Republican leaders, including most of the 2012 presidential field, have responded forcefully to the S&P downgrade. Of course, Bush-era Republican spending helped set the table for Obama's borrow-inflate-and-spend feast and the leadership of neither party has seemed equal to the task of confronting our worsening debt crisis. The one silver lining is that we will longer be able to pretend that mounting deficits and debt have no consequences for the United States.
Liberals will try to pin this on Republican unwillingness to raise taxes. And it's true that the major credit rating agencies don't care if the federal government tries to address the deficit on the spending or revenue side. But our tax code has never consistently raised the 25 percent of GDP now consumed by federal spending. Despite the president's talk of a "balanced" deficit reduction package, tax increases cannot bring the budget into balance. Serious spending cuts are necessary, tax increases are a choice.
I've also seen a few liberal bloggers trying to score points by saying the Democrats cut $500 billion from Medicare and imposed health care cost controls, only to be attacked for it by Republicans in 2010. I think the GOP's version of "Mediscare" was indeed counterproductive, but let's look at the facts. The Medicare cuts, assuming they were ever actually going to materialize, were to pay for a new entitlement and the cost controls are all based on the highly debatable assumption that Obamacare was going to work.
Blame the dysfunction of divided government if you will, but there seems to be a lot of unity on borrowing, spending, and inflating the United States into a banana republic.
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