In the House Budget Committee Federal Reserve chairman Ben Bernanke has called for the federal government to move towards fiscal balance despite the government’s efforts to spend its way out of the current economic recession. Bernanke has cited that it was in the government’s long term interest to maintain a fiscally balanced strategy to maintain a stable and healthy economic growth.

The problem with the Fed Chief’s concern is that the most economically viable solution is not the most politically favorable one. Politicians, especially the recent Presidential candidates, have stressed on tax cuts and slimming down government spending when at the same time government services are at the highest levels of demand. Even then Presidential-candidate Obama has stressed on tax cuts on the middle class America to gain political power for his win in the Whitehouse.

Nobody likes paying taxes unless one has somehow have a more altruistic or patriotic attitude in filling out the tax forms, but with the general tax rate lower than many of our European counterparts, raising taxes in this country should not be ruled out as a viable option. We have the greatest tendency to view the federal and state government has spending hogs, whose wasteful spending on this program and that program are the primary cause of government budget deficits. The primary cause of budget deficit, I believe, is not the inefficiencies within government, although I agree that there are wasteful programs here and there, but that our tax revenues are too low for all the efficient and necessary government services that we receive as citizens.

You know all the highway projects, airport improvements, and other key infrastructure spending? They cost a lot of capital! Even the basic government services costs a lot of money to run, and this is not because our government is “inefficient” in running those programs but that these programs are as expensive to run at face value. Many political commentators attempt to focus on the government inefficiencies without considering the true, optimal cost of such government services. My main argument is that basic government services are a luxury compared to how little we want to pay. Sure, I personally do not want to pay more taxes than I need to, but nevertheless I am arguing that the amount we pay might not be enough to cover our basic government services.

With that being said, let us be more skeptical with any political claims that promises fiscal responsibility and tax cuts, because I have not seen any politicians successfully execute those two together.