Last Updated:December 20 @ 07:13 am

Charen: What Price 'Fairness'?

By Mona Charen

Realistic Republicans understand that President Obama and the Democrats head into fiscal cliff negotiations in a far stronger bargaining position now than in 2011. When voters were asked on Nov. 6 whether they favored raising taxes to reduce the deficit, a total of 60 percent said yes (47 percent favored increasing taxes for those who earn $250,000 or more, and 13 percent approved tax increases for all).

So taxes will be going up. As a matter of political strategy -- not to say survival -- Republicans will have to agree to raise taxes on those defined as rich. It's more than just the exit poll on support for tax increases. Republicans must also contend with the Pew poll that asked who would be more to blame if a fiscal cliff deal were not reached. Before a single meeting has been held or talking point fed to the press, 29 percent said they'd blame President Obama, while 53 percent said they'd blame Republicans in Congress.

President Obama sounds so reasonable when he asks for a "balanced approach" to deficit reduction. Whether the implied spending cuts -- the flip side of his balance -- will materialize is the great question.

Obama is the anodyne face of a leftist party -- a party perhaps best defined by Massachusetts Senator-elect Elizabeth Warren. Her speech to the Democratic Convention in September was a protracted roar of grievance, a fulmination against the (imagined) entrenched interests who were "rigging the system" against the poor and the middle class.

Wow. A nation that is skating to the brink of bankruptcy because it spends so much on the middle class is whipped into a righteous frenzy about how rigged the system is toward the rich? As the Washington Post's Robert Samuelson wrote in April, 60 percent of the federal government's non-interest spending goes to transfer payments to the poor and middle class. Spending on the 10 largest means-tested programs -- that is, programs for the poor -- has increased from about $4,300 per person in 1980 to $13,000 per person in 2011 in inflation-adjusted dollars.

The bill for this spending is disproportionately paid by the wealthy. The top 20 percent of income earners pay 70 percent of the taxes. Soon they will pay even more. If this is what happens when the rich rig the system, the poor and middle class should beg them to keep rigging it.

The Democratic Party is consumed by the insatiable appetite to make America "fairer" -- by taking from some to give to others. As noted above, the U.S. tax code is already steeply progressive. You needn't love the rich to understand that chasing the goal of redistribution rather than growth can result only in everyone becoming poorer.

Like many European social democratic countries, the U.S. has gotten into trouble by spending far more than it collects in taxes. Andrew Biggs, Kevin Hassett and Matt Jensen examined studies on how other nations have recovered from their fiscal improvidence. Looking at 21 countries over 37 years, they concluded that effective resolutions are rare (only about 20 percent of cases) and successful attempts to balance budgets rely heavily on spending cuts, whereas failed ones rely on tax increases. What about the "balanced" approach? "On average," the authors noted in the Wall Street Journal, "the typical unsuccessful consolidation consisted of 53% tax increases and 47% spending cuts."

Yes, taxes are going up, but let's remember, as we bow to the inevitable -- that raising taxes on the rich will put only the most trivial dent ($80 billion according to one proposal) in our trillion-dollar annual deficits. This is the great god "fairness" appeased, while the demon debt continues to breathe fire.

The sane policy goals for a nation in the kind of trouble we're in would be economic growth and entitlement reform. The progressive agenda, Richard Epstein writes in "Why Progressive Institutions are Unsustainable" (Encounter Books), supplies a "one-two punch." First, it reduces the private sector by ill-advised regulation. "Second, it imposes extensive and counterproductive programs of redistribution that cannot be supported by a stagnant economy and a shrinking productive wealth base. As that base gets smaller, the demand for a stronger safety net induces yet another round of transfer payments and makes the tax burden heavier and the rate structure more progressive. The new redistributive tax regime in turn exerts greater negative pressures on production levels."

And down we go. The worship of "fairness" is a death cult.

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6 Comments

  1. joe93Comment by joe93
    November 20, 2012 @ 9:56 am

    So if congress raises taxes as the president wants, and the economy continues to sputter, who will the Dems blame for the poor economy? Who will the press blame? Who will the public blame?

    It’s easy to find fault in the “obstructionist” Republicans now (they’re used to it), but when the left gets what they want and the country fails, how easy will it be to continue to blame the rich or the right?

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  2. JDZComment by JDZ
    November 20, 2012 @ 11:07 am

    I actually think that it is time to give the Obama administration whatever they want as it is clear that they refuse to do what is really needed to turn around our economy. Why fight it? They are hellbent to borrow and spend and optimize wealth redistribution which is deadly wrong in terms of what needs to be done.

    So, at the end of the next four years, where will we be as a country? The likelihood of anything changing is very small as the insatiable entitlement monster embellished by Obamacare will be eating more and more of the federal budget, the tax increases will be like a drop in the bucket in terms of the federal operating budget let alone the national debt, the interest on a 20 Trillion dollar national debt (will be there by 2016) will be $500 Billion a year, the federal government will continue operating at a plus Trillion dollar deficit each year, the unemployment rate is going to go to higher levels, and those Americans on welfare, unemployment, and food stamps will increase.

    There is not one member of the Obama administration (starting with Obama himself) that has the gonads to even propose the kinds of actions necessary to even begin to turn around this fiscal armmageddon in the making. The so-called “fiscal cliff” is really fluff compared to the huge financial liability laying on the table that is totally unsustainable and we will eventually run out of borrowed money to even pay the interest on the loans.

    Tax revenue is going to go down not up as the economy is not going to recover much, if any, over the next four years under this administration.

    Only when the government starts to acknowledge that it has killed the golden goose and now has to face this disaster and admit it has totally screwed up, will this country have the possibility of turning it around. It is like the addict that has to end up living on the street before he/she finally admits they have a problem. Before any problematic situation can be resolved…one has to admit they have a problem, and the federal government at large refuses to admit it has a major fiscal problem.

    Those running government at all levels of this country have basically blown it. The liberals continue to push for more and more “freebies” and the Republicans continue to push for less government and more fiscal responsibility and between these two factions, regardless of party, they have finally fumbled the ball to the point they have bascially ruined one of the greatest countries to ever be a part of this world. The politicians elected by the American people have finally killed the golden goose which is our private economy where whatever wealth is generated in this country is created. Without our private economy, nothing else can exist. Why is this so hard for the American people to understand? The massive government growth in this country at all levels has gone over the level of being affordable by those taxpayers still left to provide the revenue to pay for government.

    Government policies starting at the city level and going up to the federal level are out of control and business suppressive to the point that they suppress private investment in new ventures or product development and manufacturing in this country. Stupid…stupid…stupid. The massive growth in big labor, especially in public service, and their collusion with the Democrat political operatives are a major part of the problem for both the cost of government and our failed economy. Stupid…stupid…stupid.

    And the naive and moronic mentality of millions of Americans, who continue to vote for these liberal eggheads who could not design themselves out of a paper bag, are facilitating our economic problems. Stupid..stupid…stupid.

    When the voters have a rare opportunity to elect a super intelligent and competent man like Mitt Romney who has forgtten more about how our economy works then Obama knows, and they fail to do it…stupid..stupid…stupid.

    God help us.

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    • fubar22Comment by fubar22
      November 20, 2012 @ 9:08 pm

      Obama is nothing but a community organizer puppet controlled by George Soros the most dangerous man in the world. He wants to destroy the American economy and create a global government he can control through the United Nations. When we elect a conservative President the first order of business should be to get us out of the UN. The most bigoted and racist entity in the world.

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    • BillzillaComment by Billzilla
      November 20, 2012 @ 9:34 pm

      “God help us.”

      As a nation, we’ve turned or backs on God. The God who sustained us as a nation, the God who made us wealthy and powerful as a nation, the God whom our ancestors relied upon, thanked, and praised for His goodness toward us, the God who created us has now left us to our folly.

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  3. stickmanComment by stickman
    November 20, 2012 @ 11:41 am

    Bargaining – thugs and unions don’t bargain. bargain means you strike some modicum of a deal – each side giving a little. The Democrats don’t and won’t deal – they’ve no need to. They are perfectly willing for the military to take HALF of the hit of the total sequestration, when it should have been an across the board government hit – all departments. instead it is the military and the “descretionary” spending, with not a jot against “entitlement” welfare spending. The wonder of this – it’s the Republicans set it up – in the false belief that even the democrats wouldn’t cut the military that hard.

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  4. hart65Comment by hart65
    November 20, 2012 @ 11:42 am

    Prosperity without fairness is bad;
    Fairness without prosperity is worse.
    To believe that we are experiencing the former, you have to believe that the reforms of the last 100 years have suddenly failed. To prove the latter, you only have to look at history, to see how “fair” hard times are on the most vulnerable. It is ironic that the party of the 47% is willing to put these folks at risk. Liberal policies have not yet killed the proverbial goose… but they seem hell-bent on emasculating the gander.

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