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Fletcher: Either grow economy or cut taxes

May 22, 2012
Stephen Fletcher , The Alpena News

The fact that today we are debating raising America's debt limit is a sign of leadership failure. It is a sign that government cannot pay its bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government's reckless fiscal policies.

Increasing America's debt weakens us domestically and internationally. Leadership means "the buck stops here" but instead, we are shifting the burden of bad choices onto the backs of our children and grandchildren. Concerning the debt, then Sen. Barack Obama said in 2006: "Americans deserve better."

This is the same guy who has raised the national debt more than all of the previous presidents combined. However, I agree with his 2006 statement.

The problem of "living the lie" doesn't exist at just the federal level because it also exists right here in Alpena.

Basically, politicians are folks just like us. They want to please the people who elected them, so why should we expect them to be different? They are "people pleasers" because they ran for election on the platform that they could satisfy our needs.

We, on the other hand, have told them we want change and we want economic stability. The president ran successfully on a platform, after all, of "hope and change."

The real problem is that we want the City of Alpena's budget to be in balance and the feds to stop these huge deficits. Oh, but we don't want anyone laid off, nor do we want to touch Social Security, Medicare, nor Medicaid.

Oops, collectively we just got into trouble.

It's that darned old economic structure that is getting us into a conflict with our elected officials. Since Social Security, Medicare, and Medicaid take up more or less 100 percent of the taxes collected by the feds, all we have to do is cancel all other functions of the federal spending in order to get back into balance. Now, when I say all other, I mean ALL other spending.

No more postal subsidies, no more Defense, no more Department of Agriculture, no more federal parks, no more Department of Justice, and, well, you are probably getting the idea. In other words, we probably can't balance the budget without both cuts to all programs and new economic growth and revenue.

There is no "if we just would do this one thing we could balance the budget without touching Social Security, Medicare, and Medicaid." The politicians are being told to do the impossible by us, the voters.

Locally, we have buffaloed some city council members into saying that we will not have to lay off any employees in order to balance the city's budget. I have economic news for you.

The city's spending is about 80 percent in wages. The deficit at the city is on the order of 10 to 12 percent of the general fund budget. If you cut all other non-wage spending enough to cover the shortfall, then the city won't have cash to buy stuff like fuel for its vehicles.

The question being asked at the city is "How do we balance the general fund without laying anyone off?" The way the question is phrased is for the benefit of those receiving the tax dollars.

How about phrasing the question to benefit those paying the tax dollars? "How can we provide the city's essential services for the amount of tax dollars collected?"

One question concentrates on how to do business as usual while the other asks how we can be more efficient?

I want all the services you do but I want them cheaper. I know industrial output in the U.S. is greater than it was 20 years ago, but there are fewer people employed because of an increase in productivity. How does the city increase its productivity to match its available income?

Our job as voters is not to be part of the problem, but, rather, to be flexible enough that our elected officials have enough latitude to find solutions. We can't have a ton of "untouchable programs."

The truth is we probably aren't going to raise the tax rates either locally or nationally. As a consequence, we need to concentrate on economic growth to check government spending.

I know it's the current fad to go ballistic about every decision made, but rather than always being against something, why not examine what we all can lobby for?

Stephen Fletcher was graduated decades ago from Cornell University with an A.B. in Economics and from Michigan State University with an M.B.A. He has lived and worked in the decades from graduation until now in the Alpena area. He thinks economics is fun and interesting.

 
 

 

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