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Conservatives and liberals are kindred spirits as far as government spending is concerned. First, let's make sure we understand what government spending is. Since government has no resources of its own, and since there's no Tooth Fairy handing Congress the funds for the programs it enacts, we are forced to recognize that government spending is no less than the confiscation of one person's property to give it to another to whom it does not belong – in effect, legalized theft. – Walter Williams
The money taxed and spent by the politicians comes from the labor and ingenuity of millions of working persons. Politicians spend other peoples’ money.The grand bargain so many in Washington yearn for—tax increases coupled with spending cuts—is a fool's errand.
Erskine Bowles and Alan Simpson want to raise taxes by 2.5% of GDP to 21% of GDP. Alice Rivlin wants an additional 6.5% national sales tax. All are members of the National Commission on Fiscal Responsibility and Reform and recommend higher taxes coupled with spending cuts to reduce the debt. Beware, all of these DC elites were involved in the politics that created the debt.
In the Wall Street Journal, Stephen Moore and Richard Vedder substantiate that the additional taxes will increase spending and the debt. Moore, of the WSJ, and Vedder, an economics professor, analyzed the correlation of past tax increases to promised cuts and found:
But no matter how we configured the data and no matter what variables we examine, higher tax collections never resulted in less spending.
In a traditional DC ploy, Bowles prepared the public to accept a tax increase by claiming there will be $3 of spending cuts for every $1 tax increase. The Washington crowd knows emphasizing spending cuts creates an impression of responsibility. Also, the DC elites always seek facile political solutions. Everyone knows government spending must be reduced. The DC power players know it will be easier to obtain Congressional votes with tax increases, which will protect key constituencies from cuts. Think Social Security, Medicare, Medicaid and public employee unions.
Without a doubt government debt is a critical problem for the United States, most states and most democracies of the world. Correctly, most Americans sense government spending must be reduced.
Fortunately, the DC elite no longer monopolize the information pertaining to public policy. In the past, politicians passed legislation and then controlled the information fed to the public. Multimedia, in the age of instant communication, informs the voters, organizes citizen coalitions, and enhances participation in making public policy
The informed/concerned citizen teamed with reform politicians dedicated to our constitutionally limited government is the countervailing power to the customary DC solutions – more taxes. At least 55 members of Congress and 12 Senators signed the Contract From America calling for a balanced budget and no new tax increases. Teamed with hundreds of thousands of voters, this is the force to reduce spending without tax increases.
Moore and Vedder stated the benefits of reduced spending:
The only era in modern times that the budget has been in balance was in the late 1990s, when Republicans were in control of Congress. Taxes were not raised, and the capital gains tax rate was cut in 1997. The growth rate of federal spending was dramatically reduced from 1995-99, and the economy roared.