What is wrong with America?

Or, why should we let the Bush tax cuts expire?

Is there a problem?

Yes, this blog has a provocative title. But is there anything to it?

Obviously America has problems. What first comes to mind is the poor state of the economy. But we also have dysfunctional families, extreme partisanship, voter discontent, and more. Am I going to explain all of these mailaises with one Grand Unifying Theory? No. Today I want to concentrate on one, mind-bogglingly large symptom: the national debt. I don't care whether you are Republican, Democrat, or Independent, a national debt that is approximately equal to our Gross Domestic Product is not an uplifting reality.

Where there is a symptom, there is a problem.

What is the problem?

Why do we have such a huge debt? Why is our debt going to double in the next ten years? Why will it be growing at $2,000,000,000,000 per year in 2035?

Well, what is debt? It is, by definition, the state of spending more money than you have. In other words, it is wanting (and obtaining) what one cannot afford. This is an epidemic at a personal level (Shania Twain's Ka-Ching is really a great song) and a national level (as one YouTube user stated, Ka-Ching should be our national anthem). And it's what drives our national debt. What else could?

Is debt really a problem? Am I fair to call it an "epidemic"? Yes. Even the champion of public debt, John Maynard Keynes, who argued that the government should go into debt during a bust, also urged nations to get it back during a boom, something we have not done since the Great Depression.

Our debt is a mediocre short-term boon and a terrifying long-term liability, and our unrestrained greed is driving it. Greed is the pathology causing this symptom and it has two forms.

One form, which I'll call "entitlement greed", is feeling like we deserve this or that whether we care to work for it or not. It is closely tied with any kind of welfare (or, more technically, means-tested aid) the government provides for us. It is food stamps, housing, health care, education, and more. I previously talked about how we should care for the poor, but that's not what I'm talking about here. Here I'm discussing the attitude behind this, and the abundance of these programs and the number of people on them shows how prevalent this attitude is. It is scary because the more people believe that they deserve food, shelter, and clothing no matter what, the less motivation people will have to work. But all this money to feed, shelter, and clothe has to come from somewhere, and therein lies this attitude's contribution to our national debt.

The other form I'll call "happy-middle-class-life greed". It is related to entitlement greed, but moves beyond basic necessities to luxury. It is basically the attitude, "America is rich. I live in America. I shouldn't ever have to suffer." For example, folks who made a bad economic decision and refuse to pay the consequences for it. This attitude is likewise scary because it means we as a nation depserately avoid short-term pain even though short-term pain is often necessary to avoid long-term ruin. Why is America free today? Because our ancestors went through the horrors of war to earn it. Why is my baby daughter sleeping right now? Because my wife and I went through the pain of getting her on a schedule so that she could have extended periods of sleep. This attitude contributes to the debt by a reluctance during booms to pay back what we've borrowed turning into a panicky fear of paying it back during a bust (see response to Bush tax cut expiration and Britain's austerity package). No matter the time or season, tax hikes and spending cuts are a politician's path to a forced retirement.

What is the solution?

Just as there are two classes of greed, we as a nation must attack the greed problem in two ways: we must eliminate perverse incentives and we must be realistic about the future pain we are creating.

The Bible offers a clear-cut solution to the perverse incentives of welfare. In II Thesselonians 3:6-10 Paul asserts, "If anyone is not willing to work, let him not eat." Yes, this is coming from the same guy who sacrificed everything he had in service of God and others, and the same God who judged nations for their oppression of the poor (Isaiah 10:1-4). Thus, if our government is wise, it must work to eliminate incentives which discourage work and teach our people once again the value of self-sufficiency. We don't need to eradicate all welfare in one swoop, but we have got to seriously consider its secondary effects when establishing policy.

To be realistic about the future pain we are creating is a much tougher task. The issue is that by default "I'm suffering right now" outweighs "our nation will be broke in a century or less." Americans of late have shown again and again that they are short-sighted. Thus, the only way to be realistic about future suffering is the transfer some of it now: either cut spending or raise taxes now. Cutting spending would probably be of no benefit right now, it would just make us angrier. Tax increases done carefully, however, could serve to teach us, "this is where the money comes from. If you want government benefits, this is the cost."

Thus why we should let the Bush tax cuts expire. After all, this tax increase can be enacted by doing nothing--far less reprehensible than actively raising taxes. Yes, I have heard the Republican mantra, "don't raise taxes in a bad economy," but I am looking a little bit further than the next two years here, and I suggest we all do the same. Furthermore, the CBO has found that extending the Bush tax cuts would be the worst of 11 possible options to encourage economic growth, so we could even save money and mitigate the economic harm by putting a portion of the money saved into some of the CBO's other options such as infrastructure or cutting payroll taxes.

But really, how?

One problem with all this hypothesizing is that we the people do not make policy in this country. Instead we must use the power of representative democracy. So, please, elect politicians on Tuesday that discuss serious options for reducing the deficit. Elect courageous folks who are willing to sacrifice a bit of popularity for long-term benefit. Elect (and re-elect!) realists who don't try to delude us with utopian promises. Do your duty to the nation!