The Hush-Hush Reality of Federal Budgeting by Elise

In response to the recent (and ongoing and going and going…) federal budget deliberations in the White House, on Capitol Hill, and in Americans’ offices and living rooms, I’d like to elaborate on my two-part political philosophy:  1) the government is mismanaging tax dollars and failing to close the gap between America’s highest and lowest earners, and 2) U.S. wealth is not a nonrenewable resource.

According to USA Inc., a nonpartisan report that evaluates the financial health of the U.S. government as if it were a business, 58% of FY2010 expenses can be attributed to entitlement programs.  Fifty-eight percent.  The federal government took in approximately $2.2 trillion in revenue, spent about $3.5 trillion, and watched the unemployment rate exceed ten percent, even though President Obama promised that the post-stimulus jobless numbers would not make it into the double-digits.  Now take a look at the chart on page forty-six of the USA, Inc. report.  There has been an alarmingly steady increase in federal spending over the past five decades, particularly on education and health care (systems that are broken and bordering on unconstitutionality, respectively), but the government has little to show for it.  More Americans are at least partially financially dependent on the state, fewer Americans are paying taxes, income inequality is more noticeable, and current U.S. government budget deficit and debt figures are mildly terrifying.  There is a serious disconnect here.  Deficit spending during (and some would argue after) an economic recession has not worked, and it is not going to work.  How much more do federal and state governments have to spend before Americans start doing some simple math?  Progressives in Congress, the White House, and multiple governors’ mansions and state legislatures have been beating this dead horse for over a year now.  State initiatives to improve the social welfare by taking in tax dollars and spending rather haphazardly with little or no acknowledgement of failing programs and unintended consequences may be well-intentioned, but they certainly aren't working.  Keep raising taxes, the Democrats say.  We need more money to…do what with exactly?  Mismanage.  

The pragmatist in me is opposed to the attempted PAYGO system because it isn’t working.  The libertarian zealot in me says ‘no’ on principle.  Here, I want to address who gets taxed in the United States and why.  During the recent Bush tax cut extension debate in the lame duck session of the 111^th Congress, progressives argued that the ‘rich’ should be contributing more, that those individuals at the top of the income bracket don’t need the extra cash that the federal government could use for (what I have argued are failing) entitlement programs.  Nancy Pelosi, then House Majority Leader, led the left-wing pack.  This is ironic, and grossly hypocritical, because Minority Leader Pelosi is a multi-millionaire…who has never actually employed anyone.  Similarly, Senator John Kerry, who married the heiress to the Heinz Corporation, is taxed at an annual rate of approximately ten percent on his family’s inherited wealth.  The Kennedy politicians played the same card.  Who are these demonized ‘rich’ people making over $250,000 who may be forced to hand over 40% of their annual incomes to the federal government if the Democrats do well in the 2012 elections?  These Americans are, by and large, entrepreneurs and business owners.  They are subjected to an income, as opposed to a capital gains, tax rate and the highest corporate tax in the world.  These men and women are the innovators and the job-creators.  President Obama lauds small businesses, but he seeks to punish them when they succeed, when they employ.  Progressives in Washington want to give Americans a slice of the collective pie.  America’s entrepreneurs (who, by the way, added about 100,000 jobs in the month of March alone) are trying to make more pies, in spite of the state monkey hanging on their backs.

So what of the budget?  1) Government spending has been tried (excessively) and found ineffective.  So stop it.  2) American entrepreneurs must be allowed, no, encouraged to expand and employ, and U.S. businesses deserve a system in which they can compete effectively on a global playing field (i.e. something needs to be done about a growth-stifling corporate tax and the excessive, complicated, and disproportionately shouldered U.S. tax burden on the whole).  In the face of some inevitably angry voters, someone in Washington has got to touch entitlements.  Federal spending on social programs is not producing results, and slapping American business owners with unfair income taxes and an obscenely high corporate tax is counterproductive.  Limit the government, and, to reference an Obama 2010 midterm election campaign metaphor, give the keys to someone who won’t drive the car off a cliff…with a good chunk of American wealth tied up in the back seat.


Check out "The Path to Prosperity," the GOP federal budget plan released by Congressman Paul Ryan on April 5!