In this commentary, Missing the point, AIMS Board Chair John Risley examines the attempts to reduce the deficit and resolve the fiscal cliff in the United States. Up to this point politicians are claiming that if the “rich” would only pay their fair share, the deficit and the debt wouldn’t be a problem. Furthermore, if the rich would only pay their fair share, then the country can continue to offer all the social programs it currently has on its agenda. Risley examines why this is a completely dishonest premise.
Risley explains the governments cost to provide for the three so-called entitlement programs is equal to the government’s revenue. The current situation cannot continue and that the government must both raise revenue and reduce expenses. The current deficit and social programs are paid for by borrowing money. At some point, presumably, there is a valid and underlying promise to repay that money. The only legitimate way that can happen is to ensure two things: a reduction in the rate of borrowing, and a concurrent growth in the economy.