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Jewish World Review July 15, 2011 / 13 Tamuz, 5771 Debt deception: If only Dems were honest and GOPers were courageous By Deroy Murdock http://www.JewishWorldReview.com | Team Obama's debt-limit negotiating position is fueled by a central non sequitur, a core myth, and a spectacular oversight. Correcting these deficiencies would help Democrats and Republicans drain America's Olympic pool of red ink without drowning the economy in tax hikes. First, the idea that the federal debt ceiling must be raised in order to lower federal indebtedness is the logical equivalent of a high-speed train derailment. Debt-soaked American consumers do not beg credit-card companies to hike their borrowing limits. Instead, they freeze their credit thresholds and pay their debts, ideally until their finances are back in black. Obama's insistence on raising the debt limit is like saying, "You are right, MasterCard. I am tapped. So, I will forego theater tickets and skip my annual ski trip. Now, please raise my limit by $5,000." Congress should not hike the debt limit, period. The staggering sum of $14.3 trillion should remain the Everest of U.S. financial irresponsibility from which Uncle Sam must descend. This will be arduous, but far healthier than climbing into ever-more-vertiginous debt and triggering an all-consuming avalanche of unpayable bills. Furthermore, the notion that leaving the debt limit intact will trigger default is another monstrous lie designed to bamboozle the American public and cow Republicans into retreat. As with a credit card, default requires neglecting one's bills rather than respecting a debt cap. If Visa refuses to augment a customer's credit line, default only occurs if he stops making minimum payments. America must do this. For Fiscal Year 2011, Treasury expects $2.23 trillion in revenues, from which it must pay bond holders $213 billion in interest. As Senator Pat Toomey, R-Pa., explains, if Treasury can manage this, America will not default. Meanwhile, Democrats advance the core myth that the wealthy do not pay their fair share of taxes. These marina-dwelling slackers, their argument goes, devour caviar while the American worker toils to keep Washington operating. "Pay up," Senator Frank Lautenberg, D-NJ, demanded last week. "Don't let the fat cats sit there purring nicely while they watch events unfold." And now, the truth: According to an April 2009 Congressional Budget Office report, in 2006 (the most recent data available) the top one percent of taxpayers made at least $332,300 annually and paid 28.3 percent of all federal taxes. The top 10 percent (earning $98,100) paid 55.4 percent. Meanwhile, the bottom 60 percent earned up to $47,399. They paid 14 percent of all federal taxes. Regarding effective federal tax rates, CBO reported April 4 that in 2007, all taxpayers averaged a 20.4-percent tax rate. However, the top one percent effectively paid 29.5 percent, and the top 10 percent paid 26.7. The bottom 20 percent of taxpayers paid an effective rate of just four percent. So, the idea that the evil rich pay less than their "fair share" is yet another lie. If it is insufficient for the top 10 percent to pay 70 cents of each federal tax dollar, what would suffice? 80 cents? 95? 100? Finally, a spectacular oversight plagues Democrats and Republicans alike. As Senator Tom Coburn, R-Okla., and Rep. David Schweikert, R-Ariz., observe, some $703 billion in forgotten funds languish across the federal budget. When Congress authorizes, say, $1 billion for a program, the unspent $250 million, for instance, just sits there. These coins between the cushions of the national sofa exceed TARP's original $700 billion budget! Schweikert's Forgotten Funds Act would apply this dusty money to debt reduction. Why on Earth is this massive sum not on the table? Wouldn't it be nice if Democrats abandoned their galactic deception and hateful class-warfare? What a wonderful world it would be if Republicans were less timid about proposing deep budget cuts, agency closures, and revenues that did not impose tax hikes on this wheezing economy? Imagine what an attractive debt-reduction deal America might enjoy if Democrats were honest and Republicans were courageous. Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. Comment by clicking here. Deroy Murdock is a columnist with Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University. Previously: • 07/08/11: Congress' war on light bulb blows up © 2011, SCRIPPS HOWARD NEWS SERVICE

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