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Every now and then you read a sentence that hits you like a hammer. So it was the other day when I thumbed through the April 17 Newsweek, which I hadn’t picked up in many moons.
I chanced upon an essay by Niall Ferguson, “Doing the Right Thing: America finally comes to its senses and faces the fiscal facts.” He put his finger on the choice America faces today when it comes to solving the budget crisis.
Ferguson quoted Winston Churchill:  “The United States will always do the right thing—when all other possibilities have been exhausted.” He concluded:
“For a long time many people clung to the delusion that the United States could simply borrow $1 trillion a year for the rest of time. Now only two possibilities remain.
”The first possibility is the one devised by Rep. Paul Ryan, which would eliminate the deficit largely through deep spending cuts and Medicare reform. Possibility two is President Obama’s bid to close the budget gap with more modest cuts and tax hikes on ‘millionaires and billionaires.’
“It’s a bracingly binary choice. Shrink the government. Or squeeze the rich.”


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3 comments on “The Binary Budget Choice

  1. Carbine says:

    Since Obama’s “plan,” if it can even be called that, comes nowhere near balancing the budget in this lifetime or any foreseeable one, it’s obvious that deeper cuts are going to be necessary. Why not start with the Ryan plan, and see how far we can reduce our spending before asking the productive sectors of the populace to pay even more? “Millionaires and billionaires” already provide the lion’s share of federal income tax receipts. They also are responsible for the creation of most new jobs (and new industries, for that matter) in the country.

  2. Chris says:

    Well, that makes sense except….

    (1) President Obama doesn’t actually have any plan.
    (2) “More modest” is relative — you could take away the entire income of those making $100K and up, and it still wouldn’t close the gap.

    It may be that there will be tax increases — in fact, it seems likely. But, there will have to be serious cuts in spending to make up for the $1.6T annual deficit, the $23T Medicare short fall and $550B Social Security shortfall. The rich simply don’t make enough to come close to paying for all that.

  3. Carbine says:

    Obama’s “plan” isn’t realistic–you can’t close the gap just by taxing the rich. Some taxes may have to go up, but if there are not serious cuts to government spending it will all be for naught. Republicans ought to demand that the cuts come first.

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