Possible solutions and likely outcome
1. Raise taxes: A moribund economy leading even less revenue.
2. Lower taxes: A more active economy leading to higher revenue.
3. Reduce or nix entitlement spending: As noted above, the accelerator is stuck on full throttle. Bush and Republicans added to it with Medicaid, and Obama and Dems are looking to add to it with the health care bill. Alas, there is no end in site. Whatever form of government you may desire, it is in danger with this profligate spending.
Many conservatives decry Obama's executive order to set up a 'Debt Commission' claiming that he is just passing the buck and won't make the hard decisions. At this point, I don't care who gets the credit, what has to be done must be done. So I support the establishment of a debt commission as long as the job gets done.
5 comments:
They should appoint some regular people to be on the commission. A non-politician....that would help to keep it more objective...hopefully. I would vote some one like Alan...and some one like Doug. Two great thinkers but different party lines and non-politicians. Just good American regular guys.
What am I? Chopped liver? Just kidding. I have often wondered if just a regular schmoe like myself ran for congress or senate without any prior experience in community service on the platform of living within ones budget, how viable would I be as a contender? Hum.
1. On raising taxes: it all depends on which taxes.
A small, even temporary national sales tax would provide a lot of money and not prevent anyone from buying their morning coffee, afternoon Coke, and evening hamburger. Two pennies on the dollar would not change any of my purchasing intention. For heaven's sake, restaurant taxes are 7% is Salt Lake City and I never think twice about eating in restaurants because of it. I agree that an increase in income tax is not the best for those under a quarter million, but even then a small increase would not change my spending habits.
2. On lower taxes: Bush's tax cuts did obviously not 'cut' it! The debt and deficit skyrocketed during his 8 years. The debt increased under Reagan, Bush Sr. and Bush Jr. Tax cuts are not the panacea
for our problems.
3. On reducing or nixing entitlement spending: entitlement spending is attached to a general notion of fairness and need. There are a great many other areas in which spending can be cut in order to reduce government spending. As I have mentioned many times before, military spending, foreign aid, subsidies to businesses of all types and under a great many guises, non-need based entitlement spending (military commissaries around the world come to mind), they all could/should be drastically cut before dipping into entitlements.
I agree with Alan that action must, must be taken and now. It is often a question of whose priorities will win the day. We all cling to our principles so tightly that (seemingly) opposing principles have brought a stalemate. Whatever the response turns out to be, one thing is sure: we will have to suffer or give up things in order for this mess to be remedied.
Actually, the Bush tax cuts did work to stimulate the economy, and revenue increased. The problem was the excessive spending on wars and greater Medicaid entitlements! I have said many times on past occasions that I am for cutting whatever needs to be cut, including military, NASA, entitlements (including my own social security), etc.
So my position is to cut taxes AND spending.
I agree that the two sides are unlikely to agree on what to cut and are likely to scream bloody murder when the other party cuts something they are particularly fond us.
I have heard, not substantiated, that when they say the government has imposed a spending freeze, it does not mean there will not be an increase in spending. Only the rate is frozen. So if we increased spending 4% in 2009 then the government still increases spending 4% in 2010. The freeze is in the rate, not the dollar amount. This could explain why the deficit keeps rising with the claim that "Well we imposed a spending freeze" in this administration. The government simply needs to not spend more than it takes in monitarily. It then may take 100 years to get back to deficit nuetral but like any budget, it takes longer to get out of debt than it took to get into debt. This of course is due to interest and penalties.
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