Death and taxes

I have to confess that given my vow of poverty I tend to think quite a bit more about death than taxes.  And, for similar reasons, I don’t claim to be an expert on any and every political issue, even though here in the blogosphere that’s not always a bar to offering an opinion.

But I’ve been watching the progress of the tax compromise moving its way through Congress this week and there’s something about it that reminds me of the ocean… maybe it’s that fishy smell…

Perhaps my calculator is broken; perhaps my taste for irony is just that much stronger than my taste for Keynesian economics; perhaps I spent too much time around a grandfather who paid for his house in cash; but something in this “compromise” doesn’t make sense to me.  Something, in fact, seems wrong, and I’m beginning to suspect that what is wrong has a moral tinge to it, instead of being an accounting oops or a technical legislative flaw.

Let me back up.  The U.S. economy is very slowly pulling out of a very serious downturn.  A large part of this downturn is due to people and banks spending wildly beyond their means and racking up massive debts they could never have hoped to pay for.  The solution to this problem is for the United States government to spend wildly beyond its means, racking up debts so large they involve numbers I can’t even pronounce.

The current President of the United States campaigned criticizing the fiscal recklessness of the previous President of the United States, whose solution to every domestic problem was simply to cut taxes for everyone, including dead people (the estate tax).  Compared to the fiscal rectitude of the Clinton Administration, the Bush economic policies seemed rather irresponsible to say the least.  And for the Clinton Administration to outdo you in rectitude of any stripe really takes some doing.

But the current President of the United States has been criticized himself for the same sort of fiscal irresponsibility.  In fact, his Republican opponents did rather well for themselves in the last election by pointing out, among other things, the un-sustainability of running a budget deficit of around 10% of GDP.  We need to restrain our spending, they said, or we will face even more serious economic problems in the future.  We need a new era of responsibility, of sobriety.

In light of the past election results and the rather mind-boggling budget figures, we might expect both Republicans and Democrats to agree that the budget deficit is a serious problem that needs addressing.  We might even expect, given the rhetoric of the past two campaigns, that both sides would finally admit that the way to solve national problems is not to pass them off to future generations.  And the solution Republicans and Democrats arrived at was to… cut taxes… while increasing spending… including several billion dollars in ethanol subsidies.

I don’t know why my calculator isn’t working.  Maybe I’m holding it upside down.  I suppose it’s really all the Republicans’ fault.  Or maybe the Democrats’ fault.   Or maybe I’m worried about nothing.  What’s another $900 billion anyway?

But maybe something else is wrong here, too, maybe something more profound than the artillery barrages of partisan warfare suggest.  In Light of the World, Peter Seewald asked Pope Benedict if there wasn’t a moral problem involved in the inconceivable debts being racked up by wealthy Western nations, and he replied:

Naturally, because we are living at the expense of future generations.  In this respect it is plain that we are living in untruth.  We live on the basis of appearances, and the huge debts are meanwhile treated as something that we are simply entitled to.

In classes over the past few semesters on Catholic social teaching, I’ve noticed how in Catholic thought talk of rights is usually paired with talk of duties.  This pairing, it seems to me, rarely occurs in contemporary political discourse, with results like the tax “compromise” making its way through Congress right now, which is about as much of a compromise as using one credit card to pay off another credit card’s bills.

I suspect that what is really at the root of our surreal economic situation is the tendency to defend one’s own rights without considering one’s duties, coupled with the replacement of a sense of the common good with the competing demands of interest groups.

The absence of a notion of “common good,” a goal toward which we are all striving and for which we all bear responsibility, is evidenced by the disappearance of a notion of shared sacrifice from our political rhetoric.  During World War II, citizens were asked to buy war bonds and collect rubber and metal.  After September 11, we were told to go out and buy consumer goods in order to keep the economy chugging along.  Is it a good thing for people to think that buying oneself a new flat screen TV is the ultimate act of patriotism?

“Ask not what your country can do for you…” has been replaced with “Show me the money!”

For all his eloquence, the vague hope of President Obama’s campaign often had in it the whiff of a blank check, though I’m not blaming him in particular.  The Republicans who gave him a shellacking in the midterms are not even in office yet, and they’re already adding to the national debt.

So why this little expectoration of political cynicism just in time for the holiday shopping rush?  I think we need to recognize how deep many of our political problems run in the United States, that our social problems in some ways reflect both the strengths and the flaws of our national character.  I’m not expecting the readers of Whosoever Desires to solve the nation’s economic blues, but perhaps we can order our own lives in such a way that rights correspond to responsibilities, that we think first of our duties and then of our demands, that we live less “on the basis of appearances” and more within our means.

Maybe it will catch on.  Maybe not.  But maybe something even greater is at stake.

AL, SJ

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4 Responses to Death and taxes

  1. 3kjc says:

    well said. thank you

  2. Qualis Rex says:

    Very thoughtful and bi-partisan. Love it!

    I have often said that the solution to the war in Afghanistan is to build several television and cable-satelite facilities across the country, staff them with local workers, sell the products for $2.00 each so every mud-built house can have one, then air-drop Wii/playstations from the air. Within 10 years the population would become so docile and hooked on the possibilities of buying things that they wouldn’t dream of spending their energy on anything else but acquiring the latest fad advertised.

    Welcome to the US. I think the “tea-party” movement is actually a blip in our modern culture in that most Americans under the age of 65 are so docile, complacent and unaccustomed to sacrifice. And those old enough to remember what sacrifice was like are basically looking after themselves, making sure no one lays a hand on their golden calf; social security and medicare. I’m really not as pessimistic as I sound there. It’s just that I really think this sense of entitlement is going to create a very harsh wakeup call very soon.

  3. Gregory Wenker says:

    I disagree with this statement: “The U.S. economy is very slowly pulling out of a very serious downturn.” This statement is nothing but happy talk. The economy is not finished tanking. Our economy is no where close to where it is going, the pain has just been papered over, and the delay will just intensify the pain when it finally arrives. The top 500 companies call all the economic shots these days, and the result is an economy that is an unstable upside down pyramid with those fortune 500 corporations at the top with the most wealth and influence, Those same corporations get the government they want too, a government that seeks to control every aspect of our lives and this formula is one of complete failure in the long run, because when you get all the laws you wish for, in the end you will foul your own nest so much that not even the fortune 500 corporations will want to reside in the stink they have made for themselves. We are in a world of hurt, and most do not realize how bad it is, especially those folks calling the shots.

  4. Qualis, There will be a huge wake up and it will not be pretty. Some of us may be broke & dismayed, but we are not blind to the thievery going on in the old USA. Every dollar I spend is a vote. It is a vote for the type of world I want to live in. That is why I research the hell out of every purchase and keep spending as local as possible. I listen to the rhetoric, then I look under the ole lid to see what the actions of the players are before I spend one cent.

    Here, this article will point out the thievery going on and the debt that will probably never be repaid…………..

    Number of the day – $14,025,215,218,708.52

    by steveegg @ 0:34 on January 4, 2011.
    Filed under Economy Held Hostage, Politics – National.

    That number is the total amount of federal government debt outstanding as of 12/31/2010. Of that, $9,390,476,088,043.35 (plus about $10 million, or if you prefer, $0.00001 trillion in what is termed “guaranteed debt of government agencies” that is somehow not part of the public debt but is part of the “debt subject to limit”), and $4,585,749,068,174.55 in “intragovernmental debt” (that would be, for the most part, the various “Trust Funds”). To put it in a bit of text perspective, the Gross Domestic Product was $14.119 trillion in 2009, and if projections can be believed, will come in at just over $14.7 trillion in 2010. That makes the public debt just under 64% of GDP and total debt over 95% of GDP.
    That dry text doesn’t, however, do it justice. I decided to go through 40 years’s worth (or, give or take a few shakes of a lamb’s tail, about the length of time I’ve been walking the Earth) of calendar-year-ending Monthly Statements of the Public Debt, grab the GDP for each of those years (estimated for 2010), and whip up a “little” frightening chart for you:

    Click for the full-size chart

    The short version of that chart:
    Between 1970 and 1981, total debt remained right around the 37% of GDP, and publicly-held/guaranteed debt remained right around 27% of GDP.

    Publicly-held debt plateaued right about 40% of GDP between 1986 and 1989, but because of changes to Social Security, the increasing intragovernmental debt, which crossed the 10% of GDP threshhold in 1988, caused total debt to continue to increase at an unchanged rate.

    Sticking with intragovernmental debt briefly, it steadily increased to a high of nearly 32% of GDP in 2009 before multiple “trust funds” began running deficits, both primary (cash) and gross, helping to increase the publicly-held debt as said “trust funds” get monetized through borrowing while there is exactly $0.00 set aside or otherwise available for the purpose.

    Back to the publicly-held debt, it again plateaued at 50% of GDP between 1992 and 1996, with total debt plateauing around 68% of GDP, before “unified budget surpluses” and a gangbusters economy allowed them to go down as a function of GDP.

    By 2000, total debt dropped to about 57% of GDP, with publicly-held debt hitting its post-1981 low of 33% of GDP in 2001. While publicly-held debt remained about 37% of GDP through 2007, the increasing reliance on “trust fund” surpluses caused total debt to increase to about 66% of GDP in 2007.

    The muzzle came off the debt monster in 2008, with publicly-held debt increasing to about 64% of GDP and total debt increasing to about 95% of GDP by the end of 2010.

    Several of those in my bloated feed reader, like Dad29, Zip, Allahpundit Stephan Tawney, and ultimately NRO’s Corner crew, found yet another utterance from Barack Obama that has reached its expiration date – one from a 2006 debate in which he opposed raising the debt limit as Senator, an act which his economic advisor now calls “insanity”:

    “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here. Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”

    The publicly-held debt was 37.3% of GDP at the end of 2005 and 36.6% of GDP at the end of 2006, while total debt was 64.6% of GDP at the end of 2006 and 64.4% of GDP at the end of 2006.

    Revisions/extensions (7:02 am 1/4/2011) – The Emperor links, and provides a further link to Aaron Worthing at Patterico’s Pontifications and the full Obama remarks that were walked back.

    The relevant extension:
    Over the past 5 years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is “trillion” with a “T.” That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers. And over the next 5 years, between now and 2011, the President’s budget will increase the debt by almost another $3.5 trillion.

    For those who can’t do the math, Obama was complaining about a potential $12.1 trillion total debt by the end of 2011. Well, we’re at just over $14 trillion before we got to the beginning of Calendar Year 2011 (or if you prefer, a quarter of the way through Fiscal Year 2011).

    The kicker – had Pelosi taken up Obama’s proposed budget, the total debt would be $15.1 trillion at the end of FY2011.

    R&E part 2 (7:45 am 1/4/2011) – Dan Spencer points out just how much the debt has gone up under Nancy Pelosi’s now-expired Speakership – $44,662 for every man, woman and child who make up the 310,574,015 U.S. populace.

    A minor point of order – the first 9 months of 2008 were largely budgeted by the prior Congress, while the last 3 were budgeted solely by Pelosi and Senate Democrat leader Harry Reid. That explains why the deficit, at least as a percentage of GDP, didn’t increase all that much in 2007.

    I might redo the chart to reflect fiscal years instead of calendar ones, but it is a bear to get the numbers.

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