Dear Senator

Today I received Senator Mark Udall’s newsletter in my email.  His blog for the day was entitled, “The Wrong Time to Tax the Middle Class.”  (You can read his blog here: http://www.markudall.senate.gov/?p=home .) I tend to agree with that idea, but not with a number of the ideas he put forth in his blog – or, rather, the number of important elements about the economy he did not mention at all.  So, I wrote him a letter, which  I’m reprinting here.  I’ve been thinking about how to say some constructive things about our current economic situation and what I would like to see from our leaders, and perhaps this is a good way to start that train of thought.  Eventually I want to return to the “life as a story” theme, but for now, let’s take a “short cut” through the political and economic scenery…

Dear Senator Udall,

First let me say I enjoyed your blog, "Rising Together from a Summer of Heartache" -- well said.  However, I cannot say the same about your recent blog, "The Wrong Time to Tax the Middle Class."  I'm just hoping you are pandering for votes, or that you can explain how you believe that an economy can be grown "from the middle out."  I'm aware of no such economic theory. Economies, as I am sure you actually know, grow when capital, labor, natural resources, and information are efficiently allocated by a free market to produce goods and services that people freely and genuinely want.  In order for capital to be allocated, there has to be capital, which means two things:  1) the government can't take it all, and 2) people who have it (aka "The Wealthy") have to be free to use it.  The "middle", whose support you are currently trumpeting, have relatively little capital to allocate, and thus cannot be a major growth engine by themselves. Perhaps you think I am wealthy, and just defending my own status - but such is not the case.  I'm firmly lower middle class, and I am certainly aware that I have no ability inherent in my personal finances to help rebuild the economy.

So here's my plea: you are correct that the economy is a top priority for Congress. But you do not address an important fundamental issue: you all in Congress spend bucketfuls more of our money than you take in. That practice must stop. You must find ways to immediately balance the federal budget and gracefully communicate those painful choices to the American people.  You must be honest about cuts in spending that have to be made.  And you must support allowing people with capital the freedom to allocate it as the market indicates.  This means a reduction in corporate income tax, and a reduction (or holding the line) in taxes for the wealthy.  Failure to be courageous and honest will mean that the US will become like Greece, whose leaders are still too cowardly to boldly tell the Greek people that their welfare, nanny state must end.

Our president is arguing in a television commercial right now that this "top down" approach is "how we got into this mess in the first place."  The trouble is, that is both untrue and misleading. First of all, the mess was caused, and continues to be largely continued, by well-intended but misplaced actions by the Federal Government that have interfered with the "invisible hand" of the free market and have caused untold economic pain for millions.  I refer to the extension of housing loans to those unable to pay (a specifically Democratic plan, by the way, that contributed in huge measure to the housing crisis) and to recent monetary policy, "stimulus" bailouts, tax incentives for technology unable to hold its own in the free market, over-regulation of business large and small, and on and on. 

Secondly, our president's claim is misleading because "top down" is a fundamental element of growing a healthy economy. If the "wealthy" don't invest, who will? The poor cannot do it, and the middle class is primarily limited to contributing through honest, diligent labor, smaller-scale saving, and consumer spending.  The government cannot do it, because  fundamentally government is a wealth consumer, not a wealth creator. It is the "top" who have the capital needed (or should have it, if the government leaves them alone) to invest in new ideas, new technology, and new hiring. 

So your article might sound appealing to members of the middle class who are only interested in their own financial circumstances.  I like the idea of a tax cut as much as anybody!  But those of us who are interested in the economy as a whole (and that should be everyone) are hoping to see much bolder, freedom-oriented leadership on economic matters.  

Balance the budget. Stop talking about it and just get it done.  Spread it over a few years, so that the pain can be somewhat mitigated.  But be honest with your voters: we do not have the means to pay for all our current wants, and as a nation we must do the same as individual families do: make challenging choices and live within our means. Be honest with your voters about "the wealthy" too -- it is in everyone's best interest to have a large, thriving upper class. Even though you are yourself a member of that class, do not be shy about defending it.  Protect everyone's freedom (NOT entitlement) to strive for wealth, and everyone's freedom to use their wealth to try to grow more wealth, and the economy will grow. Wealth creation is a virtue, not a vice.

Reduce regulation.  Give businesses more freedom. Pay down the debt. Tell people the truth.  Be bold.  And be courageous enough to put your own job as Senator on the line.

Tax cuts for the middle class will not fix the economy unless significant action is taken in other areas as well, and I think you know that. Don't tell us what you think we want to hear, and don't try to give us what you think we want to have.  Speak of what we need to hear, and do what will lead toward strength and growth in the long run.  We're headed for economic disaster if things do not change soon.  I'm looking for elected leaders who will stop telling only part of the story, stop trying to get me to vote for them, and just help get things fixed.  Are you one of them?

Sincerely,

Erik Ritschard

Buena Vista, Colorado