The 50-year Tug-of-War.
Since 1960, the country has been in a tug-of-war between those on the right that believe that one can only be truly free when one accepts full responsibility for one’s own life, and those on the left that believe that freedom is not possible unless the basic necessities of life, such as food, clothing and shelter, are guaranteed by a large, activist government.
On four occasions since 1960, those on the left captured the White House and sizable majorities of Congress. In 1964, it was Lyndon Johnson. In 1976, it was Jimmy Carter. In 1992 it was Bill Clinton and in 2008 it was Barack Obama.
On three of those occasions, the country’s move to the left set the stage for Republicans to take either the White House or sizable gains in the Congress in the next election. On no other occasion has the lurch to the left been greater than it has been in the 20 months following the 2008 victory of Barack Obama and it is now clear that the Democrats will certainly lose the House next month and they may lose the Senate as well.
What lessons are these 50 years of political history trying to teach us? I can think of three.
First, America has a very sizable plurality of those that would love for the government to somehow relieve us of freedom’s downside and sometimes they win the day at the ballot box. Personal responsibility is the ultimate expression of freedom but with personal responsibility comes the very real chance of suffering and failure. I believe that a sizable percentage of us would like to believe that we can be relieved of that worry and live our lives as we see fit, work only when the available job amuses us, use tomorrow’s money for today’s gratification, hand off the raising of our children to government-run schools and all-in-all live a consequence-free life secure in the knowledge that if things don’t work out, the government will be there to rescue us.
Why deny yourself the brand new car for the purpose of setting money aside for retirement when there’s social security? Why take a crummy job when unemployment benefits can be stretched to nearly two years? Why set aside money for health care when someone else will pay the bill if you get diabetes or heart disease? Why worry about borrowing more than you can pay back when the government will step in as your advocate should things get tight?
These natural desires reflect human nature but they also set the predicate for the second lesson. When we get a national government that caters to our desire to be taken care of, we get economic and social chaos and we then recoil in horror. Thus the Republican victories that followed in 1968, 1980, 2000 and almost certainly in 2010. Only Bill Clinton’s move to the center following the 1994 Republican midterm victory kept him from being a one-term Democrat like Johnson and Carter.
But the third lesson is by far the hardest. Despite repeated bad experiences with big-government liberalism, we keep going back for more. The desire to be taken care of overwhelms the experiences of disasters like those like those of the Johnson and Carter years and the rejection of HillaryCare in 1993. We then enthusiastically vote in an Obama – only to repudiate that vote at the next opportunity.
Thus the tug of war continues. But this election may – may – be different. Our parents and grandparents were pretty self-sufficient as a result of their experiences in the Great Depression. Big government as we now know it only exploded as we comfortable Baby Boomers began to come of age and vote.
The experience of the Great Recession of the 21st Century may, at last, be a game-changer and the false promises of big government may stand repudiated for a generation.
We should all hope so, anyway.
I agree, the third lesson (for us anyway) may be it’s hardest ever…we have gone from a great nation to one of a status unbefitting our potential. With millions unemployed we allowed the government to step up and become our largest employer. Reduction of which will by necessity, cause further unemployment. Big business will be slow to react, unions will fight us tooth and nail and we will suffer for some time until recovery is complete.
I pray that America has learned that “sunshine and lollipops” come at a terrible price if we ask the Government to provide them. However, if we can stay the course to recovery and not waiver, the end results will be worth the trials. Re-establish of Liberty, the Constitution and small government are the light at the end of the tunnel.
My question is this…are we, as a people, strong enough to realize that the goal is worth the tribulations? Are we, as a people, resolve enough to see it through? Do we, as a people, have what it takes to make the temporary sacrifices needed to effect recovery.
Of course, this essay is just another right-wing fantasy. So, anyone who receives any kind of benefit is in that spot because they have been irresponsible? Bring back the debtor’s prisons! No allowance for catastrophic illness, they should have set aside money for health care. Folks on Social Security probably bought a lot of new cars in the past.
All right, that was fun. But now to come back to an actual discussion. I’ll limit myself to just a couple of points. First, as an aside, I note that there’s the usual lament that today’s generation is much worse than our noble ancestors. But this is a complaint that has echoed through the ages. You can find this sort of thing every generation back to the Ancient Greeks. So, let’s take our “self-sufficient” grandparents. Social Security was enacted in 1935, and welcomed by them. The rates of poverty in the elderly have dramatically declined in the decades since. I assume these folks should have just been more thrifty and rejected “handouts”.
I’ll also indulge for one moment more and assume Mr. Gleiser has never received any benefits from government. So, he cannot have attended a public school of any sort (taxpayer supported, you know).
But, in all seriousness, let’s cut to the bottom line of what this sort of ranting actually implies. From your comments, Mr. Gleiser, I take it that you would favor the abolition of Social Security and Medicare. Fair enough. A point of view, even if not one with which I could agree. But state so or, if you do not favor this, explain why, given your essay above. Challenge your own audience at KTBB, which skews very right, to actually consider what they are arguing for. It’s easy to be for “personal responsibility”. But over half of the government spending is for SS, Medicare (most economists add Medicaid into that but I know poor folks aren’t very popular here so I won’t) and defense. Add in servicing the national debt and other things like education, food safety inspections, highways, etc. (not the kind of programs that end up on tea party signs) and you end up with not a lot things that people actually want to cut very much. By the way, foreign aid, a favorite right-wing bogeyman, is a tiny fraction of spending. And yes, I have actual numbers for each of the above. And so do you, with even a little digging.
So, let’s hear it from you and the crowd. Not just fulminations against “liberals” but what you actually would favor doing that would actually impact all this runaway spending. With credible numbers, please, instead of generic “billions”.
What Mr. Channing didn’t say, maybe he just doesn’t know, is that social security was NOT meant to be a full retirement program. It was to SUPPLEMENT their retirement, not BE their retirement. If you are going to spout off, please be informed. The ss program morphed into what we see it today BECAUSE of the LIBERALS and their ever increasing desire to dictate what we can and can not do. This is NOT freedom, this is tyranny. We might not be in the predicament we are in today if President Eisenhower had repealed the social programs enacted under roosevelt and truman, which set the cast for what we are suffering from today. President Eisenhower did repeal a lot of the programs, but he left a lot in place… Like social security. We need to learn a lesson from this and when the election in November is over, conservatives being elected, the repeal process needs to start.
Starting with the debacle called obamacare. If Mr. Channing is so good with numbers, then he needs to crunch the numbers of this and all the other Nation DESTROYING programs obama has rammed down our throats! All the bailouts that were nothing more than BUY OUTS by the government in order to take over our lives. Liberty is an INDIVIDUAL process and with LIBERTY comes PERSONAL RESPONSIBILITY…NOT government!
Another lesson that was lost is that when Republicans had a chance to make serious fiscally responsible choices (2001-2007) under a republican president they failed to do so, instead spending money at an alarming rate, and many agreeing to the bailout of the banks. True responsibility would have those banks that failed be allowed to really fail, as should have GM and Chrysler if need be. I see no reason to get excited about the chance of Republicans taking the House this year… Dems my be bad but Repubs are no different, 2001-2007 shows it.
Of course I didn’t say that SS was meant to be a full retirement program. It wasn’t germane to the point I was making and doesn’t alter my argument. So, I am baffled as to what you are arguing here. Social Security in its original passage was limited to only certain occupations; it excluded large swaths of jobs such as domestic jobs mostly held by women. So, if you had been alive back then, you wouldn’t have had to worry about it. The rest of your comments don’t address anything I stated and just drift off into the ALL CAPS sort of screed that mostly calls to mind a spittle-flecked rant.
And, that leads to a discovery. Although a native East-Texan, I am relatively new to this site. I had thought it might offer a forum for debate, not necessarily polite, but at least informed. However, today I have looked over the archives of Mr. Gleiser’s commentary, and the resultant posts, and have concluded that it is designed solely as a pep-rally for people like Ms. Montrose. So be it. I withdraw my comments and will leave you people to your rally.
Isn’t it time that we all agree (including Mr. Channing) that the Progressive-Liberal/Socialist movement in this country has simply followed a 70 year trend that is world-wide? It has actually gathered momentum as populations have become more concentrated and have demanded more government services at all levels. It should come as no surprise that the rugged individualism that characterized the founding of America has all but faded from our culture. How many politicians are promising fewer government benefits in order to reduce the US budget deficit?
With this dependency on government services it should also come as no surprise that the operating expenses of government have risen dramatically and therefore demand a larger share of the income earned by the population at large in the form of taxes and fees. In order to allow those at the bottom of the earnings scale not to be driven further into poverty, we have adopted a progressive income tax system that requires the most wealthy to share a greater portion of their income with those less fortunate via the Internal Revenue Code. Due to the increasing demand for government spending, we are running an even larger deficit and national debt to the tune of over a trillion dollars per year that could crush our long term prosperity. The answer to this perplexing problem is a factual look at the revenue received by the US Treasury by category and, therefore, derive a solution based on where the funds can be obtained.
The following information was obtained from the latest IRS records from 2006 and everyone should be able to accept the truth that we are not paying our way as a society and must quit printing and borrowing money to maintain the facade of funded services. This problem can be fixed by improving the tax code which requires an understanding of marginal tax rates, number of individual tax returns, taxable income, and income tax paid by each tax bracket.
The entire 2006 federal tax revenue from all sources was $2,387 billion. The SOURCES OF FEDERAL TAX REVENUE and their respective percentage share of the total are illustrated by the following table.
Individual Income Taxes:$1,023 billion: 42.9%
Corporate Income Taxes: $354 billion: 14.8%
Payroll Taxes: $838 billion: 35.1%
Excise Taxes: $74 billion: 3.1%
Other Taxes: $98 billion: 4.1%
The tax revenue from all sources other than Individual Income Taxes should not be increased due to their already high rates as compared to the rest of the industrialized world. The Corporate tax rate (35% in the USA) is one of the highest in the world. Any further increase in the US Corporate tax rate would provide even more incentive for companies to move their operations overseas (to stay competitive) and further exacerbate our unemployment situation.
Did you know that this country has a vast disparity of income between the top and bottom halves of the population? This is born out by the latest available IRS Statistics of Income Division (for year 2006). In 2006 there were 152.3 million individual tax returns filed. Returns that were in the 0% to 10% marginal tax rates numbered 72.6 million, the BOTTOM 48% of individual tax returns filed. Returns that were in the 15%, 25%, 28%, 33%, and 35% marginal tax rates numbered 79.7 million, the TOP 52% of individual tax returns. The NO. OF INDIVIDUAL RETURNS BY MARGINAL TAX RATE is illustrated in the following table.
Tax Rate No. Returns % of Total
0% 45.7 million 30.0%
10% 26.9 million 17.7%
15% 49.9 million 32.8%
25% 22.8 million 15.0%
28% 4.4 million 2.9%
33% 1.6 million 1.1%
35% 1.0 million 0.7%
All returns 152.3 million 100.0%
The total individual taxable income for 2006 was $5,699 billion. Taxable income is defined as income after deductions and exemptions. The annual taxable income of the bottom 48% (tax rates 0%-10%) was 5% ($266 Billion) of total taxable income. The annual taxable income of the top 52% of individual tax returns (tax rates 15%-35%) was 95% ($5,433 billion) of total taxable income. The following table illustrates this vast inequality of income based on the SHARE OF TAXABLE INCOME for each of the current marginal tax rate categories: 0%, 10%, 15%, 25%, 33%, and 35%.
Tax Rate Taxable Income % of Total
0% $119 billion 2.1%
10% $147 billion 2.6%
15% $1,607 billion 28.2%
25% $1,584 billion 27.8%
28% $584 billion 10.2%
33% $431 billion 7.6%
35% $1,227 billion 21.5%
All returns $5,699 billion 100.0%
Is it fair that nearly half of the population (48%) has only 5% of the taxable income whereas the other half (52%) has 95% of taxable income (19 times more)? The American dream has failed. The income distribution is hardly equitable. Obviously, we have a large gulf between the rich and poor half of the country. The following improvements to the tax code will correct this problem and force better income distribution throughout the country. Raising taxes on the rich upper half will bring income discipline and proper compensation for all workers and citizens that deserve to Share in the Prosperity that our economy generates.
Obama has a famous quote: “True prosperity for any one American can not be achieved until all Americans participate in a SHARED PROSPERITY. It is our responsibility to make this happen.”
The following table, TAX PAID BY MARGINAL TAX RATE, illustrates the percentage share of each tax bracket that contributed to this total individual income tax revenue of $1,023 billion. Note that the bottom 48% had such little taxable income (bracket 10% and below), that it only shared in .7% of the total tax generated.
Tax Rate Final Tax % of Total
0% $0.0 0.0%
10% $7.5 billion 0.7%
15% $179.0 billion 17.5%
25% $260.7 billion 25.5%
28% $123.8 billion 12.1%
33% $107.4 billion 10.5%
35% $344.9 billion 33.7%
All returns $1,023.3 billion 100.0%
Summary: There were 72.3 million returns (bottom 48%) that paid $7.5 billion in taxes on $266 billion of taxable income, an overall tax rate of 2.8%. There were 79.7 million returns (top 52%) that paid $ 1,016 billion in taxes on $5,433 billion of taxable income, an overall tax rate of 18.7%.
Raising the OVERALL TAX RATE from 18.7% to 37.4% on the top 52% of tax returns will produce an additional $1,016 billion of revenue per year (given 2006 statistics). This additional tax revenue will reduce the harmful effects of long term deficits and reduce the possibility of runaway inflation and very high interest rates. This will require the IRS to generate new marginal tax rates and income ranges in order to replace the current levels of 15%, 25%, 28%, 33%, and 35% marginal tax rates with new brackets: 30%, 50%, 56%, 66%, and 70%, respectively. The current rate of 10% should remain unchanged since it has such little taxable income to be beneficial.
Taxing the rich (top 52% of taxpayers) at a higher rate (2X current revenues) will help generate the income to the US Treasury necessary to fund the SHARED PROSPERITY that President Obama can use to bring about economic FAIRNESS to all Americans. The Obama administration’s Secretary of the US Treasury, Tim Geithner, has recently reminded the American people that we ALL must strive to live within our means, reduce our collective burden on society at large, and be willing to sacrifice our standard of living, if necessary, to promote the national economic health.
Paul, you have it nailed. Until we recognize that we have been seduced by self aggrandizing liberal politicians into believing in the “free lunch”, the country will continue to let them buy our votes with our money that we don’t have.