Liberals, Progressives and even middle-of-the-road Democrats, if you are interested in the truth read on. If you have no interest and just wish to live in your CNN, NBC, MSNBC, et al, Chuck Schumer, Joe Biden “we are always right and conservatives are nothing but hate mongering, gun toting, racist savages” bunker then please go back to whatever it was you were doing. But, if you believe we cannot go on spending trillions we do not have, then let’s talk.
First, spend three minutes reading this editorial piece from the Las Vegas Review Journal as a primer.
WHAT OTHERS ARE SAYING
Inflation Reduction Act Will Add to the Deficit
LAS VEGAS REVIEW-JOURNAL
Massive government spending programs typically cost more than projected. At some point, one might even call it a pattern.
The latest example is the ill-named Inflation Reduction Act, which Democrats rammed through last August. The main thrust of the legislation was to push a radical green agenda. It included consumer tax credits for electric vehicles and roof-top solar. The bill gave corporations access to hundreds of billions in tax credits for clean energy projects. It also provided the U.S. Department of Energy $12 billion to craft a new loan program for replacing and upgrading energy infrastructure.
Democrats wanted to convince the public that massive subsidies for otherwise unattractive renewable energy projects would reduce the nation’s debt. The bill also boosted funding for the IRS. In theory, increased enforcement would increase tax collections.
That was supposed to net the government $130 billion over 10 years. The legislation raised corporate taxes by more than $200 billion. It allowed Medicare to negotiate prices of prescription drugs. The Tax Foundation projected drug pricing provisions would save almost $300 billion over the decade.
At the time, the White House estimated the bill would reduce the deficit by $300 billion over the next decade. President Joe Biden declared, “We’re cutting the deficit to fight inflation by having the wealthy and big corporations pay part of their fair share.” Hold on to your hats, but that’s not happening. Shocker.
“Originally, this was supposed to be a deficit reducer, but now it has flipped. Instead of reducing the debt, it will add to it,” Kent Smetters, the faculty director of the University of Pennsylvania’s Wharton Budget Model, said. He projects the bill will add $750 billion to the defi cit.
Why? Because people respond to incentives. The bill didn’t include caps on many tax credit provisions. Individuals and companies are rushing to take advantage of that “free money.” For instance, Tesla reduced its prices to make its vehicles eligible for the tax credit.
The costs of the tax credits were initially projected to be under $390 billion. Penn Wharton’s model now suggests the credits will total more than $1 trillion. The cost of the electric vehicle tax credit alone is now likely to top the initial estimate for all the tax credits.
The revenue raising provisions face challenges, too. Republicans have opposed hiring new IRS agents. Analysts are unsure when a new 15 percent corporate minimum tax will start producing revenue as companies use COVID losses to offset taxes. Lawsuits may prevent Medicare from negotiating drug prices.
Democrats can cover their ears if they like, but reducing the deficit is going to require spending restraint, not using statistical games to low-ball the cost of the cost of new green handouts.
LAS VEGAS REVIEW-JOURNAL
So, when you had control of all of government, like you did recently, why didn’t you raise taxes enough to cover all your spending programs and pay for our national debt service? The rich can afford it, right? Millennials won’t need as much Social Security or Medicare, right?
You want to cut defense spending while the Chinese, Russians, Iranians and North Koreans are gunning for us with everything they have. Is that a gamble you are honestly willing to make?
You are not doing ANY of these things because…they are political suicide!
So, instead, we are very s-l-o-w-l-y committing financial suicide as a nation. Because, by the time we drum up enough political will to actually tax the right amount and reduce spending to the right amount to not completely implode our economy and form of government, it will be too late. When the debt service cost on the enormity of the national debt exceed our ability to pay, when combined with our rapidly worsening and completely out of control spending, it will exceed the aggregate total of the wealth of everyone in our nation. The economy will cease to function as all of the invested wealth (that’s everyone’s, EVERYONE’S, the wealthy, your 401K, my retirement savings, everyone’s) will not be enough to service the debt, support current government spending and invest enough to create the jobs necessary to sustain positive economic activity.
So, what must we do? Simple, come together before it’s too late, and develop a long term plan that makes everyone unhappy but averts complete disaster.
The Willow 