Yesterday’s Washington Examiner posted an article stating that the Democrat Senate intends to pass a budget this year. Sounds like good news, but wait a minute.
The article reports:
But now a prominent Democratic lawmaker says his party will finally pass a budget — for the express purpose of raising taxes. “We Democrats have always intended to do a budget this year,” Sen. Charles Schumer said on NBC’s “Meet the Press.” “It’s a great opportunity to get us some more revenues.”
“You’re going to need more revenues as well as more cuts to get the deficit down,” Schumer said. “And I’ve talked to Leader Reid. I’ve talked to Budget Chair Murray. We’re going to do a budget this year. And it’s going to have revenues in it. And our Republican colleagues better get used to that fact.”
Great. More taxes. The article also explains why the Democrats have not passed a budget since 2009:
The Democrats’ strategy has long been clear. The last time Majority Leader Harry Reid allowed a budget through the Senate was in April 2009, when huge Democratic majorities in Congress passed steep increases in spending. Since then, Democrats have funded the government through a series of continuing resolutions — essentially locking in the 2009 budget as the new baseline for spending.
The article concludes:
Schumer, with 55 Democrats in the Senate, is now saying: Think again. We’re going to raise taxes, and you can’t stop us. The battle between the two sides will likely consume the Senate for the next two years.
The question is simple. Are there enough grown-ups who vote in America who realize that we cannot continue to spend money we don’t have? Raising taxes does not necessarily increase revenue. (Please see the Laffer Curve.) Raising taxes also slows the economy, increases unemployment, and ultimately causes the cost of government to increase while slowing growth in the private sector.
Part of our current economic problems is the relationship between government spending levels and the Gross Domestic Product (GDP). Traditionally spending has been about 18 percent of GDP and tax revenue has been about 18 percent of GDP. Unfortunately since 2009 (when the Democrats took control of the House of Representatives), spending has been approaching 25 percent of GDP. Unless the government takes almost all of the money that Americans earn away from them, there will never be enough tax revenue to fund that spending.
The chart below (from The Big Picture) shows where we are:
The American voters will determine in 2014 whether or not America survives economically.