By: Nicholas Roch
It has been
well documented that America is in fiscal trouble. Lack of accountability in the government has
set the American economy spiraling downward as we continue to increase federal
deficits and accumulate additional national debt. A federal deficit occurs when government
expenditures are higher than the tax revenue raised by the government. The accumulations
of all deficits ultimately become the national debt. The current national debt is
$16,292,873,505,285.88 (Debt Clock, 2012) and is growing by the second. Each United States citizen’s share of that
debt is $51,693. Just to put it into
perspective, according to the Social Security Administration the national
average salary is $42,979.61 as of 2011.
The question facing congress now
is how to deal with the federal deficit.
Republicans and Democrats each have separate ideas on how to handle the
debt crisis. Traditionally, Republicans believe in less government interference
in the private sector and lower taxes. The current issue for Republicans is
that President Obama does not want to extend the Bush tax cuts to families who
make over $250,000 and individuals who make over $200,000, effectively returning
the tax rate to the levels they were during the early 2000’s. The thought of
tax increases has sent many in the Republican Party into frenzy. Grover
Norquist, founder and president of Americans for Tax Reform, has been an
outspoken critic of any sort of tax increases. He is so adamant about tax
increases that he “suggests” that Republicans sign a pledge to not raise taxes
upon entering Congress. If any members try to refute the pledge or publicly
criticize it, he paints them as a RHINO, Republican in name only. In his latest
outburst, Norquist has attacked respected veteran lawmakers such as Senator
Chambliss of Georgia, Senator Lindsey Graham of South Carolina, and
Representative Peter King of New York. He has gone so far as to say about
Representative King “I hope his wife understands commitments last a little
longer than two years or something” (Cohen, p.5).
If Republicans want to prove that they care about the middle
class, they cannot afford this kind of childish banter. In normal economic times
increasing taxes on those who make over $250,000 would have an adverse effect
on the economy and small businesses. A majority of small businesses in America
file as sole proprietorship so their revenue is taxed on an individual basis.
This in turn would be unacceptable. Unfortunately, these are not normal economic
times. Currently the US debt as a
percentage of GDP is around eighty percent with no sign of dropping in the
future. According to most estimates in the near future the GDP percentage will
be one hundred percent and above, without a clear plan to cut spending in order
to reduce the national debt. It is time
for both parties to return to a bill similar to that of the Simpson-Bowles Act
in which Congress would cut $10 of government expenditures for every $1 dollar
in tax revenue raised. It would be worth
considering temporarily delaying an economic recovery to ensure that we secured
a firm financial foundation for the future. A recommended approach for economic
recovery would be collaboration between Republicans and Democrats to focus on
fiscal crisis at hand rather than polarizing on standard political party
agendas.
http://www.ssa.gov/oact/cola/AWI.html
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