As I write this, the President’s debt commission has just issued its preliminary report on the spending cuts and tax increases it recommends to fix the country’s fiscal problems. Right away, critics from all sides pounced.
A union leader claimed it unfairly targeted working people and the middle class. A conservative leader warned that supporting it would violate some politicians’ pledges never to raise taxes.
So this is what it comes down to: Everyone knows that deficit spending and debt are a serious threat to the nation’s future. But everyone expects the problem to be solved without pain, or with pain only to someone other than themselves. Similar issues exist at the state and local levels, where budgets are in deficit, or where services have to be cut to keep budgets balanced.
The reality is that the solution to this problem is very simple, and everyone who runs a household or manages a public budget knows what it is: For every dollar spent, a dollar must be raised. Plain old arithmetic. If you want it, you have to raise the money to pay for it. If you can’t raise it, you can’t have it. Or if you borrow for it, you need to have a plan to pay it back.
Something for nothing?
Saying all that is not the same as saying that solving the problem is easy. Neither is it the same as saying “Live within your means.” Because sometimes the means at hand simply are not enough, and more means need to be provided.
The trouble is that somewhere along the line the connection between “want/need” and “pay for” got broken, at least at the federal level. In recent times alone we’ve funded everything from wars, to a Medicare drug plan, to hurricane relief without so much as a discussion of where the money would come from. Then the recession reduced tax revenue and revealed just how bankrupt — literally — our approach had been.
Complicating things further is the assertion, taken as Gospel in some circles, that “taxes are too high” and can never be raised. So if we are to balance the budget, we can only do it by cutting spending. The trouble is that, at local levels at least, budgets have always been lean. So cutting spending means laying off teachers, police officers and firefighters, letting roads decay, cutting library hours, and so on.
Even at the national level, most people greatly overestimate the amount of “fraud, waste and corruption” in the budget. So cutting spending in a significant way means reducing medical assistance for low-income people and the elderly, cutting Social Security benefits, closing military bases on which some entire communities depend, and cancelling defense equipment programs that employ thousands.
Maybe we’ll end up doing things like that at all levels. Maybe we’ll have to. But first it would be better to have a discussion of what services we want, versus what we’re willing to pay.
That’s a lot tougher (and plays less well on TV news and YouTube videos) than screaming, “No new taxes!” or “Soak the rich!” or “Keep your hands off my Medicare!” But it’s also necessary — what alternative do we have?
The ‘equals’ sign
We seem to live in a fantasy world where we can cut government spending as much as we want and never feel any impact. The real world is different. Cutting spending affects real people and real physical assets — whether or not each one of us feels the effects personally.
A simple but powerful symbol in mathematics is the “equals” sign. It’s like the pivot point of a balance scale. You can do anything you want to an equation: As long as you do the same thing to both sides, the scale will stay in balance. Where taxing and spending are concerned, we’ve forgotten the meaning of the “equals” sign.
We might as well get used to the idea that there’s no easy way to make the equation ring true again. The concept is simple: A must always equal B. Getting there will be hard. If we all just dig in our heels and rail against any tax increases, and any cuts in spending, then we’re going to slide slowly (or maybe not so slowly) into an abyss.
At some point, cooler heads and the laws of arithmetic must prevail.
