The Economy: What Was Once, Seems to Have Come Around Again.

What is called "conservatism" might better be called infantilism. Those of us blessed with small children recognize childishness when we see it. Increasingly the nation, like a child, wills the end without willing the means to the end. The end is a full platter of government services. The means to that end is the energetic government that does the inevitable regulating and taxing. Today's "conservatism"? The average voter has looked into his heart of hearts, prayed long and hard, and come to the conclusion that it is high time the government cut his neighbor's benefits.

The tendency to will the end without willing the means is one reason why the government is out of resources, and why Carter has problems with his arithmetic. The United States is no exception to the rule that in democracies the appetite for government benefits is increasing, and the willingness to pay for them is diminishing. Carter's arithmetic reflects this. No matter how imaginatively he fudges his assumptions, he cannot plausibly argue that he can deliver his laundry list of blessings while balancing the budget and avoiding substantial new taxes.

...He [Carter] is driven by simple arithmetic to the specious suggestion that substantial new revenues can be painlessly wrung from "special interests" such as the "rich corporations" and "the rich," especially those "big shots" who consume "fifty dollar Martini lunches."

It is naughty to suggest that the Democratic platform's proposals can be paid by revenues derived from measures like making business lunches non-deductible. And before Carter imposes new taxes on corporations he should consider Irving Kristol's cautionary thought:

"There is a powerful argument to the effect that corporations, by their very nature, do not ordinarily pay taxes so much as collect them. After all, where does a corporation get the money to pay its taxes? There are only three possible sources. (1) It can get it from its stockholders by holding down or cutting their dividends--in which case, we are talking about a concealed tax on dividend income. (2) It can get it from its customers in the form of higher prices--in which case, we are talking about a concealed sales tax. In the normal course of events, these are the ways corporations do raise their tax money--or, to be precise, these are the means of collecting it.

"But if , for any reason, a corporation cannot lower or omit its dividend or raise its prices without crippling the business, it does indeed pay taxes instead of merely collecting them. It then (3) gets the money from retained earnings which would otherwise be re-invested in new plant, new processes, etc."

Given Carter's proper concern about unemployment, he cannot be serene about increased reliance on option 3, because capital formation is job creation.

George F. Will, October 4, 1976

I found Will's book, The Pursuit of Happiness and Other Sobering Thoughts in a used bookstore the other day. Copyrighted 1978, it has Mr. Will's columns over the late 1970s. I've been dipping into here and there. This bit jumped off the page at me. You would not have to change much to cause this to sound like it was written about the 2008 election or any time during our current economic situation.