Wednesday, November 02, 2011

People want stuff but they want someone else to pay for it

No, this isn't a post about those clowns at OWS.  First here's Tyler Cowen with an excellent post at Marginal Revolution about "Why Greece is turning down the bailout":
This is a way to back out of everything, under the guise of “democracy” and ex post blame the speculators and the rest of Europe.
Good heavens how I chuckled last week when this "grand deal" was announced last week to save the Euro and the markets soared.  Really?  Greece was going to vote to slash their public pension programs?  The rest of the EU should have just tossed the Greeks out a year ago and hasten this play's inevitable conclusion.

Meanwhile, half-a-world away, Colorado voters decided they don't want to pay either: "Prop 103 falls: Tax increase measure dead"
Colorado voters have rejected an attempt to raise state income and sales taxes to fund education, The Denver Post has declared.  With 61 percent of precincts reporting, Proposition 103 was going down in flames across the state, with 35 percent in favor to 65 percent against.
Shocking, I know, but no less than those polls cited over and over that Americans favor raising taxes on "the rich" (read: someone else) to pay for the government.  It would be nice if our leaders in Washington were honest about the unsavory outcomes ahead and take responsibility for tough choices before they're made for us.  But there's no discernible action from the debt supercommittee, the Simpson-Bowles plan was shelved, and Captain Teleprompter has other things on his mind when he's not stoking class warfare.

I would much prefer that we acknowledge that if we ever want to escape the debt spiral, taxes need to rise on everyone and there needs to be a significant contraction of the government at all levels.  We've run up the credit card and it needs to be paid.


another Eric Lindholm said...

Eric, you're talking out of both sides of your mouth. The Colorado measure would have raised taxes on everyone, as you would know if you had followed your own link. It had nothing to do with bringing taxes on the rich back closer to Reagan-year levels. If you recognize, as you claim to, that taxes need to go up across the board to pay for important government services, you should be lamenting Prop 103's defeat, not smugly celebrating it as another anti-Obama referendum.

Eric said...

Let me clarify: it's human nature to vote your pocketbook and - with very rare exceptions - people are going to vote for lower taxes and more long as somebody else is paying. I didn't link the Colorado vote with Obama, just that it wasn't unexpected.

What I loathe about Obama is that even he knows raising taxes on "the rich" won't pay for his spending. Repealing the Bush tax cuts will bring in another $70 billion a year which is roughly what we overspend in a couple of weeks. But Obama has decided on the "candy for everyone" approach to getting re-elected. Some leadership.

If there's to be "shared sacrifice" then let's have shared sacrifice. But Obama won't make that case so don't be surprised when another ratings agency downgrades the U.S. again.

another Eric Lindholm said...

As someone solidly in the upper-middle class (borderline top quartile, I'd guess), I can afford an income tax raise, and I wouldn't cry foul over one of a couple percent. But I'm pretty skeptical that those in the lower half could take one on -- at least not without doing more harm than good, such as (implicitly) encouraging more debt, skimping on education, etc. State and local taxes (including sales taxes, which are regressive) are way up over the last 20 years, so the poor are shouldering a greater share of overall tax burden, even if they aren't contributing much to Uncle Sam.

Across the board tax increases are a non-starter in this economic climate, even if you could convince a few of the cognoscenti that they'd be a good idea. So it's not realistic to ask Obama to make a case for them; he'd immediately surrender what little political capital he has left, for no good reason.

Your position seems to be that if universal tax increases aren't viable, then it's not fair to increase taxes selectively on those in the best position to afford them. That's just miserly. Everyone would benefit from an improved economy, and whether the "fairness" of asking the rich to pay more is debatable, the logic is iron-clad.

Eric said...

Well, this is where I fall back onto libertarian doctrine: if people want government, why don't they pay for it? I simply don't buy into the argument that "hey, that guy has more money than me, therefore he should pay more." Has it become "fair" just because we say it is? As the adage goes: "Robbing Peter to pay Paul will always have the enthusiastic support of Paul."

Further, I reject the notion that government spending will help the economy. See: Stimulus I.

Anonymous said...

Multiple CBO analyses have determined that the stimulus directly lowered the unemployment rate, increased the total of fulltime jobs, and raised the GDP.

You're repeating a false point that half of the politicians are saying in hopes of-- gasp, no, oh the horror-- winning re-election. Some leadership.

Eric said...

You're quite right: the stimulus "saved or created" jobs to the tune of - if I remember correctly - about $250,000/job.

Worth every penny we borrowed from the Chinese.