Democrats crave more money to spend
President Barack Obama raised the stakes in debt ceiling talks this week, saying there will be no deal if Republicans do not agree to raise taxes even higher (there are already $600 billion in new taxes contained in ObamaCare) and that he would not sign any short-term, “kick-the-can” agreement.
The administration contends if there is no deal by Aug. 2 to raise the ceiling, the U.S. could default on its obligations.
But Washington’s big-spenders have known since the last time they raised the debt ceiling — in early 2010 — that it limited borrowing to $14.294 trillion. And Mr. Obama opposed raising it even that high, voting against a previous debt ceiling hike when he was in the Senate, back in 2006.
So why have Mr. Obama and his party been busily increasing spending all through the past 17 months, rather than reducing spending at a more gradual rate, so as to avoid the current, supposed crisis?
Republicans, who control the House of Representatives, quite sensibly oppose increasing the limit without slashing spending to reduce the huge budget deficit, which was cited by Standard & Poor’s when it downgraded the country’s credit outlook to “negative” on April 18.
Democrats say they must have tax increases to go along with spending cuts.
That’s sort of like the old Monty Python routine in which Doug and Dinsdale Piranha go into the extortion business by telling merchants that if they don’t give the Piranha Brothers any money, the Piranhas won’t burn down their stores.
Because Republicans aren’t particularly anxious to raise the debt ceiling — they seek smaller government, and the debt ceiling limits the growth of deficit-financed government – Democrats demanding further concessions “or else there won’t be any deal” could have been scripted by funnyman John Cleese.
Federal government spending is now at 24 percent of the nation’s gross domestic product — 33 percent above historical norms. And we’re not fighting Hitler or Tojo.
Cut spending by a quarter and you’d eliminate most of the current need for borrowing. Washington would still be bigger than it was in the year 2002. It would just return to its normal size as a percentage of the private economy.
Meantime, the problem with any proposal from the left that they need tax hikes to “balance” spending cuts is that the tax hikes turn out to be real — and very hard to repeal — while their “spending cuts” generally turn out to be chimeras.
This isn’t theory. Remember the winter 2011 budget pact that was supposed to yield the biggest annual spending cut in history? Turns out it’ll produce less than 1 percent of the promised $38 billion in savings by the end of this budget year, according to a CBO estimate released April 14.
Washington’s big spenders can be trusted to do nothing but what they’ve been doing for 70 years — raise spending and call it a “cut.” Besides, what does it mean for them to say they want to hike taxes only on “the rich,” when the lower-earning half of Americans effectively pay no federal taxes, anyway, meaning that to today’s Democrat, everyone who pays taxes is “rich”?
Federal receipts are higher than ever, and the economy founders. In these economic times, of all times, Republicans cannot afford to fall yet again for the handful of magic beans known as tax hikes.
