Something very rare happened yesterday in Washington: the United States Senate actually passed a budget, a feat that body had not even bothered to attempt for the previous four years. The budget was, as it always is, a very political document. It is important, however, because it puts the Democrats on record as to how they want to handle federal spending and taxation.
First of all, the Democrats came out in favor of increasing spending. If you read the articles in the mainstream media, you will undoubtedly hear that the budget contains $975 billion in spending cuts over the next ten years. This is correct, but it leaves out the fact that the same budget also restores $1.2 trillion of cuts that were made previously. The net effect of the Democrats budget is to increase spending by $225 billion.
Secondly, the Democrats also came out in favor of raising taxes by a trillion dollars. This increase is in addition to the huge tax rise just approved two months ago. In order to avoid being pinned down on specifics, the Democrats did not state exactly which taxes would be raised.
Third, the Democrats do not come close to balancing the budget. Under their proposal, the budget deficit would still be just under $600 billion in a decade. What this means is that for the entirety of the next ten years, the Democrats want to have a budget deficit that is larger than any deficit in any year prior to the election of Barack Obama as president.
Fourth, in a comical note, the Democrats say that their budget is one designed to grow the economy. This is a claim that only an economic illiterate could make. The Democrats want to bleed a trillion dollars out of the private economy, reduce incentives for investments by drastically raising taxes, and drive up interest rates by huge deficits that will swallow up a large portion of the funds available for borrowing. That will hurt economic growth, not help it.
First of all, the Democrats came out in favor of increasing spending. If you read the articles in the mainstream media, you will undoubtedly hear that the budget contains $975 billion in spending cuts over the next ten years. This is correct, but it leaves out the fact that the same budget also restores $1.2 trillion of cuts that were made previously. The net effect of the Democrats budget is to increase spending by $225 billion.
Secondly, the Democrats also came out in favor of raising taxes by a trillion dollars. This increase is in addition to the huge tax rise just approved two months ago. In order to avoid being pinned down on specifics, the Democrats did not state exactly which taxes would be raised.
Third, the Democrats do not come close to balancing the budget. Under their proposal, the budget deficit would still be just under $600 billion in a decade. What this means is that for the entirety of the next ten years, the Democrats want to have a budget deficit that is larger than any deficit in any year prior to the election of Barack Obama as president.
Fourth, in a comical note, the Democrats say that their budget is one designed to grow the economy. This is a claim that only an economic illiterate could make. The Democrats want to bleed a trillion dollars out of the private economy, reduce incentives for investments by drastically raising taxes, and drive up interest rates by huge deficits that will swallow up a large portion of the funds available for borrowing. That will hurt economic growth, not help it.
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