Grover's Missing Piece
by JONATHAN BYDLAK
December 11, 2012
For years, Grover Norquist and Republicans have tried "starving the beast" of the federal government by capping taxes. While they've been highly successful at preventing tax increases, they have been less effective at addressing one problematic aspect of fiscal policy: the ability of the Federal Reserve and Treasury to borrow more and more to finance massive spending, as they have done under the Bush and Obama administrations. It's simple: Borrowing today means a higher tax burden tomorrow when the debt comes due. True fiscal responsibility, then, requires us to curb spending in addition to limiting tax rates.
Imagine if instead of pledging not to raise taxes, all those politicians had pledged not to raise spending. It's unlikely the United States would be facing massive tax increases as part of the so-called fiscal cliff. That's why it's important to do for spending what Norquist has done for taxes: create a means for voters to hold elected officials accountable when they break campaign promises of fiscal responsibility.
It's hard to imagine a better time to secure such a pledge from elected officials. Given our ever-mounting debt, it is incumbent on all of us who care about the future prosperity of this country to reexamine the completeness of Norquist's approach. We have to look at more than the tax side of the equation.
The American people are finally realizing that federal spending is way beyond the point of sustainability, and the moment is ripe to change the direction of the political discourse. A Rasmussen poll from Monday found that "nearly half (48%) of likely U.S. voters now believe it is necessary to significantly reduce the cost of entitlement programs and military spending to reduce the long-term federal deficit." Now is the time to shift the focus from which taxes we can lower (or not raise) to what spending we can cut.
My claim is a simple one: Spending more than you take in is dangerous because that money ultimately has to come from somewhere. When a government operates on an unbalanced budget, the tax burden is passed not only on to future generations but also onto our own, diminishing our opportunities through indirect taxation, such as higher interest rates and inflation.
Both parties have failed in this regard. We've seen Medicare Part D under Bush, the Affordable Care Act under Obama, and bank and auto bailouts combined with wars in Iraq and Afghanistan under both presidents.
It's time for all of us to take our hands out of the cookie jar. Having the Pentagon spending billions running grocery stores doesn't make the U.S. strong on defense. And keeping the retirement age indefinitely at 65, even as Americans are leading longer and healthier lives, doesn't make us compassionate. Both mean that we're fattening up at the expense of our grandkids' standard of living.
Fortunately, some in Washington are taking aim at our political sacred cows. Doug Collins, representative-elect from Georgia, and Ted Cruz, senator-elect from Texas, both pledged to voters this cycle that they consider all items in the budget eligible for reduction. By signing the Reject the Debt pledge in addition to the taxpayers-protection pledge, they have promised to vote against not only tax increases now but also spending increases that would amount to future tax burdens.
As one columnist recently wrote, "From now on, any politician who signs the anti-tax pledge without also signing the anti-debt pledge can be dismissed as a complete hypocrite." The companion to Norquist's no-tax pledge is the Reject the Debt pledge. Elected officials need to sign both.
Jonathan Bydlak is the president and founder of the Coalition to Reduce Spending. He is the founder of the independent consulting firm, Bydlak & Associates, LLC. Jonathan began his career in the financial services industry as a hedge fund investment analyst. Originally from Massachusetts, he holds a bachelor’s degree in economics from Princeton University, and currently resides in Alexandria, VA.