We’re Broke. We Can’t Just Keep Spending Like We’re Not.

There’s a case to be made for raising taxes. But not while progressives are trying to spend trillions.

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Confession time: I’m open to raising taxes. As a lifelong conservative, making this case comes as easily as arguing for a weak national defense, or more United Nations funding.

So please bear with me as I walk through why I’m open to the idea.

One of the most important lessons of the last two decades is that black swan events—game-changing surprises—aren’t nearly so rare as we’d like.

In 2001, a terrorist attack resulted in two decades of military conflict. Adding up defense, health care for vets and other related costs, the price tag amounts to an estimated $5.8 trillion to $8 trillion.

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  1. Avatar photo
    Ben Connelly

    Black swans. That hits the nail on the head. Many people seem to believe we can just keep spending like crazy because the debt hasn’t bitten us yet. Debt-hawks are likened to chicken little. But a black-swan debt crisis only has to happen once to radically alter American life. Before 2019, many people thought that people who warned about future pandemics were chicken littles.

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    Tmcke

    Let's calm down and also think clearly. While the financial crisis was a black swan event - one created by relying on an unfounded belief that markets were self regulation, the September 11 event was not - at least not in the sense of requiring 5.8 trillion in military spending. The Iraq War was the triumph of neocon myth making.

    Oh - and George Bush II did not want to raise taxes to pay for his folly.

    So... now someone wants to spend money on people and the deficit hawks have risen from their graves to warn us.

    I suggest that everyone who pretended to be a conservative from 2002 till now should sit on their hands for maybe 10 years.

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      El Duderino

      Yes, let the conservatives go on a "spirit journey" in the oasis. But by all means, continue to pay the taxes to fund an agenda that they don't support and watch inflation water down the dollar. Thanks but no thanks.

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        Tmcke

        So do you think that I get to choose what I pay taxes for? And I pay a lot by the way. Sorry yes all should pay taxes or if not, let be carve out that taxes that paid for the Iraq War.

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          El Duderino

          The agenda you choose to support with your tax dollars is up to you. You get to vote like the rest of us. But telling a whole group of politically like-minded people that they get to have no say in the political and fiscal process of the country is a little different. And by all means, let's pay down the Iraq War.

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    Kevin C. Smith

    Man, I can't imagine Jonah's Twitter feed today...

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  4. Alex DeLarge

    "But none of it makes sense given the fact we’re broke . . ."

    The Fed has taught us that nobody with a money printer can ever be "broke." It's just a question of making it go brrrrrrrrrr . . . Taxes are so 20th century.

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    1. Avatar photo
      BWG

      https://www.youtube.com/watch?v=jk1eU_zlf3s

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      Jack

      Noooo! You can’t just

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  5. Don Harban

    A couple of points.

    One of my conservative friends (anti-max, anti-vax, anti-shutdown, anti-anti) shared an article describing Norway's recent to more or less consider the pandemic over and to deal with it pretty much like the flu going forward. My friend failed to notice that Norway's early interventions with testing and extensive isolation (including closing most businesses and schools) has resulted in current Covid statistics that are, on a per capita basis, about 10% of our levels. More importantly, he was willing to overlook that "Socialist" Norway, partly as a consequence of its oil wealth, maintains a "Sovereign Wealth Fund" that largely offset the costs of its early Covid interventions. A "rainy day fund". A nearly perfect execution of Keynesian Economics. Surely a contrast to our congenital maintenance of "sunny day debts".

    Our current path begs the question "if we continue to borrow on sunny days at current rates, what will we do when a real "Black Swan" comes up?"

    As to taxation, we measure the regressiveness of our taxation based on our income and capital gains. The social safety net policies that the Scandinavian countries that our progressives would emulate are based on TOTAL TAXATION that is substantially more regressive than ours -- especially when their Consumption Taxes are considered. EVERYONE PAYS.

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  6. David A L

    So much of the comments on taxation focus on the federal personal income tax, but according to a quick search, "individual income taxes (federal, state, and local were the primary source of tax revenue in 2019, at 41.5 percent of total tax revenue. Social insurance taxes made up the second-largest share, at 24.9 percent, followed by consumption taxes (me: sales and toll roads?), at 17.6 percent, and property taxes, at 12.1 percent."

    It's a lot more complicated than simply saying the rich pay all the taxes - they don't. Even if someone pays no federal tax they pay sales tax.

    My own take is that we (the USA) are like Wiley Coyote running out on a ledge into thin air 3000 feet up, and when he finally looks down and sees there is nothing underneath him....he falls and kaboom. When the rest of the world (mainly China) stops funding our debt and the dollar stops being the world currency, we will experience a crash that will make 1929 look like a good thing.

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    1. Steven Vandzura

      Could you please elaborate on what your are saying, I am very curious? My thoughts go toward that possible scenerio but I am not very well informed, just a Dispatch reader who is a construction worker and would like to know more from more knowledgable people. Is that very possible? I tend to think it's probable. It is so convoluted.

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      1. David A L

        The national debt is 26.7 trillion and counting. That sum is so large it's impossible to wrap your head around it - it's almost not real. It's like the distance between the stars - it's so large our brains cannot grasp it at an emotional level.

        We have gotten so used to simply increasing the debt without worrying what will happen when we can no longer do that. That day will happen (I don't know when, just that it will). As human beings we tend to project in straight lines - the world was like this yesterday and so will continue to be like that tomorrow. We borrowed the money yesterday so of course we can borrow more tomorrow. Except that one day we can't - and then the next financial extinction level event will happen.

        If the treasury just cranks up the printing press we will have hyper-inflation that would make the Weimar Republic blush (they had a monthly inflation rate of 29000%).

        So I compare our borrowing today to be as unrealistic as Wiley Coyote expecting to be able to run on nothing but air - it works until he looks down.

        I am not the most well-informed guy out there, just someone who looks at the world around me and thinks about the "what-ifs". I don't go out and buy old missile silos, convert them into an apartment and call it a resort, but one day those guys may be laughing at us....

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    dmklever

    I’m in Illinois, and it’s pretty well known that our finances are in the tank. I would be willing to pay some more tax if it were part of a comprehensive plan to address the drivers of the problem. Unfortunately, the ruling class here just sees tax increases as the solution, and is not willing to address the root causes.

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  8. Nevertime

    Didn't the GOP once try to pass a law where any new spending required either an offsetting spending cut or a new tax to pay for it? Maybe that is just my delirium showing itself.

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    1. Jaybrown

      "The original PAYGO was part of the Budget Enforcement Act of 1990....The law officially expired at the end of fiscal 2002." From https://www.taxpolicycenter.org/briefing-book/what-paygo

      GHW Bush was a great president.

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      1. Nevertime

        Thank you!

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    Jason Gibson

    I don’t disagree jonah. I’ve had the same thoughts. I try to repress them

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  10. Mark

    Sure Jonah but whose taxes exactly? The rich already pay almost all of the freight and i am a little sick of being lectured on fair share. The Euro states spread it out a bit more evenly so if you're a fan of more revenue by all means have everyone pay a little more. My total tax burden is around 50% and yes I do well and I don't even mind really but listening to the gormless Biden lecture us about fair share just isn't going to get me on board.

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    1. Greg G

      This is one of the biggest lies the Democratic Party promulgates to the American public; that we can have European level benefits without European level taxes on the middle class as the rich aren’t holding the tens of trillions that it will take to do so.

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