Nineteen months ago President Obama was inaugurated. At this very moment leaders of the Republican party began to voice their concerns about the deficit.
We didn’t start spending money like a drunken sailor yesterday. We began ten years ago with the Bush tax cuts, passed through reconciliation. Now Obama wants to let the tax cuts for the richest 1% of the country expire and keep the tax cuts for the lower and middle classes. Is this unreasonable? Where else is the money to reduce the deficit going to come from?
Every economist agrees that if the tax cuts are allowed to expire that the budget deficit will be reduced by about 30%, 680 billion dollars over the next ten years. Otherwise, nearly all of this would go to those making more than $500,000 per year.
Is there anything we have on the table that could reduce the deficit so much? Their argument is that tax cuts is a bad idea given the state of our economy. Will the top 1% of the earning populace rush out to Walmart and Target if the tax cuts are extended or pocket the cash and put it in the bank?
Many so-called fiscal conservatives complained about the auto bail out. This is one of the most successful government programs since the New Deal. Detroit is back in business again. Many complained about the bank bailout but most of the money that the government laid out has been repaid.
When will the fiscal conservatives put their money where their mouth is? Allowing the tax cuts to expire will only raise the tax rate about 3% on the richest Americans, a rate that is identical to that during the Clinton years and lower than the rate during the Reagan years.
I may not be an economist but this is the biggest bang for the buck, deficit reduction wise, while causing the least amount of pain to those who can afford it the most.