I find myself supporting Barrack Obama, in his show-down with Republicans, over the Issue of Raising their Debt Ceiling.
This despite the fact that I have written several Blogs on the out of control US Spending and their Deficit and Debt Levels.
Indeed, I have made several comments to the effect that America is "Dead Broke".
So why my support for their President now?
It certainly has nothing to do with his sound fiscal management. Indeed, the current occupant of the W.H. has increased the debt / deficit levels more than any other in American History. And this is saying something due to the fact that his predecessor - Geo. W. Bush - was no slouch in the spending department either.
Rather, I support Obama's new approach because it has come a long way toward the Republican (read Tea Party) position that Government Spending must be drastically reduced. In fact, Obama's plan calls for 85% in such reductions and 15% tax increases. The Republicans are asking for 100% spending cuts and no tax increases.
So what gives - you thought I oppose tax increases in principle.Usually I do, but there are two important differences here.
First and most important, America is in desperate financial shape. In my humble opinion, a combination of spending cuts and tax increases are required to address this problem. Neither alone will suffice.
Simply stated, the USA needs to attack the problem on a war footing - all hands on deck so to speak.
Second - Americans are less taxed than Canadians. This is especially true in the case of a national sales tax - the US does not have one, while we in Canada continue to pay GST at a rate of 5%. In addition, Americans are able to deduct their mortgage interest costs from their income. So it cannot be said that they are currently over taxed, at least in comparison with us.
But that said, I am still opposed in general to tax increases. Government has gotten too large - too bureaucratic - too invasive and too wasteful. It is the reason why this crisis has arisen in the first place. But under the current dire circumstances, a rise in taxes are a must.
There is another reason I support Obama's plan and this is a more self-serving one.
If the Republicans continue to refuse his offer and should Obama stand firm, all hell will break out in American Society and the Republicans will be at the receiving end of its Wrath. If welfare/social/ employment cheques stop flowing - look out.
And this will jeopardize the roll that the Republicans have been on since the rise of the Tea Partyers. This roll culminated in their retaking of the House of Representatives this past November and if allowed to continue, will regain them the Presidency next November.
So Galagher - what is going to happen - who will blink first?
I have to agree with most pundits that a last minute deal will be brokered because the effect of default is just too horrendous to contemplate. And since the Republicans have the most to lose, should a deal not be struck - I suspect they will in the end accept the President's offer.
If, on the other hand, the US goes into default - the landscape for the next Presidential will be forever changed along with the likelihood of another major world recession.
As I see it...
'K.D. Galagher"
