Government Doesn't Need A Raise

Imagine this exchange in your boss’s office:

You: I need a raise.

Boss: (holding in laughter) Well, we’ve had two very difficult years in a row, I just don’t think there is enough money in the pot for anyone to get a raise right now.

You: But I’ve racked up some major credit card bills, my teaser rate mortgage is about to reset, any I can barely afford the gas for my new Mercedes SUV, much less the monthly payment - I really need the money.

Boss: I understand your concern, but we can’t just hand out raises to everyone with financial difficulties – especially when we’re struggling to make payroll as it is! Why don’t you just cut down on your spending?

You: Why would I do that?

Boss: Because that’s what rational human beings would do if they were in your situation. If your income can’t rise, you need to cut spending. It’s called “Finance for Idiots.”

You: But, I really can’t live without my 60” flat screen TV with the Platinum Satellite Cable package, my gas-guzzling Mercedes SUV, or my monthly trips to Vegas!!!

Boss: Dude, you have issues…

Is there really a difference between the exchange above and the ranting and ravings of the Democratic left who are going berserk over Obama’s deal to extend the Bush Tax Cuts, including those for “the rich.”

Replace “You” with “Government” and “Boss” with “Taxpayers” and it’s being played out on new channels everywhere – politicians arguing that the Government needs a raise (i.e. higher tax revenue) to help lower its debt.

Just like the average consumer, Government need to spend less, not earn more. The omni-present “Deficit” is nothing more than Total Spending – Total Revenue. We have such a large deficit because we spend more than we collect in taxes, not because we don’t tax enough. Somehow the Total Revenue side of this equation is dominating the discussion in the media and in Washington, while the Total Spending side sails along in the bliss of ignorance (entitlement spending in particular).

Give credit to President Obama for understanding this equation, or at least understanding that raising taxes is the wrong answer, especially when the green shoots of recovery are finally starting to pop out of the ground. Let’s hope this signals a move in the direction of economic sanity for the Obama administration and Congress. After all, the only thing that keeps President Obama and the current Congress in office is an improved economy – too bad it took them two years and a “shellacking” in the midterms to finally appreciate this reality.

A Problem with Priorities

Should “Don’t Ask, Don’t Tell” be repealed? Yes.

Is repealing “Don’t Ask, Don’t Tell” more important than setting the US Government’s 2011 budget, or providing clarity on 2011 income tax brackets and rates? Absolutely not.

The fact that our legislators are spending valuable time discussing, debating and funding research into “Don’t Ask, Don’t Tell”, food safety, nuclear weapon treaties, or providing child immigrants an automatic path to citizenship, in December 2010, is a total joke and is completely irresponsible.

These issues all deserve debate and votes, but not during a lame duck session, and certainly not before the Government has finalized a budget or income tax rates that go into effect in less than 30 days.

Guess how many members of our armed forces were discharged due to “Don’t Ask, Don’t Tell” in 2009….428, or 0.04% of soldiers on active duty at the time.

While 428 is the lowest since at least 1997, and significantly lower than the peak of 1,227 in 2001, the fact remains that only 13,000 or so Americans have been discharged from the military due to “Don’t Ask, Don’t Tell” since its inception 17 years ago. While that’s 13,000 too many, it’s still just 0.004% of all Americans.

While this debate rages on and studies and surveys are funded and generate headlines, the US Government still does not have a budget for 2011, and the 144 million individuals that filed tax returns in 2009 still don’t know what their tax rates will be in 30 days.

So, for those keeping score at home, 100% of Americans are impacted by the US budget, at least 50% of Americans (significantly more if you include the tax filer’s dependents) are impacted by income tax rates, and 0.004% of Americans are impacted by “Don’t Ask, Don’t Tell”. If you were a politician in Washington, which issues would you prioritize?

Too many of our elected representatives believe it’s more important to debate and pontificate about issues that affects 0.004% of Americans, rather than focus on the issues that affect all Americans (high unemployment, weak economic recovery, exploding deficits and spending, etc., etc.), none of which can be solved without first setting a budget and income tax levels.

The debate and legislative effort required to repeal “Don’t Ask, Don’t Tell”, while admirable, can wait.