Tag Archives: National Debt

News

Would the Republican “cut, cap and balance” plan solve the debt crisis?

2 Comments

Let’s take a look at the Republican “Cut, Cap and Balance” plan, as reported by CBS News.

Excerpt:

The House next week will take a vote to raise the debt ceiling and pass a balanced budget amendment, House Republican leaders said today.

The plan is unlikely to go anywhere, since a balanced budget amendment would likely fail in the Democrat-led Senate, but GOP leaders nevertheless called it a serious plan to raise the debt ceiling. They said President Obama and Democrats have failed to come up with an equally serious plan.

“We asked the president to lead,” House Speaker John Boehner said in a press conference today. “We asked him to put forward a plan — not a speech, a real plan — and he hasn’t. We will.”

The “cut, cap and balance” proposal would make raising the debt ceiling contingent on Congress sending a balanced budget amendment to the states. It would also cap government spending at 18 percent of Gross Domestic Product over the next 10 years.

The plan would raise the debt ceiling by $2.4 trillion, since that is the increase requested by the president. However, the plan would actually make even more in spending cuts — as much as $111 billion in 2012 alone.

[…]Boehner said the House would vote on the “cut, cap and balance” plan and then decide how to proceed from there.”I don’t want to preclude any chance of coming to an agreement, but [Democrats have] been unwilling to put a real plan on the table,” Boehner said. “Without serious spending cuts or real reform to entitlement programs, this problem is not going to be solved.”

That’s what the Republicans would do if they were in control. The balanced budget amendment would cap spending at 18% of GDP, so that we would never have a debt crisis ever again. That’s the right solution, except that the Democrats cannot give up the idea of buying votes with the money they steal from job creators. They just can control their addiction to spending.

Now, let’s take a look at who caused the debt crisis, with this House Budget Committee article by fiscal hawk Paul Ryan. (H/T Washington Post)

Excerpt:

While President Obama has recently professed a newfound — and vague — desire to cut government spending, it’s useful to recall what the President has actually done since taking office in 2009. The President signed into law a massive spending spree that plunged us deeper into debt, and failed to deliver on its promise to create jobs.

  • 24% Increase in Base Spending. Non-defense discretionary spending grew by 24% for the first two years of the Obama Administration, adding $734 billion in spending over the next 10 years.
  • Record Government Spending. The Federal government will spend $3.6 trillion this year, 24% of gross domestic product (GDP) and the highest burden on the economy since World War II. Spending has historically averaged a little over 20% of GDP.
  • President’s Budget Makes Matter Worse. According to CBO, the President’s budget never spends less than 23% of GDP and by the end of the decade rises to 24% of GDP. His budget’s failure to address the drivers of our debt threatens the health and retirement security of America’s seniors, and the economic security of all Americans. The President’s budget seeks to spend $46 trillion in government spending over the next decade, and has subsequently fought against House Republican efforts to restrain his spending appetite down to $43.5 trillion.

During the four years when Nancy Pelosi was the Speaker of the House, and Harry Reid was in control of the Senate, the Democrats packed 5.34 trillion dollars onto the national debt.

Podcasts

FL senator Marco Rubio: “We need more taxpayers, not more taxes”

3 Comments
Florida Senator Marco Rubio
Florida Senator Marco Rubio

If there is anyone I like almost as much as Michele Bachmann, it’s Marco Rubio. And boy, can this guy do an interview.

On the Sean Hannity show: (7 minutes)

And on the Rush Limbaugh radio show: (11 minutes)

He’s William Lane Craig-esque. He just talks about the issues without one hem or haw. Not an uh or an ah to be heard. It’s uncanny. Hmmn. Look at that picture up there. He looks very intense. Do you think he might be some sort of conservative super-android designed by the U.S. Military in a secret base under a mountain in Colorado? I’m not sure.

I actually heard him interviewed on the Hugh Hewitt show on Tuesday night. Hugh played the interview back-to-back in two consecutive hours, and then his producer Duane Patterson posted the full transcript. This one was the best interview of all. Hugh does a great interview, and he was blown away by Marco Rubio.

Excerpt:

HH: Now the President is betting, obviously, that he can turn a conservative message into a toxic one for 2012. Your old colleague from the Florida House, Adam Hasner, is running for Senate down there, a lot like Josh Mandel in Ohio, and Ted Cruz in Texas, they’re running as real conservatives with very much a Rubio-like message from 2010. Will that work in this environment of demagoguery from the White House?

MR: Yeah, it will work, because the common sense of the American people is powerful, and I think that too many people here in Washington walk around thinking well, we can spin it this way, or we can use our allies in the media to confuse people and make them not believe their own eyes. But the truth is that we’re way past that today. The ability of people to get information from multiple sources in real time, the ability of us to communicate directly to our constituents, to go on programs such as yours and talk about the reality of what we’re facing, is something that wasn’t around not that long ago, and it’s incumbent upon us who feel passionate about this to go out there and make clear to the people what our choices are. And this is not a complicated issue. It’s very, very simple. The United States spends more money than it takes in, and it’s not generating enough revenue for its government to pay down the debt. So we have to figure out how do we stop spending more money than we take in? We need a balanced budget amendment. We need a spending cap. And we need real reductions in spending starting right now. And what do we do to get more revenue in the hands of government so it can pay down its debt and not grow its government? Well, you’re not going to do that through tax increases. You’re going to do that through new taxpayers, that is getting people back to work, getting people hired and working, so these people will pay taxes, and then we can use that revenue to pay down the debt. That’s what we need. And you’re not going to create new taxpayers, you’re not going to create economic growth and jobs in America if you’re running around threatening to raise taxes.

HH: Do you think the President understands the underlying economics, Senator Rubio, and is just demagoguing it? Or is he fundamentally misinformed about how capitalism works?

MR: I think there are three things going on here. Number one, I think he’s a prisoner to extremist elements in his own base who not only, they don’t care that the taxes don’t solve any problems. They want their pound of flesh. They want to punish somebody, they want class warfare. That’s what they believe in. And this is their chance to do it, and they’re putting pressure on him to do that. So I think that’s his first problem. His second problem is that I think he’s surrounded by a bunch of people who philosophically do not believe fully in the free enterprise system, and in fact, they’d like to see government play a greater role. And they see this downturn in the economy, and crisis such as this, as an opportunity to exert more government involvement in our economy. And that’s the second problem. And his third problem is a level of incompetence. I think the President, quite frankly, is not up to the job. And if you look at every measure of quality of life in America today, unemployment is higher. The debt is higher. The only thing lower is the value of your home. If you look at every measurable economic thing in America today, they are all worse than they were the day he took over. Two and a half years into his presidency, things continue to get worse, not better, and it’s because the President is incompetent in his job as president. He is not, he doesn’t know what he’s doing.

I think he’s going to be President one day. And I agree with him on Obama’s competence. The man is not qualified in any way, shape or form to run a lemonade stand, much less to be the President of the most powerful country on the planet. I would like to see a Marco Rubio/Allen West ticket in 2020, after the two Michele Bachmann terms are done.

 

Commentary

Are the Bush tax cuts to blame for Obama’s 1.6 trillion dollar deficits?

2 Comments
Obama Budget Deficit 2011
Obama Budget Deficit 2011

From the Wall Street Journal, the raw numbers on the Bush tax cuts and the deficit. (H/T Paul Ryan)

Excerpt:

But what about the liberal claim, repeated constantly, that the Bush tax cuts of 2001 and 2003 caused today’s deficits? CBO has shown this to be demonstrably false. On May 12, the budget arm of Congress examined the changes in its baseline projections from 2001 through 2011. In 2001, it had predicted a surplus in 2011 of $889 billion. Instead, it expects a deficit of $1.4 trillion.

What explains that $2.29 trillion budget reversal? Well, the direct revenue loss from the combination of the 2001 and 2003 Bush tax cuts contributed roughly $216 billion, or only about 9.5% of the $2.29 trillion. And keep in mind that even this low figure is based on a static revenue model that assumes almost no gains from faster economic growth.

After the Bush investment tax cuts of 2003, tax revenues were $786 billion higher in 2007 ($2.568 trillion) than they were in 2003 ($1.782 trillion), the biggest four-year increase in U.S. history. So as flawed as it is, the current tax code with a top personal income tax rate of 35% is clearly capable of generating big revenue gains.

CBO’s data show that by far the biggest change in its deficit forecast is the spending bonanza, with outlays in 2011 that are $1.135 trillion higher than the budget office estimated a decade ago. One-third of that is higher interest payments on the national debt, notwithstanding record low interest rates. But $523 billion is due to domestic spending increases, including defense, education, Medicaid and the Obama stimulus. Mr. Bush’s Medicare drug plan accounts for $53 billion of this unanticipated spending in 2011.

The last GOP budget was in 2007, and the deficit was $160 billion, ONE TENTH of Obama’s budget deficit. And that was WITH the tax cuts. The cause of the current trillion dollar deficits is Barack Obama’s spending.

Remember what the unemployment rate was under Bush:

Comparison of unemployment rates - Bush vs Obama
Comparison of unemployment rates - Bush vs Obama

I think that looking at the budget deficit numbers and the unemployment numbers is a good way to judge how capable a President is. It gets away from the media spin, the gaffes, the jokes on those liberal Comedy Channel shows. Just look at the numbers, because we all have to care about jobs and spending. Politics is about our freedom, prosperity and security. Not about making us laugh or feel superior to others.