To resolve our current budget problems, some amongst the democrat elite have desperately exposed tax rates as high as 70%.
The main problem with the tired old song of simply "raising taxes" is that our debt is quickly exceeding our revenues. To review, U.S. GDP currently stands a approximately $14.4 trillion, with the U.S. Government receiving ~$2.2 trillion of this via taxes. At 14.7% of GDP, these revenues are the second lowest as of 1950. Spending however, is expected at ~$3.7 trillion for FY2011, resulting in a deficit of $1.71 trillion that must be borrowed to pay for other services. With such exploding deficits as of late, our total National Debt quickly grows beyond 70% of GDP.
Simply "raising taxes" out of this fiscal hole remains the primary mantra of Democrats. However, even with a 100% tax rate effective immediately, current spending levels would continue to push us towards crisis. The following video illustrates:
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It is clear that prior to any talks of raising taxes rates (supposedly in order to raise revenues), spending cuts are required. Now the subject of intense negotiation amongst leaders within the Democrat and Republican parties, the primary political caveat however, is that outside potential reductions in military spending, the details of such cuts are to be quite painful for all sides. Particularly in regards to entitlement spending.
To better one's understanding of why our crisis shall require hard decisions, try your own hand at returning the United States back to solvency here, via a simulator brought to us by the Committee for a Responsible Budget.
~David Morris~
Monday, June 27, 2011
House Courage Under Crisis
It is admirable that House Republicans are displaying backbone concerning the negotiation of a credible plan to cut our deficit.
How did we come to this current standoff in Washington? It begins earlier in March, as Representative Paul Ryan(R) authors a serious challenge to democrat spending policies with his "Roadmap for America's Future," now adopted as the official House Budget Proposal for FY2011. In a display of leadership, President Obama then punts to Vice-President Joe Biden in developing a democrat counter-proposal to this so called "Ryan Plan," due by this month of June. Unsurprisingly, this counter-proposal essentially amounts to "raise taxes on the rich" as the principle solution to the crisis. In negotiating with Biden's committee last week, House Republicans staunchly rejected their recommendations in the face of looming concerns regarding the debt limit of the U.S. Government. With little time left on the clock, tonight the punter-in-chief will have no option other than to directly negotiate with the Senate Majority and Minority leader.
A test of leadership is upon Obama. Will he demonstrate true bipartisanship by negotiating a plan that House Republicans can support? Failure to do so not only further undercuts his electoral chances, but brings us closer towards failure in the acquisition of House authorization in raising the debt limit. To fail in raising this limit would lead to a default by the federal government, forcing a crisis of austerity measures upon the American people.
With so much at stake both politically and economically, House Republicans continue to hold position regarding debt limit authorization, demanding first from democrats serious measures to reduce spending levels. This decision to risk government default is not easy for the GOP. Without a true plan to reduce our deficit however, it nonetheless remains the courageous and responsible choice. May they continue to demonstrate such spine for the good of the republic.
~David Morris~
How did we come to this current standoff in Washington? It begins earlier in March, as Representative Paul Ryan(R) authors a serious challenge to democrat spending policies with his "Roadmap for America's Future," now adopted as the official House Budget Proposal for FY2011. In a display of leadership, President Obama then punts to Vice-President Joe Biden in developing a democrat counter-proposal to this so called "Ryan Plan," due by this month of June. Unsurprisingly, this counter-proposal essentially amounts to "raise taxes on the rich" as the principle solution to the crisis. In negotiating with Biden's committee last week, House Republicans staunchly rejected their recommendations in the face of looming concerns regarding the debt limit of the U.S. Government. With little time left on the clock, tonight the punter-in-chief will have no option other than to directly negotiate with the Senate Majority and Minority leader.
A test of leadership is upon Obama. Will he demonstrate true bipartisanship by negotiating a plan that House Republicans can support? Failure to do so not only further undercuts his electoral chances, but brings us closer towards failure in the acquisition of House authorization in raising the debt limit. To fail in raising this limit would lead to a default by the federal government, forcing a crisis of austerity measures upon the American people.
With so much at stake both politically and economically, House Republicans continue to hold position regarding debt limit authorization, demanding first from democrats serious measures to reduce spending levels. This decision to risk government default is not easy for the GOP. Without a true plan to reduce our deficit however, it nonetheless remains the courageous and responsible choice. May they continue to demonstrate such spine for the good of the republic.
~David Morris~
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