Why the Sequester is a win for fairness

sequester“Fairness” in politics is an arbitrary concept, which is exactly why liberal politicians love it. Once they’ve claimed the mantle of fairness, their policy prescriptions become unassailable. After all, who could be against “fairness”? Only Republican jerks, that’s who.

The increase in “fairness” between a 36% and 40% tax rate is intangible, and despite liberals protestations to the contrary, probably a net decrease.  But your opinion on the fairness of that tax code modification depends on your underlying assumptions about the proper role of government and your visceral reaction to income inequality.  When measuring fairness in that instance, logic and reason remain on the periphery.

But the sequester is a different story. 

For the same reason that the prophetic claims of “apocalypse by sequester” are laughable, the enactment of the sequester is a laughable solution to our dire fiscal straits. It’s only a 3% cut in our dramatically bloated federal spending. Deficit-wise, the sequester doesn’t solve anything. The trajectory of entitlement spending is what will really bankrupt us.  Reducing discretionary spending is like a guy with an underwater house and skyrocketing interest rates cutting his daily Starbucks to save money. Yes, it might be better than nothing, but all he’s really done is push back foreclosure a few more days.

While discretionary spending doesn’t pose the same financial danger as entitlements, the moral danger has already arrived.

Of the following two scenarios, what’s worse: having a lot of desperate and poor people dependent on the government for a check in the mail? Or having more and more of the country’s smart and productive people dependent on the government for their job? To put it a better way, what can more realistically be fixed in the short-term: a mother of four kids from three different dads in Branson, MO skating by on federal checks? Or a country-wide inrush of graduate degrees flocking to Washington, DC, effectively turning northern VA into a federal-workforce-hued blue?

(For a better idea of what fairness-by-government means, consider this: the unemployment rate in northern VA is hovering under 5% when the rest of the country is around 8%. How is that fair?)

As Kevin Williamson insightfully points out in The Dependency Agenda, “it’s easy getting poor people hooked on the government, but the really neat trick is hooking the rich.” By exercising options unavailable to the private sector (i.e. printing money, or just lending it at unrealistic rates or in shady intra-government fashion), the feds have created a whole workforce incentivized to perpetuate a status quo that keeps the country’s finances on a mathematically unsustainable path. They’ve become advocates for big government not on a moral or intellectual basis, but out of pure self-interest.

Think I’m overstating the problem? A recent Washington Post article on the sequester helpfully put a human face on a very troubling mindset:

“The good news is, the world doesn’t end March 2. The bad news is, the world doesn’t end March 2,” said Emily Holubowich, a Washington health-care lobbyist who leads a coalition of 3,000 nonprofit groups fighting the cuts. “The worst-case scenario for us is the sequester hits and nothing bad really happens. And Republicans say: See, that wasn’t so bad.”

Discretionary Spending, like Quantitative Easing, is a phrase not intended to enlighten. “Spending at the discretion of politicians, whose main incentive is re-election” would be a much more clarifying description.sequester graph

No society will ever be perfectly fair, decided on nothing but merit. The influence of luck and circumstance, like being born into a loving family of means, will always play a role. But I’m much more comfortable being subject to the will of God than the whim of Nancy Pelosi. Success based on political connections can never be more fair than market competition.

The case of NREL and Congressman Ed Perlmutter highlights the unfairness of crony capitalism enacted at politicians’ discretion. Regardless of one’s opinion on the feasibility of renewable energy sources, it’s fairly obvious that NREL has been an abject failure:

“NREL has given us two of the most significant boondoggles, one of them being ethanol and the other being (bankrupt) Abound Solar,” [energy expert Amy Oliver Cooke] said. “They were part of the team that pushed Abound Solar along. In fact, they wrote in March 2011 on their website how proud they were of their role in Abound Solar.
“Am I impressed with NREL? No, not really,” she said.

Yet, as always, the gravy train keeps coming:

NREL’s taxpayer-funded management company has seen its budget more than double since 2006. That’s when one of its most ardent supporters, Rep. Ed Perlmutter D-Lakewood, was first elected to Congress. The lab sits in the middle of his district.
But Perlmutter’s ties go beyond merely promoting green legislation and lobbying his colleagues for NREL funds. He has received $12,670 in campaign contributions from executives of NREL and its management company, MRIGlobal, a company that describes itself as “an independent, not-for-profit organization that performs contract research for government and industry.” Perlmuter’s father has served as a trustee for MRI and MRIGlobal during the past decade. Between 2003 and 2005, Perlmutter was also a trustee. These positions were unpaid.

You want to take the money out of politics? Discretionary spending is the place to start. If politicians lose the ability to lavish favors on targeted groups, suddenly big money donors have a lot less motivation to write those big checks.

There are certainly reasonable criticisms of the sequester.

Yes, it’s dumb to “take a meat cleaver” approach to spending cuts, as The One has said. But is there really any alternative? When does the government ever do anything smartly? Shoot, in his recent State of the Union address, Obama just argued for essentially expanding Head Start, a proven failure. It’s not like the federal government’s budget was thoughtfully prioritized and constructed in getting it where it is (anyone up for a Cowboy Poetry Festival?), so what makes anyone expect a well thought out strategy when going in the other direction? This is the only way.

And considering National defense is the only reason the federal government needs to exist, targeting the DoD as the place to start cutting is misguided. But there are undoubtedly areas of waste in the Pentagon’s half trillion dollar budget.  Furthermore, the Senate just confirmed a new Secretary of Defense in Chuck Hagel, whose hearings revealed him to be a bumbling buffoon completely unqualified for the position. On the heels of that, how can we give any credibility to those politicians’ claims that the sequester would devastate our military readiness?

The political class has shown they lack the capacity for intellectual, moral, or financial discretion. The sequester is a necessary first step in stopping them from pretending they can exercise it. It’s a blow at crony capitalism, and thus a point for fairness.

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