Sunday, November 14, 2010

Showboating the Federal Deficit

President Obama created the National Commission on Fiscal Responsibility to suggest solutions to the nation’s fiscal problems. The commission was to be bipartisan; incorporating Democratic and Republican ideas with the obvious effect that the Democrats, at that time controlling the Senate, the House of Representatives and the White House was surrendering their political advantage in advance of negotiations.

Then the President appointed two chairmen of the commission; Erskine Bowles, the Democratic co-chair has a big business background and a small government agenda; and Alan Simpson, the Republican co-chair, had been a US senator whose voting record was solidly cautious conservative.

It is no surprise that these Obama chairs led their commission to endorse proposals that would solve the long-term deficit by cutting back Social Security, Medicare and other social welfare programs. Thus the poor, the sick and the elderly would pay for the tax breaks and bailouts for the already wealthy.

In addition, the co-chairs are proposing a mixture of tax cuts and tax increases - tax cuts for the wealthy, tax increases for the middle class. They suggest eliminating tax breaks that mean a lot to middle-class Americans, including the deductibility of health benefits and mortgage interest, raising the age of social security eligibility, increasing the Federal Gasoline Tax, etc.

The suggested changes would erase nearly $4 trillion from projected deficits through 2020 and stabilize the accumulated federal debt now hovering about $14 trillion. Half of this enormous debt is directly attributable to the tax reductions installed by President George W. Bush and the growing cost of the US military establishment that rules the world. Our country spends more on its military than all other nations in the world combined. We have more than 1000 military bases on the soil of 175 of the 192 member states of the United Nations Most of these countries buy US Treasury Bonds in spite of the big US deficit. Is there an element of compulsion here? Does China actually represent a military threat to the United States? For all the saber-rattling during the Russian-Georgia crisis, did anyone really think Americans were going to die for South Ossetia? The U.S. Navy has eleven large carrier battle groups structured to fight the Imperial Japanese Navy. The Imperial Japanese Navy?

Yes, the Bowles-Simpson panel seeks a cut in the military budget of $100 billion per year. Anybody want to bet on that reduction passing this Congress or any other Congress representing 435 congressional districts each with at least one juicy contract from the Pentagon?
They must be kidding.


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