Paying the piper
By Bruce Smart
Paying the piperBy Bruce Smart
The United States has been enjoying a play now, pay later party. Now we must pay the piper — in Leesburg, Richmond and Washington.
Real estate taxes are Loudoun’s chief source of revenue, and three quarters of its budget funds schools. Compassion for taxpayers in a slowing economy has obscured two unavoidable facts: The United States lags behind international competitors in quality of education, and the nation’s success hinges on being competitive in a technology-driven global economy.
For our grandchildren’s future, we cannot afford to shortchange education today, but we just have.
Loudoun’s tax rate decision has forced our school board to eliminate 100 planned teacher positions, raising class size by one pupil, or about 4 percent. Educators know that smaller classes lead to better results. Loudoun, one of the nation’s most affluent counties, has chosen the reverse, shortchanging tomorrow’s competitiveness for today’s taxpayer comfort.
Why? In recent years, Loudoun elected Republican supervisors who promoted residential growth and the presumed prosperity brought by a building boom. The result was a 79 percent increase in school enrollment since 2000. Our children must now suffer the consequences — a school budget that does not adequately cover the 25,000 added students and the cost of inflation.
The subprime mortgage crisis is a product of similar faulty thinking — buy a big house, nothing down, interest-only payments for several years, and the rising house value covers your debt. Sadly, markets can go down, and the ensuing bailout programs will be financed by innocent taxpayers.
It doesn’t stop there. To avoid higher taxes, we have allowed infrastructure to lag population growth and fall into disrepair — think Loudoun traffic jams and bridges collapsing in Minnesota. We deplore the price of gasoline, but those prices do not include military costs of protecting supplies, or the climate damage caused by tail-pipe emissions.
Because of incomplete costing, artificially low gas prices have stimulated America’s auto-dependent lifestyle. Yet one presidential candidate now suggests we cut gas taxes to encourage summer driving, adding to CO2 emissions — and debt.
Social Security and Medicare are safety nets for our elderly. The U.S. population is now aging — fewer workers per retiree. Payroll taxes will no longer cover benefits.
This bill is coming due, calling for reduced benefits, deferred retirement or higher taxes.
Then there is the huge demand for government-financed universal health care.
The Iraq war was initiated concurrent with a major federal income tax cut. Presidential advisor Larry Lindsay was fired for estimating the war would cost $200 billion. Economists now put the all-in cost at 10 times that -- $2 trillion to $3 trillion, financed by borrowing.
Private citizens have also borrowed to spend now. Our national savings rate is below zero, so our spend-and-consume habit is financed by foreign lenders, threatening loss of American economic sovereignty.
Obviously, this binge cannot continue.
A first corrective step is to ask political candidates to explain how they will address these fiscal realities. Any who promise never to raise taxes should be considered numerically illiterate or — to put it politely — unfamiliar with telling the truth.
Here’s the good news. Educating our young, improving infrastructure, providing better health care, decarbonizing energy and protecting our coasts from rising sea levels all entail jobs providing real benefits to future generations, jobs that will be personally more fulfilling than those providing the products and services of frivolous luxury.
Recent research finds that once necessities of life are obtained, more possessions add nothing to happiness. That, too, is good news, for our present materials-intensive lifestyle is environmentally unsustainable.
“Progress” in the future must shift from increasing consumption to intangibles — service to others in health, education and governance, and from material-intensive luxuries to sustainable pleasures — biking or hiking, enjoying family, friends and nature, music, reading, writing, relaxed contemplation and greater understanding of the world around us.
Only then will America become truly civilized — sustainable and emotionally at peace with itself.
The author, of Upperville, was undersecretary of commerce for international trade in the Reagan administration.