Cutting is the key - Coeur d'Alene Press: Editorial

Cutting is the key

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Posted: Friday, August 10, 2012 12:00 am

Democrats seem to think raising taxes is a vital ingredient in the recipe for righting the nation's unbalanced budget.

Republicans, on the other hand, appear to be armed only with scalpels and cold stares.

So who's right? Or, as common sense suggests, isn't a little bit of both important? Maybe a lot of both if a $16 trillion hole is going to be filled in?

Not according to U.S. Rep. Raul Labrador. Before you shoosh the freshman from Idaho as a tea party propagandist or ultraconservative curmudgeon, hear him out.

In a meeting this week with The Press editorial board and during two town halls in North Idaho, Labrador waved off higher-tax acclamation like it was a stingerless bee.

"The problem in the United States is spending," he told the editorial board. "The only problem we have is spending."

Labrador cites a graphic published recently in the Wall Street Journal that shows how the 34 nations comprising the Organization for Economic Cooperation and Development have increased their government spending as a percentage of Gross Domestic Product. The graphic then shows that in every single case, the GDP of those countries subsequently fell. These aren't Third World nations, either. The U.S., Japan, Germany, France and the United Kingdom are among the 34.

The idea that government must charge citizens more so it can spend more, ostensibly with the goal of somehow increasing production and balancing the budget, does not pass the common sense litmus test. And there's always the question of return on investment. If we increase taxes today for a better tomorrow, when will the budget actually improve? Next year? In 10 years? We need look no further than the bounds of human nature to know that when given a chance to put off financial pain as long as possible - charge like crazy now and worry about paying for it later - most people will. That goes double for those sitting in the U.S. Congress.

We aren't convinced that Labrador is completely right when he says the only problem is spending. For instance, until the U.S. tax code is dramatically simplified with hundreds or thousands of loopholes hammered out, it's hard to say the federal revenue stream is what it should be. But we agree with the congressman that to cut the nation's overwhelming debt, dramatic spending cuts are absolutely essential.

We also believe runaway spending at the federal level sets the tone at the local level. Look at how every taxing entity within Kootenai County so far is approaching its budget for the next fiscal year. Of those whose budget hearings have been reported in the paper, not one is even considering overall cuts to payroll. Not one is determined to adopt a zero percent property tax increase, let alone cut it.

That's not in step with the real world, where businesses and families have made cutting a way of life, and it strongly suggests that Uncle Sam is setting a bad example for smaller governments everywhere.

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  • Gary Ingram posted at 10:41 am on Fri, Aug 10, 2012.

    Gary Ingram Posts: 90

    Good opinion as far as it went. But, a missed opportunity to suggest that the cities, county
    and other local units of government stop going after federal grants. Every time they do, they admit ownership of the fed=eral spending spree and ADD

  • Chinkman9 posted at 10:16 am on Fri, Aug 10, 2012.

    Chinkman9 Posts: 49

    Dear Mike and Jim,

    You are displaying very shallow thinking on not that deep a subject.

    You are making the classical mistake and assuming a certain set of givens which need not be the assumed set of givens.

    You assume that the only way forward is based upon the assumption that all money is debt. This assumption also includes the exponential curve built into it, the same exponential curve which Europe is facing as a whole, and which we will shortly face as well.

    If, on the other hand, you challenge that assumption, you see that spending is not the problem, nor are taxes. The problem is the vigourish which must be paid to sustain the debt.

    When money is created as debt, there is never enough money created to pay the vig. The only solution one is left with is to "borrow" more money to pay the current vig which only increases the amount of vigourish one must pay later. It's like using your master card to pay off your visa while you still have the same amount of money to work with. It is unsustainable.

    Money doesn't have to be debt. As long as that assumption is held to be inviable, raising taxes or cutting spending are indeed the only solutions which present themselves. Challenge that assumption, and a whole slew of possibilities open themselves up for consideration.

    But challenging assumptions precludes one from becoming elected ... or published. So we are left with shallow thinkers on deep subjects. Raul is one of them, Senator. C is another. But then, they are elected ... and you publish.

    Thank God for the Internet.

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