Monday, October 22

Changing Conversations: Can We End Partisanship?

Because of the presidential race and recent debates, there has been plenty of conversation about the role of government. And frankly, it seems to me the national discussion often causes more confusion than clarity for anyone attempting to follow it.

Part of the problem is that there doesn't seem to be any real authority in reconciling the federal budget. If you want to give it a go, start with Wikipedia. Otherwise, you will find different sets of numbers that categorize how the government spends its money. Almost all Americans know is that the federal government spends more than it collects.

They also know that we can't keep doing that. It's a lose-lose proposition because not only do we continually lose every month, but the interest rates on debt erodes purchasing power. Ergo, if you have $100 and spend $110, borrow $10 to cover the difference, and then pay back $10 plus $5 in interest, you'll only have $85 the following month. So to maintain $110 of spending, you'll have to borrow $25 next time. And so on.

Except, in the case of the U.S. government, it's worse. It is more likely to ask for $115 the following month, thereby increasing the rate of the debt and its inability to catch up. We all know it has to stop.

Why what should be simple math becomes partisan and complicated.

The simple math problem illustrated above becomes complicated because in order to solve the debt spiral, the conversation centers around the question "how does the government find more money?" In other words, both parties want to find a way to collect the $110 it needs (maybe $112.50 to pay for past debt) so it doesn't have to borrow any more money.

Two partisan positions eventually surface: raise taxes (and who to raise them on) or increase the number of the employed people who pay taxes while decreasing the number of people who need help (via economic growth). Both have risks.

The risks associated with the first is that if you try collect $112.50 instead of $100, then the number of contributors might diminish revenue to $98. The risks associated with the latter are related to the speed of recovery. For every month more contributors aren't added to the labor pool, the debt spiral continues (perhaps at a faster rate if you temporarily reduce taxes to $98 in order to stimulate growth).

What is even more difficult is attempting to talk about the other side of the coin. Maybe you don't have to collect $110. Maybe you can collect $100. Most politicians don't like to talk about it because cutting $10 means that somebody will lose something. For example, some people think if $450 million is cut from PBS, then there might not be PBS. (The federal funds represent 15 percent of its budget.)

Although PBS would likely weather such a cut, the outcry is generally emotional. There are dozens (maybe hundreds) of expenditures just like PBS. All together, some estimates place federal, state and local governments near $1 trillion in welfare and social programs (more than $700 from the federal level and $210 billion on the state level). Depending on where you look, some consider it to be significantly higher and others significantly lower. Regardless, it's a big number and there is outcry with each program cut.

We need to change the conversation and evolve our culture.

I am not sure that we can change the conversation. In the last decade, politics has become overwhelming partisan — enough so that I avoid most political conversations unless I can tie it to a teaching opportunity for communication. (Political mistakes tend to make for pronounced examples on both sides.)

And yet, the conversation needs to change. We need to find ways to move more welfare and social programs away from government and make corporate and individual giving part of our culture.

This isn't partisan. It's math and morality. The return on investment for government-funded social and welfare programs is paltry compared to direct giving to fiscally responsible nonprofit organizations.

When people give $1 direct to a nonprofit, 80-90 percent of that dollar directly benefits the person in need (assuming the nonprofit is fiscally prudent). When we pay taxes, the value of that same dollar is diminished by bureaucracy and oversight on the federal side and nonprofit expenditures related to pursuing grants, lobbying efforts, and administration costs.

I'm not sure if there has been a study, but I wouldn't be surprised if the value of that $1 drops to 50 cents before reaching the program (and then another 10-30 cents is deducted by the nonprofit), leaving 20 to 40 cents for the people who need it. If we found out a nonprofit was delivering 30 cents for every dollar raised, it would be a scandal. When it's government, we expect someone else to pay more — even if government further erodes the benefit by borrowing to cover the loss of value.

It's also not uncommon for many government-reliant programs to think differently about government funding. They don't think of it as taxpayer money. They look at it as earned money. Earned money doesn't inspire the same frugality as charitable donations. It tends to be spent in the least efficient areas.

At the same time, for every tax dollar increased, people have less to give. It's not a coincidence that tax increases tend to reduce charitable donations, thereby driving more people to government programs.

Still, we won't see it during this election cycle, and maybe not ever. But it would make a lot more sense if the so-called millionaires for higher taxes started writing checks for social and welfare programs instead of insisting other people write checks to the government for a lower return on social investment.

If you can afford more taxes, then you aren't giving enough to charity.

If they and others started to donate more, maybe we really could reduce spending to a hypothetical monthly budget of government to $95 or $85 instead of $110, with $10 borrowed. And maybe, if other people follow by example, we could start to make charitable giving such a strong presence in our culture it would lower the need and demand on government.

As much as I like PBS, that might even be a good place to start. The $450 million in tax dollars it received is nothing compared to the $1.5 trillion or more that was spent on political campaigns this cycle. Maybe the government could ask the private sector (that already donates 60 percent of the PBS budget) to cover it. Or maybe consumers can just buy an extra Elmo. There is some very big money in Sesame Street merchandising. I've been an avid contributor over the years.

The more programs we could take off the government books with affluent individuals and corporations agreeing to adopt in lieu of tax increases makes much more sense. It would also empower people to prioritize their own giving instead of entrusting a third party to take some and spread it around.
blog comments powered by Disqus
 

Blog Archive

Google+ Followers

by Rich Becker Copyright © 2010 Designed by Bie Blogger Template