The S&P downgrade, and why revenues are necessary

Anyone who has been following this mess in Washington is aware of the fact that Standard and Poor's downgraded the U.S. Government's debt rating.  Many on the right are pointing out that the primary reason given was a failure to cut the National Debt significantly enough, and that this means that the crap deal hammered out in Congress didn't go far enough.  True and False.


The National Debt, generally, is the amount of money owed by (or taken on credit) by the national government, as opposed to the Deficit, which is the shortfall between revenues and spending.  The problem with Debt is that it must (or damn well better) be paid, and this guarantees further increase of deficits under almost any circumstance.  The National Debt is necessitated by the Deficit, to adjust for shortfalls, to make sure that money continues to move to necessary services.

The only way to prevent the government to accrue less debt while responsibly fulfilling its functions and obligations is to adjust the revenue structure.  Yes, taxes.  I am going to avoid numbers deliberately, and just try to illustrate this simply.  Deficit = Spending + Revenue, where spending is a negative number, and revenue is positive.  The only way to reduce the deficit absolutely (since spending can not conceivably reach zero) is to increase revenues.  The most sensible, reliable, short-term solution to this is to raise taxes levied domestically, especially income taxes.  Simply erasing the Bush Tax Cuts is enough to take a huge dent out of the Deficit, allowing more fluid capital and, therefore, a more manageable Debt situation.  The less money that needs to be borrowed, it will generally follow that less is borrowed.

Why is it that the rich are expected to pay a higher percentage of their income in taxes?  Simple.  As humans, we all have basic necessities.  Honestly, the cost differential between one's necessities (needs) and another's should be minimal.  Let's say one person makes A dollars income a year, and that one other person makes B dollars, where B is ten times more than A.  Both of these people have the same necessities, which account for, more or less, the same dollar amount, leave a much smaller slice from A behind as they do from B.  It follows that the person who makes B can afford to take on a greater tax burden while still looking after his or her own necessities.

This is the basic principle behind our Progressive Tax system.  While the government should do what it can to protect people and their property, people are more important than property.  Is it more important to protect one man's profits, while failing to protect another man's basic human needs?  The answer, of course, is no.  This is far from some socialist, egalitarian approach.  It is a basic, sensible approach, which leaves plenty behind for the rich, and I would argue that it doesn't go far enough.

The basic aversion to taxes by many people doesn't simply have to do with a selfish desire to hold on to every earned cent, but to insure that the money they give up is spent wisely.  How much more wisely than to pay down the National Debt, allowing a secure future of borrowing, low mortgage rates, etc.?  Most government programs created over the past century have been created under progressive agendas.  They have, then, been routinely dismantled, piece by piece, by reactionary "conservative" agendas, leaving less robust programs, often finding themselves fighting harder for survival under the threat of "austerity" than serving its intended purpose.  As long as the right tries to disable important government institutions, it can be guaranteed that your tax dollars will be less sensibly spent.

Flat Tax?  National Sales Tax?  These are the most ridiculous things ever.  Again, with the stupid Sales Tax idea, it unnecessarily burdens the poor (who can't afford it) because a greater proportion of their income goes towards purchasing things to fulfill their necessities.  It doesn't work, and it is only proposed to attempt some new attempt at what some Texas textbooks almost came to call an "Ownership Economy."  Whatever you call it, it is still slavery, indenture, and a slashing of the American Dream (which, to those have achieved it, it seems to be less important that others can).  If only we could have a sensible body politic and economy devoted to true shared sacrifice and some sense of a categorical imperative, we'd be on the right track.  I feel less and less that this is going to happen.