Friday, December 11, 2009

What Happens When the Bill Comes Due?

Via Memeorandum:

After twenty-five years working in the banking industry I've seen it thousands of times-that moment when the bills are due and there isn't enough money to pay them. The vast majority of people are not deadbeats and the vast majority of people will pay their bills no matter what it takes. In the real world, when the bills come due people will adjust their lifestyle in order to meet their obligations.

The real world does not exist within the halls of Congress. That's because they are playing the game with other people's money. When the bills come due in Washington they simply spend more of your money. Unfortunately, you and I aren't giving the kids in Washington enough money to keep them in the lifestyle to which they have become accustomed to so it is time to pony up.

According to the New York Times, the VAT is back on the table:

The favored route of economists is known as a value-added tax, which is a tax on goods and services that is collected at every step along the production chain, from raw material to a consumer’s shopping bag. Similar to a sales tax, it generally results in consumers paying more for the things they buy. The revenues could be used to pay for health care or other social programs, or just to pay down existing debt.

Like universal health care, every other industrialized country in the world already has a value-added tax (as do about 100 emerging countries). And also like universal health care, this once-taboo policy option has recently been invoked, at times begrudgingly, by many prominent Washingtonians, including the House speaker, Nancy Pelosi; John Podesta, who was co-chairman of President Obama’s transition team; and two former Federal Reserve chairmen, Alan Greenspan and Paul A. Volcker
...a tax on goods and services that is collected at every step along the production chain, from raw material to a consumer’s shopping bag. In simply terms, the price of everything you buy for your family goes up and up and up until finally, it reaches you, and you then pony up your "fair share" for spineless politicians who don't have the balls to play by the same rules imposed on the rest of us. So much for Obama's promise not to raise taxes on the middle class.

Our politicians don't think that we will stand for having services scaled back in order to pay down the deficit. But in our personal lives, we cut back on things that we consider 'essential' all the time. We brown bag it to lunch, eat dinner at home, drive our car until the wheels fall off.
And maybe Washington should clean up its own house before it asks us for more:

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available. (emphasis added)

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000. (emphasis added)
I don't think that it is unreasonable to tell our representatives that they can forget about getting one more penny from us until they start spending the money we've already given them more responsibly.


smitty1e said...

A clean, simple VAT may make sense, if it is used as a club to beat the IRS to a pulp.

Carol said...

A VAT or a national sales tax would be just fine if it replaced our current ridiculous system. But that isn't the intent. They try to sell this crap by saying that they will use it to pay down the debt. Yeah, right. They increase taxes and just keep spending. Enough.