(Also on my “Roger Graf” Facebook page)
Recently, I had an exchange with Sen. Jon Tester’s office over the Republican tax reform effort. I’ll try to be fair to Sen. Tester in summarizing his position. What follows is my response. You might find it interesting.
Sen. Tester:
* Tax cuts must be done “in a fiscally responsible way and not increase our deficit or add to the debt”.
* Republican tax cut proposals would “add trillions to the national debt, saddling our children and grandchildren with heavy financial burdens”.
The issue of the national debt hangs heavy in his response.
My resonse:
Sen. Tester,
Thanks for the timely reply. I appreciate your willingness to communicate with your constituents.
But I’m taken aback by the use of partisan rhetoric such as “everyone pays their fair share”, “saddling our children and grandchildren with heavy financial burdens”, “tax breaks for the extremely wealthy and big corporations”, and the frequent use of the term “irresponsible”. I understand the need to be concise by using generalities, but the inclusion of the rhetoric complicates attempts at a thoughtful discussion of the issues.
First, the class warfare charge (“tax breaks for the extremely wealthy”) obfuscates the reality. No one, for all practical purposes, gets a job from a poor person. Sorry, you need rich people. Targeting rich people is self-defeating. So, now the question turns on the quest to get upper middle income and rich people to increase their business activities and create jobs. Punishing them with high tax rates and transferring wealth to DC won’t do the trick. If it did, then a robbers’ economy would be a fountain of prosperity. I refer you to Henry Hazlitt’s classic, “Economics in One Lesson”.
Next, the worry over adding to the deficit rings hollow coming from people who approach spending cuts with all the enthusiasm of nurses entering an ebola ward. The deficit is an indication of a spending problem, not a product of people refusing to be fleeced any further. The tax haul is already huge, particularly among the people who you’ll expect to produce the jobs. I’m reminded of a slave economy. For that hideous society, it is believed that increased whipping will make the people more productive. What? How does that work? The same is true with tax-the-rich schemes.
Thirdly, it’s strange to apply “cost” to a lowering of the tax burden. Our economy, and the people shouldering the burden of creating the jobs, is already excessively labored by a plethora of noncompetitive taxes. A tax cut is relief. Deficits are, ipso facto, creatures of spending excesses.
Anyway, projections of the “costs” and “benefits” are like many of the projections regarding environmental impacts, WAGS or SWAGS: “wild a** guesses” (WAG) and, adding a gloss of math, “scientific wild a** guesses” (SWAG). The federal number-crunchers can’t even get their spending WAGS correct. Look at the ’65 projections on the outyear costs of Medicare and Medicaid. What makes you think they’re any good at measuring the outyear ramifications of new tax rates?
Fourthly, if worry over adding to our children’s burdens was legit, we’d be taking a serious look at spending, especially entitlements. They are spending on cruise control. There’s no amount of “revenue raisers” that can keep up without biting into our children’s future prospects. The extractions to DC means less available for a growing the economy. An anemic economy is one that won’t make room for them.
So, get on board with the tax reform bill. I’ve already cited ways to improve it. These suggestions aren’t about the fool’s errand of Keynesian stimulus. Such foolishness is an acting out of a robbers’ economy, as mentioned earlier. “Bottom up” economics – or demand-side economics, or a “robber’s economy” – is one of the most anti-young economic approaches on the political shelf. If you’re serious about a prosperous future for the young, it won’t come out of maintaining, or increasing, the dollar flow to DC.
I think that a reconfiguration of the practical meaning of ‘irresponsible’ is in order.
Thanks again for hearing me out.
RogerG