More taxes. More spending. No surprises.

The Photo: Associated Press

WASHINGTON, DC, January 2, 2013 ― When Congress engineered the fiscal cliff a year and a half ago in response to its persistant over-spending, the idea was to tie an increase in the debt limit to future budgetary responsibility. Immediate responsibility was out of the question as the campaign season was ramping up.

With the elections finally over, we finally turned our attention to the fiscal cliff. And again, irresponsibility won.

President Obama continues to repeat the convoluted half-truth that the middle class won’t see its tax rates increase, without mentioning that their taxes will rise. His use of language is Clintonesque.

“Taxes on the wealthiest 2 percent” will go up, though income taxes won’t rise on the wealthiest, but only on high-earners. The truly wealthy aren’t affected by income tax hikes. The wealthy will be hit with higher estate taxes when their property, already taxed at every stage of its accumulation, passes to their heirs, but the truly wealthy aren’t affected by this, either: They have trusts to avoid such looting.

Government spending will continue to rise. The very minor cuts that were negotiated will come from baseline budgets, which means that they will represent cuts in spending growth, not actual spending cuts. Algae farms, export subsidies, movie-maker subsidies, rum-maker subsidies, wind and solar, biofuel development are all untouched, or even increased. 

The Department of Defense, which is a particular target for cuts, is required to maintain its costly biofuels research program at the expense of – not pensions and benefits – but training and materiel. The military budget will continue to fund Obama’s pet energy programs even if our fighting men run out of ammunition in the next Benghazi.

Political and media pundits applaud “the spirit of compromise” that fostered this sell-out. Perhaps it’s because they’re partisans, reflexively and always supporting President Obama. Perhaps it’s because they think that big government is the answer to every problem. Perhaps it’s because they slept through economics class, dreaming of TV careers as news presenters, unburdened by the need to understand what they say.

Whatever the reason, the “fourth estate” has been reduced to an administration lap dog. 

It doesn’t matter which party controls Congress; government continues to grow, and the sheer size of it has become unsustainable. The duty of government officials (in their minds) is first to preserve the structure of their own fiefdoms, paychecks and pensions. At all levels of government, those pension liabilities are so vast that they will break us.

Worse, some of the bureaucracy actually does things; inevitably, the things it does work against business interests and economic productivity. If something were productive per se, people would do it voluntarily; you don’t have to force people to work in their own self-interest. So, huge government not only takes our blood, it tightens our chains. Then it demands more blood, and tells us to work harder, or entices us to submit with the promise that all will be taken care of.

The more government takes, the greater the price in potential discontent from the remnant productive class. The cost of their votes is rising, even as those already “entitled” demand more and more.

The problem isn’t that the government takes in too little; no amount of tax increase will work, or even cover their escalating vote-buying expenses. Only real spending decreases will begin to address the deficit, and there aren’t any on the horizon. The Constitution was written to set sharp limits on what government is allowed to do. If only we honored it today!


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Tim Kern

Tim Kern taught economics for fifteen years, and discovered that understanding life is easy; it’s recognizing reality that takes practice. He holds a music degree, and later earned an MBA in finance from Northwestern University. He has lived across the US, and now makes his home in Anderson, Indiana.

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