What Government Should and Shouldn’t Do

Needs are endless but resources are limited. It’s been a fact of human existence from the very beginning.  As Deuteronomy said: “There will always be poor people in the land.”

Now, we face stark choices on how to divvy up what we have. And as population explodes (seven billion people in the world and 315 million in the US), demands are growing faster than our ability to meet them. A global recession and a mountain of debt have pushed us to our limit just as more people get deeper into a rut.

And then there are the Baby Boomers who are retiring at the rate of 10,000 a day for the next 20 years and who expect to get the benefits they “paid for.”

These issues  have defined every battle between the president and Congress, Democrats and Republicans, over the last few years. How much government can we afford? Who’s going to pay for it? Who’s keeping what they have and who’s going to have to take less?

Neither party has the courage to address these fundamental questions.  Republicans pretend we can just cut some programs objectionable to their base and privatize everything else. Democrats think we can solve everything by raising taxes on the wealthy enough to cover the difference.

Except that the costs of these programs are rising dramatically and there’s only so much we can ask the  wealthy  to pay before they decamp  to, say, Belize or Switzerland. I think there’s still some room to reduce tax deductions and exemptions for higher-income people, but that won’t do the trick by itself. Something will have to be cut, but what should it be?

Well, defense, to start. We do need to be an international power—our absence has encouraged bad actors to step forward—but do we really need military personnel  in 148 countries?  And must we intervene militarily in every single conflict? President Obama has concluded the answer is no.

Then, there are entitlements, which will be the biggest drain on our budget in the future. We can do things like gradually raise Social Security eligibility by a year or two and charge higher Medicare co-payments for wealthier beneficiaries. That in itself would be a nasty political battle and would make only a slight improvement.

But most of all, we need to explain to current and future Medicare recipients that they’re taking out three times as much as they put in and that they simply can’t expect unlimited care until the costs of that care come way down.

 

Unemployed line up for a job fair in Buffalo last year. AP Photo/David Duprey.

Unemployed line up for a job fair in Buffalo last year. AP Photo/David Duprey.

Finally, there’s discretionary domestic spending. The president has rightly stressed focusing federal dollars on programs that improve competitiveness of the country and the workforce—education, infrastructure, immigration reform. If successful, they can help  generate the wealth that will enable people to take care of themselves and generate tax dollars that can provide for the truly needy.

The ranks of the needy have ballooned during the recession, and so has the cost of government programs, like unemployment compensation, food stamps, and disability.

Federal and state governments spend around $1 trillion a year on so-called “welfare” programs to fight poverty—not including entitlements and veterans’ benefits, according to the Congressional Research Service. Yet 46 million people continue to live in poverty.

As Michael Tanner of the libertarian conservative Cato Institute wrote:

Despite nearly $15 trillion in total welfare spending since Lyndon Johnson declared war on poverty in 1964, the poverty rate is perilously close to where we be­gan more than 40 years ago. Clearly we are doing something wrong. Throwing money at the problem has neither reduced poverty nor made the poor self-suffi­cient.

This raises even more disturbing questions. How much taxpayer money should we keep spending on people who will likely never get out of poverty? Or should we focus on proven programs that help people get to the next level? Can we move away from costly income-maintenance programs at a time of such high unemployment? How many dependent people can we as a nation afford to support?

This gets into people’s deepest values. I certainly don’t have the answers. But we have to begin asking these troubling questions.

 

2 Responses to What Government Should and Shouldn’t Do

  1. Jim Thomas February 22, 2013 at 3:47 am #

    The solutions to our annual deficit are right in front of our face(s). If we could have a balanced budget in 1999, we could easily do it again. Why don’t we? Our leaders lack the courage and the people themselves have fallen victim to the belief they are over-taxed. What we truly need is a transformational understanding that it is immoral for this nation to run huge deficits when we have the money to pay our bills. Today, most of our citizens see the deficit as nothing more than an abstract number. Until this nation truly understands that every dollar of needless deficit spending is a dollar stolen from future generations, solutions will remain elusive.

    • HowardRGold February 22, 2013 at 8:26 pm #

      I think you hit the nail on the head on this one, Jim. BOTH politicians and voters need to face up to what the real consequences of our current policies are. Thx for your comment, HG

Leave a Reply