Pharos-Tribune

Opinion

January 2, 2013

KITCHELL: Avoiding “cliffs” should be permanent

There is a reason why congressional approval ratings are at an historic low and why statesmen seem to be leaving Washington just as highly-charged partisan warriors are belting it out in the Beltway.

Government in the United States has become more about who has more votes than who has the best ideas. Lost among all the wrangling is a deliberative debate over where we’re steering this country. For the past few months, we’ve been told we’re headed right over the edge, just as Christopher Columbus was told he would sail off the edge of the world.

Fortunately, it was not the case in Columbus’ case, and if we’re mindful of how a government should work and a country must function, it won’t be true in our case either.

What the debate over the fiscal cliff boils down to is this: Our country evolved in the 20th century into a land where the government incentivized ways to avoid paying our country in return for acceptable investment and behaviors that create a stable culture – home construction, college educations, retirement savings, nonprofit organization contributions and various other deductions. What we also did in the 20th century is deal with inflation. Those who remember the late Gerald R. Ford’s “Whip Inflation Now” (WIN) buttons remember the turning point in that battle. But when we whipped inflation, we also whipped wages, and with slow-growing wages and rising costs of living, government had the short end of the stick.

The solution to the fiscal cliff problem is simple: We have to incentivize ways to invest in the American government.

What does that mean? It means we have to do more things like offering long-term treasury notes known as T-bills that encourage Americans to invest in their country for the long run now, knowing they’ll receive interest later. It means we might consider incentivizing the tax code so that inheritance taxes are paid years in advance. It means we might have to think about income and corporate taxes like the post office thinks of “Forever stamps” – paying costs in advance so that we never have to pay the costs of postage later when prices are higher.

What that also means is that we have to play to our strength – our brand. If foreign countries believe in us and what we mean to the world, we have to provide investment instruments that are backed by the federal government.

It also may mean that if pay-as-you-go is the goal of Medicare or Social Security, that we calculate a maximum benefit for a lifetime. If an American doesn’t live long enough to collect that benefit, their contributions are used to pay down the federal debt. It’s maybe not the leading entitlement reform proposal out there, but it’s one of few that hurts no one in the process, except those paying into the system if the program costs exceed contributions.

Of course, all this doesn’t matter if we continue spending levels that are not fiscally sound. If Congress adopts unfunded mandates on future generations without attaching funding mechanisms, we’ll be back in this mess again several times over in the near future.

One final thought is this: For all the bitter struggles over the auto industry and financial industry bailouts, both have made money for the U.S. Treasury. GM stock went on sale at the end of 2012, and that company along with Chrysler has avoided the fiscal cliff that would have cost millions of jobs and an incalculable loss in reputation worldwide for the United States. The proposals would not have passed muster if there were not provisions that ensured the U.S. would be better off for ensuring their is a competitive auto industry in this country. And we are.

We just have to take that same kind of thinking back to Washington – and keep it there.

1
Text Only | Photo Reprints
Opinion
  • Sandra Stotsky STOTSKY: The next step redux in education standards Writing at National Review Online, Rick Hess and Mike McShane of the American Enterprise Institute make the complaint that critics of Common Core have not come up with the next steps to "repeal and replace" for states that want to restore academic in

    April 24, 2014 1 Photo

  • WILLIAMS: Get out on the highway My son's truck is in the shop and my friend, Jan, was in the hospital so I had her truck in order to be able to go feed her cats while John used my car to go to work. Jan and I both purchased vehicles before we retired that we hoped would be the last

    April 24, 2014

  • THEIR VIEW: Indiana needs open primary elections Indiana's primary election system is dysfunctional. What the state really needs is an open primary system. This month, the Lake County election board argued about the procedures for recruiting high school students as poll workers for the May 6 primar

    April 23, 2014

  • KITCHELL: Tax bills show what smoke & mirrors don't There's a price to be paid for the decline in what we call civic engagement -- and local property taxpayers are paying that price. In case you haven't received your 2014 Cass County property tax statement yet, be prepared for a bit of sticker shock w

    April 23, 2014

  • MARCUS: Illinois brings joy to Indiana From the email this week, I sensed a profound need by Hoosiers to find joy in the problems of Illinois. Our neighbors to the west are fighting their way through a mess of their own making. They have forced themselves to raise taxes and cut services t

    April 22, 2014

  • THEIR VIEW: Let voters weigh option of easing daily commute There was a time in this country when workers typically lived less than an hour's walk from their jobs. A time when a "commuter" was simply a traveler taking advantage of a reduced railway fare on his way to the big city. A time when the American sub

    April 22, 2014

  • VILLAGE IDIOT: Wait a minute here — what did I just sign? When Dr. Sam said, "You've got the prostate of a 16-year-old," it was hard to keep from beaming. This must be how a woman feels when a complete stranger tells her she has a beautiful baby. Well, maybe not quite. Still, it was hard not to feel proud o

    April 22, 2014

  • LYONS: How we devalued the 'R' word At the risk of angering somebody like MSNBC's Melissa Harris-Perry, I sometimes used to joke that I only look white. Actually, I'm Irish. Meaning basically that I wasn't raised to think the man in the big house had all the answers, nor deserved all t

    April 21, 2014

  • HAYDEN: Want better teacher ratings? Ask the kids The state may be back where it started, encumbered with a flawed teacher grading system, a year after implementing what were meant to be tough new standards. That was the general consensus of the State Board of Education days after teacher evaluation

    April 21, 2014

  • THEIR VIEW: Careful look at tax structure needed Indiana legislators this year created a "blue-ribbon commission" to study the state's taxes on businesses this summer. We hope the commission will listen to Larry DeBoer, a Purdue professor who might understand Indiana's tax structure better than any

    April 20, 2014

Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Poll

Should mushroom hunters be allowed to forage off-trail in Indiana state parks?

Yes
No
Undecided
     View Results
Featured Ads
AP Video
SKorea Ferry Toll Hits 156, Search Gets Tougher Video Shows Possible Syrian Gas Attack Cubs Superfans Celebrate Wrigley's 100th Raw: Cattle Truck Overturns in Texas Admirers Flock to Dole During Kansas Homecoming Raw: Erupting Volcanoes in Guatemala and Peru Alibaba IPO Could Be Largest Ever for Tech Firm FBI Joining Probe of Suburban NY 'Swatting' Call U.S. Paratroopers in Poland, Amid Ukraine Crisis US Reviews Clemency for Certain Inmates Raw: Violence Erupts in Rio Near Olympic Venue Raw: Deadly Bombing in Egypt Raw: What's Inside a Commercial Jet Wheel Well Raw: Obama Arrives in Japan for State Visit Raw: Anti-Obama Activists Fight Manila Police Motels Near Disney Fighting Homeless Problem Michigan Man Sees Thanks to 'bionic Eye' S.C. Man Apologizes for Naked Walk in Wal-Mart Chief Mate: Crew Told to Escape After Passengers
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.