Tax Cuts and the Budget

An article somewhere out in the ether, we want to say on the Huffington Post but are simply too lazy and unconcerned to look it up, asserts that the Obama White House has given up on trying to kill the Bush tax cuts and is willing to extend them, at least temporarily. The thought seems to be that that would be the only way to keep the cuts in place for the middle class. This despite the fact that it would also keep the cuts in place for the evil rich.

It doesn't matter how often it may be said, attacks on the wealthy so often are simply jealousy. People aren't bad because they're affluent, and anyone who says they wouldn't want to protect their wealth if they were wealthy is an ignoramus or a liar. It is difficult to imagine that even a full blown and true philanthropist wouldn't want to get the most bang for their buck. If you could feed two poor folks well for the initial price of feeding one, what unsympathetic character wouldn't do it?

But we digress. What all this fuss about tax cuts ignores is that budgeting is a two way street. Simply cutting direct revenue, no matter how much more in taxes that would gain in the long run (which Reagan proved rather well would happen, while the Democrats in Congress squandered the windfall) ignores the other side. It ignores the question of what government should and should not fund.

That issue tends to get set aside when budget talks go on. We fail to ask ourselves what should and should not be the province of government when we talk about the nuts and bolts of how governments acquire their gold. We cannot do that and expect any real fiscal sanity.

Mathematics teach us that both sides of an equation must balance. Likewise, we need to tie revenues and spending together if we are to get any real hold on what governments should and should not be doing. Anything short of that strikes us as intellectual dishonesty, and a recipe for economic calamity.