GloucesterTimes.com, Gloucester, MA

January 10, 2013

Letter: Serious talks needed to mend broken system


Gloucester Daily Times

---- — To the editor:

In our ever more dysfunctional political system, discussions about real problems never seem to happen. As a result, neither our problems nor potential solutions are well understood.

For whatever reason – probably because facts are boring and conflict sells newspapers and draws viewership – the media seems intent on casting last weekend’s congressional action as a plus or a minus for one or another of the political parties and individual political figures.

The facts are that, while the legislation raised taxes on some affluent Americans by a bit, it also made the ill-advised tax cuts of 2001 and 2003 permanent for most Americans and did nothing to reduce U.S. government spending. As a result, the deficit will increase by about $4 trillion dollars more during the next 10 years than would have been the case had the Congress done nothing. The entire charade was political theatre, pure and simple.

Federal spending is running at about 23 percent of our gross domestic product (GDP) while our tax system is generating federal revenues of only about 16 percent of GDP. The federal government’s share of Gross Domestic Product – federal revenue as a percentage of Gross Domestic Product – is far below the 21 percent collected by the federal government in 2001 and well below the average collected for the last 60 years.

The notion that we can bring the deficit under control simply by cutting spending is pure fantasy. The big entitlement programs – Social Security and Medicare – can certainly be modestly adjusted, but cannot be substantially changed without repudiating promises on which millions of Americans depend. Moreover, our aging population will be pushing entitlement spending up, thus offsetting our efforts to reduce costs.

We can and should stop acting as the world’s policeman, and having done so, should be able to reduce defense spending substantially. We should demand that the government’s agencies and programs be run more efficiently, but whatever we save will likely be more than offset as interest rates rise and the interest we must pay on our massive government debt increases.

To have a real conversation, we need to know what share of our national income the government needs to provide the services we all want and expect. Once we reach a consensus on what’s needed, we’ll need to have another discussion about how to raise the needed money. It can’t all come from those characterized as rich, although we should – in my judgment – expect affluent Americans to pay the same percentage of their incomes as they did in 1990, before the two rounds of ill- advised tax cuts in 2001 and 2003.

But no amount of taxes on the rich will even scratch the surface of the deficit problem. To pay for the government we all seem to want, every American is going to have to pay more than we pay today. Like it or not, the “hard working middle class” that our politicians love to pander to cannot be spared their share of the burden.

In my view, we need to design and implement a far simpler income tax code, with fewer deductions, loopholes and exceptions, impose higher Social Security and Medicare taxes, levy a gasoline or usage tax to pay for our highway system and add a value added tax. Most other developed countries employ a similar variety of taxes to meet their revenue needs, and we ought to follow their lead.

Whatever the answer, we aren’t going to get there until all of us tell those who represent us to get serious. Instead of threatening to destroy the full faith and credit of the United States, every member of Congress should stand up and tell us – in detail – exactly which government programs he or she wants to eliminate, what modifications to present rules and regulations they propose and how much the government they propose to preserve will cost. Having done so, they should also tell us how they propose to raise the money needed for the things they think we should continue doing.

It’s time – and long past time – for a real conversation. Each of us needs to do what we can to be sure that whoever represents us understands that we will no longer tolerate generalities, ideologically driven rhetoric and dishonest numbers.

Unless we act, we will leave our children and grandchildren an America that is a pale shadow of the great country we have been privileged to enjoy.

ROBERT CRANDALL

Eastern Point, Gloucester