Cognitive Dissonance

Americans suffer from a very bad case of cognitive dissonance and Robert Samuelson summarizes it well in his most recent Washington Post column:

Our wants and needs from government — the two blur — exceed our willingness to be taxed.

It isn’t a new phenomenon. Sen. Russell Long characterized the same phenomenon 40 years ago, saying: “Don’t tax you, don’t tax me, tax that fellow behind the tree!” I’ve called it the “roomful of money” hypothesis—the idea that somewhere there’s a roomful of money, all you need to do is find it, and all fiscal problems will be solved. That’s the theory behind the funding of the Chicago Public Schools.

I oppose cuts in the personal income tax rates. I don’t believe they will stimulate the U. S. economy as much as its proponents do and I don’t believe it will spur domestic investment. I do believe that we should cut the business income tax so that it’s comparable to that of other OECD countries. When even Nancy Pelosi says that, as she did on the Sunday morning talking heads programs yesterday, it’s hard to claim that’s a far right wing position.

If you feel the need to maintain a balanced budget, introduce another tax bracket that will tax those in the top .01% of income earners. Or cut spending. The idea that in the half trillion annual Medicare tab there is absolutely no waste, fraud, or abuse doesn’t pass the smell test.

Or don’t balance the budget and just issue the credit. That level of money expansion won’t cause a run on the bank.