years. The truth is that your kids and mine will be paying the piper of the collective profligacy of our generation. So much for Mr. Obama’s moral case for continuing the madness. So, how about some leadership?

Candidates for public office who promote individual freedom, free markets, and economic growth offer the only real solutions to our problems. Please find them, support them, and vote for them.

Hello? Mr. Romney? Are you there?

Regards, Pete Weldon

POST SCRIPT August 12, 2012 – With his pick of Paul Ryan as his running mate Mr. Romney proved he is in fact “there.” Thankfully, we will now be choosing between big government and big people when we vote for President in November.