Posted in Big Government, Debt, Deficit, Economics, Entitlements, Europe, Fiscal Crisis, Fiscal Policy, Government Spending, United States, tagged Big Government, Debt, Deficit, Economics, Entitlements, Europe, Fiscal Crisis, Fiscal Policy, Government Spending, United States on November 7, 2011 |
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Even though the unwashed masses decided that I didn’t win my stimulus debate in New York City, I continue my fight for the hearts and minds of the American people.
I’m now taking part in a debate for U.S. News & World Report on “Who Is Handling Its Debt Crisis Better: United States or Europe?”
This was a tough question. I asked the organizer whether I could vote none of the above, but I was told I had to pick an option.
As you can see, I said the United States was doing a better job – but only by default.
Our long-run outlook is grim, but at least we still have time to reform the entitlement programs and save America… The only major difference is that European nations are farther down the path to fiscal collapse. The welfare state was adopted earlier in Europe and government spending among euro nations now consumes a staggering 49 percent of economic output. This heavy fiscal burden, especially when combined with onerous tax systems, helps explain why growth is anemic. …the United States still can turn things around. Greece, Italy, and other welfare states have probably passed the point of no return, but it’s still possible for American lawmakers to fix the entitlement crisis by turning Medicaid over to the states , modernizing Medicare into a premium-support system, and transitioning to a system of personal retirement accounts for younger workers. If those reforms don’t take place, the consequences won’t be pleasant. To be blunt, there won’t be an IMF to bail out the United States.
For all intents and purposes, I contend that America can be saved if something like the Ryan budget is approved.
You can vote on this page on whether you like or dislike what I said, as well as what the other participants said.
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Posted in Big Government, Fiscal Policy, Government Spending, Higher Taxes, Republicans, Supercommittee, Tax Increase, Taxation, tagged Big Government, Fiscal Policy, Government Spending, Higher Taxes, Republicans, Sequestration, Supercommittee, Tax Increase, Taxation on November 7, 2011 |
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Commenting on Supercommittee deliberations last month, I asked whether Republicans will choose the real budgetary savings of a sequester or surrender to a tax hike.
Well, it appears that the GOP likes being known as the Stupid Party and is seriously considering a plan to increase the net tax burden on the American people – even though some of us have warned from the beginning that the left would use the Supercommittee process as an opportunity to trick gullible Republicans into a tax increase.
Here’s the relevant section of an editorial by Steve Moore in this morning’s Wall Street Journal.
…raising rates and raising revenues are different. Eliminating loopholes in exchange for making the Bush tax cuts permanent after 2013 is on the table—and by broadening the tax base, this could bring in tens of billions of new revenues each year. Says Mr. Hensarling: “Republicans want more revenues. We want more revenues by growing the economy; we’re not happy with revenues at 14% of GDP, but we don’t want to do it by raising rates.” One positive development on taxes taking shape is a deal that could include limiting tax deductions, perhaps by capping write-offs on charities, state and local taxes, and mortgage interest payments as a percentage of each tax filer’s gross income.
I’m a bit disappointed that Steve thinks restricting deductions is a “positive development.” I’m a big fan of getting rid of all preferences and distortions in the tax code, but that should only happen if all the revenue is used to finance lower tax rates, not to finance big government.
But that’s a secondary issue.
Republicans have complete power to achieve a victory in this battle. All that’s needed is for them to say no to a tax hike. That will lead to a Supercommittee stalemate, which will then lead to automatic budget savings known as sequestration.
Failure to take that option – particularly when the alternative is a tax hike – is breathtakingly misguided.
Especially when the historical evidence is overwhelming that any new tax revenue will be used to make government even bigger. Heck, the cartoon in this post is a disturbingly accurate description of what’s happening.
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