Here we are again.
$2 trillion later, we are back at the precipice, looking over the edge into financial chaos, and all anyone can seem to say is “Ain’t love grand?” as they talk about how Republicans and Democrats should be able to get along and come up with a “grand” compromise, when everyone knows that all a compromise would buy you is another $2 trillion of debt, something we didn’t even really need in the first place.
Let’s review: Back in July 2011, the United States government was $14.3 trillion in debt because it had kept spending money it did not have on programs it could not afford. This resulted in a situation known as the Debt Ceiling Crisis of 2011, which the mainstream media blames on the Republicans because they didn’t want to raise the debt ceiling without cutting spending. The bad old Republicans said that going ahead with that proposal would simply result in continuing the out-of-control spending with no prospect for a solution.
No, the Democrats (and their media allies) said — it will prevent the nation from defaulting and hurting its credit rating. The patriotic thing to do is borrow more money and solve the problem of spending tomorrow. And to sweeten the deal — to make the grand compromise an offer the Republicans couldn’t refuse — the Democrats agreed to put together a “Super Committee” of Congress who would act like adults and find a solution. PLUS... if the adults started acting like children and refused to do anything, that would trigger automatic spending cuts of 8 percent in non-military spending and cuts between 9.4 and 10 percent in the Defense Department.
So that’s what happened. Congress OK’d raising the debt ceiling by $2.1 trillion, and the threat of harsh, non-discretionary, across the board cuts in everything except some entitlement programs was supposed to scare Congress (and its Super Committee) into action. Only problem was the cuts were scheduled to take place on Jan. 1, 2013, conveniently seven weeks after the 2012 elections, allowing the Super Committee, the rest of the members of Congress and the president to ignore the problem, hoping it would go away.
In the meantime, right on schedule, we have spent $2 trillion more and have just $100 billion in borrowing authority left to stand between us and the coming Debt Ceiling Crisis of 2012. But the politicians of Washington, D.C., have begun their magic act again, sweeping that extra $2 trillion under the rug and pretending it never happened. What we are supposed to focus on instead is the presumably horrendous “Bush tax cuts” which allowed millions of Americans to keep billions of dollars of their own money instead of sending it to Washington to be used in the latest pyramid scheme to fool creditors into thinking that the United States actually has any wealth left, when all we really have is a printing press and an unlimited supply of rag paper.
You see, the Bush tax cuts expire at the beginning of the year, too, and politicians want you to believe that somehow evil wealthy people are getting wealthier because of those tax cuts, and therefore the country is getting poorer. That is wrong in so many ways it hurts your head to even think about it. But let’s start with the fact that no one is getting “wealthier” because of tax cuts. A tax cut just means you get to keep more of your own money instead of shoveling it over the fiscal cliff and into the abyss below.
Moreover, the tax cuts didn’t just allow the wealthy to keep more of their own money; the same was true for millions of middle-class Americans. The child-tax credit alone has benefited American families by about $50 billion a year. Sure, rich people get the credit, too, if they have children under age 17, but $1,000 per child is a huge benefit to the middle class, but a mere drop in the bucket to the wealthy. This is a tax cut that helps people who need help, and doing away with it is going to hurt them, not the wealthy.
So now, President Obama is trying to convince Republicans that they should preserve the “Bush tax cuts” for the millions of people in the country who make less than $250,000 a year, but do away with them for those above that threshold. This sounds good on the face of it, because certainly the wealthy can afford to pay more taxes more easily than the middle class can. But what the president doesn’t tell you is that the bucket he is dropping this new revenue into has a leak in it. He is proposing to raise an addition $1.7 trillion in new revenue, which sounds impressive, but that revenue is spread out over 10 years! That means he will only raise an additional $170 billion per year.
But remember that our United States national debt has climbed by $2 trillion since Aug. 2011, namely in 16 months. Do the math yourself. That means we are going deeper into debt by about $125 billion a month! Whereas those tax cuts on the wealthy could account for just over $14 billion a month.
The numbers just don’t add up, but the president wants Republicans to sign off on raising taxes for the “wealthy,” reducing the spending cuts and OK’ing another increase in the debt ceiling for the sake of “good governance.” Sounds to me like a misnomer. Better yet by far would be “good riddance” to the tricks and chicanery that have kept enticing us higher and higher on the fiscal cliff. A plague on both the houses of Congress and the president. You blame Bush? Good. So do I. You don’t blame Obama? Then get your bipartisan bifocals on and take a good close look at the past four years — President Obama is right in the thick of this mess, and now he’s playing politics with it by trying to paint the GOP in a corner.
Republicans would be foolish to give him what he wants though, because it will just continue our financial crisis indefinitely, and give tacit permission to spending more than we have and borrowing more than we should. Enough borrowing. Enough spending. Let’s start paying for what we bought already.
If that means raising taxes on every person in the United States, then so be it. Let’s — by all means — include illegal aliens in that. They get services; let’s ask them to ante up. If we are going to continue to insist that we can provide health care, education, food and a guaranteed income for everyone in the country, we had better be realistic about what it costs.
For too long, Republicans and conservatives in general have been holding out hope that fiscal sanity could be restored and that supply side economic policies would turn around the nation’s economy so that we could start to afford all the social programs that have been approved in the past 50 years. Forget that. Fiscal sanity is not possible anymore. The only thing left to do is to pay the piper.
Republicans should forget about supply-side economics and kick-starting the economy by encouraging the private sector to invest in new jobs. The fact of the matter is that the growing welfare bureaucracy and the massive federal regulation morass that is Washington, D.C., would suck the energy out of any potential recovery.
It’s time we face where we are, not just climbing up the fiscal cliff, but long since toppled over it, with two broken legs and a serious economic concussion.
Democrats want to have their cake and eat it too. I say, let them have their welfare state and let them pay for it too. Raises taxes now, across the board, and let the Democrats start to accept responsibility for what they have wrought. They have sown the wind; now it is time for them to reap the whirlwind. There’s no point delaying the inevitable. Austerity now!
They broke it; let them own it.