During one of the UAW strikes against General Motors in 1970, Richard C. Gerstenberg, the CEO of GM, asked the President of the UAW, W.P. Reuther what he wanted, since GM had previously capitulated on every single demand made during earlier strikes. Reuther’s reply was one word, simple, and chilling. More, was all he said. Within two decades of that conversation, the car company that at the time held an eye popping 54% of the world market, would find itself closing nearly half of its plants, the subject of a Michael Moore hit piece, and constantly on the verge of insolvency, the last one by the way has not been made any better by a $50 Billion government bail out. Such is the nature of the left, and all would be well advised to heed these words. They, no matter what they claim, will always want more. They may couch it in terms of, “just a little more,” or, “only their fair share,” or even my personal favorite, “just enough to fund this year’s brand spanking new entitlement dujour.”
I had some realizations over the course of the Sequestration and recent government shut down. One is that the anxiety felt by Americans was totally disconnected from the reality. In reality, hardly anyone even remembers that Sequestration happened. In fact, if not for the leaders of the Democrat Party screaming like Kirstie Alley’s girdle while she’s out pimping her Scientology diet crap, not one single American taxpaying citizen would ever have known that such an event had taken place. One positive effect of the Sequestration however, is that it set the baseline budget joke back to its 2008 level, a political defeat for the President that has had far greater impact than anything else attempted by the Republicans since his inauguration. Keeping the Sequestration intact was a much greater political triumph than any reporting on this latest budget show down than any reporting on it will ever be willing to admit, much less credit Ted Cruz and Mike Lee for. Secondly, except for Veterans utilizing their well earned benefits, a minority of overpaid government employees, and anyone foolish enough to actually visit a national park or something that Barack Obama mistakenly believed to be a national park, the government shut down had zero effect on anyone actually working for a living.
The argument from the political left in all of these arguments has been the simplistic statement that our government can not possibly get by on one penny less than what it had to spend last year, plus a plucky 8% automatically built in growth, thanks to the miraculously bad idea known as baseline budgeting. So, when you hear those words that we just need to tweak our tax revenues just a little bit to squeeze out a few more pennies to cover the bills that we have, balderdash! The fact is that spending will be increased to fill out any shortfalls in negative cash flow that may mistakenly crop up, and that spending will for ever increase, as government largess is the lazy man’s way of not only holding on to a power base, but also actually increasing that base. The problem of course is that we mere little people are the lucky beneficiaries of such malevolence.
I remembered this snippet from an essay authored by Thomas Sowell. If a government agency was responsible for two activities, one of them erecting monuments to Benedict Arnold and the other being the supply of life saving medications for children, which one would you expect to be disturbed if that department suddenly had its budget cut. The answer of course would be providing life saving medications for children, as cutting this activity would be the one most likely to get the citizenry on board with reinstating the lost budget. Otherwise, the citizens might realize that they never actually wanted those monuments to Benedict Arnold in the first place.
Our government has shut down 18 times now, and the reporting of this hardly noticeable event as though it were the end of civilization as we know it is fairly recent. If you polled Americans at large, I’m not certain at all that more than a handful of people could tell you that the government ever shut down prior to Newt Gingrich assuming the duties of House Speaker, even though most of these events happened during the Presidencies of Jimmy Carter and Ronald Reagan. During the punditry’s analysis of who won and who lost, they’ve never correctly identified the losers, which is inevitably you and I. We lose because the ensuing budget, or lack thereof has never been sane, or even decreasing.
Just remember, what the political left wants can be summed up in one simple, concise, and chilling word, more. We give them today on average, a full one fifth of our annual national income in order to run things in Washington. That is not enough. Art Laffer has fortunately mapped out the relationship between tax rates and revenues. He has found, while proving the theory of Andrew W. Mellon, the economist who served as Calvin Coolidge’s Secretary of The Treasury, that no matter where our marginal tax rates are placed, revenue will be one fifth of our national income. So when they seek to increase our taxes to cover that little increase in what they suddenly can not do without, our national income will suffer, and that cost will invariably be borne by those earning a living. We have long been guilty of conflating wealth and income in our nation, and I blame this on a serious lack of qualified people teaching basic economics in our public school systems. I do not know how to say this any clearer, so here it is. The wealthy do not pay taxes, and they will not ever pay taxes, no matter what we do with our tax rates or code. Warren Buffett, even while he was jetting around the nation telling anyone with a sofa and a talk show that he felt he should be paying a higher rate than his secretary, who was recompensed at over a Million bucks per year at the time, he had a team of accountants and lawyers who’s sole purpose in their working lives was the lowering of Buffett’s tax bill. He also had a judgement in which the Supreme Court found him guilty of cheating by a cool $1 Billion on previous returns. The more will come from those working for a living, as directed by those who don’t have to, and redistributed to those who do not want to.
