Tuesday, July 12, 2011

Washington and the Debt Limit

Barack Obama, Senate Democrats and House Republicans are negotiating raising the federal debt ceiling.  The Democrats are insistent on raising taxes.  (Politics dominate: In 2009, Obama said "The last thing you want to do is raise taxes in the middle of a recession.") The Democrats have offered a combination of spending cuts along with the tax increases.

In 1982 Reagan agreed to a deal with Congressional Democrats -- $3 in spending cuts for every $1 it raised in tax increases.  He later called this deal the biggest mistake of his Presidency. Democrats imposed the tax increases they wanted, but broke their promise and failed to implement the spending cuts.  Reagan remarked, “I’m still waiting on those $3 of spending cuts I was promised by Congress.”

Other than the obvious fact that Democrats are untrustworthy, there is another point.  The federal government is notoriously and brutally efficient when it comes to legislating, imposing and collecting taxes from us. (The IRS, with an annual budget of more than $13 billion, is a government agency solely created for this purpose.) How efficient do any of the Democrats appear when it comes to lessening the amount of our money that they spend?  The old saying goes that there are only two sure things in life, and neither one of them is federal spending cuts.

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