Bill for the Unborn: $20,000 (FY 2011)
Back in February 2008, I satirized George W. Bush’s $150 billion stimulus checks in “The Power of Numbers: Simplify! Simplify! I broke down the costs of Big Government for a family of four and showed how pitifully small $150 billion was in comparison to the $5 trillion then spent by local, state and federal governments. Of course, Big Spenders (Paul Krugman crowd) called for deficit spending ten times that amount.
Well, Mr. Krugman, your solution has come to pass (with no recovery in site):
The White House announced that the 2011 deficit will be $1.4 trillion.
This money-we-do-not-have produced a mouse of a recovery (if we can call high joblessness and continued declines in government revenue a “recovery”). As government revenue declines, politicians will simply borrow more: the Obama administration projects a similar deficit for next year with modest cuts to the minuscule programs that fall under “discretionary spending.”
It’s not just the lawful plunder in Washington. State governments spent most of the past 10 years spending like, well, politicians. When the bust came, no one could make the proverbial “hard choices”: cut spending (the horror!), raise taxes (in a bust?!) and so they borrow year to year.
Example: The state of Illinois has a $13 billion current deficit and a population of 13 million people. That is another $1,000 per capita of borrowing per capita.
What does this all mean? Recall the principle of “Simplify! Simplify! :
The federal deficit (this year only) amounts to $4,000 per capita (every man, woman and child)
My state deficit amounts to $1,000 per capita
Total bill: $5,000 per capita. For those of us who recklessly married, have two children and pay taxes the bill is $5,000 X 4 = $20,000 for this year only plus interest.
Even worse, 40% of the population pays nothing in income taxes. The rest of us must pay much more than $20,000. Think of it as a deferred tax bill with interest due.
Yes, yes, the Left reminds us that those people pay FICA but that money is in a “lockbox,” right? “Contract between generations” and all that?
Here we come to the grand irony of the Keynesian worldview: Keynes saw the Great Depression and declared that there is no contract between generations. Spend the next generation’s money! As my state lottery commission chants: “Go for it! ” Live for today because “in the long run we are all dead” (J.M. Keynes). But once the really big spending is locked in as an entitlement, the Left dreams up a “contract between generations” on the spending side.
Bastiat would remind us of “what is not seen”: The Keynesians pooh-pooh the “contract between generations” on the tax side: In the long run we all die, but we leave children behind. If the Left believes in its “contract,” then what about the unborn? If we (the living) are X generation, they are Y generation in this “contract between generations.” A modern-day Jonathan Swift might pen this “Modest Proposal”: a 100% abortion rate could eliminate this obligation to the unborn. However, even NOW isn’t that radical; and our government would lose the power to mortgage future generations.
The fallout of this fiscal disaster, if it persists, will mean fewer children as taxes rise higher and higher. Another alternative is the hidden tax of inflation (rather than direct taxation) but that would have the same effect: couples could no longer afford two or more children. Welcome to Eastern European demographics:
America, the Incredible Shrinking Nation.
All of this reminds us that economics does matter to every aspect of people’s lives. Keynes never had children (some writers blamed his short term view on his childlessness). But those of us with children ought to be doubly concerned.
A popular left-liberal slogan is that “It takes a village [government] to raise a child.”
Alas, their policies are burning the (unborn) child’s bank book to save those currently living in the village.
Shame on our Village.