Video: Debating the Debt Ceiling

Guy Benson
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Posted: Jun 28, 2011 4:16 PM

As debt ceiling negotiations ramp up, Republicans have been steadfast in their opposition to any tax increases as part of the deal -- and for good reason.  Democrats, by contrast, are eager to raise taxes by hundreds of billions of dollars, presumably to help finance the 'stimulus' adventurism they're still proposing.  Which side will blink first?  I debated the issue on FoxNews.com live this morning.  Here's a short clip of what ended up being a rather lengthy discussion:
 


In this five minute snippet, my Democratic counterpart hits the liberal talking point trifecta:  He pushes tax hikes, attacks Paul Ryan, and graciously accedes to spending cuts --- at the Pentagon.  These are all specious arguments, and I did my best to parry them later in the conversation, after this clip ends.  Point One: As James Pethokoukis informed us yesterday, even draconian, totally unrealistic tax hikes on everyone -- including the middle class (altogether now: What Bush tax cuts for the middle class?) -- won't eliminate deficits: 


Let’s say all the Bush tax cuts were left to expire, as was AMT relief. Assuming no economic fallout, according to the CBO, revenue would be 23.2 percent of GDP by 2035. Three problems here: a) even with all those tax increases, the annual budget deficit would still be nearly an unsustainable 10.7 percent of GDP in 2035; b)  the U.S. tax code has never generated that level of revenue and almost certainly can’t without a value-added tax; and c) there would be tremendous economic fallout. Axing all the Bush tax cuts would chop three percentage points off GDP growth, according to Goldman Sachs, certainly sending America back into recession. Tax revenue would again plummet.


In other words, we are empirically confronting a spending and growth problem, not a revenue problem.  Another fun fact:  Even if every single household earning $100,000 or more were taxed at 100 percent this year, all of that revenue wouldn't come close to paying off this year's deficit.  One last "soak the rich" example:  Even if every single American billionaire's entire net worth were confiscated by Uncle Sam, that sum of money also wouldn't suffice to pay off this year's deficit.

Point Two: Attacking Paul Ryan is de rigueur on the Left these days, but dishonest broadsides (and honest ones, for that matter) aren't a substitute for a bona fide plan.  Later in my exchange, my sparring partner asserted that Democrats have a plan to fix the problem.  I asked him to name it.  He sat in silence.  That's because a Democratic plan does. Not. Exist. (And, in the Senate, hasn't existed for 790 days).  By contrast, not only does Paul Ryan's plan exist, it's detailed, practical, and saves the social safety net from being swept away by the tsunami of red ink that everyone agrees is approaching.

And finally, Point Three: Liberals always seem eager to cut spending, so long as that spending happens to be military spending.  Indeed, some Republicans have signaled an openness to taking hacksaw to the defense budget.  Charles Krauthammer is alarmed:
 

I think the real news [is] that Republicans are open to defense cuts as a way to satisfy Democratic desires. I think it is something new and disturbing.  There are already isolationist tendencies among the Republicans expressed on the Libya [and] Afghanistan operations, although in those cases, you can argue that people have misgivings about the benefits of these operations or about their chances of success.

But if you want to cut the defense budget — after we have heard from Obama’s own secretary of defense six months ago that, say, a 10 percent the cut would be a catastrophe — what you are doing is voting against Americans strength abroad. It would satisfy Ron Paul. It would make Reagan… absolutely appalled — and disappointed that Republicans are the ones who are looking to diminish America’s reach and power. …

Well that’s true. Look, even if you did all the defense cuts — a 10 percent cut is $50 billion. You could do that for — what – for 30 years [and]… collect all that money. It wouldn’t cover one year of Obama deficit spending.

That [defense spending] is not where the money is. The money isn’t in that — or the… tax breaks the oil companies are getting, which is $2 billion a year. The money is in entitlements.


Krauthammer is right, as usual.  Even if Democrats and some Republicans got their wish, and the Pentagon's bottom line was slashed dramatically, it wouldn't alleviate our systemic problems.  What many people don't realize is that the federal government spends much, much more money on our unsustainable entitlement programs annually than it does on national defense:
 


But other than all that, raising taxes, gutting defense, and demagoguing Paul Ryan sounds like a surefire solution!


UPDATE - I should also point out that the Ryan plan isn't nearly as radioactive as the Left thinks/hopes it is.