Dakota Beacon

By all indications, the US economy is slowly dying. The economy is growing at less than 2%, has almost zero job growth and experiences ever-increasing unemployment. Federal revenue is approaching a flat line.

            Imposing higher taxes and more regulation on manufacturers, corporations and small businesses will shrink production, increase job losses and generate less revenue.

            The dominant media led by Democrats have battered Republicans for supporting spending cuts and opposing tax increases. Nevertheless, House Republicans had a mandate from voters in November 2010 to support the very actions they have conducted during the debt ceiling crisis. The freshmen congressmen stand firm.

            The high steaks in the debt debacle focus precisely on ever increasing federal government control over American lives. This is the fundamental political goal of liberals and progressives and the very nexus of opposition from a growing number of people represented by Tea (Taxed Enough Already)  Party reformers. There is no deal without reform.

            President Obama is sitting on the sidelines calling for compromise. But, how do you compromise with an alternative that isn’t present? There is no substantive Obama plan, or Senate plan for that matter, with which to compromise. Spend, spend, spend is not a solution to debt, debt, debt.

            House conservative Republicans are the only group of Washington politicians actively seeking an economic solution to an economic problem rather than posturing for a political fix. Twice they passed House bills and sent them to the Democrat-controlled Senate. Twice the Senate in a partisan vote tabled each bill. The bills were never addressed, discussed or debated. So much for vaunted bipartisanship.

            The Cut, Cap and Balance Bill featured cutting government spending in FY 2012, capping the growth of government over 10 years and giving the states the opportunity to vote on a Constitutional amendment requiring a balance budget.

            The Boehner Bill featured increasing the debt ceiling $900 billion by early 2012, finding $917 billion in savings over 10 years and requires the House and Senate to send to the states a balanced budget amendment before once again raising the debt ceiling.

            All politicians are not created equal. The House Republican freshmen represent the real heroes in this debt debacle. Their constituents elected them, many of them Tea Party supporters, to stop the inside-the-beltway spending insanity. These freshmen do not care whether they are re-elected or receive plumb committee assignments. Their vote is not for sale. They were sent on a mission and are holding true to their constituents and their principles. These freshmen cannot be bought or cajoled or arm-twisted. This is what a term limited congress might look like -- more substance and less posturing.

            Meanwhile, Moody’s and Standard & Poor recognize America’s economic problem for what it is and are looking for a $4 trillion debt reduction as a down payment to save America’s AAA rating.

            Moody’s proposes two fiscally responsible options for solving the US debt crisis. First, adopt something called the “Maastricht Criteria” that requires America’s debt not exceed 60% of Gross Domestic Product. Greece, Spain, Portugal, Italy, and Ireland approach a ratio of 100%. Look at the trouble they are in. Over the years the US debt averaged about 20% of GDP. Democrats inveigh against the Maastricht Criteria claiming it is a political trick.

            Second, Moody’s encourages the US to follow Chile’s fiscal management example by privatizing social security. Chile privatized its social security 30 years ago and it is solvent and popular.

            Increasing the debt ceiling over and over becomes a political solution to an economic problem. Unfortunately, political solutions to economic problems seldom work. For example, an economic solution of lowering corporate tax rates would relieve the burden on business, loosen cash flow, inspire confidence and encourage hiring. A political solution would advocate “tax the rich.” Already the top 1% of the wealthy now pay 39% of all income tax and the top 50% pay 97% of all income taxes. Taxing the rich is a political solution going nowhere.

            Continuing to raise the debt ceiling without making any effort to curtail spending is a political solution resulting in government expansion. This is in no way an economic solution to an economic problem. In particular, raising the debt ceiling for the short term may bring about some economic discipline if the issue must be revisited in public debate, especially during election season. But, allowing the debt ceiling to extend past the election season gives the president political cover and removes accountability.

            The Tea Party caucus is the winner. They changed the framework of the debate and the professional political Ruling Class is stymied.

            That’s the way our system of government is designed to work.

Dennis M. Patrick can be contacted at P. O. Box 337, Stanley, ND 58784 or (JavaScript must be enabled to view this email address).