Stop the Silliness from Washington

Well, the budget debate has morphed into campaign blather a full 18 months before the 2012 elections. I am not sure I can take 18 months of electioneering, but I wish we could at least put to rest some of the inane and silly rhetoric coming out of the mouths of our politicians and particularly our president.

I know the president is a smart guy and I know he knows that the reality of this comment is as ridiculous as it sounds, but the comments continue - to the effect that, "if we could just get back to the top marginal tax rates of the Clinton years...." fill in the blank here because the president and his minions have said them all..."we would solve the budget problem, we would restore economic growth, we would lower unemployment"...I think we solve world hunger too. The reality is, and the president knows it, there is no causal relationship, no magic that made the top marginal rate of just 39.6% the driver for all that was economically good in the United States in 1999. It was just one part of the equation of the economic expansion of the time...that ended BTW, like all expansions eventually end. Who is to say if the marginal rate had been 29.6% the expansion would not have been greater and lasted longer? I don't know, but neither does anyone else. Maybe it would have had the opposite effect (I doubt it)but no one knows. So the proclamations that better times lie ahead if we could just raise the top rate are just silliness.

Here is what we do know. In 1999:

Top marginal tax rate: 39.6%

US population: 278M

Total Federal Spending: $ 1.702T

Federal Spending per Ca pita: $6,123



Here is more of what we know. In 2010:

Top marginal tax rate: 35%

US population: 308M

Total Federal Spending: $ 3.456T

Federal Spending per Ca pita: $11,194


Hmmm, it seems to me that a couple of the variables have changed if we were going to roll back to the 1999 top marginal rates.

While the population increased from 1999 to 2010 by 10.8%, federal spending increased by 202%. If we rolled back tax rates to 1999 levels and rolled back spending per ca pita to 1999 levels then our federal budget would be just under $ 1.9T. I would suggest given the increases in productivity and technological advances over that time period, one could argue that government should be able to deliver more and better services to the population for less money - in absolute terms, not per ca pita. Business across the country are massively more productive and tremendously more efficient now than they were in 1999. So why not the Feds?

The everyday reality is that this is a complex problem with many variables. However, as evidenced by some pretty simple math, we have a spending problem, not a revenue problem. Statements of fantasy about "the Clinton tax rates" as a panacea or even a major part of the solution are not only false, but down right silly. If people support higher tax rates for punitive reasons, if they want to stick it to those greedy rich people and redistribute other people's money to the rest of the country, fine, I don't think it is smart policy, but I respect the point of view. To put out falsehoods that a reversal of policy to the Clinton top marginal rates is part of a serious national get well program is not just misleading, it is dishonest and hides what is likely a broader agenda - it also makes people distrust the rest of the president's agenda because this cornerstone suggestion is so clearly false.

Look, if you want to redistribute wealth, just say so and let's have the debate. Don't mask that objective with claims that are easily debunked in 10 minutes with a couple of Google searches and a calculator. It just cheapens your position. I am all for transparency in math and motives. If we could get this from Washington, it might make the next 18 months a little more bearable.