The U.S. is barreling directly toward a Greece-style financial crisis complete with a sovereign debt downgrade, a currency crisis, and double-dip recession. It is a threat to every man, woman, and child in America.
There is a direct connection between the federal debt and the imminent financial crisis. Reducing the current and projected debt has to be the top priority for any serious federal policymaker.
The burgeoning debt we are faced with stems directly from the broken entitlement programs. Social Security is bleeding red ink and will not survive to the next generation. Medicare will implode financially while failing to meet the legitimate health needs of seniors. Medicaid is in worse shape, providing substandard care right now and still dragging down both federal and state budgets. And the “Affordable” Care Act is anything but; it will merely provide the budgetary exclamation point to the failure of the social safety net.
Put simply, the status quo entitlement programs will be a disservice to their intended beneficiaries, feed the bloated debt bomb, and fuel an economic disaster. Reform of entitlement programs must be the number one issue.
So, one would expect that entitlement reforms would be at the center of the debt-ceiling negotiations. Wrong.
Instead, raising the debt ceiling is imperiled. President Obama will only talk about raising taxes when revenues are the furthest from the issue at hand. Raising taxes will not solve the problem, and President Obama has already proven it. His 2012 budget contained all the tax increases his imagination could muster. The result? A debt spiral and predictable crisis inside of one decade.
Entitlement reform is off the table and the focus is on a tax strategy that is a proven failure.
This is leadership? Really?
— Douglas Holtz-Eakin is president of the American Action Forum. His Twitter handle is @djheakin.
I wish more people on the right would make this point: "revenues are the furthest from the issue".
It's spending that is the issue. We are at our debt limit because we SPEND TOO MUCH! Conservatives should be cheering on the prospects of shrinking the size of government, not gobbling up more and more of the private sector via 'increasing revenues'.
Reply to this commentLinkReport AbuseThe problem is spending. The bigger problem is I don't believe the leadership (Repbulican) believes this. They are fighting this fight because they must. Not because they have the conviction.
Reply to this commentLinkReport AbuseI think that this graph from Heritage Foundation says it better than anything.
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If the increase in federal spending would have continued on the same plane that it had been on since 1960, we would still have a deficit problem primarily because the recessions of 2000 and 2008 have had a deleterious impact on tax receipts.
But, our problem would be MUCH more manageable - with probably "only" a $300B annual deficit (maybe a tad less).
Instead, the graph shows the remarkable uptick in federal spending that started in 2002, and increased until it absolutely exploded in 2005/2006 (prescription drug program + war?). Then, when Obama came it, things just got ridiculous.
Reply to this commentLinkReport AbuseMr. Obama proposed $4T in spending reductions along with tax increases. All federal spending (including defense) is the problem, not just Medicare, Medicaid and SS. Republicans categorically refuse to consider tax increases and the Tea Party caucus refuses to consider an increase in the debt ceiling. This is all Mr. Obama's "failure of leadership"? Not so.
Reply to this commentLinkReport AbuseWhich $4 trillion would that be? Oh, that's right, he didn't provide any (public) details, probably because it would become obvious that they weren't really cuts, none happening this year or next, and all "scheduled" for 10 years from now, which is the same as saying "ain't gonna happen."
Reply to this commentLinkReport AbuseCouold you provide details about the 4T in spending reductions?
Reply to this commentLinkReport AbuseNo. Mr. Obama *said* he proposed $4T in spending reduction. What Mr. Obama *says* has historically been quite at odds with what actually *is*.
However, if you can provide the specifics of the $4T in reductions, then by all means, do so.
(Which means this is the last we hear from Kevin in this thread.)
Reply to this commentLinkReport AbuseThe above was, of course, directed at Moriarty, not RTP.
Reply to this commentLinkReport AbusePlease. As any economist will tell you, our most serious problems are the entitlement programs -- we don't have the money to keep them going and they will sink the ship if we don't have structural reform very soon. Given all the publicity this topic has received, it's hard to believe you don't know that. And given that Pres. Obama promised to be the one who would make the "tough choices," it's pretty rich, even for him, that he continues to dodge any real talk of entitlement reform.
Remember, he kicked the debt issue to his bipartisan "deficit commission" shortly after taking office, and when they came out with their recommendations, he ignored them. Didn't implement, or make plans to implement, anything. His own budget was rejected by the Democrat-controlled Senate and he was MIA on the debt ceiling talks until just a couple of weeks ago. What presidential leadership are you seeing in all this?
Reply to this commentLinkReport AbuseDidn't Sen. Obama in 2006 say that requesting an increase to the debt ceiling represented a "failure of leadership"?
Reply to this commentLinkReport Abuse"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure"
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you have to stop getting your Tea Party caucus news from liberals ...
The Tea Party caucus is for spending reductions ... there is no demand for no debt increase by the caucus as a whole ... some individuals maybe but certainly not the caucus in general ...
Since we have a spending problem Obama's refusal to consider real spending cuts is really a lack of leadership ...
we don't have a debt problem, the debt is a symptom of our spending problem ...
Reply to this commentLinkReport AbuseIf Obama had not increased spending by 24% over the last 2 years we would still be a trillion dollars under the current debt limit ...
I know you don't want to focus on what Presentdent Obama has done and just focus on all the goodies he's GOING to do but really are we just supposed to ignore what he has done because you choose to ?
Reply to this commentLinkReport AbuseNah. In Kevin's world, Obama never does anything wrong and no criticism or questioning of him is ever legitimate. Ask Kirsanow.
Reply to this commentLinkReport AbuseI have no idea where this number comes from or what its component parts are. Can you enlighten us?
If the facts of Karl Rove's column in today's WSJ are accurate (and spare me the snide comments), the President has deemed the following to be "untouchable"--$1T in his "health care reform",$128 B in unspent stimulus, education and training outlays, $53 B high speed rail proposal, spending on green jobs and student loans and, most importantly, virtually any structural changes to entitlements except further squeezing payments to providers and hospitals.
This is not serious. I don't believe, even after taking a whack at defense spending, that the problem of our structural deficit can be solved without addressing entitlements in a way that assures their survival.
I would guess, if such structural changes were adopted, that the GOP would go along with revenue enhancements, tax increases, or whatever you care to call it to address future deficits and debt reduction.
Reply to this commentLinkReport AbuseReally? Exactly what reductions did Mr. Obama "propose"?
Reply to this commentLinkReport AbuseKevin muddles the message as well as Obama. Congrats!
His $4,000,000,000,000 is in "spending reductions along with tax increases." Kevin's words, not mine.
Ronald Reagan learned the hard way with tax and spend types. Instead of $3 in cuts to $1 in tax increases as he signed on to, the reverse was true. $1 in cuts to $3 in tax increases. Obama talks out both sides of his mouth, and he thinks of himself as the adult in the room.
Sheesh!!!
Reply to this commentLinkReport AbuseFish often makes the claim that since the Ryan budged did not specify which deductions were to be eliminated in exchange for reducing the top tax rate, that the only logical conclusion was that he had no intention of eliminating any deductions.
Now, tell us again, exactly what programs Obama is proposing to cut.
Reply to this commentLinkReport AbuseReally, have you seen the specifics of Mr. Obama's proposal? I haven't, and I've looked. Don't think anyone has.
If Obama was serious about deficit/spending reductions, why didn't that show up in his budget proposal in February (which was voted down 97-0 in the Senate) which included INCREASES in spending.
Yes, this is a failure of leadership by President Obama. He and his party have essentially been in charge for 3 years now, no budget, no jobs, staggering increases in debt and ever larger annual deficits.
Failure, plain and simple.
Reply to this commentLinkReport AbuseReally, have you seen the specifics of Mr. Obama's proposal? I haven't, and I've looked. Don't think anyone has.
If Obama was serious about deficit/spending reductions, why didn't that show up in his budget proposal in February (which was voted down 97-0 in the Senate) which included INCREASES in spending.
Yes, this is a failure of leadership by President Obama. He and his party have essentially been in charge for 3 years now, no budget, no jobs, staggering increases in debt and ever larger annual deficits.
Failure, plain and simple.
Reply to this commentLinkReport Abuse"The U.S. is barreling directly toward a Greece-style financial crisis"
Sort of disappointed for someone with an Economics Ph.D. you do not differentiate Greece whose debt is in a currency it does not control vs. the US whose debt is denominated in its own currency. Japan has a Debt-GDP ratio of over 200% and yes that has hurt growth but the sky has not fallen in on Japan. Perhaps if you compared a state like Illinois or CA to Greece that would be a more accurate comparison.
Sort of disappointed in all the "Sky is Falling" talk. Looking at the history of the Anglosphere, we usually find a way to compromise and muddle through before letting the ideologues on either side blow things up.
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