April 14, 2011

Last week, Wisconsin representative Paul Ryan released his 2012 budget proposal called “The Path To Prosperity”, his proposal to gradually pay down and eliminate the federal deficit by 2050. The response from Democrats was, as one might expect, both predictable and breathtakingly juvenile. “This plan would literally be a death trap for seniors,” shrieked congresswoman Rep. Debbie Wasserman-Schultz (D., Fla.). “A call for waging war on American workers,” was how Rep. Xavier Becerra (D., Calif.) put it.

(To which, BTW, Ryan responded with this.)

Today, President Barack Obama gave a speech envisioning his own ideas for reducing the federal deficit, but, as has been the case from the very start of his presidency, it was long on rhetoric and maddeningly short (actually, nil) on specifics:

Essentially tossing aside the budget he submitted just two months ago, Mr. Obama called for much deeper defense and domestic spending cuts and said while he will not trim benefit payment from Social Security, Medicare or Medicaid, more money can be squeezed out of the latter two programs in other ways.

The president also called for undoing the Bush tax cuts for upper-income taxpayers, and for canceling other tax cuts many of them receive such as the mortgage interest deduction — which he called “spending reductions in the tax code.”

“Spending reductions in the tax code”? Why not just come out and call for tax increases? Oh, that’s right, we’re just two days away from April 15. Heh.

What we basically have here are two entirely different visions for America and the great threat the budget deficit, if left unchecked, poses for our economic future. One, Ryan’s, looks at the situation and sees a spending problem. The other, Obama’s, sees it more as a problem in revenue generation. The problem with the latter is that, unless you confront entitlement program spending square on, you can comfiscate 100% of all income made in the United States and still not completely pay off the deficit, as American Thinker’s Steve McCann writes:

…the left’s argument turns to having the wealthy pay more income taxes every year as a major means of reducing the annual deficit and minimizing the amount of spending cuts necessary to balance the budget.

As a starting point lets us stipulate that the projected budget deficit for the current fiscal year is $1,665.0 Billion. Per the Obama Budget it will be $1,100.0 Billion next year.

The tax year of 2008 was the last to date that the IRS has done this kind of analysis. In 2008 the highest marginal tax rate of 35% was applied to all AGI above $357,700.00. In that year the total amount of AGI subject to the highest rate was $662.8 Billion. The government collected in taxes $218.0 Billion (35%).

Assuming no change in behavior and a general eagerness to pay more, and if Obama and the left convince the Congress to raise taxes on the so-called rich, then the potential increase in revenue would be as follows. If the highest rate of 35% were raised by a factor of 29% to 42%, the additional revenue would be $43.5 Billion, not much of a dent in the $1,665 Billion deficit. If the rate was raised by a factor of 50% to 52.5%, the additional revenue would be $108.9 Billion. Still nowhere near enough, so let’s just tax it at a rate of 100% thus bringing in an additional $404.8 Billion. Unfortunately, the country is still $1,260.0 Billion in the hole for the year.

As you can see, what we have here is exactly what Paul Ryan has laid in his “Path To Prosperity”: the deficit is a spending problem, and no amount of taxes Barack Obama and his Democrat cronies attempt to increase on anyone – let alone the so-called “millionaires and billionaires” the President decries as not sharing their wealth fairly enough – will solve the deficit issue if entitlement program spending is not addressed. You can’t just keep kicking the can down the road – sooner or later, you either run out of road or the can disintegrates.

Given that both House and Senate Republicans have given President Obama their guarantee that if he were to join them in reforming – and ultimately saving – Medicare and Social Security they would provide him political cover, I am disappointed at President Obama’s speech today, as was Ryan:

Exploiting people’s emotions of fear, envy, and anxiety is not hope; it’s not change. It’s partisanship. We don’t need partisanship. We don’t need demagoguery. We need solutions. And we don’t need to keep punting to other people to make tough decisions. If we don’t make tough decisions today, our children will have to make much, much tougher decisions tomorrow.

So I am sincerely disappointed that the President had a moment when we were putting ideas on the table, trying to engage in a thoughtful dialogue to fix this country’s economic and fiscal problems, decides to pour on the campaign rhetoric, launch his re-election, and pass partisan broadsides against us, making it that much harder for the two parties to come together with mutual respect of one another to get things done.

In my view, the President would have virtually guaranteed his re-election if he were to have embraced such a bold and bi-partisan approach. Unfortunately, he chose to play the tired, old, and worn out politics of the past, which is too bad – for everyone.

Genuine leadership is what is needed right now, not pure politics. Representative Ryan’s “Path To Prosperity” is an excellent and mature proposal that deserves careful examination and debate by adults. Ideally, that would mean no seats at the table for the likes of Nancy “Elections shouldn’t matter as much as they do” Pelosi, Harry Reid, and Wasserman-Shultz – all of whom long ago lost whatever shred of credibility whatsoever – but that, my friends, is your Democratic leadership these days.

So, a long, drawn-out struggle is soon to be played out across the mainstream dino-media and the cable network talking heads: Republicans trying to break through the media fog to convince the electorate that this country has a serious deficit problem resolved only when we confront the “third rail” issue of entitlement program spending, and Democrats accusing Republicans of protecting the rich, wanting to kill women (by defunding Planned Parenthood), feed the elderly cat food, and close every public school and toss children (they’re our future, you know!) out on the streets.

Our nation’s very economic future and our way of life depends on who wins this battle of words.

Filed in: Politics & World Events by The Great White Shank at 00:11 | Comments (0)
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