Wednesday, December 22, 2010

Time to Call the Bluff

(written early last month on Facebook, pasting here for posterity.)

The government's fiscal problems is actually pretty simple math. It spends a certain amount, and takes in via taxes a certain amount. If tax revenue is less than spending, there are only three solutions:

One, raise taxes. In reality, this is not impossible. A family that makes $100,000 can pay an additional $1,000 in taxes. This is about the size of a cable TV bill, and is not a tremendous sacrifice if you believe in the programs you are funding. (A very big if.)

Two, borrow. This of course adds to the deficit, which the future generation not only has to pay back, it has to pay back with interest. Unless you're investing in something that will increase future revenue greatly, borrowing is not usually a good idea. Note, however, that interest rates are really low right now, so it's relatively easy to make good on the investments.

Three: cut spending. You can't talk about cutting spending without first looking at where the money has been going. About three-fourths of the federal budget goes to Social Security, Defense, Unemployment, Medicare, and Medicaid, and even if you cut the rest of the government (which includes everything from NASA to meat inspectors to veteran affairs, by the way), the government will still be in deficit. Thus, it is factually impossible and therefore irresponsible to talk about spending cuts without touching the top five.

Now, the reasonable thing to do might be to do a bit of all three, so that you don't borrow so much, raise taxes by too much, or have to cut spending (and therefore services) too much. To refuse one of the three solutions means you have to rely more on the other two, this is just simple math.

Unfortunately, Republicans in the House will refuse to raise taxes or borrow more, which leaves heavy cuts in spending as the only option on the table. On the other hand, I don't think they dare to cut any of those popular programs, particularly the ones that benefit the older voters who support them.

President Obama should propose a balanced budget that includes severe cuts in all five areas. We are engaged in a war and a half, not to mention a financial crisis that hasn't really ended yet. It's time for some pain. Democrats need to face up to the fact that they cannot fund all these programs without the Republican votes that they can't get, and cut as intelligently as possible. There isn't another option*, until voters allow the government to choose at least one of the other two. It is futile for Democrats to try to make ends meet with both hands tied behind their backs, thanklessly trying to save people from themselves, so the lesser of two evils is to cut them while you have the White House and Senate.

Or, perhaps, the Republicans are just bluffing. If they don't like Obama's balanced budget, they can propose an alternate balanced budget.


* No, tax cuts will probably not increase revenue. There's not even any guarantee that the tax savings will be spent by its beneficiaries in the US (or even spent at all), much less result in future revenue. Remember, lowering the tax rate means the corporations need to do fabulously well for the government to collect the same taxes back.

A Hierarchy of Sins

Pope Benedict XVI recently stated that while prostitution is immoral, there is something of a first step to respecting life if a prostitute who is HIV-positive uses a condom to avoid infecting another person. The Catholic Church quickly issued a clarification that this does not mean condoms are okay for contraception.

The important thing is actually not condoms here, but the understanding that not all sins are equal. Prostitution is seen as a sin, sure, but when compared to knowingly infecting somebody else with a fatal disease, the Pope made a moral decision. This is, believe it or not, somewhat extraordinary for this painfully rigid institution. Usually they just make a list of things that are immoral, and never bother themselves with the implementation details. The Church typically would've just said "don't be a prostitute" without wondering how one who had to enter that profession might stop being one. Instead, what the Pope said was essentially, "if you must be a prostitute, at least wear a condom."

This has remarkable parallels in other issues. For example, the Church considers abortion and contraception (in general) to be immoral. That's a fine stance in abstract, but the result is unwanted children, poverty, even crime. If a teenaged girl becomes pregnant, having the baby will usually change her life in a pretty devastating way, which is why people are tempted to abort.

While a sensible approach might be to preach abstinence, but teach the sinful option of contraception in order to avoid the even more sinful option of abortion, the Church is anything but sensible. It fears any sin so much that it immobilizes itself into impracticality. As such, the Church is part of the problem instead of the solution. Imagine if the police prevented you from saving a drowning child, because the pool is closed and you'd be trespassing.

Now, I don't know if this reflects a new understanding of the world, but one can hope. The Philippines is one country that would benefit greatly if the Church applied this principle.