Consider this. As of this year, every other household in America will have at least one person in it who is receiving an entitlement benefit, according to the Census Bureau.
As of this year, fewer than half of the Americans who have earned income will pay income taxes on that income.
These two facts together explain in large part why the nation is headed toward bankruptcy.
The political implications of these facts are considerable. The pressure to maintain and even expand these two trends is compounded by the interest groups who thrive on promoting the entitlement program that drive the first and the lobbying groups that live off the consequences of the second.
The AARP comes to mind as one of the most irresponsible panderers to the entitlement market place. Today, for example, it has ads running that say, in essence: Do not even think about adjusting any benefits. Rather, all needed reform can be accomplished through cutting waste.
This claim is political fraud. There is no conceivable way to make major programs such as Social Security, Medicare and Medicaid fiscally sustainable without adjusting their long-term structures. AARP’s position is not defensible, unless it adds the corollary that it wishes to destroy the nation and our children’s economic future.
Also in the area of political fraud, regarding the second fact, we find groups like Americans for Tax Reform. This group needs to be given a scarlet “A” for disingenuous and deceptive practices in pursuit of contributions from unsuspecting but sincere Americans.
It takes the position that the fiscal problems of our country can be cured with no revenue increases of any type at any time. Its position is that a tax code that is dysfunctional, counterproductive, internationally uncompetitive and incomprehensible is sacrosanct.
This position is taken in the name of reducing taxes when in fact it is little more than a stalking horse for the protection of tax breaks and special interest deductions inserted into the code over the years through effective lobbying by the narrow groups who benefit from these tax benefits. The effect of this is to retard the economy and the government with a code that is a burden to economic growth and reasonable and efficient revenue production.
If the nation is to reset its future and return to a solvent and prosperous course, it will need to address these two facts. We will need to overcome the shouters with their selfish agendas and move toward an approach that acknowledges we are all in this boat together. One generation cannot be allowed to game the next generations and groups of people who have their tax deduction piece cannot be allowed to close out effective tax reform.
The other important fact is this: There is no easy way out of our mess. The politics of taking on the driving forces that have led us to this point of fiscal insolvency are extremely difficult to resolve in a democracy. After all, people are naturally inclined to vote for their personal interests rather than some amorphous concept built on the better good of the nation.
It is an especially difficult sell for those seeking election in a world where the loudest shouters in the political marketplace are those who see themselves as losing either a benefit or a tax break.
As a result, both parties promise much more than can be supported by the revenues of the present, debt is used to cover the excess and this creates the massive instability in our nation’s finances, which are being accelerated and radically compounded by the retirement of the baby boom generation.
We simply cannot function long in a nation where half the households are receiving an entitlement benefit and fewer than half the people with earned income pay taxes — unless of course we wish to adopt a European-model social welfare state where growth and prosperity are stifled and the standard of living of most is reduced.
The time has come to face up to these facts and recapture the energy of our culture as a place where we expect and can accomplish a better future and strong, vibrant economy.
Ironically, we have in place the vehicle to accomplish this in the form of the supercommittee, which has not only the power and portfolio to act to correct our nation’s fiscal problems, but a path to do that by jumping over the debilitating influence of the irresponsible interest groups by forcing simple majority votes without amendment.
Let’s hope the members of Congress, the president and supercommittee see this unique opportunity as the once-in-a-political-lifetime chance that it is and act for the better good of the nation.
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