Jewish World Review August 5, 2011 / 5 Menachem-Av, 5771
Upside to the compromise leaving the door open for obnoxious maneuvers
By Jay Ambrose
http://www.JewishWorldReview.com | Relative to the task, it's a pittance, but $3 trillion in budget cuts just could be an important first step in doing something real about our ruinous debt.
The debt itself, of course, could lead to a default, but for now we've avoided one by raising the debt ceiling in this deal between House Republicans and Senate Democrats and, yes, with President Barack Obama. His ineptitude had sidelined him in negotiations, but he still had to sign on to these trillions in spending cuts that constitute a final trashing of his original, absolutely absurd 2012 budget proposal.
Let's consider that one of the single most important things a president does each year is devise a budget signifying his economic plans, priorities, endorsements, rejections and hopes. Figuring out what to do is a major year-round, long-hours, sweat-and-tears task that must not be shirked..
Consider next that the Obama budget was, to use a word he recently employed, "dysfunctional" -- a $3.73 trillion document blithely ignoring his own debt commission's warnings that we needed revenue-raising tax reforms along with steep entitlement cutbacks and other reductions. The president did zilch, zero, nada about either kind of reform. Although he did announce some freezes in areas already fattened by past increases, he made up for that austerity charade with new spending in education and energy and, to give us a more European look, on heavily subsidized high-speed trains.
While unbelievably sly about it, the president did count on tax hikes in the years to come -- $1.6 trillion worth. At the same time, he and his gang were still projecting a 2012 deficit of $1.1 trillion and enough additional deficits over the coming decade to add $10 trillion to a $14 trillion debt. If you do the arithmetic, the sum comes to goodbye to the America we've known.
Niall Ferguson, a Harvard history and business professor, has written that if lenders think we're a "safe haven" now, we're safe like Pearl Harbor was in 1941. Interest rates could scoot skywards, meaning growth would hardly budge at all. He also says a decline in power is likely in the offing, seeing as how interest payments on borrowed money will leave little left over for the armed forces.
Author-journalist Mark Steyn puts the issue of our relative decline in vivid terms. In a recent Denver speech, he noted that if China keeps on lending us money at the same rate as now, it won't be many years until our return interest payments will cover the costs of its military, described by him as the largest employer in the world.
Here comes Arthur Brooks, president of the American Enterprise Institute, who spoke at the same conservative conference as Steyn. He has written that you can't perform the rescue with still more taxes only on high income groups. If you hit everyone making $200,000 and more with a 100 percent marginal rate, you'd just be about three-fourths of the way to eliminating this year's deficit. And, he said at the convention, an AEI study shows the main thing that works in a debt crisis is spending cuts..
But look, was the debt-ceiling fight and the last-minute compromise worth all the hassle? Yes, because first off, the fight caused Obama to retreat from his loco budget to the extent that the Senate voted 97-0 not even to consider it.
The compromise leaves the door open for obnoxious maneuvers, and the $3 trillion cut would still give us a debt hike of $7 trillion in 10 years. But $3 trillion is still mucho moola, and there's life after this deal. Republicans can keep seeking other ways to effect cuts, especially should they take over the Senate and the presidency in the 2012 election.
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Jay Ambrose, formerly Washington director of editorial policy for Scripps Howard newspapers and the editor of dailies in El Paso, Texas, and Denver, is a columnist living in Colorado.
• 08/03/11: The people who may save America
• 07/29/11: On making deals, Obama is no LBJ
• 07/27/11: The threat behind the debt
• 07/23/11: Mean opposition to means-testing
• 07/20/11: Leftist babble makes debt crisis even worse
• 07/18/11: Time to raise demagoguery ceiling
• 07/13/11: Obama treating treaties badly
• 07/08/11: Is decline of U.S. exaggerated?
• 07/05/11: Not math deficiency, but demagoguery
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