This is going to be a long, hot summer — and I don’t mean the temperature. The debt, deficit and spending fight on Capitol Hill is intense. If the government does not increase the debt limit in August, the United States will default on its bills. The Republicans want Washington to cut its spending to match the revenue (taxes) coming in, and the Democrats want to increase our taxes. Unless the two sides come together with a compromise, our country goes into default.
If Congress does not cut spending, I am in favor of a default. If we default on our bills, it will be harder for Congress to spend us into oblivion because the government will not be able to borrow more funds.
If you or I spend more money than we take in, our personal deficit will increase — probably through loans and credit cards — until we get to the point where our creditors cut us off. At that point, if we can’t repay the debt, we are forced into bankruptcy. When a government goes into bankruptcy, it prints more money, making its currency less valuable.
If the dollar is devalued, we lose our buying power because the cost of goods will rise. This devaluation has the same consequence as a tax. If the Democrats raise taxes, we have less buying power.
President George H.W. Bush said, “Read my lips — no new taxes.” Then, he had to raise taxes. And because he had to backtrack on his promise, he lost the next election
President Obama promised no new taxes for the middle class, but if the Democrats raise taxes, will this cause the president to lose the next election?
Taxes do not necessarily have to be income taxes to influence our way of life. To raise $600 billion in new taxes, the administration wants to cut subsidies to the oil companies, which will raise the price of gas and defeat the purpose of releasing some of our oil reserves.
Ending tax breaks to large corporations only will keep unemployment high because companies will cut jobs to make up for the tax increases. Unlike the government, companies must live within their means and are limited by the revenue generated by sales. If they raise prices to make up for the taxes, sales will slow down, thereby making employee cuts the only way to stay in business.
Of course, the administration wants to raise the taxes of the wealthy job creators. Our government must be more responsible with our money. They need to work with a balanced budget — just like you, me and every company that wants to stay in business.
The Democrats want to increase revenue to reduce the debt. Since Washington does not manufacture anything, increasing the revenue means raising taxes. The Democrats have no intention of reigning in government expenditures, which are out of control. More taxes will be needed to support their habit of runaway spending.
There is an old saying, “A penny saved is a penny earned.” Congress is going to have to save a lot of pennies to keep our country solvent. If Congress does not save stacks of these pennies, America’s streets will look a lot like the chaos in Greece.
Calderone is a conservative who lives in Midway. He is a professional salesperson and for 30 years has written articles for trade publications in various fields.