Reducing spending is the real work
As tough as it seemed for Congress and the president to settle on a taxation plan, the real heavy lifting to get the nation out of debt is still ahead of them.
At the 11th hour our lawmakers in Washington settled on higher taxes for the rich, a permanent tax break for lower income earners, and more. That action will raise about $600 billion over 10 years.
However, the deal did not address spending or the debt ceiling. The debt ceiling is the amount of money that the government can borrow, or basically the amount of money needed to make up what it spends and what it is getting in revenue. The current debt ceiling is a whopping $16.4 trillion.
While the lawmakers fought over how to raise taxes on everyone — it was not just the rich — it failed to do anything about how to eliminate the gab between what the government takes in and what it spends. The federal deficit today is running more than a trillion dollars a year.
For decades, we have been told that Social Security and Medicare are both going broke. How broke and why, have never been clearly explained, but certainly with the mass amount of Baby Boomers now becoming beneficiaries of Social Security and Medicare, it will certainly put a pinch on those programs. And, with more and more Americans become dependent on the government for their substance, they are not paying into those social programs. That is probably why no one even attempted to stop the 2 percent break on what is withheld from paychecks for social security from ending, which it did on Dec. 31. Everyone is going to feel that 2 percent increase in what is withheld out of their paychecks.
America has a debt crisis and it is likely the debate to solve that crisis will be between those who want people and businesses to pay more — some are even calling for churches to be taxed — and those who want deep spending cuts. We have raised taxes and it was like pulling a couple of wisdom teeth. That may seem painless compared to the debate on spending cuts, but America has to get its spending and debt under control. We can no longer kick the can on down the road.