Friday, July 1, 2011

The debt-limit severity

Daniel Henninger, in his weekly column for the Wall Street Journal, sets the coming debate in pretty concise terms: “Democrats say they won't vote to raise the debt limit unless they get someone in the private sector to pay higher taxes. Republicans say they won't raise the debt limit unless they get reductions in public-sector spending without raising taxes.” The outcome Henninger describes as an igniter for the 2012 presidential election.

"In the universe inhabited by this generation's Democrats, public spending is life and taxes are their oxygen.

The debt-limit debate has made explicit that the Democrats will address whatever debt and deficit concerns are agitating the public by matching an upward spending curve with a steadily rising stream of tax revenue.

What's ultimately at stake here may be found in the dry pages of the Congressional Budget Office's Long-Term Budget Outlook released this month. From 2022 through 2085, CBO projects annual GDP growth of 2.2%, and growth in real earnings per worker of 1.4%. For 63 years! In short: We become Europe.

To seal the Faustian entitlement bargain, we eventually cave and consent to higher taxes to "pay for" what we said we wanted through the politics of past decades. We concede the economic and eventually the military future to Asia. We entertain ourselves, like any slow-growth nation, by watching unemployed youth riot in the streets. Or we vote not to do it.

Given the stakes, any GOP presidential candidate who tries to pocket the nomination with no more argument than that the economy is all Obama's fault should be defeated. People are looking for a path forward, not some Republican version of hope and change.

The $14.2 trillion debt limit began as a Treasury technicality. It is now a metaphor for the 2012 election."

But before we even get to the 2012 campaign, there’s a more immediate issue of severity on the horizon that Mark Levin made an even more explicit comment concerning, which I’d be hard-pressed to disagree with at this juncture:

“If the only way – according to Obama, and he is the president, so he’s got a lot of power, and according to the Democrats in the Senate, and they do run the Senate and they have a lot of power – if the only way that they’re prepared to make a “deal” on the debt ceiling is to demand increases in taxes, then the Republicans need to let it go, that is, let the system collapse…It’s catastrophic if they raise taxes, and don’t address in a systemic way the debt, because you can’t keep putting that off. So we draw a line in the sand…this is Obama’s Waterloo, and we need to be Wellington…there’s a collapse coming either way. If we can’t make significant progress with a balanced budget amendment and slashing spending and capping future spending, then there’s no hope. And my point is, if the problem is Obama, and it is, and the problem is Reid, and it is, and these people are INSISTING that we go over the edge with their policies, but that we not do it on their watch, we do it on our children’s watch, I say ‘No, no, this is our responsibility. We’re the parents and the grandparents. Let’s get it over with, let’s take care of it now.’…I’m not saying I favor a collapse, they’re the ones saying it’s going to come, and they’re the ones saying ‘we’re going to continue down the road to what will be massive dislocation and massive…civil unrest and violence. So let’s address this now, August 2nd, if that’s the date.”

And make no mistake, to prove that his way is the only way, and if we push against that way in the form of rejecting an increase in the debt ceiling, then the first thing Obama and the Democrats will actually cut will be the necessities, not the desirables, to sustain the maximum amount of pain on We the People, in a last-ditch effort to make more come running back to Big Daddy Government. The sad thing, pointing back to Levin’s question in the previous post of 'what we’ve become', is that far too many will eagerly return. It’s past time to start standing on our own, folks, to become independent once again.  Remember that going into this weekend.

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