A new Gallup/USAToday poll finds Americans want to maintain the status quo of fiscal irresponsibility:
71% oppose increasing sales, income or other taxes while 27% are in favor that approach
53% oppose reducing pay or benefits for government workers while 44% are in favor.
48% opposed reducing or eliminating government programs while 47% were in favor of cuts.
As The Coming Generational Storm shows, beyond a shadow of a doubt, spending cuts and tax hikes are inevitable:
In 2002, Secretary of the Treasury Paul O’Neill asked Dr. Kent Smetters to prepare a report for the President’s 2004 budget showing the federal government’s long term liabilities. Dr. Smetters asked a friend, Dr. Jagadeesh Gokhale from the Federal Reserve Bank of Cleveland, to assist him. Just days after Secetary O’Neill was fired from the Treasury, the report was yanked from the 2004 budget. However, their study lives on, and can be read in its entirety (in PDF form) at The American Enterprise Institute. The fiscal bill they estimated in 2002 was $45 trillion! Waiting 15 years would bring it to $76 trillion! It’s even higher today.
This figure was arrived at using a form of accounting known as generational accounting. It’s nothing new, having been used in 30 countries and by such institutions as the Bank of England, Her Majesty’s Treasury, and the Bank of Japan. It includes local, state and federal spending and it’s comprehensive. In order to correct the generational fiscal imbalance we are placing on future generations, the Smetters-Gokhale study found we would have to do one of the following in 2003:
Increase federal income taxes: 69%
Increase payroll taxes: 95%
Cut federal purchases: 106%
Cut Social Security and Medicare: 45%
And the difference in 5 years if nothing was done? Even worse:
Increase federal income taxes: 74%
Increase payroll taxes: 103%
Cut federal purchases: 115%
Cut Social Security and Medicare: 47%
The numbers have increased even more since 2008, but Americans still want low taxes, high benefits, and government restraint while allowing the public unions to disregard that restraint at will. These contradictions can’t exist together, and the it’s only a matter of time until the public does become aware of it.