Obama claims that our debt problem is not taxing the rich enough. No, it is a spending problem. Why?
Well, here is what Bill Clinton’s former budget director, Alice Rivlin, had to say about Obamanomics. She was particularly vocal about the entitlement programs Medicare, Medicaid and Social Security. Her analysis was that, “They’ll drive federal spending up faster than our economy can grow. And revenues won’t keep up, so we have a problem. If you don’t have enough revenues to pay for the spending, you have to borrow. And the track we are on, if we go on doing what is in the law over the next several decades, our public debt will rise faster than our economy can grow.” Add to this entitlement mix ObamaCare, then you have an even greater problem looming.
Here are the plain facts about government spending now. The government spends $11 billion a day. Tax revenue only brings in $5 billion a day. So each day the United States goes deeper into debt by $6 billion.
Think that taxing the rich more would solve the problem? The Congressional Budget Office has already done a study on the impact of taxing the rich more. They concluded last year that taxing the rich would only help defray some of the government costs for 40 to 60 days. That leaves over 300 days where the government cannot cover its expenditures. The same situation we have now. Spending exceeds revenue.
Rather than cut spending, Obama has proposed more stimulus spending. If he spends more than the tax on the “rich” will cover, it means that the added revenue from the rich may slip to 25 to 30 days of covering government expenditures. It is counter-productive and not cost beneficial to taxpayers. It will further increase the debt.
Obama knows the math which is why he wants to raise the debt ceiling. By raising the debt ceiling, he can borrow more. As Arthur Brooks of the American Enterprise Institute characterized it, “It’s like your irresponsible brother-in-law runs up his credit cards and goes bust and says the real problem is because you’ve stopped sending me checks.”
Why is this so hard for people to understand? Spending creates debt! On the campaign trail, Obama said, “every day, families sacrifice to live within their means – they deserve a government that does the same.” He is a hypocrite if he doesn’t do what he said should be done and scale down spending.