MYRNA BROWN, HOST: Today is Thursday, May 16th. good morning!this is the world and everything in it From WORLD Radio, which is supported by listeners. I'm Myrna Brown.
MARY REICHARD, HOST: I'm Mary Reichard. Next up, WORLD commentator Cal Thomas talks about resolving the US debt crisis.
Cal Thomas: Many people have made money by following the advice of Berkshire Hathaway CEO Warren Buffett. His recommendations on what stocks to buy, what stocks to sell, and where to invest earned him the title “The Oracle of Omaha.” I prefer the modern cultural version, the “Taylor Swift of capitalism.”
Buffett recently predicted that the government would have to raise taxes to reduce America's $34 trillion debt. He said nothing about spending cuts, which remain the real issue. It's not hard for economists to conclude that Buffett thinks the opposite way.
The Committee for a Responsible Federal Budget said this month that “in the first seven months of fiscal year 2024, net interest spending reached $514 billion, exceeding spending on defense…and Medicare…interest spending also… “It's increasing,” he said. That's more than we spent this year on veterans, education, and transportation combined. ”
Does anyone believe that letting the Trump tax cuts expire at the end of next year will help? We all know that the main drivers of debt are Social Security and Medicare. Few politicians dare to touch this “third rail” for fear of losing valuable seats in Congress or losing the presidential election.
The Peter G. Peterson Foundation says, “Increasing debt reduces business investment and slows economic growth. It also raises expectations for higher inflation and less confidence in the U.S. dollar.”
This should be uncontroversial, but you can't have a real discussion about economics. Because so many people rely on government to do for them what they once did primarily for themselves. So, save and invest wisely, live within your means, be responsible for yourself, and if you have to ask the government for help, put it last on your list, not first.
The Congressional Budget Office projects that the federal deficit will increase to 8.5% of GDP in fiscal year 2054 from the current 5.5%. Remember, it's just a deficit, not a debt. The deficit is added to the debt. When politicians claim to have reduced the deficit, they usually haven't done anything to reduce the debt.
I have previously advocated for a complete audit of the federal government. Audit committee members may be appointed by Democrats and Republicans. They should be non-partisan and take seriously the tasks assigned to them. This is what the Pentagon's Base Realignment and Closure Commission did in 1988. Although some politicians have cried out about the closure of aging bases in their constituencies, it has worked and saved money.
A similar approach could be applied to national debt. What we most need is higher taxes imposed on productive citizens so that politicians can continue to waste money.
A true prophet must be 100 percent correct. Warren Buffett is right most of the time, but he is not a prophet because he thinks the economic crisis can be solved by ignoring spending cuts.
I'm Cal Thomas.
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