Fayette County’s skyrocketing property taxes are part of much larger economic problems | Opinion
One hundred years ago, the average worker might earn $20 per week, and he could spend half of that on a nice suit. He could have been paid in either gold or cash, which were once interchangeable. At today’s value of gold, half an ounce of gold will still buy a nice suit, but a $10 bill won’t. Back then, a home might cost one year’s salary, but not today. Do you wish your great grandfather had passed down a $20 gold piece, or a $20 bill?
That hundred year inflation is the legacy of the Federal Reserve. Its stated policy of 2% annual inflation is a species of theft. It loots savers, and it rewards profligacy. The more money the Fed prints, the more hard assets like precious metals, stocks, and property go up in price. Inflation is a hidden tax, and a way for the government to borrow, then pay its debts with less value. When salaries fail to keep up with inflation, those without assets fall farther behind, and the wealth gap widens. When the wealth gap widens, the middle fails to hold, and democracies become unstable. Democracies implode when the people exhaust the treasury by voting themselves money.
Envy is a fact of human nature. Social media is an envy machine, and wealth disparity induces debt to keep up. Class struggle never took hold in America because people were able to move up the economic ladder through hard work and education. The Marxists simply shifted their target from class to victims. Much of that victimhood is nonsense, but not in a regime of money printing, which creates real victims. Those who get the new money first reap the greatest benefits. The richest counties in American are clustered around Washington, DC.
Local politicians do not control Federal Reserve policy, but they can mitigate its damaging effects — property inflation and thus higher property taxes. They do this by controlling the cost of local governance. Progressives fashion themselves as the friend of the little guy, but their policies hurt him. By constantly expanding the programs of local government, and shoveling more and more money at schools, they increase taxes. If they raise taxes on artificially inflated home prices, they make homes unaffordable for the little guy. San Francisco has chased out its middle class, and, given how private equity has converted many local homes into rental properties, Lexington is well on its way. As the folksy front man on the radio says: “And I want to buy more!”
These days, public service is just spending money. Council members remain popular by paying people to plant a garden, or putting speed bumps on their friends’ streets, or establishing a remote park on a river, creating all sorts of unintended costs down the road. Many of these expenditures seem wonderful, but they don’t put more cops on the street or fill potholes. For the amount of money Fayette County spends per student per year, they could shut down the whole system, hire PhD’s to tutor small groups of children, and get better results.
At every level, government service does not attract people who have achieved the highest levels in private business, law, finance and engineering, and are thus imbued with experience and wisdom. Such people will say it’s not worth it, or they have learned helplessness, the sense that no matter what one does, he will be punished. One thing is certain, until such people step up at every level, we can expect more inflation, spending, and higher taxes. Think about that when you write the Sheriff a check in November.
Cameron S. Schaeffer is a pediatric urologist with offices in Lexington and Louisville.
