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Tim Blagg

Not a zero-sum game

We face a complex fiscal situation

It’s been interesting — and irritating — watching the tiresome battle between Progressives, Liberals, Democrats, Republicans, Tea Party fanatics, etc., over the “Fiscal Cliff.”

Interesting, but misleading.

The fact is that it’s not really a zero-sum game, the way it’s portrayed in most news coverage.

The talking heads, TV correspondents and anchors like to consider it as some sort of sport — one side wins, the other loses.

Simple enough for TV, but stupid.

That’s not the way it really is.

The debate really shouldn’t be about raising taxes on the rich guys or protecting social programs, although those are handy handles to use if you only have 20 seconds to discuss an incredibly complicated set of economic problems.

The hard fact is that our government is spending more money each year than it takes in, and it’s been doing that for quite a long time. Usually, that’s because of depressions, recessions or wars.

But the Bush tax cuts really started us on our current trend, and the combination of those cuts and government efforts to spend us out of the recession .... some of which have been successful, others not so much.

One huge contributor are the current undeclared wars. It’s estimated that we’ve spent some $1.4 trillion since 2001 on the wars in Iraq and Afghanistan.

And then there are the entitlements — Social Security, Medicare, Medicaid and the huge government bureaucracies needed to run them, all of which are going to get larger as the baby boomers age.

It’s important to note that most of the spending listed above goes to businesses inside the U.S. Despite the fact that the wars are being fought thousands of miles away, the materials being used in them are largely made here, keeping tens of thousands of Americans at work. It’s a very inefficent way of promoting economic growth, and the loss of thousands of young Americans makes it a criminal enterprise, but it does pump lots of money into the economy.

Let’s not forget that World War II essentially spent us out of the Great Depression.

But that money is supposed to come from taxes, and ours simply aren’t high enough to make ends meet.

Are we undertaxed, then?

Certainly our new “citizen” partners — the corporations — are. Their rates are quite high, but their opportunities to use the tax code to avoid them are even greater.

And by European standards, so are the rest of us. Most developed nations hit up their citizens for much more than we do ... as much as 50 percent more in some cases. But as we’ve seen recently, their spending, per taxpayer, is even higher than ours, and they can’t afford it ... that’s why so many of them are declaring bancruptcy and asking for bailouts.

So what’s the answer?

Well, we need to stop thinking of it as a “we win, they lose” situation, for one thing.

The fact is that we’re ALL going to have to be hurt if we are turn this thing around.

Some services must be limited, more taxes will be levied, and some sort of fiscal discipline imposed.

Unfortunately, there is absolutely no motive for members of Congress to practice this sort of behavior. Each individual is judged by how much “pork” they bring back to their district, not by how little.

Long-range, strategic thinking that cuts pork and entitlements and raises taxes is likely to be rewarded by defeat at the polls by someone promising to bring home the bacon.

It’s a tangle that requires statesmanship — something that is in short supply in Washington these days.

Blagg has been Editor of The Recorder since 1986. He lives in Greenfield and is a military historian with an interest in local history. He can be reached at: tblagg@recorder.com or 413-772-0261, ext. 250.

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