Above is a long-term simulation from the non-partisan GAO (Government Accountability Office) that clearly shows that in couple of decades our government will only have enough revenue coming in to pay the interest owed on National Debt. There will not be enough funding to cover any other obligations and entitlements. Any politician who says there is a way to solve our government's fiscal irresponsibility without cutting benefits and increasing taxes (rolling back Bush' tax cuts) is a liar. Entitlement programs must be revisited and Tax Cuts can not be made permanent. Despite what appears to be a popular believe on Capitol Hill, Americans are neither selfish nor stupid. We are capable of understanding our country's needs. It would not be a political suicide to speak of much needed reforms which will include tough cuts. George H.W. Bush' failure to get reelected is often attributed to his decision to raise taxes. But the reason he paid that ultimate political price, is because "no new taxes" was such a big part of his 1988 campaign. Even McCain who is usually a straightforward politician and opposed Bush's tax cuts in 2000 is reluctant to admit that US treasury has both a spending and a revenue problem. He often speaks out against all the pork spending saying that would be the first step towards a balanced budget. He is right, the pork must go, but that is not even close to the amount needed in order to approach a balance. A first step would be to enact pay as you go laws--a policy worth having is worth paying for. Last week congress passed another tax cut thus siding with President Bush that trickle-down economics is the way to go. Never mind the fact that these latest tax cuts, like the previous ones, will mostly benefit the top 2% of income earners (tax cut breakdown), never mind our unsustainable budget deficit and national debt, the argument is that it is good for the overall state of economy. But trickle-down economics is a theoretical concept at best and simply does not work. One study examining tax cuts and the state of economy (GDP, unemployment rate, income growth, wage growth) for the past five decades or so found the correlation coefficient between the two to be around zero, or in other words, there is no relationship between tax cuts previously implemented and economic wellbeing. And if tax cuts are the silver bullet, then after five years of policies consistent with trickle-down economics, why does our national debt continue to grow (even if all war related spending is subtracted) and why are real wages not rising? Anyway, the point is, we need to do something about the national debt currently a quarter of which is being funded by foreign governments. The longer we wait, the higher the price we'll have to pay.
A REVENUE AND A SPENDING PROBLEM
Above is a long-term simulation from the non-partisan GAO (Government Accountability Office) that clearly shows that in couple of decades our government will only have enough revenue coming in to pay the interest owed on National Debt. There will not be enough funding to cover any other obligations and entitlements. Any politician who says there is a way to solve our government's fiscal irresponsibility without cutting benefits and increasing taxes (rolling back Bush' tax cuts) is a liar. Entitlement programs must be revisited and Tax Cuts can not be made permanent. Despite what appears to be a popular believe on Capitol Hill, Americans are neither selfish nor stupid. We are capable of understanding our country's needs. It would not be a political suicide to speak of much needed reforms which will include tough cuts. George H.W. Bush' failure to get reelected is often attributed to his decision to raise taxes. But the reason he paid that ultimate political price, is because "no new taxes" was such a big part of his 1988 campaign. Even McCain who is usually a straightforward politician and opposed Bush's tax cuts in 2000 is reluctant to admit that US treasury has both a spending and a revenue problem. He often speaks out against all the pork spending saying that would be the first step towards a balanced budget. He is right, the pork must go, but that is not even close to the amount needed in order to approach a balance. A first step would be to enact pay as you go laws--a policy worth having is worth paying for. Last week congress passed another tax cut thus siding with President Bush that trickle-down economics is the way to go. Never mind the fact that these latest tax cuts, like the previous ones, will mostly benefit the top 2% of income earners (tax cut breakdown), never mind our unsustainable budget deficit and national debt, the argument is that it is good for the overall state of economy. But trickle-down economics is a theoretical concept at best and simply does not work. One study examining tax cuts and the state of economy (GDP, unemployment rate, income growth, wage growth) for the past five decades or so found the correlation coefficient between the two to be around zero, or in other words, there is no relationship between tax cuts previously implemented and economic wellbeing. And if tax cuts are the silver bullet, then after five years of policies consistent with trickle-down economics, why does our national debt continue to grow (even if all war related spending is subtracted) and why are real wages not rising? Anyway, the point is, we need to do something about the national debt currently a quarter of which is being funded by foreign governments. The longer we wait, the higher the price we'll have to pay.
