Demagoguing the Elephant In the Room

April 3, 2012 § Leave a comment

This expands on Fidler’s article titled “Liberals Need to Stop Supporting Welfare.” I make the case that ignoring the massive growth of entitlements and welfare, at the nation’s expense, is politically convenient but morally wrong.

I'm right there in the room, and no one even acknowledges me.

Someone once said once the public can use the government as a tool of plunder, we near the end of the republic (1). It was Alexander de Tocqueville who said, “the American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.” These two popular phrases rung true for me this week when Congress debated over the Rep. Paul Ryan’s plan. For the record, I am no fan of Ryan’s proposed budget–which is only $300 billion less than the President’s $3.8 trillion request–for several reasons, one most obvious being it continues to run a deficit. He also increases “defense” spending.

What I am a fan of is Ryan’s forthrightness about how we as a nation need to deal with entitlement and welfare programs. Like it or not, we can’t have a serious conversation about balancing the budget without addressing something that covers 60%–and growing!–of the federal budget. Likewise, we can’t have a serious discussion without including “defense” spending. I believe it is simply immoral to spend what you don’t have, while subsequently distorting the money and market, which in effect hurt the people, to make up for unfunded liabilities, and pass it on to the next generation.

In a free society, one shouldn’t be forced to pay into a broken, unsustainable system.

I have yet to see a study which shows entitlement spending and welfare will become a smaller share of the budget in the years to come. One unfortunate thing is the Democrats (2) propose nothing but more spending–through higher taxes–which is akin to throwing money into a well.

On a separate note, there is an obvious fallacy and  negative consequences should we continue the “tax the rich” chant. Let’s ignore the several cumbersome taxes in the upcoming analysis. According to the Tax Foundation, an income of  $380,000 qualifies you into the 1% and $114,000 for the top 10%. In addition, the top 1%, with an average effective tax rate of 23%, paid 38% of the income taxes, and the top 10%, with an average effective tax rate of 18%, pays 70%.

Do we propose to double their tax rates to 46% and 36%? Small business, companies with fewer than 500 employees make up half of the private sector. What decency would we have to request higher taxes from them? What effect would higher taxes have on the economy?

A more fitting chant should be to simplify the 3 million word, 76, 000 page tax code. A simpler tax code, which Ryan’s plan addresses with two brackets of 10% and 25%, would rid the problem of half of Americans paying no income taxes. Thomas Paine said “there are two distinct classes of men in the nation, those who pay taxes, and those who receive and live upon the taxes.”  How can a society sustain like this? The common talk of arbitrarily raising taxes will do nothing.

Thankfully, Ryan and his alleged Path to Prosperity initiatives has brought the well-needed conversation to the forefront.

As expected the Republican controlled House passed Ryan’s budget and it would be an act of God if the Senate followed suit. MSM and the pundits prohibit any (even proposed) conversation which only dilutes and skews an honest conversation. So will we finally at least discuss the entitlement and welfare system or continue to kick the can down the road?

I invite you to join the conversation and subscribe to Minds Alike, follow me @BAdetiba, or e-mail me at BabAdetiba@gmail.com

(1) Maybe it was Frederic Bastiat, author of The Law
(2) I give credit where it is due. Democratic Sen. Weyden crafted a plan with Rep. Ryan titled “Guaranteed Choices to Strengthen Medicare and Health Security for All: Bipartisan Options for the Future” <http://wyden.senate.gov/imo/media/doc/wyden-ryan.pdf&gt;

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