LISTENING to the radio on my way to Charlottesville Monday, I heard a roundtable panel on C-SPAN discussing the Republican candidates and their prospects for winning the race. One commentator claimed that if John McCain and Mike Huckabee were to emerge as the two leading candidates (as they seem to be doing), it would be a terrifying prospect for the established base of the Republican party. I would argue the opposite, that it might be a good thing for the Republican party, as the traditional issues have become a bit tired, and fresh ideas could provide energy to revitalize the party while also confronting some of the most important issues facing the country.
Much of the establishment's concern with both candidates revolves around money, particularly a fear of tax increases. No one wants to pay more to the government. This is why a shake-up of the party's core might not be such a bad thing.
Conservatives often view increased taxes as a harbinger of government interference. They fear that government will either diminish either on their personal rights or the power of a free market economy. Many conservative campaigns feature tax cuts, not only because tax cuts poll well, but also because they benefit the economy. This sentiment emerges from the premise that money not taken in taxes instead returns to the market, creating jobs and further income.
While all this may well be true, under certain circumstances, a president willing to raise taxes is not a bad thing. At times -- like now -- it might even be necessary. The reason for this has to do with a simple principle of finance: You can't spend more than you have (at least, not for long). Eventually if you spend money, you must pay the piper. This holds true, from the checking account of the poorest college student to the collected trillions of the United States government. What one spends, one must earn.
This is something America does poorly. Currently, our national debt sits at over $9.2 trillion, or two-thirds of a year's gross domestic product. This number has risen from about $7.5 trillion in 2004, in part because of the Iraq War, in part because of various commitments of the United States government to entitlement programs such as Social Security and Medicare. But the government refuses to abide by simple finance rules. In 2006, for example, Congress voted to increase the amount of debt the government could accrue. This increase was the fourth in the last five years, according to a National Public Radio report.
To me, the continued postponement of debt signals a lack of responsibility running through our nation's leadership, present in both parties. The trend seems to be to take whatever measures necessary to enact one's immediate policies and then to leave the next generation of politicians with the problem of coming up with the money to not only settle the current debt but also to fund their own initiatives. This process continues, with debt continually piling up.
The solution to the problem requires several measures. Most importantly, it requires a government willing to spend less than it takes in. This can happen either by cutting programs to fit a budget or by adjusting the budget to fit the necessary programs. One possibility would be to require a balanced federal budget. This seems the most rational solution -- almost painfully simple.
If the government were to accrue more money than it needed each year, it could slowly but surely pay off the debt. This would not be an example of the government raising taxes to fund its own eternally increasing measures, but a temporary solution to solve a burden of debt. Once gone, the lack of a debt could provide a huge boon to the American economy, as for the fiscal year 2006 the government spent $406 billion paying off interest on the debt. Imagine the ability to give $406 billion in tax cuts. All the money paid in taxes to pay interest on the debt could return to the market economy, creating new jobs and opportunities for growth .
The purpose of this article is not to advocate one candidate over another simply because he raises taxes. I only seek to point out that raised taxes sometimes are a fact of life, and that perhaps the mention of a past tax hike ought not be the kiss of death for a campaign, but might rather simply project a sense of responsibility currently lacking in government.
Robby Colby's column appears Thursdays in The Cavalier Daily. He can be reached at rcolby@cavalierdaily.com.
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