Progressive Democrats are the Party of Fiscal Responsibility

 

Republicans of the Radical Right are Fiscally Irresponsible

It never ceases to amaze me that radical rightist Republicans are able to present themselves as the party of fiscal responsibility when the truth is that they are anything but.  Yesterday (January 23, 2013), the Post-Crescent reported that Governor Walker and his allies in the legislature are hoping to give us all a reduction in our income taxes.  The paper says, “The governor has made his proposed income tax cuts a key part of his budget, which he is expected to present next month, and highlighted the cuts in his State of the State address last week.”  Governor Walker is proposing these cuts, he says, because our state has a budget surplus of about $342 million.  The budget surplus is largely due to the fact that Wisconsin has collected more in revenue than was projected, and the extra revenue is due largely to the improvement in our economy.  To use this extra revenue to cut taxes makes no sense from the point of view of fiscal responsibility.

Cutting Taxes is Like Giving Your Bonus Back to the Boss

The extra revenue is like a bonus that a company’s employees receive when the company does especially well.  Now let me ask you, if you received a bonus from your employer and you found that it exceeded your expectations, would you go back to your employer and say, “I don’t really need that money.  So please don’t give it to me,” or would you use the money to pay down your debts, make an extra contribution to your retirement account, add to your savings account, or save it for your children’s education?  Would you expect to receive a similar bonus every year, or would you treat the bonus as an unexpected windfall?

We Cannot Count on Having a Surplus Every Year

The situation of our state is just like the situation of an employee who has received a bonus.  The improvement of our economy has given our state some extra revenue, and the money could be used to improve our roads and bridges or to restore the cuts that were made in the funding for education in the budget for the last biennium.  We could also use that revenue to pay down our state’s debts or to put money away in the state’s Rainy Day Fund.  This last alternative would be particularly prudent because we cannot assume that a growing economy will give us a budget surplus every year.  We have to assume that we will sometimes have deficits in the future.  In this situation, using the money for a tax cut is an example of shortsighted fiscal irresponsibility.

We Don’t Really Know the Size of the Surplus

It gets worse.  The real size of the budgetary surplus is questionable because Governor. Walker’s administration has been budgeting based on the same suspect accounting methods for which he criticized his predecessor.  Governor Walker has been using cash flow accounting rather than accrual accounting just as his predecessor did, because cash flow accounting allows him to ignore obligations accrued in this year that will not be paid until next year.  Using cash flow accounting, the state can make the budget appear to be in balance merely by shifting expenses from the current year into next year.  So, it is hard to tell just how big the surplus really is, and it is equally hard to tell how much money might be available to fund the tax-cut.  In short, the Republican radical rightists in Madison are fiscally irresponsible not only because they are failing to pay down the state’s debts or to save money for a rainy day but also because they are doing so when they do not really know how much money they have.  Why are they doing this?

The Real Goal of the Radical Right Is To Reduce Key Government Services

They are doing it because the real goal of the radical right is not fiscal responsibility.  The real goal is to shrink the size of government.  The radical rightists believe that taxes should be cut whenever possible in order to force reductions in the size of government.  Of course, “reductions in the size of government” means reductions in key government services.  It means reductions in things like education, conservation, healthcare and the maintenance of roads and bridges.  We need these services, and our fellow citizens are smart enough to see that.  As a result, the radical right’s strategy has never worked. It was tried by President Reagan, and instead of shrinking the size of government, it led to unprecedentedly large federal deficits.  It was tried again by President Bush, and the result was the same.  Why does this happen?  It happens because everybody loves paying less tax, but we all resist reductions in government services that we know are important.  The radical rightists do not want to recognize the fact that their strategy has never worked, because they have a blind faith in the rightness of their cause and because people like the Koch brothers can always be counted on to support politicians who push for lower taxes.

Progressive Democrats Are the Real Party of Fiscal Responsibility

It is time for us to recognize that the Republican radical right is the party of fiscal irresponsibility.  We progressive Democrats are the only real fiscal conservatives in the country because we understand that if we want to have government services we have to pay for them.  We must reject budgeting based on fantasy.