With all of the talk about the impending “fiscal cliff”, it’s a good time to step back from the trees and take a good look at the forest and how we got here to begin with.
For the last sixty years or so, Congress has been on an ever growing spending binge, guided by a political philosophy that government should play an ever growing role in our everyday lives – a role which requires more of our substance. In fact, it increasingly requires more than we can spare in any given year and maintain a healthy economy. So we borrow the rest, year after year.
This year’s federal deficit is 1.2 trillion, last year’s was 1.2 trillion and next year’s is projected to be over one trillion as well. Our national debt, the sum total of our annual deficits, is well over 16 trillion. And all of that is on top of the tens of trillions of dollars in “off-the-books” future obligations to entitlement programs.
When you are in a hole, stop digging, or so the advice goes. But what do you do when voters keep electing politicians who won’t put down the shovel, but hold to the insane notion that we can somehow dig our way out?
It's tax day, and a good time to renew our repeated call for REAL tax reform in our country. As Newt Gingrich said in his column on the subject, "Nothing is certain except death and taxes, and physicians will tell you that death is much less complicated than the tax code".
More often than not, tax policy in our country is all about controlling behavior...as inpoliticians trying to control the behavior of the American public. This is the thing liberals don't usually want to admit (or just don't understand).
You can't predict the impact of taxes on a static basis because people react to taxes. They change their behavior. You can't say that if we increase taxes, we'll increase revenue...or that if we decrease tax rates (as conservatives want to do), we'll lose revenue. People react and change their behavior accordingly. The people who actually understand that work in the private sector and keepour economy moving...despite government.
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