Deception at the root - tobacco taxes

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Deception Is Root Cause Of America's Ills
By WALTER E. WILLIAMS | Posted Tuesday, April 07, 2009

Most Americans accept the continuing attack on tobacco companies and
smokers, but how do they feel about the massive government deception?

In 1998, 46 state attorneys general and major tobacco companies signed the
Master Settlement Agreement.

The major tobacco companies agreed, among other things, to give states $240
billion over 25 years to provide for smoking cessation programs and cover
the health costs associated with using their product.

In return, state attorneys general promised tobacco companies they wouldn't
sue them and would use their lawmaking power to protect the major tobacco
companies from competition from small tobacco companies.

Of the $80 billion extorted so far, states have spent about 30% on health,
not all tobacco-related, and less than 6% on smoking cessation programs.

Instead, state legislatures spent the bulk of their tobacco money for items
such as museum building, tax relief, rainy-day funds and other expenditures
having nothing to do with tobacco or health.

The U.S. Congress' deception was, and continues to be, a major player in our
financial meltdown.

In congressional hearings before the meltdown, on the soundness of Fannie
Mae and Freddie Mac, Rep. Maxine Waters said: "Through nearly a dozen
hearings, we were frankly trying to fix something that wasn't broke. Mr.
Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie
Mae, under the outstanding leadership of Franklin Raines."

Rep. Barney Frank, the ranking Democrat on the Financial Services Committee,
said: "These two entities - Fannie Mae and Freddie Mac - are not facing any
kind of financial crisis. The more people exaggerate these problems, the
more pressure there is on these companies, the less we will see in terms of
affordable housing."

Other congressmen gave similar assurances. Unfortunately for our nation, the
forces pushing for "affordable" housing won the day and saddled us with
today's unprecedented financial disaster.

How stupid is it of us to ask those who brought us "affordable" housing to
now turn their attention to bringing us "affordable" health care?

Congressional deception about government finances means today's children
will face a financial disaster that will make today's mess seem like a walk
in the park.

What's called the public debt stands at $11 trillion and growing. That pales
in comparison to the federal government's unfunded liability - obligations
that are not covered by an asset of equal or greater value.

Mike Whalen, former policy chairman of the Dallas-based National Center for
Policy Analysis, commenting on last year's Social Security Trustees annual
report on the state of the Social Security and Medicare programs, said, "The
report on the state of entitlement programs is rather grim - the combined
unfunded liabilities of both programs are $101 trillion."

What that means is that in order for government to make good on its
promises, Congress would have to put aside tens of trillions of dollars in
the bank today. Keep in mind that our GDP is only $14 trillion.

In the absence of massive tax increases or cuts in benefits, in order to
meet its promises Congress must cease spending on one in four programs by
2020, such as education and highway construction, and one in two by 2030,
and by 2050 or so all federal revenues will be spent supporting Social
Security, Medicare and prescription drug benefits.

Such a scenario is unsustainable.

There will be economic and political chaos. Today's politicians are not
likely to take measures to avoid the coming chaos because senior citizens,
the major beneficiaries of Social Security and Medicare, vote in large
numbers and will exact a high political price.

Plus, neither today's senior citizens nor today's politicians will be alive
in 2050.

I'd be more optimistic if my fellow Americans were simply suffering from
congressional deception as opposed to their not caring about the economic
calamity that awaits tomorrow's Americans.

I'd be even more optimistic if today's seniors started putting heat on
Congress to allow those Americans who want nothing to do with Social
Security to opt out.

Copyright 2008 Creators Syndicate, Inc


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