Wednesday, November 28, 2012

“What Do We Want To Be?”

Sydney M. Williams

Thought of the Day
“What Do We Want To Be?”
November 28, 2012

I was struck by the eloquent but sober tone of a recent essay written by a 28-year-old Brit (now living in the U.S.), Charles C.W. Cooke, in National Review. It’s entitled, “Why I Despair” and dated November 10, 2012. What concerns him is his take on the meaning of the re-election of Barack Obama. The vote, in his opinion, marks the final repudiation of classical liberalism and the rise of the welfare state. Mr. Cooke emigrated to this country because of the freedom it offered. But he is now concerned. He quotes Thomas Jefferson who in 1788 wrote, “The natural progress of things is for liberty to yield, and government to gain.”

There is reason for concern. Twice in these epistles I wrote of the video “Julia’s World,” which was displayed on the President’s website. I saw it as a chilling vision of a future that reflected the fears that George Orwell saw in Soviet Russia and wrote about in 1984. I was mistaken in thinking it would frighten others, as it had me. Apparently there were those who saw those images as providing comfort, unaware, I am sure, of the personal costs they will ultimately incur. Those who think otherwise should re-read Stephen Vincent Benet’s The Devil and Daniel Webster. Jabez Stone was able to enlist Mr. Webster to extricate him from the terms of the contract of having sold his soul to the devil. Most of us would be on our own, and so would Mr. Stone today.

I agree with Jefferson’s sentiments that that is the natural progress of civilization, and certainly it has been true for the United States for most of the past eighty years. However, I also recall the clarion call that heralded the election of Ronald Reagan in 1980. He ran and won on the principle that government was not the answer to all our problems. Remember his observation: “What are the nine most terrifying words in the English language? I’m from the government and I’m here to help.” At the time, America was on its heels. The economy was meandering aimlessly. Confidence was low. Inflation was rampant. Stocks were selling at the same level as fifteen years earlier. The Iranian government had been holding 52 Americans hostage for 367 days at the time of the election. Government’s answers to problems are too often chimeras – it provides the verbiage people want to hear, but without an explanation of the costs, either in dollars or in freedom. People’s response is that was a different time, another age. We have changed, but in the grand sweep of history thirty-two years is but a moment. We attach too much importance to ourselves, if we believe our time is our country’s crucible.

Now, in the wake of Mr. Obama’s re-election and as we confront the fiscal cliff, it is a good time to debate what it is we want from government. I suspect Congress is incapable of such a meaningful discussion. Their time horizons are far too short – generally no further than the next election. So the debate will have to be conducted in the media, in fact as it has been. From my perspective it is unfortunate that so much of today’s mainstream press is aligned with the Left, but that is reality. It becomes incumbent on those who worry about the long slide toward paternalism, to persist in warning of its ramifications – the most important of which are the loss of personal freedom and the fact that more government means higher taxes. While most of us can live with higher tax rates, it is the loss of freedom that is of greater concern.

In regards to the latter, David Brooks’ column in yesterday’s New York Times is worth reading. It is entitled “How People Change.” He writes of an English father who let his children grow up unsupervised and to whom he finally sent a long e-mail admonishing their life-styles – their jobs and their spouses. A daughter released the e-mail and it went viral. As a consequence, Mr. Crews has become a folk hero of sorts to British parents. I agree with Mr. Brooks that the honor is unwarranted, but nevertheless there is a lesson in acting irresponsibly. There is risk in adhering to a moral relativism that does not permit moral standards. When government provides its citizens cradle-to-grave care, there is a concomitant loss of personal responsibility. Mr. Cooke quotes the British historian, A.J.P. Taylor who wrote in August 1914, that “a sensible Englishman could pass through life and hardly notice the existence of the state beyond the post office and the policeman.”

This is not a suggestion that we should return to a frontier mentality, but we must recognize that individuals should take responsibility for both their actions and inactions. They reap the benefits and suffer the losses. It is the only way that children, and a nation’s citizens, learn maturity.

The subject of taxes is more specific and less philosophical. Government expenditures are expected to be $3.8 trillion in 2012, roughly 24.7% of GDP. Receipts are expected to be about $2.7 trillion, leaving a deficit of $1.1 trillion, or 7.7% of GDP. The deficits, we know are unsustainable. Either spending must come down, or receipts must rise. We cannot remain as we are. But that should prompt reflection on what we want from government. Keep in mind, before 2009 federal spending was generally capped at about 20% of GDP. Federal government spending had been around 15% before Lyndon Johnson’s Great Society programs of the 1960s.

Our population is estimated to be 315 million today. The breakdown is roughly as follows: 85 million people between the ages of 0 to 20; 105 million between 20 and 45; 85 million between 45 and 70, and 40 million over 70. We can assume that, on balance, the cost of government is borne by the 190 million Americans who are of working age – between 20 and 65. That suggests roughly a tax of $19,000 per person in that age category to pay for the $3.8 trillion in spending in this year. (Joint filings brought down the actual number of returns filed, in 2011, to approximately 110 million.) The numbers are estimates, and I recognize that, but they provide a sense of the situation.

In general, one can assume that roughly 60% of the population works to support the other 40%. I believe most people are fine with that. The debate should be over the level of service we choose to provide and the distribution of the costs of providing those services. The first is the more important and my feelings are well known on the subject, and I recognize its sensitivity. As for the second, most of us agree with the concept of a progressive tax, and I would suggest that everyone should have to pay something, no matter how little. It sends a terrible message when people benefit from services provided, including social welfare, education and defense, yet have no skin in the game. It is my opinion that the Tax Code should be simplified, broadened and lowered.

The President ran for re-election on the basis that the rich weren’t paying their fair share. He explained neither “fair” nor “share.” In 2009 10% of the working population paid 70% of all federal income taxes while earning 43% of all income. (Incidentally, that is a ratio that rose during the Bush years. In Clinton’s last year, the top 10% paid 65% of all taxes.) The top 1% earned 17% of all income while paying 37% of all federal income taxes. The bottom 50% earned 13% of all income and paid just 2% of all taxes. It is hard to argue honestly that the rich are not paying their fair share. One might argue that the rich earn too much and the poor too little, but that leads to the slippery slope of redistribution policies, likely the President’s real goal.

A symbolic gesture, such as that recommended by Warren Buffett in which a minimum tax be levied on those earnings more than $1 million, makes good press but does nothing to find an answer to today’s deficit. According to a study by Congress’ Joint Commission on Taxation, a Buffett-style 30% tax on all those earning more than $1 million would generate just $5 billion – less than 5% of today’s deficit. Nor does it advance the debate we should be having – what size of government do we want? Whenever one hears Warren Buffett chime in about raising tax rates, keep in mind he loves complexity in the Tax Code. Simplifying the Code, capping deductions and exemptions would capture more money from Mr. Buffett than raising the statutory rate.

This is a complex issue that entails far more wisdom than I am capable of imparting. But it is an issue with which we must deal; it should be conducted in public forums, in small and large meetings, in schools and universities, in blogs and in the op-ed pages of today’s newspapers. Such discussions are healthy and invigorating. Our history is not being written; we are living it. We are not at a significant turning point, much as we would like to believe we are. The country is fairly evenly divided on these issues. In their wisdom, the people sent a populist President to Washington, but they sent men and women of quite a different stripe to the state capitals in thirty of our fifty states. In a country as dynamic as ours, nothing is decided in a single election. Presidents don’t get mandates. They get an opportunity and a pulpit from which to preach their own version of democracy. Some do a good job; others do not. But nothing ever stays the same.

It is not in my nature to feel the despair toward which some of my conclusions might lead, or which Mr. Cooke expressed so eloquently. Yet I feel great empathy with his piece in the National Review. When I find my spirits begin to lag, I pick up a novel from another Englishman, P.G. Wodehouse, and from the first page a smile begins to crease my face. The opening line in Luck of the Bodkins (1935) is a perfect example: “Into the face of the young man who sat on the terrace of the Hotel Magnifique at Cannes there had crept a look of furtive shame, the shifty, hangdog look which announces an Englishman is about to talk French.” When I watch Harry Reid march to the microphones, a line from The Code of the Woosters (1938) comes to mind: “I could see that, if not actually disgruntled, he was far from gruntled.”

Escapism can only help maintain one’s sanity; it will not solve our problems. But, can anyone read those words without recognizing the universality of their appeal? And, while Mr. Wodehouse was born British, he chose to make his home in America – for the same reason Mr. Cooke came here and for the same reason millions of people from all over the world still clamor to come to America. It is a unique place. Let’s not change that.

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