Nothing new in Obama address or Boehner response — How we got to the brink of default and what should we do? And why not pull out of Afghanistan and use that money to pay off the national debt?

UPDATE:  (Monday evening) Just listened to President Obama’s address to the nation on the debt ceiling crisis and then I missed most of Speaker of the House John Boehner’s response because of a computer glitch or the fact I tripped over the telephone cord and I was finishing dinner and putting the dishes away at the time, but I heard some of it and saw the first part of a replay on it, and all and all, nothing has changed, although it still seems as if the stalemate will be broken at the last minute with both sides, Democrat (Obama) and Republicans (Boehner), coming to a compromise of sorts and jockeying for political leverage and position the whole time.

As bad and dangerous as this all seems — the threat of the United States defaulting on its obligations — it may be necessary to make people figure out how they want their money spent — your really can’t have it all and borrow your way out of debt at the same time. But hopefully a compromise will be reached by the Aug. 2 deadline.

While I tend to be more on Obama’s side, I will say this: While most people want the rich to pay their fair share of taxes, they are probably also smart enough to know that simply requiring the rich to pay for everything won’t work, and hardly anyone wants his or her taxes raised, especially not before it can be shown tax money is spent more prudently. Republicans, though, are playing a dangerous game. If Social Security checks don’t go out, they are ruined.


To have civilization, as we know it, you have to have government, but to operate a government and to enable that government to do what you want it to do you have to have money, therefore you have to have taxes.

Most people seem to be cool with a graduated tax, where people who earn more money pay more taxes, the reasoning being that those higher earners have more money they can afford to part with and still live well, while those with less feel the hurt much quicker.

That is, most people agree with that until they become higher earners. Then maybe not so much (there are exceptions, such as Warren Buffet and Bill Clinton and Barack Obama).

I think that those who argue that making people pay a higher tax rate as they make more money is an unfair penalty on those who put in the extra effort to make more money and who by doing so help spur the economy have a point, to a degree at least. But what usually happens is that people who increase their wealth find ways to avoid taxes, often quite legal, with all the available deductions and such.

Meanwhile, taxpayers across the board, but I suppose especially in the vast middle, play the game of essentially giving Uncle Sam an interest-free loan or loans through the year, only to get the money back at tax time, via what we call the tax refund (of course they don‘t usually get all their tax money back).

Pardon me if I ramble a bit, but there is a point here:

Except for those such as the super-fortunate folks I mentioned earlier, most people do not like to pay taxes. Because of that they prevail upon local governments and even state governments to keep taxes down as much as possible. Not everyone wants government to do all the same things, but in general people expect a lot from government. Therefore the tax money has to come from somewhere, so through the years, through both Democratic and Republican administrations, the tax burden has shifted steadily toward the far-off federal government with its vast resources. But of course it faces the pressure to keep taxes down too. And that has led us to where we are today. The federal government has been borrowing money, much of it in recent years from China, and spending way beyond  its tax revenue.

The so-called tax and spenders in Washington are blamed for all of this. But why did they do this? It isn’t as if they simply took all the money as individuals (although there is some of that). No, they reacted to pressures from lobbyists and campaign contributors (probably not so much from individual voters) to pass legislation enacting a myriad of programs and services and tax deductions or deferments (read that tax shift to some other unfortunate people) schemes aimed at supposedly promoting some worthwhile endeavors for the good of the public and the economy.

It’s all the dirty little not-really-a-secret that people ignore for the most part — the government is really insolvent, but lives on payday loans, if you will.

Now that things have come to a head with the federal government facing default if the debt ceiling is not raised by Aug. 2, really in a kind of artificial way, those in the political establishment who carry the water for the anti-tax crowd who really just want someone else to pay for all they demand, are using this all for political leverage.

I checked the news this morning and nothing has really changed: Democrats are calling for a combination of spending cuts and new taxes, and Republicans are demanding no new taxes, or not much new taxes, with a much larger amount of spending cuts (and they are really after social programs, which they abhor, except when they themselves benefit from them (That’s a tough one. Their constituents, by and large, really like Social Security and Medicare, for themselves anyway. But the business lobby does not like anything that means higher taxes).

Mixed in with all this is our foreign policy based on strategic military actions such as that in Afghanistan. Come to find out in a story running today, U.S. tax dollars are finding their way into the hands of the enemy there through private contracting. I say: why not pull out of Afghanistan, but continue to spend the money we would have spent there on paying off the national debt?

Right now the show is what will happen Aug. 2 (or even in the next few hours or this week) if Uncle Sam looks as if he or actually does default on his debt payments. It would seem that there would be economic chaos, with no confidence left in the American dollar.

But I also wonder if the battle over raising the nation’s debt ceiling is kind of meaningless in that we have lived beyond our means, in strict economic terms, for so long. Maybe a nation with the size and resources of the United States can actually continue like this virtually forever.

One reason we get away with borrowing so much money from China is that we have a symbiotic relationship with that nation. We need their money and they need our market.

But we do have to make better use of our tax dollars for sure, I would think.

I also think we need a more equitable tax system. I don’t know what that might be, but maybe we need to have a flatter tax rate and fewer deductions.

The other day I heard someone promoting essentially a national sales tax. He said that with that the vast underground economy, to include drug dealers, prostitutes, and even trades people and others who work under  the table, would be taxed when they buy goods and services.

The philosophical debate on the role of government will always be there.

But government needs to act responsibly. If the government does default and if economic chaos ensues, then all of those responsible, Democrat and Republican alike, should be swept out of office.

And I still think that most political positions out to be volunteer with only a stipend. People constantly running for reelection are far too beholding to lobbyists.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: