The Sky Is NOT Falling

by Kerry Thomas

April 19, 2005

There is so much gloom and doom being spewn by political pessimists these days it’s difficult to choose where to begin. Let me just assure you, the sky is not falling. Social security as you know it will pretty much go on as usual for those of you receiving social security checks every month. Ditto for almost everyone who currently receives any form of federal government assistance payment every month. The old axiom is true. There is no such thing as immortality, unless you’re talking about a government program.

When you read scary tall tales about this government budget getting cut or that government program being targeted for elimination, don’t be so frightened. There, there, it’s okay. No one is going to take your security blanket, err, check, away from you.

Yes, the President has proposed cutting the rate of increase in some budget items, but read that again. The rate of increase is what’s being cut, not the numbers themselves. The raw numbers still go up. And up. And up.

I have to laugh at the preposterousness of some of these claims. On one hand we’re being told that government budgets are being cut. Yet on the other hand, the government is spending record amounts of our money for us. Let’s see, budgets go down, spending goes up. How can this be? If all these budgets are being cut, how can we be spending more money?

It’s all in what the government calls baseline budgeting. I’ve written about this before, but there are still people who fail to grasp this concept. So let me ‘splain it one more time.

Government program X spent $100,000 this year, and was projected to spend $120,000 next year. When next year comes, that program spends $115,000. The spending amount went up by $15,000. In bureaucratese, however, the budget got cut by $5,000, since it was going to spend $120,000.

Yes, President Bush has proposed reducing the budgets of several agencies. As well he should. Remember when the Pentagon was paying $600 for hammers and toilet seats? That kind of government excess is still going on. There is no question there is still wasteful spending going on in Washington. There are a lot of programs that need to be cut, really cut, or eliminated entirely.

But when doom-and-gloomers throw out statements like 300,000 low-income children and 300,000 mostly working families will lose their benefits, take a closer look at those statements, and at who is making them. Remember how we had to parse every phrase uttered by the former administration? That sort of deceptive jargon is still being preached by certain political groups and their flappers.

Using your common sense, take another look at that gloom-and-doom statement about 300,000 children and families. What is meant by “low-income” and “working families?” Most children I know don’t qualify as high income. How much money do your children make? And don’t most families “work?” I submit to you, Bill Gates works to support his family, doesn’t he?

As far as the old argument about “tax cuts for the wealthy,” who is it that actually pays the taxes in this country? If you consider “the wealthy” to be those people in the top 50% of all income earners, then you’re “wealthy” if you earn about $28,000/year. And that same top 50% of tax payers pays more than 95% of all income taxes. So it’s back to that old common sense thing, again. Those who actually pay the taxes are the ones who will see the benefits in a tax cut.

And there’s one more thing about cutting tax rates. Cutting tax rates provides you with an incentive to be more productive, to work harder, because you get to keep more of what you earn. You work harder, you earn more money. And, here’s the tricky part, government revenues actually go up, too. It may seem strange, but it’s worked out that way every time it’s been tried. It worked when President Kennedy lowered the top marginal income tax rates from 90% (yes, the top tax rate was at 90% once) to 70%. It worked when President Reagan dropped the top rate to 28%, and nearly doubled federal revenues in eight years. As usual, though, the problem in Washington is never a lack of revenues; it’s a lack of discipline on the part of the Congress to spend, spend, spend your money.

Look. I really hate to have to keep explaining these things every year or so. Politics and the free press do battle in an arena of ideas. If you feel like criticizing something, at least be intelligent enough to be able to offer an alternative vision. It might be fun, and even amusing occasionally, to battle unarmed opponents in this arena. But it gets boring very quickly without at least a credible challenge.