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President Obama talks a lot about "winning the future." But to a large degree, America's future will be determined by the ongoing budget debate between him and House Budget Committee Chairman Paul Ryan, with the American people deciding the outcome.
The budget debate can sometimes seem a bit complex, but there are really two key numbers to remember: 18 and 24. No matter when you start the clock — at the end of World War II, in 1970, or in 1990 — the average percentage of the gross domestic product that Americans have paid in taxes is 18%. And whether you look at the first or the last year of President Obama's 10-year budget, the percentage of GDP that he wants the government to spend is 24%.
If this model of $3 in and $4 out doesn't seem sustainable, it's not. And if you can't believe that our elected leaders in Washington would really let things get so out of control, consider this:
According to President Obama's own budgetary estimates, for every $4 that comes in this year, $7 will go out, and mandatory spending alone will surpass all federal revenues. In other words, if we didn't spend a dime this year on national parks, interstate highways or even national defense, we would still have a deficit.
Moreover, we face a colossal $14 trillion in national debt that we have already accrued.
So, facing such daunting fiscal challenges, what should we do? The Congressional Budget Office has provided scoring for three possible paths forward from here.
Simpler Tax Code
The first of these paths is the CBO's "extended-baseline scenario," the scenario under current law. In this scenario, the tax cuts of 2001 and 2003 would be allowed to expire, and spending would continue on schedule.
The second path is the CBO's "alternative fiscal scenario." This scenario incorporates changes to current law that are "widely expected to occur." In this scenario, the 2001 and 2003 tax cuts would be extended, politically infeasible efforts to limit health care spending would be reversed, and so on.
The third path is laid out in the Paul Ryan-authored House Republican budget. The Ryan budget would repeal ObamaCare, reduce non-security discretionary spending to pre-2008 levels and block-grant Medicaid payments to the states. It would simplify the tax code. It would seek to end corporate welfare and financial bailouts.
Contrary to some assertions, it would not cut taxes — except for the corporate tax rate, which it would reduce to the more internationally competitive rate of 25% (from 35% today).
The Obama administration and Democratic leadership could easily save some money by incorporating old Soviet propaganda posters like those above to manifest their actions and vision. Today, the Obama administration is inserting federal government dictates into major aspects of life and the economy ...
A phrase you hear in Washington a lot these days is "shared sacrifice." To an alarming degree, the budget debate has degenerated into a game of green-eyeshade arithmetic, with many in Washington demanding that we trade ephemeral spending restraints for large, permanent tax increases. The only ...
A very reliable source reports that the White House believes the Republicans have handed them a "political bonanza on Medicare." The Republican leadership, the source reports, counters that they are "insisting on an alternative health bill that might have avoided Medicare's current state of ...
As if more proof were needed about the minimum wage's devastating effects, yet another study has reached the same conclusion. Last week, two labor economists, Professors William Even (Miami University of Ohio) and David Macpherson (Trinity University), released a study for the Washington, ...
Much was written last week about how much thanks George W. Bush deserves in tracking down Osama bin Laden. The answer is: a great deal. Information extracted from al-Qaida operatives under Bush's interrogation policies ultimately led us to the compound in Abbottabad. But he did more. As an IBD ...
Posted By: boray(40) on 5/19/2011 | 11:45 PM ET
The difference between Obama and Ryan is that Ryan knows what he's talking about. Obama only knows what the democrats know -SPEND TILL WE'RE ON OUR KNEES, then blame the Republicans. Comparing the three plans, only Ryan's actually improves our economic situation. A no brainer.
Posted By: InCincy(3240) on 5/19/2011 | 8:38 PM ET
David Stockman recently critiqued both plans and made some very astute observations. Both of these bills have huge sacred cows: entitlements vs military industrial complex support. Ladies and gentlemen, the cows must all die or we will be crushed.
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