Balancing the Budget
Balancing the Budget
Shows how budget deficits help the rich
Consider a family of two spouses R and M, two children S and D and a dependent parent P. R makes more than M and therefore contributed more to the family expenses than M.
The family starts running into debt. So, how do they make ends meet? Not the common sense way. R declares that the best way would be for him or her to contribute less than before. The expenses on S, D and P must be reduced. They must also be made self-sufficient regardless of their inability to do so in view of their age, weakness, and lack of training or other mitigating circumstances. R would not let S or D mow the lawn because the neighbor’s kids do it for less. R would also want to spend more money on the security system of the house although the inimical family across the street has been hit with hard times and is bending over backwards to be friendly with M and R. All these steps are being proposed for strengthening the ‘family values’.
If this sounds ridiculous, think again. The family that is America periodically keeps going through a similar phase. R the rich citizens want to contribute less than before. M the middle class some how does not realize the absurdity of the proposal and seems to go along with the rich. The children, the sick and the old are going to suffer. But who cares? Not R and M, because they have the power to make the decisions, however wrong.
People who push for ‘personal responsibility’ are the same ones who exhibit absolute lack of sense of responsibility to the nation by their opposition to paying their fair share of taxes.
Yes, the budget must be balanced. Deficits hurt any nation in many ways. First, the rich get away with paying less than their fair share of taxes. Second, government’s borrowing enables the rich to charge interest on their unpaid taxes by investing the same moneys in government bonds. Third, the same rich people claim exemption from income tax on the interest paid to them by the country. The deficits work in favor of the rich who are willing to lend their money to the nation even without a collateral. This is the reason why, in spite of all the talk, Balanced Budget Amendment is not going to be passed and even if passed, not implemented. Borrowing without a collateral does not make any sense. Therefore, no public body should be allowed to issue bonds.
Clearly, higher taxes must be used to raise the funds necessary to run the country. Opposition to taxes is unpatriotic and must be recognized as such. If one cannot or would not give a part of his income for the country, what else would hse give?
People who are not patriotic enough to fuel the national economy by spending all their income become investors. They make more than what they can spend and invest the unspent moneys. The unpaid taxes, unspent incomes and un-disbursed dividends add up as capital gains. The double whammy is that these investors pay reduced taxes on such capital gains. In fact, the capital gains must be taxed at higher rates than other incomes. People who make a living simply by selling and buying stocks must not be subsidized by others who earn their living by hard work. Although investors are necessary, they must not be given exclusive importance at the cost of the other contributors to the national economy.
A constitutional amendment requiring the federal government to balance the budget would be good but is not essential. All that the Congress needs to do is to revise its resolution increasing the debt limit to lower it gradually from year to year to eventually eliminate all governmental borrowing.
Taxpayers are also benefit receivers. Some of the benefits are indirect and intangible and yet substantial. Therefore, objections to the ‘misuse’ of taxpayers money are at the best misleading and at the worst malicious. Whenever some body is referring to the ‘tax payer's money’ it only means that the person is not the recipient of the benefit of the activity he or she is objecting to. Such objections are therefore best ignored than taken seriously.
Insisting that the government must not spend money it has not yet received is like telling a business not to manufacture any thing until it has been sold and payment received. If credit is so much important for businesses, why not for government?