The Clock is Ticking

Just recently, the latest attempt to raise the national debt ceiling failed.  We have already reached the debt ceiling of $14.3 trillion last month, and there is fear that if we don't raise it by August 2, the nation will default, which would be catastrophic to our already weak economy.  The reason is that most of the money in the budget has already been committed when the budget was approved in March, which unfortunately requires more borrowing just to pay the interest on the debt, let alone everything else in the budget.  The government can trim a little here and there with accounting tricks for now to prevent a default, but that can only last for so long.

We at the TSAP were against raising the debt ceiling back in January, but that was before the budget was passed and the money already committed.  Now, however, we denounce Boehner and the Republicans' asinine and ideological attempt at playing chicken with our nation's finances, for very obvious reasons.  Now that both parties have already ordered their dinner and ate most of it, one party decides to dine and dash--only in this case it's not just a restaurant but the entire nation.  And the penalty would be far worse than a mere few hours of washing dishes.

The only way out of this, ironically, is to raise the ceiling just enough to get through the rest of the fiscal year (e.g. to about $15 trillion), but tie it to significant tax hikes and spending cuts.  These would include:

Tax Hikes

• End the Bush tax cuts immediately for the top two brackets, and the rest of them effective one or two years later.
• Create a new 50% bracket at $1 million and up immediately, and possibly even a 60% or greater one at $10 million.
• Close ALL loopholes in the tax code that benefit those with high incomes.
• No more tax breaks or loopholes for large corporations--absolutely NONE.
• Remove the tax cap on Social Security immediately, so everyone pays their fair share.
• Pass a financial transactions tax of 0.25%.
• Raise the alcohol taxes and other excise taxes significantly.
• Raise the gas tax by a penny a week until it is $1.00 greater than it is now.
• Consider significant tariffs on imports from countries where workers are paid next to nothing.

Spending Cuts

• End the wars in Iraq and Afghanistan, with a complete withdrawal by December 31, 2011 (Iraq) and no later than July 1, 2012 (Afghanistan).
• Get out of Libya as soon as Gaddafi is captured or killed, if not sooner.
• Cut the defense budget (including the hidden parts) in half within a year, and close all unnecessary overseas military bases.
• No more subsidies to large corporations or Big Agro--NONE.

Do all of those things and the budget should be balanced for several years to come.  But of course that would require logic and common sense, two things that are unfortunately lacking on Capitol Hill.  It really makes you wonder if there's something in the drinking water over in DC.