Government money can do a lot of good, especially when it’s in the pockets of Americans who spend it. That’s as basic to economics as widgets, supply, demand and the crushing certainty of too much debt.
Lawmakers in Denver are frolicking about like kids writing their fiscal letters to Santa to spend money they don’t have yet and won't have long. I think of what my Pop, a famous tomato farmer, practicing fiscal conservative and Southern philosopher, would say: “You’re going to wish you hadn’t done that.”
I hear things at odds with each other lately. One is that the legislature made cuts deeper than it needed to last year predicting economic doom, and Colorado's tourism-and-oil-fed economy is back on the launch pad. The other thing I hear is that we just have to back up a dump truck full of money to every statehouse in the land to fix the economy, before the economy has a chance to fix itself.
We just finished a month in which 916,000 Americans went back to work, and unemployment slipped to 6%, a far cry from the 14.8% peak in April a year ago.
I’m not saying send back the $17 billion Colorado is expected to get from the American Jobs Act, but I’m saying let’s respect where it came from after we cart gold out the back door of Fort Knox.
Republicans can sit this one out, short of naked hypocrisy. Deficit hawks were grounded as Donald Trump, who pledged to eliminate the national debt, grew it by $7.8 trillion in four years, after Obama swelled it by $8.6 trillion in eight.
Before the latest $1.9 trillion serving of stimulus, Uncle Sam dropped $5.4 trillion in relief, and now there's already talk of another stimulus.
Now there's talk of another major infrastructure plan paid for by new taxes on businesses.
Biden's plan to pay for it is to restore reason to the corporate income taxes, which have plunged along with America's exceptionalism. On April 7, the administration rolled out $2.5 trillion over 15 years. Businesses collectively sighed and said their customers would have to pay it.
Other progressive should up it to $10 trillion. If those costs get passed along, well, inflation is the most regressive thing there is.
The problem with business taxes isn't the rate, it's the loopholes.
Let's talk tax reform that ensures everybody pays their fair share, then we can, as Trump put it, have a country. The Washington Post just reported that 55 major companies paid no federal income tax on combined $40 billion in earnings last year. Nay, they enjoyed $3 billion in rebates.
Big problems require big solutions. The biggest White House spender ever was Abraham Lincoln, who increased the national debt by 2,859% — $64.8 million to $2.2 billion — fighting a war with half a nation.
“It has produced a national debt and taxation unprecedented,” Lincoln said of the war in a speech in Philadelphia in 1864.
Twenty-one years earlier, Honest Abe wrote in a Whig circular: “As an individual who undertakes to live by borrowing soon finds his original means devoured by interest, and, next, no one left to borrow from, so must it be with a government.”
After a $4.2 billion war, the federal income tax was born, 3% on annual earnings over $800, or about $13,000 today. I'm forking over a quarter of my pay in income taxes, so thanks, Honest Abe.
Yet look at all the good he did to get a spot on Mount Rushmore.
My point is, you can't shift the burden and blame of governing while keeping the glory forever. Like any other unpaid tab, it catches up with you eventually.
Much of the Camelot promised by Kennedy and spelled out in Lyndon Johnson’s Great Society was just too expensive for our tapped-out budget, and our economy reeled through the '70s and much of the '80s.
Congress created nearly 200 civil rights laws, almost 300 environmental laws, urban renewal, the first major federal investment in K-12 education, Pell Grants and consumer safety.
National health insurance, however, was negotiated down to Medicare and Medicaid.
Despite Johnson's promises and a 1964 tax cut, the War on Poverty had to compete with the war in Vietnam. Neither was ever winnable. The result was a temporary 10% income tax "surcharge" for people and businesses, plus a planned rollback on excise taxes on telephone bills and car sales was kicked down the road. Thanks, LBJ.
You might think I don't care about helping the poor. The opposite is true. I'm worried about the next generation of poor, beyond the next few elections, and the next set of problems there's no money to fight. Who pays then?
The next generation will be forced into being fiscal conservatives with the nation's treasure tied up in interest payments. Wars will be fought on credit cards, and on it goes. Tax hike? Get back to me on that when you can pass it.
With a pad and pen, I’ve had a front-row seat for government spending for four decades, so I know how this story turns out. Debt is the gift that keeps on giving.
Like my Pop said, a dollar usually comes around once, but you can chase after it for a long time.