Common Sense says don’t spend more than you make. Socialists around the world have never heard of common sense.
As the United States and the rest of the world continues to totter on the edge of a financial abyss, both politicians and people alike continue to call for ever bigger government. If this is not surprising, it is nevertheless the chief oddity of modern life.
The current world financial debacle is, at root, very easy to understand. Both people and politicians have been spending more money than they have earned. The average responsible adult understands this concept. You cannot go on forever spending in excess of income. Eventually, creditors will deny access to further loans. Worst case, long-term overspending will lead to economic difficulty, inability to pay bills that are due, and even, ultimately, destitution. For individuals, these are disincentives that should dissuade people from bad economic behavior.
No such luck for politicians and governments. When they spend money in excess of revenue, they face no consequences. They are playing with other people’s money. What’s a few trillions in debt when it isn’t your money? When you are a politician, you can just push for higher taxes, or, at the federal level, leave it to the bankers at the Federal Reserve to inflate the money supply. No big deal.
Oddly, again, many taxpayers who understand intuitively that they should be responsible with their own finances, are eager, or at least willing, for government to be irresponsible with the public treasury. They signal their support by voting into office politicians who promise to redistribute wealth and punish the rich with high taxes.
This could be seen in action with the election of François Hollande in France. Despite Europe’s escalating financial woes caused by government spending in excess of revenue, French voters put Hollande into office on the candidate’s promise to ramp up government spending and increase taxation. His predecessor, Nicolas Sarkozy, was by contrast “widely disliked for budget cuts,” Canada’s CBC reported. This despite the fact that Sarkozy was no libertarian.
Hollande, instead, promised the French people that in exchange for his office he would pay them out of the public treasury. Retirement age would be reduced from 62 to 60, he said, and he would hire 60,000 teachers. He would also punish the rich, promising that he would steal 75 percent of their incomes. As far as balancing the budget, he promised not to worry about that until 2017. That this is a recipe for building a deeper recession and further economic malaise seems to bother no one. Except, that is, for entrepreneurs and business leaders who are fleeing France.
According to Bloomberg News, Hollande’s proposed tax increases “triggered a 30 percent spike in searches from France for prime properties in wealthy London neighborhoods such as South Kensington and Chelsea, according to real estate agent Knight Frank LLP.” Even the New York Times took note of the potential evacuation of France on the part of the wealthy and ambitious.
“Even before the voting Sunday, there was concern about the growing number of French people — and not just the rich — packing their bags for greener pastures,” wrote Harvey Morris for the Times and the International Herald Tribune.
Morris continued: “Discouraged by some of the highest taxes in Europe, and attracted by better job prospects elsewhere, educated young French people have joined more traditional tax exiles in seeking their fortunes abroad.”
How many have left? According to Morris, “The main European destinations have been Belgium, Switzerland and Britain, where in London alone some 400,000 have set up home.”
That last number seems shockingly high, but even if it is an overestimation it underscores the seriousness of the problem. People were leaving the French utopia even before Hollande — will that trend do anything but accelerate under him?
Unfortunately, the metastasizing growth of cancerous government is not just a problem in Europe. Socialists are on the march in the United States, too, where they threaten to further undermine the financial security of Americans.
Both Wisconsin and California are examples of the dangers ahead.
In the Badger State, during the majority of the last decade, Democratic governor Jim Doyle led the growth of state government taxing and spending during his time in office. According to a review of his tenure as governor, the MacIver Institute noted that he promised to hold the line on taxes, but “increased taxes just about everywhere and on everything. From taxes on iPod downloads to the taxes on garbage, it would be difficult to find a tax that Doyle did not want to increase.”
He also spent taxpayer money at a rate that would do Congressional Democrats and the Obama administration proud. Though Doyle promised to control spending to reign in the state’s budget deficit, the opposite happened. “In 2003, Wisconsin spent $18.3 billion. By 2010, it is estimated Wisconsin will spend $25.6 billion,” the MacIver Institute noted. “Wisconsin’s last budget increased spending by $3.6 billion. Included in the 2009-2010 state budget is $2 billion of federal stimulus funds spent on existing state programs.”
To deal with this budget mess, Wisconsin voters put Scott Walker into office. During his short tenure Walker did what few politicians ever have, and followed through on his campaign promise to put in place substantial reforms. This he did despite the most ferocious and partisan opposition any state governor has faced in recent memory.
To see how well Walker has done requires just a quick check with Politifact Wisconsin’s tritely named “Walk-O-Meter.” Sponsored in part by the Milwaukee Journal Sentinel, a paper no one will mistake as a friend of conservatives, it’s worth noting that there was no previous “Doyle-O-Meter.” Plainly, the Walk-O-Meter was set up to point to what the Journal Sentinel hoped would be embarrassing failure. To the Journal Sentinel’s credit, the Walk-O-Meter actually charts Walker’s success despite the odds against him.
In response, Wisconsin’s powerful socialist cohort wants him out and may very well succeed in the upcoming recall election wherein the alternative is the current Democratic mayor of Milwaukee who is running, like France’s Hollande, on a platform of renewed growth of government. Specifics of Barrett’s platform are hard to come by — they amount in large parts to soundbites on the order of “Walker bad, me good.” But in an interview with the blog “Badger Democracy,” he offered some rare specifics.
“We have to closely examine Scott Walker’s tax policy, and close loopholes and political favors in the tax code that allow companies and the wealthiest individuals to avoid paying their fair share,” Barrett said. “That money must be re-invested in our public schools, tech schools, and universities to create an educated and skilled workforce. That is how we create good jobs, build our infrastructure and get Wisconsin on track.”
In short, Barrett promises higher taxes and more spending, just like Hollande in France.
On a bigger scale, California also showcases the counter-to-common-sense trend to embrace disastrously big government. Campaigning for the governorship, Jerry Brown touted his record for fiscal conservatism, but under his leadership spending in California continues to grow.
Under the budget plan proposed by Brown, the Los Angeles Times reports: “In total, state spending would increase under Brown’s plan by 5.6% to $91.4 billion. The proposal assumes that total revenue, mostly from income taxes, would grow 10.2% during the next fiscal year to $95.7 billion.”
And make no mistake, Brown is practically begging voters in California to support tax hikes to pay for an expanding deficit now reaching $16 billion. He issued “a plea to voters: Please increase taxes temporarily.”
This won’t fix California. Like France, the state has seen people flee its high-tax, high-regulation environment. Many of those leaving are like blogger and entrepreneur Erica Douglass. She laid out the problems caused by big government in California in a blog post she titled “Dear California: I’m Leaving you. Here’s Why….”
In the post, Douglass noted that she loves California, and San Diego in particular. “But one thing I’ve struggled with about California for years is the government. (Yes, I’m going to break my own unspoken rule and wax political on my blog.),” she wrote. “The government is notoriously business-unfriendly–with everything from high taxes on business earnings to badgering businesses into more work.”
Business consultant Joe Vranich of Spectrum Location Solutions has been tracking the business exodus from California. He reported in 2011 that 254 companies left California, a 26 percent increase in departures over the previous year.
His explanation for the business departures tracks with that given by Erica Douglass. “Top reasons are high taxes, costly regulations and general hostility directed toward businesses by state and local public agencies. Companies in virtually every industry are exiting the state.”
To return to common sense, when spending exceeds income, financial problems are the inevitable result. The fix is to cut back spending. This isn’t rocket science, it’s simple reality.
But then again, Socialists don’t care about reality. They only care about government power for themselves and their comrades. And their strategy is class warfare, promises to tax the rich, and plans to spend other people’s money.
They may succeed in building utopia for themselves upon this platform, but the rest of us will suffer as jobs and prosperity become a thing of the past.
Image (François Hollande) Credit: CC By 2.0/Jean-Marc Ayrault
Image (Tom Barrett) Credit: CC By 2.0/barrett4wi
The Moral Liberal Associate Editor, Dennis Behreandt, is the Founder and Editor In Chief of the American Daily Herald. Mr. Behreandt has written hundreds of articles on subjects ranging from natural theology to history and from science and technology to philosophy. His research interests include the period of late antiquity in European history as well as Medieval and Renaissance history.