Building a hammock instead of a safety net

The "grand bargain" agreed to by the White House to preserve the Bush-era tax rates, extend unemployment insurance for another year, and reduce the payroll tax for 2011 doesn't get to the heart of the country's main financial problem: overspending.

The Irish were told this week they are going to have to bite the bullet and sharply reduce their expectations of what government can do for them, as it cuts spending and broadens the tax base. But liberal Democrats in the United States remain on a different track: increasing debt and waging nonstop class warfare. Did they miss the message of last month's election?

This is where the self-indulgence of the 1960s and the excesses of the modern Gilded Age have led us.

A little background courtesy of Digital History, a website developed by the University of Houston's College of Education to support the teaching of American history.

It was Mark Twain who referred to the late 19th century as the "Gilded Age"-glittering on the surface, but corrupt underneath. Still, the era witnessed the birth of modern America. The Western frontier closed, Americans settled 430 million acres in the Far West and the economy transitioned from a largely agrarian society to an industrial one, a shift that transformed the country. Incomes grew rapidly. More people prospered.

"These years also saw the rise of the Populist crusade," Digital History notes. "Burdened by heavy debts and falling farm prices, many farmers joined the Populist Party, which called for an increase in the amount of money in circulation, government assistance to help farmers repay loans, tariff reductions, and a graduated income tax."

Short-term government assistance, taxation, and regulation became a monster that has brought dependence on government and an unsustainable debt. It is one thing for government to create a safety net. It is quite another for it to build a hammock.

Penalizing success and those willing to take risks with their capital will mean fewer successful people and less capital. Why do Democrats, especially, seem to hate the successful, when so many of their party leaders are wealthy? Why do only Republicans want to talk about success while Democrats seem more comfortable in the company of failure and dependency?

Last week, the Democratic congressional leadership transported dozens of people they said were long-term unemployed to plead for more unemployment benefits. Where did the money come from to bring them to Washington? Wouldn't Speaker Nancy Pelosi have done better sending these people the money it cost for their travel, housing, and food? Even better, why didn't Democrats offer the businesses that had fired or laid them off a tax break if they re-hired them? The longer someone gets a check for not working, the less likely that person is to feel motivated to look for work.

The idea that one can't succeed without government ought to pose several questions: How many anti-poverty programs have emancipated the poor from an addiction to government? Why should government be trusted with more of our money when it has done such a poor job of spending what we've already given? At what time in our country's existence have higher taxes on businesses and individuals created prosperity and more jobs (other than government jobs), especially for the middle class? Please don't say, "during Bill Clinton's administration," because Clinton arrived at a surplus by cutting defense spending and without two wars and before the first wave of baby boomer retirees. Clinton admitted at a fundraiser in Houston in 1995: "Probably there are people in this room still mad at me at that budget because you think I raised your taxes too much. It might surprise you to know that I think I raised them too much, too."

Don't look for liberal Democrats to become supply-siders when lower tax rates again produce jobs. That's because they prefer to continue the class war, a war that finds them fighting on the wrong side. Most people would like to be rich, or at least better off. Increased debt and acting as the welfare equivalent of a drug pusher, addicting people to more government, will not help them achieve that goal.

© 2010 Tribune Media Services Inc.