The game of fiscal chicken
by Tom Maertens
It's astonishing that the debates, both Repub and Dem, have avoided the tremendous debt overhang the U.S. is facing.
David Walker, the Comptroller, says that our unfunded liability is now at $53 trillion -- more than the entire private wealth in the country. We can reduce some of this liability by reducing Medicare/Medicaid and Social Security benefits, but those are difficult decisions. What are the candidates going to do? All the choices, including raising taxes, are hard.
Second, the budget deficit is projected at $168 billion this year, while we are at the top of the business cycle. What happens at the bottom of the cycle? $400 billion deficit? $500 billion? That looks to me like a major structural deficit.
Bush already ran up more than $4 trillion in debt. The debt service on that money is $200 billion per year. Bush and the Republican Congress have mortgaged our future, yet nobody seems to care. Tax and spend is reprehensible; borrow and spend is good government. How dare someone suggest we pay our bills.
Perhaps the Repubs are hoping for a replay of '93 when Clinton's balanced budget amendment -- passed without a single Repub vote -- raised taxes and helped (eventually) result in a surplus.
Of course, the Dems got creamed in '94, partly because of Clinton's tax increase. The Repubs seem to be playing the same irresponsible game of chicken, and the Dems aren't calling them on it. In fact, the Dems were thoroughly pusillanimous in opposition, letting the Busheviks pass a repeal of the estate tax, which affects the top 1/4 of 1 percent, 8200 of the ultrarich who financed the campaign against the 'death tax.'
The debate moderators seem more interested in who's the most religious candidate.
Makes you wonder....Does anyone care? Does anyone even know?
It's astonishing that the debates, both Repub and Dem, have avoided the tremendous debt overhang the U.S. is facing.
David Walker, the Comptroller, says that our unfunded liability is now at $53 trillion -- more than the entire private wealth in the country. We can reduce some of this liability by reducing Medicare/Medicaid and Social Security benefits, but those are difficult decisions. What are the candidates going to do? All the choices, including raising taxes, are hard.
Second, the budget deficit is projected at $168 billion this year, while we are at the top of the business cycle. What happens at the bottom of the cycle? $400 billion deficit? $500 billion? That looks to me like a major structural deficit.
Bush already ran up more than $4 trillion in debt. The debt service on that money is $200 billion per year. Bush and the Republican Congress have mortgaged our future, yet nobody seems to care. Tax and spend is reprehensible; borrow and spend is good government. How dare someone suggest we pay our bills.
Perhaps the Repubs are hoping for a replay of '93 when Clinton's balanced budget amendment -- passed without a single Repub vote -- raised taxes and helped (eventually) result in a surplus.
Of course, the Dems got creamed in '94, partly because of Clinton's tax increase. The Repubs seem to be playing the same irresponsible game of chicken, and the Dems aren't calling them on it. In fact, the Dems were thoroughly pusillanimous in opposition, letting the Busheviks pass a repeal of the estate tax, which affects the top 1/4 of 1 percent, 8200 of the ultrarich who financed the campaign against the 'death tax.'
The debate moderators seem more interested in who's the most religious candidate.
Makes you wonder....Does anyone care? Does anyone even know?
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2 Comments:
I care … but there are few of us.
Look at the Farm Bill … with all the articles about how subsidies are being abused yet changes were blocked principally by Republicans. The Dorgan-Grassley amendment which would have closed loopholes, placed a hard cap of $250,000 on payments failed because it did not meet the Super Majority of 60. Coleman was one that supported the status quo … while I give kudos to Klobuchar in a recent commentary on my blog .
As an aside to your comment about the Death Tax, the Poster Child is the Family Farm … that tax subsidies helped to build its net worth. The only thing that Mitt and Rudy agree on is that the Death Tax must be abolished.
Next look at the ATM debate … Republicans are supporting hedgefund managers by allowing their income to be classified as capital gains (15 % versus maybe 35%). Why … just look in today’s Strib … Jim and Marcus Jundt are “profiled” … and they gave $6,000 to Bush’s campaign, $10,000 to the Republican Party and over $4,000 to Gutknecht …. How much would you donate to save 20% on your taxes ?
The 2008 elections should be based what will happen to the Bush Tax Cuts … and I am afraid the Republicans will continue the brainwashing of the Middle Class and return Coleman to the Senate.
Hi, Tom. Good question. I have to admit to being increasingly dismayed at all the fights we supposedly need to back away from because we need to get (elected) (re-elected). The cost of this thinking is not just the $trillions$.
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