it’s the spending stupid!


It’s the Spending, Stupid

The news that several of my erstwhile conservative allies in Washington raised taxes as their remedy for the “fiscal cliff” leaves me feeling a little like George Patton when he remarked that, “I would rather have a German division in front of me than a French one behind me.”

To confirm the obvious, it is not a revenue problem, it is a spending problem. The Tax Policy Center reports that since 1989 (recognize that year?) federal revenue has grown 149 percent, from around $991 billion to $2.468 trillion (2012 estimate). Federal spending, simultaneously, has risen from $1.143 trillion to $3.795 trillion (20012 estimate), or 232 percent. It’s a spending problem, but apparently not for some Republicans.

Apparently not because in the same bill that Republicans voted to raise your taxes they voted to spend the money on these gems: $59 million for algae growers, a $4 million green energy tax credit for electric motorcycle manufacturers, a wind tax credit for $12.1 billion, $430 million for Hollywood producers, $70 million for NASCAR, and a rum tax subsidy for Puerto Rican rum makers.

Senator Pat Toomey (yes, the former chairman of the Club for Growth) explained his vote for the tax and spending spree as such: “This legislation is the best we could do for taxpayers and job seekers.” I wonder if Senator Toomey would show up at a burning house with a five-gallon can of gasoline.

Senator Mitch McConnell opined that, “By acting, we’ve shielded more than 99% of taxpayers from a massive tax hike.” First, that one percent that McConnell so blithely threw under the bus already totes about 40% of the tax load. Second, I wonder if the next mugging victim in your home town will feel better if you tell him that he is the only one that mugged that day. Never have so few taken so much from so many.

House Ways and Means (the spending committee) Chairman Dave Camp of MI said, “This legislation settles the level of revenue Washington should bring in.” Really? We already had enough revenue for big-government politicians to spend on things like I found in this list from 2011: $764,825 for a study on how college students use cell phones and social media; $136,555 for teachers to retrace Chaucer’s Canterbury Tales in England; $55,660 on butter packaging; $606,000 for a study about online dating; $48,700 towards the Second Annual Hawaii Chocolate Festival; $147,138 to build a magic museum; $175,587 for a study on the link between cocaine and the mating habits of quail.

The dollars noted above amount to the fiscal equivalent of turning a garden hose on a forest fire, but they highlight the point. We cannot trust Washington politicians with the nickels and dimes, so how can we trust them with the big money?

Recall fondly the 2009 Stimulus Bill that by the end of 2011 had spent nearly $900 billion of your money. An October 2012 study by Ohio State University economics professor Bill Dupor concludes that, “ARRA created/saved approximately 450 thousand state and local government jobs and destroyed/forestalled roughly one million private sector jobs. State and local government jobs were saved because ARRA funds were largely used to offset state revenue shortfalls and Medicaid increases rather than boost private sector employment. The majority of destroyed/forestalled jobs were in growth industries including health, education, professional and business services.”

Perhaps we do not generate enough revenue if the goal, now shared by Republicans, is to completely annihilate the private sector and replace it with government. If the government does everything for us, then we have no need for the private sector, and it has no need for its money, so government should just take it from them.

South Carolina at least is blessed with a few holdouts from a Soviet future. Representative Trey Gowdy declared that, “what we’re — and I mean the South Carolina delegation — not in favor of is more spending.” Mick Mulvaney noted that, “’Borrowing’ money without intending to ever pay it back is not debt. It is theft.” Jeff Duncan said that, “Not only does this bill fail to address spending, but it potentially undoes the spending cuts adopted as part of the debt ceiling compromise from 2011.” Tim Scott said that, “revenues have not been the problem, are not the problem, and will not be the problem”.

The new Republican tax-and-spenders, however, now can slap backs and yuk it up with their new friends across the aisle—while you and I foot the bill.