Economize By Cutting Fat, Not Muscle

Republicans say “Cut back!” Democrats say “Spend!” In our magical democracy, I can happily report that both are correct. But Democrats spend wastefully, while Republicans cut back with self-serving animosity. By thinking logically, we can safely climb down the fiscal cliff that poor policy-making has artificially erected.

In the fine spirit of bipartisanship on the first day of a year one hopes will be better than last, I will grant Republicans this point: we need to economize. To implement this important Republican point, I propose:

  1. changing the tax code to distinguish between finance gambling and legitimate investment of the traditional sort (building factories, etc.) with the assessment of a punitive tax on gambling (e.g., trading in derivatives;

  2. a stiff financial penalty on the re-selling of mortgages to restore the principle of the responsibility of the bank or mortgage firm toward the mortgage extends to a homeowner;

  3. tax penalties on second homes, with harshly graduated rates, conceptually the reverse of the tax benefits on first homes;

  4. a zero-based review of all military-intelligence activities, including full and open dialogue with the Republicans, but, pending agreement, an immediate 50% cut in military-intelligence expenditures, starting with the elimination of at least 90% of defense contractors.

Gambling with other people’s money, evading responsibility for the mortgages one sells to homeowners, and the ownership of mansions one is not even living in are perhaps games that a rich society can tolerate but certainly not forms of behavior that should be allowed without the payment of a “thank you” license fee…and a big one. The scam that expensive contractors replacing civil servants would somehow enhance quality and cost-effectiveness of the military was perhaps the most outrageous myth of the Reagan era and has become a boondoggle of historic proportions. We can no longer afford this form of welfare for the rich. More importantly, we can no longer afford a military policy that entices corporations to advocate war in order to obtain lucrative contracts to manage those wars. “War” and “profit” need to become mutually exclusive concepts.

When a rich man tells a poor man to economize, you ought to be able to smell the rat. If you live in a mansion and suddenly face hard times, you economize by selling the good china, not the foundation timbers. Education, health care, unemployment insurance, infrastructure, and a cautious foreign policy based on searching for positive-sum outcomes rather than pursuing a zero-sum policy based on force constitute the foundation timbers of governance. Owning multiple empty mansions, replacing career civil servants with short-term contractors focused on personal profit-maximization, gambling with other people’s money or mortgages, and making war for profit are dust-gathering sets of good china on which society never eats. The above reforms would put the important conservative principle of economizing on a solid moral—not to mention financial—foundation: economize by reducing fat, not muscle.


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