place economy among the first and most important virtues, and public debt as the greatest of dangers to be feared,” Thomas Jefferson once wrote. “To preserve our independence, we must not let our rulers load us with perpetual debt.”
Fast-forward to 2012, and the notion of “perpetual debt” is no longer a condition to be avoided. It’s a reality we must confront — a crisis we must solve. This is especially true because, as Jefferson warned, our very liberty is at stake if we fail to do so.
Remember the clash on Capitol Hill last year over raising the debt ceiling? It may have seemed like a huge battle at the time, but it was merely a holding action — a rear-guard maneuver to buy a little time. Which direction has federal spending gone since then? Up, of course, soaring toward record levels and endangering our economic future. We can’t put off the day of reckoning forever.
We are fortunate that some members of Congress get it. Rep. Paul Ryan, Wisconsin Republican and chairman of the House Budget Committee, recently came to speak at the Heritage Foundation about his proposed budget for fiscal 2013. Titled “The Path to Prosperity: A Blueprint for American Renewal,” it does something too many budget plans fail to do: face reality and propose some sensible solutions.
It’s not perfect, but there’s much to like. Mr. Ryan’s budget would roll back the spending excesses of the past, tackle entitlement programs and make defense a priority. This may sound like common sense, but many lawmakers seem content to make meaningless trims, not serious cuts. They act as if we can allow Social Security and Medicare spending to continue growing — and growing — on autopilot. They seriously think we can slash defense spending, yet continue fielding a world-class military.
They focus on the revenue side of the ledger. The problem, they insist, is that not enough tax money is coming in. The fact is that public debt, at current spending rates, is set to be as big as the U.S. economy itself by 2023 (just 11 years from now). You and I aren’t paying enough — that’s the problem, or so we’re told. It’s as if past tax hikes haven’t proved time and again that government will quickly consume any additional funds and then some.
Indeed, we should be reforming taxes. That’s why it’s good to see that Mr. Ryan’s budget would reduce the U.S. corporate tax rate (already the world’s highest) from 35 percent to 25 percent, and reduce the top individual income tax rate to the same level, while reforming our complex and unfair tax code. These changes would reverse the flow of jobs to foreign countries, improve incentives for workers and businesses to produce more, and motivate investors and businesses to create jobs.
Both Mr. Ryan’s budget and Heritage’s plan, “Saving the American Dream,” would take another vital step toward bringing the budget under control: repealing Obamacare. As I’ve shown in past columns, the law is beyond fixing. It must go.
Even if Obamacare were constitutional (and it isn’t), it makes a bad fiscal situation far worse. It adds trillions of dollars in spending — and billions in tax hikes. It massively broadens a broken Medicaid program. It takes a failed pricecontrol model for Medicare and expands it. It also introduces a subsidy scheme that is financially unsustainable.
“We must make our choice between economy and liberty or profusion and servitude,” Jefferson wrote. “If we can prevent the government from wasting the labors of the people, under the pretense of caring for them, they will be happy.” Lawmakers should heed the words of our third president — and have the courage to steer us off the path of financial misery.