Public Sector v. Private Sector

Writing in the WSJ, Daniel Henninger says “One or the other. It’s time to choose.”  I agree.  The Democrats’ agenda is clear after 18 months in power.  They want to manage the economy by legislation and regulation.  That takes money.  The Democrats have no credible plan to cut spending because they have no desire to cut spending. 

That is why Obama impaneled a commission to study the deficit issue and report back later.  He is looking for political cover for a plan that will inevitably promise to cut spending while actually increasing taxes.  The promised spending cuts will never come, but the tax increases will.

 The deficit and public debt are a problem.  They are a big problem.  But taxation levels did not cause them.  According to the Heritage Foundation, “[s]ince World War II, tax receipts have averaged around 18 percent of GDP.”  The taxation level has dipped below this average due to the recession, but will soon be moving into unprecedented territory — easily 20% or more of GDP — if the Democrats have their way.

 Meanwhile, federal spending is going through the roof — from $11,337 per household in 1965 to over $30,000 per household today (in inflation-adjusted constant dollars).  Let me say that again — federal spending on a per-household basis has tripled during my lifetime.   Federal spending has in fact increased at an average rate over double the rate of inflation for the past  20 years. 

 We are not taxing too little.  We are spending too much. 

 It is time to choose.  Do we want more power and money given to taken by public employees?  Or do we want less government, less spending, and a vibrant private sector.  The key, as Mr. Henninger says, is taxes.

 Higher taxes would simply be spent on increasing the size and power of government, not used to reduce the deficit or pay down the national debt.  Meanwhile, increased tax burdens on private employers would negatively impact employment and growth.

The GOP must stand firmly against raising taxes, even in the name of deficit reduction.  

 Via Real Clear Politics.

Published in: on July 29, 2010 at 5:47 pm  Leave a Comment  

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