05.12.10

The difference between ignorance and stupidity

Posted in Around The Nation, Around The State, Commentary, Taxes, The Budget at 12:01 pm by wcnews

“Ignorance is not knowing. Stupidity is knowing and doing it anyway.” In other words, ignorance has to do with a simple lack of knowledge or education, but stupidity results when a person already possesses the necessary knowledge, yet continues to engage in behaviors that are patently illogical.

Over the next few months heading to the November election, and 2011 legislative session in Texas, there will be much discussion about the budget shortfall that our state will be facing. The publicized estimate grew yesterday from what was an $11 billion shortfall to an $18 billion shortfall. In order to have a serious discussion about this it’s key for us not to be ignorant of how we got here. It’s not an accident, or a perfect storm, this is all part of a plan.

By and large most people are for what government does for them, and only think it’s “too big” when it does things that don’t directly benefit them. And often times politicians are not good at explaining to the people how and educated population, health care, clean water and air, roads, etc…benefit everyone as a whole and that we should all pay something for them. It’s much easier for a politician to make silly jokes about it, (“I’m from the government and I’m here to help”), or blame all the problems on the government. It’s much harder to educate the electorate and bring about workable solutions.

But key to finding a solution is knowing how we got where we are, knowing the history. Back to the plan referenced above. Anyone who is a regular reader likely already knows what the plan is. Republicans since Reagan devised a scheme of how they wanted to “shrink government”. It’s was supply-side economics, nicknamed “Voodoo/Trickle-Down Economics”.

(There’s much more in the extended entry).

As with any good sales pitch it had to be too good to be true, and this one was, that’s has a hint of truth in it. Voodoo Economics said that if tax rates were lowered, it would actually bring in more tax revenue. There’s a modicum of truth to that but only when tax rates are really high, which they haven’t been since the 1960’s. But instead it was really just a scheme to run up massive deficits, while giving tax cuts to the wealthy, and force cuts in programs. Which also gave it the nickname “Trickle-On Economics”. But Republicans always chickened out, deciding it was better the stay in office, than cut programs voters like and get thrown out. Instead they would blame the deficits on big spending Democrats, and by and large the ignorant electorate, kept electing those politicians abetted by a compliant corporate media.

And as a recent poll shows, while Americans are eager to cut government spending, they’re ignorant as to where there money is spent. And the programs they are willing to cut, would hardly put a dent in the deficit. And the programs that make up a large part of the budget they like the most. So it appears that most Americans agree that we want certain government programs that are expensive (Defense, Social Security, and Medicare), but don’t want to have to pay for it. And no politician is willing to tell them if they want it, they’ll have to pay for it. The Futility of Budget Cuts.

The poll highlights the conundrum: Americans want to solve the long-term deficit program and want the federal government to run a balanced budget. They are willing to make budget cuts. But the government cannot cut enough from discretionary programs to bring the budget into check and ultimately to reduce the deficit. (Half of Americans still believe the government can.) Entitlement programs — Medicaid, Medicare, and Social Security — are at the heart of the problem, with spending growth in health care programs the single biggest culprit. The lone solution — save for politically improbable radical spending cuts to defense, health care programs and social security — is tax hikes. Most economists agree on the point, reiteratedstrongly by Fed Chair Ben Bernanke in a speech yesterday. But the promise of tax increases is hardly a savvy campaign platform, and it will be up to members of Congress to sell the necessity and prudence of tax hikes to an economically distressed citizenry.

Back to those several things from yesterday. Texas House Speaker Joe Straus laid out the usual GOP canard that everything is on the table…except for what isn’t…a tax increase, of course. Now nobody wants a tax increase but if that’s what we need to keep our schools running well, or build new roads, then that’s a different story. How many are aware of the budget tricks the legislature and the governor have been playing for years, including the diversion of transportation money? While they’ve kept from “raising taxes” every fee in the state has been raised over the last decade, some by quite a bit. How many are aware of that?

There was also this report yesterday, (link via BOR) Tax bills in 2009 at lowest level since 1950.

Federal, state and local taxes — including income, property, sales and other taxes — consumed 9.2% of all personal income in 2009, the lowest rate since 1950, the Bureau of Economic Analysis (BEA) reports.

And here’s why taxes are so low now:

Why the tax bite has eased:

•Stimulus law. One-third of last year’s $862 billion economic stimulus went for tax cuts. Biggest reduction: The Making Work Pay tax credit reduced income taxes $800 for married couples earning up to $150,000.

•Progressive tax rates. Presidents Clinton and Bush pushed through a series of tax changes — credits, lower rates, higher exemptions — that slashed income taxes for poor and middle-class families. A drop in income now can trigger big tax breaks and sharply lower rates, sometimes falling to zero.

•Sales tax. Consumers cut spending sharply in this downturn, thereby paying less in sales taxes.

What that shows is that we’ve cut taxes over the last ten years, and not cut spending, and the deficits have soared. Who would have thought that was going to happen? That kind of makes a mockery of all the tea party rage that’s been sweeping the country. But the deficits, remember, are the plan. See McBlogger’s thoughts on the tea partiers, and this video from BOR:

It’s apparent that our current state leadership, all GOP by the way, is willing to cut any program and even institute gambling statewide - which wouldn’t do anything to solve the near term problem - to avoid having to raise taxes on the wealthy in Texas, who do not pay their fare share. But Kate Alexander points our very succinctly why the budget shortfall go so big, so fast in Texas.

As Alexander correctly notes, this budget crisis was caused in large part by a couple of decisions the Legislature made in 2006. For one, lawmakers passed a sizable property-tax cut without the money to replace those dollars. Then, the replacement source they had — the state’s revised franchise tax — woefully underperformed. And all this came while the Legislature was increasing spending on education with a sizable pay-for-performance plan and a new allotment for high schools.

That’s essentially right our of Reagan’s playbook. Run up a huge deficit, or in this case a tremendous pending shortfall, and use it as an excuse to cut programs that help working Texans the most while keeping the wealthy’s taxes as low as possible.

The difference between ignorance and stupidity is just about gaining knowledge and using it in a productive manner, learning from past mistakes, or history.

Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it.

We went from massive deficit (Reagan, Bush, and tax cuts), to surplus (Clinton and a tax increase), to massive deficits again (Bush and tax cuts). It’s ignorant for us to think we can get out of our current situation without increasing taxes.

It’s simple really. We want government - federal, state, and local - to do certain things, and do them well. But many of us are unwilling to pay for them. That’s just stupid.

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