Debt Tops 12 Trillion – Can A Substantial Tax Increase Be Far Behind?
Another out of control government spending milestone tries to slip by quietly:
It’s another record-high for the U.S. National Debt which today topped the $12-trillion mark. Divided evenly among the U.S. population, it amounts to$38,974.34 for every man, woman and child.
Technically, the debt hit the new high yesterday, but it was posted on the Treasury Department website just after 3:00 p.m. ET today. The exact calculation of the debt is a 16-digit tongue-twister and red-ink tsunami: $12,031,299,186,290.07
And the 12 trillion mark was reached 8 months after reaching the 11 trillion mark – with oceans of red ink ahead as far as the eye can see according to the budgets the Obama administration has projected.
But don’t worry, Sec. of Treasury Timothy “Turbo Tax” Geithner, hero of the AIG bailout, had said they plan on getting serious about the debt. Are you feeling more assured now?
James Pethokoukas thinks he’s picked up on how they plan on doing that – or at least the trial balloon they’ve launched concerning their idea to see how well it flies. He saw this is the Wall Street Journal.
But the chairman of the president’s Council of Economic Advisers admitted that health reform and a growing economy isn’t enough to bring down the deficit. She did mention one other place that revenue could come from: letting the Bush tax cuts expire.
You say, “that’s not news, they’ve always talked about letting the Bush tax cuts expire”. No. That’s not what they’ve always talked about. They’ve talked about letting them expire on the richest of Americans. But “95% of you won’t see your taxes go up by a single dime” – remember? Pethokoukas thinks the statement by CoEA Christina Romer is talking about all of the Bush era tax cuts:
Since Obama already wants to get rid of the income and capital gains tax cuts for wealthier Americans that expire at the end of 2010, clearly what Romer is referring to is the rest of the 2001 and 2003 Bush tax cuts. Letting all the 2001 cuts — rate reductions, child tax credit marriage penalty relief — expire would raise tax revenues by $2.5 trillion through 2019. (These CBO numbers assume no negative economic feedback impact from higher taxes.) And letting the 2003 tax cuts on capital gains and dividends expire would be tantamount to a $350 billion tax increase through 2019. And none of this includes possible plans for a VAT that could raise $400 billion a year more to close the huge projected gap — maybe 7 percentage points — between spending as a percentage of GDP and revenues as a percentage of GDP.
3 trillion in raised taxes? If they can manage to get away with it – you bet. And the previous no new taxes pledge for the 95%? It will be explained away as having been overcome by events – the financial meltdown, bailout, stimulus, etc. And again, you will be reminded that government, not you, has first claim on your property as they again raid your paychecks to the tune of a cool 3 trillion over 10 years.