Today’s issue is, of course, the impasse in Wisconsin. There is no doubt that there have been distortions in state and local pension systems, but I suspect that the overriding reason in almost every case has been the bargain that calls for more money later in the form of health care and pensions in return for lower wages now. Everyone wants government services but no one wants to pay the market price, so the solution is to conceal the total cost of the compensation package needed to keep teachers teaching and patrolmen on the beat and let the children pay later or, as in Wisconsin, renege on the deal. The idea of raising taxes to cover the whole cost of programs that legislatures have approved is anathema.
This is a microcosm of the situation on the national level. The government isn’t doing anything that hasn’t been approved by both houses of Congress and signed off on by the President. (I can’t remember a Presidential veto of a spending bill being overridden in decades). Some of the programs approved may have been ill-advised from the start, and many may need to be revisited, but in every case there was agreement that they were needed at the time they were authorized. (Yes, some earmarks slipped through that would never have been approved on their own merits). The problem is the one that Mr. McCawber described so accurately: expenses 20 shillings, income 19 shillings sixpence, misery.
At this point the Republicans would like to gut programs in the discretionary budget and force Obama to lay his hands on the third rail of entitlements – those socialist programs that everyone hates except for the payments they themselves get. Almost everyone is urging “leadership” on the President, but Dan Rather doesn’t agree and in his homey way makes an interesting observation: The President may have punted, but it was a quick kick, an offensive play to regain field position. As I look down the road, what I see happening is an eventual compromise that involves means testing and higher contributions from more affluent participants. I think this is where some Republicans are going. Nobody ever says it, but all this is is introduction of more progressivity into programs that have been masquerading as “pure” insurance vehicles. This raises the question of why some progressivity would be good for entitlements but bad for income tax. Go figure.
I wrote several notes to myself recently and notice that the subject of the Constitution appears quite often. There are people out there, who want a constitutional convention or constitutional amendments to provide a stronger basis for the conservative agenda, which they truly believe is enshrined in the Constitution. There are times when I wish I hadn’t dropped out of law school to go out and see the world, because the legal issues are fascinating. For example, is the health care law constitutional? If you are a woolly headed liberal like me and have been worrying that the red state attorneys general will succeed with their case against healthcare, read David Cole’s article in the Feb 24, 2011 issue of the NYRB. Cole believes the issues were settled by the Supreme Court in the Roosevelt years. I think he is right. Unless Glen Beck succeeds in persuading the nations’ courts to take us back to 1900, there is no way a challenge could succeed.
When am I going to get to the point? Right now, I hope. Society in the late 18th C was uncomplicated. If there were any welfare programs, they were private initiatives or church programs. These worked for the simple life of the time. Most people lived on their own land and could provide for themselves. When the framers looked around, they didn’t have to account for the effects of steam engines, internal combustion engines, oil spills, big pharma, the internet, airport congestion, etc. etc. There was no need for food inspectors. What one ate came from his own farm or the one next door. Yes, that’s an over simplification so the framers mentioned interstate commerce, but none of them could have foreseen the complexity of a modern economy and society and its inherent benefits and dangers to individuals.
We live in a complex world. People who say we have too much government and pine for some idyllic age when people were free to do whatever the hell the pleased haven’t looked around at the modern world and, in fact, don’t really understand the one they think they want to go back to. Individual initiative is a good thing and we should all provide for ourselves when we can, but it's not possible for everyone all of the time. Many of us need guidance or help or both. It’s wonderful that some people with entrepreneurial skills can rise from nothing to become masters of great fortunes. All they need are the labor of publicly educated workers, an affluent market of well paid workers to buy the products and services they offer, and a highly regulated commercial system that protects them and their growing fortunes. Yes, I did mention workers in two different contexts. They are essential to the system to get things done, and if they don’t share in its fruits, the system doesn’t work.
We are all in this together, and it costs money to keep it going. The more complex it gets, the more it costs to maintain and the more benefits there are to be shared. In this kind of society, a few will be able to provide for themselves, but the vast majority will need to be insured for their healthcare and their needs in old age. And they will need the FDA, the FCC, the FAA and all of the other agencies that make modern life bearable. This all costs money, and the share of what people pay for ever growing essential services will necessarily take a greater and greater share of what they earn. Government grows in response to need, and it only grows when those needs are recognized by our elected representatives and response to those needs becomes the subject of legislation.
It’s time to look at entitlements and at revenue and to introduce more progressivity into both. Cutting the PBS budget is not the answer.