FRONT PAGE CONTRIBUTOR
Dispatch From Lisbon
The Canary Is Dead, The Coal Mine on Fire
“There appears to be an enormous divergence between what the Portuguese believe the state should deliver and the amount of taxes they are prepared to pay,” he told parliament recently.
– Vítor Gaspar, Portuguese Minister of Finance (HT: Ft.com)
It helps from time to time to get out that old set of notes from Economics 101 and give them a snappy re-read. On day 1 of the class, you get introduced to The Fundamental Problem of Economics. This cute little chestnut states that economics attempts to meet insatiable demand with limited resources. No feasible solution exists that is also optimal. The debate thus ensues over who gets fed and who gets (expletived).
A more civilized discussion of this problem gets into opportunity cost versus fundamental fairness. We can’t give people what they want, but they can sure get exactly what they deserve.* Honorable men, and politicians as well, differ dramatically over what that exactly entails. In the seven plentiful years accorded to Joseph, these differences stay submerged amongst a population sated and satisfied. It’s the seven lean years that follow where we discover just how far apart Confucious once claimed men grew in practice.
I refer to Portugal as a canary in that particular coal-mine. Unlike Greece (which has succeeded in staying the debt collectors for one more billing cycle), the Portuguese are forced to make a trade-off. They first ran out of resources and then ran out of credit. They are solvent in name only and have to change the way their nation allocates resources or face whatever fates the most sadistic financial minds in Brussels, Bonn and Paris would care to mete out.
This gives Prime Minister Pedro Passos Coelho and his parliamentary majority the choice of raising revenues (read taxes) or lowering expenditures (read mostly income redistribution). The takers in Portugal overwhelmingly outnumber the makers. The weight of the poor fell heavily on the supposedly Center-Right governing coalition. They folded like a cheap card-table in a tornado.
Portugal’s Parliament has approved unprecedented tax increases despite a broad public outcry and concerns that the latest austerity package will prolong the bailed-out country’s recession.
This allows us to see exactly what we get in return for national income distribution. It provides a tenuous and temporary cease-fire. Otto Von Bismark described his contributions to Germany’s social welfare state as an act of “stealing the Socialists’ thunder.” While most of what he enacted is standard fare in the modern employee’s benefit package, meeting the mob half-way only made them clamor for more.
Portugal has just enacted what are considered unprecedented tax increases on its productive population. In return, they wanted university students to borrow/pay tuition and patients at the national health system’s care facilities to pay larger co-pays. This has lead to the predictable and strategic leftist temper-tantrum.
But redefining the state’s responsibilities is highly contentious for many Portuguese, who see universal health care and education, free or subsidised at the point of delivery, as fundamental achievements of the 1974 revolution that overthrew 48 years of dictatorship. The government’s opponents fear it wants to destroy the welfare state.
Like the ignorant Left in Amerika, the Portuguese Leftists think they can declare something a right and therefore never again have to plan, resource or pay for it. They can just tax the “rich”. Oh, wait…Mark Steyn explains below.
“If you took every single penny that Warren Buffett has, it’d pay for 4-1/2 days of the US government. This tax-the-rich won’t work. The problem here is the government is way bigger than even the capacity of the rich to sustain it. The Buffett Rule would raise $3.2 billion a year, and take 514 years just to pay off Obama’s 2011 budget deficit.”
Yet the cynical, enlightened and world-weary all scoff at silly Jeremiads. This article talks about Portugal, not America! Were exceptional, gawd-almiddy ‘Murican Peebles! Portugal is…Portugal. Give it up, Jake. It’s Oporto.
You should soothe yourselves no longer with such banal and empty denial. Here’s straight and stank poop on the current “negotiations” over “The Fiscal Cliff.” We are not discussing terms by which we reduce a deficit. We just got our (bleeps) handed to us in a one-sided, ideologically-charged election. We are discussing the terms of our reparations to support an ongoing Visigoth Holiday for the victors at taxpayer expense. Eric Cantor admits as much below.
“Well the president got reelected and we know at the end of this year taxes are going up on everybody — everybody, rich, poor alike — we have marginal rates across the spectrum going up as well as [capital] gains, dividends, AMT, death tax, everything, right? This is the so-called fiscal cliff. So we know that is reality,” said Cantor. “That’s what’s changed, we know that. So why would we want to punish folks to see their taxes go up.”
Yes, Ladies and Germs, that’s the sound of Prime Minister Chamberlain signing over the Sudantenland. The President got reelected and we know we’ll have to pay. Winter is coming. As we watch the Portuguese enter the blizzard; gather your firewood and prepare to dress warmly.
*-H. L. Mencken once suggested that they get it good and hard.