Budge blunders continue.

• Author: Emord, Jonathan W.
• Position: ECONOMIC OBSERVER - Budget cuts and management of national debts

PRES. BARACK OBAMA undoubtedly knows that if he had offered a budget to Congress that included cuts sufficient to eliminate the national debt over the next decade, he necessarily would become the villain of his own party (having to bleed many a pet agency and program). No leading Democrat wants to reduce government spending by more than a few hundred billion dollars per year, although the nation needs in excess of one trillion dollars in cuts just to eliminate the annual deficits (without doing a thing to reduce the existing 16.7 trillion-dollar debt). No leading Democrat is willing to take any action that alters the reality that spending overall--and on entitlements in particular--is unsustainable, bringing the nation and the economy down with each passing day.

The President is able to avoid accountability for his failure to lead because he rests atop a near majority of the electorate that benefits from entitlement spending and is unwilling to accept any degree of sacrifice associated with an immediate change to Social Security, Medicaid, and Medicare. He therefore does nothing substantive to alter the status quo and will likely do nothing substantive to achieve fiscal stability for the remainder of his term.

Nevertheless, a true love of country compels any responsible person to recognize that substantial cuts in government spending are required and that the precarious state of the domestic economy makes any additional "revenue enhancements" to be ones likely to yield unemployment and more economic stagnation but no revenue capable of altering the nation's dire financial circumstances. Consequently, the only way out of the mess we are in is to cut spending, roll back regulation, and reduce taxes on those with the capital necessary to grow the economy. An intelligent approach lies in doing everything possible to grow the private sector, but that is an unacceptable alternative for those wedded to existing entitlements and to political power over market forces.

The tax increases already slated are said to be modest because they affect only the top one or two percent of taxpayers. That opinion misleads, however, because the top one or two percent are those in this economy with the capital accumulation needed to employ, expand, and innovate. In short, by diminishing the wealth of the rich in the midst of a recession, the Obama Administration has shot itself in the foot. The increased taxes will do nothing to reduce meaningfully annual deficits...