For those who haven’t been following the melodrama unfolding in the Capitol, the next highly anticipated show takes place this week. Proposed in the Budget Control Act of 2011 and then delayed by the American Taxpayer Relief Act of 2012, the automatic federal budget cuts, or “sequester,” take effect on the first of March, trimming defensive and non-defensive spending by a total of $85 billion. The lead roles of this tragedy: the party seeking tax increases on the villainous “wealthy,” and the party seeking greater belt-tightening due to severe, untreated bloating over the past decade. Where are they right now in reaching a deal to finally close the curtain on this horrendous performance of political representation and negotiation? Well that’s anyone’s guess.
With much of the banter in news and conversation centered on who deserves the blame for this debauchery, the nature of this issue has become so twisted that the very politicians tasked with solving this fiscal crisis want no further part in the process. Put aside the name-calling, the invocations of Bill Clinton and Ronald Reagan, and all other political fanfare, and what we have at the most basic level is a choice: Should the American people be forced to sacrifice on the behalf of the government’s recovery, or should the government that has increased spending under both Republican and Democrat leadership make changes on the behalf of the people who empower it?
To be clear, someone will have to pay for our outrageous public debt, otherwise our sovereign nation will cease to exist as we know it. If one side has its way, the “wealthy” will be forced to bear the burden of shrinking the deficit; if the other side has its way, no one will be forced to bear an unfair share of the burden, but support of welfare programs will be significantly reduced. Which is worse? Well let’s consider the first approach. Taxes go up for the nation’s top earners (in fact, income and dividend taxes already have), and all the unemployed and minimum-wage earners feel pretty good that the greedy bastards are finally atoning for their glut. But the government finds out that even at 100 percent taxation rates, the wealthy cannot pay for even a fraction of spending. Who’s next in line for the rate hike? Everyone else, eventually. Suppose you are a farmer who owns an apple orchard. You can choose to pick and sell all the apples now, or you can pick and sell only as many apples as you know are necessary to keep up with demand, letting the rest of the apples fall to the ground to create an even larger orchard for next year’s harvest. Now replace apples with national income (economic production), and then reconsider which is better for future growth.
Consider the opposite approach: Welfare programs, which make up more than half of the current budget, are reduced to sustainable levels, and any future increase in taxes will be the same for all earners. Believe it or not, the greatest consumer and producer welfare comes from natural market interactions, not from government interventions aimed at redistributing welfare so that everyone is equally happy. We don’t need more government welfare, because with a lighter tax burden, we can claw and scrap and earn our way to whatever welfare level we desire like our ancestors before us, who had no such luxury. We’re already forcing employers to provide more employees with healthcare, so why does the government still need to control the welfare system? Instead of forcing everyone to pay into these programs, why doesn’t the government mandate that insured citizens pay into a fund for his or her parents, making only direct relatives responsible instead of everyone across the board? Only the uninsured, incapable of providing for themselves because of illness, age or disability would now need to draw from the government welfare pool, and this draw could be funded by a smaller tax rate on employed workers.
The bottom line is that regardless of whom you voted for last November, whom you voted for before that and whom you plan on voting for in the future, the choice to be made over who should sacrifice must be made now. Politicians do not care for our welfare; both sides just use those programs as bartering chips for their own benefit. Whatever solution Congress and the president come up with, if any, will undoubtedly leave a sizeable portion of the voting population dismayed, so why are we bothering to accept their decision at all? Why not throw out the broken game of trading spending cuts for tax hikes, and come up with entirely reimagined, individualized welfare policies that will allow for lower taxes for everyone—there are more efficient solutions beyond the current welfare system. We the people can come to a new agreement without deferring to politicians; we the people can finally say with authority “no more” to reckless deficits; and we the people can choose to accept individual responsibility for our welfare instead of the current inefficient, collective system, removing the government from the once-sacred duty of supporting our relatives and compatriots, and all the while increasing our economic production through lifting the binds of heavy taxation. Let’s finally solve the fiscal crisis by thinking beyond the old, unsustainable model of spending.
William Picoli is a Pratt freshman.