The inability [of Congress] to reduce spending and tax its citizenry represents a competitive disadvantage for the U.S.. It is the mark of a country that cannot keep its fiscal house in order, does not care about repaying its debts and, [as such, it] may be heading for collapse. Words: 978
So says Diane Francis (www.nationalpost.com) in edited excerpts from an article* which Lorimer Wilson, editor of www.munKNEE.com (It’s all about Money!), has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. Francis goes on to say:
Greece and the U.S. are frighteningly similar. The Greeks, with their tear gas and Molotov cocktails, refuse to give up entitlements or pay for them through taxation. They are simply a violent version of the havoc that the U.S. Congress is wreaking.
Nobody likes taxes, but the historical opposition to them in Greece and the USA could be ruinous for everyone. In Greece, the Ottomans made taxes and subjugation synonymous. Turks required Greeks to let Ottoman tax collectors slap their faces and grab their hair if they did not bow…The same anachronistic, taxation-as-subjugation mentality exists among many in the United States and may lead to default on its debts in August.
After all, America is the country that threw the tea in the harbor, and launched a bloody war of liberation, over taxation…The dirty little historical secret is that after the War of Independence the new country, and its 13 state governments, were unable to get anyone to pay taxes so they began swiping land from Indians and selling it to new arrivals. Then, when they weren’t able to collect payment for much of that land, they had to steal some more, go to war or buy it. Until the last century, the U.S. was anarchical, violent and unjust. Communities had to band together to provide police, road, education and other services of any kind.
It’s symbolic, therefore, that the anti-tax Tea Party Movement in the US, with its Revolutionary garb, three-cornered hats and muskets, aims to move the country forward by going back in time. Their electoral success and influence is wreaking havoc in Congress and impeding the needed compromise to control the deficit through spending cuts and tax hikes. This is not posturing, but anarchy. Republican Tim Pawlenty states that public spending should total 18% of GDP, which would barely cover the Pentagon, Homeland Security, prisons and debt repayments, and all entitlements should be unconstitutional.
Brinkmanship with world economy
On August 2 at 4 PM, the federal government must sign off on a deficit reduction plan in order to exceed debt ceilings or default. “There are 3 possibilities: a serious down payment solution in return for deferring issues; a last minute compromise to postpone the deadline or no deal which is unchartered territory,” said Jonathan Spector at the Conference of Montreal last week. That’s when the end of the economic world as we know it happens unless there is a deal. It is, without hyperbole, being dubbed the “Lehman” moment or the day the financial system worldwide seized up. “Nobody knows what would happen, but why in the world would you want to try to find out?” said David Walker, former US comptroller general now heading the fiscal watchdog group Comeback America Initiative told a newspaper. “At least we experimented with nuclear bombs before we dropped one.”
(By the way, the Americans are loopy about taxation: If Americans paid the same taxes on incomes, gasoline, alcohol and cigarettes as Canadians pay they would have zero deficit problem)…
Without a doubt, the President and Congress will pull something out of the bag (this deficit deadline has been lifted 49 times in 20 years)…but the damage is already done. The United States sputters in large measure because its politicians [are dealing with] lousy credit ratings which impede job creation and activity and help explain the lack of investment, credit or the inability to finance the building of infrastructure through private-public partnerships. American governments are lousy bets because they don’t or cannot collect enough taxes to pay their bills.
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To reiterate Francis’ opening comments: “the inability of Congress to reduce spending and tax its citizenry represents a competitive disadvantage for the U.S.. It is the mark of a country that cannot keep its fiscal house in order, does not care about repaying its debts and, as such, it may be heading for collapse.” Well said!
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- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.