Column: More Sequester, Still No Action
The sequester is working according to plan. Not in that it is reducing the deficit, which is declining on its own in large part because of the slow but steady economic recovery and a slowing of projected health care costs (Thank you Obamacare).
It is working because it is giving the Congressional Republicans, who refused to just eliminate it, exactly the results for which they had hoped. The sequester is causing unnecessary cuts to be made in programs that actually help people, in order to preserve unwise and unnecessarily low tax rates for people who could and should pay more.
Most importantly, to the extent that people are getting upset about the reduction in government services, they are blaming Congress generally, not the Republicans specifically. Which means that if/when the people most hurt by these cuts show up at the ballot box wanting to throw the bums out, the Democrats will take at least as big of a hit as the GOP. Probably more so, given who the brunt of this is falling on.
The latest in terms of local impact of the sequester are the forced furloughs for civilian employees of the National Guard and the cutbacks and hiring freeze at the USGS EROS center. Significant pain enacted on specific employees in one case and a whittling down of a project that has brought good employment opportunities to the Sioux Falls area in the other. And what did we get in trade for that? Are your pockets now extra full since the deficit, which was already declining, is now declining a fraction of a percent more?
The sad truth is that we would have no deficit if we just had a proper taxation policy. There are numerous opportunities from raising marginal rates on high income earners, to eliminating loopholes exploited by corporations, to taxing capital gains just like normal income and so on that would do the work necessary to end deficit spending.
But shouldn’t we cut spending? Sure, but by eliminating waste and subsidies to people and companies that do not need them, not by depriving our economy of the investments in people and infrastructure that will result in more robust economic growth in the future.
Here is the sad truth. Our government spends more than it takes in because one half of our politicians are committed to protecting people who are already loaded with money from having to pay higher taxes. So how does our government pay for the rest of its purchases? By borrowing money, in form of government bonds, that are sold to and through big banks, to the very people and companies who just got their low tax rates protected. Where is China in all this? Read my next column.
Instead of just taxing them now, we are borrowing their money and promising to pay them back more in the future. Sounds like a terrible idea doesn’t it? Not to the person who is getting the good end of that deal. It leaves them with enough extra cash burning a hole in their pocket that they can afford to throw unregulated millions at political groups designed solely to help people that will protect their low tax rates get elected.
You might have heard that some low level IRS employees delayed the approval of some of those groups’ tax exempt status. That is a scandal? The real scandal is that Congress is wasting all of our time digging for something, anything that they can pin to Obama, no matter how contrived, instead of acting to end the ridiculous and unnecessary sequester, or better yet fixing the tax code that got us into this mess in the first place.
The opinions expressed in this commentary are solely those of John Gossom and do not reflect Results Radio, Townsquare Media, its sponsors or subsidiaries.