Wednesday, August 13, 2008

Worrying About The National Debt

Worrying About The National Debt

There's a new ad on the blog for a movie called I.O.U.S.A. I'm guessing that since they interview Warren Buffett and other billionaires that the proposed solution will be an increase in tax rates--not a reduction in spending. But what the heck: running deficits is really a bad idea. I wish that I could blame this on Democrats, but Republicans have been quite willing to whore after votes with various special interest spending projects the last few years.

I try not to laugh when I see liberals worried about deficits. What next? Will John Edwards and Bill Clinton start making impassioned speeches about the importance of fidelity? Will Nancy Pelosi start arguing that young women are spending too much money on plastic surgery? Perhaps Michael Jackson will start warning parents of the dangers of child molesters.

Here's a piece of bad news: President Clinton raised taxes in 1993 to solve the deficit. It made very little difference--because Congress (then controlled by Democrats) increased spending enough to wipe out most of the gain. What finally helped was when Republicans gained control of Congress in 1994, and actually, for the first time in decades--cut spending.

Deficits are bad. Raising taxes might be a partial solution to deficits. But when nearly all Democrats in Congress, and most Republicans, pass a $300 billion farm price support program that transfers taxes from middle class Americans to couples making $1.5 million a year--it is clear that most of Congress doesn't see a crisis. Democrats like Warren Buffett are hard to take seriously when they give money to people like Barack Obama--and then complain about the deficit.

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