Entitlement cuts needed to cut debt, annual deficit

info@islandpacket.comDecember 9, 2012 

The Nov. 27 Wall Street Journal had a truly frightening column on the national debt, written by two men who served on President Bill Clinton's Bipartisan Commission on Entitlement and Tax Reform. Their main points were:

  • The debt, at $16 trillion, is understated by $86.8 trillion. This is because the unfunded liabilities of Medicare, Social Security, Medicaid are not counted. Every private sector entity is required to show unfunded liabilities on their balance sheets, while our government just ignores them.

  • To avoid going deeper in debt would require tax collections of $8 trillion annually, which is the rate at which unfunded liabilities are increasing annually. However, taxable income of individuals and corporations filing tax returns is $6.7 trillion. Even if the tax rate were 100 percent, we'd still go deeper into debt. Taxing our way out of debt is compared to bailing out the Pacific Ocean with a teaspoon, and President Barack Obama knows it.

  • It seems clear that entitlement reform is the only way to rein in runaway annual deficits and ever-increasing national debt, but what is the Democrats' position? Recent editions of this newspaper, as well as the New York Times and Washington Post, noted that many, if not most, Democrats opposed almost any changes to entitlement programs.

    Other than Obama's obsession with raising taxes on the "rich" (who are already paying their fair share and then some), what is the Democrats' specific debt-reduction plan? I doubt they have one or even care.

    Al Beck

    Hilton Head Island

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