Victor Davis Hanson has some great ideas about what needs to be changed. I fall short of confidence on his tax notions, however. Granted, this is a ransom note reply to a brief post of his, but the point I want to get at is this: the Iron Law of Bureaucracy calls for one mother of a smelter.
1. Pay as you go, balanced budget—whatever you wish to call a return to fiscal sanity. Conservatives need to stop talking about tolerable deficits in terms of GDP; and liberals should cease the charade that trillion-plus annual borrowing is great stimulus.
2. Freeze federal spending at the present rate, and let increased revenues balance the budget. The idea that we could ever cut outright the budget seems long ago impossible—given the culture of complaint and the melodramatic rants about starvation and murder if another entitlement is not granted. Still, some sort of leadership is required to remind the American people that much of what their government does is not just unnecessary, but counter-productive and they would be better off without it.
3. Some sort of fair or flat tax that ends the trillion-dollar industry of tax preparation, avoidance, and fraud. For about a quarter of the population April 15 is a spooky sort of Halloween. Instead, we need a tax system in which one can complete the necessary preparation in about 2 hours. Whose bright idea was it to excuse nearly half the American households from income tax exposure (Clinton and Bush, and now Obama?)—a fact that explains why in Pavlovian fashion recently Senators have been saying that we can add on a new war tax, a health-care surcharge, and a new high rate on “them”? The justification of a 40% income tax, 10% state income tax, 15.3% payroll tax, and new war and health care surcharge taxes can only be that one’s income was undeserved, ill-gotten, and thus better “rectified” by more enlightened federal redistributors.
These may be good, reasonable and attainable suggestions. But for how long? The attention span isn't going to last past the memory of economic hard times. While the US Constitution is a wonderful document, it offers scant hope for continuity beyond the dedication of the people to limited government. This dedication and ~$4.00 will get you some froo-froo at Starbucks, but not for long.
The discussion we need to have is about how we take away the whiskey and the car keys from the teenage boys, to re-work P. J. O'Rourke. As long as we have a Federal Reserve printing money at will, and a Sixteenth Amendment supporting Federal control over our wallets, the structural problems remain.
My suggestion is to strike the 16th Amendment, eliminate Federal peacetime borrowing, and let the Federal government bill the States. There can be an annual steel cage match where politicians fight for control over the formula for deciding percentages--could be a fundraiser.
If the reality of the Federal costs were presented to the States, the voters would be incentivized to elect responsible adults, an admittedly shocking prospect.
Ideas like those of Professor Hanson seem tactical in nature, and not the strategic re-direction required.