No politician would dare say it--Americans spend (waste) too much and aren't taxed enough. But we need to spend less and save more at the personal level, and should be taxed more to pay for programs we all want like social security, medicare-health care, and defense. And we must insist on getting better value for every dollar we spend personally and by elected officials. Our freely elected government has led us into the ditch of huge deficits and massive debt service payments to foreign countries, because we bought the Kool Aid about having more by getting taxed less and borrowing to make up the difference. Now that the bills have come due it's doubly hard to change--it means a period of difficult austerity. But neither Democrats nor Republicans want to own up to it--since they want to get re-elected. Who has ever won on a platform of higher taxes and reduced programs?
But essentially that is what is going to happen to us. We can see the future by looking at state and local governments, which are forced by law to balance budgets. Property and sales taxes increase, the number of user fees expands. You pay more for car registrations and fishing licenses. Tolls go up. Cigarette taxes and parking fees increase. We get nickle-dimed and quartered everywhere. But people scream to keep schools funded and sanitation and police service untouched. They want roads repaired. So income taxes may have to increase too. And no official wants to see the state bond rating go down, which would boost borrowing costs and dig a deeper fiscal hole. So governors and mayors close parks and slice at welfare spending.
At the personal level we can't afford to buy bigger houses that cost more to heat and cool, and we can't afford to spend as much driving around to get everywhere not only because it wastes a lot of time in traffic, but also because it costs so much--gasoline, insurance, repairs et al. And we won't be able to buy as much in malls and lifestyle centers or even on line, because we just don't have as much to spend and can't get as much credit. Although at least if we shop on line, we can save time and gas costs.
Now it would help everyone if our economy started to cook, more jobs were created and we could pay off our debts more quickly. But nobody and I mean nobody is talking about a sudden rebound.
So the trend lines are pretty clear--living closer to work in smaller homes, shopping less at malls, and saving more, while paying increased taxes. The politicians and the ideologues can yack all they want and throw blame around. It won't change the realities.
I respectfully take issue with the phrase "freely elected government" and the assumption that a bloated bureaucracy that has not shown its spending to be responsible will simply "do better" when given more. I agree that Americans have been grossly irresponsible with their money, but I'm not convinced that giving it all to an unaccountable third party, like the federal government, will solve anything.
Thank you for your insights. I do find them to be helpful.
Posted by: Gabriel | October 19, 2009 at 05:54 PM
Gabriel, i trust you are also referring to the previous Administration's irresponsible spending of our money??
Posted by: KC | October 21, 2009 at 11:03 AM
Indeed. As well as every administration since Jimmy Carter - with the possible exception of one.
Posted by: Gabriel | October 21, 2009 at 11:41 AM