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Townhall...
Balancing
the Budget
By John Stossel
8/3/2011
The
political class predicted
“disaster” if Congress didn’t raise its debt limit.
I
think that was a scam to get more
money. See, the poor politicians don’t have enough, and they need to
borrow
more. We taxpayers are cheap. This year we’ll give them only $2.2
trillion.
They want to spend $3.8 trillion.
The
president said if he didn’t get
more money, Social Security checks wouldn’t go out. Why not?
With
$2 trillion, they can pay Social
Security, Medicare, the interest on the debt and still have billions
left. It’s
billions more than the government spent when President George W. Bush
took
office. What’s the problem?
The
problem is that Republicans and
Democrats under Bush and President Obama doubled spending. Now, Obama
wants
more taxes.
Taxes
shouldn’t be the answer when
spending is the problem.
Grover
Norquist, who heads Americans
for Tax Reform (ATR), leads the charge to keep the focus on spending.
Norquist
and ATR are famous for asking officeholders and candidates to sign a
pledge not
to raise taxes. Some say he is the reason the debt-ceiling debate was
so drawn
out.
“I
think the reason there isn’t a tax
increase on the table,” he told me, “is that 235 members of the House
of
Representatives signed a pledge never to raise taxes, a pledge to their
voters,
and 41 senators did. ...
“Only
if you take tax increases off
the table do you even begin to ... focus on spending, and that’s what
Obama
wants to keep our focus off of. He wants us to talk about the deficit,
not
spending.”
I
pointed out that Obama might have
scored points with the public because new revenues he sought -- even
though
they wouldn’t do much to shrink the deficit -- would come from closing
unpopular
tax “loopholes.”
Norquist
said he favors that -- if tax
rates are lowered at the same time.
“(We)
want to simplify the code,” he
said. “(We) want to take a lot of the goodies that politicians have
laced into
that code ... as long as you reduce tax rates and it’s not a hidden tax
increase.”
Milton
Friedman always said taxes
don’t tell the whole story. What counts is how much of our resources
government
spends, however it acquires them. The doubling of spending under Bush
and Obama
hasn’t gotten enough attention.
“We
need to ask what it is government
should do,” Norquist said. “But it’s going to be knockdown, drag-out.
All
government overspending creates the constituency for its own
perpetuation. ...
Weaning people off, that is very difficult.”
He’s
right. When politicians make
little cuts in the rate of spending growth, every interest group
mobilizes to
protect its little piece of the pie. That’s why you must cut government
like
you take off a Band-Aid: quickly and all at once.
It’s
not hard to balance the budget.
On my show, we made enough cuts to create a $237 billion surplus. I cut
whole
departments, like Education and Commerce. I cut two-thirds of the
Defense
Department (which still leaves it much bigger than China’s). I indexed
Medicare, Medicaid and Social Security to inflation, raised the
retirement age,
and took away benefits for rich people. But I don’t have to run for
office.
Congressmen do, and they can’t even manage to cut ridiculous tax breaks
like
those for ethanol.
Obama
predicted disaster if the debt
ceiling wasn’t raised. Some predict disaster if the ratings agencies
downgrade
Treasury bonds. I’m dubious. In 1995, President Clinton and Republican
Congress
couldn’t agree on a budget, so the government shut down twice, the
second time
for three weeks.
Did
the economy grind to a halt? No.
During the first shutdown, the stock market went up. During the second,
it
dropped then recovered.
The
alarmists screamed that the fight
over the debt ceiling would discourage lenders. Wrong. Ten-year
Treasury bonds
sold for a measly 3 percent interest (versus 15 percent in 1981).
I
wasn’t worried that Congress would
fail to raise the debt ceiling. But I am worried that Congress will
keep
spending.
Read
it at Townhall
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