Raising taxes is not the answer

I guess we all live in different worlds. On one side we have those who think we are spending ourselves into oblivion (count me in) and on the other are those who see our debt problem not as a spending issue, but a not taxed enough issue.

Consider this from the Center for American Progress:

The Bush Tax Cuts Are the Disaster that Keeps on Giving
Debt Would Be at Sustainable Levels Without Them
By Michael Linden, Michael Ettlinger

Ten years ago today, the first round of Bush tax cuts became law. But what if they hadn’t? What would our fiscal situation look like if history had been different in just one respect: if we’d never implemented President George W. Bush’s eponymous tax policies? The short answer is that the debate over federal debt levels would be entirely different.

In that alternate world, total debt as a share of GDP would be under 50 percent this year—instead of pushing 70 percent—and it would be expected to stay under 60 percent for the rest of the decade. That’s well below the levels causing such great consternation in Washington.

So, if we had just kept taxing and taking more from some Americans our debt would not be as high as it is today. Wanna bet? History shows that spending always equals and mostly exceeds new revenue. Look what happened to the Social Security Trust Fund, excess taxes were used to buy special treasury bonds and the proceeds from those bonds were spent by the government. Now when those bonds are cashed in to pay benefits more debt must be created to make the payments. I think it’s a genetic thing with members of Congress. There simply is no spending that cannot be justified by someone.

George Bush might not have been too smart cutting taxes and raising spending, but is it any smarter to increase spending even further knowing that every penny of new spending must be borrowed?

Tax credits to buy a house, a car or put air conditioning or solar panels in your home have not gotten us much for our money. Even acknowledging that clean energy is a good thing, you still should be able to afford to stimulate it before you do so. “Improving” Medicare is no doubt welcome by many, but when the liability for these promises grew by $1.8 trillion last year, more than the federal deficit, any additional spending is questionable.

I find it inconceivable that many people support more spending with or without higher taxes and believe that higher taxes are the answer to dealing with the national deficit. Let’s think about what we are doing. We pay taxes to the federal bureaucracy. The money is then filtered back to our communities to build a new sidewalk, help a town build a community center or give our neighbors $1,500 to install central air conditioning or $7,500 to buy a car. Aside from the obvious national level items; defense, interstate roads and the like, how is this process more efficient than leaving the money with people to pay for their own community center or air conditioning?

Our quest to stimulate the economy at the expense of the next generation seems ill conceived. Striving to tax more to spend more is shortsighted and is a reflection of the way many Americans lived their lives and led us into this recession.