Instead of listening to the Svengalis who insist that raising taxes is the only way out of the nation’s dire financial straits, new members of Congress should read Reason’s “How to Balance the Budget Without Raising Taxes.”
As Nick Gillespie and Veronique de Rugy point out, federal spending has increased 60 percent in inflation-adjusted dollars since 2001 and now consumes 25 percent of the nation’s Gross Domestic Product (GDP). Raising taxes will just take even more money out of the private sector and push even more people out of work.
“Can America really reduce its debt and deficit without raising taxes to job-killing rates or cutting essential services to developing-world levels?” Gillespie and de Rugy ask. “The answer is not simply yes, it’s that we have to.”
Their prescription: “A balanced budget in 2020 based on 19 percent of GDP would mean $1.3 trillion in cuts over the next decade, or about $129 billion annually…Note that these are not even absolute cuts, but trims from expected increases in spending.”
The beauty of this proposal is not only its simplicity, but the fact that it sets a concrete, achievable goal to shrink the federal government that also puts tax-and-spenders on the defensive, forcing them to make a political case against trimming “expected increases in spending” when the nation teeters on the brink of bankruptcy.
In his Nov. 29 National Review article, “What to Cut,” The Heritage Foundation’s Brian Riedl offers a similar prescription:
“Congress should enact government-wide spending caps that gradually return spending to 20 percent or less of GDP.”
In case Congress doesn’t know where to start, Riedl provides a helpful list of 12 specific areas that need to be either pruned back (federal pay, Pell grants, aid to states, duplicate programs), redirected (highway funds), saved (unspent stimulus funds) or completely eliminated (earmarks, Obamacare and its spin-off programs, high-speed rail, corporate welfare, and farm subsidies).
Get out the scalpels.