Tuesday, November 14, 2006

Tuesday, November 14 is...

King Hussein Day (Jordan)
Children's Day (India)

I was going to skip the reads and just go straight into the debate today, but then I saw one thing in this morning's Register that demanded my attention:

PANIC! PANIC! MYSPACE IS COMING FOR YOUR CHILDREN!

By the way, here's my Myspace.

Anyway, on to a more worthwhile discussion. I mentioned yesterday that Joe had offered a platform for his (hypothetical) political party (can we call it the Kristan right?). Today Iowa Ennui offers a post-election post on what the Republican party needs to do to rebuild. They both seem to have a point in common, which seems about as accurate as the Myspace comment from before: that Democrats are bound and determined to raise your taxes and blow the money.

I think it's important to put that argument into context. Say you were faced with two options:

a) Raise taxes, balance the budget and continue to operate on the status quo,

or

b) Cut taxes, raise spending, spend approximately $1 trillion more than you brought in over a three year stretch, and sell the debt to the nation's ever-growing economic competitors.

I'd take the first option, and I think most Americans would be with me. Sadly, over the last 6 years of more-or-less one party rule, we've gone down the second road. Way down the second road. Blame it on whatever you want, it's still tremendously irresponsible. So if your argument against Democratic leadership is their fiscal irresponsibility, I'd say they can't be much worse than their predecessors.

Furthermore, you can't consider taxes in a vacuum. Everyone likes the concept of lower taxes. Everyone likes the concept of being able to work less and take home more. But it's not that simple. There are expenses to consider.

Here's a real life example. In 2006, I'm going to make about $24,000, all told. Based on the fact that I have student loan debt, rent to pay and bad teeth, I'm probably also going to spend about $23,999 in 2006. I could pursue jobs that pay more, but I like where I'm at right now. I could cut some corners and spend less money too, but I like how I live right now. I don't, however, have a long-term option of keeping my current spending habits but making less money. Eventually I'd max out my credit cards and tap out my other options and I'd be forced to return to fiscal reality. Government needs to come back to fiscal reality too. If they're going to make less money, they also need to find a way to spend less money. Right now they're about $400 billion annually in the hole on that.

This is where Joe takes it to the next level, and makes real suggestions where government could cut costs to pay for tax cuts. Some of his suggestions:

...Get the government out of the business of allocating investment capital. This means no research credits, no ethanol credits, no historic building credits, no venture capital credits, no tuition credits. Then...

Shrink Iowa's government. Iowa delivers government services with the same structure that it has had 100 years ago. Does any business operate that way? Go to 10-15 counties; we sure don't need 99. Force more school consolidation. Stop squandering money on convention centers, stadiums, and the like. And maybe trim duplicated programs at the state universities. What about our "unmet needs?" If jobs are going begging in Iowa, like the Register keeps telling us, any such needs aren't likely things the state of Iowa will be very good at fixing.
I'm in favor of some of those things. Not all, but some. Ten years ago, the Hotel Pattee in Perry was vacant. Today, it's struggling, but it's also valued at about $3.7 million and it was a key part of the revitalization of downtown Perry. Historic tax credits played a part in that. Research credits save lives, flatly. And while I can't justify taking Iowa down to 10-15 counties, I think 30-50 is a viable option. But if lower taxes are your highest priority, I think these are some of the points that need to be considered.

If you started skimming when I started ranting, this is the time to start reading again. This isn't about higher or lower taxes. It's about fiscal responsibility, and the way I see it, fiscal responsibility can be divided into two equally important points:

1) Don't take more than what you need.
2) Don't spend more than what you have.

Any solid fiscal strategy needs to include both of those points. And anyone who suggests that one party does both things better than the other is full of crap.

KL

3 comments:

Anonymous said...

Kyle,

Good points. The Congressional Republicans did fail, and fail badly, in their efforts at fiscal restraint. It remains to be seen if Democrats can do any better. The Ds natural allies are all about spending more tax dollars and not particularly interested in worrying about where it comes from.

Joe said...

Kyle-

Good post. But "research credits save lives?" Come on. Research credits are harvested by taxpayers for stuff they would do anyway. And rehab credits didn't make the Hotel Patee. It was the willingness of a millionaire to spend her own money that rebuilt the hotel. That's fine, when it's her money. Just don't take mine, or yours, and tell me it's for my own good.

I know, your post deserves more than a hit and run comment; I will try to put something together.

awmason said...

ha ha ha- Kristan right.... funny