One of the most important elements in any type of conflict is to control the ground you fight on. In politics, that usually means controlling the issues that will be discussed. And for Republicans in the pending fight over the debt limit, that means taking the issue of defaulting on our debt payments off of the table and focusing on spending.
In our country’s fiscal wars there have been three major moving parts: 1) taxes, 2) spending and 3) borrowing. Republicans don’t want tax increases and Democrats don’t want spending cuts, which left borrowing to finance the spending. But now increasing payments on borrowing threaten to gobble future revenue for spending and mandate future taxes; which brings us the recurring battles over the debt ceiling.
Despite the tax hikes in the recent “fiscal cliff” deal, neither Obama nor any Democrats will publicly state that the rich are now “paying their fair share”. They know that with the great unwashed, the politics of envy (AKA, jealousy) is always gold.
They also know that facing up to spending means facing up to reality, and facing reality means making choices, which will set some elements of the Democrats’ coalition at odds against each another. If pretty much your entire political party is built out of constituent groups bought off with tax dollars, then you better keep the punch-bowl filled or the party’s over. read more »
With all of the talk about the impending “fiscal cliff”, it’s a good time to step back from the trees and take a good look at the forest and how we got here to begin with.
For the last sixty years or so, Congress has been on an ever growing spending binge, guided by a political philosophy that government should play an ever growing role in our everyday lives – a role which requires more of our substance. In fact, it increasingly requires more than we can spare in any given year and maintain a healthy economy. So we borrow the rest, year after year.
This year’s federal deficit is 1.2 trillion, last year’s was 1.2 trillion and next year’s is projected to be over one trillion as well. Our national debt, the sum total of our annual deficits, is well over 16 trillion. And all of that is on top of the tens of trillions of dollars in “off-the-books” future obligations to entitlement programs.
When you are in a hole, stop digging, or so the advice goes. But what do you do when voters keep electing politicians who won’t put down the shovel, but hold to the insane notion that we can somehow dig our way out? read more »
- By Senator Jim Demint
Democrats on the so-called “Super Committee” have demonstrated why their party is disqualifying itself from any rational discussion when it comes to cutting spending.
The deficit committee was tasked with reducing the deficit by $1.2 trillion over the next ten years, but Democrats refused to make any kind of deal unless it included more than a trillion dollars of tax increases. One of their proposals, that remember is supposed to cut spending, contained billions of dollars in new stimulus spending! Despite the overwhelming evidence that the stimulus didn’t work, they are committed to funding more boondoggles big and small, like Solyndra and research for exotic ants and monkeys.
It is stunning. To meet their meager target, the Super Committee didn’t even need to cut a single penny from the budget, but only slow the rate of increase in spending by a fraction. Rather than letting the country rack up $23.4 trillion of debt by 2021, the Super Committee only needed to to keep it rising to $21.3 trillion. Still Democrats refused. $6 trillion in new deficit spending wasn’t enough for them. To Democrats, the answer of when to cut spending is simple: never.
The federal government is now $15 trillion in debt, the country is mired in recession, unemployment is at record highs, but Democrats believe taxpayers must sacrifice more so Washington doesn’t have to. Even on the brink of fiscal collapse, Democrats want to take more from American families and businesses so the government can spend more, not less. That, in a nutshell, is why the Super Committee failed and why Washington is incapable of making any of the necessary reforms to get the economy moving again. read more »
Soon the federal government will reach its current legal debt limit of 14.3 trillion dollars, and the only way it can stay open is if Congress raises that limit.
That means Obama needs Republican support – which means they have leverage. The question is, will they use it?
Year after year Congress borrows more money and then spends all that it borrows; and year after year they vote to increase our national debt limit. It’s like being able to increase your credit limit after you’ve maxed out your credit cards. read more »
In 1997, a proposed amendment to the Constitution that would require Congress to balance the budget received sixty-six votes – falling just one vote short of the required two-thirds majority it needed to pass and be sent on to the states for ratification.
That was the last time Congress considered a balanced budget amendment. The national debt at that time was over five and a half trillion dollars. Today it is over fourteen trillion. Coincidence?
Year after year Congress borrows more money and spends all that it borrows; and year after year they vote to increase our national debt limit. It’s like being able to increase your credit limit after you’ve maxed out your credit cards.
Soon the government will reach its current legal debt limit of 14.3 trillion dollars, and the only way that it can continue to borrow is if Congress raises that limit. That means that Obama needs Republican support for the idea. And that means that Republicans have leverage. The question is, will they use it? And will they use it for a long term solution, or just some cosmetic cuts (or reductions in the rate of growth)?
Republicans should welcome the opportunity to put the issue of fiscal responsibility squarely on Obama and the Democrats by linking any debt limit increase to passage of a balanced budget amendment.
With a new conservative majority in the House of Representatives, and several more real conservatives in the Senate, not to mention a greater public sense of our fiscal reality, we have the best chance to push a balanced budget amendment that we have had in years. When you add the fact that many vulnerable Senate Democrats are up for reelection in 2012, now is the time. read more »
Margaret Thatcher once said that, “the problem with socialism is that you eventually run out of other people’s money”. One could easily add that another problem is that the other people eventually want to get paid back.
It’s a problem that is becoming more real with each passing day. As the interest on that borrowed money consumes more of our nation’s economy, our options and our future will be increasingly limited. The result is a threat to our individual freedoms and economic liberty, and eventually even our national security.
In the last fiscal year federal spending was almost twenty-five percent of GDP, and we now have the biggest annual budget deficit since World War II, (over one and a half trillion). Annual federal government spending in on pace to exceed forty percent of GDP within our children’s lifetimes, and our national debt, (the total of all annual deficits), will triple by 2020. read more »
Liberals in denial
There was a truly incredible column today from the NY Times resident liberal economist Paul Krugman explaining how people in the US need not worry about becoming like Greece. “We’re not Greece”, he says, which turns out to be the most accurate statement in his entire column.
He then goes on to blame our current financial problems on everything except the bloated spending that put us in the situation we’re currently in.
Of course he gives no thoughtful discussion at all of whether we may actually be spending too much money…rather focusing on our not paying enough taxes. And then blames that on conservatives.
...bear in mind, also, that taxes have lagged behind spending partly thanks to a deliberate political strategy, that of “starve the beast”: conservatives have deliberately deprived the government of revenue in an attempt to force the spending cuts they now insist are necessary. ...
So, it’s all conservatives’ fault, huh? Or rather the fault of American voters who feel they already pay too much in taxes?
He also goes on to suggest that other primary reason for impending doom is because health care costs too much.
...health care costs will rise in the future as they have in the past. This tells us that the key to our fiscal future is improving the efficiency of our health care system — which is, you may recall, something the Obama administration has been trying to do...
you can't make this stuff up
Given all of the overwhelming evidence about our country's finances, to say nothing of the projections just ten years out, (even the admissions of the guys with green eyeshades in the White House), THIS is truly amazing.
In yet ANOTHER interview promoting the wonderful benefits of ObamaCare AFTER it has become law, The One declared that his remake of the health care system was necessary because "this country was going to go bankrupt".
Of course there's no mention of how they cooked the books in the House to make it appear that this sorry bill would save money, (how it only counts 6 years of expenses and 10 years of revenue for its first decade...or that it double counts savings/cuts in Medicare, leaves out the cost of the "doctor's fix", etc., etc..).
And no mention of the fact that, bill or no bill, the country was and is still heading towards bankruptcy...and that it's big government programs (like ObamaCare) that are taking us there.
No shame. No shame whatsoever.
right idea, wrong cause
Our fearless fiscal warrior went on television yesteray to declare that our country will go bankrupt if he doesn't get his health care "reform" bill passed. Via ABC News:
The president said that the costs of Medicare and Medicaid are on an “unsustainable” trajectory and if there is no action taken to bring them down, “the federal government will go bankrupt.”
“This actually provides us the best chance of starting to bend the cost curve on the government expenditures in Medicare and Medicaid,” Obama said.
Obama told Gibson that anybody who says they are concerned about the rising deficit or worried about tax increases in the future has to support this health care bill.
A few things here.
1) Congratulations on admitting to a keen grasp of the obvious. Anyone and everyone with a lick of common sense and the ability to read a financial report has pointed out that there is absolutely no way under the sun that the federal government will be able to continue to provide all the wonderful entitlement benefits that liberals have saddled us with without, eventually, going broke.
2) You lose any credit you might have gained for recognizing our financial strait when you proclaim that the only way to fix our problem is to "bend the cost curve" by creating yet another entitlement. read more »