09 May 2011

"Free Lunch" Magical Thinking at Root of National Debt Problems

I believe that most people, regardless of their political beliefs, would agree that the level of our federal government’s spending and taxes has been “highly influenced” by what our politicians have considered important to their re-election.   Add to this, the reality that most citizens want their fair share of any “free lunches”.    Politicians + Citizens…we now have the perfect storm for excess spending and under taxation.

About half the citizens are duped into thinking they can get their free lunch in the form of low taxes and the other half are duped into thinking that they can get theirs via specific spending that benefits them.  Many citizens think they can get both…and they do.  Of course most of us citizens don’t think that we have been duped…no, we all “deserve” and have “earned” what we want…ya right!!!

All this patriotism on the part of our politicians and citizens just gives me goose bumps.  All kidding aside, it angers me that this nonsense is part of what our service men and women are risking their lives to defend.

Assuming this premise, nearly all spending areas of the federal budget are higher and nearly all taxes are lower than our country can afford.  Of course, there are exceptions in both areas where maybe our politicians and citizens experience moments of “statesmanship” and  “individual responsibility” and agree upon a competent decision.

Over the next two days there will be two more articles published that will address Excess Spending and Under Taxation with some specificity.   Reductions in spending and increases in taxation will be suggested.  You will note that my suggestions affect all significant areas of the budget.  This is not due to an attempt to be politically correct by asking all Americans to chip in…it is due to my belief in the premise noted above.  There are systemic and people reasons why our country is in the financial trouble we are in…

I look forward to your comments.
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6 thoughts on “"Free Lunch" Magical Thinking at Root of National Debt Problems”

  1. I think something you allude to but didn’t mention specifically with regards to politicians’ re-elections, is our entire political finance system. It’s no more than legal bribery. And when you have Congressmen/women like my own Cathy McMorris-Rodgers one day bragging in her emails and on her website that she voted against all of the Obama bailouts and stimulus bills (but of course not the Bush bailouts or stimulus bills), while later posing with a photo of a giant cardboard check for a federal funding project paid for by the very stimulus she vehemently opposed, it illustrates the very problem.

  2. Mark, you make a very good case…

    What do you think might be a large additional contributor to the mounting national debt? I would suggest it is all you have said plus the growing divide between the rich and the really less rich.

    Since the 80’s there has been a continual whittling away at the middle class income. On top there has been an explosion of poor, single parent families. Nearly half of American households do not pay taxes because they do not make enough for our tax code…

    So while we feel indignant about how much the rich make each year and relatively how little they pay in taxes, there is an even more profound impact. There is no one and no money left to pay taxes… Greece here we come.

    1. I agree with your concern about divide between the rich and poor and the associated issue of the shrinking middle class. Creating a modern day feudal system is not a good direction for our country.

      Over the next two days my articles on where to spend less and increase taxes will be in sync with the concern about the middle class. I don’t want to live in a country where the middle class just keeps shrinking.

      No doubt a larger middle class would raise more tax revenue.

  3. A famous quote by Alexis de Tocqueville…
    “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”

    Of course the rub is that a lot of people agree this happens but can’t agree on what to do about it. The situation is made worse by a political climate that pushes for partisan warfare over compromise.

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