Opinion: Taxes and spending beyond bumper sticker slogans

This article is substantially longer than my political counterparts’. Bear with me. This will be my longest post because it sets the foundation by which I will continue my writings.
I know I speak for the minority at Manual High School.
 Democrats and Independents, please read this opinion piece. I think that you will find it much different than your stereotyped conception of conservatism and the Republican Party. Thank you, get informed, and vote!


————-
  ————-  ————-  ————-  ————-  ————-  ————- 

The 2012 election is going to hinge upon which of the following statements the American people believe in.

1. We should lower spending to meet revenues.

2. We should raise revenues to meet spending.

Newt Gingrich (during one of last month’s GOP debates) pointed out the above contradicting statements as the primary ideological difference between Obama’s administration and the 2012 Republican candidates. Newt is right. Obama’s debt plan is focused on increasing 800 billion dollars of revenue from the “rich” and repealing the Bush tax cuts for another 800 billion in revenue. The Republicans are focused on cutting multiple trillions of dollars in spending.  Ron Paul pledges to cut 1 trillion dollars in the first year alone.

I believe that if you agree with number 1 you should vote for the Republican candidate (whomever that is). If you agree with number 2, then vote for Obama.

The rest of this editorial will be focused on convincing you why you should agree with number 1 and why you should agree with the above “(whomever it is)” statement if you already agree with number 1.

Obama plans on increasing revenues by $1.6 trillion. What people don’t know is that this is a 10-year estimate. That means that his plan would increase revenue $1.6 trillion over 10 years. This means that, if he is re-elected, after his second term he will have increased revenues by $0.64 trillion and will have lowered the deficit by the same amount. Ron Paul would cut $1 trillion in the first year. However, Republicans may say that if Obama gets more revenue, then he will spend more too. Democrats may say that Ron Paul (or another Republican) would not only drastically cut spending but also drastically cut revenues. Yes, both would be right. History shows that more revenues means more spending and vice versa. The more money you give the government, the more it spends. But by how much and at what rate? Obama may spend 1.4 times the amount he receives and Romney may spend 1.1 times the amount he receives. This makes a difference. This rate I will call “X-Rate”.

Our annual deficit can be modeled by the equation

[X-Rate x Revenue] – Revenue

So, if Obama spends 1.4 times the money he receives and he receives 10 dollars then the deficit would equal [1.4*10]-10=$4.

Now, let’s assume that Obama and the Republican’s X-Rates are equal. They both spend 1.4 times the amount they receive. Let’s say that Obama raises revenue up to $15 dollars and the Republican lowers it to $5 dollars.

Obama’s deficit=  [1.4*15]-15=$6

Republican’s deficit= [1.4*5] -5 = $2

As you can see, even if both candidates spend at the exact same rate compared to revenue, Obama raises the deficit 3 times as much. More revenue means more debt and less revenue means less debt.

But, I was being really generous there because Obama’s rate of spending is much higher than what the Republican’s would be…so realistically we wouldn’t be comparing an “X-Rate” of 1.4 to 1.4. Imagine that the 2012 Republican nominee had the same spending behaviors as G.W. Bush. In reality it would be much lower because Bush was a relatively high spending Republican. But, for the sake of argument, lets assume our 2012 candidate equals Bush. Bush’s average “X-Rate” was 1.12…meaning that he spent 112% of his revenues. Obama’s average “X-Rate” is 1.57…meaning that he spent 157% of his revenues. **(Data from CBO, US Treasury, and OMB used)

Now, let’s re-calculate the deficit using these new and still Democrat-benefiting rates. Again, let’s say that Obama raises revenue, from $10, up to $15 dollars and the Republican lowers it to $5 dollars.

Obama’s deficit=  [1.57*15]-15=$8.55

Republican’s deficit= [1.12*5] -5 = $0.56

Obama’s is about 16 times more.

Now, let’s say that revenues stay constant at $10 for both candidates.

Obama’s deficit=  [1.57*10]-10=$5.7

Republican’s deficit= [1.12*10] -10 = $1.2

Obama’s is about 5 times more.

When the Republicans talk about lowering spending, this is what they mean. They mean lowering the rate of the amount of money going out the door divided by the amount coming in the door. Current GOP candidates view even Bush’s spending behavior as excessive. Thus, any current Republican candidate would have an “X-Rate” below that used above based on Bush’s average. This is an election about the economy and the deficit. Fiscal issues should drive your votes. Even if you are pro-choice, vote for the Republican. I am. Vote Republican even if you are pro-gay marriage. I am. These social issues are not going to be stressed by the GOP, nor does the president have any power over them. They are constitutional issues that are left to the Supreme Court, and I don’t think any of the 9 current justices are dying in the next 4 years.

Obama says that the issue of increased/decreased revenue and spending “isn’t class warfare, it’s math.” I agree. That’s exactly why our votes, as high school students who ought to be concerned about the long-term success of our nation, should go to the Republican Party.

Sources:

**http://www.cbo.gov/ftpdocs/108xx/doc10871/appendixf.shtml

**http://en.wikipedia.org/wiki/2012_United_States_federal_budget