January 10 2013

The Ultimatum We All Face

Donna Wiesner Keene

The new Democratic Senator from North Dakota Heidi Heitkamp recently said on ABC News “we all need to stop talking in ultimatums” in Washington. 

Even George Stephanopoulos chuckled at the irony and suggested that perhaps President Obama’s no spending cut ultimatums would be a good starting place for ultimatums.  The tea party, the conservatives, the Republicans, those nasty gun owners … they have all taken hits since November for views contrary to the mainstream media, or what passes for a democratic mainstream in Washington.  We’ve been lambasted for talking about a debt that doesn’t matter to liberals.  The Nation and The Huffington Post decry that if only we institute another tax – say a transaction tax when what the country desperately needs is more commerce -- we will work our way out of debt.

Those who believe higher taxes will solve our debt problems should check out this study of countries that had worked out of their debt.  Countries that taxed fell hard, with default, devaluations, declines, and desperation.  Countries that increased productivity, lowered taxes, reduced spending, and increased productivity thrived and the debt was paid off as the economy grew. 

The lost decade of Japan or the fall of the great communist experiment should tell us all we need to know about stimulus programs and increasing the money supply, yet the American left and too many American voters want us to continue on this tax-and-spend path.  In Boston election night Al Cardenas, head of the American Conservative Union, had the best election line “we told the voters to take their medicine, and they voted for more candy.”

 How long will our government, which the new US Senator from Texas Ted Cruz aptly describes as, “broke,” be able to afford that candy?  Time will tell, but I have a feeling that economic reality will issue the final ultimatum.  

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