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I open the New Year drawing from Jean-Baptiste Alphonse Karr, who suggested: “Plus ça change, plus c’est la même chose.” Jean was a French writer who offered the aforementioned in 1849! A long time ago. My Southside Chicago upbringing prepared me for the world, but my exposure to French was limited, as in non-existent. To take French, even if available, would have gotten my rear end kicked on the playground faster than if I showed up wearing one of those bicycle helmets. However, I still know the Catholic mass in Latin as well as the Act of Contrition, but French … not so much. Anyway, Jean-Baptiste’s French translates to “The more things change, the more they stay the same.”
So here we go, way back to the ’60s, Sen. Everett McKinley Dirksen said: “A billion here, a billion there, and pretty soon you are talking real money.” At least on paper, we say we learn from our mistakes and harvest the lessons learned. Important for, as George Santayana offered, “Those who cannot remember the past are condemned to repeat it.” But while it makes a good sound bite, do we ever exercise caution?
Unfortunately, a mathematical immunity has set in to our budget, deficit and debt. This was clearly evident in the quick passage of our government’s 2023 $5.8 trillion budget. Inherent in this budget is a predicted $1.2 trillion shortfall. Wait a minute; you mean our purported leaders in Congress approved a game plan that has us spending yet another $1.2 trillion that we do not have! The omnibus portion was a 4,155-page bill that wasn’t read by anyone. In fact, as it was released near year-end, 235 of our congressional members were absent and voted by proxy. The Wall Street Journal Editorial Board deemed it the worst omnibus bill ever! Most disturbing is that embedded in this budget is $1.6 trillion in “discretionary spending.” That would be the omnibus bill, basically where we dump all the appropriations into one convenient pork trough. This particular funding boosts the budgets of nearly every government agency. However, important to you, it also increases taxes for corporations and corporate owners, unfortunately, and not so respectfully, called the wealthy. Too many either forget or ignore Art Laffer’s caution that “You can’t love jobs and hate job creators.”
How bad was it for us! To name just a few, it raises corporate taxes by $35 billion, lowers deductibility for interest expense, and lowers capital investment deduction from 100 percent to 80 percent. Perhaps most mystifying to me is that it will now tax corporations (1 percent) on their own stock buybacks!
In the middle of this overly generous budget process, we were navigating inflation at a 40-year high and a slowing economy after the post-COVID-19 GDP bump. Seems to me this would be a classic cause for pause? Further, the budget ignores what will be escalating debt service as both the deficit grows, and interest rates increase. Government forecasts … forget them! For fiscal year 2022, the forecasted interest spend on our country’s aggregate debt was $399 billion; however, at year-end, it was $475 billion. Where’s the headline? How can this happen when deficits and interest rates were known variables? So, let me ask you a question: If you are $76 billion off in a forecast 12 months out and approve a budget where you spend 21 percent more than your ability, how long will you stay employed? How long should you stay employed? How long would your organization be in business? Mark my words, our debt service alone this year, on $31.5 trillion, will exceed $500 billion. No bigger warning signs exist than this fly wheel effect of our nation’s ever-escalating debt. For shock value, please Google usdebtclock.org. Please humor me and invest just two minutes. I guarantee you’ll be forwarding it through your network.
To raise your blood pressure, let me share just a few highlights of the absurdity of this year’s budget:
$70 million for salmon research
$750,000 to modernize the fire alarm at the Metropolitan Opera
$3 million for the American LGBTQ+ Museum in New York
$3.6 million for a Michelle Obama trail
$200 million for the Gender Equity and Equality Action Fund
$7.5 million for studying what is called “Domestic Radicalization Phenomenon”
$3 million for bee-friendly highways
Etc., etc., etc.
There really is no end to this outrageous spend. How about $575 million for family planning in geographic areas where population growth is endangering species? Yep, you got it, we will pay people in a certain area not to reproduce. Of course, few would argue with the mandatory funding of national defense, Social Security and Medicare/Medicaid. Granted, of the aforementioned spends there might be an initiative of interest to many of you, myself included. However, I would be more open-minded if it was covered with a balanced budget, as opposed to yet more borrowed money. As you read through more detail, you will see alarming increases in existing and new social programs. Ah yes … the ever-increasing, ever-escalating social giveaways. The end result will be more and more people reliant on government. Excuse my cynicism, but I think that may be by design.
In the end, our enterprise pays its taxes, as do I. We have no sheltered offshore accounts or money hidden. Not only do we pay, but we do so willingly, as we feel it’s the price of admission for operating our business in the greatest country of all. One that values risk-taking, job creation and entrepreneurship. However, in return the ubiquitous outcry is we apparently do not pay “our fair share.” As deficits increase, the target to fund will be from successful businesses and successful businessmen and businesswomen.
Ironic, is it not, that with our own fiscal responsibility, which we demonstrate every day in the running of our business, our taxes remitted fund a wholesale fiscal irresponsibility of our great country, and there is little we can do about such.
So, my industry brethren, don’t accept the growing mantra that deficits don’t matter, for they certainly do. In effect, we are selling out the next generation. That would be our children and grandchildren.
“The only difference between death and taxes is that death doesn’t get worse every time Congress meets.” — Will Rogers