Boehner Is Partially Right... The Full Truth A Bit More Complex
Rational Nation USA
House Minority Leader John Boehner has declared the Bush tax cuts did not result in out of control deficits this nation is experiencing. Boehner's claim is the collapse of the economy 18 months ago is the real culprit.
On the surface this claim makes perfect sense... until one thinks it through. What Boehner is stating is the Republican party line that is meant to play well with main stream RINO's and long time Republican establishment loyalists.
The truth of the matter is the Bush tax cuts did contribute to increasing deficits. The reason however is not that the tax cuts were bad in principal. The reason can be found in the massive expansion in our federal spending to finance two costly wars that we continue to fight. One has to question if there really is an end in sight at this point or even if they can be won.
Cutting taxes to spur economic growth and create jobs, particularly during recessionary cycles is nothing new and in fact makes sense. John F. Kennedy did it after taking office realizing it would spur investment, lead to job creation, ultimately lead to desired economic growth thereby increasing tax receipts. The obvious supporting component, at least to me, is this... When taxes are reduced government spending should be frozen. The freeze must be maintained until the budget is in balance and a surplus is being realized before any additional spending is considered.
What really happened with the profligate spending during the Bush years was a massive drain on our nation's economic health. This was primarily due to the massive spending increases to fund the general increase in the size and scope of the Federal government, along with financing two wars... One initially justified and necessary, the other dubious at best.
Boehner would be speaking words more closely aligned to the truth if he stopped pandering and said it like it really is. Our current economic plight is a result of massive uncontrolled government spending by the Bush administration while at the same time reducing revenue that would support and pay the cost of the increased spending.
Obama has continued on the spending spree and will bury us in further debt. His bailouts, healthcare/insurance reform, and the myriad of other spending increases by the federal bureaucracy will surely have us on the doorstep of bankruptcy. Obama is going to let the Bush tax cuts lapse, but to balance the budget at this point, without significantly curtailing spending or increasing taxes is just a pipe dream. And so It is likely that significant tax increases will be forthcoming at some point under Obama.
While I am no economist it just seems like common sense that for a house to stand financially it must have more revenue coming in than it has dollars going out. As it has been over a decade since this was the case, we have been sinking further and further into debt, sooner or later (if we don't address the root causes) stiffing debt will suffocate this nation.
Boehner is partially right, but he should be talking about the entire picture. So should Obama. The only way out of this mess is a serious downsizing of our worldwide military commitments to a sensible point, a reduction in foreign aid commitments, particularly to states who accept our goodwill but don't like us. At the same time the government needs to identify programs that our obsolete, unnecessary, or too costly.
After these actions are taken the government could rightfully look to increase the tax burden on the America people or American businesses if necessary. Oh, and the ideal thing would be a flat tax with absolutely no loopholes for anyone. Business or private citizen.
What we really have is an equation way out of balance. The question really is this... Does the government have the will to take the necessary steps to control it'self and do the people have the understanding that even given this it may require some personal discomfort before we find ourselves solvent again as a nation.
Discussion Memeorandum
>The reason can be found in the massive expansion in our federal spending
ReplyDeleteThat's the point that people always seem so conveniently to forget. The problem is NEVER that taxes are too low. (When has THAT ever happened?!?!) The problem is that there is too much spending.
Let's say I have an income of 10 and expenditures of 10. One day, my income drops to 9, but my expenditures increase to 17. Certainly the decrease in my income is part of the problem, but it is nowhere near the problem caused by my spending.
Let's also say that the amount of expenditure required to support me with the necessities is 1. This makes my expenditure of 17 even more outrageous and irrational.
This is essentially the situation with the federal government. Only a tiny fraction of what they do is what they need to be (or have a legitimate role in) doing, so their income (my money taken by them in taxes) could be a fraction of what it is, and still be plenty to cover expenses, if they would only do what they have a legitimate place in doing.
I'm also for a flat tax, but the percentages that are usually given are FAR too high. Anything above 1% of yearly income is too high. If the federal government can't survive on that, then let it die.
Les, this is a great post and philosophically consistent. Boehner and the GOP power brokers are not example of limited government!
ReplyDeleteYou guys should check out my economic post today, it has a great link to a simple story of a pizza shop small business, as it relates to progressive economics....
A lot of common sense here, RNUSA. Unfortunately, as long as we try to be the policeman of the world/arbiter of every social grievence in this country, the deficits will be as far as the eye can see - no matter which of these miserable parties rule.
ReplyDeleteBastiatarian - Your points are of course valid. The most significant is the profligate spending above "our means" driven by the things noted.
ReplyDeleteI see it as an interconnected propblem and the solution is to eliminate unnessary spending,gut programs that are of little value (low ROI),reduce our global interventionist foreign policy, etc. and only then rasise taxes and only to expeditiously pay off the national debt.
But you and I know that ain't gonna happen.
Tim - Thanks, it is as I see it and consistent with conservative thought.
ReplyDeleteWill "take no prisoners" Hart - Thanks, and that is precisely why we need a credible 3'rd and perhaps 4th party.
ReplyDelete