The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (July 10, 1997)  Politicians of all persuasions just don't get it.

With the strong economy we've enjoyed over the last several years, it appears that the deficits are continuing to fall faster than Washington's original estimates. The result might be that the budget can be balanced even sooner than the 2002 goal the current budget agreement strives for.

In fact, some optimists think we may even have a budget surplus for the first time in some thirty years. And guess what, the pols are already lining up their proposals for how to spend it.

Never mind that we're not even out of the deficit side of the barn yet (and some economists think we're headed right back there in a few years), the hogs are already shoving towards the trough again. Lord help us all.

Let's see, with a national debt of roughly $5 trillion, I can think of a decent place to put any as-yet-unrealized surplus. As Carol Cox Wait (head of the Committee for a Responsible Federal Budget) put it, "there's blood in the water, and the sharks can't wait." It's so ugly right now the administration's budget office has even delayed the release of its typical July update for fear further good economic news will wash away what little -- very little -- fiscal discipline there is in Washington.

It's time once again for the Ridiculously-Simple-So-Never-To-Be-Realized- Sheard-Tax-Proposal. Sit a bunch of economists down from across the American landscape, not just from inside the Beltway. Figure out how much it really takes to run the government (sans pork). Match that up with readily available consumer spending data and come up with a simple percentage national consumption tax. Exempt food, prescription drugs, and clothing up to a certain dollar amount so the essentials of life are tax free, protecting the poorest in society. Then tax all other purchases equally and automatically. The rich don't get loopholes, yet the frugal aren't punished for living within their means and saving. I know, I know. It'll never happen. I've been called worse things than naive. Nevertheless, I persist.

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