The great sword of the United States government is the power of the purse. We can wield that sword to attack poverty, safeguard the environment and elderly, and project power across the world, among many other pursuits. And we share that burden through revenue raised on individuals and corporations. It is so important, this power, that I believe it has become the fundamental divide in American politics. What should we spend money on? How are we going to pay for these programs?
But there is a fundamental flaw here... the American public is largely unprepared for this debate due to a lack of education about where we are at. Most Americans don't know how we spend our money. They may know they would be hard pressed to get a credit card with a 50,000 dollar limit, but I'd bet they'd be shocked to know the credit limit the Federal Government has issued them and spent on their behalf is much higher than that. They don't understand that our education system is mostly paid for by state and local government, not the federal government. They wouldn't know that entitlement programs make up more than half the budget. They also don't know how we pay for it. They don't know how mandatory payroll taxes are taken out of our paychecks. They don't know how the tax burden is currently distributed. They don't know that for every dollar they pay in taxes, the government is borrowing another 64 cents that they are expected to pay later.
And the problem is, this leads to simplified arguments. We hear politicians say "rich people need to pay their fair share", and we echo back "they should pay more", but when we ask them what a rich person's fair share is, they quote a tax rate lower than what the rich currently pay. When Jerry Brown was mayor of Oakland, he was exasperated when Oakland residents passed a ballot measure to increase the number of cops on the street, and then shot down the measure that would have paid for the added cops. There really is no way to sensibly govern when rational analysis isn't a part of the equation.
So what do we do? Well I think that young American's need to be better prepared to understand the crux of the spending and taxing issues they will vote on later in life. We all remember the civics and economics classes we took in high school, right? They focused on the theory of how our government works... a house and senate, a supreme court, separation of powers... supply and demand curves... but nothing said about how the government appropriates budgets. Nothing practical, about the history of how our budgets and taxes look. Nothing to prepare us to consider future generations. And this needs to change.
I think students should be first allowed to construct their own governments, with their own houses or senates or parliaments or whatever... then make their own budgets and set up their own taxation system, all with tools that model reality and long term outlooks. Then teachers come back to show our history of how its done. Maybe even the history of how its done elsewhere in the world. Then they should analyse the consequences of their original choices, as well as the choices that were really made by our government. And then they should build a budget again. This kind of exercise is the kind of thing that can have a life long impact on people. When they consider how they vote, they can compare their own values which they've already analyzed to what the politicians are promising. And they can make rational decisions.
I also believe there is a great tool out there already, called budget hero. Its a simple game that lets you take actions to change the current budget, and see how it plays out over time. It is a good start towards the type of system that could engage young Americans in that impacting kind of way. I encourage you to play around with it... see what kind of system you would come up with... and compare that to other demographic groups out there. Its another step we can take towards improving how our government works.
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