Sunflower and more

From Twin Lakes Park in Cedar Park on September 24th, here’s a backlit back view of a sunflower (Helianthus annuus) with out-of-focus silver bluestem seed heads (Bothriochloa laguroides) beyond it. On one of the sunflower’s rays I noticed a tiny insect. Once I did, I brought my macro lens as close as possible to what turned out to be a true bug (as opposed to the common English use of bug to mean any kind of insect). Naturalist Ken Wohlgemuth says it might be in the genus Harmostes (which I showed a member of in 2015). Click below to truly enlarge the true bug.

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Discussions of taxes focus mostly on income taxes, property taxes, sales taxes, and other overt forms of taxation. Many people don’t realize that low interest rates are a form of tax. For much of my life, and as recently as 2008, people who lived within their means could save some money and put it in a bank to get interest of 4% per year. As decades passed, compound interest would let a person’s savings grow to a nice nest egg for later in life. Since the financial crash of 2008, however, governments around the world have kept interest rates artificially low, so low that 1% has often been the best deal available. A big reason why governments have done so is that they continue borrowing extravagantly, and lower interest rates correspond to lower repayments of debt.

Another tax that often isn’t thought of as a tax is inflation. People in recent months have begun to notice it because so many prices have been rising. Among the most conspicuous are the prices of staple foods—have you been to the supermarket lately?—and of fuel. The price of natural gas has risen 100% in the United States this year, and 280% in Europe, as winter approaches and the demand for heating homes heads for its annual peak. According to one website, “The annual inflation rate in the US eased [!] to 5.3% in August from a 13-year high of 5.4% reported in June and July.” So even as thrifty people struggle to get pitifully little interest on their savings in a bank—the best rates are currently running at about half of a percent—the value of each dollar keeps going down.

Not only is inflation a hidden tax, but it’s the kind of tax economists classify as regressive. That means it disproportionately affects people who are the least able to afford it. A wealthy person doesn’t care if gasoline is $3 a gallon or $6 a gallon, or if a loaf of bread this year costs a dollar more than it did last year. But for a person who is living on the margins and who needs to drive to work, the dollar-a-gallon rise in the price of gasoline over the past year is painful, as is paying noticeably more for a cart of groceries to sustain a family.

Several years ago I would occasionally ask someone out of the blue: “Have you got your $60,000 ready?” That was the share of the national debt owed by each person in the United States, from newborn baby to centenarian. By 2019 the per-capita share had risen to around $69,000. By 2020 it had soared to almost $81,000. As of two weeks ago, the amount every single person in America owes was calculated to be $85,424.

I bring all this up now for a couple of reasons. One is that it’s distressing to watch helplessly as the money we’ve dutifully saved by living within our means is worth less and less each month. Another reason is that the current administration in the United States is pushing to “spend”—which means borrow—$3.5 trillion more than the trillions it has already borrowed. That will drive the national debt even higher; soon I’ll be asking you whether you’ve got your $100,000 ready to pay your individual share. Profligate borrowing will also further incite inflation, which, as noted, most affects the people least able to cope with it. To use a word that’s in vogue, all this is unsustainable. Our representatives in government have to find ways to begin paying down the national debt, not driving it ever higher. In short, just as individuals have to live within their means, so do governments.

(And let me head off potential criticism by adding that I was against the large increases in the debt under both Obama and Trump. Inordinate debt is bad no matter which party is responsible for it.)

© 2021 Steven Schwartzman