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 Home > Opinion > Story

Published - Sunday, July 27, 2008

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Column: Nation of whiners? Phil Gramm more right than he knows

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Is America a nation of whiners?

Phil Gramm said so, and it ended his status as an “official” economic advisor to John McCain’s presidential campaign. But is he right? Absolutely -- even more than Gramm himself would dare admit.

Gramm, in the most politically incorrect manner, challenged the notion that Americans are economically deprived. While America does have pockets of genuine economic deprivation, by most objective standards, Gramm has a legitimate point. Take, for example, me. Thirty-five years ago, I lived in a five-person household with 1,300 square feet of living space. The house had one bathroom. It had no air conditioning. The family owned one car and one black-and-white television set that received four channels on a clear day. The family didn’t own a dishwasher or clothes dryer, and nobody in the family owned a cell phone.

Today, I live in a two-person household with 1,800 square feet of living space. The house has two bathrooms. It has air conditioning. The family owns two automobiles and a color television set hooked up to a subscription cable service that delivers 70 channels. The household has a dishwasher and a clothes dryer. Both family members carry cell phones. We also own a computer that delivers something called the Internet.

Census data show that my situation isn’t unique. The percentage of people who own automobiles (or multiple automobiles), homes, television sets, etc., are at all-time highs. Most people of my generation have more stuff and enjoy a higher standard of living than they did 25, 30 or 35 years ago. The standard may vary from year to year -- a family can buy a lot more stuff when gas is $1.50 per gallon than when it’s $4, but consumers are still tossing around lots of discretionary income. If you don’t believe it, check how many people pay $40 to enter Camp Randall for the next University of Wisconsin football game.

But whining extends to another issue: taxation. If liberals claim that free trade, skyrocketing health care costs, excessive CEO pay and concentration of private power compromises our ability to consume, conservatives blame it on taxes. A typical expression of this idea is found on a website called “Homeland Stupidity” with a column titled “Why you’re always broke: 40% of your money goes to taxes.”

The headline is misleading in three respects. First, the total federal, state and local tax burden is actually 37.6 percent. Second, not everybody pays 37.6 percent; the effectively progressive nature of the federal income tax ensures affluent people pay a higher percentage while poor people pay considerably less. Third, a significant chunk of taxation pays for services we would need to purchase privately. Roads, sewers, trash collection, security (including national defense and homeland security), etc. are things we’ll all pay for one way or another. It’s not even clear whether the private sector can do these things any cheaper. The privatization of Medicare, student loans and the military have been expensive boondoggles.

Regardless of how one views the nation’s tax burden, it still hasn’t prevented consumers from supersizing their houses, supersizing their automobiles, supersizing their entertainment choices and, of course, supersizing their meals. America’s tax policy may have many consequences, but blunting our ability to consume hasn’t been one of them.

Do Americans have some reasons to complain? Of course. We have reason to complain when an arrogant and incompetent President squanders $10 billion a week on a pre-emptive war that was waged under false pretenses. We have reason to complain when CEOs grab 8- and 9-figure salaries that represent less the value they add to their companies than their unfettered access to the corporate cookie jar. We have reason to complain about a private-sector health care bureaucracy that gobbles up 31 cents of every health care dollar. We have reason to complain about “free” trade agreements that are actually thick volumes describing things that nations are prohibited from doing, such as protecting labor rights and the environment.

But despite everything described above, most Americans (myself included) still live some of the most opulent lifestyles the world has ever known. If you’re reading this article, you’re likely among the world’s elite when it comes to consuming natural resources for your comfort, convenience and entertainment. Neither the free market nor the tax man is pushing the vast majority of Americans anywhere near destitution.

Buck up, Phil Gramm. You’re more right than you even know.

Steve Rundio is the Perspective Page Editor of Tomah Newspapers.
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sorry wrote on Sep 23, 2008 7:02 PM:

" I wonder if your sorry you wrote this article now...

Oh and thirty-five years ago WE DIDN'T HAVE CELL PHONES! Moron. "

Michael Hampton wrote on Jul 31, 2008 10:52 AM:

" As the author of Homeland Stupidity and the 2005 article cited, I would like to make a couple of points.

The primary point is that far too much of the money that's taken from us is to pay for government "services" is wasted. Whether it be an oversized bureaucracy, overpriced contracts, or just plain corruption, far too much of that money doesn't actually go to the services you expect. It winds up in the pockets of the powerful and connected. (And this doesn't even address the waste that is the Iraq war.)

Since writing the article in 2005, I've come to the conclusion that there is no way to fix this. A system of government must necessarily wield power, and positions of power will always attract a certain type of person who seeks power for the sake of either enriching himself at our expense, fulfilling a psychological drive to control people, or both. Regardless of the checks and balances placed on the system, these people will find ways around them, as they have been doing since before the ink dried on the Constitution.

The only way to solve this problem is to not consolidate power in the first place. If government is to exist at all, and be based on "the consent of the governed," it must be decentralized and local.

When I lived in Madison, just four blocks from the capitol, it may as well have been on another planet for all the access I felt I had to the legislative process. I've since moved to New Hampshire, where my state representative lives a block away from me and invites people to call him -- at home -- to discuss the issues of the day. This is typical here, and this extremely localized system of representation creates a much more responsive and accountable government.

Faraway bureaucrats in D.C., or even in Madison, are never going to be as accountable, responsive, or even honest, as the neighbor who lives down the street and isn't even getting paid to be a legislator.

The second point I would like to make is in regard to privatization of services. What is usually meant by this is a complicated bureaucratic process whereby some large government contractor is given a sweetheart deal to run some government service, and other companies are prevented from offering similar services.

This doesn't work. The reason it doesn't work is because the government maintains its control over the service and the money used for it, and so market pressures such as competition cannot enter the picture to drive up quality and lower costs. This is the primary reason health care has become so expensive, for instance.

Finally, a word about rising prices and inflation. As Ron Paul has said for a very long time, and people in the media are just beginning to understand, inflation is the most insidious hidden tax there is. Not only does it disproportionately affect the poor, it affects even the middle class, whose attempts at saving money are more than offset by inflation, eroding away their standard of living until eventually they too will be poor. And, as Paul has also said, joined by Comptroller General David Walker and many others, this financial house of cards will ultimately collapse. When it does, we will all be poor. "

Chris King wrote on Jul 30, 2008 3:43 PM:

" I for one am completely offended that Mr. Gramm had the audacity to call us a nation of whiners. Darn it, that really upsets me, who does he think he is, telling us like it is...

On the other hand, Barack Obama sure can play basketball. "

I agree with Phil Gramm BUT YOUR WRONG wrote on Jul 30, 2008 1:22 PM:

" You Stated:
The headline is misleading in three respects.
"First, the total federal, state and local tax burden is actually 37.6 percent. Second, not everybody pays 37.6 percent; the effectively progressive nature of the federal income tax ensures affluent people pay a higher percentage while poor people pay considerably less. Third, a significant chunk of taxation pays for services we would need to purchase privately. Roads, sewers, trash collection, security (including national defense and homeland security), etc."


My retort:

First off: TAXATION

When you consider Taxation you must include ALL TAXES, Look at your Cable bill, your Phone Bills, Taxes upon EVERYTHING, now buy a new or used car and pay taxes on that, besides the fact that every process of making and hauling that car has been taxed already.

TYPICAL LIBERAL VIEWPOINT ON TAXES is to say hey the most TAXES PAID IS 37.5% and then forgets about all the other Taxes in our lives, LIBERALS ONLY USE INCOME TAX FOR THE PURPOSE OF SAYING WE DON'T PAY ENOUGH

Now add state and Fed taxes on Gas,Oil and everything else you purchase

In Reality we pay over 50% for TAXES when we start adding up ALL the taxes we pay, HOW ABOUT PROPERTY TAXES? FICA? MEDICARE AND MEDICAID? Taxes on Electric now add in FEES(which are taxes in disguise)

YET SOME SAY JUST RAISE TAXES, the Problem is TO MANY GOVERNMENT SPENDING BOONDAGLES.

The State, Federal and Local Governments are totally out of control with SPENDING and there is no end in sight.

if OBAMA wins election we are going to see ENORMOUS TAX INCREASES, right after he takes office, and for what, to spend on his WORTHLESS PET PROJECTS

2)MY FACT HERE: The Top 10% wage earners Pay 75% of all Taxes...... and you stated were on a progressive tax system and only the Highest earners pay 37.5% so are you saying the POOR is not paying enough? do you want to raise there TAXES to equal the top 10%?....So by your own words the POORER PEOPLE aren't paying enough TAXES, what a PATHETIC way to think about taxes and whose money it really is

3)If you truly understood the GAS TAXES at all you would understand that the Highways and Bridges are taken out of the GAS and Fuel TAXES NOT INCOME TAXES IN ANY FORM. GUESS YOU ARE NOT SO INFORMED ARE YOU?
3a) Just for the record our nation spends 3 trillion dollars a year, well more now. Almost 1/3 of the Budget comes from FUEL TAXES in all forms. Now factor in less driving and that means less taxes collected and less money to spend. If we cut driving by 5% this year then that means 5% less revenue collected.

Also if the STATES would have spent the money on the highways and bridges over the past 30 years the way they were supposed to have done we would never have had the bridge in MPLS fall in last year


This was an ignorant remark and shows your true liberal bias

"We have reason to complain when an arrogant and incompetent President squanders $10 billion a week on a pre-emptive war that was waged under false pretenses"

First off the Clinton administration had the same info and so did most other countries and us going in was the right thing to do, but this will take years for some to realize the need for this action over a POLITICAL TALKING POINT that sounds so uninformed about the true facts of the war in IRAQ,

But then again living here in Tomah and not having to have fought in the war you can enjoy the "FREEDOM" that others have fought to give you.

By the way you took Phil Gramm's comment totally out of context and here it is

"nation of whiners" whose economic complaints are mostly "mental."

The meaning behind this comment was, The economy is getting worse because it has been portrayed as that by the media and beat down for years, and people have bought into the "DOOM AND GLOOM" from the LIBERALS

I remember in the 90's when everyone was cooking there books from 97' on and BUBBA and ALGORE kept coming out LYING about the shape we were in, Then in 2000 the tech bubble burst and the markets lost big time and the recession started.(BEFORE BUSH TOOK OFFICE)

Now for 6 years we have heard we are going into a recession from the same morons that in the 90's that said everything is fine.

You need to study up on how the taxes are collected and how they are WASTED in our country and especially this STATE OF WASTEFUL SPENDING "

Grant Moseley wrote on Jul 28, 2008 10:09 AM:

" Mr. Rundio: You and I probably hold to almost opposite "world views", but your article is absolutely right.

I am not sure we have an arrogant and incompetent president, but nonetheless, I agree with everything else. "


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