The same “experts” who got us into this mess are now telling us that the only way out of our debt crisis is to “increase revenue,” but not by creating more jobs and therefore a larger tax base; no, they want to “increase revenue” by raising taxes on job creators who are taxed enough already!
Mrs. Palin criticizes Mr. Obabma and his administration but again sets forth no alternative plan, only platitudes. Keynesian economics would agree that "increasing revenue" is not necessarily the way out of financial difficulties, but it would advise building demand by deficit spending in its place. What Mrs. Palin argues for can either be seen as either a desire to shrink the American economy by stilfing demand (which will in turn result in fewer jobs, which will perpetuate a cyle of decreased demand) or as a hope for magic. I would be very interested in hearing Mrs. Palin's economic theory, in the hopes that she proves my conclusion wrong—unfortunately she provides no insight in her writings.
This debt ceiling debate is the perfect time to do what must be done. We must cut. Yes, I’m for a balanced budget amendment and for enforceable spending caps. But first and foremost we must cut spending, not “strike a deal” that allows politicians to raise more debt!
I could not disagree more with the first sentence, and the final sentence is either misleading or demonstrates a misunderstanding of the issue at point. If the debt ceiling is not raised, one of two options happens: the United States will fail to pay Americans, either as entitlements such as Social Security or salaries for the military; or it will fail to pay debt holders, but domestic and abroad. Mrs. Palin has already stated her opinion on (at least portions of) the former, but has said nothing explicit about the latter—yet her suggestions leave no other realistic option. If we do not raise the debt ceiling in order to pay our existing debt, and if default on the money that we owe, it will have the effect of devaluing our currency leading to inflation and increased costs on imported products, which make up a large portion (30%) of the resources required of our highly technology-centric economy. Defaulting on our debts will result in retaining less money within our own economy, leaving us in a much worse position in the long-term.
Should we have a balanced budget? Should we have a balanced budget amendment? Those are two very good questions, possibly with two very different answers. Is now the time to argue over it—under thread of default? The answer is a resounding no.
As we approach 2012, there are important lessons we can learn from all of this. First, we should never entrust the White House to a far-left ideologue who has no appreciation or even understanding of the free market and limited government principles that made this country economically strong.
Mrs. Palin implies that Mr. Obama and his adminstration's policies have weakened our country's economy, and with its inclusion in an article about the national debt would imply by relation that Mr. Obama is to blame for these. As we have raised in previous articles, Mr. Obama inherited the current budget deficit after excessive spending by the previous holder of the office.