Pay back what we owe

Republican presidential candidates throw around a lot of purported reasons for supporting massive tax cuts. But whatever motives they claim, their real one is obvious: votes. In fact, that's about the only one they could possibly have, because by economic standards their position is unsound if not suicidal. Though I cringe at the mere mention of John Maynard Keynes' spending policies, I find it hard to argue with his taxation theory. Given the nonexistent saving habits of the American populace, more money in our pockets means a jump in personal spending—and that's the last thing we need right now. We can't stop hearing how explosive our economy is to begin with. In fact, with the Federal Reserve already raising interest rates at every turn in a desperate attempt to head off inflation, a tax cut could be just the thing to push us over the edge. If the government steps in again to stop us, as it may well have to, this lost surplus won't have done us any good.

The Democrats' primary objective, the "shoring up" of Social Security and/or Medicare, is no better. Though Gore and Bradley may crow about a "promise to the future" we were forced into making years before our births, these entitlement programs are nothing more than glorified pyramid schemes. Their continued solvency is dependent on the induction of ever more members or on the raising of taxes to provide for a large population with a higher cost of living. What's worse, as soon as the government takes money from these members, it is committed to providing for them, and the vicious cycle expands.

Like all pyramid schemes, entitlement programs will soon collapse—even Democrats speak of "extending the life" of these trust funds for another precious year or two. The demise of these schemes is inevitable—the only things in question are the digits on the tombstone. The longer we inflate our entitlement balloon, the louder and more violently it will burst. We don't need to save Social Security and Medicare, we need to euthanize them. If we must get the surplus involved, we should use it to pay off current participants rather than to suck in fresh victims.

They say we owe the surplus to our taxpayers, or that we owe it to future retirees. We do owe it to someone, but both parties go wrong after that. We owe it to the people with the slips of paper to prove their claim. That's right—the public debt. A securities buyback will spur economic growth like a tax cut, and it will preserve our future like entitlement programs try to do, but in both cases, it will do the job right. When demand for bonds increases, their prices go up, which means that interest rates go down. As bonds become less attractive, investment increases. This growth in capital, rather than a short-term surge in consumption, lays the solid ground for continued economic expansion. If a tax cut is kerosene for our economy, debt reduction is anthracite coal—cleaner, more efficient, and longer lasting. As more securities mature and the buyback process continues, our economy will continue to grow steadily, increasing surpluses further and allowing an even faster end to our cycle of debt.

Economically speaking, the present is almost too good to be true. As for the future, we should build it on a solid foundation rather than on a swelling bubble. So I couldn't really answer that online test question. Nothing I could mark would be the truth, but faced with the dilemma of our two-party system, I wound up telling the biggest lie of all: "No opinion."

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