In 2010, Ryan Witt of Examiner.com published the following article: Rand Paul concedes he will cut Medicare and Social Security to pay for tax cuts
To this day I see it popping up ever now and then on the web, and the headline generates the fury of even alleged conservatives in Rand Paul's directions.
But let's take a step back for a moment. The article is basing its claims on an interview that is not embedded within at this point, if it ever was. So we are taking the author's word for it.
First, we need to address the subject of the Bush tax cuts. The Bush tax cuts (passed between 2001 and 2006) were essential for growing the economy in the Bush years. They have been extended continuously since they were first set to expire in 2010.
Most Republicans, and even some Democrats, support making those tax policy changes permanent. They benefit the economy. And if taken away, the economy would suffer severe consequences. Even with the Bush tax cuts in place, the United States is still at a competitive disadvantage with the rest of the world from a tax policy perspective.
Now, many assume that the Bush tax cuts must be paid for with spending cuts. That is simply not the case. Every dollar left in the private sector is a dollar better spent. Dollars left in the private sector allow for economic growth, and economic growth leads to greater tax revenues. If the Bush tax cuts were taken away, the economy would take a hit, and so would the federal budget. Kennedy and Reagan understood this principle when they proposed their historic tax reductions.
Second, we need to address the subject of entitlement reform. The greatest drivers of our debt are the entitlement programs. There is simply no way around it. Every Republican supports reforming entitlements because to not do so means terrible things for seniors.
Entitlement reforms, like all government programs, have structural problems. Medicare and Social Security are costing more money on an exponential basis. As our deficit and debt continue to grow, the more we must tax, borrow, and spend. All of those actions take from the private sector and weaken our economy.And as our interest payments on the debt continue to increase, that means less money can be devoted to programs benefiting seniors in the future.
So, it is imperative that we reform our entitlement programs. Here is what that does not mean: It does not mean cutting benefits from seniors currently dependent on those programs. It does not mean cutting benefits from the poor and hungry. It does not mean pushing grandma off the cliff.
It means things such as means testing, so that the very wealthy do not receive benefits they do not need. It means that as we live longer and longer, future generations will have to work a little longer before they can draw benefits. It means targeting fraud, waste, and abuse. It also means encouraging younger people to invest in private means of investment, where the returns are higher and their money benefit the economy, rather than hurts it.
You can read Paul's specific plans for Social Security and Medicare, HERE and HERE.
No senior has any reason to oppose what Republicans like Rand Paul are opposing. Their proposals do not hurt seniors, but they do help younger generations.
Misleading articles like the one posted by Examiner.com are plaguing our political process, and that is why this rebuttal was written.
"Now, many assume that the Bush tax cuts must be paid for with spending cuts. That is simply not the case. Every dollar left in the private sector is a dollar better spent. Dollars left in the private sector allow for economic growth, and economic growth leads to greater tax revenues. If the Bush tax cuts were taken away, the economy would take a hit, and so would the federal budget. Kennedy and Reagan understood this principle when they proposed their historic tax reductions."
ReplyDeleteIt is all about the resources, human or other. If the private sector gets a hand on more than there is a positive effect and resources will be used better. But if taxes are cut and the government increases it's spending as it usually does, you just have more money in the private hand chasing goods and more money in from the government chasing these same goods and the balance will not be changed the least, no resources will be used any better and no economic growth is going to result.
What has to reduced is the governments share of all things, fat government has to be put on a diet. Otherwise the tax cuts will simply be offset by more government debt, because that is the most convenient way to handle things for government and politicians. To actually reduce the government share would be painful for them.
Government employees want to get raises at least as high as inflation every year, bureaucracy grows, it hires more people, not less. Some tax cuts alone will not cut it.