--Walter Mondale (1984)
The fundamental economics problem is unlimited wants set against limited resources.
Conservatives are classical liberals, believers in “negative liberty.” Provide people the freedom to pursue wealth through hard work, according to predictable and fixed rules, and prosperity will result. Our founding fathers, who escaped the tyranny of the British monarchy at the exact moment (1776) Adam Smith spelled out the virtues of a market economy, thought this way. As Gary Sorman says in the conservative City Journal, “rules reinforce the power of the people.”
Today’s liberals or progressives are in the tradition of Jean Jacques Rousseau and the French Revolution, of Marx’s critique of capitalism as modified to West European social democracy, believing in “positive liberty,” government’s need to rectify the capitalist imbalance in the direction of “égalité,” wanting freedom and equality.
In practical terms, liberals fear capitalism and embrace government. Conservatives fear government and embrace market growth.
In policy terms, liberals raise taxes to pay for more government, conservatives lower taxes or hold them steady to keep resources in the private sector. Liberals think government spending spurs growth, conservatives think private sector growth will finance more social good.
The Democratic Party is a coalition of special interests tied to government power. Republicans are a coalition that mistrusts big government. The 2012 election is a zero-sum game; one side will win at the expense of the other. These are basic truths.
Democrats, however, are up against two gigantic problems: 1) their big government has failed to get the economy going, and 2) voters don’t want the tax increases Democrats need. So Democrats are operating a smokescreen campaign, even as insiders know a Democratic victory means higher middle class taxes.
Yet behind the smokescreen, one can see the outlines of Democrats’ ultimate objective, as Walter Mondale so honestly said in 1984 on his way to crushing defeat--raise taxes on the middle class.
Here is the liberal Washington Post, in a recent editorial:
it’s impossible to tackle the federal debt by taxing only the wealthy. As the cost of retirement and health care for an aging population rises, the middle class is going to have to pay more, and federal benefits are going to have to be adjusted.And here is Timothy Noah, in the liberal New Republic:
income tax rates need to return across the board to the Clinton-era levels. "I don't want to raise taxes on the middle class," Obama says. But if he doesn't, he can forget about achieving meaningful deficit reduction. . . It would be political suicide for Obama to say any of this right now, because voters think taxes are already too high. . . Taxes . . . need to rise on the middle class. . .if Obama gets a second term, he'll have to get over his aversion to raising taxes on the middle class. The past three decades have been rough on the middle class in all sorts of ways—but not when it comes to taxation. Their taxes have fallen and now the country is broke. [emphasis added]William Voegeli, in the conservative National Review, pounced on Noah’s words, adding, “In other words, tell lies during the campaign and face reality after the election.”
I would say, “of course.” The facts are simple and and they are stark. As Voegeli notes, total (federal, state, and local) government spending had already increased from 26.5% of GDP in 1965, the year the Great Society began, to 32.6% in 2008, and that before Obama began his massive spending.
The current revenue-expenditure gap--at 7% of GDP--is unsustainable. Republicans will cut big government, Democrats will raise taxes on the middle class. The choice is yours, in the unlikely event you aren’t already tied to one side or the other.