Those Insidious Entitlements

Are sound US principles really founded on creating huge government programs, then taxing the people to fix them when they fail? (Photo)

The last few months my family's had to make some choices. With the economy as bad as it is, we've had to cut back on some of the things we normally do. For example, we could not renew our membership at the local gun range and have cut back on shooting. That's something everyone in the family enjoys doing. We can't go to the theater very much anymore. The pottery class has become too expensive. And so on.

The point of these examples isn't to gripe about the economy but to demonstrate a conservative value and apply it to the federal government. You see, in the past we offered our family opportunities to do a lot of things, but when the money got tight, we had to cut back spending. The "programs" we enjoyed were all good and served useful purposes. The children liked having these programs around. They miss them. Simply put, we cannot afford them.

Under these circumstances, it would be foolish of me if I kept paying for the gun club, when I couldn't afford it, then went out and got a loan to buy a $35,000 sports car. Household economics cannot support borrow and spend practices, even to keep beloved projects - the stuff my family has come to need and expect. Household economics certainly cannot sustain huge borrowing and spending programs, like a new sports car.

This example works on the micro scale and we should all be familiar with the principles and the dangers of overextending our income or borrowing to pay for family "entitlements." Of course, if I were stupid enough to borrow on my family's future, eventually the whole thing would come crashing down and I and my family would be out of luck (since I don't belong to a protected class that the government would then bail out).

Let's take another example from one of the local cities in my area. Several years ago, the city of Mesa, Arizona decided it really needed to "come of age" and create an arts program, just like the other big cities around the country. (Mesa was ranked the 38th largest city in the US in 2007, ahead of Miami, Florida and Honolulu, Hawaii.) Mesa put several measures on the ballot to borrow money to create a huge and unwieldy arts center. The center included two theatres, art galleries, art studios, and over-designed buildings and common area. Through eminent domain, the city took over an entire city block. Somehow the businesses and city government hoodwinked the people of Mesa into incurring a huge city debt, all in the name of progressive city planning.

Mesa spent a lot of money, speculating that the arts center would bring in talent and money from all over the Southwest. As it turns out, after only a few years of operation, they were wrong. Now here's the problem. Mesa created a huge spending program through borrowed funds. Unfortunately, the program did not pan out and now it threatens to drag the entire city under. What did the city council do? Did they cut out the arts budget? No. With looming budget cuts, dwindling taxes, and a bad economy, the city of Mesa threatened its citizens that it had to cut services, like police and fire fighters.

Here's the pattern: The city of Mesa created a huge program it could not afford. Then, when the program failed, the city created a crisis by threatening to cut off basic services - police and fire - since the city council knew the voters would never approve more money for the arts program. With the new sale of bonds for police and fire, the city borrowed its way out of a failed arts program, postponing the inevitable day when the money runs out and taxes won't cover the increased spending.

Here's the point: The city of Mesa created the problem by overspending, then expected the taxpayers to fix the problem by approving more borrowed money and by raising taxes.

OK, next example - California. About a month ago, California voters overwhelmingly rejected tax increases to pay for the huge $24 billion deficit. Now the ultimate conservative dream has occurred - the California legislature has to actually consider how to reduce spending, including entitlement programs. Notice how budget cuts to welfare are reported:

Could California become the first state in the nation to do away with welfare?

That doomsday scenario is on the table as lawmakers wrestle with a staggering $24.3 billion budget deficit. (McClatchy)

Now I'm not saying that I gloat with the prospect of taking welfare away from so many people in California. That said, I do not agree with the huge welfare entitlements state and federal governments have foisted on Americans over the years. Keep in mind, government created the problems in the first place - creating programs which cannot sustain themselves - and now, with real economic problems facing the US, government needs to take a long look at their spending habits. At least some folks in California understand this:

"I don't wish for a moment to minimize the profound impact" that eliminating CalWORKs would have, [Department of Finance Spokesman] Palmer said. "But the easy decisions are way past being in the rearview mirror for us. We face the specter of California not having cash on hand to pay its bills in July." (McClatchy)

Microeconomics cannot sustain unlimited borrowing and spending and neither can macroeconomics. The taxpayers of California, tired of getting stuck with the bill, decided they would not fix their government's mistakes.

The federal government, however, doesn't seem to get the message. After passing two huge spending bills ("stimulus") and a massive debt-ridden budget, after a weak economy, after mortgaging the future of the US to China and other countries, after wasted bailout funds failed to save GM or, for that matter, just about any company which took funds, after all that, Congress is still in high-speed tax and spend mode, trying to bolster a failing government-created health care fiasco.

Democratic leaders in both houses said they would require individuals to carry insurance and employers to help pay for it. But they have yet to decide how to raise the necessary tax revenue....

Asked whether he would consider taxing employee health benefits, Mr. Rangel (D - New York) said, “There is nothing, no matter how stupid it sounds, that I am rejecting.”...

The House bill, as outlined on Tuesday, would allow people to enroll in a government-run health insurance plan similar to Medicare. (NY Times)

I don't know about you, but comparing the new plan to Medicare does not instill a lot of confidence. Government got us into this health care mess by trying to fix, regulate, socialize, and welfare out medical expenses for US citizens. What this news story indicates is not a fix to government spending, but increased spending in order to hold up a failing system.

This sort of thing cannot work. Taxpayers cannot afford the taxes we now pay, let alone increased taxes for increased health care regulation. The current economy cannot sustain a tax and spend strategy, especially after borrowing money to the limit that stretches even the US's ability to pay. A few congressmen are making a stand:

“We saw a Washington takeover with banks,” said Senator Lamar Alexander of Tennessee, the chairman of the Senate Republican Conference. “We saw Washington try to take over student loans. We see a Washington takeover with car companies. And now we see an attempt to have a Washington takeover with a government-run health care plan.” (NY Times)

Yet the Democrats in Congress continue to press to "fix" health care, to require all Americans to buy health insurance (or have it given to those who cannot afford it as another entitlement), and to find new ways to increase taxes. Congress created the problem and now expects the US taxpayer to fix it.

This scheme doesn't work for my household, it didn't work for the city of Mesa, it didn't work for the state of California. It will not work for the US.