RANCHO SANTA FE, CA., April 5, 2011 – The President presented his budget proposal for 2012 on Valentine’s Day, while the House Republicans presented their budget proposal today … just missing April Fool’s Day. The President’s budget was submitted one week later than is required by law (according to The Budget and Accounting Act of 1921), but let’s not quibble over that. His fellow Democrats still haven’t passed a budget for last year, and the Senate hasn’t given any indication that it is taking our current debt crisis seriously.
The problem with the President’s and the House Republican’s proposed budgets is that they pander to politics rather than address the real world in which the rest of us have to live.
The President’s budget challenges us to believe that we can spend our way out of debt and that the government can do a more effective job of picking “winners” and “losers” from a commerce perspective than the open market. Raise your hand if you’ve ever successfully lowered your personal debt by spending more money … and please share the name of the fiscally responsible lender who gave you the additional money to do so. Raise your hand again if you think that government officials know what you want better than you do. Who needs the open market anyway?
The House Republican’s solution to reduce debt by spending less may make more intuitive sense, but it disregards any consideration of increasing taxes to bring down the debt more quickly. Think of it this way: can you reduce your personal debt more rapidly by generating more income through a second job? Of course, you can! So, why shouldn’t that option be on the table?
While Michael Moore should never be confused with a Rhodes Scholar, he did recently make a statement that garnered a great deal of attention and is roughly correct: “Right now, this afternoon, just 400 Americans … have more wealth than half of all Americans combined. Let me say that again … Four hundred obscenely wealthy individuals, 400 little Mubaraks … most of whom benefited in some way from the multi-trillion-dollar taxpayer bailout of 2008 … now have more cash, stock, and property than the assets of 155 million Americans combined.”
The 400 richest Americans have a net worth of approximately $1.4 trillion (extrapolating from the Forbes 400), which is more than the cumulative net worth of the bottom half of our population. Admittedly, those with negative net worth pull down the average for the bottom half, but the statistic is still staggering. Perhaps, some sort of progressive tax might be appropriate to consider.
Let’s take a moment to look more closely at the 400 richest people in America. The 16 individuals who tied for “last” place all have an estimated net worth of $1 billion. Since we’ve been told that “rich” people make $250,000 a year, let’s do the math. If you made $250,000 a year, didn’t pay any taxes, and never spent a dime, it would only take you 4,000 years to amass a net worth of $1 billion. Another way to look at it: these people have twenty times the net worth of Michael Moore, which is estimated to be $50 million! Why not have them share more of the burden?
If Michael is right about how most of them “benefited in some way from the multi-trillion-dollar taxpayer bailout of 2008,” why not take some of the money back to accelerate the reduction of our National Debt?
Speaking of documentaries and people benefiting from the taxpayer bailout of Wall Street, you might want to check out Inside Job, which provides a good overview of how the Bush Administration contributed to the economic collapse … and how the Obama Administration has provided senior government positions for many of the perpetrators.
Returning to those 400 really rich people, it’s interesting to note what a “mixed bag” you have. At the top, Bill and Melinda Gates, along with the great support of their friend, Warren Buffet, have created the Gates Foundation. They have contributed and raised approximately $24.5 billion in grant money ($36.7 billion in endowed assets) for this worthy charity. Their generosity has almost undoubtedly had more of a beneficial impact on society than any amount of taxes we reasonably could have exacted upon them.
Moving on to #3: Larry Ellison probably bought a bigger boat. After all, yachts really should be sized according to ego.
Then, just a little further down the line, we have the Koch Brothers. They went from #9 in 2009 to #5 in 2010; increasing their respective fortunes from $16 billion to $21.5 billion in only one year. That’s about a 34% increase from their diversified industry holdings. How they accomplished that while funneling so much money to Republican and Tea Party candidates to skew the political balance of power and destroy the unions (at least according to Michael Moore) is anybody’s guess!
Luckily, we have George Soros to balance out the political spectrum. Poor, old George climbed from #28 to #14 on the list while almost doubling his fortune … going from $7.2 billion to $14.2 billion in only one year. The Koch Brothers could learn a few things about capitalism from George!
The funny thing about these latter titans of wealth is that the Koch brothers are the darlings of the Right while George Soros is the champion of the Left. Think about it. The Koch Brothers run a wide variety of manufacturing companies that provide hundreds of products and thousands of jobs for “Main Street” Americans throughout the United States. Meanwhile, George Soros runs a Wall Street hedge fund that makes obscene money for “qualified investors” (i.e., the “uber-rich” the Left professes to hate). Just as an aside, he also is credited with making $1 billion in personal income in a single day by orchestrating the collapse of the British pound on September 6, 1992. According to stereotypes, you’d think the Koch Brothers would be revered by the Left and that Soros would be the poster child of the Right.
Maybe the politicians are “on” to something. Maybe things are just the exact opposite of what makes sense. If that’s true, let’s spend our way out of debt and eliminate taxes for everyone. It doesn’t matter that those two extremes go against every instinct … the world just isn’t what it used to be.
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T.J. O’Hara is an internationally recognized author, speaker, and strategic consultant in the private and public sectors. In 2012, he emerged as the leading independent candidate for the Office of President of the United States and the first nominee of the Whig Party in over 150 years.
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This article first appeared in T.J. O’Hara’s recurring column, The Common Sense Czar, in the Communities Section of The Washington Times.