According to Michael D. Tanner of the CATO Institute, America isn’t just headed for a fiscal cliff – we flew off it long ago like Thelma and Louise thanks to our out-of-control spending habit. Tanner writes: “federal spending is set to rise to 46 percent of GDP by 2050. When you add in state and local spending, government at all levels will be consuming more than 60 percent of everything produced in this country. We cannot long remain economically productive or personally free with a government of that size.”
That vast spending increase makes every “fiscally responsible” suggestion by President Obama into a laugh line. Obama’s $1.6 trillion tax hikes wouldn’t cover even one fifth of the projected deficit; it won’t even cover his proposed spending increases. And as for Social Security and Medicare, which are massive unfunded liabilities, that cost clocks in at a hefty $78.5 trillion to $128.2 trillion. “You could confiscate – not tax but confiscate – every penny belonging to every millionaire and billionaire in America,” says Tanner, “and still not have anywhere near enough money to pay for all that we owe.” And all that assumes that Obama’s assumption that higher taxes create higher revenues is correct. Every time that’s tried, though, tax receipts end up dropping off.
We don’t have a taxation shortage. We have a spending problem. And Obama and the Democrats don’t want to admit it, just like any other addict.