What if: In January, a new Republican Congress is sworn in. First up on the agenda? A bi-partisan report stating that Congress must enact the most draconian tax increases and entitlement cuts in history or face total economic collapse.
That’s the scenario developing.
President Obama appointed a bi-partisan commission to make recommendations about the US government’s debt. The commission will not report out until after the November 2010 elections, but the leaders—Republican Alan Simpson and Democrat Erskine Bowles–have given some warning about what we can expect. Here are some of the frightening highlights:
* “This debt is like a cancer” Erskine Bowles * Federal revenue—the sum of all taxes and fees— “is completely consumed by three programs: Social Security, Medicare, and Medicaid.” * “We cannot grow our way out of this” Erskine Bowles. * Neither Bowles nor Simpson is confident that any measures will prove successful * "I don't know that I ever heard a gloomier picture painted that created more hope for me”—Arkansas Governor Mike Beebe * Your personal debt obligation—the amount Congress charged to your Social Security Number—is over $47,000 and growing daily. And “you” is every American, born today or 100 years ago.
Among the ideas being tossed around:
* Reduce or eliminate the home mortgage tax deduction * Raise the Social Security age to 70 * Means tests for Social Security benefits * Means tests for Medicare
The irony, of course, is that 100 percent of taxes go to three entitlement programs prohibited by the Constitution. Either we begin a long-term phase out of those programs, or we face a horrific and prolonged depression. Half the population cannot continue to live off the other half.
What do you think about giving up your home mortgage deduction to pay for wild government spending? Speak out in the comments section.