From California House Republican Tom McClintock To His Constituents...No Surprises

[TomCADem]

I know some folks have suggested that the American people did not know what they were getting when they elected Republicans to the House in 2010. But, I think that once you get passed the talking points, they are pretty clear about what they want to do, which is protect the rich from taxes, destroy entitlements by turning Medicare into a voucher program, make light of the risk of default, and repeat the folly of trickle down economics. Here is Tom McClintock from the Blue State of California:

http://www.tommcclintock.com/blog/the-debt-crisis

Imagine a family that earns $50,000 a year but is spending more than $88,000 with a credit card balance of $330,000. The discussions around the kitchen table are likely to be a little tense.

Proportionally, that’s where Washington’s finances are today, and that’s why the national discussion is a little tense, too.

Even these figures belie the magnitude of the fiscal crisis. Shutting down the entire federal government and firing every federal employee is no longer enough to balance the budget. Mandatory spending – mainly entitlements – consumes more than the government takes in.

Fortunately, revenues vastly exceed debt payments, so threats of an actual default are so much flimflam. The President has both the legal authority and Constitutional obligation to prioritize payments to prevent a default. The problem is that a lot of other bills would go unpaid, causing a downgrade to the nation’s triple-A credit, forcing up interest costs, wiping out all of the savings now on the table and jacking up everything from mortgage interest costs to family credit card rates.

But avoiding a downgrade will take more than just raising the debt limit. Without a credible plan to place the Treasury back on the path to fiscal solvency – which Standard and Poors defines as reducing the deficit by $4 trillion over the next decade -- the nation’s credit will be downgraded no matter what happens with the debt limit.

So what to do?

The President wants to raise taxes on “corporate jets” and “millionaires and billionaires.” But the awful truth is that there aren’t enough corporate jets or millionaires and billionaires to make more than a dent in these numbers.

That’s why the President has actually proposed raising taxes on those earning $200,000 per year ($250,000 for couples). These are families who are already paying more than half of all income taxes, many of whom are struggling to keep up with upside-down mortgages while putting kids through college without financial aid. Worse, over 80 percent of small businesses’ net income would be subject to the president’s “millionaires and billionaires” tax at a time when we’re depending on them to produce 2/3 of the new jobs that people desperately need.

The folly of the Left’s tax nostrums is to assume that high taxes are the path to prosperity and an antidote to deficits. They are neither.

As Adam Smith warned, raising taxes in a recession makes as much sense as a shopkeeper raising prices in a sales slump. New revenues are needed, but the healthy way is to remove the burdens that government has placed on the economy and produce those revenues through economic growth. Prosperity is the only true source of revenue.

Nor are taxes an antidote to deficits. In fact, they’re close cousins: a deficit is simply a future tax. Both are driven by spending. It’s no coincidence that while annual spending increased by $1.2 trillion in the last five years, the annual deficit increased by $1.4 trillion. It’s the spending, stupid.

So how do we reduce spending when promised entitlements are pushing the nation to bankruptcy? A family grappling with a problem as big as the federal government’s would rapidly come to several conclusions.

First, it’s going to need a work-out plan, starting with a family budget. In March, the House passed the first Federal budget since 2009. It would ultimately balance the budget and pay off the debt. The Senate tore it up.

Second, that family’s going to have to review its spending and pull out everything that it can do without. The House has begun that process but has a long way to go. The Senate frets over losing the “Cowboy Poetry Festival.”

Finally, it’s going to have to renegotiate any promises it has made but just can’t keep. And that’s the biggest budget challenge, because an entire generation of Americans has made retirement plans based on those promises.

For example, an average couple earning $89,000 and retiring in 2011 will have paid $110,000 into Medicare and will consume $350,000. Is anyone really surprised the system is collapsing?

Paul Ryan has done the nation a great service by offering an alternative that stops provider flight and guarantees seniors the choice of the health care plan that best meets their own needs, underwritten by a solvent Medicare system in a manner that provides higher support to those who are sicker, poorer and older.

Facing grim financial reality after decades of profligacy is a difficult, time-consuming and thoroughly unpleasant process. But there’s an infinitely worse alternative.

Just ask the Greeks.

So, should we really be surprised that the House Republicans are holding the economy hostage?

[CarmanK]

1. WHO IS This guys opponent in the next election??

This is the type of list that we need to be making, so that when the state races come up, we know which one of the TPARTY NATION loyalists have to be defeated or challenged. He is a liar and delusional. And the people of the US of America have to rid themselves of this parallel govt that is evolving in the US congress. Not since the confederacy has our democracy been so threatened.

[dwilso40641]

2. If this family were in debt

but had a little left over after paying their bills, Would they ask for a cut in wages because they had a surplus?

[JDPriestly]

3. Yes, the answer to the average family's debt problem is to kill

grandma and steal her money. Of course. What could be more obvious?

I've been poor. And here is what you do.

You absolutely never eat in a restaurant. You cook at home -- lots of homemade macaroni and cheese, soups and beans. You buy second-hand not new. You fix things. And you wear your clothes until they can't be worn any more. To make sure your clothes look as good as possible as long as possible, you change from anything that looks good enough to wear outside your own four walls to the most ragged of your clothes as soon as you get in the door.

You never throw anything away if there is any possibility whatsoever that you or someone else might be able to use it. You do not go to movies, buy beer or wine or more than one present per person at Christmas. Maybe your family just draws names and each person gets and gives one gift. You certainly don't put up Christmas lights outside your house.

You do not buy Halloween costumes. You either make them at home or just have the kid go as a gypsy or a ghost -- wearing an old sheet.

You do not buy books. You go to the library.

Mom and dad and any kid old enough try to get overtime or probably a second job.

Maybe you start a garden even if you have to do it on land that someone else lets you use.

In other words, you become more self-reliant and less materialistic.

As a nation, we could start by ending our wars altogether -- just bring the troops home -- and excusing ourselves from our trade agreements. Sorry guys, but we can't afford your cheap imports right now. We can't afford to buy anything.

Taxes go up -- on everybody but on the rich first and most. The kid who got new shoes last year can't have them this year. You decide what is necessary, what is not, and you only do the necessary.

Yachts and corporate jets are not necessary. Before you kill grandma, put the yachts and corporate jets into mothballs. Costs too much to keep them up.

[NobodyInParticular]

4. Let the wealthy and the corporations thrive. Take them back to

the Clinton era tax rates. With those rates, not just the wealthy, but the whole nation prospered, and above all there was a budget surplus. I bet that a majority of the wealthy would still be fulfilled in their need to see themselves as superior as their net worth is still phenomenally greater as that of "little people."