Hard choices?

2009/08/06

So, Treasury Secretary Geitner is a bit of hot water over some comments he made this past weekend regarding the possibility of tax increases across the board, rather than the limited tax increases the President has previously stated will only affect the wealthy. [1] If that, in itself, weren’t bad enough, Geitner’s statements also mention “hard choices” that we must all make, so that Fedgov can whittle away at the massive deficits it currently faces. Of course, the White House has also done its best to back away from these statements, renewing their pledge not to raise taxes.

One wonders if the President and his sycophants understand how disingenuous they sound when they claim to want to cut down on the Fedgov deficit, whilst constantly campaigning in support of massive new Fedgov programs, all of which must be funded somehow. Geitner, at least, appears to understand the conundrum here, but I am also have some concerns about his statements, as well. In particular, I wonder what, precisely, he means by “hard choices,” and, more importantly, who he expects to make said choices. It begs the question, what hard choices have the President and his administration made regarding their grandiose designs for Fedgov expansion? How much are they willing to sacrifice before demanding that the citizens of the Republic sacrifice more of their hard-earned money to support the increasingly bloated bureaucracy? Are they even willing to sacrifice anything, or will the sacrifices all be on the side of the citizens?

Of course, the President does not appear to have gotten the message regarding these sorts of funding concerns. [2] Nor, for that matter, has Congress. [3] This latter action also has some salient points regarding the choices that our representatives in Fedgov have made thus far – and are continuing to pursue even now. Consider, for example, that the initial funding assessment for the “Cash for Clunkers” program was estimated at 1 billion USD; Congress is now admitting that the program was underfunded, and that an additional 2 billion USD will be required to meet demand. Note that the additional funding amounts to 200% of the original budgetary estimate for the program. One wonders, of course, that if Congress couldn’t accurately gauge the demand for such a relatively small-budget program, could they accurately assess the requirements for far larger programs, such as the health care proposals now under consideration. This latter program is no minor issue, especially when one considers that the average cost for these programs is estimated at 1 trillion USD – three orders of magnitude higher than the CfC program; what if the Congressional committees have similarly underestimated the overall costs involved, yet they pass one of these trillion dollar programs anyways? Will we, the loyal citizens of the Republic, be required to continue paying for the program, even though it may cost two or three trillion dollars? The President and his allies are already having trouble finding ways to fund the current estimated cost of the program; how do they expect to pay for the program if it costs two or three times an amount that they cannot currently fund?

Furthermore, consider the actual stipulations of the CfC program: the Fedgov credit is only available to those whose cars have an estimated combined gas mileage of 19 mpg or less; what of those who own cars that get a higher rating, but would like to purchase a car that has even better mileage? [4] If the program is also intended to help stimulate the economy, would it not also be wise to include stipulations that provide additional incentives to purchase American-made cars? [5] On a positive note, Congress did, at least, ensure that the voucher provided would not be considered income for tax purposes. Even so, would it not have been more useful had the program included a sliding eligibility scale such that any individual could take advantage of the program, so long as their intended purchase had a higher mpg rating than their current vehicle; different voucher amounts could be tagged to specific mpg increments, such that, say, 2,500 USD would be paid out for a 5 mpg improvement, 3,500 USD for 10 mpg, etc. Would it not also have been useful to include an additional incentive to buy a qualifying American car; say, +25% to the voucher amount for doing so?

Such concerns as these often seem to arise only after the legislation has been created, and it often appears that the Fedgov solution, when presented with a difficult set of choices is to err on the side trying to implement a “one-size-fits-all” solution, even when this sort of solution does not even approach being an ideal one. When it comes to the healthcare proposals, is this the sort of consideration we are likely to get from our representatives in Congress? Will the finalized program provide similar such nuanced options for the 40 million+ citizens who are projected to be enrolled in the program? And will we be treated to the spectacle of having Congress reconvene on the matter a few years down the road, finding themselves needing to appropriate more funds towards the program because they did not give due consideration to the overall costs when they first enacted it? Yes, these two programs are almost entirely unrelated – apart from both being products of the legislative process – but if the one is any indication of how stellar the results will be from said process, should we sit idly by while our representatives prepare to vote on what will be one of the largest expansions of Fedgov in history? If the aforementioned situation is any indication of the level of consideration our representatives bring to their solemn duties to the Republic, then I truly fear for the future of the latter, when the former so blithely discuss spending such enormous amounts of our money.

Notes:

[1]: CNN article, 03 August 2009

[2]: CNN article, 05 August 2009

[3]: CNN article, 06 August 2009

[4]: Lest you think this is just an abstract consideration, I checked into such a possibility myself (yes, I realize that there are some other issues I’d need to overcome to actually participate, but that’s somewhat beside the point). My car, which is 10 years old and has over 100,000 miles on it, gets an EPA estimated combined gas mileage of 24 mpg; as such, I cannot qualify for the program, even if I were interested in buying a car that gets, say, 30 mpg.

[5]: See here for a link to the full text of the act, from the official website for the Car Allowance Rebate System (CARS) website. Note that the text of the act itself is available in PDF form, so be forewarned.

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One Response to “Hard choices?”

  1. MI Says:

    Re. tax increases…well, TANSTAAFL.

    Re. CfC – my prescription remains Pigovian taxes upon objectionable fuels.

    BTW, the proper spelling of the current SecTreas’ last name is “Geithner”.


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