You ar $8,000 in debt. So is your wife. So is each of your children. The Reagan administration, in setting the new debt limit, has just announced that is your share. It will also add $800 or more to your debt every year. You can dodge your share by dying, but every new born baby inherits one share. You just have to learn to live with the deficits Reagan creates.
David Stockman, Reagan’s Director of the Office of Management and Budget, says that if the Securities and Exchange Commission rules were applied to budget making and selling, a lot of administrative officials would be in jail. He also suggests that the Reagan-Regan duo have no intention of reducing the debt. They want to use the debt to change the function of government from promoting the general welfare to easing the way for more aggressive speculators and entrepreneurs. They talk about deficit trimming, but are like the irresponsible alcholoic who, waking from a drunken stupor, swears off drinking; but an hour later hunts for a bottle to take another swig. They talk piety but practice economic vice.
There are four ways to cut the debt, and the annual deficit which increases the debt.
1. Cancel the debt by law. Proclaim the year of Jubilee (Leviticus 25:8-17) in which every fifty years all debts are wiped out. Reagan wants a constitutional amendment requiring a balanced budget. An amendment setting a year of Jubilee – say 1990 – would require a balanced budget because no one will lend the government any money when he knows it will not be repaid.
2. Print more money. The Reagan administration is pressuring the Federal Reserve to do this. It will make dollars worth less, but it will send prices sky high. You can pay off the debt with worthless dollars, but the cost of living will go up beyond all reason.
3. Cut expenses. Except for Pentagon waste and cost of living adjustments for government pensioners and Social Security recipients, federal government expense has been cut to the bone. Medicare has already been slashed, inflicting suffering on the elderly ill. A blanket cancellation of COLAs will hurt those whose primary income is Social Security. A fairer procedure would be to tax Social Security payments where total income exceeds a given amount. At present that amount is set at at$32,900 for a married couple. The breakpoint for tax purposes could be lowered to the level of the average family income in America, or about $25,000 for a couple, and $18,000 for a single person. (My own taxes would be increased by this arrangement.)
4. Raise taxes, to increase government income. The President wants tax reform, - a good idea. He, however, vows to veto any increase in government revenue from taxes. That is nonsense. A person, hopelessly mired in debt, who rejects an increase in salary to help him pay off that debt would be considered a candidate for an asylum for incompetents. The President rammed a tax cut of about $168,000,000,000 a year through congress in 1981. That tax cut has cost the government about $850,000,000,000 if five years. If one add to that the amount lost through Casper Weinberger’s military mismanagement we could have had a balanced budget now.
Reagan says he wants tax fairness but a look at his record raises serious doubts about his proposals. Through special grants in accelerated depreciation and investment credits his tax law cuts close to $50,000,000,000 a year from the federal treasury. The President of a major corporation was asked, at a Congressional committee hearing, to explain how he could report profits of over half a billion dollars to his stockholders and pay no income tax. He replied that there were two sets of books, one for the stockholders and another for the Internal Revenue Service. Another $30,000,000,000 a year is lost through tax shelters available to the well to do. All of this is Reagan’s tax legislation.
Reagan’s proposed tax reform will increase taxes for persons with incomes between $25,000 and $50,000 a year, but reduce rates for those with incomes over $100,000 a year. It will force home owners and home buyers to pay federal income taxes on the state, county and city income and property taxes they pay, along with the home mortgage interest payments they make. And it will continue to push up these local taxes to pay for the services thrown off by the federal government.
We need tax reform; but we need fair tax reform which the Reagan-Regan proposal ignores. And we need increaded government revenue to get a balanced budget, which Reagan has promised to veto.
Perhaps we should veto Ronald Reagan.
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