Thinking beyond the Deficit

The American Thinker ^ | December 12, 2010 | Andrew Foy, MD

[Scanian]

There is bipartisan agreement across the country that the debt level is out of control. As a result of previous spending and future, unfunded obligations, America faces two outcomes if nothing is done. The first possible outcome is an acute national debt crisis if creditors decide to stop buying our debt. Overnight, government programs could literally come to a screeching halt forcing austerity measures that could spark social unrest and possibly much worse.

The second outcome is less drastic but no less worrying, and involves debasing our currency by printing money to pay for spending obligations; destroying existing wealth and permanently damaging our prospects for economic growth. In response to this potential threat the American people must get serious about deficit reduction and more importantly, recognize that not all deficit reduction solutions are created equal.

President Obama's bipartisan deficit commission presented a blueprint for reducing the deficit essentially by raising revenue through broadly lowering marginal tax rates and eliminating or reducing various credits and deductions. This nod to supply-side economics was viewed by some as the ultimate compromise: the Republicans would get a more friendly tax code, while the Democrats would get more money to spend. While the blueprint did propose to cap discretionary spending and modestly trim the biggest entitlement programs like Social Security, Medicare and Medicaid, it ultimately accepted the premise that the federal government should continue to do everything it does now. Under the commission's plan, federal spending and revenues as a share of the economy would both settle at 21% of gross domestic product (GDP). According to Tad DeHaven of the Cato Institute, the message from the blueprint was, "the big government we have is the big government we're going to keep."

[randita]

The people say they want the debt paid down, but they don’t want any cuts in Medicare, SS and other social services.

But those are the programs that are killing the budget.

We’re going to have to grow our way out of this mess as politicians are never going to make the tough choices to downsize our way out of it.

We need pro-growth economic policies big time. Hope the GOP is willing to go to the wall for them.

[RC one]

The jobs bubble is bursting. look out, here comes the fall out.
http://ilike.myspacecdn.com/play#Joe+Walsh:Bubbles:619017:s28233021.8084939.6512.0.1.81%2Cstd_6faa105f14e840b39312dcef1713b547

[circlecity]

"There is bipartisan agreement across the country that the debt level is out of control."

While there has been bipartisan lip service to this effect there has been nothing resembling remedial action so as to suggest anybody really cares. This is the way the world goes, not with a bang but a whimper.

[crescen7]

Excellent, Excellent article.

Explains clearly and concisely that “deficit reduction” is useless without “Government Reduction.”

I would encourage everyone who hasn’t done so - to read the entire article.

[johnpannell]

Paying off the national debt has become nigh on impossible. Even if we were to run a $500 billion surplus every year it would take more than a generation to pay off just the principal.

No politician would voluntarily stand for this. It would be money they couldn’t spend. A significant portion would go to foreign interests.

[Scanian]

Glad you liked the post.