Tax day reflections

 

Editor’s note: This is the second of two essays by Dr. Todd Stewart about the new health care law and the reach of federal government. Link here to read the first essay. Any reproduction of all or portions of this commentary requires full credit to both the author and The City Wire.

I fear the road ahead to a large degree. My fear is rooted from simple observation of an increasing polarity of world views in our country combined with the reality of our financial situation as a culture.

April 15th represents our responsibility to our government to cover the costs of her operation. Few will argue the necessity of her existence and few argue that she has potential to be good. Many argue to what degree she should impose herself on the labor and liberty of her citizens. But, this is nothing new.

A short trip in history can demonstrate this age-old argument. Jefferson and Hamilton fought fiercely about this point at the Founding of our nation–indeed Hamilton died in a duel with Aaron Burr that was indirectly stoked by the argument of the role of big government. Conflict over this basic question has existed before today and it has been bloody at times.

The most current conflict is well illustrated by the Tea Party movement and the reaction of more liberal citizens to it. The New York Times (one of the most liberal in the mainstream press) conducted a poll recently about the composition of people who call themselves Tea Partiers. The slant and the “editorial take” is obvious, and it serves to bolster the conflict. To contrast the results of the NYT poll, a recent Gallup poll shows very different results. Who to believe …

I say that it doesn’t matter at all. It is sufficient to say that a great rift exists in this country and it is worsening. It is fundamental and it is irreconcilable. And it will lead to conflict.

My own life changed a bit after learning “The Crash Course.” I always considered myself fairly well informed, and the content of the Crash Course was not brand new to me. However, when taken in aggregate, in its total form, the Course altered my thinking. Take the course, invest the time. It’s free, except for your time.

Once digested, and it’s a big bite, you will then confront the reality of where we stand as a nation. For starters, we are a deeply divided nation. I doubt anyone will disagree. The dividing lines are not necessarily Democrat or Republican, rich or poor, old or young. Those labels are too easy. Our division is different. I think it lies at the fundamental question of what is the role of government in society. It is the same argument that led to our First American Revolution, our Civil War, our Great Depression, and our current bloated State.

The edge upon which we stand is a financial one. The beliefs of Teddy Roosevelt, as outlined in 1909 in his New Nationalism speech, which were embodied in government by his cousin FDR in the 1930s with the advent of the Federal Reserve (in 1916), the FDIC, the Social Security program, and then finally by Medicare in 1965 by LBJ and expanded in the 2000s by George W. Bush. These Presidents are a mix of Democrat and Republican, but all stem from an expression of what is an appropriate role of government in society.

The financial consequences of these policies are finally coming home. Fundamentally, and I think it is not arguable, the financial strain of these policies is not sustainable. All debt can be understood to represent a promise to pay. It can take the form of a loan/bond which is a formal financial instrument or it can take the form of a promise–such as a promise to pay a pension in retirement or to pay health expenses in retirement. Social Security and Medicare represent those promises. So, our true National Debt represents the combined value of all of these promises: our aggregate bonds, our Medicare promises, and our Social Security promises.

This True Debt is staggering at $62.3 Trillion. It is best analyzed by David Walker, who was our national Comptroller – THE non-partisan keeper of our financial books for the United States. He resigned two years ago from his post because he could not convince Congress that we were in DEEP trouble as a nation. I highlighted his efforts on this blog post last year, but he has since created a Foundation where he is traveling the country trying to tell people that we must change the course of the Titanic or else we are going to sink.

He issued a report last month highlighting the most recent data from our government regarding our True Debt. You MUST digest these facts. They are facts, plain and simple. The reality of the situation is that we simply cannot pay our financial debts. It is just not possible. We could raise taxes to 95% of all income, leaving people just 5% to live on, and it would still take us almost 4 full years to pay it down.

April 15th is Tax Day. The Tea Party movement was active throughout the country. They represent one side of the conflict that is erupting. They represent the point of view of angry citizens who are fed up with the tax policies that support a form of government that they view as immoral and unsustainable. This point of view is identical to the original Tea Party, which occurred on Dec. 16, 1773.

The first Tea Party movement culminated in all out War just three years later in 1776. It led to War precisely because the differences were fundamental and irreconcilable. I fear that we are approaching a similar fate. Neither side seems to be able to sway the other through civil discourse. Both sides inflame the other through distortions of fact and opinion — just watch Fox News versus MSNBC. Both sides should take a pause and give some thought to the tinderbox that exists right now before they add any fuel or actual flame to the situation.

Take some time today to think about what April 15 truly represents for you. Take some time to think about where you stand in the debate. Take some time to think about how you should act.