December 6th, 2010, Fairfax, VA—Americans for Limited Government (ALG) President Bill Wilson issued the following statement on the rejected recommendations of the Obama National Commission on Fiscal Responsibility and Reform:
"The only credible way to seriously address the debt crisis is through spending cuts, not tax increases. A recent International Monetary Fund study makes this point, writing, 'the
tax burden is already high in several advanced economies, which means that a large part of the adjustment will have to take place on the spending side' in order to achieve debt sustainability. And as noted by the American Enterprise Institute's Kevin Hassett, based on that study, the most successful fiscal consolidations consisted of at least two-thirds spending cuts.
"In contrast, the Obama deficit commission did not contemplate a balanced budget until 2035, nor did it contemplate ever reducing overall spending. That means, under the proposal, spending would still have increased year-on-end. Therefore, it never contemplated reducing the overall $13.8 trillion debt, which would have continued to grow under the proposal. That is unacceptable to the American people, who want to pay down and retire the national debt, not continue to grow it. We don't have 25 years to balance the budget. We have to do it now.
"Fortunately, the half-measures of the Obama deficit commission were rejected by that very commission. Unfortunately, the insolvency crisis the United States faces still looms above all other issues. If Congress does not act to balance the budget and begin reducing the debt immediately, next year the Federal Reserve will become the number one holder of U.S. debt, and the debt will soar past 100 percent of the Gross Domestic Product in just a few short years. By 2018, if not sooner, our Triple-A credit rating will likely be downgraded.
"We cannot grow ourselves out of this mess alone, although robust economic growth must be restored through permanent tax relief. We cannot tax our way out, although revenues would begin to recover with robust economic growth. But even those are not enough. The only way to stop this death spiral any time in the near future is to cut spending immediately. Any balanced budget plan that does not contemplate severe spending cuts is delusional and will not work."