Sunday, September 16, 2012

Now Might Not be Best Time to Cut Social Programs

If we want to cut our federal deficit, then, for the moment, let's not do away with many of our social programs.

This might be the worst of times to do away with social programs.

When our economy teetered in 2008, we rushed to inject hundreds of billions of dollars. "Stimulus," you remember we called it.

So, if injecting money into an economy can be a good thing, yanking money out can be bad. So, let's be careful. Let's not too quickly end any of our spending.

Let's just go about our spending a little differently. Let's let someone else do it. Instead  of Uncle Sam, let those from the private sector (including you and I) do it.

Now, how does this translate as we deal with Medicare, disability insurance and a host of other social programs? If we were to keep all these programs, and at the same time balance our budget, we would have to increase our taxes.

And, that seems unacceptable to the masses.

The alternative might prove even harder. If we don't cut the programs, but just transfer them to private charities, it means we will have to come up with all the same money, but gather it through donations instead of compulsory tax payments. Yes, it does seem a guy who doesn't have to pay is going to be less likely to do so.

And, we will need to collect more through private donations than we are now collecting via taxes. The federal government might be able to secure loans and run up a debt, but I doubt charities will be able to. No deficit spending allowed for them.

So, can we do this? It will depend how good of a pitch we make, talking folks into donating. And, just as government taxes are progressive, we will need to collect more from the rich than from the poor. Charity giving already is that way, more coming from the rich philanthropists than from the less well to do.

It might be, we will need to continue government programs, or at least phase them out slowly instead of all at once. Let the private sector meet what needs it can, then fill the unmet needs with government programs. The danger with this is that it might grow the social programs unnecessarily. So, let's put a cap on how much government contributes, while letting the private charities grow as large as donations allow.

No comments:

Post a Comment