Not wanting to connect the dots

So, there was a study that asked conservatives what programs they would actually like to cute- and surprise, most conservatives don’t want to cut spending! Or rather, they want to cut spending in the abstract, but a majority opposed cutting spending on any given specific program. Well, OK- foreign aid managed to sneak across the 50% line, but nothing else did. And nothing got the level of consensus I expected. This is rather like finding out that 60% of liberals oppose health care- smaller government has been a core conservative political philosophy from the get-go.

The problem is one of not connecting the dots. The conservatives do have a point here- per inflation adjusted dollar in taxes paid, the average American taxpayer is getting a much worse deal today than he was fifty, or even thirty, years ago. We’re paying more in taxes and getting less service. What happened? What’s different between now and fifty years ago?

One theory is that the Government got taken over by a bunch of incompetent crooks. I’d like to point out, if you’re advancing that theory, that 30-40 years ago we started electing conservatives again- before that point it was pretty much solidly New Deal liberals in charge. Eisenhower? The guy who expanded social security, spent billions on infrastructure improvements (the highway system), and shut down an unpopular war started by the previous administration (Korean)?

But I don’t think that’s it- I don’t think the government is any more corrupt or inefficient today than it was fifty years ago. I think what happened was simpler, if subtler, than that. I think what changed was the tax rate- specifically, the tax rate on the richest segment of our population.

When Ronald Reagan took office, the top tax rate was 70%. Back in the fifties, when Eisenhower was president and everything was so great? It was 90%. Today, it’s 35%.
Right or wrong (and for the record, I say “right”), fifty years ago, even thirty years ago, we were subsidizing the average tax payer. The average tax payer was getting government services that they weren’t paying for- the wealth were. The obvious way to get back to the “good old days” would be to just raise the taxes on the rich again.

If you want to make the case that we shouldn’t be subsidizing the poor and the middle class from the rich, by all means do so- but do so honestly. Step up, and either state which programs you wish to cut, or advocate raising taxes on the middle class (the poor don’t have any money anyways- taxing them is trying to get blood out of turnip).

The conservatives do want to cut government spending (at least on everyone else)- what they don’t want is to do is take the blame for cutting popular programs. Thus the “starve the beast” approach- accumulate so much debt that we are forced to cut the popular programs in a financial crisis. Which is why the conservatives cheered when Bush added trillions in debt for unfunded wars and unfunded tax cuts (why they went ape shit when Obama dared to do a stimulus package simply to avoid another Great Depression is a different matter).

At this point, I feed obliged to address the perennial bugbear in budget debates: pork. Here’s the thing: it’s real easy to say “we should cut pork”, because all pork means, apparently, is money spent on targeted programs from some one else some where else. Stuff doesn’t get added to the budget unless someone with some political pull (which usually means a congressman at least) puts it in there- and they’re going to fight against pulling it back out again.

You might think that spending $400 million dollars to build a bridge to an island with 50 people on it would be a good example of pork that no one would object to dropping- but Senator Ted Stevens and Rep. Don Young would disagree with you. The Democrats pull similar sorts of stunts as well (maybe not quite as bad- I can’t think of a Democrat who would place holds on 70 appointees just to blackmail the White House into sending some pork to their home state). The point here is that one person’s pork is another person’s vital and important project brings jobs and needed improvement to their state/district. And asking other people to sacrifice for your convenience isn’t likely to work very well.

So this is where we sit. We have three choices. One, we could back to the way things were, and raise taxes on the rich. Two, we can cut services and programs, including things that are popular (at least in a limited area) and will be resisted. Or three, we can raise taxes on the middle class, which is even less popular than choice #2. I don’t see a choice #4. So the Republican’s unwillingness to choose, publicly, which of three choices they support, renders them either delusional, or deceitful.

Related posts:

  1. Rats leaving the sinking ship
  2. “Stoking the Beast”
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  • http://meekostuff.net Sean Hogan

    I think transaction taxes have much to recommend them, which ends up being #1 but in a less obvious way.

  • Marc

    I’ve done a lot of research on the subject of spending (I built a massive spreadsheet in the process) and yes, there’s absolutely nothing to the claim that conservatives are about fiscal conservatism. In fact, the there’s very little history for budget reducing presidents for either party. Since the early 1900′s there’s only been three Democrats to reduce the deficit: Truman, Carter and Clinton; and one Republican: Eisenhower. (Truman basically eliminated the massive debt accumulated by Roosevelt for WWII.) It should be noted that with the exception of Clinton, these reductions were done almost entirely under Democratic congresses.

    Another interesting tidbit: Conservatives advertise they are against big government. “Big” can mean a few different things but one of the meanings is that they don’t want large government institutions with large numbers of federal employees. There are no numbers for this information prior to 1946 but since it’s been tracked, the Democrats and the Republicans are about the same. The only presidents to lower the number of federal employees by 100k or more were Nixon and Clinton. Reagan was the biggest offender in modern history (by a large margin); increasing the number of federal employees by 456k. Of course, Bush Jr. created a whole new branch of government. (Imagine what would happen if the Democrats made such a request.) It should be noted that the federal government isn’t much larger than it was 63 years ago (when tracking began). In 1946, there were 2.43 million employees and now there are 2.72 million. Hardly a picture of out of control government especially when you take into consideration the the large increase in population since then. In the mid 40′s, there were about 150 million people. Now there are over 300 million. For the most part you can credit this minuscule increase to the massive increase in privatization. Republicans are huge vocal promoters of privatization but the Democrats have done just as much for that cause as anyone else (especially Clinton).

    I would have to say that if you ignore the rhetoric and look purely at the numbers, Bill Clinton was, by far, the best conservative president in modern history (since 1900). He reduced the deficit by a larger percentage than any Republican ever has, he reduced the size of government by 100k employees, and he even reduced spending in education and welfare. No republican comes close to achieving this level of fiscal conservatism. In fact, no republican president since 1946 (the first year we have government size info) has ever reduced the size of government and the deficit. No wonder they hate him so much.

    Finally, this is simple research that anyone can do. Most of the data is readily available. The only thing I had some difficulty obtaining is the federal employee numbers since I had to specially request it from the government to get info back to 1946. It’s stunning to me that the media (especially the liberal media) has never bothered to look into this stuff.

    Bias disclosure: I’m not a Democrat and have no love for them. In the 80′s I self identified as a Republican but now I’m a “centrist” with no party affiliation of any kind.

  • http://enfranchisedmind.com/blog/posts/author/bhurt-aw/ Brian Hurt

    Sean: I’m actually opposed to the transaction tax, because most high-frequency trading actually *reduces* volatility, and increases liquidity. If they were jumping in and out of stocks at random they would increase volatility, but they’re not. What they’re generally doing is betting the price will revert to some mean (and thus tending to force it back to the mean). So if the price drops enough below their expected mean, they buy- driving the price back up. If the price rises enough above, they sell. What this means to you the lay person is that when you go to buy or sell stock, there is always someone there willing to sell to or buy from you the stock, and the stock will always be pretty near the fair market value.

    There is some logic behind imposing the transaction tax that I simply don’t get. The high frequency traders didn’t cause the banking collapse- CDOs and CDSs and shady home loans and Enron-style accounting did. But hey, let’s not address the real problem, let’s go beat up someone else. Rather like when Al Qaeda attacked us on 9-11 and we invaded Iraq in retribution. We must do something, this is something, there for we must do this.

    Marc: WWII was, IMHO, a really good reason to rack up the debt. There are times when the correct answer is to spend money like there is no tomorrow- because if you don’t, there isn’t. Fighting a two front war against global fascism is one of those times. This is why a balanced budget amendment is a really bad idea. If you add in “escape clauses” (except in the case of war, etc.) you just encourage the government to just always be at war with someone, if for no other reason than to allow them to rack up debt. There is no substitute for a rational populace who is willing to punish politicians who aren’t fiscally responsible. Too bad we don’t have that.

    I’d be interested to know why you haven’t joined the Democratic party.

  • http://meekostuff.net Sean Hogan

    @Brian,

    Actually I meant a universal transaction tax, with the exception of paper money transactions. It’s not even a tax really, it’s just charging for the utility of money.

    You say that “most high-frequency trading actually *reduces* volatility, and increases liquidity”. This is also what money does. The traders get their cut for facilitating liquidity – it isn’t unreasonable for the state (on behalf of the people) to also get a cut. I’m only amazed it didn’t happen years ago.

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