… which country would it be? Just so we can all wrap our heads
around how big President Obama’s Trillion-Dollar Debt Plan is, this
graphic compares the pre-Senate debt plan costs with the GDPs of major
nations:
Just think of it: The deficit-spending package passed by House Democrats already is bigger than 168 of the 180 national economies measured by the World Bank. Now, in the Senate, it threatens to break into the Top 10 by catching up with Russia (No. 11) and then Brazil (No. 10).
Democrats on the Joint Select Committee on Deficit Reduction last week floated a proposal that includes massive tax increases on wealthy Americans. While their plan would also include some cuts to entitlement programs, the tax-code changes make up a significant portion, according to press reports.
The Los Angeles Times reported: “Revenue would be raised mostly by bumping up the high-end tax bracket and limiting deductions for upper-income earners, those familiar with the talks said.”
This isn’t exactly a surprise. President Obama and his liberal allies in Congress are waging a war against successful Americans. House Budget Chairman Paul Ryan (R-WI) spoke at Heritage last week about the divisive nature of Obama’s scheme.
The so-called Super Committee, of course, could be an opportunity for Congress to reform the tax code. Writing in the Washington Times last week, Heritage’s J.D. Foster observed:
The Foundry: Conservative Policy News Blog from The Heritage Foundation
Just think of it: The deficit-spending package passed by House Democrats already is bigger than 168 of the 180 national economies measured by the World Bank. Now, in the Senate, it threatens to break into the Top 10 by catching up with Russia (No. 11) and then Brazil (No. 10).
Chart of the Week: Taxing the Wealthy to Cover Future Deficits Won’t Work
Democrats on the Joint Select Committee on Deficit Reduction last week floated a proposal that includes massive tax increases on wealthy Americans. While their plan would also include some cuts to entitlement programs, the tax-code changes make up a significant portion, according to press reports.
The Los Angeles Times reported: “Revenue would be raised mostly by bumping up the high-end tax bracket and limiting deductions for upper-income earners, those familiar with the talks said.”
This isn’t exactly a surprise. President Obama and his liberal allies in Congress are waging a war against successful Americans. House Budget Chairman Paul Ryan (R-WI) spoke at Heritage last week about the divisive nature of Obama’s scheme.
The so-called Super Committee, of course, could be an opportunity for Congress to reform the tax code. Writing in the Washington Times last week, Heritage’s J.D. Foster observed:
But if tax reform is part of a deficit-reduction exercise because the language of tax reform has been co-opted to disguise a tax hike, then both the hike and the reform should and likely will fail. Be very clear — tax reform is revenue neutral as traditionally scored. If a tax proposal is shown to raise revenue, then it’s not tax reform, it’s just another big-government tax hike.As for that proposal floated by Democrats this week, it’s simply not a viable solution. This chart from Heritage’s 2001 Budget Chart Book reveals that Congress would need to increase tax rates on wealthy Americans to mathematically impossible levels to close future deficits.
Economic Growth Remains Too Slow Because of Policy Uncertainty
Today’s report on gross domestic product (GDP) shows that not
much changed in the economy during the second quarter. The Bureau of
Economic Analysis’s initial estimate shows that economic growth was just 1.7 percent from April 1 through June 30—well below the rate the economy should be growing this far into a recovery from a recession.
Although growth came in higher than many expected, the economy continues growing at a slow rate that is too low to translate into the robust job growth needed to significantly lower the unemployment rate below 7.6 percent. Sluggish growth has become the new normal.
Consumption was the biggest contributor to growth in the second quarter. Investment, both by businesses and in housing, exhibited strong gains. The increase in investment bodes well for future growth and shows that the housing market continues to recover. Inventories also increased sharply, which could mean either that businesses anticipate stronger sales in the near future or that they overestimated demand in the current quarter. Time will tell.
This is the first full quarter that sequestration was in full effect. Despite the protestations of some in Washington that it would bring economic ruin, it had little effect outside its harmful impact on national defense. The small and mechanical negative economic impact it did have will disappear in future reports as the private sector spends or invests the money the government didn’t take out of the economy to spend.
As the economy stumbles along at sub-par growth, President Obama continues his economic speaking tour touting previously failed policies that won’t work to ramp up growth. Yet one of the biggest anchors holding the economy back is uncertainty among businesses caused by the President’s own policies: Obamacare, the Dodd–Frank financial law, environmental regulations, and lack of government action to head off a debt crisis that runaway entitlement spending will cause in the near future.
Until Washington alleviates the uncertainty caused by these policies, growth will remain below where it should be. Sub-par growth caused by policy uncertainty will continue to prevent an improvement in the labor market, which we should have seen by now.
Although growth came in higher than many expected, the economy continues growing at a slow rate that is too low to translate into the robust job growth needed to significantly lower the unemployment rate below 7.6 percent. Sluggish growth has become the new normal.
Consumption was the biggest contributor to growth in the second quarter. Investment, both by businesses and in housing, exhibited strong gains. The increase in investment bodes well for future growth and shows that the housing market continues to recover. Inventories also increased sharply, which could mean either that businesses anticipate stronger sales in the near future or that they overestimated demand in the current quarter. Time will tell.
This is the first full quarter that sequestration was in full effect. Despite the protestations of some in Washington that it would bring economic ruin, it had little effect outside its harmful impact on national defense. The small and mechanical negative economic impact it did have will disappear in future reports as the private sector spends or invests the money the government didn’t take out of the economy to spend.
As the economy stumbles along at sub-par growth, President Obama continues his economic speaking tour touting previously failed policies that won’t work to ramp up growth. Yet one of the biggest anchors holding the economy back is uncertainty among businesses caused by the President’s own policies: Obamacare, the Dodd–Frank financial law, environmental regulations, and lack of government action to head off a debt crisis that runaway entitlement spending will cause in the near future.
Until Washington alleviates the uncertainty caused by these policies, growth will remain below where it should be. Sub-par growth caused by policy uncertainty will continue to prevent an improvement in the labor market, which we should have seen by now.
The Foundry: Conservative Policy News Blog from The Heritage Foundation