The debt hawks are to economics as the creationists are to biology.
“Congress to Weigh Options for Reducing Federal Debt
Hard choices on Social Security, Medicare, defense and taxes can’t be avoided much longer. By Richard DeKaser, Contributing Economist, The Kiplinger Letter
July 30, 2010
Is Washington serious about tackling the federal debt? […] The key is Obama’s debt commission. Its short-term mission is to balance the budget by 2015 — not counting interest on the swelling national debt. That would slash the annual deficits by two-thirds, to about $500 billion. The long-term goal: Achieve fiscal sustainability, which is generally seen as holding debt at something under the equivalent of 65% of gross domestic product (GDP).”
Let’s get this straight. With a balanced budget, even minuscule inflation would reduce the amount of real money in the economy. Historically, recessions follow low deficit growth, and recoveries correspond with high deficit growth. So why aim for a balanced budget? No evidence, just anthropomorphic economics disease.
What makes fiscal sustainability 65% of GDP? No evidence. The DEBT/GDP ratio is meaningless – an apples/oranges comparison with zero significance. And where did 65% come from? Nowhere. Just popped into someone’s head. And that “pop” will cost you plenty.
The ignorant article continues:
“Recommendations in four areas are likely:
“Social Security. . . .Gradually raise the retirement age to 68, calculate benefits using the Consumer Price Index instead of wage inflation and shave a half point from annual cost-of-living increases would knock $548 billion off the deficit in 2040, for example. Another possibility is to raise the cap on earnings subject to payroll taxes, perhaps to 90% of earnings for everyone. That would juice up incoming revenue.”
If someone told you they would cut your Social Security payment, would you at least ask, “Why?” And if the answer were, “The government can’t afford it,” would you at least say, “Show me the evidence”? You never have seen any evidence except for unsubstantiated statements that the debt is too big. This is the same answer you have received since 1971. Wrong then; wrong now.
The ignorant article continues:
“Health care. . . apply a means test for Medicare and revise the recently passed health care law.” Yes, we’re going to cut your Medicare payments, reduce your doctors’ payments and require you to prove you need the money. Do you care? Naw. And don’t even bother to prove the government can’t afford the expense. I trust you. Just take my money and reduce the number of doctors. I love pain.
More from the ignorant article:
“Other government spending. . . A full-scale review is already under way, including plans to forgo or scale back big weapons systems — the F-35 Joint Strike Fighter, the C-17 transport and more. More base closings, especially abroad, are also possible.” Either we need these things for defense or we don’t. Or are you saying the unsupported notion that the government is broke trumps American defense initiatives?
And finally, my favorite ignorant paragraph:
“Taxes. . . rates will surely be raised at some point. Holding them steady for a year — for all but high incomers — costs $95 billion. For 10 years, the tab climbs to $2.46 trillion. Other tax options on the table include limiting itemized deductions and imposing a value-added tax.” Yes, debt hawks, raise my taxes. You don’t provide evidence, but you are much smarter than me, so go ahead, take my money. I don’t care.
The ignorant article continues, “All of the options are extremely painful, and lawmakers’ instincts will be to balk and refuse to budge.” And with darn good reason, because these options not only are painful, but are incredibly harmful and foolish.
America, wake up. These fools want to steal your money, your health, your defense and your lifestyle. Don’t let them do it. Demand proof they know what they’re talking about. Demand proof the federal deficit and debt are unsustainable. If someone wants to steal from you, vote them out.
Or you can just lie back, spread wide and say, “Take me.”
By the way, my $1000 offer still is unclaimed. I wonder why.
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
No nation can tax itself into prosperity
As I read this I got angrier and angrier. These people really have no clue–and the scary thing is they make the decisions for our future. I sent your post about the $1000 challenge to my representatives. I’m sure you won’t hear from any of them.
One question–do you think a lot of this Defecit Doomsdaying going on now is more tied to the mid-term elections in November than to an actual problem per se? I wonder when that dust settles if the defecit will be such a big deal to talk about or if it will be more business as usual since those guys and gals won’t have to worry about re-election.
Sidnee,
I suspect you are correct about the midterm elections precipitating some of the nonsense. But unfortunately, very few Congress people are economists, so they rely on the media people, who also are not economists, to tell them what to think.
Even more unfortunately, many economists were educated before 1971, or had teachers who were educated before 1971. They do not realize the world changed in 1971, the end of the gold standard.
It was then that the U.S. became monetarily sovereign, which changed everything. Ask 100 economists what the term “monetarily sovereign” means, and frighteningly few will know. Many economists even equate the situation in Greece (which is not monetarily sovereign) with the U.S. situation. That truly is sad.
For a one-paragraph explanation of the fundamentals, readers can go to the section titled “CONCLUSIONS”
Rodger Malcolm Mitchell