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Disheartening study

RealClearPolitics has a very interesting, albeit disappointing to me, article about politicians, the public, the debt crisis, and how the participants of this study feel it needs to be solved. As usual, what we have here is a debate between what the left thinks the public wants and what the right does, as the article starts off discussing. What’s obvious to me from the study that the article is based on is the fact that most people are not able to grasp the fact that we are where we are today because of ourselves. We are the enablers that have caused government to grow out of control. But more importantly, the fact that polls taken in a vacuum will skew reality.

Americans are reportedly childish about the debt crisis. The public says the budget deficit is a serious issue. So serious that Americans will let other people sacrifice. Rich people. We know the enemy of U.S. debt, and it’s us. You, dear reader, are framed as a hypocrite. But is that true?

Last week’s Washington Post carried a familiar headline: “Poll Shows Americans oppose entitlement cuts to deal with debt problem.” Bloomberg News led a December article: “Americans want Congress to bring down a federal budget deficit that many believe is ‘dangerously out of control,’ only under two conditions: minimize the pain and make the rich pay.” Politico recently reached for Shakespeare with its conclusion: “the fault lies not in our stars but in ourselves.”

But the fault may actually lie in misreading the stars (data) and how our political stars (lawmakers and pundits) misread us. Americans appear willing to make hard choices, according to a largely unnoticed but landmark study. Given the chance, the public cuts much of the deficit and saves Social Security.

I agree that based on my own experience it looks like most sane people actually want balanced budgets, an end to the deficit spending, a reduction of the debt, and are willing to accept cuts to get there. But way too many also want freebees, paid by others. And the real greedy and envious ones have no problem saying they want everyone that makes more than they do to give as much as they can get away with stealing, in the name of social justice or some such nonsense, of course. And while we can blame the politicians for our disastrous state, we need to keep in mind that they only did what too many people wanted, and that was obviously a free ride.

But the problem with those making the case that cuts are not what most people want based on these disconnected surveys, is obviously that they disconnect the needs to get things balanced with the need to give up some of our sacred cows. Check it out.

The conventional wisdom is wrong not because the evidence is wrong. Polls capture a gap between how seriously Americans view the debt problem and how seriously they take it. The right questions were asked. But they were asked in the wrong way. A budget requires choosing between the most tolerable of unwanted sacrifices. Think Otto Von Bismarck’s maxim that “politics is the art of the possible.” Conventional polls pose budget questions in isolation. Budget politics is reduced to what’s preferable rather than what’s possible among imperfect alternatives.

“It’s like you are saying, would you like to have some cake? Yes. Would you like to eat your cake? Yes. Ah, they want to have their cake and eat it too!” said political psychologist Steven Kull, director of the Program for Public Consultation at the University of Maryland, which conducted the study. “The public is capable of dealing with the budget in a rational fashion,” Kull continued. “When you ask one-off questions they can only react in a visceral way. No, it’s not attractive to cut spending. No, it’s not attractive to raise taxes. Yes, you want to balance the budget. You haven’t asked them to make tradeoffs.”

Exactly! In a vacuum practically everyone will opt to keep the free ride for themselves. Why not? Let others make the sacrifices! Don’t take my shit! But that’s a big problem in getting a real feel for what’s acceptable, and most of us understand this. When you can not make these choices of what to cut and who to fleece in a vacuum, the game changes. Well, it changes for most of us sane enough to understand that just confiscating even more of the wealth of others, in order to keep the gravy train rolling, isn’t going to solve the problems, just postpone them, and then for a very short while. In the end, the spending has to be rolled back, or we run off the tracks into the ravine. So lets move on here.

Kull’s study asked a random sample of Americans to do precisely that. They presented adults with the discretionary budget shortfall of $625 billion by 2015, as well as shortfalls in Social Security and Medicare. Participants chose from a range of realistic options using a computer application.

Now we have something more realistic to work with, although that $625 billion shortfall isn’t close to what we see now, unless the shortfalls in SS and Medicare they mention above added another $1 trillion to the total numbers, which I doubt was the case. Take a test ride of that application yourself and play along. It’s interesting when you are being told there are consequences to the decisions you make and you are not going to meet your objective if you aren’t serious.

Anyway, let’s look at what they have gotten so far from the people that took this test ride and discuss.

The majority made Social Security solvent. They acomplished that by raising the income limit subject to the payroll tax and increasing the retirement age to at least age 68; majorities agreed to similar tweaks of Medicare eligibility and benefits.

Absolutely not surprised by these actions/results. Most Americans now understand SS enough to see it for the Ponzi scheme it is, and they know that our government has been robbing and mismanaging it to the point that it is on the verge of imploding. I wish more of them understood that these fixes that left SS in the hands of government bureaucrats are still going to expose SS to future abuse and had simply privatized the thing for anyone under the age of 50, but at least it shows most Americans understand SS as it exists right now, is an disaster waiting to happen.

The average respondent reduced the discretionary budget deficit by 70 percent. One third of deficit reductions came from cuts to government programs. Two-thirds came from increased taxes and adjustments to the tax code.

This information really bothered me. The cuts are way too little to be serious, and it proves that way too many have become totally dependant on the nanny state. That so many opted to feed the politicians by allowing them to jack up taxes again, tells me they have not been paying close attention. As soon as the politicians get more income they will jack up spending. That’s the way it has always been, and I see no reason that these hyenas will change their spots now.

I wonder what the taxes people were Ok with were. Are we talking about just fleecing the rich again? I am disgusted that so many feel they have the right to confiscate other people’s money to pay for their spending. I wish I could do the same to pay credit cards. Then I could really go on a decent spending spree.

“People’s reaction to that package may be different than their reaction to each element individually,” said Michael Dimock, associate director for research at the Pew Research Center. “One element of opposition to specific proposals is the sense of unfairness. The package of solutions may give a sense of shared sacrifices that they don’t see when asked about cutting Social Security and Medicare.”

Indeed, when respondents were forced to consider the budget’s give-and-take, even partisans confronted sacred cows. Most Republicans, including tea party sympathizers, raised some taxes. Most Democrats cut government programs and increased the retirement age.

While this is all good, the amount of people that went for more taxes bothers me, unless said tax obligations are going to be spread to everyone. We already have way too few people paying taxes: more than half of the population doesn’t pay. Maybe when everyone has to pay, they will suddenly decide cuts are better. Taxes as a means of wealth redistribution are a disgusting concept, and the result, the fact that so many believe the money of others should be shared so they can keep getting a free ride, shows it.

The average respondent made three quarters of the cuts in defense, followed by trims to intelligence and the military operations in Afghanistan and Iraq.

Yeah, sure. Cut deep in what government is actually tasked with doing in the constitution and can levy taxes for. And pretend that if we just can walk away from these wars. It’s not like this will have consequences or something. Not surprised many people chose to do this. Isolationism and the fact that the western world’s freedom rides on us being able to fight for it isn’t important until said freedom comes to a screeching halt.

Wait until congress gets to fighting over whose pet project gets hammered too. Not to mention the drastic decline in those high paying – and tax paying of course – military industry jobs that will evaporate, and all the other peripheral jobs that will disappear as a consequence of those cuts. I have always known most people aren’t bright enough to see that unlike the fortunes wasted on the welfare state that this was actually giving Americans a value add. Oh, well.

Smaller cuts were made to programs such as veterans’ benefits, the highway system, space exploration, and subsidies for large farms. Those cuts were slightly offset by some increases that even tea party sympathizers favored: investing more in job training, pollution control, energy conservation, humanitarian assistance, education and small farms.

Yuck. That’s all I have to say.

The majority firmly opposed instituting a national sales tax or valued added tax.

I could go with a sales tax, if we did away with income tax. But I am glad that the VAT is a none starter.

But majorities favored increasing the tax rate for capital gains and restoring the tax on stock dividends to 20 percent, where it stood prior to the Bush-era tax cuts. Americans backed closing the loophole that allows private investment fund managers to have a significant part of their income taxed at only 15 percent, which enables an ultra-rich sector to avoid the tax burden borne by most Americans. The majority also favored a tax on large banks and increased corporate taxes. Most would also repeal tax deductions for the oil and gas industry.

What? No taxes on the demcorats favorite companies? What about GE? And when the economy dips a second time because people move their money elsewhere to avoid these new taxes? Heh, pretend there are no consequences and move along. Is everyone is pissed at the oil & gas industries making profit but me? I happen to have stock in my 401K that’s rocking because they are making profits. WTF? Don’t be surprised when we see a whole bunch of special regulations exempting this or that friend of some demcorat from these taxes either.

Americans have long favored abolishing the Bush tax cuts for the highest earners.

Which Americans? The ones that don’t pay taxes? Like the 51% that are tax exempt and the liberal elite that just “forget” to pay their taxes? Maybe they are talking about John Kerry and his yacht?

But the public would actually make the tax code even more progressive to bring the budget more in balance. The plurality raised taxes 5 percent on those with annual incomes of between $75,000 and $100,000. The majority raised them for earnings between $100,000 and a half million dollars. They raised it 10 percent for earnings that exceed $500,000.

What about the bottom earners? Make them pay taxes too. Bet you they suddenly will grow a sever aversion to government confiscation of their wealth, and all this pro tax increase talk will evaporate in a flash.

Most instructive was the altruism exhibited by all income brackets. Wealthier and middle class Americans did not raise taxes on lower classes. A plurality of upper middle class Americans was willing to accept increasing taxes on themselves. Higher earners most opposed increasing taxes on lower incomes and chose to bear higher taxes to balance the budget.

Sorry, but this is obviously one of our biggest problems. Too many people do not have to pay into the pot, and hence have no stake in the excessive spending or taxation schemes that feed this monster. This isn’t altruism, this is suicidal stupidity. If taxes have to go up, make it do so on everyone. In fact get with the flat tax already.

“People are not simply acting in their self-interest,” Kull said. “You don’t see tyranny of the majority here.”

Nah, just a lot of stupid people that don’t realize that as soon as they give government more money, it will simply decide to spend it and more anyway, as it has done in the past. Brilliant!

There were also signs of shared sacrifice. The majority supported increasing the alcohol tax and taxing sugary drinks like soda. They would limit the child tax credit to children younger than age 14 beginning in 2015. They found it acceptable to reduce the amount of interest 10 percent that can be deducted on all mortgages (a concession that would hit the middle class) and cap the amount that can be deducted to $25,000 (a concession even high earners found “tolerable”).

This is why we are in the mess we are today. All these silly taxes on special interest, and the political industries that sprout up around creating loopholes for some at the expense of others.

Anyway, there is one other thing I want to address:

Independents and Democrats slashed the deficit most. Why? The average Republican and tea party sympathizer were less willing to raise taxes and cut defense. The least fiscally conservative group was, paradoxically, conservatives.

I was not surprised by this result. If the tea partiers and republicans think like me, they are smart enough to have realized that the moment we allow government to raise taxes to cover the problems – and this is based on historical evidence, not just opinion – that they will not just lose all interest in meaningful cutting, but ramp up spending.

We shouldn’t ever commit to any kind of tax increases until we have gotten real and deep cuts. In my state of Connecticut for example, our new demcorat governor pushed a bill with huge tax increases and what seemed like harsh demands for union concessions, he claimed to want $1 billion, under the guise of shared sacrifice. The tax increases are happening, but we are finding out that the union concessions, short of a few token ones, are not, and the threats of layoffs if they don’t are nr just empty words.

Buyer beware. If we let them get tax increases, we can kiss any fiscal sanity, and certainly any chance for meaningful government cuts, goodbye. And most Americans seem unable to grasp that. I wonder what it takes to emmigrate to New Zealand.

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  1. TaxSanity says:

    You might want to learn what you are talking about re the national sales tax.

    Do you arrive at these God like pronouncements without ANY understanding of math? Or do you just not have a clue of the various proposals?

    A national sales tax to replace all other federal taxes would have to be a 50% sales tax — or more, much more. This was the clear and indisuputable finding of the Joint Committee of taxation, in a study they did for President Bush, in 2005. I suggest you look it up.

    Fairtax – that farce ridden bit of lunacy- actually AGREES. — but they base their 23% sales tax on the absurdity of taxing all city, county, township, state, and even federal government

    Actually I’d love for Fairtax, or other gooy plans to pass, We should pass one of these farces, so the lunatics who propose them and want them, can have them.

    http://fairtaxfineprint.blogspot.com/

    We need an entirely new tax code — not bullship and balderdash, nor do we need goofy pompus folks spewing cliche based stupidity.

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