Center for Limited Government Newsletter – Feb. 9, 2012

1. Reality, Not Political Philosophy

By Ed Robinson

While I am hopeful that the 2012 national election will include a long, detailed debate about the political philosophy that should govern our country (small constitutional government and self-reliance vs. large unlimited government and dependency), I believe that political debaters (both politicians and ordinary citizens) frequently hide behind philosophy rather than addressing reality. Quite often, starting from known and agreed reality makes a much easier case for the conservative approach than does taking the philosophical approach.

One great example relates to the quality of public school education. In most larger cities, that quality has fallen hugely over the last 50 years. The usual liberal cry is to call for more money to be spent. Yet more money has in actuality been spent year over year in most places, usually substantially more than the increase in school population plus inflation – yet results don’t get any better. Interestingly, though, this agreed-upon fact doesn’t lead the money-spending advocates to change their tune.

On the national scene, we have the budgetary crisis, caused by the almost inconceivably large deficits that we are running – over a trillion dollars per year for the last three years, with approximately the same deficits projected for the foreseeable future. All reputable economists, and almost all citizens, agree that this pattern is unacceptable and unsustainable, and must be reversed – because no nation can have debt at 100 percent of GDP and rising, if it wants to honor its obligations and prosper in the long run.

The Republicans took a crack at fixing the problem with Paul Ryan’s plan, which proposed ways to fix Social Security and Medicare, among other things, in order to bring expenditures into eventual balance with sustainable revenues. Even this plan didn’t balance the budget until way out in the future, which leads me to say that it isn’t a good enough solution. But liberals attacked it for changing the entitlement programs, which they choose to treat as somehow sacrosanct.

To which my response is: Fair enough as a philosophical position, but then tell us how you are going to balance the budget, which we all agree needs to be done. If you plan to do it by greatly increasing taxes on the “rich,” as you like to call them, tell us what the rates will be, and how much additional revenue those rates will collect. If you plan to cut other programs, please give the details.

Surprise, surprise: There have been no such comprehensive proposals! Ending the Bush tax cuts for the “rich” (the major component of the liberal cry for the “rich” to pay their “fair share”) will raise miniscule sums of money in the overall scheme of things. The only major spending cuts being proposed by liberals are to the defense budget, about which we can argue philosophically, but making such cuts will do nowhere near enough to eliminate future deficits.

Why the lack of a comprehensive liberal proposal that actually ends the deficits? Because the numbers can’t be made to work under their frame of reference. There isn’t enough reasonably available tax money to sustain the entitlement programs as they are currently structured. Since liberals don’t like that inarguable fact, they ignore it, and pretend that increases in “rich” people’s tax rates, here and there, will make all our problems go away, at no cost to the overall economy. If those tax rate increases aren’t enacted, then liberals claim that it’s the fault of the “rich” that we have ongoing huge deficits. Math and facts no longer matter.

This ignoring of facts and math is not a weakness of liberals alone. Conservatives often argue for policies that aren’t supported by practical reality either, such as in the immigration and drug war arenas. This is just as unacceptable from conservatives as it is from liberals.

Let’s push our politicians and friends to make policy proposals that add up factually and mathematically, regardless of their philosophical underpinnings. Then we can go back to the political philosophy discussions about which approaches are appropriate for our country, and decide accordingly – and actually have some chance that the enacted policies might achieve the advertised goals!

The author, Edward N. Robinson, is director of Sutherland’s Center for Limited Government. He has been a financial adviser to corporations, a senior executive, and a management consultant. Prior to retiring in 2006, he operated Robinson Partners, consulting CEOs on corporate strategy and mergers and acquisitions. Before that, he was an executive vice president of Texas Commerce Bank (later Chase Bank of Texas and now JPMorgan Chase), where he ran the investment banking business, and then created and ran The Private Bank; was an executive director at Azurix, an international water utility business, responsible for corporate strategy and M&A; and was a managing director at First Boston (now Credit Suisse), running the firm’s Los Angeles office and the regional M&A practice. Mr. Robinson has a B.A. from the University of Michigan and a J.D. from New York University School of Law.