Tax cuts steal from future
Whether it's the "fiscal cliff" debate or the way we fund education, our selfishness is impeding our future growth
Topics: Higher education, Education, Fiscal cliff, Income inequality, News
FILE - This Nov. 16, 2012 file photo shows President Barack Obama, accompanied by House Speaker John Boehner of Ohio, speaking to reporters in the Roosevelt Room of the White House in Washington. Even if Congress and the White House fail to strike a budget deal by New Year's Day, reality may be a lot less bleak then the scenario that's been spooking employers and investors and slowing the U.S. Economy. The tax increases and spending cuts could be retroactively repealed after Jan. (AP Photo/Carolyn Kaster, File) (Credit: AP)The central political problem of our time is finding some way to stop the present from stealing from the future. Whether the issue is global warming, cutting taxes or funding higher education, we apparently find it impossible to resist the temptation to spend today what our children will have to pay for (at much increased expense) in some conveniently distant tomorrow.
In each of these cases, we are passing on the costs of our behavior to future generations, in a way that is both economically inefficient and deeply unfair. For example, it would be much cheaper in the long run to take serious steps to cut back on carbon emissions now, but in the long run, as John Maynard Keynes famously observed, “we are all dead.”
So we continue to live ecologically destructive lives because most of the consequences of our irresponsible behavior will be visited on our descendants, who at present have little or no say in the matter.
Similarly, when we vote ourselves tax cuts today we are in effect voting for tax increases — and/or spending cuts — for our children. Combining tax cuts with increased spending is the social equivalent of running up a multi-trillion dollar credit card balance and then mailing the payment notices to the future.
This is why the so-called “fiscal cliff” is a phony metaphor. There is no fiscal cliff — not as long as we can keep putting off the due date for our bills, which we can and will until they’re somebody else’s problem entirely.
Or consider how we have come to fund higher education in this country. I, like so many other members of my generation, went to an excellent public university and an equally excellent public law school for not much more than the opportunity cost of attendance. If I were to attend the same schools today, I would have to pay more than $200,000 in tuition for the privilege.
This helps explain why outstanding student loan debt has grown by a factor of five over the course of the last decade, from around $220 billion to more than one trillion dollars – and it’s rising by a mind-boggling 15 percent per year.
A simple extrapolation of that trend brings to mind two economic aphorisms. The first is Herbert Stein’s observation that “if something cannot go on forever, it will stop.” Equally germane is Michael Hudson’s almost Zen-like insight that “debts that can’t be repaid won’t be.”
Paul Campos is a professor of law at the University of Colorado at Boulder. More Paul Campos.




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