July 22, 2011
Editor:
Dave Uphoff
Congress has until August 2 to come up with a deal that will produce a budget that stays under the debt ceiling of 14 trillion dollars. If an agreement is not reached by then, the country could go into default on its obligations which could cause another global financial crisis and no one knows how bad that could be. Unfortunately, an agreement may not come in time due to politics.One way to avoid default is to raise the debt ceiling. This has been done almost every year. But this year is different. Our government is spending way more than it takes in and Republicans refuse to increase the debt ceiling unless matched by spending cuts. Many financial experts maintain the only way to get government debt under control is to both raise revenue and cut spending. However, the Democrats do not want to cut spending on entitlements and the Republicans do not want to raise revenue through tax increases or tax reform. Both parties are sticking to their mantra and waiting for the other side to blink first. President Obama has conceded to allowing reductions in Social Security and Medicare and other entitlement programs if Republicans will consider ending the Bush tax cuts for the wealthy. However, the Republican Party has numerous rookies who were elected under the Tea Party platform and refuse to budge on the tax issue. House Speaker John Boehner cannot get enough votes from his fellow Republicans to back down on the tax issue and President Obama has angered his fellow Democrats by agreeing to consider spending cuts on entitlement programs.
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Congress will probably find a way to raise the debt ceiling that will satisfy both parties but will not address the huge government deficit. The best way to reduce the deficit is to improve the economy. Raising taxes and cutting spending will not jump start the economy. Jobs need to be created to put people back to work. As government spending during World War II effectively ended the Great Depression, government spending on a program to improve the nation's deteriorating infrastructure can help lift us out of the Great Recession. This will result in more people paying taxes and providing revenue for the government and also will increase consumer spending, which will provide a boost to the economy. Tax reform and cutting spending can be revisited once the economy gets going again through a government stimulus program. Meanwhile the Republican Party is beholding to Americans for Tax Reform President Grover Norquist, who got most Republicans to sign a pledge not to increase taxes, rather than listening to their constituents. The intransigent stance taken by the House Republicans is going to backfire on them at the next election. The American people are being held hostage to a dangerous game of chicken between our elected officials who seem to be more concerned about being re-elected rather than compromising their party dogma and doing what is right for the country.
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