Many pundits and politicians blame the Tea Party for Standard & Poor’s recent downgrade of U.S. debt. Whether one agrees or disagrees with the policy prescriptions of the Tea Party, placing blame for the downgrade is clearly wrong.
Without Tea Party intervention, Congress would have merely raised the debt ceiling with no spending re-straints or revenue enhancements as they have ten times since 2001. By insisting on spending cuts, the Tea Party simply made U.S. debt somewhat more attractive to investors and thwarted and even larger downgrade.
As a result of the economic downturn beginning in the final quarter of 2007, federal spending has grown by 30.0 percent while federal tax receipts have slumped by 5.4 percent thus leaving the nation with an annual budget deficit of $1.3 trillion for next fiscal year and a federal debt that is growing at an unsustainable pace. Cuts from the baseline in “discretionary” spending reached in the latest debt ceiling compromise will not put a dent in the problem.
To successfully reduce the debt burden of the federal government, we must as a society accept real cuts to larger non-discretionary spending programs such as Medicare and Social Security, allow the Bush tax cuts to expire for all workers at the end of 2012, not just the so-called wealthy (there are just too few affluent), and experience vastly higher economic growth. Short of these outcomes, more and more of the national income will be transferred to baby-boomers from younger workers who will be saddled with the mounting U.S. debt. Ernie Goss.