I may be giving him too much credit, but President Obama probably misspoke when he revealed his true sentiments toward individual private property in today’s White House press briefing regarding the ongoing debt ceiling negotiations. Whether it can be justifiably termed socialist, the fact is that he – along with many other American politicians, members of government, and economists – truly feel that the fruits of one’s labor rightfully belong to the state to do with as it sees fit, and any retention of that income by the individual in question is seen simply a privilege to be grateful for.
When the citizenry’s private property, rightfully earned, is taken and redistributed, especially to politically-solicited groups such as unions, “community organization groups,” certain demographic groups, religious institutions, corporate and organizational allies, etc., the state has in effect become a vehicle of the oligarchy to obtain and retain power and authority at the literal expense of productive citizens (of which only 1 out of every 2 households actually pay said federal income taxes by the way). This, in its most basic form, is what defines a kleptocracy – “government by those who seek chiefly status and personal gain at the expense of the governed.”
While Republicans and Democrats spar with each other over what kind of deal is to be reached to establish a new debt ceiling before the nation defaults* – whether to cut spending or raise taxes, or both – I find that a couple of very important, substantive, and ethical questions directly relating to the issue at hand are largely going unaddressed.
For instance, by what sovereign right does government expect tax revenue increases – in effect a bailout of the very government that all too recently bailed out insolvent corporations while admonishing them for their collective and individual displays of irresponsibility? When the debate comes down to a conflict between slashing expenditures and raising revenues, reducing spending is the only ethical choice available simply because government does not have any inherent right to that property which individuals earn through their own labor. At its worst, this mentality is tantamount to government-instituted bondage, where an individual that hypothetically falls within the 30% income tax bracket must work about four months every year on Uncle Sam’s Plantation before s/he begins working for themselves and their families (this before including FICA taxes and state income taxes, if applicable). At best, it equates to a modern aristocracy where the people exist to provide assets for the ruling class to ration as they see fit. As James Madison once similarly pondered, do the people exist for the state or the state for its people?
It is highly offensive for President Obama to suggest that the elderly will slowly die of exposure or impoverished children will starve without more government-sponsored thieving from our pockets. This is the tried-and-true modus operandi of smooth political operators who seek to play on the emotions of the electorate, however, and is not altogether unexpected. But for those that still retain some measure of reason, logic, and a healthy dose of common sense enough to understand that a nation which already takes in considerable tax revenues annually (~$2.2 trillion in 2010) ought to be able to better manage that money and address these issues at the ultimate expense of other nonsensical expenditures, if they are indeed as important he suggests.
I can think of just a few ideas off the top of my head to help facilitate this much needed management. This is certainly not an exhaustive or comprehensive approach, just some talking points to get folks thinking and illustrate my meaning:
1. Perhaps we could stop funneling foreign aid to every single third world cesspool with a well-documented history of corruption and fraud (e.g., Haiti, Pakistan).
2. We could stop running record trade deficits with every nation on the planet that is simultaneously receiving offshored American jobs.
3. We could let the generals and admirals do their jobs and request what they need/desire rather than continuing the current trend of using defense appropriations as a congressman’s/woman’s personal district/state auction house for unwarranted and unsolicited programs, systems, and platforms.
4. We could return to limiting the military to its sole constitutional role – that of protecting and defending the United States and her national security /commercial interests (yes, this was an original function of the navy), rather than using it as an aggrandized Interpol or International Red Cross.
5. The nation could adopt some general components of President Obama’s own commissioned Bowles-Simpson Plan†, which suggests to establish a single, lower overall tax rate (for both individuals and corporations) while eliminating all loopholes and deductions and all exempt statuses. Both substantially increase collective revenue across the board by themselves, so what is not to like by the kleptocracy? This is the only way I would support increasing revenues on income, be it individual or corporate, because it would effectively lower the rates of those already paying taxes while requiring those not currently doing so to contribute. This is the more fair, equitable, and ethical approach and would address the growing phenomenon of class warfare in society, as all citizens and residents will have a relatively equal fiscal stake in the matters of government as they should if they are to share a voice in it. On a side note, it is my estimation that introducing significant simplicity and stability into the corporate tax hell that is the American economy are probably the two most immediate causal factors that could lead to internal business investment and expansion (i.e., job creation).
“The want of confidence in the public councils damps every useful undertaking, the success and profit of which may depend on a continuance of existing arrangements. What prudent merchant will hazard his fortunes in any new branch of commerce when he knows not but that his plans may be rendered unlawful before they can be executed?”
6. Entitlement reform simply must occur‡. Entitlements are the “sacred cows” of politics that are killing future prosperity potential in this country, as the collective entitlements of Social Security and Medicare are the greatest contributors to national debt – especially future debt projections. While these entitlements do not draw from income taxes, per se, they will be funded in part by them once the legal debt limit is reached and the delta between revenue generated by payroll taxes and expenditures paid out can no longer be financed with credit (this also clearly demonstrates the pyramid-like structure of the programs). It is an unpopular topic to be sure, but the arithmetic simply no longer supports the viability of these programs in their current states.
*This would not necessarily occur as the fear-mongering would lead us to believe unless the government bureaucracy fails to reprioritize its expenditures such to pay the interest on the debt prior to any other payments, thereby securing the nation’s international credit rating.
†This commission’s recommendations have thus far gone largely ignored, essentially because they did not return findings and conclusions commensurate with the current political climate and/or will. In other words, it generally acknowledged that we are, in fact, in a lot of fiscal trouble.
‡ There are far too many approaches, political and ethical concerns, complex factors, and constitutional considerations to briefly capture in a single paragraph within this post regarding this particular topic.