Friday, August 03, 2007

A REAL Fiscal Picure of the Future For Urbanites by Akindele Akinyemi


It is to my understanding that each generation hopes their children and grandchildren will achieve more economic potential and more individual freedom than prior generations.

There are so many great & positive things about our beloved Michigan to celebrate. But, there are also some negative trends. Perhaps if more are aware of the negatives even more solutions & positives will result.

#1 Core Problem: INCREASED GOVERNMENT-DOMINANCE OF OUR ECONOMY.

HOW BIG SHOULD GOVERNMENT BE recognizing our founding forefathers intended limited government?? (as specifically defined by Article I, Section 8 of the Constitution )

Many believe state/local government should not exceed a 20% share of the economy. To reach that 20% share of the economy, government spending would need to be half of what it is - - or today's spending levels must not be allowed to rise, even considering inflation, until the economy's size has doubled - - or a combination of these: cuts and future freezes).

Speaking of state and local governments if we had quality education and low crime rates when we had 2 government employees per 100 citizens, why the heck should we need three times as many today.

In prior decades local trash was collected by city employees. No longer. Trash is now mostly collected by private carriers, with the city only processing the billing. Again, why do we have more city and local government employees per capita than then?

City and local government employees used to take care of most street repairs. No longer. Most is now contracted-out to private sector firms, with government employees only 'playing' paper managers. So, again, why more government employees per capita than before?

Must our children face an economy where state & local government spending now eats nearly 3 times more of the economic pie than before, resulting in a smaller share for the private sector and standard of living enhancements?

Must families of private sector workers pay more taxes to support higher wages, benefits and job security for state & local government employees than they receive? These are questions we have to answer at some point in our lives.

The tax hikes from state and local governments have placed an significant drain on families by the fact state & local government spending and taxation have chewed up more and more of our economy, rendering same less free and efficient - and more socialized and government-dependent - than for prior generations.

Speaking of taxes:

Is it fair that today's families, many requiring 2-wage earners compared to one per family in past generations, must work on average 5 months (142 days) per year just to cover federal, state & local government spending - - compared to but 1.4 months several generations ago? Did our nation's founding fathers intend that citizens work more and more and more to support government?

Is it fair that federal income and social security taxes on individual incomes in 2000 fueled 82% of all federal revenue, compared to just a 51% share in 1950? That shift certainly has not helped more mothers of young children stay at home, if they wish

Is it fair that a median income dual-earner family paid the highest, inflation-adjusted taxes to federal & state/local governments in history?

Is it fair that working families pay higher federal income taxes than did seniors with the same income, in addition to already paying the highest social security tax rates in history to support senior pensions?

Is it fair that the typical American pays more in taxes than they do on food, shelter and clothing combined! And that doesn't even include the "hidden taxes" on products caused by government regulations - compared to senior generations. Is that proper?

In addition to paying more taxes, Americans spend 5.4 billion hours per year complying with the federal tax code - - roughly the equivalent of 3 million people working full-time. If it were employed in productive activity, the labor now devoted to tax compliance would be worth $232 billion annually. The federal cost of hiring 93,000 IRS employees is $6 billion. If all these people weren't fooling around with the tax code, they could produce the entire annual output of the aircraft, trucking, auto, and food-processing industries combined. Source: W. Williams, Professor Economics, George Mason U, Imprimis August 2000.


The greater the portion of our economy consumed by government at all levels, the smaller the Private Sector and the smaller the future economic opportunities are for my grandchildren.

According to Economy.com, since 1995 property taxes nationwide have jumped 48%, that’s 30% higher than inflation.

In my book its time for government to tell cities like Detroit and the rest of Urban Michigan to say that we are no longer going to perform this work with our own workforce. Right now states are privatizing utilities, prison management, data processing, foster care and others. Counties and cities and schools are privatizing fire protection, police protection, waste-water treatment, street lighting, tree trimming, snow removal, hospitals, custodial and jails.

That is why I am for regionalization and privatizing city services.

However, to achieve these targets requires a controlled and phased reduction of government spending of more than 50% from current levels, and elimination of over $8 trillion in debt.

With nearly 40% of our economy now dependent on government spending, there will be fierce resistance from many adults. This will be despite the knowledge of most seniors, that not only are their own living standards better by far than their forefathers, but they actually paid significantly less share of their income during their working years for their elderly than do their own working children today. And, most young adults are very concerned about the economic future of their children, and the lower quality of their education. To be concerned on one hand and resist corrective action on the other is the challenge.

As David Boa of the Cat Institute said: "The 20th century has been a failed experiment in big government. Every day more people see more ways that problems could be better solved by profit-seeking companies, mutual aid associations, or charities than by government. Private capital markets can provide sound insurance and offer better retirement benefits than Social Security. A company called Human Capital Resources wants to sell equity investments in the future earning power of college students as an alternative to student loans--better return for investors, less post-graduation burden on students, and no cost to the taxpayers. Private communities, based on governance by consent, can be better tailored to the needs and preferences of 250 million diverse Americans than local governments can. Private schools provide a better education at lower cost than government schools, and in the next few years information technology and for-profit companies will revolutionize learning. Private charities get people off welfare rather than snaring them in it."

In the meantime those spending the $4.6 trillion of federal-state-local governments are not going to give up their power without a fight. The U.S. Postal Service tenaciously clings to its legal monopoly. School boards and teachers unions declare they won't let children "escape" from their schools, and spend millions to prevent the implementation of school choice plans.

Most politicians will cover their eyes while they promise everyone that his or her government program will not be cut, since they want to retain their chairs and recognize that our children and grandchildren cannot vote on their futures.

Such a reaction would be immature, selfish, and irresponsible toward our youth - - the next generation.

This is our fight as urban conservatives. If we are serious about transformation within our urban communities then it begins with us as one.


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