Is America Greece? That is the question that deficit hawks have been asking about the United States and its budget deficits. In their view, the United States is teetering on the precipice of default and economic collapse because of deficit spending.
There are a variety of reasons why the parallel with Greece does not hold. As the U.S. economy rebounds, deficits are shrinking more rapidly than the experts had predicted. Also, the United States economy is faring better than that of Europe because it has been willing, at least to a degree, to stimulate the economy to avert recession. Thus, the U.S. has avoided the austerity policies that have worsened the economic disasters afflicting Greece, Spain and the rest of Europe.
But there is a way the United States is like Greece, or at least, there is a tendency that United States shares with Greece.
It was surprising to learn in the wake of the recent Internal Revenue Service scandal that the budget for the IRS has been cut by a billion dollars since 2010. Thus, the IRS has been suffering serious manpower shortages that have hampered its ability to do its job, which is to collect taxes. It cannot conduct sufficient audits or monitor the claims of taxpayers, including corporations, political groups or social welfare groups. It cannot make sure everyone is paying the taxes they owe.
One of the big problems plaguing Greece, and also Italy, has been the impunity with which taxpayers evade their taxes. Only a few middle class suckers actually pay what they’re supposed to pay, or so it is claimed. Anybody with enough money to hire a clever accountant or lawyer can get away paying far less than they should. One result is that the government of Greece has been starved of revenue, and combined with irresponsible spending, mounting debt has tumbled the nation into depression.
Americans tut-tut the irresponsible behavior of these profligate nations where a lack of respect for the government and a disregard for the citizen’s obligations pervade the culture. But hostility among Americans toward the IRS and resentment about the obligation to pay taxes is not so far removed from the culture of impunity that has undermined nations such as Greece and Italy.
The outlaw is always going to want to underfund the sheriff’s office. If he can convince ordinary people that the sheriff is really doing them wrong, then the outlaw can foster an atmosphere where lack of respect for authority allows him free rein.
What do we do when we underfund the IRS but allow the outlaws among us free rein to hide their money and avoid their obligations? And when we starve the government of revenue, we cause respect for its role to erode. That has been the conservative project for a generation.
The desire for those with wealth and power to seek to protect their wealth and power is a perennial fact. If they can rig the rules and diminish their obligations to pay out, all the better for them. But as they do so, the burden grows on everyone else. That is one reason the wealth gap in the nation has reached a historic level.
President Obama has begun to address the recent IRS scandal, in which IRS workers singled out conservative groups for special scrutiny, and he will try to ensure that no category of taxpayers is targeted for favorable or unfavorable treatment. The larger problem remains: how to provide government the resources it needs to do the work of serving all of us, rather than stripping it of the ability to make sure that those with power have not rigged the game for their own benefit. Taxpayers need to be audited. That means those of us who play by the rules are not stuck with a larger bill than we deserve. That means we don’t end up like Greece.
- Most Popular
- Most Emailed