We predict Republicans will takeover both Houses of Congress. The question is: Once they achieve power, what will they do with it?
Clearly the dominant issue for the new Congress in 2011 will be how to bring down the deficit. Democrats will, of course favor tax increases, and Republicans will resist them. But drowning out the partisan rhetoric will be the editorial drumbeat from the economic and journalistic establishments that will call for compromise, splitting the difference between the two.
Here is where the Republicans' new congressional majorities must hold the line. Every single GOP member of the House and the Senate must make a firm commitment to oppose any and all tax increases. In the coming congressional and senatorial primaries, it is our duty as voters to support only those Republicans who sign the no-tax pledge of the Americans for Tax Reform.
When Obama took office, he had one paramount goal in mind: to increase the size of the federal government. Socialism is not an epithet or even an economic philosophy. Whether a nation is socialist or not is determined by a single, simple statistic: What percent of the economy (gross domestic product) goes to the public sector? When Obama took office, the U.S. public sector (federal, state and local) spent about 30 percent of GDP. Now it is 36 percent. If Obamacare lives to be fully implemented, it will pass 40 percent.
The United Kingdom has a public sector that accounts for about 40 percent of its economy. Germany is at about 48 percent. France is at 50 percent, and Sweden at 54 percent.
If Obama is allowed to let the public sector expand to 40 percent of our GDP, we will become a European socialist democracy, to our everlasting detriment. We will thereby inherit the sclerosis that afflicts Europe -- permanently high unemployment and low economic growth.
But after his swearing-in, President Obama couldn't say that he was going to raise taxes to move us toward socialism. So, instead, he raised spending to do it and borrowed the money to pay for it. Now, with interest rates set to rise (because the Fed is not printing money as fast as it was), our debt service burden will be so onerous that it will become obvious to everyone that the deficit Obama has created is unsupportable.