In the next several weeks we’ll be hearing the bitter debate in Washington concerning the Debt Ceiling. Democrats {sale’rs} won’t cut anything, and will offer tokens to appease and distract. Say anything, try every trick, just get the increase.
They’ll agree to cut the rate of growth claiming this will save trillions over the next ten years. One problem: if the rate slows but still leads revenues, we have the same deficits and go deeper in debt every one of those ten years. Net result, raise the ceiling, climb over $20Trillion by the end of Obama’s term, then fight again to raise it higher!
Our entire GDP is about $15Trillion, so we’re talking about letting debt approach 200% of that figure, a level currently rivaled only by Ireland & Greece. Other European countries are growing debt as well, and we’ll soon see an epidemic of defaults requiring financial rescues by organizations like the IMF & World Bank. It’s possible the UN will appeal to its richest members to establish a monetary consortium of maybe 5-10 nations, asking they provide immediate loans/credit guarantees to debtor countries, to avoid massive defaults.
Guess which countries are sure to be part of that group? You got it. America, UK, France, Germany, Canada and probably China, Australia and Brazil. Point is, how can we rescue somebody else when we’re deeper in debt than they are?
Conservatives understand we’re getting to the end of our financial adventure. Every new dollar of debt can be likened to the proverbial straw breaking the camel’s back. No one knows the one it will be, but at this pace we can’t stop even if we see it coming.
This doomsday scenario has us extending credit, making guarantees and giving cash loans to a slew of debtor nations presently on track to go bankrupt, thus becoming unable to make good on their obligations to us. At the same time, we’re going broke and will ultimately look back to them to bail us out.
Are we getting the picture? The world is spending like a drunken sailor {apologies to all you sailors!} and we’re quickly becoming the worst of the lot. Soon we’ll be a caricature of that whimsical syllogism: going round & round in ever decreasing circles, eventually disappearing up our own backside!
We can’t keep borrowing our way out of this. We have to cut spending and/or increase revenues. We did the latter to no great effect. I think government runs an extra 9 days in the black, before going red again. Hypocritically, there isn’t the will to raise taxes on everybody, even though a majority of everybody voted for it. We aren’t willing to put our money where our vote is!
My own take is taxes are high enough. Raising them produces the wrong effect, actually reducing total revenues since it puts a damper on the economy. Economic activity slows. People and businesses make less, so they pay less tax. Arthur Laffer proved this over 30yrs ago, with his Laffer Curve, and it’s been demonstrated time & time again: tax beyond a certain level, and tax receipts begin to fall, Q.E.D. Nothing could be more obvious, but the sale’r types refuse to get it: Quod erat demonstrandum, ad infinitum!
There’s room to raise taxes on those making $50,000 – $200,000 and this would definitely help, but as I said, these folks and their sale’r politicians aren’t willing to do it.
So we’re back where we started, raising taxes only on the rich.
That’s done and worth a nickel in this argument, leaving cuts in spending as the only way to reach a balanced budget. We know the two programs needing cuts: medicare & social security. Sacred cows. Icons of a benevolent government. Bloody, budget- busting monstrosities, more like.
If Presidents Roosevelt/Johnson could see how their programs worked out, they’d be appalled! I don’t think either of them envisioned what fiscal burdens they’d become. They’d like the vast middle class, overall standard of living, and how people achieve greater life expectancies. But I’m not sure these men {daddy’s democrats} would agree with today’s democrats & their entitlement programs, or their stance on not taxing about half of us and aversion to balancing the budget.
These two programs must be cut, along with many other items in the federal budget. We can pare, adjust and modify until we have workable models that can sustain themselves, yet still provide most of the benefits for which they were intended. We can also cut numerous welfare programs, tightening entry levels and encouraging millions of people to get back to work and off the government’s back!
Conservatives must order their republican representatives to hold the line. They must not falter or cave on this crucial issue.
They must insist on immediate cuts across the board. Not slower rates of increase, delayed cuts, or abandonment of all kinds of new spending on those sale’r’s wish list. None of these save the day. Only immediate, significant cuts.
For each dollar of new tax, they must find and cut $3 of spending. They must produce a formula that results in a balanced budget within 3yrs, and this must include a mandatory allocation to pay down the debt. Further, they should target for a 50% reduction in debt within five(5)yrs and pass two constitutional amendments: require the senate to pass a balanced budget every year; require national debt cannot exceed a fixed percentage of GDP, except in the case of a national emergency.
No Debt Ceiling increase, without these measures. No deals or compromises. No cooperation, excuses, dilly-dallying or delays. We must be intractable and resolute, in this purpose. The good faith and credit of the nation is at stake, as are good and healthy abidings amongst our people and the future of our country as a free and enterprising democracy. We must stand ready to shut down the government, in the face of these dangers.
Sale’rs beware. This is not business as usual, where you mostly get your way. It will be a turning, a moment of reckoning where the people are finally made to understand the party is over!
You’ve been reading Shaneview
I’m Al Shane
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