Failure of the public sector
Whenever something goes wrong, our society seems to run straight to the government for a solution.
When the Dow Jones Industrial Average plummeted in 2009, we ran to the government for a so-called “stimulus” of the economy.
Commentators and the media said the “free market” and “private sector” had failed, so for some reason we assumed the only alternative was to let the government intervene.
Never mind the fact that the stock market has historically always recovered faster when the government does not get involved. For example, when the stock market crashed in 1987, government remained relatively uninvolved. The result was that the stock market actually ended up higher at the end of the year than the beginning.
When the real estate bubble burst, we ran to the government for help. Supposedly bailing out the banking industry in one of the most monumental displays of corporate welfare was the only solution. Never mind the fact that both the Clinton and the Bush administrations pressured banks to increase loans to high-risk individuals to increase the rate of home ownership.
When a gunman tragically killed 20 children and six adults in a school shooting in Connecticut, we ran to the government for a solution. Supposedly the government would find a way to ban assault weapons, or at least ensure that no madman ever gets a gun again. Never mind the fact that crimes committed by guns actually increased in Great Britain after stricter gun laws were passed. Never mind the fact that mass shootings are more likely to occur in gun free zones.
Is this the same government that’s been playing chicken with the American people regarding the debt ceiling? Is this the same government that continues to spend $1 trillion a year it doesn’t have? Is this the same government that couldn’t agree on the top tax rate?
According to the Congressional Budget Office, if Congress had not acted, the economy would have declined 0.5 percent this year. Congress had 10 years to avoid the so-called “fiscal cliff” to make their Dec. 31 deadline. Instead, they finally came to a deal on Jan. 1 after playing a game of chicken that only hurt the taxpayers and that scared employers.
Now they’re back at it. They’re still arguing about whether to raise the debt ceiling.
No one else has threatened our economy recently than our own federal government. And few presidents have been as anti-business as the current one. As The Economist magazine (which wholeheartedly endorsed Obama in 2008) pointed out: “No administration has had such a poor appreciation of commerce. Previous Democrats, notably Bill Clinton, raised taxes, but still understood capitalism.”
Both sides of the political aisle say that middle-income Americans shouldn’t have to pay more in taxes. And yet, Dec. 31 came and went without an agreement. Only on Jan. 1 – past deadline – could Congress come to an agreement.
If they hadn’t come to a deal, how would this have affected the average Surry County resident?
The median household income in Surry County is $36,788, according to 2011 Census data. A household making that much would end up paying an extra $735 a year in taxes, according to a Wall Street Journal calculator. Even a household making only $25,000 a year wouldn’t be exempt. That household would pay an extra $500 a year in taxes.
It may seem simple for Congress to realize that they shouldn’t raise taxes by $735 for a household making less than $40,000. And yet, it took them months to come to a solution.
We continue to hear about Congress playing a game of chicken regarding taxpayers’ dollars and the debt ceiling. Last year, the federal government spent $3.6 trillion and brought in only $2.3 trillion. It would be nice if our representatives understood economics. If nothing else, it would be nice if they understood arithmetic.
Is this the same government we want to solve our gun problems? Is this the same government we wanted to solve the automobile disaster? Is this the same government we wanted to solve our banking problems?
The best thing our government can do to help us is to get out of the way.
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