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Wherever politics intrudes upon economic life, political success is readily attained by saying what people like to hear rather than what is demonstrably true. Instead of safeguarding truth and honesty, the state then tends to become a major source of insincerity and mendacity. – Hans F. SennholzDebt, Spending and Mendacity
The federal debt is enormous, expanding and dangerous. Cutting government spending and reducing the debt is essential for economic growth and prosperity. In the Financial Times, Glenn Hubbard, Dean of Columbia University's Business School, cites the empirical studies of two Harvard economists, which analyzed the successful reduction of debt by many countries:
… stabilising and eventually reducing the debt-to-GDP ratio by limiting the growth of spending is more likely to be successful and to lead to growth. … Careful analysis by Alberto Alesina and Silvia Ardagna reveals that successful debt stabilisations focused on reducing spending rather than raising taxes and that fiscal adjustments associated with higher GDP growth are those dominated by spending cuts.
Medicare, Social Security and Medicaid are the largest contributors to the debt. President Obama claims a tax on the rich will solve the crisis. Hubbard strongly disagrees:
Ruling out long-term entitlement spending restraint, Mr. Obama has argued that fiscal sustainability can be accomplished by raising marginal tax rates on households earning more than $250,000 per year. This is simply not true.
The public must appreciate the crisis and know the solutions. Hubbard is critical of politicians like Obama and Gingrich.
Polls indicating that many do not understand the debt problem, and the demonisation of specific solutions by politicians ranging from Mr Obama to former House Speaker Newt Gingrich underscore the problem.
This political mendacity must cease. Government debt imperils America, the world economic order and freedom. For Democracy and freedom to prevail, “We the People” must know the truth, the whole truth, and nothing but the truth.