Occam's Razor

Yes, as hard as it is to believe I, a good liberal, am a fiscal conservative! I realized this yesterday when I read stories of President Bush rushing to Ohio to push for his $550B tax cut, calling a few Republican senators like neighboring Senator George V. Voinovich of Ohio weenies for agreeing “only” to a $350B tax cut.

All these tax cuts are in addition to massive tax cuts made over the last few years. Those tax cuts were made to make the economy grow. They didn’t seem to do the trick so naturally we need more and higher tax cuts that will do the trick. How deep do we want to dig our own grave? The economy is not improving George. Maybe it’s because of the reckless way you are steering our economy? Well, duh!

Let’s look at what worked. Let’s look at your father who also fought a war against Iraq but failed on the economy. He lost reelection largely because he didn’t do what was needed for the economy and us citizens, who were sick of high unemployment. Bill Clinton came in to office. Did he cut taxes right and left to stimulate the economy? No, in one of those increasingly rare shows from a politician, Bill Clinton developed a spine and did the right thing. He got a marginally Democratic congress to approve tax increases that were needed to bring the government’s expenditures in line with its income. I don’t think a single Republican voted for them.

What happened? Maybe it was just coincidence, maybe it was all those low interest rates but Wall Street got confidence and the economy improved. It seems that not knowing from year to year how much money the government is going to borrow is bad for the economy. Business likes to have reasonable certainty about capital. We all know the rest. During Clinton’s eight years of pragmatic leadership the economy boomed, tax revenues poured in, deficits dropped and record surpluses emerged.

One would think Bush and his Republican party would learn from the experience but no, it’s back to cut those evil taxes while spending more and more. And let’s have faith in his, his father’s and Reagan’s voodoo economics that we can build a prosperous economy through deficit spending. This is Keynesian economics, for crying out loud. Bush and the Republicans are advocating the same sort of logic pushed by JFK. Is there role reversal here?

I’m a fiscal conservative. I am by no means anti-tax. I think taxes pay for us to have a civilized society and I think civilization beats the heck out of the alternative … look at Angola for a sterling example of the benefits of zero taxes. However I do believe the government should live within its means. Yes, I think we probably should have national health insurance and it will cost a lot of money. So let’s find taxes to make it a reality. But if we don’t have a political consensus to do it then it let’s certainly not borrow the money and spent it anyhow.

In just a couple years we went from record surpluses to record deficits. Unbelievable. Yeah, there’s a war on but even factoring in the cost of the war these deficits would still be in the stratosphere. It was those unwise tax cuts, George. But another $90B down payment to rid Iraq of weapons of mass destruction it apparently didn’t possess didn’t help either.

Hey, let’s all follow the government’s example. Here is real leadership for you. You have vital needs too. The United States needs to protect its national security. You need to protect yours. You need, for example, an armor plated SUV just in case of a terrorist incident. Don’t have the money now? No matter, charge up those credit cards to the max. No sense in being unprepared. Oh but wait a minute you also deserve a break today. You work too hard, poor dear. You don’t need that full time job. Cut your hours. Make it a 32 hour week instead of a 40 hour week. You deserve it.

That’s what Bush is doing to the nation. We are simply living beyond our means. If your income were cut you would probably feel it might be wise to cut back on frivolous expenses. Perhaps you would defer that armor plated SUV purchase, or maybe target more modest expenses like going out to dinner or the cable TV. You might look at used cars and a cheaper apartment. Not the US of A. We want it all first class! We deserve it! And if we don’t do it one of our neighbors across the channel will get that armor plated SUV and maybe pick a fight with us and then where will we be? Horrors! (Never mind we spend more on “defense” than the rest of the world combined.)

Enough! There is no free lunch, folks. It works the same way for the federal government as it does for the rest of us. Republicans are hoping with enough chants and incense their deficit spending will buy us prosperity, even though the evidence is scant it has worked in the past. This is about ideology; it is not grounded in much economics and it certainly isn’t grounded in the real world. Maybe in a way it’s just naked vote buying: give people a big enough tax cut and they’ll overlook those massive, record deficits they will have to pay with interest later. But maybe it is time for the government to go on a diet because its income will be lean until the economy improves. But hey we can’t go on a national “diet” while porking out every night with all you can eat specials at the Red Lobster.

You will get the government you pay for. If you want more government then cough up more taxes. If you don’t want more government, pay the price and drive on crappy and congested roads and let services lapse. But you can’t lower your income and keep spending for very long and not have problems pop up elsewhere as a reaction to it. We’re seeing it now in the form of a flat economy and a business climate full of uncertainty. And that’s because what purports to be our leadership is out on the quarterdeck drinking the evil rum of don’t tax and spend more instead of competently steering the ship.

Come 2004 we the citizens must sober up and throw these winos off the poop deck. We need new and sober management.