FRONT PAGE CONTRIBUTOR
All of a sudden, the President says we don’t have a debt crisis
Presto, change-o! At the beginning of the year, we were sternly lectured that huge tax increases were absolutely necessary to confront our looming debt crisis. America was driven to the edge of the “fiscal cliff,” ostensibly producing business panic that explained a fair measure of Barack Obama’s permanent economic malaise, by the President’s refusal to budge an inch from his demands for those deficit-fighting tax increases.
During the previous years, the President insisted that this “payroll tax cut,” funded by a raid on Social Security, was the vital ingredient to American economic survival. He asked citizens to send him their horror stories about how losing $60 in higher taxes from each paycheck would ruin their lives. But at the end of 2012, Obama let this supposedly crucial tax cut die without saying one single word in its defense. I mean that literally – he made absolutely no effort to protect it during “fiscal cliff” negotiations. The urgency of deficit reduction through tax increases was simply too great!
Throughout the 2012 campaign, every proposal for growth-inspiring tax cuts, and every serious effort at reforming America’s embarrassing tax system – from Mitt Romney’s relatively modest proposals, through the flat tax ideas advanced by Rick Perry and Newt Gingrich, to Herman Cain’s “999 Plan” – was savagely denounced by the President and his team because they would supposedly risk increasing the deficit. A fraudulent study supposedly “proving” that Romney’s plan didn’t “add up” was endlessly cited by the Obama campaign, even after its authors admitted it was bunkum. The same argument is invariably advanced by liberals whenever ideas like the Flat Tax, Fair Tax, or even small tax rate reductions are suggested. The possibility (indeed, to any serious student of economics, absolute certainty) of increased government revenue from the combination of lower rates and higher economic output – a smaller slice of a larger pie – is dismissed out of hand. We simply cannot risk adding a single dollar to the deficit by reducing the tax burden on American consumers and businesses!
But all of a sudden, Barack Obama sat for an interview with George Stephanopoulos of ABC News and breezily asserted that “we don’t have an immediate crisis in terms of debt.”
Well– I understand. Which is why, at some point, I think I take myself out of this. Right now, what I’m trying to do is create an atmosphere where Democrats and Republicans can go ahead, get together, and try to get something done. And, y– you know– I think what’s important to recognize is that– we’ve already cut– $2.5– $2.7 trillion out of the deficit. If the sequester stays in, you’ve got over $3.5 trillion of deficit reduction already.
And, so, we don’t have an immediate crisis in terms of debt. In fact, for the next ten years, it’s gonna be in a sustainable place. The question is, can we do it smarter, can we do it better? And– you know, what I’m saying to them is I am prepared to do some tough stuff. Neither side’s gonna get 100%. That’s what the American people are lookin’ for. That’s what’s gonna be good for jobs. That’s what’s gonna be good for growth.
That comment about how he “takes himself out of this,” incidentally, is the President’s excuse for ignoring his absolute legal requirement to submit a budget. His aides are now vaguely suggesting that he might put something on the table two months after the deadline.
Obama repeated this “no crisis” mantra several times during the interview:
Well, the– you know, those are still tough. But the conversations are still takin’ place. And– and part of what– I’m– I’m tryin’ to encourage Congress to think about is yes, we’ve got some big disagreements on the budget. But we’ve made some big cuts. There’s not– in any way– an immediate crisis with respect to– our finances.
The economy is growing. And, you know, there may be disagreements that we can’t bridge right now– when it comes to financial situation. I’m hopeful that we can. But let’s not have this crisis mentality stall all the other progress that needs to be made to help– Americans find jobs, help Americans grow the economy.
It’s hilarious to watch the shrill drama queen who wailed that America would collapse in the face of sequestration try to pose as the calm, reasonable guy who says everything is under control, so we should avoid a “crisis mentality.” It’s also a hoot to hear the guy who gave us years of double-digit real unemployment after squandering a trillion dollars on a string of Solyndra disasters assure us that he’ll be finding jobs and growing the economy any day now, if we just open our wallets a little more. Sorry, Mr. President, but even your most devoted fans in the media are never going to be able to sell you as Mr. Spock or an investment genius again.
This is all a lovely demonstration of the true Democrat attitude about “deficit reduction”: it matters only as a cudgel for beating tax increases out of the reluctant populace. When it’s time to spend more money, the deficit vanishes completely, and the big spenders enjoy a cute little laugh about the absurdity of anyone thinking a government heading for $20 trillion in debt, plus another $100 trillion in entitlement liabilities, has a “debt crisis.” But when talk turns to tax reduction and reform, suddenly the “debt crisis” becomes overwhelming in its urgency, and terrifying in its implications. In the hands of a glib socialist like Obama, the debt crisis can transform from kitten to Cthulhu and back again almost instantly.
If Obama truly believed what he says in this interview about the agreeable nature of the debt situation – we’re good for at least ten years, no big deal, in fact we can run up even more debt, no problem – then why not put tax cuts on the table, take a very safe gamble on the proven power of the Laffer Curve, and get this economy moving again? For the sums Obama has already added to the debt, we could have had the Flat Tax or Fair Tax – and that’s assuming the worst-case deficit projections of their harshest critics came true. But let’s at least talk about some strong pro-growth tax cuts – no temporary tax holidays, please, because we’ve had quite enough of those fiscal cliffs. Permanent job-creating wealth-generating reductions only.
Hey, if it doesn’t work out, and the deficit rises unacceptably, we can always raise taxes again in the future, right? Obama won’t even have to write a new speech – he can just recycle everything he said about the need for tax hikes, the last time he pretended to take the deficit seriously. Call his bluff, Republicans. Throw every stupid, irresponsible thing he said in this Stephanopolous interview right back in his face, demand tax cuts to stimulate growth instead of deficit spending, and force him to present his core belief honestly to the American voter: only the ruling class can be trusted to “gamble” with deficit money, and the size of the national debt doesn’t matter, as long as the government gets bigger.