Skip to comments.Dan Mitchell's Seven Minutes of Sanity
Posted on 12/07/2012 10:01:53 AM PST by Kaslin
You may think there isn't much common-sense anywhere close to Capitol Hill, but less than a ten minute drive away there is a veritable wellspring to be found in the person of Dan Mitchell, Senior Fellow at CATO. Mitchell is an expert on tax policy and supply-side economics.
With the clock ticking rapidly to the end of the year when higher tax rates and budget sequestration are scheduled to automatically kick in, lawmakers are deadlocked over a solution to avoid going over "the fiscal cliff."
Most of the attention has focused on sucking more money out of the taxpayers pocket and into the U.S. Treasury. Barack Obama and Tim Geithner remain in their "no-deal-without-higher-tax-rates" bunker. The President wants $1.6 trillion more. Republicans are willing to talk about "revenue" increases even if not higher tax rates. They have put $800 billion on the table.
But, Mitchell points out that barring a recession, government will get more revenue even without raising tax rates quite a lot more, in fact. "Indeed, the Congressional Budget Office projects that tax revenue will climb by an average of more than 6 percent annually over the next 10 years even if the 2001 and 2003 tax cuts are made permanent," Mitchell explains.
Wow! But, I thought Barack Obama and Nancy Pelosi said those Bush Tax Cuts cost us hundreds of billions, created the trillion dollar deficits, and caused the recession?
If the President and other politicians really wanted a "balanced" solution to the nation's fiscal crisis, Mitchell knows exactly how to make it happen. "All that's really needed to bring red ink under control is a modest bit of spending restraint," he writes in a recent memo.
And, then there's Mitchell's Golden Rule: "Good fiscal policy exists when the private sector grows faster than the public sector, while fiscal ruin is inevitable if government spending grows faster than the productive part of the economy."
But, since 2007, federal spending has increased nearly 30 percent while the economy expanded just over 8 percent. Sounds a lot like Mitchell's formula for "fiscal ruin," doesn't it?
Back in 2010 when the politicians were also discussing the fiscal mess, Mitchell produced the following seven minute video. It is as relevant today as it was then. Within the Washington cacophony, Mitchell is a tiny island of sanity.
It's Simple to Balance The Budget Without Higher Taxes>
The Republicans should offer 0bama an “offer he can’t refuse” by agreeing to higher rates “on the rich”, but write the law so that if total tax revenues come in at less than the previous year the rich get their rates retroactively reduced to 35% and are issued refund checks. In addition, if there is a revenue shortfall, spending must be reduced by TWICE the amount of the shortfall, and the cuts come out of entitlements. Thus the refunds to the “rich” are funded by spending cuts.
Just an idea.
No flight plan? No cell phones? No brains?
Iam all for ‘sequestration’ (automatic budget cuts)
If they weren’t serious then why put this artificial deadline on themselves?
PLUS- they have no guts about doing actual cuts- so let the automatic ones take place
EVERY department could make do with less, even the military
The PENNY PLAN is good too (drop 1% per year for 6 years and we reach a balanced budget- how hard can it be for the government to cut one penny out of every dollar?)
We could call it the sanity clause.
Hmmmm. I wonder what happened in 2007 that caused the gummint to start growing like a cancer?
Fiscal ruin is the quickest path to establishing the New World Order. It is clear that most of DC is working toward a larger agenda they aren't talking about, and their attempts to disguise that agenda from the public are getting flimsier by the day. I guess they are no longer concerned about the consequences of discovery.