The story I’m going to reference is a few days old, but the point made is still valid.
On Monday the Washington Times ran this piece which simply restated facts many already knew, but made them clear for comparison’s sake: the entirety of this year’s tax increase on the rich was spent on one storm’s relief. Obviously insurance companies and other private-sector industries had sizable losses on Superstorm Sandy as well, but for the insurance industry it’s chalked up as the cost of doing business and over time they will raise rates (and/or deny coverage) to eventually make themselves whole.
But this piece isn’t being written to argue whether government assistance of victims of freakish weather is good policy. We’ve spent the equivalent amount to all these billions (and more) in recent years to prop up failed businesses, subsidize those in industries the market deemed not ready for prime time, and in giveaways to tinpot dictators around the world. We’ve created weaponry for which there may not be an application, paid producers not to produce, and tried to build nations out of subjects unwilling to cooperate. And $50 billion doesn’t even begin to scratch the surface of the overall sum millions feel they are entitled to by virtue of reaching a certain age and having a few pennies on the dollar deducted from their paychecks over the lifespan of their respective careers.
To sum up: it’s chump change.
Yet I don’t want to make the case that those who are affected aren’t going to miss it. While I don’t think anyone is going to go to the Jersey Shore specifically to see where their share of the $50 billion went – in many cases, the repairs and spending won’t be on the drawing board until later this summer anyway, with some infrastructure reconstruction still years away – the Times story illustrates once again the folly of Band-Aid solutions to our chest wound of deficit spending.
Moreover, the old saw about raising taxes in a recession? Well, if the economic figures from the fourth quarter of 2012 hold up, we’re halfway to a recession right now. Of course there’s always the prospect for an “adjustment” in the next quarter which will goose the GDP just to the growth side of zero, but most people are believing their own eyes rather than the media hype – consumer confidence is down, the 2012 holiday season shopping was pretty much a bust, and I read a Rasmussen Poll this morning that fewer than 2 in 5 of those surveyed think the economy will be better in five years; the lowest mark since the question was first asked in 2009. (At that time over 3 in 5 believed the economy would be better. Fooled you!) In the perception of many, we are indeed in a recession and the government’s only solutions seem to be promises and handouts. In the oft-quoted words of Margaret Thatcher, that works until you run out of other people’s money.
It’s rather unfortunate that Barack Obama and Harry Reid received another four and two years, respectively, to continue to plunder the pocketbooks of those they deem able to afford such a financial flogging, print more money, and create IOUs to handle the rest. Most of those who have even the tiniest sliver of common sense know that’s not the long-term solution, but voters placed Obama and Reid at the helm, the captains of the government Titanic approaching the financial iceberg dead ahead. And the leaky lifeboat commanded by John Boehner at the House is little better; look for small business owners to be swept overboard and drown in the sea of red ink created by a system which has finally shown itself to be the unsustainable one many seers knew it would be, a theory derived from a careful reading of history.
In general I’m an optimist, and perhaps we as a nation can avoid the iceberg and the rocky shoals which await us about our current course. With luck we can navigate a safe passage with the proper austerity program and leadership back toward a government restored to its rightful place.
But we have placed ourselves in a situation where the results are more likely to be worse than better, as tonedeaf Washington leadership continues on a course to economic destruction. If you thought the “fiscal cliff” was a steep precipice, the chasm of our unfunded liabilities could be the bottomless pit. Mixed metaphors aside, the reality is we aren’t in good shape and solutions won’t be coming very quickly from Washington.