Robert Samuelson: Americans and Congress Assisted Fiscal Suicide

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No exit

The always perspicacious and frequently depressing Washington Post economics columnist Robert Samuelson has a particularly downbeat column today. In the print edition the title is "Suicidal Politics," while online it's "Government on the Brink." Just a few highlights (lowlights?) below:

By suicidal, I mean that government has promised more than it can realistically deliver and, as a result, repeatedly disappoints by providing less than people expect or jeopardizing what they already have. But government can't easily correct its excesses, because Americans depend on it for so much that any effort to change the status arouses a firestorm of opposition that virtually ensures defeat. Government's very expansion has brought it into disrepute, paralyzed politics and impeded it from acting in the national interest.

Few Americans realize the extent of their dependency. The Census Bureau reports that in 2009 almost half (46.2 percent) of the 300 million Americans received at least one federal benefit: 46.5 million, Social Security; 42.6 million, Medicare; 42.4 million, Medicaid; 36.1 million, food stamps; 3.2 million, veterans' benefits; 12.4 million, housing subsidies. The census list doesn't include tax breaks. Counting those, perhaps three-quarters or more of Americans receive some sizable government benefit. For example, about 22 percent of taxpayers benefit from the home mortgage interest deduction and 43 percent from the preferential treatment of employer-provided health insurance, says the nonpartisan Tax Policy Center….

Polls by the National Opinion Research Center at the University of Chicago consistently show Americans want more spending for education (74 percent), health care (60 percent), Social Security (57 percent) and, indeed, almost everything. By the same polls, between half and two-thirds of Americans regularly feel their taxes are too high; in 2010, a paltry 2 percent thought them too low. Big budget deficits follow logically; but of course, most Americans want those trimmed, too.

The trouble is that, despite superficial support for "deficit reduction" or "tax reform," few Americans would surrender their own benefits, subsidies and tax breaks — a precondition for success.

Samuelson concludes:

Government is suicidal because it breeds expectations that cannot be met. All the partisan skirmishing over who gets credit for averting a shutdown misses the larger issue: whether we can restore government as an instrument of progress or whether it remains — as it is now — a threat.

It appears that acute 19th century political observer Alexis de Tocqueville's prescient warning that unfettered democracy would lead to this sorry state is coming all too true:

I think, then, that the species of oppression by which democratic nations are menaced is unlike anything that ever before existed in the world …

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?

However, Tocqueville missed one point–the immense tutelary power would become bankrupt.

Perhaps there is a way to avoid doom. My colleagues at Reason have been doing excellent work in analyzing the manifold problems posed by our current fiscal mess. For just one example, see "The 19 Percent Solution: How to balance the budget without increasing taxes," by Nick Gillespie and Veronique de Rugy.

The whole Samuelson column well worth reading.