Tuesday, May 4, 2010

Getting real about the national deficit?
The Fed Chair is telling Washington the Reagan model was the right model

WASHINGTON, DC—Ben Bernanke, the Federal Reserve Chairman has told a White House debt commission the United States needs to seriously begin deficit cutting which currently stands at $1.4 trillion. Mr. Bernanke went on to urge an engaging, sobering reevaluation of the US Tax Code but made no specific recommendations.

Rudy Penner, a former director of the Congressional Budget Office under Ronald Reagan told the debt commission, "I think it just screams out that we do something about this tax code." 

Conservatives have long argued that cutting marginal tax rates as well as reducing capital gains taxes and corporate taxes will bring more money into the Treasury via tax revenue and indeed, the three times rates were reduced by Presidents’ Kennedy, Reagan, and Bush 43, tax revenue increased substantially. But tax cutting is only one part of the equation—federal spending must be cut as well, not just minor percentage cuts in the rate of growth.  

Liberals have argued against this method (and history) and against cutting federal spending—demonizing the first as “tax cuts for the rich” and the latter is “draconian cuts in Medicare and Medicaid”.

-- Killswitch Politick

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