Last week, a friend and I got into a bit of a debate on his Facebook page. The genesis of the discussion had very little to do with fiscal policy. It actually grew out of my defending TEA Party conservatism from the charge that it is extreme and full of hateful racists and fascists. But when I pointed out that advocating for limited government, tax reform and sounder fiscal policies is not extreme, nor is it hateful, nor is it anti-Semitic, Nazi-like or fascist, my friend responded that smaller government has been happening over the past two years, spending and the deficit are both way down, and that there have been no tax increases of any kind in the past five years and taxes are at a historic low, and then asked, “What MORE DO YOU want?” While I disagree with his premises (and will explain why below), the question itself is a fair one, and one which warrants an answer if there is any hope for meaningful discourse between those who hold opposing political and policy viewpoints. I promised to respond when I had the opportunity to do so, as I figure to fully and fairly answer that question will require more than just a few words in a Facebook comment. Following is my attempt to do so:
First, as alluded above, I’d quibble with the premises. 1) “Smaller government has been happening over the past two years.” This may be a definitional issue, but I’m hard-pressed to see how this is so. If we’re speaking purely in terms of spending by the federal government, this link provides a helpful starting point for analyzing that. (Please note, I’m citing the White House itself, which I’m fairly certain my friend would consider an acceptable source.) The first Table (1.1) lays out the “Summary of Receipts, Outlays, and Surpluses or Deficits 1789-2019.” I didn’t ask my friend for a clarification as to what he meant by “the past two years.” We’re mid-April, 2014, so do we look at mid-April, 2012 to present day? Well, the table doesn’t really break it down that way — rather, it goes by calendar year. So, do we just go with 2012 and 2013 and compare them to 2011? If we do, we’ll see that outlays in 2011 were $3,603,059,000,000. (The numbers in the table are presented in millions of dollars.) (Aside: Holy HELL that’s a boatload of dollars!) By comparison, outlays in 2012 were $3,537,127,000,000. Yes. That’s a smaller number than in 2011. In 2013, outlays were $3,454,605,000,000 — an even smaller number. So, at first blush, I’ll concede that, by that measure — i.e., spending only and comparing calendar years 2012 and 2013 — “smaller government has been happening over the past two years.” In the interest of context, I’m going to include the numbers for the five years preceding and five years following (based on the government’s estimates):
- 2009 – $3,517,677,000,000
- 2010 – $3,457,079,000,000
- 2011 – $3,603,059,000,000
- 2012 – $3,537,127,000,000
- 2013 – $3,454,605,000,000
- 2014 – $3,650,526,000,000
- 2015 – $3,900,989,000,000
- 2016 – $4,099,078,000,000
- 2017 – $4,268,606,000,000
- 2018 – $4,443,145,000,000
- 2019 – $4,728,791,000,000
Couple things to note here: 1) Even if we can agree that outlays are down in 2012 and 2013, clearly, the White House is not predicting they will continue trending that way. Not by a long shot. 2) But BUSH! Yes, indeed. In the eight years of GWB’s presidency, outlays increased (steadily) from $1,862,846,000,000 in 2001 to $2,982,544,000,000 in 2008. (That’s an increase of 60%, for those who really like to go nitty-gritty. And it’s utterly unacceptable. Sorry, you won’t see me defending many — if any — of George Bush’s fiscal policies. That ain’t my bag, baby. That ginormous jump you see between 2008 and 2009? That’s called TARP and the Stimulus. Both of which yours truly railed about. Oh, hey, some may recall that the TEA Party movement was born long about the same time as TARP and Stimulus were enacted.) 3) I’m far from a math/econ whiz, but I do understand that there’s this thing called inflation, and, in order to make apples to apples comparisons, that may need to be taken into account. I believe Table 1.3 sets forth the numbers in current and constant dollars for anyone who’d like to delve that deep. As I peruse it, the trends appear to correlate, but I’m sure someone will be happy to point out to me where I’m wrong if I am. 4) There’s another way to look at these numbers and that is to assess outlays as a percentage of our GDP. Table 1.2 handily does that for us – In 2011, the percentage was 23.4%; in 2012, 22.0%; in 2013, 20.8% — certainly an arguable step in the right direction, though the predictions for 2014-2019 having it creeping back up the other way.
All of which is to say that if we’re looking purely at spending in the calendar years 2012 and 2013 as compared to 2011 as a measure of “smaller government happening,” okay, then yes. But, as I noted above, that followed a sharp increase, and downward isn’t the direction we’re trending. And, more importantly, I interpret “government” to encompass not only spending, but regulation, action, function and not purely federal, but at all levels. So, when I advocate for “limited government,” I’m contemplating all of those things. The ACA alone belies the notion of “smaller government happening” in the past two years. Then we have the multitude of other arenas in which government continues to inject itself into everything from land ownership to soft drink size. No. Not a fan. Step off.
But before I head off down that road, let’s take a look at the other premises my friend mentioned: 2) “Spending and the deficit are both way down.” Well, I’ve already addressed spending in the paragraphs above, but just to review, between 2011 and 2013, outlays decreased from $3,603,059,000,000 to $3,454,605,000,000. That’s a decrease of $148,454,000,000. No question, that’s a LOT of dollars. But it’s a decrease of only 4%. I’m not sure that qualifies as “WAY” down. Alright, well, what about the deficit? He didn’t include a time frame for that, so it makes sense to me to compare it over the same timeframes discussed above. From 2011 to 2013, the deficit decreased from $1,299,593,000,000 to $679,502,000,000. Now THAT’S something to write home about – a 47% decrease! Good. I like that. We’re still operating at a considerable deficit. (That’s $678 billion dollars.) We’re also carrying a gross debt of $17,152,000,000,000. (That’s $17 trillion dollars.) Is this really something for which we ought be patting ourselves on the back? I’m not cool with this. Are you?
Okay, third premise: 3) “There have been no tax increases of any kind in the past five years.” No. This is flatly incorrect. If we’re purely talking income tax rates, the top rate held steady at 35% from 2003-2012. (The infamous “Bush Tax Cuts.”) In 2013, that increased to 39.6%. Link. The corporate tax rate has held steady at 35%. But income tax isn’t the only form of tax. For example, the Individual Mandate “penalty” under the ACA was held by the United States Supreme Court to be a tax. Additionally, there is a new tax on investment income: “A new $123 billion tax on investment income, which took effect in January 2013, places a 3.8% surtax on investment income on households with more than $250,000 in annual income or $200,000 for individuals.” Link. And then (from the same link) there are the following:
- The Cadillac Tax
- The High Bills Tax
- The Health Savings Account Tax
- The Indoor Tanning Tax
- The High Risk Tax
- The Medicare Tax
That HSA tax is one which has already directly affected me. (Don’t even get me started on increased premiums and deductibles, and that elusive $2,500 of savings….) And I’ve neither the time nor patience to dissect the current status of state and local taxes, though I suspect my friend was referring purely to federal taxes.
Last premise: “Taxes are at a historic low.” Again, we have a clarification issue here. Does he mean rates? Does he mean receipts? And what does “historic” mean? All time? Lately? Generally not a fan of linking to Wiki, but about two-thirds of the way down this page, there’s a chart of historical income tax rates from 1913 to 2013. (Of course, before 1913, there wasn’t an income tax, so, by definition, we can’t be talking about an all-time historic low.) During that century, the top rate has varied from 7% to the current 39.6% — with stops in between as high as 94% (what the ever-livin hell?!) The first bracket rate was initially 1%, and is presently 10%, reaching a high point of 23% during WWII. So, unless we’re measuring “historic” as “within the past twenty years, or so,” then that doesn’t appear to be the case. Same goes for corporate tax rates. (As you might expect, receipts have fairly steadily increased over time — they were $2,775,103,000,000 in 2013. Even adjusted to constant dollars. (See first link provided.))
So, in large part, I must respectfully disagree with the premises raised by my friend. That said, what more DO I want? Where to begin?
Well, as I mentioned at the outset – I’d like to see limited government. What I mean by that is not simply “less spending.” Really, I mean less almost everything. I’m a BIG fan of the Constitution and of the role and function of our federal government as set forth therein. To that end, I’d like to see us scale back not only spending, but government involvement and oversight into what we say, with whom we associate, how we practice our faith (or non-faith), how we educate our children, whom we choose to marry, for whom we choose to work, how we choose to compensate our employees, whatever firearms we choose to own and use (or not), with whom we communicate via phone, e-mail, social media or other, what we drink, what we eat, what we smoke, what sort of health insurance we opt to purchase (or not), etc. I’m pretty libertarian on most things these days. I’m not an anarchist. I don’t advocate zero government. But limited. MUCH more limited than what we presently have.
Tax reform? Oh yes, I’d like some SERIOUS tax reform. I’d like to see us move to a consumption tax along the lines of the Fair Tax (rather than an income tax), or barring that, a flat tax. Simplify, streamline. Do away with tax policy as a political tool to be wielded by our elected representatives. Taxes are supposed to pay for NECESSARY governmental functions. Not to fund an ever-expanding and increasingly unaccountable slush fund, and not to beat this or that segment over the head or give this group some cushy deal.
Sounder fiscal policies? Well, they go hand-in-hand with limited government and tax reform, but to state what should be obvious: Quit spending money we don’t have! Quit setting up programs that perpetuate dependency rather than fostering independence. Quit subsidizing this industry or that interest group. Quit bailing out failed enterprises. Quit enacting policies that stifle growth. Recognize that growth is possible and preferred to simply redistributing from one group to another. Quit pitting fellow citizens against one another in order to shore up voting blocs. Quit enacting regulations and legislation that are so tangled and complex no one can figure out what the hell they even mean. Start advocating for your country rather than your political party. (Okay, those last few weren’t purely fiscal policy-related, but I was on a roll.)
Most of all, what I want is to be able to express the above views, discuss them with my fellow citizens — be they right-leaning, left-leaning or non-leaning — and identify with a political movement which espouses them without being branded as a racist, a fascist, an anti-Semite, ignorant, rabid or extreme.