The following article was originally published by Pat Slattery of The Free Markey Project on July 14,2011.
The Progressive Trap Revealed
Everyone must read this column by John Hayward: Empire of Debt. Here’s just one section I loved:
Debt is not universally interpreted as a sign of failure on the part of government planners. On the contrary, it becomes a weapon used to demand more taxes. The same politicians who spent $1.7 trillion more than they collected, in just this year alone, say the problem is that private citizens are not paying enough. Democrats will not even begin to discuss minimal fiscal restraint unless they get a tax hike… and they claim the urgency of this tax increase is irresistible because of the huge national debt they have created.
Combining federal, state, and local taxes, the government already takes or controls over half of what the private sector produces. Now they want more. That is the demand of an imperial conqueror, not a humble public servant.
Here’s the crux of John’s piece… the reveal of the trap the progressives have laid:
If we refuse to let the Empire of Debt grow larger, it will have to immediately slash government spending by 44%. This, we are told, will result in a massive surge of unemployment, as thousands of federal employees lose their jobs. In other words, the Empire has been using those gigantic annual deficits to hire a huge number of people… and if you insist on spending cuts, you will be held accountable for putting them on the unemployment lines… where, of course, more federal spending will be needed, to pay their unemployment benefits.
High corporate and individual tax rates lead to high unemployment rates. If you suggest reducing those tax rates to spur private-sector growth and lower unemployment, you will be accused of making the debt situation worse. That wouldn’t be very intimidating if the national debt was low. Why not lower those taxes and see if the resulting growth generated more net revenue at the lower rates?
But because the political class has made the national debt so high, it is able to insist that taking a chance on the power of liberty is an irresponsible gamble. Because the government lives so far beyond its means, it would be irresponsible to provide it with reduced means.
This is how we have reached the madness of a moment when the national debt is used as an argument against spending reductions, or growth-oriented tax and regulatory policies. The insane problem becomes a weapon against rational solutions.