By John Stossel
Americas political class predicted disaster if Congress didnt raise its debt limit. I think that was a scam to get more money.
See the poor politicians dont have enough and they need to borrow more. The president said if he didnt get more money Social Security checks wouldnt go out. Why not?
We taxpayers are cheap. This year well give them only $2.2 trillion. They want to spend $3.8 trillion.
With $2 trillion they can pay Social Security Medicare the interest on the debt and still have billions left. Its billions more than the government spent when President George W. Bush took office. Whats the problem?
The problem is that Republicans and Democrats under Bush and President Obama doubled spending. Now Obama wants more taxes. Taxes shouldnt be the answer when spending is the problem.
Grover Norquist who heads
Americans for Tax Reform 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 isnt 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 thats 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 wouldnt 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 its not a hidden tax increase.
Milton Friedman always said taxes dont 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 hasnt gotten enough attention.
We need to ask what it is government should do Norquist said. But its going to be knockdown drag-out. All government overspending creates the constituency for its own perpetuation. ... Weaning people off that is very difficult.
Hes right.
When politicians make little cuts in the rate of spending growth every interest group mobilizes to protect its little piece of the pie. Thats why you must cut government like you take off a Band-Aid: quickly and all at once.
Its 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 Chinas).
I indexed Medicare Medicaid and Social Security to inflation raised the retirement age and took away benefits for rich people. But I dont have to run for office. Congressmen do and they cant even manage to cut ridiculous tax breaks like those for ethanol.
Obama predicted disaster if the debt ceiling wasnt raised. Some predict disaster if the ratings agencies downgrade Treasury bonds. Im dubious. In 1995 President Clinton and the Republican Congress couldnt 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 wasnt worried that Congress would fail to raise the debt ceiling. But I am worried that Congress will keep spending.
Columnist John Stossel is nationally syndicated by Creators Syndicate.
