Cutting Through the Fog of the Debt Ceiling Debate

Why can’t they just get along down in DC and solve this debt ceiling problem? The mournful cry of the folks who do not understand the watershed moment we have come to.

Democrats and the President want to raise taxes and revenues in order to protect the ruinous levels of current and future spending the government has promised or undertaken in the past couple of years. Republicans want to hold the line on revenues and even lower tax rates.

Who has the better argument? Democrats hold the position that it is necessary to make sure the promises made on Social Security, Medicare, Medicaid, veterans benefits, as well as education and other programs will be kept. In order to do that the President insists that tax revenues must be raised above current projections.

Here is the crux of the matter. In order to ensure the long run viability of these programs one thing is absolutely essential: We must have an economy that is growing sufficiently to throw off enough revenue to finance the promised benefits, now and in the future. The burdening of the economy with new regulations, the anti-business attitude of the administration and the rise in taxes that will occur because of the ending of the Bush tax cuts and the money needed for Obamacare are already being factored in by businesses. Little wonder job creation is so anemic. Talk of even more tax hikes as if they will automatically increase revenue is fatuous thinking at best. People are not machines; take away incentives or punish success and the economy stagnates. How long will it take to learn that lesson?

If Democrats are really concerned about the viability of the entitlement programs, they should be jumping at the Republican proposals to get the economy on a stronger growth path. Since they continue to play the class warfare game and side with strong arm union tactics, one must conclude they are not really concerned about the old and the infirm. Rather, they are concerned about remaking the USA into a socialist utopia. It would be nice if they could point to one.