Emphasis added. “Little more?” That’s pretty huge, you ask me. Are we just another crappy country with great food and no work ethic like Greece or Spain? We seem to be getting there at warp speed.
Let’s be clear: The downgrade is not just about the recent debt ceiling negotiations. That outcome disappointed the raters, but was only a reflection of the underlying problem: Our debt, and therefore our spending and taxes. Spending is clearly out of balance on the high side; taxes, if raised substantially, would prolong our recession or turn it into a full-fledged depression.
As the graphic from Heritage.org clearly shows, deficits surged as soon as Obama took office in 2009. This isn’t due to any changes in taxes; it’s due to massive spending: TARP, bailouts, “stimulus,” ObamaCare. This unprecedented spending is coupled with economy-killing new regulations that are causing companies and whole industries to shrink their workforce, hold tightly onto cash, and not hire due to uncertainty.
The downgrade of our nation’s rating is but a symptom. The cause is spending, and we can and must make drastic spending cuts. To be even remotely sufficient, cuts must include significant changes to entitlements and slashing of unnecessary federal departments and agencies. We must also make changes in the tax code to simplify, eliminate pork (can you say “ethanol subsidies?”), and lower individual and corporate tax rates.
This may seem the fiscal equivalent of nuking the place from orbit. But we’ve certainly seen what doesn’t work, and it’s a definition of insanity to keep doing the same thing over and over and expecting different outcomes.
How will this magic be done? It’s hard, but it’s not magic. It’s voting in qualified fiscal conservatives to the Senate; it’s voting profligate spenders, mostly but not exclusively Democrats, out. Most of all, it’s getting a fiscally conservative president to replace the arrogant incumbent who’s got a tax-and-spend fixation.