If Congress doesn’t act soon, economy could take another hit
This article on Yahoo!’s “The Lookout” is actually well written, but advocates for re-authorization of the now familiar litany of “temporary” boosts to social spending that are turning us into Europe. This moved me to post a response over on Yahoo!, which turned into the following screed:
From the top…
First, if we don’t rein in spending, no amount of tax increases will prevent us ending up like Europe. Already California and New York look like Greece and Italy because they can’t stop spending and they can’t print their own money. As long as the Federal government is willing to print money and help them (a bit like the French and Germans have been doing for southern Europe), the music will continue, but when the Federal government can’t afford it, the music stops and some states will go bankrupt.
Second, the Doc Fix. without it, Medicare reimbursement rates will be as artificially low as Medicaid – there’s a reason why Medicaid patients have trouble finding doctors – the docs lose money on every visit. Want Granny to keep her doctor? Vote for the Doc Fix. That is, of course only a stopgap method of keeping the music playing – the doctors can’t afford to be in Medicare if the rates are cut dramatically, but the country can’t afford Medicare if it isn’t restructured – Paul Ryan had a good plan for gradual reform which would hurt no-one, but we saw what happened to him!
Third, the payroll tax. This is hugely regressive and reduces both the number of jobs and the wages of low income earners. In an equitable tax system, this would be eliminated altogether, but according to the fiction which has existed since FDR, Social Security is actually funded by these taxes. In fact, since about the 1960s (LBJ), this has become less and less true, whereby the tax revenue goes into the gaping maw of government just like general revenue, and the benefits are paid by printing and borrowing money. The proper solution would be radical tax reform, lowering rates, broadening the base, and eliminating payroll taxes altogether – EG Cain’s 9-9-9 plan. Social Security needs complete reform, too.
Fourth, unemployment insurance. Enough studies have shown – see Europe – that infinite social assistance leads to infinite laziness – a complete dependent class who does not live well, but gets by without working, sometimes for their whole miserable lives – we call them Democrat voters. (Especially now that Democratic strategerists have announced that they will not be courting white working class voters in this cycle!) The proper solution, even if benefits are extended, is to stiffen eligibility so that proof of job search and interviews is required in order to receive continued assistance. Also, since the current administration had lowered eligibility standards for disability assistance and foodstamps, the benificiary base has exploded, and includes many who are milking the system (I don’t begrudge help to truly needy and truly disabled people).
