THE HIGH COST OF SMALL GOVERNMENT AND ABSENT REVENUES

The news that congress walked away for vacation without fully funding the FAA says a lot about where we are as a nation at this chaotic juncture in our history (As of Thursday, a temporary deal is said to have been reached). Unsurprisingly, the funding failure has to do with the usual Republican intransigence and ideologically motivated vandalism against our still, but only barely, first world level government.

If you read a little deeper into the FAA story, you find that many of those sent to the showers early, such as engineers, were engaged in critical upgrading of the air traffic control infrastructure. It is the sort of quiet, ongoing work that ensures so many things function in this country with a reasonable expectation of safety and efficiency. It’s also part of the big government we hear condemned on a regular basis in the banal sloganeering, and destructive politics of the right.

There is indeed a high cost for retaining scandalously low taxes on very wealthy people and very wealthy corporations, and for the failure to obtain revenue, all in the name of continuing to direct an extraordinary portion of the benefits of the nation’s economic production to the very top. And that’s all it is: a web of policies, legislation and permissions of various kinds allowing that or fully encouraging it.  Simultaneously, enormous pressure is exerted to continue the siphoning away from programs and initiatives designed to improve the security and quality of life for ordinary people in the country.

The array of government functions consistently taken for granted by most Americans, as one would expect, run the gamut of all forms of safety inspection from transportation infrastructure, foodstuffs, medicines, toys, equipment and automobiles, not to mention the countless construction projects that build and improve what literally is the physical foundation of the country. It cannot continue, and in fact, for some time now it has not to any sufficient degree done so, since Republicans’ “starve the beast” agenda has taken hold over the last decade, and in some cases, longer than that.

But there is no question that America has a stark choice: remain a first world nation with a first world government or become like many third world countries around the globe, particularly in the Middle East and Latin America, a nation with the natural resources to generate enormous wealth, though wealth that exists only in small pockets of the nation as a whole, while the national government and the nation generally are shoddy. There’s a lot of ambient noise, an unprecedented amount now in the public square, but Americans must cut through it if they are to understand as straightforwardly as possible the choices they will have before them.

The decline of America can be empirically measured and charted, as can the comparatively meager size of America’s government and public sector.

To demonstrate it I’ll offer data in something of a remix of information from an earlier post, AMERICA THE BASKET CASE. But it’s illuminating.

First, relatively speaking, our national debt isn’t large at all. Ours is 35th among the world’s nations. Our government, rather than the mythological behemoth painted by conservatives, is 144th among the nations of the world as a percentage of GDP. When conservatives saturate the airwaves with the phrase big government it is a politically expedient buzz word, with no grounding whatsoever in actual fact.

As for the terrible tax burden Republicans would mislead you into believing actually exist, and angry mobs of severely misinformed Teabagger anti-tax obsessives take as an article of faith, the data prove otherwise, prove in fact, that America is one of the least taxed countries in the developed world. According to  Organization for Economic Cooperation and Development data, the combined taxes levied by federal state and local governments are less than in all but two nations in the developed world, in other words, third from the very bottom. Personal income taxes comprise 9.6% of GDP, lower than at any time in at least sixty years.

Corporate taxes, which the right incessantly harps upon and relentlessly seeks to decrease even more are the lowest among all OECD nations (there are 27) and is next to last among developed nations, with only Iceland having lower corporate taxes. By 2009 U.S. corporate taxes had fallen to only 1.3 percent of GDP, from 4 percent in 1965.  Then there are sales, excise and consumption taxes, which combined were 5.5% of GDP in 1965 and now are 4.5%. The average for OECD nations is 8.4%.

Since 1965, property and wealth taxes have fallen from 3.9% to 3.1%. The only taxes that have risen in the United States since 1965, are the taxes that fund the major safety net programs, and the bulk of which is contributed by middle-class earners, since contributions are capped at around $106,000 of annual income. These taxes have risen from 3.2% to 6.5%, meaning the middle class has, and continues to pay the price tag for its safety net programs, contrary to deceptive Republican generalization.

As for our nation’s perceptible slide the statistics support the perception. Our highways are comparatively both slow and unsafe. America has 15 deaths per year for every 100,000 people, 60% above that of OECD countries. In a comparison of the overall quality of infrastructure, America now ranks 23rd.  American investment peaked around 1960 and has declined since. Total public spending on transportation and water infrastructure is currently 2.4% of GDP, whereas Europe as a whole invests 5% of GDP in infrastructure. China invests a whopping 9 %. The Census Bureau projects the population here to increase by 40% over the next four decades. Unless significant public spending is diverted to infrastructure it is difficult to see how America avoids a literally crumbling and collapsing infrastructure.

According to measurements by four organizations (IMF, World Bank, CIA Factbook and OECD) using the PPP (Purchasing Power Index) America is now eighth in wages. The average earner in Qatar or Luxembourg has twice the purchasing power of the average American. In education, the slide has been more pronounced. In comparative rankings among nations, America ranks in the twenties for math, reading and science performance. America ranks 43rdamong nations in all spending on education as a percentage of GDP. America ranks 28th in the average internet connection speed, and only 17th in broadband penetration: in other words access to internet service.

As for healthcare, of the world’s 33 most developed nations, 32 have systems of universal health care insuring everyone. We do not. As of September, 2010 the United States ranks 49th among nations in combined male and female life expectancy.  The United States ranks fourth from the bottom among the 27 OECD nations in infant mortality rates. Child poverty rates in the U.S. are nearly double the OECD average, at 21.6 percent compared to 12.4 percent. The United States has 2.5 times as many deaths from diabetes than the average among OECD nations. Americans on kidney dialysis have a mortality rate of 23% compared with 15% in Europe and 9% in Japan. The United States does not even make the list of the top thirty nations of the world for the number of physicians per 100,000 in the population.

These are the facts. This is the reality behind the propaganda that America is somehow brutally unfair toward its wealthy classes; or that the government is a fatted calf enabling all sorts of taxpayer supported luxuries and even basic amenities it cannot afford.  Contrary to inane and blatantly untruthful conservative rhetoric, European nations haven’t enlarged their government sectors on some free-spending whim, or in a misguided effort to pamper citizens irresponsibly but because doing so has made those populations healthier, better educated and more productive, in other words, made them stronger nations. A fairer distribution of the benefits of everyone’s collective productivity makes for a superior nation.

The highly ideological House Republicans contrive legislation daily, which though it cannot be enacted into law without Senate approval and the president’s signature, reveals the breadth and depth of their intent. It is a relentless attack on the regulatory apparatus that protects consumers, not only financially, but in areas of health, safety and transportation. It seeks the opening up and exploitation of America’s treasured public land. It protects a single class, a wealthy business class, and financial institutions along with their ability to act virtually as they please: that is, to act in their own profitable interest whatever the negative consequences  (known as negative externalities in economics) to other Americans. The “freedom” of these interests are imperiled we are told, when they are prevented by regulation from harming, or undermining the health of other Americans.  Without the government’s intervention in other words, their right to behave as they wish is paramount, and cannot be impeded, no matter the harm done, your right to health and safety in reality simply non-existant.

Virtually all things in which citizens engage cooperatively through their own government are anathema to this prevailing Republican point of view; though exceptions are made  of course for direct subsidies paid to a number of global industries.  The inherent assumption in this glorification of the private is that one has the choice of squeezing out all that is materially possible, unencumbered by any values other than ferocious pursuit of acquisition; or else to rot in what is then left, including the shrunken public sector.  On an individual level, to have value in this philosophy one must abandon other intangible goals, and participate in the mad acquisitive rush, or else. Other forms of reward are not considered, and the products of toil that result in the enrichment of society generally, through art, altrusim or any other form literally beside the point. Indeed, this approach is a brutal perversion of the original theories of capitalism, and creates a very barren and sterile world. Surely those who advocate this philosophy give little thought to these concerns, and in fact ,surely cannot be troubled by that which they care little or nothing about.

In the minds of the proponents of this philosophy, it is a noble one, highly self-justifying for those who have acquired much already, or were born to wealth. In this view it is a system that allows the very best to thrive, though the other inevitable side of the coin is that the rest are consider to be of little worth, and deserve the paltry remainders they in fact get. One of the uglier sides of this Austrian School/Ayn Rand/Libertarian view of the world is that one group of citizens is elevated as human beings well above all their fellow citizens, having earned power over others by demonstration of their alleged superiority through the accumulation of wealth. It is just this side of eugenics as a matter fact, and only feudalism and aristocracy by another name.

It is a view that hides a multitude of sins behind the label “philosophy”: greed, stinginess, petty power, callous indifference and theft among others. It is inevitably advertised as a “philosophy” which produces a giant bang of prosperity that will come trickling down from the mighty if they are given everything for which they ask.  But it never materializes and it won’t. In America’s 70% consumer driven society it simply can’t work. And in fact this philosophy cannot even argue its own merits in the light of day, nor even state its true goals, for to do so would garner public revulsion. So the deception continues apace, furiously, firing on all political, activist and media cylinders.

What also comes to the fore is the question of what it costs when America diminishes its basic humanity in adopting such a narrowly materialist tack. Indeed, no matter how thoroughly and gaudily the right wraps its social and economic philosophy in flags and sugary cornpone it is a soulless, materialist approach, absent other human or transcendent values.  Proponents will say, mostly targeting the social safety net and its associated programs, including those designed specifically to mitigate the depredations of the poor, that it is not government’s place to do these things.  They won’t specifically tell you why not; though they will glibly and unpersuasively tell you these are matters that could and would be better handled by private sources, charities and churches for instance.

But they won’t, and they couldn’t if they wanted to, so vast and pervasive is the need. This is the reason why peoples of nations have chosen to allocate their pooled resources in the ways they have. What would exist now without the safety net is what existed before, along with the same looking away and indifference to the suffering tolerated without as much as a blink by the sort of people seeking now to return to a similar time. Though the ignorantly deranged such as Glen Beck claim the Progressive Era was the beginning of some conspiratorial end of America’s greatness, in fact, it was government, not private entities that brought an end to brutal child labor and bluntly inhuman working conditions.

In the previous era of smaller government abject poverty in Appalachia, and America’s cities and rural areas simply persisted without redress; thirty to forty percent of America’s seniors lived below the poverty line. Prior to Medicare, life expectancy in America was considerably lower.  Greater longevity was not simply the result of improvements in medicine but access to it. Unregulated manufacturing maimed or killed unnecessary numbers of workers, regarded as dispensable, until the government and its regulators got involved. Before the FDIC and other banking reforms, when the financial system behaved recklessly ordinary people lost their entire savings, as happened with the Great Depression. Painful as the most recent recession has been, a similar failure of the financial system did not produce a similar result. For all their resentment and vicious and false stereotypes of the needy, the right’s minions cannot wish away that historical reality, which of course, their propaganda expunges from the record, or else rewrites.

Grover Norquist states his goal as starving government of revenue to the point that it is small enough to drown in a bathtub. Such glibness is easy enough of you’re an heir to the Polaroid fortune, who went to the best schools and had every conceivable advantage….the proverbial “born on third base and thinks he hit a home run.” What he doesn’t tell you, or in his ideological fugue is oblivious to, is that America will be a third rate country when government reaches such a small size, a size we are not so far away from as one may think. It’s going to take a lot of right-wing propaganda to divert and distract and falsify and misplace the blame for the misery, squalor and substandard quality of life that will surround us then; but I’m sure the Norquists of the world are convinced they can deliver it.

 

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2 responses

  1. It strikes me as very funny all the lalebs thrown on GOP candidates. If I had to guess, Romney doesn’t consider himself conservative, moderate or anything of that sort. I think he sees himself as a very moral person, who truly lives by the rule of law (therefore making a great executive) and has the ability to solve challenges with integrity in tact and a proper understanding of the intention of the Constitution to guide him. And I am more than comfortable with Romney because of what I feel, is this attitude towards politics.

    • I may not agree with you about Romney, but your advocacy for him is far more genuine and enthusiastic than that from most Republican office holders and official Republican operatives these days.

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