Deficit Dithering

The cold, hard reality is that the United States government has accrued $12 trillion in debt. Most of that came in six years when the Bush Administration proposed and passed two unfunded tax cuts, two unfunded wars, and a huge unfunded expansion of the entitlement system with a prescription drug plan for Medicare - one that is now being asked to expand to close the "doughnut hole." While the debt went from $3 trillion to $10 trillion during that time, government spending did not increase by $7 trillion. Thus, any competent middle school math student can conclude that the budget deficit has ballooned the debt primarily through a cut in revenue. However, spending most certainly played a role. It played a huge role. In no way should this post be construed as absolving the Democrats of responsibility, especially for wasteful spending.

Thus, as David M. Walker and the Concord Coalition have argued since 2003, the debt and deficit will not be addressed without spending cuts AND tax increases, and significant entitlement reform. It is that simple. It's so simple. It's astoundingly obvious. Cut spending AND raise taxes while reforming entitlements. That is what the proposed Fiscal Responsibility Committee would have done. That's what a new bill in Congress to re-institute "Pay-as-you-go" would have done.

Yet, the GOP has vowed and voted to defeat these attempts because it will raise taxes. Of course, it will. It has to. And, then, Senator McCain responded to ABC news today by claiming the spending freeze might be OK, but he would "cut taxes" so that revenue would increase. Even though cutting revenue is the majority of the problem. Ugh! Does everyone in the GOP misunderstand the lessons of the 1980s and 2000s, and the inherent flaws in supply-side economics. Or are they just that pathetic in their fear of PACs and "think tanks" that threaten to derail the career of any Republican voting for tax increases.

It's $12 trillion.

I want to see taxes at the 1992 and 1983 levels. That's where the economy can be strongest. That is absolutely the goal. And, to do so, spending will have to be cut and entitlements reformed. I know that. I get it. I want the spending to go down, so the taxes can go down. But the debt and the deficit have to go, too. And taxes will have to go up, for some time, in order for that to happen.

This is our problem. There are no, or few, fiscal conservatives in the Republican Party. No one is willing to be pragmatic about this. Fiscal conservatives are not conservative if they think the deficit and debt can be handled without tax increases. Just crunch the numbers. Really. Do the math. Lower taxes are preferable. Less wasteful spending is the goal. But do the math. Be honest with yourself.

It's $12 trillion.