I was reading this post by Jared Bernstein:
A Few Fiscal Points re this AMs WaPo
http://jaredbernsteinblog.com/a-few-fiscal-points-re-this-ams-wapo/
and then read this comment:
http://jaredbernsteinblog.com/a-few-fiscal-points-re-this-ams-wapo/#comment-412115 (reproduced below)
The “intra-governmental” debt is maybe even more problematic. What it really represents is money that the Nation decided not to pay in taxes when the baby boomers were at the their highest earning period but rather shifted “retirement” funds to cover operating costs.
So in ten years, when the bulk of the baby boomers are in the process of retiring, we have to pay for the upsized budgets they voted for (but chose not to fund) plus their retirement through retiring the debt owned by the Social Security trust fund.
If nothing else– if NOTHING ELSE AT ALL– it makes a strong case for jacking up the estate tax. Money that should have gone to taxes in the 80s and 90s but instead were kept in private coffers can finally be taxed appropriately.
That’s not an argument against short-term Keynesian stimulus. Just a realization that our long-term debt issue is not really about government spending but rather a refusal to pay for that spending.
…
and it made me think about a discussion (argument?) I had with a brother-in-law (once removed? the husband of my sister-in-law) over the weekend. Our disagreement seemed to boil down to his conviction that interest/dividends/capital gains should not be taxed because they had already been taxed at some point in the past when the dollars were once labor income. My disagreement basically boils down to ‘income is income’ and it is extremely unfair in my world view that people who have to work for a living (me!) pay higher taxes on less income than people who don’t have to do a damn thing (get money from their money) to get their income. We didn’t really resolve anything (there might not be any resolution), but the comment above is something that really seemed to speak to that discussion (in particular his acute objection to any sort of inheritance tax). Much like our two unfunded wars (remember Iraq and Afghanistan? Both wars were (and continue to be) funded by borrowed dollars), our government has committed to spending certain dollars in the past, but then failed to generate the revenue to pay for those commitments. To say that you didn’t agree to this or that expenditure is disingenuous at best, you can’t pick and choose what parts of your government you want to pay for. We (collectively) elected these idiots to represent us (never let anyone tell you we lack a representative government!); not voting or voting for the loser doesn’t absolve you of the collective responsibility for our government. If you don’t want to be part of the society that results from our government, emigrate!
Anyway, as that comment so eloquently puts it, collectively we have decided to borrow funds from the future and are now balking at paying the price. I particularly like the bit about the high estate tax as compensation! People can’t pick and choose which bits of society they want to use and only pay for those bits, it is an all or nothing proposition. That our society chooses not to pay for what it wants (and has already used!) shows that we are collectively a dysfunctional one. Of course, the vast (and increasing!) asymmetry between the haves and the have nots (or, as rather amusingly stated on a show on BBC I watched yesterday (Russia Today, I think), the “have nots” and the “have yachts”) exacerbates the problem as our oligarchy wants to have expensive wars for ‘free’, not to mention use highways, airports, police, etc. for ‘free’ (meaning borrow for these facilities and let the middle class pay for it).
Even though not exactly apropos to this post, I also really like the comment’s bit about immigration (my brother-in-law and I also discussed this idea, though we were a lot less far apart):
The real path forward– that we’ve been doing, quietly, for three decades but refuse to acknowledge– is to immigrate our way out of slow growth and lopsided demographics.
That’s why the refusal to do anything to normalize the “illegal immigrants” who are here is disingenuous. The reality is that we’ve made it as welcoming for them to come as we can because they’ve been economically beneficial to us. To then turn around, insult them, deport them, and criminalize them is hypocritical.
