The other big entitlement program is Social Security, which is facing a $22 trillion shortfall. President Clinton, whom you have designated “secretary of explaining stuff,” has explained that the only three ways to bring Social Security into balance are to raise taxes, cut benefits, or invest privately. You have attacked Governor Romney because his running mate, Paul Ryan, has in the past advocated private investment through personal accounts. You have also recently ruled out any changes in Social Security benefits. That leaves only an increase in taxes — a 50 percent increase in the payroll tax or the equivalent in other taxes. Are you prepared tonight to formally call for such a tax hike?
While we are on taxes, Mr. President: You have repeatedly said that the wealthy “don’t pay their fair share in taxes.” Given that the top 1 percent earns 16 percent of all income in this country but pays 36.7 percent of all federal income taxes, what would you consider a “fair share”? Do you believe that any level of taxation is inherently too high, either as a matter of fairness or for its impact on economic growth?
Since World War II, federal spending has averaged 19.9 percent of GDP. Under your administration, it has averaged 24.4 percent. According to the Congressional Budget Office, by 2040 federal spending will reach 43 percent of GDP. If one adds state and local spending, government at all levels will consume 60 cents out of every dollar’s worth of wealth produced in this country. Is that too much? What is the proper size of government? Is it possible for government to be too big and do too much? Can you name one thing that government does today that should instead be done by the private sector?
For Governor Romney:
You have said that you want to reduce federal spending to 20 percent of GDP. That’s a reasonable goal, though it would still be higher than the federal during the Clinton administration. Meeting that goal will require significant reductions in federal spending, a task made harder by your insistence on increasing defense spending. Cutting spending is bound to offend some voting constituency somewhere. Still, you have promised to tell the American people “hard truths.” Here is your chance: Can you name three government programs that you would eliminate or significantly cut?
You have been critical of President Obama’s proposals for increasing government employment, correctly noting that the government jobs created come at the expense of private-sector jobs, since the taxes or borrowing necessary to pay for those jobs makes it harder for businesses to grow and hire. This is Bastiat’s classic case of the “seen and the unseen.” However, how do you reconcile that with your attack on looming defense cuts because they would kill jobs? Purely from a jobs standpoint, how is government’s hiring a defense contractor different from government’s hiring a teacher or a firefighter? Should defense spending be used to stimulate the economy? Or should it be based solely on America’s defense needs?