It's no secret that this site is an avowed opponent of big government and believes that America's debt crisis is solely a function of out-of-control spending and government profligacy in virtually every area the state infects.
The fact is that out-of-control discretionary spending, unfunded wars and a looming entitlement crisis are pushing America to the brink of fiscal collapse. Both Republicans and Democrats share equally in the blame. George W. Bush -- enabled by first a Republican Congress, then a Democratic one -- doubled the size of the national debt in just eight years. Despite his assurances that he would do something about the deficit, Barack Obama has managed to be even worse than his predecessor, with his last fiscal budget clocking in with a $1.4 trillion deficit. Democrats in Congress have even failed to pass a budget. Short of taxing the rich and shrieking about rich yacht owners, the Democrats have done little to demonstrate any concern whatsoever with the massive fiscal crisis. President Obama -- as with the perpetual warfare state, executive power and civil liberties -- has completely ignored Candidate Obama's own words. Given that Obama promised to cut the deficit in half in four years, his presidency has been an utter failure.
But I was bitterly disappointed to see Mitch McConnell and Eric Cantor walk the GOP away from a plan that would cut the deficit by an estimated $4 trillion over the next decade. Here's why:
1. Big-picture legislation requires compromise. There is not a single piece of significant legislation passed in the last 50 years that did not require each side to give, even a little.
2. Ronald Reagan, the ultimate conservative icon and the greatest president of the 20th century, presided over some sort of tax increase 11 times in 8 years. For conservatives to suggest -- as Cantor has implied -- that any tax increases are completely off the table because they are "not conservative" is preposterous. It's yet another example of the 21st century Republican Party wrapping itself in only part of Reagan's legacy while completely ignoring others.
3. Politically, Republicans (again, particularly Cantor) need to be careful about defending taxes and loopholes, such as the capital gains tax, that benefit only the wealthiest Americans. While most Americans do not want marginal rates to increase, the GOP is playing a very dangerous game by appearing to align themselves behind policies that only benefit the rich.
4. We've noted this before, but it is highly misleading for Republicans to suggest that the way to a balanced budget is through tax cuts, as Tim Pawlenty has. Marginal rates increased incrementally in 1993, and due to a combination of increased revenue and spending cuts, the government was running a surplus by 1999. That increase was reversed by the Bush tax cuts in 2001, and in FY 2002, the government began running a budget deficit and has never recovered. It is so mind-bogglingly stupid for anyone to suggest that cutting taxes automatically increases revenue, or raising taxes cuts revenue, that I cannot take them seriously.
5. Just so we are clear, my ideal tax reform would include 2 items: (i) throwing out the entire tax code, including all tax breaks and loopholes; and (ii) instituting a flat tax of 22 percent, applied equally to individuals and corporations.
6. For conservatives to suggest -- as Gov. Pawlenty has implied -- that it would be better for the U.S. to default on its obligations than to raise the debt limit is as unconservative a policy as one could concoct. Conservatism values stability, order and reason; it eschews radical change. And if the U.S. government defaults, it would throw the global financial market into upheaval. This is not in any way conservative. It is suicidal and stupid.
7. Since he took office, President Obama has engaged in egregious demagoguery on Social Security, but the fact that he put not only Social Security, but Medicare, on the table is significant. This has upset liberals like Glenn Greenwald, who have shrieked about taking money out of seniors' pockets and giving it to Wall Street.
8. The most critical part of any long-term deal is revamping Social Security and making it sustainable. As such, please ignore the atrocious AARP ads.
9. Finally, most damning to the Republicans: In March 2011, the House GOP blasted out a fantastic, in-depth study of comparable debt crises that had taken place over the past several decades across the globe. The report found that successful policy solutions to these crises had an average ratio of about 85% spending cuts to 15% revenue increases. In March, this was considered the "conservative" avenue. It has recently come to light that Republicans walked away from a package with a ratio of roughly 83/17. Minimally, walking away over such a small change in ratio makes the GOP look petulant at best, and hyper-partisan at worst.