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George Michael: Who will tell them?

December 13, 2012|By GEORGE MICHAEL

“Democracy requires of its citizens qualities that it cannot provide. Politicians can conjure an exalted vision of a prosperous, healthy, and free society, but no government can supply the qualities of honesty, compassion, and personal responsibility that must underlie it.”

This quote is from German philosopher and social scientist Jürgen Habermas. It seems appropriate for our current situation. We have politicians attempting to conjure up a picture of prosperity. But the personal responsibility of our citizens needed to actually resolve our current financial mess and keep us going in a positive direction is sadly missing. The last election proves that.

The lack of responsibility starts with our president, includes Congress and extends right on down through our news media.  For instance, the headlines announce a $1.6 trillion dollar program laid out by the president. But how many understand what is involved in this plan?

When news reports announce the plan is for $1.6 trillion and that it includes President Obama’s plan raising taxes only on wealthy Americans, many might assume that taxing millionaires and billionaires is going to generate billions and billions of dollars in new revenue and the budget problem will be eliminated. 

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Sadly, the news media is forced to operate in short sound bites and fluff pieces masquerading as news knowing that the attention span on economic matters for the average TV viewer is about 20 seconds. Many couldn’t care less about the federal budget and many more don’t want to spend time or have the time for thinking about such things. 

So what’s actually in the deal? It does include the president’s goal of raising taxes on those making more than $250,000 per year as well as returning to the higher capital gains tax rate of 20 percent plus taxing dividends as regular income meaning a tax rate for some of 39.6 percent. This means, of course, that government is taxing the same profits twice.

The president’s plan also includes keeping the 2 percent reduction of the Social Security tax in place — a very bad idea.  Plus, he is planning a higher estate tax as part of the deal.

The revenue from taxing those making more than $250,000 is projected to produce anywhere from $30 billion to $50 billion for next year’s budget, depending on who is doing the estimates and what assumptions they are making. Our tax code is complicated with so many credits and deductions that it is hard to know for sure how much revenue will be generated and what actions those getting hit with the new taxes might take to dodge them. 

Using $40 billion as a rough estimate would reduce next year’s deficit by a bit more than 3 percent and contribute just 1 percent of the total budget. That’s not much in light of the hysteria being generated about it. Raising taxes on the top 2 percent of Americans will never come close to dealing with our projected shortfalls. The public is seriously misinformed in that regard.   

In addition, the plan calls for a new stimulus package of $50 billion in addition to more money for unemployment benefits.  What’s this? I thought we were working on a balanced deal to cut spending along with revenue enhancements. Adding more spending sends us in the wrong direction.

Appeals to cut spending are just not that popular. And when someone like Paul Ryan tries to make the case for what is needed to save the entitlement programs, he is demonized as selfish with a heart of stone and no concern for the needy or the all-important middle class for that matter. So the president chooses to put the larger problem off until another day.       

Yes, the people voted last month. They voted for a program of keeping everyone’s benefits in place, having someone else pay for it and letting the next generation deal with any problems. They have been led to believe that there is not really a problem, nothing at least that can’t be solved by a tax increase for somebody else.

As Habermas noted, “Democracy requires of its citizens qualities that it cannot provide.” The question remains: Who will provide the needed qualities for our citizens, and what happens if these qualities are not forthcoming?

George Michael, who lives in Williamsport, is a former principal of Grace Academy. His email address is gfmichael46@gmail.com.

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