A cliff still looms

January 3, 2013 

As you all know, we’ve had trouble matching federal spending and federal revenue. The legislation we got in response, though, was the American Taxpayer Relief Act of 2012, Congress’ New Year’s gift apparently demanded by the American people, the markets and President Obama. Unfortunately, it doesn’t really help.

But the act is aptly named. It produces $3.639 trillion over 10 years in continued tax cuts to most Americans. Those tax cuts would have lapsed to make a dent in balancing the federal budget. The act includes almost no spending cuts at all, and $332 billion in new spending over 10 years, plus many billions more in an extension of the so-called “farm” bill, which in essence is 80 percent a food stamp program, with the rest being corporate welfare for big agribusiness. The Congressional Budget Office technically scored the “farm” bill extension as neutral because it was mostly a continuation of prior programs.

So in essence the act primarily is about lots more tax “relief,” except for the wealthiest folks who got a tax increase worth about $600 billion over 10 years. Woop-de-do. Mission accomplished, Mr. President.

Though Obama did fulfill his campaign promise to tax the wealthy more, he and Congress promptly spent more than half of that new revenue for the glitter effects of more unemployment insurance, Medicare doctor pay and keeping mommy and daddy (and big agribusiness, and the food-stamp lobby) from going postal if they have to leap off the milk cliff to deal with something more like the true market price of milk.

More importantly, both the president and Congress have shown tone deafness to the deeper issue that we in the hinterlands sense in our communities. For the most part, Americans need neither more tax relief nor subsidized milk. We need to raise taxes on everybody while also cutting spending in most areas, including, yes, on the military, and also on entitlements including unemployment, Social Security checks and food stamps for killer junk food.

Most of all, Americans really need to get back to work, but nobody’s kicking us in the pants to do so. Nobel laureate Paul Krugman can talk every day in The New York Times (which he pretty much does) about the Keynesian spending theory that deficit spending will lift all boats, but Krugman’s missing the obvious. Keynes is dead, and lived in an age before the welfare state, which changes the game.

Keynes’ big boat of a free-spending state is sinking. A brewing fiscal war is gripping this nation and the federal government is the bloody battleground.

Subsidized milk is a microcosm of a bigger problem. Many Americans see government as “Big Mama,” providing elemental nourishment as free as possible to weak “family” members.

Our family of teat-tuggers is a fast-growing brood, as you can see in part by looking at the disturbing rise in disabled people on the Social Security rolls. Those rolls have increased with record speed to record size, growing by about a quarter since the recession struck in 2008. There are now almost 11 million disabled people drawing federal checks. Our disabled citizens deserve compassion, but the rapid growth in disability determinations raises concern. Apparently the recession was more physical than fiscal, because it seems to have caused loads upon loads of new disabilities.

Meanwhile, the decreasing ranks of Americans paying meaningful taxes are tired of Big Mama government turning to them as Big Daddy cash cows to pay mounting bills for milk, the disabled, the unemployed, the military, the retired, the sick, Medicare doctors and plenty more.

Big Mama government and Big Daddy taxpayers need to call a truce. But who’s there to counsel them on saving their marriage? Our leaders have an obligation to bring us to face some difficult truths. Moses relayed Ten Commandments to a people who, the Bible recalls, were afraid to hear them.

Mitch McConnell, Joe Biden, Barack Obama and John Boehner are all said to be good guys, but not one of them even pretends to emulate Moses’ model of truth-telling, message-delivering and hard-hitting leadership. Instead, they want to cover up our troubles under a mustache of cheap milk, by keeping most people from paying higher taxes, and continuing a massive dole that’s sinking the ship.

A political Moses may come, but it’ll probably only be after we find ourselves thoroughly lost in a sea of overspending and undertaxing, deficits and debts, welfare and subsidy, bread and circus. At least we’re making progress on the threshold project of getting lost in this watery wilderness.

David Oedel studies and teaches about financial regulation at Mercer University Law School.

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