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As the year
draws to an end, America faces yet another Congressionally-manufactured
crisis which will likely end in yet another 11th
hour compromise, resulting in more government growth touted as
“saving” the economy. While cutting taxes is always a good idea,
setting up a ticking time bomb with a sunset provision, as the Bush tax cuts
did, is terrible policy. Congress should have just cut taxes. But instead, we
have a crisis that is sure not to go to waste.
The hysteria
surrounding the January 1 deadline for the Budget Control Act’s
spending cuts and expiration of the Bush tax cuts seems all too familiar.
Even the language is predictably hysterical: if government reduces planned
spending increases by even a tiny amount, the economy will go over a
“fiscal cliff.” This is nonsense.
This rhetoric
is based on the belief that government spending sustains the economy, when in
fact the opposite is true. Every dollar the government spends is a dollar
taken from consumers, businessmen, or investors. Reducing spending can only
help the economy by putting money back in the hands of ordinary Americans.
Politicians who claim to support the free market and the lower and
middle-class should take this to heart.
The reality
is, however, that neither Republicans nor Democrats are serious about cutting
spending. Even though U.S. military spending is exponentially larger than any
other country and is notorious for its inefficiency and cost overruns,
Republicans cannot seem to stomach even one penny of cuts to the
Pentagon’s budget. This is unfortunate because this is the easiest,
most obvious place to start getting spending under control. The military-industrial
complex and unconstitutional overseas military interventions should be the
first place we look for budget cuts.
Similarly,
Democrats are digging in their heels on not cutting any welfare or
entitlement spending and instead propose to fix the deficit by raising taxes
on the rich, even though the U.S. Government already has a progressive tax
code and the rich already pay more than their fair share. Furthermore, these
higher taxes would fall on small business owners, investors, and
entrepreneurs—in other words, the source of economic growth and new
jobs!
The truth is
that there is no excuse for government spending being as high as it is, nor for taxes being as high as they are. Even the God of
the Old Testament only asked for 10% as a tithe and offering, and Americans
revolted against the King of England for taxes that amounted to less than
five percent. Yet so many people today complain about “loopholes”
for the rich that lower their actual tax rate to “only” 13% in
some instances. Even that is a criminal amount to pay for a wasteful,
abusive, unconstitutional government.
We are indeed
headed to a fiscal cliff and have been long before this latest hysteria
cropped up. But it is not cuts to spending or reduced government
“revenue” that will send us over the cliff,
it is continued government spending that will. Until the federal
government limits itself to its Constitutionally-mandated role, spending and
taxation will remain out of control.
Look for a
“bipartisan” compromise in late December, with Republicans giving
in to tax increases and settling for phony spending cuts that actually grow
government, and Democrats caving on defense cuts in exchange for tax
increases. This is how the government has always grown: both sides will
sacrifice their pro-liberty, small government stances in certain areas in
order to grow the government where they prefer.
Liberty
always loses in the 11th hour.
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