One of the greatest needs is to cut spending. It does not appear that Newt wants to do much of that.
People like the CBO and others like to throw out a lot of numbers about what deficits will be a few years out, but they are just fantasy really. There are too many variables. For instance if treasury interest rates shoot up to just 10 percent then the interest on the debt might eat up all of our GDP. Then what? The only real solution is to cut all over spending immediately. And then start working on paying it down before interest rates rise. Otherwise we will have a bankrupt USA in short order.
The republicans had a chance to do this by refusing to raise the deficit(Instant balanced budget), but they are too afraid of the political ramifications. Yet there is no other way out in the long run. Or not so long run in this case. Paying the interest on the debt is in itself eating up GDP and productivity. In fact only a small fraction of every dollar borrowed at this point is productive to the economy. As in less than 10 percent. That is what happens when you play the borrowing game to long. And it steals massively from future GDP.
Only a radical cut in spending can save us according to the math. And even that is questionable at this point. Unfortunately for all those people who live off from that borrowed money, and even those that don’t then we cannot avoid a great pain that will come from going cold turkey. But that pain would end in time and things would get going again in a real economy that is not borrowed. Where demand is not being pulled forward. It would be better than a fatal and unrecoverable crash. What they call a sudden stop in the economy. And that is what is coming soon if we don’t stop the insanity. Who knows- it is not impossible for that crash to happen even before the 2012 elections. Lots of variables that we can’t predict. Yet, while our situation is becoming much more precarious every day.
You won’t find any of the candidates explaining that. And yet if you can’t be sure that they understand such mathematical fact then the end result is quite doomy. Newt is just like the rest in that he just does not get it in a practical way. But time is pretty much up. We simply don’t have time to wait for the effects of decreasing taxes(although I agree they are far to many). They will not be realized in time. And they will not offset the trillions that are still being borrowed. And even if they could then they would just borrow more. We need to stop the borrowing. It is today or never. Hannibal is at the gate.
And the greatest spending items are the so-called entitlements. Gingrich is proposing ending the welfare state. For example, not only repealing ObamaCare but privatizing social security and medicare and sending them back to the states and the people.