Tax Cuts, how much?

Many candidates attempt to buy votes with tax dollars by offering tax cuts if elected. They claim that taxes are too high. This is a gross oversimplification of a complex issue. Candidates often use oversimplifications, believing that voters are too stupid to comprehend the details. Not Glenn Thomas.

Here's the scoop. The existence of a tax surplus does not necessarily mean that taxes are too high. The fact that deficits are common and surpluses rare indicates that either the government is not efficient enough or that taxes are generally too low. Most likely it's some combination of these two.

Why does the government need money? It needs it to perform its functions. The US Constitution spells out why we have a government in the first place, "establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity". Justice, domestic tranquility and defence are expensive. The general welfare is the reason that the government must provide some regulation of the economy. In fact, a strong economy is basic to everything else we have a government for. The most important part of this is the mitigation of the recessions that occur from time to time. The market has demonstrated itself incapable of doing this, so "we the people", in the form of the government, must do this.

One way a government can get money for recession recovery (and Glenn's preference) is when economic times are good and there is a budget surplus, the extra money should be set aside and saved. When economic times are bad, the government can draw on its savings to finance the deficit it will run counteracting the recession. This way, the recession can be mitigated without resorting to any of the inflationary ways of raising cash that a government can do. Keep in mind, just because an organization calls itself a "governmant" doesn't mean it isn't subject to the same economic constraints as you and I. The only difference is that it's bigger and requires more time to fix. Think in terms of the Grasshopper & the Ant fable...

Why doesn't the government work this way now? Unfortunately, when a budget surplus does occur, the conservative knee-jerk reaction is to give the money back to taxpayers. This is buying taxpayer votes (with taxpayer money!) for the conservative politicians who support it. This is as unwise as the liberal knee-jerk reaction to spend the money on social programs, thus buying welfare crowd votes for the liberal politicians who support it. Either way, politicians are using taxpayers own money to buy their votes instead of "saving for a rainy day"..

The real issue is this: How much of a surplus is desirable during good times and how much of a deficit is tolerable during bad times? As always, the devil is in the details. In addition to the complexity of this issue is the temptation for politicians of all stripes to use any budget surplus to buy votes. That's the main reason budget surpluses are rare. Right now, the federal government is running a very large budget deficit. Given that we're also at war this is not necessarily a bad thing. However to speak of further tax reductions at this time is the height of irresponsibility.