I know you are probably more interested in Michael Jackson’s memorial service and Sarah Palin’s resignation as governor of Alaska, but you can find out all you need to know about that – and more – from your television. I have no illumination to offer on those topics. Instead I hope you will bear with me while we explore the complexities of taxes and government spending.
Time and again, naysayers respond to proposals for urgently needed reform by asking where the government would get the money to fund it. As I see it, there are three possible answers: tax revenue; bonds and debentures; deficit financing.
Of course, there’s always a fourth option – printing more money. But history shows that can be disastrous. Realistic alternatives boil down to an old advertising slogan: Pay now or pay later.
To target public spending effectively, you have to build a new budget from a zero base every year. First you establish your goals and prioritize them. Then you figure out a strategy to reach each goal. Then you figure out the tasks that must be accomplished to implement each strategy. Then you figure out what each task will cost. Add it all up and you have your budget.
Since the wish list usually exceeds your ability to fund it, you may have to defer – or even abandon – some goals. This approach ensures that the goals you want to achieve most will be funded, while those you value least will be the ones passed over. The problem is that you seldom have agreement on prioritizing public spending goals. Some people want superhighways; others want mass transit. Some want heavy industry at any cost; others want clean air and water even if it means losing some industry. Some want early childhood education, food stamps, Medicare and Medicaid, Social Security, Unemployment Insurance, and other social programs; others want more military spending and subsidies for such activities as agriculture and oil exploration…
That’s one reason we go to the polls. One party proposes to spend our money on one set of goals, another party has a different agenda. We vote for the party that proposes the goals we want most. So why are some people asking where the money will come from to reform health care in the United States? Obviously, it will come from you and me – or our children (and grandchildren). Who else?
But it seems to me that health care reform should be among the top priorities in this year’s budget. It was the number one issue in the November elections. And polls show a substantial majority of Americans want it. So, before deciding how much to spend on supersonic bombers, armor-plated tanks and nuclear submarines, before funding drones to kill insurgents (and civilians) in Afghanistan and Pakistan, before allocating a penny to subsidize multimillionaire farmers and oil explorers, before repaving that road in Alaska or building that bridge to nowhere… Before all that, Congress should figure out a lean and logical approach to ensuring affordable health care for Americans. Then Congress should allocate the necessary funds to achieve that goal.
If that means deferring or abandoning some other goals, then so be it. In making out a wish list, the sky may be the limit, but available funding is determined by economic and political realities. Potential tax revenue is limited, especially in this sluggish economy. Prudent borrowing can raise only so much. And it would be politically unacceptable to budget for a bigger deficit than U.S. taxpayers already face. Some items on the government’s wish list will have to wait till next year, or the year after next, or whenever. But affordable health care for all cannot be one of those items.