and ends with “T” for tax.
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Mr. Volker seems to think that Congress will eventually pass the budget that President Obama proposed in toto. President Obama, along with the majority of Democrats in Congress believes that the U.S. needs to emulate the economic model of Western Europe to make life in America more “fair”. This lifestyle doesn’t come cheaply. Even with unrealistic economic growth projections the administration envisions trillion plus yearly deficits for as far as the eye can see. What does this level of borrow and spend mean for our country?
The debt is projected to equal 140 percent of gross domestic product within two decades. Add in the budget troubles of state governments, and the true shortfall grows even larger. Greece’s debt, by comparison, equals about 115 percent of its G.D.P. today
If 140% of GDP is hard to fathom, here’s what President Obama envisions as a “fair” amount for the government to demand from you.
Before the recession, federal spending totaled $24,000 per U.S. household. President Obama would hike it to $36,000 per household by 2020 — an inflation-adjusted $12,000-per-household expansion of government.
Since Americans don’t collectively earn enough to fork 36 grand over to the federal government per year without ruining our economy, President Obama intends to put it on our country’s charge card. What happens when a nation wracks up that much debt in such a short time frame?
The gold-plated credit rating of the United States — an article of faith across America and, indeed, around the world — may be at risk in coming years as the nation copes with its growing debts.
That sobering assessment, issued Monday by Moody’s Investors Service, provided a reminder that even Aaa-rated United States Treasury bonds, supposedly the safest of safe investments, could be downgraded one day if Washington failed to manage the federal debt.
Moody’s said the United States and other major Western nations, particularly Britain, have moved “substantially” closer to losing their gilt-edged ratings.
In the case of the U.S., the downgrade could come as soon as 2013 at current and projected spending levels. At the same time that President Obama and the Democrats controlling Congress are rushing headlong to remake the U.S. into Europe, the New York Times, a vital cog in the progressive machine notices an inconvenient fact. Europe can’t afford to be Europe:
Across Western Europe, the “lifestyle superpower,” the assumptions and gains of a lifetime are suddenly in doubt. The deficit crisis that threatens the euro has also undermined the sustainability of the European standard of social welfare, built by left-leaning governments since the end of World War II.
Europeans have boasted about their social model, with its generous vacations and early retirements, its national health care systems and extensive welfare benefits, contrasting it with the comparative harshness of American capitalism.
Being the Times, they can’t seem to comprehend that trying to be a “lifestyle superpower” in the first place caused the massive debts that are now endangering the “benefits” of todays would be European welfare staters. In short, the economic path that President Obama and his Congressional companions have us on is unsustainable and the proof, Greece, is unfolding before our eyes yet they refuse to see it.
What do this year’s budget and the president’s ballyhooed “debt commission” have in common? Neither will be finished before this Fall’s elections. For the first time since 1974 Congress will not pass a budget. Many have speculated that the Democrats don’t want to to go “on the record” endorsing massive spending just before they must face the voters in November. The same goes for the debt commission. Congressional Democrats don’t want to be saddled with enacting the massive tax increases the commission is guaranteed to recommend. Remember, Peter Orzag downgraded candidate Obama’s promise not to raise taxes on the middle class to a pledge to try not to.
Maybe it’s watching too many episodes of the X-Files, but I can’t help but wonder that this is more than Democrats being afraid of voter wrath at the polls. Senate rules stipulate that the budget can’t be filibustered. What if Congressional Democrats are waiting until after the election to pass a budget with the inevitable VAT tax that the president’s commission recommends? With all the shady manoevres the Democrats pulled to pass the nationalization of health care I don’t think it’s a stretch to believe they would pass a VAT tax in a lame-duck session.
Every incumbent Democrat should have to answer where they stand on President Obama’s budget proposal and whether or not they would vote for any tax increase in the lame-duck session of Congress. American voters have a right to know where they stand before they head to the polls.