Fiscally Conservative

 

Remember when Republicans were fiscally conservative and Democrats had a “tax and spend” reputation?  Remember when Republicans were the educated elitists we needed to keep this country on track and Democrats where the Robin Hoods who wanted to tax the rich and piss money away on the poor?

 

Sigh… when was that again? 

 

It boggles my mind that the United States went from the biggest budget surpluses in history under Clinton (a Democrat) to the biggest deficits in history under George W. Bush.  I mean, I guess I see how it happened – recklessly excessive tax cuts and going to war at the same time is kind of a clue.  But I don’t understand why it happened.

 

Republicans were supposed to be the fiscally conservative ones, not the ones pissing away every last dime and then some. 

 

I accept the fact that our government, unlike people, can somehow be “financially sound” while running at a deficit.  I get that having a reasonably sized national debt isn’t necessarily a bad thing.  I’ll even concede that the size of the national debt shouldn’t be viewed strictly in absolute dollars.  Of course it’s bigger… it’s called inflation.  Viewing the total in terms of something such as Gross Domestic Product is one possible analytical tool.  But at some point a simple sniff test should get someone scratching their head and wondering if we went too far.

 

At nearly $10 trillion (and growing) we now have a national debt that exceeds $30,000 for every man, woman and child in the country.  Average household size is about 2.5 persons per household, so about $75,000 of debt per household.  While some of you may not believe it, median annual household income in the United States is less than $50,000 per year. 

 

So – national debt in excess of $75,000 per household and median annual household income less than $50,000.  I hope I’m not the only one scratching my head and thinking that something doesn’t smell right.  It doesn’t seem fiscally conservative to me. 

 

And the debt is growing faster than household income.  That can’t be good.  That’s like taking out a 100% loan-to-value mortgage on your house and not even covering your interest payments each month.  (I’ll save my Option-ARM mortgage rant for another post.)

 

I find it interesting that Clinton didn’t piss away all our money on the poor and that by the time he left office we actually had budget surpluses.  I’ll call that somewhat fiscally responsible.  GW Bush robbed from future generations and pissed away huge amounts of money on… well a lot of things.  I’ll call that fiscally irresponsible.

 

Now some of you panicky and defensive Republicans are thinking that I’m giving Clinton credit for generating budget surpluses.  No.  I’m giving him some credit for not pissing them all away.  Clearly we need to back up a bit farther in history.

 

Back in the early 1980’s, Ronald Reagan was able to get the biggest tax cuts in history passed.  The prime-the-pump economists and many in the business community rejoiced.  However, it didn’t take long before Ron realized that maybe they’d overshot the mark a bit.  Small tax increases were sprinkled through the rest of his presidency.  George Bush, Sr. even got caught up in the reality that they’d overcut years before and got denied a second term for failing to keep his “read my lips” campaign promise. 

 

Back then I was a Republican.  I was and still am an accountant.  As far as I’m concerned, the tax increases were the right thing to do for the good of the country.  It was fiscally conservative and I felt it to be presidential.  George Sr. put the financial health of the country ahead of his desire for a second term and he got booted.  Clinton served as president as the effects of those good decisions kicked in. 

 

So let’s summarize:

• Reagan – Huge tax cuts, but then realized he overshot the mark and took some back with small tax increases here and there.  (We weren’t even at war.)  Fiscally conservative.
• George HW Bush – A little bit more increase because we’d overcut.  Fiscally conservative AND detrimental to his career path.
• Clinton – Inherits a fiscal policy on decent footing and proceeds to NOT piss it all away.  Fairly conservative – fiscally.
• George W. Bush – Large tax cuts, mostly doled out to the rich (perhaps deservedly), but then goes to war, pisses away a lot of money, generates the largest budget deficits in history which are contributing to a national debt that is approaching 14 figures and STILL hasn’t realized that his tax cuts probably overshot the mark.  (Just a pinch, a smidgeon, a wee bit.)  Fiscally reckless and obnoxiously irresponsible.  In my humble opinion.

 

So where do we go from here? 

 

Both of the current candidates acknowledge that budget cuts need to be made.  Each have their priorities about where and how much but, in general, cutting government spending is clearly needed and a step in the right direction.  It’s not enough.

 

I’m frustrated by the fact that so many people are listening to sound bites and right wing exaggerations that suggest that Obama is going to tax us all to death.  Completely untrue.  If you read about his tax proposals and the independent studies of the proposals for both candidates you will see that he is only planning to raise taxes on roughly the top 2% of taxpayers.  Oh sure, there will be the anomalies because tax laws have gotten egregiously complicated – but mostly his tax increases only effect people with incomes over $250,000.  Obama has no plan to reverse all of the Bush tax cuts.  He just wants to get back a portion of what George W. doled out to his rich buds.  Just a PORTION.  We’ll all still be better off, tax wise, than under Clinton or George Sr.  How is that bad?

 

McCain, on the other hand, still insists that he wants to make the Bush tax cuts permanent.  Not quite sure how he is justifying the fact that George W. has the Estate Tax repealed as of 2010 and his plan has Estate Tax provisions, albeit with a higher exemption amount and a lower tax rate.  (Of course not THAT Bush tax cut… no one thinks that should go away.) 

 

That nuance aside, I can’t make the math work.  I just don’t see any way to cut the budget enough to prevent the need to increase some tax revenues.  I don’t mean to imply that Obama’s plan is awesome or that I agree with all of his budget cuts and his tax increases.  I’m just looking for the lesser of two evils.  I’m looking for a taste of fiscal responsibility.

 

One last thought about McCain.  Maybe he’s still struggling with mathematics, just like his days at the Naval Academy.  Then again, maybe he’s smarter than that.  Maybe he knows that we need to raise taxes and realizes that there’s no way he would get his tax plan through a democratic congress regardless of how much he reaches across or around the isle.  Maybe he’s borrowing a “read my lips” from George Sr. fully knowing that he has no intention of keeping that campaign promise because he has no intention of seeking a second term.

 

Maybe he’s telling us a lie to get the job he wants.  Kinda like when George W. lied about WMD to get the war he wanted.  After all, it’s for our own good?