Deficit spending is unsustainable and if current trends continue the government will eventually default. The accumulated debt is a threat to our well-being. President Eisenhower said, “Well, without fiscal soundness there is no defense.” Chairman of the Joint Chiefs of Staff Admiral Mullen said, “The biggest threat we have to our national security is the debt. Not Al Qaida, climate change or weapons of mass destruction.”
There are two ways to balance the budget: raise revenue and decrease spending.
Economists universally acknowledge raising taxes during a recession is bad for the economy. Raising rates can decrease tax revenues. When the top rate was 90 percent taxes took the same amount of GDP as they have with the current top rate of 35 percent. But GDP is higher with lower rates.
Dr. Christina Romer, the initial head of Obama’s Council of Economic Advisers, found a tax increase of 1 percent of GDP reduces output by 3 percent over the following three years, and has a large negative impact on investment.
Decreasing spending is straightforward. Any program not authorized by Article 1 Section 8 of our Constitution should be cut. As James Madison said, “The powers delegated by the proposed Constitution to the federal government, are few and defined.”