A Voice In The Wilderness

The House of Representatives passed the president’s economic stimulus package yesterday by a vote of 385 to 35. The plan is described as a 146 billion dollar package, although according to the Washington Post it will add 161 billion dollars to the economy this year and an additional 34 billion next year. http://www.washingtonpost.com/wp-dyn/content/article/2008/01/29/AR2008012901935_2.html?hpid=topnews&sid=ST2008012902692
The president is now urging the Senate to climb on board the bandwagon and enact H.R. 1541 ASAP.

I find it interesting that among Virginia’s eleven House members three, all Republicans, voted against the bill. According to today's story in the TD, one of these three, Virgil Goode of the 5th congressional district, voted against the bill because it would increase the national debt.

In my entry, “Show Me The Money,” last week, I stated,

Wouldn’t it be great, dear reader, if one of the 435 representatives or 33 or 34 senators up for reelection stood up in either the House or Senate chamber and took a stand against increasing our debt by the amount of whatever this stimulus package is going to cost? What if s/he spoke and acted for fiscal responsibility? What if s/he made it clear that the Government should not spend money whenever the President and Congress feel like it, without considering whether, in fact, we actually have the money to spend?

Well, if the TD is correct, Virgil Goode has done what I wished for. He voted against the stimulus package because we can’t afford it. Virgil Goode has risen above party loyalty. He has even taken an unpopular stand that may cost him votes should he run for reelection this year.

I congratulate Representative Goode and award him the maven’s “Responsible Elected Official” award.

The Union Has Been Saved!

Our responsible national leaders have decided to levy an additional tax on our grandchildren by giving all of us a tax rebate of about $600. I am sure they will have all these sound bites explaining how they have saved civilization as we know it. And, I bet that no politician will have the testicular fortitude to vote against this tax gift because we can’t afford it. Hey, we already owe over nine trillion dollars. Adding an extra one hundred fifty billion to that number is hardly noticeable.

Whose Gonna Pay For It, Chuck?

It was with some dismay that I read this morning that New York Senator Charles Schumer is proposing that the economic stimulus package being considered in the hallowed halls of our Congress include a rebate for those who paid payroll taxes but not income taxes last year. Apparently, Mr. Schumer did not read my post yesterday about the folly of making tax rebates that will add to our national debt.

As you must know from what I have written in the past I am a Democrat. (Before you start throwing stones, please realize that my political preference is not entirely my fault. How can I be anything but a Democrat when the bottle with which my mother fed me had a photograph of Franklin Roosevelt on it?) It is always easier for me to attack politicians of the other persuasion, so it is not with a sense of glee that I pick on the senior senator from the Empire State. It requires me to admit that not all the irresponsible politicians in America are Republicans.

As I pointed out yesterday, to get the money to make any tax rebates the Government is going to have to borrow. (I have been in the “Cash Room” in the Treasury building in Washington and let me assure you that it is quite empty.) And, since for every dollar our government borrows now some poor sucker in 2050 or 2060 is gonna have to pay an extra dollar in taxes to pay off the debt, what we call a “tax rebate” for us is really a tax increase for our children or grandchildren. Not only is transferring our tax burden to a future generation irresponsible, it’s down right immoral. As Thomas Jefferson said to James Madison in 1789,

"Then I say, the earth belongs to each of these generations during its course, fully and in its own right. The second generation receives it clear of the debts and incumbrances of the first, the third of the second, and so on. For if the first could charge it with a debt, then the earth would belong to the dead and not to the living generation. Then, no generation can contract debts greater than may be paid during the course of its own existence."

(I sure hope somebody pays attention to my postings soon because I am running out of Jefferson quotes on the public debt.)

I, like Senator Schumer, am a believer in social justice. I feel strongly that those already wealthy should not get richer on the backs of the poor. It’s hard to argue with Mr. Schumer’s conclusion that it is grossly unfair to make rebates to middle class taxpayers but not to the working poor. However, Chuck Schumer is sort of mixing apples and oranges.

The economic stimulus package proposed by the Administration would be a rebate of income taxes paid (I assume in 2007). Although the cash to make those rebates would have to be borrowed, from an accounting prospective the payments would come from the General Fund of the Treasury. If Mr. Schumer wants to also make rebates of payroll taxes paid last year he is not talking about making payments from the General Fund of the Treasury but from the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund (commonly referred to together as the Social Security Trust Fund). We all know that the Social Security Trust Fund does not have a rosy future. With the increase in retirees and the decrease in working slobs paying payroll taxes the trust fund will go belly up during the life times of those already born. Mr. Schumer’s proposal, although it will probably cost only a few billion dollars, will bring the date of Social Security insolvency a little bit closer.

What Chuck Schumer and other politicians in Washington have to learn is that there ain’t no such thing as a free lunch. Every dollar we spend today that is not covered by current revenue is going to have to be paid in the future by our children or grandchildren. Let’s make this personal to Senator Schumer. Each yearly deficit that you create with your votes now will require your daughters Jessica and Allison (and their own children yet unborn) to pay increased taxes in the future. I ask you, Chuck, is this social justice?

Show Me The Money

"We believe--or we act as if we believed--that although an individual father cannot alienate the labor of his son, the aggregate body of fathers may alienate the labor of all their sons, of their posterity, in the aggregate, and oblige them to pay for all the enterprises, just or unjust, profitable or ruinous, into which our vices, our passions or our personal interests may lead us. But I trust that this proposition needs only to be looked at by an American to be seen in its true point of view, and that we shall all consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves; and consequently within what may be deemed the period of a generation, or the life of the majority."
Thomas Jefferson 1813

It’s an election year, folks. That means that all members of the House of Representatives and a third of the members of the United States Senate face the ordeal of getting themselves reelected. Well, maybe it’s not such an ordeal. The perplexing fact in this country is that, although the Congress as a body receives grades of F minus minus from the populace, at least 90% of incumbents are odds-on favorites to be reelected. But, one can never be sure, so when it appears that the economy is on the way down, all members of Congress forget about party differences and jump on the bandwagon to do something. For the time being, dear reader, forget about Republicans and Democrats on the hill of our Capitol. Everybody has joined the “Let’s do anything to get reelected” party.

Apparently, what they’re going to do is pass an economic stimulus package of ultra-temporary tax cuts. So, in all likelihood, in just a few weeks, you and I are going to get a check in the mail from our beloved friends at the Internal Revenue Service. With the check will probably come a form letter that reads, “This gift comes to you courtesy of (fill in name of Congressperson). In the interest of our national survival, you are urged to spend it as quickly as possible.”

Hey, friend, I’m not about to look a gift horse in the mouth (or any of its other orifices). So, if that check does come I’m going to at least deposit it in the bank before anyone has a chance to figure out that the United States Treasury that wrote it is insolvent.

For those of you who are not regular readers, it may come as a shock to find out that our very own United States of America is nine trillion dollars in debt. So, when the Congress and the President, each with a performance rating below where the scale starts, proposes to send out over one hundred billion dollars in tax refunds to you and me and the Joneses down the block, I have to ask “where is the money coming from?” Since our national checkbook has a balance of negative nine trillion, in order to send out these checks our Treasury will have to borrow more money. And, you may ask, who would loan such big bucks to the US of A? I would answer that it will be the some groups to which we already owe the nine trillion. And in that group are a whole bunch of governments and other entities that are not necessarily fans of America. Hey, for all I know, Osama bin Laden may own a few hundred million in T-notes.

Let’s forget the national security implications of having hocked our government to people who don’t like us. Let’s just look at the economics. Nine trillion dollars in debt results in over two hundred billion dollars in interest payments each year. That, my friends, is a whopping big chunk of pocket change. If we didn’t have to pay it out in interest we could just divide it among us and I assure you we wouldn’t need an economic stimulus package. Because of the rather immoral fiscal irresponsibility of our four most recent Administrations, when we need money for an emergency (assuming for the second that economic stimulus is an emergency) we need to go out and borrow it. I don’t know about you friends, but if the maven and maveness managed our personal finances the way the government has managed its finances we’d have gone out of business long ago.

Wouldn’t it be great, dear reader, if one of the 435 representatives or 33 or 34 senators up for reelection stood up in either the House or Senate chamber and took a stand against increasing our debt by the amount of whatever this stimulus package is going to cost? What if s/he spoke and acted for fiscal responsibility? What if s/he made it clear that the Government should not spend money whenever the President and Congress feel like it, without considering whether, in fact, we actually have the money to spend? Wouldn’t it also be great if that member of either the House or Senate was rewarded with reelection just for voting against an economic stimulus package that we cannot afford. Do we three hundred million Americans not deserve a Congress and President who before enacting legislation that requires the country to spend first ask “Show me the money?”