Tag Archives: debt ceiling

Column: There has to be more than tax cuts

My latest column in The StarPhoenix.  I’ll add in some extra link later today but for now I need to get some work done for my other employer.

The Star Phoenix Since the end of the Super Bowl, I have been following the National Football League lockout and the litigation surrounding it. I have concluded that the hard-line owners and the players association leaders are the stupidest group of people not working in the National Hockey League’s front office.

That all changed last week, when both the Republicans and the Democrats started to talk openly about defaulting on the debt of the United States – something that seemed so preposterous that I thought I was reading a headline from News of the World.

Sadly it wasn’t. If a deal isn’t struck soon, the U.S. will default on debt – something that neither Canada nor most western nations have ever done – and it will cause economic chaos around the world, again. Why has it come to this? You can blame George W. Bush or Barack Obama, but this one rests with the Tea Party.

Almost everyone agrees that the U.S. budget has to be cut.

Incredibly, President Bush cut taxes at the start of his first term and then, while the world changed after the Sept. 11 attacks, the U.S. tax rate did not.

Rather than raise taxes to pay for wars in Afghanistan and Iraq, Bush kept the rates low and borrowed, as if there were no tomorrow.

In case you haven’t taken time to think about how expensive wars can be, the U.S. spent $20.2 billion to provide air conditioning alone in Afghanistan and Iraq last year. By contrast, Canada’s massive Economic Action Plan had just $12 billion in new infrastructure spending.

On top of the wars, the Great Recession hit. Then, to control long-term health costs, Obama brought in health-care reform. It wasn’t universal care, but better than what Americans had. Suddenly people started talking about seceding from the union. Apparently helping people with their health problems is unconstitutional.

Somehow, out of all of this, the Tea Party was formed and has decided to fight raising the debt ceiling.

Conservative columnist David Brooks calls the Tea Party a "psychological protest," and I tend to agree. You would dismiss the partiers as wing nuts if they didn’t hold the balance of power.

In the 2010 midterm elections, the Tea Party was quite willing and able to defeat any Republican incumbent who compromised on increases to spending or taxes. The result is that Republican Congressmen know they will face a tough primary challenge from the right if they step out of line and compromise.

The result? A possible debt default.

What I find interesting about this is not the politics but the psychology. Tea Party supporters see taxes and government as evil: No tax increase can ever be justified.

I complain about taxes like everyone else. I howl every year when the mill rate goes up, but after 13 years of making weekly mortgage and property tax payments, my payments are now $130, up from $114 a week in 1998. Even if the city reduced its tax rate to the 1998 level, my gain would be about $15 a week. I cheered when the GST was lowered to five per cent from seven per cent, but I haven’t noticed the price go down on anything I have bought.

While I don’t especially like paying taxes, I also know they go toward making our city and our country a better place to live. Even the great icon of conservatism, Ronald Reagan, raised taxes when more revenue was needed. Brian Mulroney’s hated GST was a component that allowed the Chretien Liberals to balance the budget.

Yet to balance the budget the Tea Party demands only spending cuts, which will largely hurt the poor, rather than seeking to close tax loopholes for the rich. They propose gutting Medicare, which could hurt seniors across the nation.

It’s something you hear often and it boils down to: "If I can make it, so can everyone else." It’s based in a deep ignorance of the social, medical and geographic realities of how we are raised, the opportunities we are given or the geography we settle in. In Saskatchewan, where prosperity often has come because of the soil conditions of the homestead, we understand this.

Spending cuts are often deemed to be courageous and noble and at times they are. But so is ensuring the less fortunate are taken care of. We’ve always known that as a city and a province. I hope we won’t forget that, as others have.