If you can get past the emotional election issues that give us a lot of 'litmus' tests for the media to talk about, you can get to the major issues of great economic import to your future.
How to handle the Social Security mess, the need for Rx relief for some, and the way to get to a fair tax program that funds only what we should want the government to do, then you will want to read this essay on letting other people spend your money.
Compassionate Conservatism and Economic Issues
or How to understand why you should spend or save your money
By Richard R. Tryon
If voters can get past the emotional issues already presented to the heart of some very important economic matters, they will have managed to do so because they realize that the prosperity of the past decade has left several embarrassing legacies.
First, the trend of the past fifty years was for working people to save for their retirement years by investing in their homes, and in insurance and other investment programs. Corporate pensions have been popular and only recently have many found ways to use the IRA or other government approved devices for deferring tax on investments until retirement years. Liberals don’t approve of this method of self regulated care for our retirement years.
Throughout this period a very small tax on income has grown to be so large that it really exceeds the one thought about first when the words “Income Tax” come to mind. The 1935 inspired and 1937 program was based upon a tax of 1/2 of 1% of the first $3,000 of annual income and it was called a program for “Old age and survivors insurance”. It is better known today as Social Security and it encompasses not only so-called retirement benefits, but early retirement, disability income, and medical care; and it consumes 15.5% of your annual earnings on the first $155,000 of income. Keep in mind that half of that money is actually paid by employers first rather than having it go to you first, where it would also be subject to income tax! It is now the largest amount of tax that most people see as income, not received, that is based upon the projected level of annual income before such taxes.
Only a fool could have believed any of the fixes of Congress enacted in the last forty years that were aimed at improving the benefits while increasing the taxes! Each time it has been fixed we were told that it will not need more repair. Now we discover that the ‘baby boomers’ are fueling the highest payouts ever, but that when it is their turn to draw benefits, the tables will be turned. Where five are now paying in for every two taking benefits out, the future will soon see only two workers paying in for every five taking them out! The current paper surplus (the money is not in storage) will disappear.
The liberal solution of candidate Al Gore is simple: Increase the taxes and keep $300 billion of the current boom-time surplus as a ‘nest-egg’ to pay for the shortfall later- after his time in office. He is a liberal who can’t pass up the chance to further the cause of income redistribution in hopes that it will cure all social ills. That hope has been the perpetual hall-mark of his party and all costly programs that have forced the above analysis to be so true. To add to his political appeal, Gore wants to add a new and costly benefit- Rx coverage, first for the elderly, and in time for all.
If you think Rx expense is high now, just imagine what it will be when it is free? You will pay every day that you work into Social Security for Medicare a sum that will pay at first for ever more costly drug support for the growing senior population. Giving the pharmaceutical industry its fair profiit, with the added cost of government administration, you will find that the total bill, in the name of equality for all, will rise enormously.
The compassionate conservative can help you avoid all of this pain by taking action to improve the competitive nature of industry while providing some optional insurance for some seniors in special need. And it can be done inside of the program that will return surplus to the taxpayers while reducing the national debt. How? Tax reductions mean more disposable income for all. Some will use it to buy consumer products of their choice; others will invest some of it this way and more of it in entrepreneurial start-ups and in investments in industry. These investments will provide more jobs and in turn more income to the government. With reductions in the size of government, the new jobs will go to some of those who leave the government’s service of trying to save us from ourselves!
Obviously these few words do not spell out in detail how such a program will work, and it is not possible to know in advance what inventive technologies will be that create real job opportunity, not just governmental make work or investment in things known to be safe and sure. You would not want your government to invest in any other kind of risk with your money, would you?
It is argued that women are especially anxious to vote for Gore because they fear that Bush will send the surplus back (somehow only to the rich) and leave them stuck with an underfunded SS system. If they think that his election will save them, I can state that they are right in a sense. I can guarantee that Al Gore will not hesitate to use the ability of the government to borrow more to fund SS or any other program when the time comes. For that matter, George Bush would have to do so too, if confronted with the obligation to pay and no other way to do it.
The difference, however, is that Bush wants to put forth a fiscal and tax policy along with reform of the SS system that will avoid the deficit and take care of the obligations. It will require some shifting in SS money to go into one or a number of choices for government approved investment or insurance companies to invest some of your SS tax dollars; and it will require some reductions in the size of government to help insure solvency with reduced levels of income taxes for all.
It will include efforts to rid the nation of the death tax and the marriage penalty tax on income. Unless the government can fund new business start-ups, to take the place of business that close because of the death tax, you can count on the folks who lose the family business, because they can’t pay the death tax, will cause many others to lose their jobs too. That is not being compassionate now, is it?
To tax married couples more than, if they live together without marriage, is in effect a liberal effort to destroy marriage as a favored state for personal relationships. That may be ok with the liberal crowd, but a lot of compassionate conservatives are not ready to push in that direction. Are you?
Oh yes, the Rx question remains. Relief from high drug costs is a matter of growing concern for two reasons: First, more of us live longer; and second, the drugs that make it possible cost more!
Now, what do you want to do?
If it is our policy to keep everyone alive as long as possible, regardless of cost, as an entitlement, then we need a lot more doctors, expensive drugs and hospitals in which to work to save all souls. In short, if we do not ration health care in old age such that the poor are allowed to suffer less and die sooner, then we need to find a way to take money from the rich to keep the poor alive! Is that compassionate? I am not at all sure that the rich get the better position on this, are you?
If all we need is to provide some senior discounts on drug expense, we can do it by finding ways to help pharmaceutical companies want to earn tax credits by providing such assistance. It makes for an effective form of help without employing thousands to administer this improvement. Is this a better idea? I think so.
Bottom line here is clear. Gore will hope for a Democrat Congress that will tax and spend so you will vote for him again. Bush will offer to be compassionate, but try to leave more of your money in your pocket and return some of it to you in exchange for your taking responsibility for more of your care. Which one do you want? Slaves are content to let the government do it for them because they never learned how to do it for themselves. Whatever they get is more than they are prepared to undertake on their own. Most Americans,when given this choice clearly, vote to be independently responsible, because they know themselves better than anyone in government can claim to do.
Don’t you agree?
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