Our problems are spending problems not revenue problems. It is simple: we cannot spend the money we do not have. Any organization would crumble if it continues to spend much more than it has and simply borrows money again and again. To blame those who want to stop the spending and refuse to ask more money from the people is truly absurd.

For two years our president had full control of both houses but chose to use government spending as a way to solve our economic problems. We warned him that such was an unwise policy but he did not listen. In fact, he used panic as a way to enact spending policies in a matter of hours. He chose to pass a health care bill after overwhelming popular opposition and his minions even justified passing the bill without reading it.

His last budget has hundreds of billions of dollars in deficit spending. The last Congressional elections sent a clear message: stop spending. His answer? To keep the course of out-of-control spending. Now those who were elected to refuse to continue the same old game are being blamed for “not compromising.” Compromising on what? On adding to the tax burden of Americans. How can anyone call “balanced” a compromise adding taxes when our real problem is spending?

The fact remains that there is a person who refuses to tackle seriously the need for entitlement reform. He dismissed the conclusions of his own debt commission because they told the truth: unless we deal with entitlements NOW we will suffer. But he is afraid of the political consequences of doing so. Instead, he waited for others to come with a plan so he could criticize it! Politics was his only reason. If it is not politics, why not tackle the problem?  Why not do something when he had all the power?

Answer: ideology. The left can blame all on “tax cuts for the rich” given by Bush but such rhetoric is myopic as it is a fact that government revenue increased with those tax cuts. These tax cuts generated a 42 percent spending increase in 2001 and 5 million new jobs since 2003. Economic growth more than doubled after the tax cuts while shifting a greater tax burden towards the so-called “rich.” The deficits coming since 2006 were a result of over base line spending, not from a reduction in revenue do to “tax cuts for the rich. The Congressional Budget Office (CBO) projected a 2006 budget surplus of $325 billion but the final 2006 numbers showed a $247 billion deficit. This represented a full drop of $572 billion. Why? Because spending was $514 billion above projected levels, and revenues were $58 billion below. This means that a whopping  90 percent of the change from surplus to deficit came from increased spending  and only 10 percent from lower-than-projected revenues.

What we know is that the only reason he is even considering cuts is because the Republicans control the House of Representatives. But all his proposals are similar: I propose cuts for later and you give me tax increases and more leeway for spending now.

We can spread the blame as much as we want but there is a truth: our President has failed to lead. Our salvation is going to come from an increase on the tax base. Such increase will never come from raising taxes, as such policy incentivizes less productivity, not more. In other words, as the tax rate moves on one direction the tax base moves on the opposite direction. Since 1952, the highest marginal income tax rate has dropped from an abusive 92 percent to 35 percent, and tax revenues have grown (not diminished) in inflation-adjusted terms while remaining constant as a percent of GDP.

Yet, ideology and “crisis-driven” emotionalism feeding class struggle continues to rule the day.

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