PIPE DREAM: SIMPLE SOLUTIONS TO COMPLEX PROBLEMS

The people that identify themselves with the Tea Party are an angry lot fed up with big government and high taxes. Their solution: Slash government spending and lower taxes. And they do not want the government’s debt ceiling raised either.

The people marching around wearing Uncle Sam top hats and other costumes, waving homemade placards, and shouting anti-government slogans are suffering from a pipe dream. They are looking for simple solutions to complex problems. When they wake up, they will realize there are no simple solutions to complex problems.

The Tea Party Republicans in Congress propose slashing government spending by making deep cuts in government sponsored health care for seniors (Medicare) and for the poor (Medicaid), while lowering taxes, not on the middle class, but on the wealthiest of Americans and on businesses.

The first issue facing Congress is the debt ceiling, a ceiling that will be reached shortly. It will be a catastrophe if Congress fails to raise the debt ceiling. The U.S. will not be able to pay its bills. Social Security payments will come to a screeching halt, as will payments to Medicare and Medicaid providers. The country is likely to sink back into a deep recession, if not a depression, when Uncle Sam not longer pays his bills.

Many, if not most Tea Party followers are seniors. They’ll sing a different tune once they discover that the proposed changes to Medicare will more than double their out-of-pocket health care costs. Those seniors will be much angrier than they are now when that happens. And do those seniors really want to see Medicaid slashed to the extent that the poor will no longer receive a minimum of adequate health care?

What about those proposed tax cuts? The Republicans claim that the loss of revenue from taxes will be more than made up by a growth in the economy, a growth that will bring more funds to the government than what it will lose from the tax cuts. That’s a gamble not worth risking.

There is no question but that we have gotten ourselves in one helluva financial mess. The trouble is that there is no simple way of getting us out of this complex mess. Slash spending? Sure! But where? I’m sure the seniors will say, ‘Not on our backs!’ And do we really want to punish the poor for being poor? I don’t think so.

Lower taxes? If we lower taxes now, we may all end up with higher taxes eventually - the middle class as well as the wealthy - to make up for a loss of revenue. There is, however, a simple solution to the tax issue. If we scrapped the loophole-loaded income tax and switched to a value added tax, our government would see a substantial increase in revenues.

For the uninitiated, a value added tax is similar to a sales tax. Everyone, individuals and businesses alike, would have to pay their fair share of taxes based on the cost of what they buy. The only value added tax exemptions should be for food, medicine and medical expenses. And, of course, there would be no more offshore tax havens.

If the Tea Party’s simple slash and burn solution somehow succeeds, the seniors among its supporters will be in for a very rude awakening.

The Republicans and Democrats are going to have to find a way to agree on measures that will cut the budget deficit and government spending without doing it on the backs of seniors and the poor.