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It’s a tale as old as time… where will our next trillion come from to feed our hungry coffers? We jest, but only a little: Negotiations on raising the debt limit are ongoing, marking, ahem, dozens of times this has happened under both Democrats and Republicans. Neither party has been able to summon the wherewithal to sacrifice political clout for the good of the long-term economy. Take healthcare spending: Democrats promote top-down, regulatory spending, while Republicans support consumer-based choice and competition. Fine – but costs haven’t been fixed, efficiencies have not been produced, and Medicare has an $80 trillion shortfall over 30 years. Who do we think is going to bail us out? China and Japan hold a measly $2 trillion of our debt and they are selling it; the Fed holds just $5 trillion and they’re trying to downshift. Are we really going to rely on American banks and savers and mutual funds to lend Washington $100 trillion over the next 30 years at low interest rates? It is not even a possible scenario. Our guest predicts that we are on a path that ends in a 15% value-added tax and a payroll tax rising close to 22% – yes, exactly like Europe.
Brian Riedl is a senior fellow at the Manhattan Institute, focusing on budget, tax, and economic policy. Previously, he worked for six years as chief economist to Senator Rob Portman (R-OH) and as staff director of the Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth. From 2001-2011 Riedl served as the Heritage Foundation’s lead research fellow on federal budget and spending policy. He also served as a director of budget and spending policy for Marco Rubio’s presidential campaign and was the lead architect of the ten-year deficit-reduction plan for Mitt Romney’s presidential campaign.
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I blame the American people.