Today's Coming Crisis Movie

Sunday, July 31, 2011

David Stockman on our quasi-bankrupt country

The crisis lies in the debt, not the ceiling. Kicking the can with a six months' ceiling increase is the worst possible alternative because it allows the politicians of both parties to continue making the Big Fiscal Lie. The Republican "no tax increase" position is preposterous; we are collecting less than 15% of GDP in taxes, the lowest since 1950, and spending 24% of GDP.

Former Rep. David Stockman

More than half of that is national security and Social Security, and the Republicans don't have a plan to cut a dime from either. Likewise, the Democrats are lying when they say Social Security is not part of the fiscal problem.

Benefits will exceed payroll taxes by $50 billion this year alone, and the red ink only gets deeper with time. Social Security should be subject to a stringent means test on the top 15 million affluent retirees, so that there is something left for the 40 million lower-income elderly who are already on the ragged edge.

Finally, the $800 billion defense and security budget is a relic of the Cold War, which ended 20 years ago, and should be cut by $200 billion. We no longer have any industrial state enemies and we have been fired as the world policeman - so it is time to mothball some carrier battle groups, ground some air wings, drastically reduce our troop strength, end the futility of Afghanistan and stop buying multibillion high-tech weapons that we can't afford and don't need. (more)