The Chicken or the Egg?

The Chicken or the Egg?

August 26, 2008 Posted by Maine Heritage Policy Center - No Comments

While this question has tasked the human brain for hundreds of decades, the answer to a similar question is much more apparent:

Which came first – the Taxes or the Spending?

Even though it may seem the case… the most aggressive politicians don’t intentionally raise taxes faster than they can spend the money.  (It DOES happen occasionally, when tax rates are so high the revenues outpace expectations – creating that ear-to-ear grin on a politician’s face when they can jump in front of a TV camera and claim to have a “surplus” to spend!)

But no.  There’s no “surplus.”  There’s never a “surplus!”  And there won’t be a “surplus.”   

Here’s why:   “It’s the Spending, Stupid!”

But how did it get this way?

Ross Perot liked to repeat: “politicians buy your votes with your money,” a statement that has been true since at least the Roman Republic.  The worst part of this observation by the little guy from Texas, is that there is always another election – with more votes to buy, more promises to fund forever, and more taxes to raise!

Government Spending is a financial sink-hole because it includes the checks written today and, more importantly, the promises to write exponentially more and larger checks in the future.  It’s the long-term interest on bonds that paid for short-term projects.  It’s hiring someone who can never be fired.  It’s paying lifetime retirement and health benefits for someone who stops working in their forties.  It’s “entitlement” programs that create multi-generational recipients who become trapped in dependency with no incentive to become self-supporting and no time-limits on their monthly checks.  It’s paying millions of dollars studying moths’ flight patterns, thorns on rose bushes, and hiring rooms full of psychologists to determine that, yes: teenagers without adult supervision will experiment with sex and alcohol.

Here in Maine, most people seem to agree that our tax dollars are wasted in criminal-theft proportions… then send the same politicians back to Augusta with one more chance to “fix” things. 

Pssssssst:  Unless Maine’s elected leaders are bound by law to control spending, they will not. 

Please don’t be fooled when politicians float “trial balloons” about shuffling lower Income Tax rates with higher Sales Taxes, increased Fees, higher Permit Costs or simply passing off more Maine taxes on tourists and seasonal residents.  The words are meaningless if they don’t control spending.

So Spending does come first. 

And Spending must be controlled before we can touch taxes