It's The Spending, Stupid!

You know the President and Democrats in Congress are in trouble when the New York Times is telling them it's time to fish or cut bait.

As David Brooks writes:

Over the past few weeks, a number of groups, including the ex-chairmen of the Council of Economic Advisers and 64 prominent budget experts, have issued letters arguing that the debt situation is so dire that doing nothing is not a survivable option. What they lacked was courageous political leadership — a powerful elected official willing to issue a proposal, willing to take a stand, willing to face the political perils.

Neither the President or the Democrats in Congress seem to be willing to take the necessary steps to actually fix the problem, particularly when the only answer seems to be to boost taxes. If it were that simple we would have had the problems fixed long ago. But it's not that simple.

Frankly speaking, Congress has been picking the pockets of the American taxpayers for so long they have come to believe the supply of money is endless. They certainly have been spending as if it were the case. Instead what we are suffering from is a spending problem rather than a revenue problem. To illustrate that point, assuming we were to tax the “rich”, meaning anyone with an annual income above $250,000, at a rate of 100%, the Treasury would theoretically collect about $400 billion.

The problem? That covers only one-fourth of this year's budget deficit. Where's the rest going to come from? So boosting taxes just on the rich to confiscatory levels won't do the trick. If we made sure everyone paid income taxes, then that might raise another $200 billion, still leaving us over $1 trillion in the hole. So raising taxes isn't going to be the salve some think it will. Instead, it's time to consider something drastic, like cutting the budget.

And in case you believe such a plan would be impossible to accomplish, Representative Paul Ryan begs to differ.

His plan isn't something he slapped together overnight. He's been working on it for years and put a lot of thought and effort into his proposal. It will require sacrifice by everyone, across the board. And even if every one of his ideas were implemented, we'd still have deficits for years to come. All this plan will do is buy us some time to incorporate institutional fixes that will help prevent future deficit spending by restricting what the government and Congress can do with the taxpayers money.

All we need to pull this off is for the adults to step up and take over the process.